SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
                      

FORM 10-KSB/A
Amendment No. 2


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

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

Commission File Number 0-6580



(Name of small business issuer as specified in its charter)

Nevada
(State or other jurisdiction of
incorporation or organization) 87-0285520
(I.R.S. Employer
Identification Number)

743 Horizon Court, Suite 333
Grand Junction, Colorado 81506
(Address of principal executive offices)

(970) 245-5917
(Issuer's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:  None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock (Par Value $.10 Per Share) 

        Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of
the Exchange Act during the past 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes  X       No___

        Check if there is no disclosure of delinquent filers pursuant to Item 405 of Regulation S-B is not
contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.  [   ]

        The issuer's revenues for its most recent fiscal year were $2,390,580.

        As of February 28, 2002 the issuer had 6,339,815 shares of its $0.10 par value Common Stock
issued and outstanding.  Based upon the closing sale price of $.25 per share on February 28, 2002, the
aggregate market value of the common stock, the Registrant's only class of voting stock, held by
non-affiliates was $457,000.

        The following documents are incorporated by reference into Part III of this Form 10-KSB:
Registrant's definitive Proxy Statement to be filed on or before April 30, 2002, pursuant to Regulation
14A in connection with Registrant's annual meeting of stockholders to be held in June 2002.

        Transitional Small Business Issuer Disclosure Format     Yes __   No  X 

TABLE OF CONTENTS

PART I	PAGE
ITEM 1.  BUSINESS	1
History and Overview	1
Recent Developments	1
Operations	2
Competition	2
Markets	2
Regulations	3
Operational Hazards and Insurance	4
Business Risks	4
Administration	9
ITEM 2.  PROPERTIES	9
Principal Oil and Gas Interests	9
Gulf Coast Properties and Prospects	10
Utah Properties and Prospects	10
Title to Properties	11
Estimated Proved Reserves	11
Net Quantities of Oil and Gas Produced	11
Drilling Activity	12
ITEM 3.  LEGAL PROCEEDINGS	12
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	12
PART II
ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED                  STOCKHOLDER MATTERS	13
Stockholders	13
Dividends	13
Recent Sales of Unregistered Securities	13
ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS	13
Liquidity and Capital Resources	13
Proposed Sale of Substantially All Assets	14
Future Plans	15
Future Contingency Plans	15
Results of Operations	16
Overview	16
Oil and Gas	16
Depreciation, Depletion and Amortization	18
Impairment	18
Abandoned Merger Settlement	18
Interest Expense	18
Other Matters	19
ITEM 7.  FINANCIAL STATEMENTS	20
ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS                   ON ACCOUNTING AND FINANCIAL DISCLOSURE	39
PART III
Incorporated by reference to Registrant's definitive Proxy Statement to be filed on or before   April 30, 2002, pursuant to Regulation 14A in connection with Registrant's annual meeting   of stockholders to be held in June 2002.	40
PART IV
ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K	40

PART I

ITEM 1 - BUSINESS
HISTORY AND OVERVIEW

Republic Resources, Inc. (the "Company") was incorporated in the state of Nevada on September 11,
1968 to engage in the oil and gas acquisition, development and production business.  Prior to 1993, the
Company conducted business primarily in Western Colorado and Eastern Utah. In August 1993, the
Company acquired privately owned oil and gas assets and commenced operating in the
Denver-Julesburg Basin ("DJ Basin") of northeastern Colorado. In the years following the acquisition,
the Company invested several million dollars in an effort to exploit the assets acquired and experienced
marginal success.  Substantially all of the DJ Basin and other Rocky Mountain oil and gas assets were
sold in 1998 for approximately $3.2 million.  Beginning in 1996, the Company began investing as a
non-operator in various acquisitions and exploration projects in the Gulf Coast region of southern
Louisiana and Texas.  In 2001, the Company acquired over 9,500 net acres in two separate wildcat
exploration prospects in the state of Utah.

RECENT DEVELOPMENTS

Sale of Assets, Planned Exchange of Debt, Preferred Stock Exchange, and Change in Future
Corporate Strategy

On February 8, 2002, the Company announced it had agreed to sell all of its oil and natural gas
properties located in the states of Louisiana and Texas to Harken Energy Corporation ("Harken")
pursuant to a Purchase and Sale Agreement dated January 31, 2002 (the "Asset Sale
Agreement").  In exchange for these assets Harken has agreed to convey: a) up to 2,645,500 shares
of  Harken Common Stock as consideration for the proved assets; and b) make a Contingent
Payment in 2004 depending on the results of future exploration and development of the exploratory
prospects, included in the assets being sold.  The Company intends to use the consideration received
from the sale of these assets, along with the issuance of 4.4 million additional shares, to pay off the
entire balance of its $2,645,500 Convertible Debentures (the "Debentures") and to exchange all of
its $5.1 million Series C Preferred Stock ("Preferred Stock") for common stock of the Company.

These transactions are significant and meaningful to the Company when considering over $7.7 million
of future obligations will be eliminated.  Upon closing the Asset Sale, the Company will have no
significant debt or other long term obligations.  Although the sale includes all of the Company's
revenue generating assets, the Company  will retain its interest in two undeveloped prospect areas in
Utah.  In addition, Republic will focus its future corporate strategy in seeking an appropriate
acquisition or merger candidate in one or more businesses which have no material debt obligations
or other liabilities, which have a prospect for immediate or near-term cash flow, and which offer a
significant opportunity for future growth and return to our common stockholders.  Although there are
no firm commitments, the Company has  commenced an informal search for an appropriate merger
candidate.  These efforts has resulted in preliminary conversations with two possible candidates.

The number of shares of Harken Common Stock to be issued at the Closing of the Asset Sale will be
determined by dividing the total principal amount of the Company's outstanding Debentures by the
average reported closing price for Harken's Common Stock for the 20 trading days ending on the day
before the Closing (hereafter referred to as the "Common Stock Value Per Share").  However, under
no circumstances shall the Common Stock Value Per Share be less than $1.00.  The Company has
offered the Debenture Holders all of the Harken Common Stock plus an additional 1.0 million shares
of the Company common stock to fully satisfy the principal balance of the Debentures (the "Exchange
Offer").  Acceptance of the Exchange Offer by the holders of at least 90% of the outstanding principal
amount of the Debentures is a condition to Closing of the Asset Sale to Harken.

The Company also reached an agreement with its Preferred Stockholders whereby all of the issued and
outstanding Series C Preferred Stock, with a face value of $5.1 million (including dividends in arrears),
have been exchanged for 3.4 million shares of Republic common stock plus an assignment of the
Contingent Payment Agreement associated with the Asset Sale to Harken.  The assets associated with
Contingent Payment Agreement include most of the exploratory prospects or "prospect inventory"
located in Jackson County, Texas.  The unproved assets have not been given any initial value in the
contemplated transaction with Harken, but will be evaluated for additional value at the end of 2003 using
a "Lookback Formula" as defined in the Contingent Payment Agreement.  If warranted, an additional
payment of either cash and/or Harken Common Stock will be made by Harken in 2004.  In the event the
Asset Sale is not completed, the Company is committed to convey to the former preferred stockholders
an interest in the exploratory properties equivalent to what such stockholders would have received from
Harken had the Asset Sale closed.

The Closing of the Asset Sale is contingent upon: (a) Holders representing at least 90% of the Debenture
principal balance approving the Exchange Offer (as described above); and (b) the approval of the Asset
Sale Agreement by at least a majority of Republic's Common Stockholders.  The Asset Sale is required
to be completed by April 15, 2002.  The Company has informally discussed the terms of the Exchange
Offer with individuals representing over 30% of the principal balance of the outstanding Debentures.
These individuals have tentatively agreed to the proposed terms and the Company initiated the formal
solicitation to its Debenture holders on February 22, 2002. It is anticipated that the requisite majority of
holders of Debentures will accept the Exchange Offer.

The Company intends to hold a special meeting of its stockholders on or after March 25, 2002 to
consider approval of the Asset Sale.  It is anticipated that stockholders will approve the Asset Sale at
the stockholders meeting, as the six former holders of the Company's Series C Preferred Stock, who
now hold over 68% of the outstanding common stock, agreed to attend and vote in favor of approval in
connection with the exchange of the Preferred Stock for Republic common stock which was completed
February 11, 2002.

The Company expects to complete the Asset Sale immediately following its special meeting of
stockholders.

Upon completion of the Asset Sale the Company expects to incur a non-cash charge estimated at of
approximately $1.4 million.  This amount, to be reflected as a "loss on sale of assets", is a result of the
carrying value of the corresponding assets will exceed the anticipated fair value of the Harken
common stock on  to be received in the transaction.

OPERATIONS

As of December 31, 2001, we had varying ownership interests in 17 gross (1.98 net) non-operated wells
located in Southern Louisiana and Texas.

The following table presents a summary of our oil and gas reserve information as of December 31, 2001
(all of our reserves are located onshore in the states of Louisiana and Texas):

Net Proved Reserves
Bbls	Mcf	Mcfe (1:6)	BOE (6:1)
237,000	1,263,000	2,685,000	447,000

COMPETITION

The oil and gas industry is highly competitive in many respects, including identification of attractive oil
and gas properties for acquisition, drilling and development, securing financing for such activities and
obtaining the necessary equipment and personnel to conduct such operations and activities. We
compete with a number of other companies, including large oil and gas companies and other
independent operators with greater financial resources and with more experience. Many other oil and
gas companies in the industry have financial resources, personnel, and facilities substantially greater
than ours. There can be no assurance that we will be able to compete effectively with these other
entities.

MARKETS

Overview - The three principal products which we currently produce and market (through our operating
partners) are crude oil, natural gas and natural gas liquids. We do not currently use commodity futures
contracts and price swaps in sales or marketing of natural gas and crude oil.

Crude Oil - Oil produced from our properties is generally transported by truck, barge or pipeline to
unaffiliated third-party purchasers at the prevailing field price. Currently, the primary purchaser of our
proportionate share of crude oil is Plains Marketing, L.P. which bought over 30% of our crude oil
production in 2001. The contracts are month-to-month and subject to change. The market for our crude
oil is competitive and therefore we do not believe that the loss of one of our primary purchasers would
have a material adverse effect on our business because other arrangements could be made to market our
crude oil products. We do not anticipate problems in selling future oil production because purchases are
made based on current market conditions and pricing. Oil prices are subject to volatility due to several
factors beyond our control including: political turmoil; domestic and foreign production levels; OPEC's
ability to adhere to production quotas; and possible governmental control or regulation.

Natural Gas - We sell, through our operating partners, our natural gas production at the wellhead to
various pipeline purchasers or natural gas marketing companies.  Our third party operators distribute the
corresponding revenues once the funds are received from the purchaser. The wellhead contracts have
various terms and conditions, including contract duration. Under each wellhead contract, the purchaser is
generally responsible for gathering, transporting, processing and selling the natural gas and natural gas
liquid and we receive a net price at the wellhead.

REGULATIONS

General - All aspects of the oil and gas industry are extensively regulated by federal, state, and local
governments in all areas in which we have operations.  The following discussion of regulation of the oil
and gas industry is necessarily brief and is not intended to constitute a complete discussion of the
various statutes, rules, regulations or governmental orders to which our operations may be subject.

Price Controls on Liquid Hydrocarbons - There are currently no federal price controls on liquid
hydrocarbons (including oil, natural gas and natural gas liquids). As a result, we sell oil produced from
our properties at unregulated market prices which historically have been volatile.

Federal Regulation of Sales and Transportation of Natural Gas - The transportation and sale of
natural gas in interstate commerce was regulated until 1993 pursuant to the Natural Gas Act ("NGA"),
the Natural Gas Policy Act of 1978 ("NGPA") and regulations promulgated thereunder. The Natural
Gas Wellhead Decontrol Act of 1989 eliminated all regulation of wellhead gas sales effective January
1, 1993.  As a result, gas sales are no longer regulated.

The transportation and resale in interstate commerce of natural gas we produce continues to be subject to
regulation by the Federal Energy Regulatory Commission ("FERC") under the NGA. The transportation
and resale of natural gas transported and resold within the state of its production is usually regulated by
the state involved.  Although federal and state regulation of the transportation and resale of natural gas
we produce currently does not have any material direct impact on us, such regulation does have a
material impact on the market for our natural gas production and the price we receive for our natural
gas production.  Adverse changes in the regulation affecting our gas markets could have a material
impact on us.

Commencing in the mid - 1980s and continuing until the present, the FERC promulgated several orders
designed to correct market distortions and to make gas markets more flexible and competitive. These
orders have had a profound influence on natural gas markets in the United States and have, among
other things, increased the importance of interstate gas transportation and encouraged development of a
large spot market for gas.

In addition to FERC regulation of interstate pipelines under the NGA, various state commissions also
regulate the rates and services of pipelines whose operations are purely intrastate in nature. To the
extent intrastate pipelines elect to transport gas in interstate commerce under certain provisions
of the NGPA, those transactions are subject to limited FERC regulation under the NGPA and may
ultimately effect the price of natural gas which we produce and sell.

There are many legislative proposals pending in Congress and in the legislatures of various states that, if
enacted, might significantly affect the oil and gas industry. We are not able to predict what will be
enacted and thus what effect, if any, such proposals would ultimately have on us.

State and Local Regulation of Drilling and Production - State regulatory authorities have
established rules and regulations requiring permits for drilling, bonds for drilling, reclamation and
plugging operations, limitations on spacing and pooling of wells, and reports concerning operations,
among other matters. The states in which we have oil and gas interests also have statutes and
regulations governing a number of environmental and conservation matters, including the unitization
and pooling of oil and gas properties.  In addition, a few states also prorate production to the
market demand for oil and gas or establish maximum rates of production from certain oil and gas
wells.  Although none of our wells currently exceed any mandated production limits, these
statutes and regulations may limit the rate at which oil and gas could otherwise be produced
or the prices obtained from our properties.

Also in recent years, political pressure has increased in states where the Company has been active to
mandate compensation to surface owners for the effects of oil and gas operations and to increase
regulation of the oil and gas industry at the local government level.  In general, such local regulation is
aimed at increasing the involvement of local governments in the permitting of oil and gas operations,
requiring additional restrictions or conditions on the conduct of operations to reduce the impact on the
surrounding community and increasing financial assurance requirements. Accordingly, such regulation
has the potential to delay, increase the cost, or even prohibit entirely, future drilling activities.

Environmental Regulations - The production, handling, transportation and disposal of oil and gas
and by-products are subject to regulation under federal, state and local environmental laws. In most
instances, the applicable regulatory requirements relate to water and air pollution control and solid
waste management measures or to restrictions of operations in environmentally sensitive areas.
However, environmental assessments have not been performed on all of our properties. To date,
expenditures for environmental control facilities and for remediation have not been significant in
relation to our results of operations.  However, it is reasonably likely that the trend in environmental
legislation and regulations will continue towards stricter standards and may result in significant future
costs to oil and gas producers. For instance, efforts have been made in Congress to amend the
Resource Conservation and Recovery Act to reclassify oil and gas production wastes as "Hazardous
Waste," the effect of which would be to further regulate the handling, transportation and disposal of
such waste. If such legislation were to pass, it could have a significant adverse impact on our operating
costs, as well as the oil and gas industry in general.

We believe that our operations comply with all applicable legislation and regulations in all material
respects, and that the existence of such regulations has had no more restrictive effect on our method of
operations than other similar companies in the industry. Although we do not believe our business
operations presently impair environmental quality, compliance with federal, state and local regulations
which have been enacted or adopted regulating the discharge of materials into the environment could
have an adverse effect upon our capital expenditures, earnings and competitive position, the extent of
which we are presently unable to assess.  We are not aware of any environmental degradation which
exists, or the obligation for remediation of which would arise under applicable state or federal
environmental laws. We do not maintain a fund for environmental or other similar costs. We would
pay any such costs or expenses out of operating capital.

OPERATIONAL HAZARDS AND INSURANCE

Our operations are subject to the usual hazards incident to the drilling and production of oil and gas,
such as blowouts, cratering, explosions, uncontrollable flows of oil, gas or well fluids, fires, pollution,
releases of toxic gas and other environmental hazards and risks. These hazards can cause personal
injury and loss of life, severe damage to and destruction of property and equipment, pollution or
environmental damage and suspension of operations.

We maintain insurance of various types to cover our operations. Our insurance does not cover every
potential risk associated with the drilling and production of oil and gas. In particular, coverage is not
available for certain types of environmental hazards. The occurrence of a significant uninsured event
could have a material adverse effect on our financial condition and results of operations. Moreover, no
assurance can be given that we will be able to maintain adequate insurance in the future at
reasonable rates.

BUSINESS RISKS

The Company is subject to a number of risks which should be considered by our stockholders and others
who may read this report, including the following risk factors, as well as the other information we have
included or referenced.

The Company has historically suffered operating losses for most of the years it has been in
existence and it continues to have an accumulated deficit at December 31, 2001.

        The Company has suffered recurring, and sometimes significant, operating losses.  The
operating loss for 2001 was approximately $5.2 million and at December 31, 2001 we had an
accumulated deficit of approximately $37.8 million.

We may require additional financing.  The terms may be unfavorable to present shareholders.
Failure to receive financing will jeopardize the chances for future success.

        We will be required to make substantial capital expenditures to develop our existing reserves and to
discover new oil and gas reserves.  Currently, the only known source of capital the Company has to fund
its anticipated oil and gas exploration and development activities is through our existing working capital
and our future operating cash flows. Historically, we have financed these expenditures primarily with
proceeds from the sale of debt and equity securities and with cash from operations.  See "Management's
Discussion and Analysis of Financial Condition and Results of Operations, Liquidity, Capital
Expenditures and Capital Resources" elsewhere in this report for a discussion of the Company's
anticipated capital budget.  We cannot assure you that we will be able to raise capital in the future.
If we cannot obtain sufficient additional capital resources if and when it is needed, our operations
and financial condition will be adversely affected.

Republic will have no revenue after January 1, 2002 if the Asset Sale is completed.

        The Company is selling all of its producing oil and gas properties including all of its proved
reserves of oil and natural gas effective January 1, 2002.  As a result, assuming the Asset Sale is
approved, as is expected, the Company's only assets will be its limited cash reserves and non-
producing, exploratory prospects.  No assurance can be made as to whether the Company
will achieve revenue from any of these properties.

Republic may not acquire a profitable business.

        Once the Asset Sale is completed, the Company intends to seek to acquire, or to be acquired by, a
private business.  The Board of Directors of Republic expects that any such business shall have no, or
limited, debt, shall have cash flow from business operations and shall have a reasonable opportunity for
growth and benefit to the Company and its stockholders.  No assurance can be given that any such
private business will be acquired or that any acquisition transaction will be favorable to the Company or
its stockholders or result in future benefit to the stockholders of the Company.

Republic may no longer be primarily an oil and natural gas business.

        If the Company is successful in completing an acquisition of another private company, the business
of such company may be outside the oil and natural gas business, and a majority of the Company's
future operations might be in another line of business entirely.  No assurance can be given as to what
line of business the Company might be in following any such future acquisition.  Notwithstanding
that we may operate another line of business, we intend to hold and explore our present exploratory
prospects in Utah.

We will be subject to the risk of volatile oil and natural gas prices.

        Our success is highly dependent on prices for oil and gas, which are extremely volatile.  Beginning
in 1997 and continuing through late 1999, the prices we received for our production generally declined,
especially for oil.  Oil prices, along with natural gas prices have recently recovered, but remain volatile.
Any additional substantial or extended decline in the price of oil or natural gas would have a material
adverse affect on us.  Oil and gas markets are both seasonal and cyclical.  Prices of oil and gas affect the
following aspects of our business:

*        our revenues, cash flows and earnings;
*        our ability to attract capital to finance our operations and the cost of the capital;
*        the value of our oil and gas properties; and
*        the profit or loss we incur in exploring for and developing our reserves.

Various factors beyond our control will affect the prices of oil and natural gas, including:

*        the worldwide and domestic supplies of oil and natural gas;
*        the ability of members of the Organization of Petroleum Exporting Countries to agree to and
            maintain oil price and production controls;
*        political instability or armed conflict in oil or natural gas producing regions;
*        the price and level of foreign imports;
*        the state of the national and international economy and the level of consumer demand;
*        the price, availability and acceptance of alternative fuels;
*        the availability of pipeline capacity;
*        weather conditions; and
*        domestic and foreign government regulations and taxes.

We will not control our oil and gas properties; therefore, we will continue to be dependent
upon the various operators of our properties.

        The Company is not presently the operator of any of its oil or natural gas properties and prospects.
These arrangements are expected to continue, at least for the foreseeable future.  Thus, we will be
unable to control material aspects of commercialization of our principal assets and we will be dependent
upon the expertise, diligence and financial condition of the operators of those properties.

We will experience drilling and operating risks.

        Oil and natural gas drilling activities are subject to many risks, including the risk that no
commercially productive reservoirs will be encountered.  We can make no assurance that wells in which
we will have an interest will be productive or that we will recover all or any portion of our drilling or
other exploratory costs.  Drilling for oil or natural gas may involve unprofitable efforts, not only from
dry wells, but from wells that are productive but do not produce sufficient net revenue to return a profit
after drilling, operating and other costs.  The costs of drilling, completing and operating wells is often
uncertain.  Our drilling operations may be curtailed, delayed or canceled as a result of numerous
factors, many of which are beyond our control, including by way of illustration, the following
circumstances:

*        economic conditions;
*        title problems;
*        compliance with governmental requirements;
*        weather conditions; and
*        shortages and delays in labor, equipment, services or supplies.

        Some or all of our future drilling activities may not be successful and, if unsuccessful,  failure of a
single or a few wells may have a material adverse effect on our future results of operations and ability to
participate in other projects.

        Our operations are also subject to hazards and risks inherent in drilling for and producing and
transporting of oil and natural gas, including, by way of illustration, such hazards as:

*        fires; natural disasters;
*        explosions; encountering formations with abnormal pressures;
*        blowouts; cratering;
*        pipeline ruptures; spills; and
*        power shortages; equipment failures.

        Any of these types of hazards and risks can result in the loss of hydrocarbons, environmental
pollution, personal injury claims and other damages to property.  As protection against such operating
hazards, we intend to maintain insurance coverage against some, but not all of these potential risks.  We
also may elect to self insure in circumstances in which we believe that the cost of insurance, although
available, is excessive relative to the risks presented.  The occurrence of an event that is not covered, or
not fully covered, by third party insurance could&nb sp;have a material adverse effect on our business, financial
condition and results of operations.

We must continue to comply with significant amounts of governmental regulation.

        Domestic oil and natural gas operations are subject to extensive federal, state and local laws and
regulations relating to the exploration for, and development, production and transportation of, oil and
natural gas.  This  includes safety matters which may change from time to time in response to economic
conditions.  Matters subject to regulation by domestic federal, state and local authorities include:

*        permits for drilling operations; road and pipeline construction;
*        reports concerning operations; spacing of wells;
*        unitization and pooling of properties; taxation;
*        environmental protection; production rates; and
*        customs regulations; worker safety regulations.
*        construction of processing facilities;

        We can give no assurance that delays will not be encountered in complying with such requirements
or that such regulations will not require us to alter our drilling and development plans.  Any delays in
obtaining approvals or material alterations to our drilling and development plans could have a material
adverse effect on our operations.  From time to time, regulatory agencies have imposed price controls
and limitations on production by restricting the rate of flow of oil and natural gas below actual
production capacity in order to conserve supplies of oil and natural gas.  We believe that we are and
will continue to be in substantial compliance with all applicable laws and regulations.  We are unable to
predict the ultimate cost of compliance with changes in these requirements or their effect on our
operations.  Significant expenditures may be required to comply with governmental laws and regulations
and may have a material adverse effect on our financial condition and future results of operations.

We must comply with environmental regulations.

        We must operate exploratory and other oil and natural gas wells in compliance with complex and
changing environmental laws and regulations adopted by government authorities.  The implementation
of new, or the modification of existing laws and regulations could have a material adverse effect on
properties in which we may have an interest. Discharge of oil, natural gas or other pollutants in the air,
soil or water may give rise to significant liabilities to governmental bodies and third parties and may
require us to incur substantial costs of remediation.  We may be required to agree to indemnify
sellers of properties we purchase against certain liabilities for environmental claims associated with
those properties.  We can give no assurance that existing environmental laws or regulations, as
currently interpreted, or as they may be reinterpreted in the future, or future laws or regulations will
not materially adversely affect our results of operations and financial conditions.

We must develop additional reserves to replace reserves depleted by production.

        Our future success will depend upon our ability to develop our proved non-producing and
undeveloped oil and natural gas reserves in the Gulf Coast area and to find or acquire additional oil and
natural gas reserves which are economically recoverable.  Once production is established, proved
reserves will decline as they are depleted by production.  We must continue exploratory drilling or
otherwise acquire proved reserves to continue to increase our reserves and our production.  Our
strategic plan includes increasing our reserve base through exploratory drilling, development and
exploitation of our existing properties and acquiring other exploratory or  producing properties if we
have sufficient capital resources and the acquisition meets certain projected financial guidelines.  We
can give no assurance that our planned drilling, development and exploitation projects will result in
significant additional reserves or that we will have success drilling productive wells with reserves that
produce revenues exceeding finding, development and production costs.

There is a risk that our estimates of proved reserves and future net revenue are inaccurate.

        There are numerous uncertainties inherent in estimating quantities of proved reserves and in
projecting future rates of production and the timing of development expenditures, including many factors
beyond our control.  The reserve data included in this report represent only estimates.  In addition, the
historical and projected estimates of future net revenue from proved reserves and the present value
thereof are based upon certain assumptions about future production levels, prices and costs that may
prove to be incorrect over time.  In particular, estimates of crude oil and natural gas reserves, future net
revenue from proved reserves and the discounted present value thereof for our crude oil and natural gas
properties described in this annual report are based on the assumptions that such properties will be
developed in accordance with their proposed development programs and that future crude oil prices
will remain the same as crude oil prices at December 31, 2001, with respect to production attributable
to our interests in our respective properties.

        In addition, you should not construe the estimated present value of future cash flow as the current
market value of the estimated oil and natural gas reserves attributable to our properties. We have based
the estimated discounted future net cash flows from proved reserves on prices and costs as of the date of
the estimate, in accordance with applicable regulations set forth by the SEC, whereas  actual future
prices and costs may be materially higher or lower.  Many factors will affect actual future net cash
flows, including:

*        the amount and timing of actual production,
*        supply and demand for oil and natural gas,
*        curtailments or increases in consumption by natural gas purchasers, and
*        changes in governmental regulations or taxation.

        The timing of the production of oil and natural gas from properties and of the related expenses,
affect the timing of actual future net cash flows from proved reserves and thus, their actual present value.
In addition, the 10% discount factor, which we are required to use to calculate present value for
reporting purposes, is not necessarily the most appropriate discount factor, given actual interest rates
at any given time and/or the risks to which the oil and natural gas industry in general are subject.

We will face substantial competition.

        We will be competing with both major and independent oil and natural gas and other companies,
nearly all of which will have substantially larger financial resources, operations, staffs and facilities.
We will continue to face intense competition from both major and independent oil and natural gas
companies when we seek to acquire desirable properties and to market our production.  These
competitors have financial and other resources substantially in excess of those which will be available
to us.  The effects of this highly competitive environment could have a material adverse on our
business.

Acquiring interests in other properties involves substantial risks.

We intend to evaluate and acquire interests in oil and natural gas properties in the Gulf Coast area and
possibly in other areas of the United States.  To acquire producing properties or undeveloped exploratory
acreage will require an assessment of a number of factors including:

*        the value of the oil or gas properties and the likelihood of future production;
*        potentially recoverable reserves;
*        estimated operating costs;
*        potential environmental and other liabilities; and
*        potential drilling and production difficulties.

        Such assessments will necessarily be inexact and uncertain.  Our review of assets to be acquired
may not reveal all existing or potential problems.  Any unsuccessful acquisition could have a material
adverse effect on the Company's financial condition.

Our corporate charter includes anti-takeover provisions.

        Our articles of incorporation presently authorizes 605,000 shares of preferred stock, of which
99,503 shares have been designated as Series C.  The Series C was exchanged for common stock in
February 2002 and retired. However, our Board of Directors may issue the remaining 505,497 shares
of unissued preferred stock without shareholder approval and may set the rights, preferences and other
designations, including voting rights, of those shares as the Board of Directors may determine.  In
addition, our articles of incorporation provide for a classified Board of Directors.  Directors serve
staggered three-year terms and may only be removed for cause.  These provisions may discourage
transactions involving actual or potential changes of control, including transactions that otherwise could
involve payment of a premium over prevailing market prices to holders of our common stock.  We
have no plans, arrangements, commitments or understandings relating to potential future issuances of
preferred stock.  We will not be subject to provisions of the Nevada General Corporation Law that
would make some business combinations more difficult, as our articles of incorporation specifically opt
out from those provisions.

Our corporate charter limits director liability.

        Our articles of incorporation provide, as permitted by Nevada law, that our directors shall not be
personally liable to the corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, with certain exceptions.  These provisions may discourage shareholders from
bringing suit against a director for breach of fiduciary duty and may reduce the likelihood of derivative
litigation brought by shareholders on behalf of the Company against directors.  In addition, the articles
of incorporation and our bylaws provide for mandatory indemnification of directors and officers to the
fullest extent permitted by Nevada law.

It is unlikely we will pay dividends on common stock.

        The Company has never declared or paid cash dividends on common stock and we do not
anticipate that we will pay dividends in the foreseeable future.  We anticipate that future earnings, if
any, will be retained for development of our business.

The market price for our common stock is likely to be volatile and the market for our common
stock may not be liquid.

        If our operating results should be below the expectations of investors or analysts in one or more
future periods, it is likely that the price of the common stock would be materially adversely effected.
In addition, the stock market has experienced significant price and volume fluctuations that have affected
market prices of equity securities of many energy companies, particularly emerging and new companies.
 General market fluctuations may also adversely affect the market price of our common stock.

The market price of our common stock could be adversely affected by sales of substantial
amounts of common stock in the public market or the perception that such sales could occur.

        Trading in our common stock is sporadic and relatively infrequent.  The sale of a material number
of our shares of common stock in the public market or the perception that such sales could occur could
havea material adverse effect on the trading price of our common stock.

ADMINISTRATION

Office Facilities - We currently rent approximately 2,300 square feet, renewable on an annual basis, in
an office facility in Grand Junction, Colorado.  The rental rate is approximately $2,300 per month.

Employees - As of December 31, 2001, we had three full-time and one part-time employees.  None are
covered by a collective bargaining agreement. We consider that our relations with our employees is
satisfactory.

ITEM 2 - PROPERTIES

PRINCIPAL OIL AND GAS INTERESTS

Developed Acreage - Our proved properties as of December 31, 2001 are located in the following
areas shown in the table below:

		OIL		GAS
Fields	State	Gross Wells(1)	Net(2) Wells	Gross Wells(1)	Net(2) Wells	Developed Acreage   Gross         Net(2)
East Bayou Sorrel	Louisiana	3	.48	-	-	368	59
South Lake Arthur	Louisiana	-	-	1	.20	349	73
Maurice	Louisiana	-	-	2	.16	258	22
Ganado	Texas	-	-	3	.38	350	44
Texana	Texas	-	-	3	.23	383	48
Formosa	Texas	-	-	4	.50	938	117
Big 12/Tortuga	Texas	-	-	1	.03	320	10
Grand Total		3	.48	14	1.50	2,966	373

Footnotes

        (1)     Wells which produce both gas and oil in commercial quantities are classified as "oil" wells
                  for disclosure purposes.
        (2)     "Net" wells and "net" acres refer to our fractional working interests multiplied by the number
                  of wells or number of acres.

Substantially all of our producing oil and gas properties are located on leases held by us for as long as
production is maintained.

Undeveloped Acreage - Our gross and net working interests on undeveloped acreage as of December
31, 2001 is as follows:

Assets Subject to Harken Sale

	Undeveloped Acreage			Expiration of Net Acreage(1)
Prospect Description	State	Gross	Net	2002	2003	2004
East Bayou Sorrel	Louisiana	90	14	14	-	-
Maurice	Louisiana	189	42	5	11	-
Formosa	Texas	3,394	1,424	278	103	43
Texana	Texas	13,138	1,106	366	650	-
Big 12/Tortuga	Texas	2,890	90	33	53	4
Totals		19,701	1,560	696	817	47

Footnotes

        (1)     Substantially all of these leases had original terms of 2 or 3 years.  The table illustrates the
                  year the net acres will expire unless production has been obtained.

Assets To Be Retained

		Undeveloped Acreage
Prospect Description	State	Gross	Net
Thompson Canyon	Utah	13,524	5,072 (1)
Cactus Rose	Utah	10,906	3,408 (2)
Other	Utah	1,020	1,020 (3)
Totals		25,450	9,500

Footnotes

        (1)     All of the leases will expire in 2011 unless production has been obtained.
        (2)     Substantially all of the leases will expire in 2002 unless production has been obtained.
        (3)     Substantially all of the leases will expire in 2003 unless production has been obtained.

GULF COAST PROPERTIES AND PROSPECTS

Overview - The three primary areas where the Company has participated as a non-operating, minority
interest partner, are described below.  These properties and prospects are those assets "held for sale"
and are subject to the Asset Sale Transaction with Harken.

East Bayou Sorrel - During 1997, the Company acquired a working interest and an after prospect
payout ("APPO") leasehold interest in the 1996 discovery of a new oil and gas field, East Bayou Sorrel
Field located in Iberville Parish, Louisiana.  The production from the three producing wells in this field
represented approximately 41% of the Company's production (on an equivalent unit basis) in 2001.
Most of the production is being drawn from the CIB Haz 2 sand formation. The prospect "paid out"
effective November 15, 1999 and our working interest  increased from 8.9% to 15.6% as a result of
owning the APPO.

Maurice Field - In 1997, the Company joined Amerada Hess Corporation to drill a discovery well at
Maurice Field, Vermilion Parish, Louisiana.  Since then, three additional wells have been drilled and
completed, of which two wells have been lost due to downhole mechanical problems.  Production from
this field represented approximately 9% of the Company's production (on an equivalent unit basis) in
2001 and is being drawn from the Bol Mex III, Marg Tex and Camerina sand formations. Our working
interests in this field range from 6.9% to 9.5%.

Formosa, Texana and Ganado 3-D Exploration Prospects - During 1997, the Company secured a
12.5% working interest in three on-shore upper Gulf Coast 3-D seismic survey projects located in and
around Jackson County, Texas. The 3-D surveys cover over 200 square miles (approximately 130,000
acres).  The Company had eight wells in these prospect areas in 2001 which produced approximately
47% of the Company's total production (on an equivalent unit basis) in 2001.  All theses wells produce
from either the Miocene, Frio or Yegua sand intervals

UTAH PROPERTIES AND PROSPECTS

Overview - The following paragraphs describe the two primary prospect areas that are not included in
the "assets held for sale" and will be retained by the Company.

Cactus Rose - The Cactus Rose prospect area is located in Grand County, Utah, approximately 75
miles west of Grand Junction, Colorado.  Geologically, this prospect area is on the northwest end of a
salt valley anticline in the Paradox Basin.  There are four prospects that have been identified by
integrating seismic data, well control, dipmeters, mudlogs, surface maps and air photo interpretation.
Maps have been prepared on four potential oil producing horizons and a series of structural cross
sections have been constructed.  The Cactus Rose prospect area and the underlying geologic work has
been generated by Tidewater Oil and Gas, LLC ("Tidewater"), a private company located in Denver,
Colorado.  The primary objectives are in the Jurassic age sandstones of the Navajo, Entrada and Moab
Tongue with relatively modest drilling depths of 5,000' or less.  The Company owns a 31.25% working
interest in this prospect area and estimates its proportionate share of costs for the first exploratory well
would be approximately $100,000.

Thompson Canyon - The Thompson Canyon prospect area is also located in Grand County, Utah, near
the small town of Thompson and is approximately 5 miles east of the Cactus Rose prospect area.
Geologically, this prospect is within the Paradox Fold and Fault Belt province in the northeastern part of
the Paradox Basin.  Although this prospect area has several potential oil and gas prospects with drilling
depths of 6,000' or less, of particular interest to the Company is the possibility of a large gas play at
depths below 13,000'.  Tidewater is&n bsp;also the generator of this prospect area and has gathered seismic and
other geologic data that supports the possibility of a large hydrocarbon accumulation at deeper intervals.
The Company currently owns a 37.50% working interest in this prospect area and, in conjunction with
Tidewater, intends to farm-out the drilling of the deeper prospects.

TITLE TO PROPERTIES

Only a limited perfunctory title examination is conducted at the time we acquire interests in oil and gas
leases. This practice is customary in the oil and gas industry. Prior to the commencement of drilling
operations, a thorough title examination is conducted. We believe that title to our properties is good and
defensible in accordance with standards generally accepted in the oil and gas industry.  We also believe
that any title exceptions are not so material as to detract substantially from the property economics.  In
addition, some prospects may be b urdened by customary royalty interests, liens incident to oil and gas
operations and liens for taxes and other governmental charges as well as encumbrances, easements and
restrictions. We do not believe that any of these burdens will materially interfere with our use of the
properties.

ESTIMATED PROVED RESERVES

Our oil and gas reserve and reserve value information is included in footnote 13 of the consolidated
financial statements, titled "Oil and Gas Producing Activities." This information is prepared pursuant to
Statement of Financial Accounting Standards No. 69, which includes the estimated net quantities of our
"proved" oil and gas reserves and the standardized measure of discounted future net cash flows.  The
estimated proved reserves information is based upon an engineering evaluation by Netherland, Sewell &
Associates, Inc. The estimated proved reserves represent forward-looking statement s and should be read
in connection with the disclosure on forward-looking statements set forth elsewhere in this report.

We have not filed any reports containing oil and gas reserve estimates with any federal authority or
agency other than the Securities and Exchange Commission and the Department of Energy. There were
no differences in the reserve estimates reported to these two agencies.

All of our oil and gas reserves are located in the Continental United States. The table below sets forth
our estimated quantities of proved reserves, and the present value of estimated future net revenues
discounted by 10% per year using prices we were receiving at the end of each of the two fiscal years
ending 2001 and 2000 on a non-escalated basis.

	Year Ended December 31,
	2001	2000
Estimated Proved Oil Reserves (bbls)	237,000	377,000
Estimated Proved Gas Reserves (Mcf)	1,263,000	1,498,000
Estimated Future Net Revenues	$5,018,000	$20,429,000
Present Value of Estimated Future Net Revenues	$3,825,000	$15,131,000
Prices used to determined reserves:
Oil (per Bbl)	$       18.51	$         25.81
Gas (per Mcf)	$         2.95	$         10.15

The Company believes that no major discovery or other favorable or adverse event has occurred since
December 31, 2001, which would cause a significant change in the estimated proved reserves reported
herein.  The estimates above are based on year-end pricing in accordance with the guidelines of the
Securities and Exchange Commission and do not reflect current prices.  Since January 1, 2001, no oil or
gas reserve information has been filed with or included in any report to any U.S. authority or agency
other than the SEC and the Energy Information Administration (EIA).  The basis of reporting reserves
to the EIA for the company's reserves is identical to that set forth in the foregoing table.

As of February 28, 2002, the Company was participating in the completion of one exploratory well (in
which we own a 3.125% working interest) and the drilling of one exploratory well (owning a 1.2%
working interest).  Both wells are located in Jackson County, Texas.

NET QUANTITIES OF OIL AND GAS PRODUCED

Our net oil and gas production for each of the last two years (all of which was from properties located in
the United States) was as follows:

	Year Ended December 31,
	2001	2000
Oil	38,000	80,000
Gas	311,000	274,000

The average sales price per barrel of oil and Mcf of gas, and average production costs per barrel of oil
equivalent ("BOE") excluding depreciation, depletion and amortization were as follows:

Year Ended	Average Sales Prices			Average Production
December 31	Oil (Bbls)	Gas (Mcf)	Per BOE	Cost Per BOE
2001	$     24.76	$      4.67	$    26.66	$      5.03
2000	$     29.12	$      4.59	$    28.55	$      4.50

DRILLING ACTIVITY

The following table summarizes our oil and gas drilling activities that were completed during the last
two fiscal years, all of which were located in the continental United States:

	2001		2000
Wells Drilled	Gross	Net	Gross	Net
Exploratory
Oil	-	-	-	-
Gas	2	.16	5	.63
Non-Productive	6	.60	2	.25
Total	8	.76	7	.88
Development
Oil	-	-	-	-
Gas	-	-	-	-
Non-Productive	-	-	-	-
Total	-	-	-	-

ITEM 3 - LEGAL PROCEEDINGS

We may from time to time be involved in various claims, lawsuits, disputes with third parties, actions
involving allegations of discrimination, or breach of contract incidental to the operation of our business.
At December 31, 2001 and as of the date of this report, we were not involved in any litigation which
we believe could have a materially adverse effect on our financial condition or results of operations.

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

We did not submit any matters to a vote of our Security holders during the fourth quarter ended
December 31, 2001.

Part II

ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

Our common stock is traded on the OTC Bulletin Board market under the symbol "RPRS."  Until
January 14, 1999, the Company common stock was traded in the Nasdaq Small Cap Market.  The
following table sets forth the high and low reported closing prices per share of the Company's common
stock for the quarterly periods indicated, which correspond to the fiscal quarters for financial reporting
purposes.

	Common Stock
	High	Low
2000:
First quarter	0.75	0.28
Second quarter	0.44	0.17
Third quarter	0.63	0.16
Fourth quarter	0.88	0.38
2001:
First quarter	2.31	0.72
Second quarter	2.60	1.48
Third quarter	1.45	0.73
Fourth quarter	0.90	0.56

Stockholders - As of January 1, 2002, we had approximately 1,000 record holders of our common
stock and 6 holders of our Series C Preferred stock.

Dividends - We have not paid cash dividends on our common stock in the past and do not anticipate
doing so in the foreseeable future.

Under our Articles of Incorporation, as amended ("Articles"), the Board of Directors has the power,
without further action by the holders of the Common Stock, to designate the relative rights and
preferences of the Company's Preferred Stock, when and if issued.  Such rights and preferences could
include preferences as to liquidation, redemption and conversion rights, voting rights, dividends or other
preferences, any of which may be dilutive of the interest of the holders of the Common Stock.  The
Board previously designated Series A Cumulative Convertible Preferred Stock, Series B 5% PIK
Cumulative Preferred Stock and Series C 5% Redeemable Preferred stock, none of which is
outstanding and all of which has been retired.

Recent Sales of Unregistered Securities - The Company issued and sold the following securities
without registration under the Securities Act of 1933, as amended ("Securities Act"), during the quarter
ended December 31, 2001 and through the date of this report.

On February 11, 2002, six entities (Kayne Anderson Diversified Capital Partners, Arbco Associates,
L.P., Kayne Anderson Non-Traditional Investments, L.P., Kayne Anderson Capital Partners, L.P.,
Bellsouth Master Pension Trust, and Metropolitan Life Insurance Co.), representing all the holders of
the Company's Series C Preferred stock ("Series C"), exchanged all of the outstanding Series C,
including accrued and unpaid dividends of $124,379 for 3.4 million shares of restricted common stock.
Certificates, representing the shares issued upon exercise, were restricted and each included a restrictive
legend prohibiting transfer of the securities exception compliance with applicable securities laws.  The
Company relied upon Section 4(2) of the Securities Act in issuing the securities without registration.
The institutions to whom the securities were issued had full information concerning the business and
affairs of the Company.  No underwriter or other sales agent participated in the exchange.

ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2001, our cash balance was $739,456 with a positive working capital position of
$386,476, compared to a cash balance of $1,407,769 and a positive working capital position of
$1,380,134 of December 31, 2000.  The change in our cash balance is summarized as follows:

Cash balance at December 31, 2000	$ 1,407,769
Sources of Cash:
Cash provided by operating activities	1,832,907
Proceeds from exercise of warrants and options	507,708
Proceeds from the sale of property plant and equipment	105,006
Total sources of cash	2,445,621
Uses of Cash:
Capital expenditures for oil and gas activities	(2,808,027)
Repayment of convertible debentures and long term debt	(143,890)
Debt restructuring costs	(92,044)
Preferred stock dividends	(62,189)
Other capital expenditures	(4,451)
Purchase of certificate of deposit	(3,333)
Total uses of cash	(3,113,934)
Cash balance at December 31, 2001	$    739,456

We were able to generate positive cash flow from operating activities of $1,832,907 during 2001
principally due to the favorable oil and gas prices.  As discussed more thoroughly later in the Results of
Operations section under the caption "Oil and Gas", the average prices received by the Company during
2001 were $24.76 per bbl of oil and $4.67 per Mcf of natural gas.  In addition, the Company received
proceeds aggregating $507,709 when warrants and options to exercise approximately 1.0 million shares
of common stock were exercised during the second and thir d quarters of 2001.

The costs incurred in 2001 for oil and gas activities are summarized as follows (the difference between
the total incurred, as illustrated in the following table, and the total amount cash used in 2001, relates to
the net decrease in the accounts payable for these activities between December 31, 2001 and December
31, 2000).

Category:	Program Operator			Internal
	NEG	Parallel	AHC	Costs	Total	%
Acquisition of Unproved     Properties	$    3,817	$   143,021	$  11,297	$152,327	$   310,462	11%
Exploration costs	-	1,199,111	487,072	142,289	1,828,472	68%
Workovers	274,028	4,737	-	-	278,765	10%
Capitalized interest	-	-	-	287,048	287,048	11%
Total	$277,845	$1,346,869	$498,369	$581,664	$2,704,747	100%
Percent	10 %	50 %	18 %	22 %	100%

PROPOSED SALE OF SUBSTANTIALLY ALL ASSETS

As more fully described earlier in this Report in Part I, Item 1, under the caption "Recent Developments",
the Board of Directors approved a Purchase and Sale Agreement dated January 31, 2002 ("Sale
Agreement") with Harken Energy Corporation ("Harken").  Under the Sale Agreement we will sell all of
our  oil and gas properties located in the states of Texas and Louisiana, which include all of our proved
reserves of oil and natural gas and certain exploratory (non producing) prospects, along with all related
assets.

The Company has over $2.6 million of 11% convertible debentures due in April 2003 ("Debentures")
and, as of December 31, 2001, had over $5.1 million of Series C nonvoting, redeemable preferred
stock (the "Series C Preferred") due in 2005.  The decision to sell our assets was made because the
Board concluded that it is unlikely the Company will be able to meet its future obligations to holders
of the Debentures and the Series C Preferred when those obligations become due.

In reaching its decision to recommend the sale of substantially all of Republic's oil and natural gas
assets, the board of directors considered a number of factors including the following:

Republic's obligation to the holders of the Debentures are due April 15, 2003 and the outstanding Series
C Preferred was mandatorily redeemable on December 31, 2005.  Annual interest on the Debentures is
$291,000 and dividends on the Preferred Stock accrue at an annual rate of approximately $250,000.

Several events occurred in 2001 that significantly decreased the value of the Company's oil and gas
reserves, including: unanticipated mechanical and geologic problems were encountered in two properties
resulting in significant downward adjustments of the recoverable reserves; and six of eight wells drilled
in 2001 were either dry or commercially nonproductive.  Therefore, Republic was unable to replace the
reserves either lost or produced in 2001; and the prevailing prices for oil and natural gas have significantly
declined during 2001.

Republic holds interests in only a few undrilled oil and natural gas prospects.  It is unlikely that we will
achieve significant additional reserves of oil and gas by participating in drilling of these properties.

Republic lacks sufficient financial resources to acquire interests in other properties or to otherwise grow
our resource base to meet our future obligations to repay the Debentures and redeem the Series C
Preferred.

We plan to use the proceeds from the Asset Sale, along with 4.4 million additional common shares of
Republic (of which 3.4 have already been issued to the former holders of our Series C Preferred Stock)
to help pay-off the obligations to holders of the Debentures and the Series C Preferred.  However, once
the Asset sale has been completed and the proceeds utilized as described above, Republic will have no
revenue and only limited assets, including approximately $100,000 in cash after payment of expenses
incurred in connection with the Harken and related transactions, capital obligations of our oil and gas
properties and other costs and expenses.

The Company expects to incur a future non-cash charge estimated at approximately $1.4 million at the
time the Asset Sale is completed.  This amount will be reflected as a "loss on sale of assets" and is a
result of the carrying value of the corresponding assets will exceed the anticipated fair value of the
Harken common stock to be received in the transaction.

FUTURE PLANS

If the Sale Agreement is approved and completed as described above, the Company will no longer be
obligated to repay the Debentures at maturity in 2003.  In addition, since all of the outstanding Series C
Preferred, with a face value of $5.1 million (including accrued and unpaid dividends), was exchanged for
3.4 million shares of Republic common stock in February 2002, this future cash obligation has also been
satisfied.  After closing the sale,  Republic will have current assets of approximately $100,000,  no cash
flow, no material debt or other obliga tions, and interests in two small exploratory oil and natural gas
prospects in Utah (that will require additional funding to both retain and fully exploit).  The board of
directors believes that the best opportunity for investment return for the holders of our common stock is
for Republic to acquire, or to be acquired by, one or more private companies which may be in another
line of business.  The directors believe that any future transaction would likely involve issuance of
Republic common stock and other securities to the owners of another business in exchange for the other
business.  The owners of a privately held business might enter into such a transaction as a means to
establish a public market for their ownership interests, or to assist in future financing for their business.
The Republic directors believed that Republic may be a candidate for such a transaction if the
obligations to holders of the Debentures and the Series C Preferred have been eliminated with the sale
of our assets, and if no other material liabilities or obligations then exist.

The directors have discussed, in general, the types of businesses and transactions which will be pursued
once the sale of our assets is completed.  Basically, the directors intend to seek to acquire one or more
businesses which have no material debt obligations or other liabilities, which have, or have a prospect
for, immediate or near term cash flow, and which offer a significant opportunity for future growth and
return to stockholders.  We anticipate that it is likely that such a business combination would result in
significant dilution to our existing common stockholders, with the owners of the private business likely
to receive at least a majority of our common stock and control of our board of directors.  We can
give no assurance or other representation as to whether any future such combination can be achieved,
the terms of such a business combination or whether such a transaction would be beneficial to our
common stockholders.  Under applicable law, we will not be required to obtain, and we do not
intend to seek, stockholder approval of a future transaction, including any which might involve
issuance of our securities, change of the principal business of Republic, or a change of control or
management.  The directors will use their best business judgment in seeking an appropriate
acquisition candidate, negotiating terms of any transaction, and completing a transaction.

Neither Republic nor any prospective acquisition partner have made any commitment to any transaction,
and we will pursue an acquisition transaction only if the Board of Directors concludes that it would
likely meet the objectives summarized above.  Republic's future activities will be significantly curtailed
because it will lack sufficient capital resources and liquidity to pursue any significant business
opportunities.  Unless Republic successfully completes a suitable acquisition transaction which does
not require significant capital resources, and which provides ongoing cash flow, Republic could be
unable to continue in business.

FUTURE CONTINGENCY PLANS

Completion of the Asset Sale to Harken is contingent upon acceptance by holders of 90% of the
outstanding principal amount of our Debentures.  Republic has proposed to the holders that each
holder surrender his Debenture at the effective day of the closing of the Asset Sale Agreement in
exchange for the holder's pro rata share of the following: (1) the Harken Common Stock to be
issued at the closing, (2) 1.0 million shares of Republic common stock to be issued to Debenture
holders and (3) payment of interest on each Debenture through the date of closing of the Asset Sale.
We expect that the requisite majority of holders will accept the proposal.  In the event that the
Asset Sale is not completed because the exchange is rejected by Debenture holders or for any other
reason, Republic will continue to seek one or more other transactions to merge Republic with another
entity or sell some or all of our assets in a manner which would satisfy our obligations to the
Debenture holders.  However, we would anticipate that our cash and liquid assets would be 
exhausted sometime in 2002 and Republic might then consider liquidation or formal insolvency
proceedings.

RESULTS OF OPERATIONS

Overview

Our largest source of operating revenue has been from the sale of produced oil, natural gas, and natural
gas liquids.  Therefore, the level of our revenues and earnings are effected by prices at which natural
gas, oil and natural gas liquids are sold. Therefore, our operating results for any prior period are not
necessarily indicative of future operating results because of the fluctuations in price and production
levels.  The Asset Sale Agreement with Harken previously discussed includes,  among other things,
all of the Company's proved and producing reserves with an effective date of January 1, 2002.
Accordingly, should this transaction ultimately close, the Company will not have a source of future
revenue or cash flows.

Oil and Gas

Operating statistics for oil and gas production for the periods presented are as follows:

	For the Year Ended              December 31,
	2001	2000
Production:
Oil (bbls)	37,817	79,937
Gas (Mcf)	311,100	273,940
BOE (6:1)	89,667	125,594
Average Collected Price:
Oil (per bbl)	$         24.76	$         29.12
Gas (per Mcf)	$           4.67	$           4.59
Per BOE (6:1)	$         26.66	$         28.55
Operating Margins:
Revenue
Oil	$     936,245	$  2,327,450
Gas	1,454,335	1,257,795
Total Revenue	2,390,580	3,585,245
Costs
Lifting Costs	(255,221)	(299,434)
Production taxes	(195,823)	(266,007)
Total Costs	(451,044)	(565,441)
Operating Margin	$  1,939,536	$  3,019,804
Operating Margin Percent	81%	84%
Production Costs per BOE before DD&A	$           5.03	$           4.50
Change in Revenue Attributable to:
Production	$ (1,055,750)
Price	(138,915)
Total decrease in revenue	$ (1,194,665)

Comparison of Oil Production between 2001 & 2000:

The Company's oil production decreased by 42,120 bbls for the twelve months ended December 31,
2001, when compared to the same period in 2000, primarily because the Schwing #1 well, located in
the East Bayou Sorrel field, has not produced since December 2000.  The Schwing #1 produced
42,073 bbls of oil, net the Company, during 2000 from the Cib Hazz 3 sand formation, representing
53% of our oil production for that year.  The Schwing #1 was initially shut-in in September 2000
because of apparent formation problems when sand began showing up in the production fluids.  At
that time, in order to mitigate the sand, NEG (the operator of the well) cut the production rate back
to approximately 500 bbls per day and 500 Mcf per day.  The well produced at that level until late
December 2000 when the sand emulsion reappeared and production ceased.  During the first few
months of 2001 remedial efforts, utilizing coiled tubing, were attempted to clean out the well bore and
restore production, however, those efforts failed.

After the remedial efforts failed, NEG proposed another procedure to laterally sidetrack the well
approximately 117 feet from the existing bottom hole location to essentially create a "sister" well.  We
non-consented to this procedure principally because: a) we did not believe the new bottom-hole
location was far enough away from the existing take point to avoid problems from the damaged
rock formation; b) we were concerned the reservoir had reached the water/oil contact at that interval
and should be sidetracked up-structure (not laterally); and c) the proposed lateral sidetrack would not
be able to recover any of the potential "attic oil" that was mapped up-structure.  NEG completed the
lateral sidetrack procedure during the fourth quarter of 2001 and found the well produced very little oil
and a tremendous amount of water thereby confirming our suspicion that the take point had likely
reached the "oil/water" contact.  NEG has recently proposed to re-complete up-hole in the Cib Hazz 2
sometime in the second quarter of 2002 and evaluate alternates for returning to the Cib Hazz 3 at a later
date.  We intend to participate in the re-completion procedure in the Cib Hazz 2 and will not be
penalized for any of the costs incurred by NEG associated with the failed lateral sidetrack procedure.
All the reserves associated with the Schwing #1 in the Cib Hazz 3 formation, which totaled
approximately 58,848 BOE, were written-off in 2001.

Comparison of Gas Production between 2001 & 2000:

The Company's gas production increased by 37,160 Mcf for the twelve months ended December 31,
2001, when compared to the same period in 2000, primarily because of the discovery wells in Jackson
County, Texas, that were completed in the third and fourth quarter of 2000.  All the Jackson County
wells collectively produced 217,650 net Mcf during 2001, representing 70% of our net gas production
this year, compared to 69,650 net Mcf in 2000.  These new wells have offset the loss of production
from the Schwing #1, which produced 41,681 Mcf in 2000, and the natural decline in production from
the Company's other natural gas producing wells.  However, because most of the Jackson County
wells decline fairly rapidly, with most of the ultimate production being accumulated within the first
eighteen months, we expect our total production in 2002 from our existing wells to be significantly less
than 2001.

Comparison of Oil and Gas Revenue between 2001 & 2000:

Oil and gas revenue for the twelve months ended December 31, 2001 decreased by $1,194,665, when
compared to the same period in 2000.  This change in total revenue is primarily attributable to a
$1,055,750 decrease associated with a loss of oil production, as discussed above, and to a lesser extent
a decrease of $138,915 associated with lower oil prices in 2001.  We received an average price of 
$24.76 per bbl of oil during 2001 compared to $29.12 for the same period in 2000 - representing
a $4.36, or 15% decrease per bbl in 2001.  There was not a significant difference in the prices we
received for natural gas during the periods presented.

Comparison of Oil and Gas Costs between 2001 and 2000:

Lifting Costs - A portion of the lifting costs are "variable" based on the volumes produced.  This is
particularly true with oil since it generally costs more to produce than gas (on an equivalent units basis).
Accordingly, the lifting costs decreased $44,213 for the year ended December 31, 2001 when
compared to the same period in 2000 primarily because of the overall decrease in oil production
between the periods presented.

Production Taxes - The production taxes decreased $70,184 for the year ended December 31, 2001
when compared to the same period in 2000 primarily because a substantial portion of the production
taxes are based on the revenue generated and not on the volume produced.  Accordingly, the lower
prices received for oil in 2001 resulted in lowering the cost of the corresponding production taxes.

Drilling and Completion Results in 2001:

An exploratory well that commenced drilling in October 2000 in our Maurice prospect area, located
in Lafayette Parish, Louisiana, logged more than 67-ft of apparent net pay in five sand intervals.
During the second quarter of 2001, this well was completed and tested at an initial rate of 7,300 Mcf
and 300 bbls of condensate a day.  However, shortly after the well was placed on production, the
flowing tubing pressure began rapidly declining and indicating either a smaller than anticipated reservoir
and/or possible depletion in that sand interval.  In addition, the well began producing heavy volumes of
water indicating a potential faulty completion.  Since then, this well has continually been evaluated to
determine if any potential remedial procedures could be performed to restore the well.  However, no
significant procedures have been proposed by the operator to date.  Given the uncertainty that any
procedures will be performed in the future and the recent conclusion that any future procedure would
likely be unsuccessful, the Company wrote off all the reserves associated with this well  in 2001.  This
revision, or write-off, associated with this well aggregated over 273,000 Mcfe (or 45,500 BOE).  The
Company has a 9,5% working interest in this well and has incurred over $650,000 in connection with
this well, of which $490,000 was incurred in 2001.

During 2001, we participated in the drilling of eight (8) exploratory wells located in or around Jackson
County, Texas, within the prospect areas operated by Parallel.  Of these eight (8) wells, only two (2)
have been deemed commercially productive with economic reserves, and six (6) were essentially dry.
The costs incurred by the Company during 2001 for all these wells was in excess of $1.3 million.

Depreciation, Depletion and Amortization

Depreciation, Depletion and Amortization ("DD&A") for the periods presented by cost center consisted
of the following:

	For the Year Ended        December 31,
	2001	2000
Oil and Gas Properties	$1,109,405	$   998,249
Furniture and Fixtures	15,243	19,495
Total	$1,124,648	$1,017,744
DD&A for the oil and gas properties, per BOE:	$       12.37	$         7.95

DD&A for the oil and gas properties is computed using the units-of-production method utilizing only
proved reserves at the end of the respective period.

Impairment - Oil and Gas Properties

We use the full cost method of accounting for our oil and gas activities.  The full cost method regards
all costs of acquisition, exploration, and development activities as being necessary for the ultimate
production of reserves.  All of those costs are incurred with the knowledge that many of them relate to
activities that do not result directly in finding and developing reserves.  However, the benefits obtained
from the prospects that do prove successful, together with the benefits fro past discoveries, may
ultimately recover the costs of all activities, both successful and unsuccessful.  Thus, all costs incurred 
in those activities are regarded as integral to the acquisition, discover, and development of reserves
that ultimately result from the efforts as a whole and are thereby associated whit Republic's proved
reserves.  Establishing a direct cause-and-effect relationship between costs incurred and specific
reserves discovered, which is the premise under the successful efforts accounting method, is not
relevant to the full cost concept.  However, the costs accumulated in our full cost pool are subject
to a "ceiling", as defined by Regulation SX Rule 4-10(e)(4).  

Our ceiling at December 31, 2001 of approximately $3.8 million was substantially lower than our net accumulated costs.  Accordingly, we incurred an impairment charge of $3,875,048 in 2001 of which
$2,947,048 was recorded in the fourth quarter.  No impairment charge was incurred in 2000 since our
ceiling at the end of that period was greater than our net accumulated costs.

ABANDONED MERGER SETTLEMENT

On November 8, 2000, the Company announced that its proposed merger with Carpatsky Petroleum, Inc.
("Carpatsky") had been terminated.  Pursuant to the terms of the Termination Agreement, as amended,
Carpatsky: a) paid the Company $82,411 in cash (in November 2000) for certain accounting and
administrative services provided to Carpatsky by the Company between October 1, 1999 and the date of
termination; and b) paid the Company an additional $160,000 in 2001 for compensation associated with
the failed merger.  For financial statements recording purposes, the total amount of these payments,
aggregating $242,411, were recorded as "other income" in 2000.

INTEREST EXPENSE

Total interest incurred, and its allocation, for the periods presented is as follows:

	For the Year Ended           December 31,
	2001	2000
Interest paid or accrued	$   288,186	$   280,156
Amortization of debt discount	73,113	219,337
Amortization of debt issuance costs	46,078	138,236
Amortization of debt restructuring costs	30,681	-
Total interest incurred	438,058	637,729
Interest capitalized for exploration activities	(287,048)	(278,250)
Interest expense	$   151,010	$   359,479

        There has been very little change in the total interest incurred when comparing the periods
presented because the majority of our debt is represented by the $2.6 million in convertible
debentures.  The principle balance of the debenture did not change during the periods presented.

        The total interest capitalized for exploration activities has remained relatively constant when
comparing the periods presented since we have, and will continue to, incur costs on our unevaluated
oil and gas properties.  Interest is being properly capitalized in accordance with FAS 34 and FASB
Interpretation No. 33, on the unevaluated oil and gas costs. Interest capitalization on the unevaluated
oil and gas costs ceases when the corresponding asset has become evaluated and is ready for its
intended use.
New Accounting Pronouncements - - In June 2001, the Financial Accounting Standards Board
          ("FASB") issued Statements of Financial Accounting Standards No. 141 "Business
          Combinations" ("SFAS 141") and No. 142 "Goodwill and Other Intangible Assets"
          ( SFAS 142").  SFAS 141 requires all business combinations initiated after June 30, 2001 to be
          accounted for under the purchase method. For all business combinations for which the date
          of acquisition is after June 30, 2001, SFAS 141 also establishes specific criteria for
          the recognition of intangible assets separately from goodwill and requires unallocated negative
          goodwill to be written off immediately as an extraordinary gain, rather than deferred and
          amortized. SFAS 142 changes made by SFAS 142 are: 1) goodwill and intangible assets
          with indefinite lives will no longer be amortized; 2) goodwill and intangible assets with indefinite
          lives must be tested for impairment at least annually; and 3) the amortization period for 
          intangible assets with finite lives will no longer be limited to forty years.  The Company does
          not believe that the adoption of the se statements will have a material effect on its financial
          position, results of operations, or cash flows.

In June 2001, the FASB also approved for issuance SFAS 143 "Asset Retirement Obligations". SFAS 143 establishes accounting requirements for retirement obligations associated with tangible long-lived assets, including (1) the timing of the liability recognition, (2) initial measurement of liability, (3) allocation of asset retirement cost to expense, (4) subsequent measurement of the liability and (5) financial statement disclosures. SFAS 143 requires that an asset retirement cost should be capitalized as part of the cost of the related long-lived asset and subsequently allocated to expense using a systematic and rational method. The Company will adopt the statement effective no later than January 1, 2003, as required. The transition adjustment resulting from the adoption of SFAS 143 will be reported as a cumulative effect of the adoption of this statement on its financial position, results of operations, or cash flows.

In August 2001, the FASB also approved SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS 144 replaces SFAS 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. The new accounting model for long-lived Assets to be disposed of by sale applies to all long-lived assets, including discontinued operations, and replaces the provisions of APB Opinion No. 30, Reporting Results of Operations-Reporting the Effects of Disposal of a Segment of a Business, for the disposal of segments of a business. Statement 144 requires that those long-lived assets be measured at the lower of carrying amount or fair value less cost to sell, whether reported in continuing operations or in discontinued operations. Therefore, discontinued operations will no longer be measured at net realizable value or include amounts for operating losses that have not yet occurred. Statement 144 also broadens the reporting of discontinued operations to include all components of an entity with operations that can be distinguished from the rest of the entity and that will be eliminated from the ongoing operations of the entity in a disposal transaction. The provisions of Statement 144 are effective for financial statements issued for fiscal years beginning after December 15, 2001 and, generally, are to be applied prospectively. The Company does not believe that the adoption of this statement will have a material effect on its financial position, results of operations, or cash flows.

OTHER MATTERS

Disclosure Regarding Forward-Looking Statements

This report on Form 10-KSB 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
Securities Exchange Act of 1934, as amended (the "Exchange Act").  All statements other than
statements of historical facts included in this report, including, without limitation, statements under
"Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding
our financial position, reserve quantities, plans and objectives of the Company's management for
future operations and capital expenditures are forward-looking statements and the assumptions
upon which such forward-looking statements are based are believed to be reasonable.  We can give
no assurance that such expectations and assumptions will prove to be correct.  Reserve estimates
of oil and gas properties are generally different from the quantities of oil and natural gas that  are
ultimately recovered or found.  This is particularly true for estimates applied to exploratory prospects. 
Additionally, any statements contained in this report regarding forward-looking statements are
subject to various known and unknown risks, uncertainties and contingencies, many of which are beyond
our control.  Such risks and uncertainties may cause actual results, performance, achievements or
expectations to differ materially from the anticipated results, performance, achievements or
expectations.  Factors that may affect such forward-looking statements include, but are not limited
to: our ability to generate sufficient cash flow from operations to complete our planned drilling
and exploration activities; risks inherent in oil and gas acquisitions, exploration, drilling, development
and production; price volatility of oil and gas; competition; shortages of equipment, services and
supplies; government regulation; environmental matters; financial condition of the other companies
participating in the exploration, development and production of oil and gas  programs; and other
matters beyond our control.  In addition, since all of the prospects in the Gulf Coast area are
currently operated by other parties, we will not be in a position to control costs, safety and timeliness
of work as well as other critical factors affecting a producing well or exploration and
development activities.  All written and oral forward-looking statements attributable to our Company
or persons acting on our behalf subsequent to the date of this report are expressly qualified in
their entirety by this disclosure.

ITEM 7 - FINANCIAL STATEMENTS

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Independent Auditor's Report	23
Consolidated Balance Sheet - December 31, 2001	24
Consolidated Statements of Operations - For the Years Ended December 31,     2001 and 2000	25
Consolidated Statements of Stockholders' Equity (Deficit) - For the Years Ended December 31,     2001 and 2000	26
Consolidated Statements of Cash Flows - For the Years Ended December 31,     2001 and 2000	27
Notes to Consolidated Financial Statements	28-39

INDEPENDENT AUDITOR'S REPORT

Board of Directors
Republic Resources, Inc.
Grand Junction, Colorado

We have audited the accompanying consolidated balance sheet of Republic Resources, Inc. and
subsidiaries as of  December 31, 2001, and the related consolidated statements of operations, redeemable
preferred stock and other stockholders' equity (deficit) and cash flows for the years ended December 31,
2001 and 2000.  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 auditing standards generally accepted in the United States
of America.  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 consolidated financial statements referred to above present fairly, in all material
respects, the financial position of Republic Resources, Inc. and subsidiaries as of December 31, 2001,
and the results of their operations and their cash flows for the years ended December 31, 2001 and
2000 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company will continue as a
going concern, which contemplates the realization of assets and the liquidation of liabilities in the
normal course of business.  As discussed in Note 12 to the financial statements, subsequent to
December 31, 2001, the company entered into an agreement to sell all of its revenue generating
assets and distribute the consideration to the convertible debenture holders.  These facts raise
substantial doubt about the Company's ability to continue as a going concern.  The financial
statements do not include any adjustments that might result from this uncertainty.

The consolidated financial statements as of December 31, 2001 and the year then ended have been
restated to reflect the oil and gas properties, which are under contract for sale, at their cost basis rather
than their estimated net realizable value.  This change resulted in a decrease in net loss for fiscal 2001
of approximately $1,400,000and a decrease in the net loss per share of $.56.

Hein + Associates LLP

Denver, Colorado
February 14, 2002

Republic Resources, Inc.
CONSOLIDATED BALANCE SHEET
December 31, 2001

ASSETS
CURRENT ASSETS:
Cash and equivalents	$     739,456
Trade receivables, net of allowance for bad debts of $7,599	206,540
Prepaid expenses and other	8,993
Total current assets	954,989
OIL AND GAS PROPERTIES, at cost (full cost method)
Unevaluated properties	129,292
Costs being amortized	24,665,489
Total oil and gas properties	24,794,781
Less accumulated amortization and impairment	(20,819,989)
Net oil and gas properties	3,974,792
OTHER ASSETS:
Office equipment and vehicle	112,575
Less accumulated depreciation	(97,480)
Net office equipment and vehicle	15,095
Deferred debt restructuring	61,363
Deposits and other	53,633
Total other assets	130,091
TOTAL ASSETS	$  5,059,872
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Current maturities of long-term debt	$         7,496
Dividends payable	124,379
Accounts payable, trade	325,607
Accrued expenses	111,031
Total current liabilities	568,513
LONG-TERM DEBT, less current maturities	2,647,512
Total liabilities	3,216,025
COMMITMENTS AND CONTINGENCIES (See Note 4)
REDEEMABLE PREFERRED STOCK:
Series C Preferred Stock, par value $0.01 per share, 99,503 shares     authorized, issued and outstanding. (Redeemable for $3,316,767 and a     Liquidation preference of $4,975,150 at December 31, 2001)	4,975,150
OTHER STOCKHOLDERS' EQUITY (DEFICIT):
Undesignated Preferred Stock, par value $0.01 per share, 505,497 shares     remain authorized.	-
Common Stock, par value $0.10 per share, 10,000,000 shares authorized,     2,939,815 shares issued and outstanding.	293,981
Additional paid-in capital	32,925,946
Accumulated deficit	(36,351,230)
Total Other Stockholders' deficit	(3,131,303)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$  5,059,872

The accompanying notes are an integral part of these consolidated financial statements.

Republic Resources, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2001 and 2000

	2001	2000
REVENUE:
Oil and gas sales	$ 2,390,580	$ 3,585,245
OPERATING COSTS AND EXPENSES:
Oil and gas production costs	451,044	565,441
General and administrative	719,550	754,268
Depreciation, depletion and amortization	1,124,648	1,017,744
Impairment of oil and gas properties	3,875,048	-
Total operating costs and expenses	6,170,290	2,337,453
INCOME (LOSS) FROM OPERATIONS	(3,779,710)	1,247,792
OTHER INCOME (EXPENSES):
Abandoned merger settlement	-	242,411
Interest and other income, net	34,131	57,793
Interest expense	(151,010)	(359,479)
NET INCOME (LOSS)	$(3,896,589)	$ 1,188,517
Preferred Stock Dividends	(186,568)	-
NET INCOME (LOSS) AVAILABLE TO   COMMON  STOCKHOLDERS	$(4,083,157)	$ 1,188,517
BASIC:
Earnings (Loss) Per Share	$         (1.64)	$          0.68
Weighted Average Shares Outstanding	2,492,000	1,755,000
DILUTED:
Earnings (Loss) Per Share	$         (1.64)	$          0.66
Weighted Average Shares Outstanding	2,492,000	1,813,000

The accompanying notes are an integral part of these consolidated financial statements.

Republic Resources, Inc.
CONSOLIDATED STATEMENTS OF REDEEMABLE PREFERRED STOCK AND OTHER
STOCKHOLDERS' EQUITY (DEFICIT)
For the Years Ended December 31, 2001 and 2000

			Other Stockholders' Equity (Deficit)
	Series C Redeemable      Preferred Stock		Series B Convertible    Preferred Stock		Common Stock		Additional Paid-In	Accumulated	Total Other Stockholders'
	Shares	Amount	Shares	Amount	Shares	Amount	Capital	Deficit	Equity
BALANCES,   January 1, 2000	-	$        -	105,828	$  1,058	1,731,398	$173,140	$37,636,191	$(33,456,590)	$   4,353,799
Purchase and retirement of     Series B preferred stock			(6,325)	(63)	-	-	(210,770)	-	(210,833)
Preferred Stock Exchange	99,503	4,975,150	(99,503)	(995)	-	-	(4,974,155)	-	(4,975,150)
Issuance of common stock for:
Bonuses to officer and     employees in lieu of cash	-	-	-	-	158,500	15,850	50,400	-	66,250
Services of Directors in lieu     of cash	-	-	-	-	34,500	3,450	18,113	-	21,563
Net Income	-	-	-	-	-	-	-	1,188,517	1,188,517
BALANCES,     December 31, 2000	99,503	4,975,150	-	-	1,924,398	192,440	32,519,779	(32,268,073)	444,146
Preferred Stock Dividends	-	-	-	-	-			(186,568)	(186,568)
Exercise of stock options and    warrants	-	-	-	-	1,015,417	101,541	406,167	-	507,708
Net Loss	-	-	-	-	-	-	-	(3,896,589)	(3,896,589)
BALANCES,     December 31, 2001	99,503	$4,975,150	-	$    -	2,939,815	$293,981	$32,925,946	$(36,351,230)	$  (3,131,303)

The accompanying notes are an integral part of these consolidated financial statements.

Republic Resources, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2001 and 2000

	2001	2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss)	$(3,896,589)	$  1,188,517
Adjustments to reconcile net income (loss) to net cash provided by     (used in) operating activities:
Depreciation, depletion and amortization	1,124,648	1,017,744
Impairment	3,875,048	-
Amortization of debt discount and issuance costs	149,873	357,573
Bad debt expense	4,131	-
Loss on sale of assets	4,223	-
Issuance of common stock for services	-	87,813
Changes in operating assets and liabilities:
(Increase) decrease in:
Note and other receivable for abandonment of merger	160,000	(160,000)
Trade receivables	353,436	(161,260)
Prepaid expenses and other	5,846	3,703
Increase (decrease) in:
Accounts payable	50,142	6,836
Accrued expenses	2,149	(56,657)
Net cash provided by operating activities	1,832,907	2,284,269
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures for property, plant and equipment	(2,812,478)	(1,398,899)
Redemption (purchase) of certificate of deposit	(3,333)	15,000
Proceeds from sale of property, plant and equipment	105,006	-
Net cash used in investing activities	(2,710,805)	(1,383,899)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of warrants and options	507,708	-
Deferred debt restructuring costs	(92,044)	-
Preferred stock dividends	(62,189)	-
Purchase and retirement of Series B preferred stock	-	(210,833)
Repayment of convertible debentures	(137,000)	-
Repayment of long-term debt	(6,890)	(6,122)
Net cash provided by (used in) financing activities	209,585	(216,955)
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS	(668,313)	683,415
CASH AND EQUIVALENTS, beginning of year	1,407,769	724,354
CASH AND EQUIVALENTS, end of year	$     739,456	$  1,407,769
SUPPLEMENTAL DISCLOSURE OF CASH FLOW     INFORMATION:
Cash paid for interest	$     284,330	$     280,156
Cash paid for income taxes	$           -	$           -
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING     AND FINANCING ACTIVITIES:
(Decrease) increase in accounts payable for oil and gas activities	$    (103,280)	$     181,347

The accompanying notes are an integral part of these consolidated financial statements.

Republic Resources, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT
         ACCOUNTING POLICIES:

    Nature of Operations - At December 31, 2001 the principal business of Republic Resources, Inc. (the
    "Company") is to participate as a non-operating, minority interest owner in exploration, development,
    production and sale of oil, natural gas and natural gas liquids.  In July 2001 the Company changed it's
    name from Pease Oil and Gas Company to Republic Resources, Inc.  The Company was previously
    engaged in the processing and marketing of natural gas at a gas processing plant, the sale of oil and
    gas production equipment and oilfield supplies, and oil and gas well completion and operational
    services.  However, during 1998, the Company's gas processing plant and the oilfield service
    and supply businesses were sold.  The Company conducted its operations through the following
    wholly-owned subsidiaries: Loveland Gas Processing Company, Ltd.; Pease Oil Field Services,
    Inc.; Pease Oil Field Supply, Inc.; and Pease Operating Company, Inc.  All the subsidiaries are
    currently inactive.

    Principles of Consolidation - The accompanying financial statements include the accounts of the
    Company and its wholly-owned subsidiaries.  All material intercompany transactions and accounts
    have been eliminated in consolidation.

    Cash and Equivalents - The Company considers all highly liquid investments purchased with an
    original maturity of three months or less to be cash equivalents.

    Oil and Gas Properties - The Company's oil and gas producing activities are accounted for using
    the full cost method of accounting, as prescribed by the Securities and Exchange Commission.
    The Company has one cost center (full cost pool) since all of  its oil and gas producing activities are
    conducted in the United States.  Under the full cost method, all costs associated with the acquisition,
    development and exploration of oil and gas properties are capitalized, including payroll and other
    internal costs that are directly attributable to these activities.  Any internal costs that are capitalized
    are limited to those costs that can be directly identified with the acquisition, exploration, and
    development activities undertaken by the Company for its own account, and do not include any
    costs related to production, general corporate overhead, or similar activities.  The total  amount
    of internal costs capitalized in unevaluated oil and gas properties as of  December 31, 2001 is
    $129,292, consisting only of interest.  The Company capitalizes interest on its unevaluated oil and
    gas properties in accordance with FASB Interpretation No. 33.  Accordingly, interest is capitalized
    on oil and gas assets that have been excluded from the full cost amortization pool.  The interest
    that is capitalized becomes part of the related projects or properties and will be subject to
    amortization when the costs of those corresponding assets are transferred to the amortization pool.
    For the years ended December 31, 2001 and 2000, capital expenditures include other internal
    costs of $12,224 and $16,127, respectively.

    Proceeds from sales of oil and gas properties are credited to the full cost pool with no gain or loss
    recognized unless such adjustments would significantly alter the relationship between capitalized
    costs and proved oil and gas reserves.  Furthermore, oil and gas properties, which are held for
    sale under the full cost method and expected to be sold at a loss, cannot be reduced to their
    estimated net realizable value.  Such losses are recorded only upon the sale of the property.

    Acquisition costs of unproved properties and costs related to exploratory drilling and seismic
    activities are initially excluded from amortization.  These costs are evaluated at least annually for
    impairment and transferred to properties being amortized when either proved reserves are
    established or the costs are determined to be impaired. When evaluating unproved properties for
    impairment, the Company considers, among other factors, historical experience, primary lease
    terms, the terms of the exploration agreement(s) within an area of mutual interest and the
    quality of a particular 3-D data set.

    At December 31, 2001, the Company owned approximately 11,060 net (45,154 gross) undeveloped
    acres, of which, 1,560 net (19,701 gross) were included in the "assets held for sale".  The remaining
    properties, consisting of 9,500 net (25,450 gross) acres are in the state of Utah and were acquired with
    lease terms ranging from 1 to 10 years.  Unless production has been obtained through exploratory
    drilling, 3,408 of the net acres will expire in 2002, 1,020 net acres will expire in 2003, and 5,072 net
    acres will expire in 2011.  Substantially all of the undeveloped acreage contain identified exploratory
    prospects or leads.  Should the leases expire prior to an exploratory well being drilled, the value
    of these properties may be negatively affected.  This in turn may have a negative material impact on
    the Company's future results of operations and/or its financial condition.  The carrying value of the
    undeveloped acreage at December 31, 2001 was $129,292.  At December 31, 2001, the Company
    also owned approximately 373 net (2,966 gross) developed acres which are also included in
    the "assets held for sale".   Substantially all of the developed acres have terms that allow the
    Company to hold the lease as long as production is maintained.

    The capitalized costs related to all evaluated oil and gas properties are amortized using the units of
    production method based upon production and estimates of proved reserve quantities.  Future costs
    to develop proved reserves, as well as site restoration, dismantlement and abandonment costs, are
    estimated based on current costs and are also amortized to expense using the units of production
    method.

    As discussed above, substantially all the capitalized internal cost were impaired at December 31,
    2001.

    As described in note 12, the Company has decided to sell substantially all of its oil and gas assets.

    The capitalized costs of evaluated oil and gas properties (net of accumulated amortization and related
    deferred income taxes) are not permitted to exceed the full cost ceiling.  The full cost ceiling involves
    a quarterly calculation of the estimated future net cash flows from proved oil and gas properties,
    using current prices and costs and an annual discount factor of 10%.  Accordingly, the full cost
    ceiling may be particularly sensitive in the near term due to changes in oil and gas prices or
    production rates.  The Company recorded impairments in 2001 to reduce its oil and gas
    properties to the full cost ceiling value.  This impairment totaled $3,875,048.

    Office Equipment and Vehicle -The office equipment and vehicle are stated at cost.  Depreciation
    for these assets is calculated using the straight-line method over 4 to 7 years which represents the
    estimated useful lives of the corresponding assets.  Depreciation expense related to the office
    equipment and the one vehicle amounted to $15,243 and $19,495 for the years ended December
    31, 2001 and 2000, respectively.

    The costs of normal maintenance and repairs are charged to operating expenses as incurred.
    Material expenditures which increase the life of an asset are capitalized and depreciated over the
    estimated remaining useful life of the asset.  The cost of assets sold, or otherwise disposed of, and the
    related accumulated depreciation or amortization are removed from the accounts, and any gains or
    losses are reflected in current operations.

    Debt Issuance Costs - Debt issuance costs are related to the restructuring of convertible debentures
    discussed in Note 2.  These costs are being amortized using the straight-line method.

    Accounting Estimates - The preparation of financial statements in conformity with generally
    accepted accounting principles requires management to make estimates and assumptions that effect
    the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
    date of the financial statements and the reported amounts of revenue and expenses during the
    reporting period.  The actual results could differ from those estimates.

    The Company's financial statements are based on a number of significant estimates including the
    allowance for doubtful accounts, assumptions effecting the fair value of stock options and warrants,
    estimated proceeds from the sale of the oil and gas assets, and oil and gas reserve quantities which are
    the basis for the calculation of amortization and impairment of oil and gas properties.  Management
    emphasizes that reserve estimates are inherently imprecise and that estimates of more recent
    discoveries are more imprecise than those for properties with long production histories.
   
    Income Taxes - Deferred tax assets and liabilities are recognized for the future tax consequences
    attributable to differences between financial statement carrying amounts of existing assets and
    liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using
    enacted tax rates expected to apply to taxable income in the years in which those temporary
    differences are expected to be recovered or settled.  The effect on previously recorded deferred 
    tax assets and liabilities resulting from a change in tax rates is recognized in earnings in the period
    in which the change is enacted.

    Revenue Recognition - The Company recognizes revenues for oil and gas sales upon delivery to the
    purchaser.  Gas imbalances, if they occur, are accounted for using the "sales" method.  However, gas
    imbalances have not been significant in the past and are not expected to be in the foreseeable future.

    Net Income (Loss)  Per Common Share -Net income (loss) per common share is presented in
    accordance with the provisions of Statement of Financial Accounting Standards ("SFAS") No. 128,
    Earnings Per Share, which requires disclosure of basic and diluted earnings per share ("EPS").
    Basic EPS excludes dilution for potential common shares and is computed by dividing the net (loss)
    applicable to common shareholders by the weighted average number of common shares outstanding
    for the period.  Diluted EPS reflects the potential dilution that could occur if securities or other
    contracts to issue common stock were exercised or converted into common stock.

    Stock-Based Compensation - For employees, the Company accounts for stock-based compensation
    using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25,
    Accounting  for Stock Issued to Employees, and related interpretations.  Accordingly, compensation
    cost for stock options granted to employees is measured as the excess, if any, of the quoted market
    price of the Company's common stock at the measurement date (generally, the date of grant) over
    the amount an employee must pay to acquire the stock.

    For non-employees, the Company accounts for stock-based compensation as prescribed by SFAS
    No. 123titled Accounting for Stock-Based Compensation.  This pronouncement requires that all
    options, warrants and similar instruments which are granted to non-employees for goods and services
    be recorded at fair value on the measurement date and pro forma information be provided as to the
    fair value effects of transactions with employees.  Fair value is generally determined under an option
    pricing model using the criteria set forth in SFAS No. 123.  The measurement date is generally the
    earlier of: a) the date in which the performance of the goods or services is fully committed; or b) the
    date in which the performance is substantially complete.

    Hedging Activities- In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS
    No. 133, "Accounting for Derivative Instruments and Hedging Activities."  SFAS No. 133 establishes
    accounting and reporting standards requiring that derivative instruments (including certain derivative
    instruments embedded in other contracts), as defined,  be recorded in the balance sheet as either an
    asset or liability measured at fair value, and requires that changes in fair value be recognized currently
    in earnings unless specific hedge accounting criteria are met.  Special accounting for qualifying
    hedges allows unrealized gains and losses to be deferred in other comprehensive income for the
    effective  portion of the hedge) until such time as the hedged transaction occurs, and requires that
    a company formally document, designate, and assess the effectiveness of derivative instruments
    that receive hedge accounting treatment.  The Company currently does not engage in any activities
    that would be covered by SFAS 133.

New Accounting Pronouncements - In June 2001, the Financial Accounting Standards Board
    ("FASB") issued Statements of Financial Accounting Standards No. 141 "Business Combinations"
    ("SFAS 141") and No. 142 "Goodwill and Other Intangible Assets" ( SFAS 142").  SFAS 141
    requires all business combinations initiated after June 30, 2001 to be accounted for under the
    purchase method. For all  business combinations for which the date of acquisition is after June 30,
    2001, SFAS 141 also establishes specific criteria for the recognition of intangible assets separately
    from goodwill and requires unallocated specific criteria for the recognition of intangible assets
    separately from goodwill  specific criteria for the recognition of intangible assets separately from
    goodwill gain, rather than deferred and amortized. SFAS 142 changes the accounting for goodwill
    and other intangible assets after an acquisition.  The most significant changes made by SFAS 142
    are: 1) goodwill and intangible assets with indefinite lives will no longer be amortized; 2) goodwill 
    and intangible assets with indefinite lives must be tested for impairment at least annually; and 3)
    the amortization period for intangible assets with finite lives will no longer be limited to forty years.
    The Company does not believe that the adoption of these statements will have a material effect on
    its financial position, results of operations, or cash flows.

    In June 2001, the FASB also approved for issuance SFAS 143 "Asset Retirement Obligations". SFAS
    143 establishes accounting requirements for retirement obligations associated with tangible long-lived
    assets, including (1) the timing of the liability recognition, (2) initial measurement of liability, (3)
    allocation of asset retirement cost to expense, (4) subsequent measurement of the liability and (5)
    financial statement disclosures. SFAS 143 requires that an asset retirement cost should be capitalized
    as part of the cost of the related long-lived asset and subsequently allocated to expense using a
    systematic and rational method. The Company will adopt the statement effective no later than January
    1, 2003, as required. The transition adjustment resulting from the adoption of SFAS 143 will be
    reported as a cumulative effect of a change in accounting principle.  At this time, the Company
    cannot reasonably estimate the effect of the adoption of this statement on its financial position,
    results of operations, or cash flows.

    In August 2001, the FASB also approved SFAS 144, Accounting for the Impairment or Disposal of
    Long-Lived Assets. SFAS 144 replaces SFAS 121, Accounting for the Impairment of Long-Lived
    Assets and for Long-Lived Assets to Be Disposed Of. The new accounting model for long-lived Assets
    to be disposed of by sale applies to all long-lived assets, including discontinued operations, and
    replaces the provisions of APB Opinion No. 30, Reporting Results of Operations-Reporting the
    Effects of Disposal of a Segment of a Business, for the disposal of segments of a business.  Statement
    144 requires that those long-lived assets be measured at the lower of carrying amount or fair value
    less  cost to sell, whether reported in continuing operations or in discontinued operations. Therefore,
    discontinued operations will no longer be measured at net realizable value or include amounts for
    operating losses that have not yet occurred. Statement 144 also broadens the reporting of discontinued
    operations to include all components of an entity with operations that can be distinguished from the
    rest of the entity and that will be eliminated from the ongoing operations of the entity in a disposal
    transaction.  The provisions of Statement 144 are effective for financial statements issued for fiscal
    years beginning after December 15, 2001 and, generally, are to be applied prospectively. The
    Company does not believe that the adoption of this statement will have a material effect on its
    financial position, results of operations, or cash flows.

2.   DEBT FINANCING ARRANGEMENTS:

    Long-Term Debt - Long-term debt at December 31, 2001 consists of the following:

Convertible debentures, interest at 11%,    due April 2003, unsecured	$ 2,645,500
Note payable to bank, interest at 8.5%, monthly payments   of $669, due March 2003, collateralized by a vehicle	9,508
Total long-term debt	2,655,008
Less current maturities	(7,496)
Long-term debt, less current maturities	$ 2,647,512

    In April 2001, the Company restructured $2,645,500 of the outstanding debentures.  The terms of
    the restructuring proposal extend the original maturity date for two years, from April 15, 2001 to
    April 15, 2003, in exchange for: a) lowering the conversion rate from $30.00 to $1.75; and b)
    increasing the interest rate from 10% to 11% per annum.  Interest continued to be due and
    payable on a quarterly basis.  The new conversion rate of $1.75 represented the current market
    rate of the Company's common stock on the date the restructuring plan was accepted by the
    majority of the debenture holders and formally committed to by the Board of Directors.  The 
    Company repaid $137,000 to holders that did not elect to participate in the restructuring proposal.

    Aggregate maturities of long-term debt, as restructured are as follows:

Year Ending December 31:
2002	7,496
2003	2,647,512
Total	$ 2,655,008

3.   INCOME TAXES:

    Deferred tax assets (there are no deferred tax liabilities) as of December 31, 2001 are comprised
    of the following:

	2001
Long-term Assets:
The effect of net operating loss carryforwards	$ 10,300,000
Property, plant and equipment	2,900,000
Tax credit carryforwards	600,000
Total	13,800,000
Less valuation allowance	(13,800,000)
Net long-term asset	$            -

    During the years ended December 31, 2001 and 2000, the Company increased the valuation
    allowance by approximately $2,550,000 and $174,000 respectively, primarily due to an increase
    in the net operating loss carryforwards which are not likely to be realizable.  The Company
    has provided a valuation allowance for the net operating loss and credit carryforwards based
    upon the various expiration dates and the significant limitations which exist under IRS Sections
    382 and 384.

    At December 31, 2001, the Company had net operating loss carryforwards for income tax
    purposes of approximately $27.0 million, which expire primarily in 2008 through 2021.  The
    majority of these net operating losses either may be or are subject to limitations under IRS
    Sections 382 and 384.  Additionally, the Company has tax credit carryforwards at December
    31, 2001, of approximately $290,000 and percentage depletion carryforwards of approximately
    $800,000.

4.   COMMITMENTS AND CONTINGENCIES:

    Employment Agreement - During 1994, the Board of Directors approved an employment
    agreement with the Company's current President/CFO.  As more thoroughly discussed in Note 6,
    the President's employment agreement was amended in November 2000.  The agreement , as
    amended, may be terminated by the officer upon 90 days notice or by the Company without cause
    upon 30 days notice.  In the event of a termination by the Company without cause, the Company
    would be required to pay the officer one year's salary.  If the termination occurs following a change
    in control, which includes a merger, the Company would be required to make a lump sum payment
    equivalent to $150,000.

    Profit Sharing Plan - The Company has established a 401(k) profit sharing plan (the "Plan") that
    covers all employees with six months of service who elect to participate in the Plan.  The Plan
    provides that the employees may elect to contribute up to 15% of their salary to the Plan.  All of the
    Company's contributions are discretionary and amounted to $842 and $962 for the years ended
    December 31, 2001 and 2000, respectively.

    Environmental - The Company is subject to extensive Federal, state and local environmental laws
    and regulations.  These laws, which are constantly changing, regulate the discharge of materials into
    the environment and may require the Company to remove or mitigate the environmental effects of the
    disposal or release of petroleum or chemical substances at various sites.  Environmental expenditures
    are expensed or capitalized depending on their future economic benefit.  Expenditures that relate to
    an existing condition caused by past operations and that have no future economic benefits are
    expensed.  Liabilities for expenditures of a noncapital nature are recorded when environmental
    assessment and/or remediation is probable, and the costs can be reasonably estimated.

    Contingencies - The Company may from time to time be involved in various claims, lawsuits,
    disputes with third parties, actions involving allegations of discrimination, or breach of contract
    incidental to the operations of its business.  The Company is not currently involved in any such
    incidental litigation which it believes could have a materially adverse effect on its financial conditions
    or results of operations.

5.   ABANDONED MERGER:

    On November 8, 2000 the Company announced that its proposed merger with Carpatsky Petroleum,
Inc. ("Carpatsky") had been terminated.  Concurrently, the Company also exchanged its outstanding Series
B Convertible Preferred Stock for a new series of Preferred to eliminate the Series B's hyper-dilutive
"death spiral" conversion feature.  The preferred stock restructuring is more thoroughly discussed in
Note 6.

    Under terms of the original Termination Agreement, Carpatsky paid the Company $82,411 in cash for
certain accounting and administrative services provided to Carpatsky by the Company from October 1,
1999 through November 2000; was obligated to issue 1.5 million shares of Carpatsky restricted common
stock on or before January 31, 2001; and both companies exchanged broad general releases.

    The Carpatsky shares were never delivered and the Companies amended the Termination Agreement in
April 2001 to eliminate the obligation of Carpatsky to issue the shares and instead provide for an additional
cash payments of $160,000 which were made in 2001.

6.   PREFERRED STOCK AND RESTRUCTURING:

        As of December 31, 2001, the Company has the authority to issue up to 605,000 shares of Preferred
Stock, which may be issued in such series and with such preferences as determined by the Board of
Directors.

        On December 31, 1997, the Company issued 113,333 shares of Series B 5% PIK Cumulative
Convertible Preferred Stock for $5,666,650 (the "Series B Preferred Stock").  The Series B Preferred
Stock was convertible into common stock at a 25% discount to the market price.

        In November 2001, six institutional holders, holding approximately 94% of the Series B Preferred
stock with a stated value of over $4.97 million, exchanged their Series B for a new class of non-voting,
non-convertible, preferred stock designated as the "Series C" Preferred Stock.  The Company redeemed
in cash the remaining 6% of the Series B Preferred at a 33% discount, or $210,833.  In connection with
this restructuring, all the holders of the Series B Preferred stock waived the payment of all unpaid
dividends in arrears. The Series C Preferred was mandatorily redeemable, at its stated value, on
December 31, 2005, or could have been redeemed at the Company's election at a 33% discount (or 
approximately $3.32 million if all of it is redeemed), either in whole or in part, through December 31,
2003.

        The Series C was to receive dividends at a rate of 5% per annum beginning in the second quarter of
2001.  However, after receiving only one quarterly dividend, at the Company's request, the holders of the
Series C agreed to waive the payment of future dividends because of the deteriorating financial condition 
of the Company.  However, the amended certificate of designation for the Series C required the
dividends be accrued on a quarterly basis and ultimately be paid when the Series C was redeemed.

        Subsequent to December 31, 2001 the Series C Preferred Stock holders agreed to exchange their
Series C Preferred Stock, including all the accrued and unpaid dividends, into 3,400,000 shares of
common stock.

        As an inducement for the Series B Preferred stockholders to restructure their investment and grant a
discounted redemption feature in 2000, the Company issued warrants to acquire up to 1,763,800 shares
of common stock exercisable at $0.50 per share. 1,005,417 of these warrants were exercised in 2001
and the remaining warrants will expire on December 31, 2003.

        In conjunction with the restructuring of the outstanding preferred stock and the termination of the
merger with Carpatsky, the Board of Directors approved an amended employment agreement for
Patrick J. Duncan, the Company's President and CFO.  The amended terms of the agreement, which
became effective November 2, 2000, include provisions for: 1) a $50,000 cash bonus; 2) the
issuance of 150,000 shares of restricted common stock; and a warrant to purchase up to 600,000 
shares of the Company's common stock at $0.50 per share, exercisable at the earlier of: (a) December
31, 2004; or (b) (i) as to 300,000 shares, if the Company's reported closing sales price for its common
stock is at least $1.50 for at least 80% of the trading days in a one month period (these warrants vested
on March 5, 2000), and (ii) as to other 300,000 shares, if the Company's reported closing sales price
for its common stock is at least $2.00 for at least 80% of the trading days in a three month period or if
the Company entered into a reorganization or merger transaction in which the deemed or actual value
received by the Company was equal to or greater than $2.00 per share (these warrants have not yet
vested as of the date of this report).  In consideration for the cash bonus, Mr. Duncan agreed to reduce
his total severance due upon change of control from $197,500 to $150,000.

        For financial statement reporting purposes, in addition to the cash bonus, the Company  recognized a
non-cash charge of $60,900 in the fourth quarter of 2000 which represents the fair value of the 150,000
common shares on the date of grant (or $.41 per share).  There was no financial statement impact for the
warrants issued to Mr. Duncan since the exercise price was 18.75% higher than the market price on the
date of grant.

7. NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS'

        A reconciliation of net income to net income available to common stockholders is as follows:

	2001	2000
Net Income (Loss)	$(3,896,589)	$ 1,188,517
Fair value of warrants issued to preferred stockholders	-	(481,612)
Dividends waived by preferred stockholders	-	376,196
Gain on redemption of Series C Preferred Stock	-	105,416
Dividends declared and paid for the Series C Preferred Stock	(62,189)	-
Dividends in Arrears for the Series C Preferred Stock	(124,379)	-
Net Income (Loss) available to common stockholders	$(4,083,157)	$ 1,188,517

8.   EARNINGS PER COMMON SHARE

        The Company follows SFAS No. 128 "Earnings Per Share".  Accordingly, "basic" earnings per
common share is computed by dividing income available to common stockholders (the "numerator")
by the weighted-average number of common shares outstanding (the "denominator") during the
periods presented.  "Diluted" earnings per common share reflects the potential dilution that could occur
if securities or other contracts to issue common stock were exercised or converted into common stock.
A reconciliation of the components of basic and diluted net income per common share for the periods
presented is as follows:

	2001			2000
BASIC	Income	Shares	Per Share	Income	Shares	Per Share
Income (Loss) available to     common stockholders	$(4,083,157)	2,492,202	$(1.64)	$1,188,517	1,755,000	$ 0.68
EFFECT OF DILUTIVE     SECURITIES
Warrants and stock options	-	-	-	-	58,000	(0.02)
DILUTED
Income (Loss) available to     common stock including     assumed conversions	$(4,083,157)	2,492,202	$(1.64)	$1,188,517	1,813,000	$ 0.66

        As of December 31, 2001, there were 1,664,163 options and warrants outstanding.  The options
and warrants were excluded from the calculation of diluted earnings per share in 2001 because they
would have been antidilutive.

        As discussed in Note 6, subsequent to December 31, 2001, the Series C Preferred Shareholders
exchanged their preferred stock for 3,400,000 shares of common stock.  These additional shares are not
reflected in the computation above.

9.   STOCK BASED COMPENSATION:

        Stock Option Plans - The Company's shareholders have approved the following stock option plans
        that authorize an aggregate of 185,732 shares that may be granted to officers, directors, employees,
        and consultants: 9,000 shares in June 1991; 27,732 shares in June 1993; 15,000 shares in June
        1994; 34,000 shares in August 1996; and 100,000 shares in May 1997.

        The plans permit the issuance of incentive and nonstatutory options and provide for a minimum
        exercise price equal to 100% of the fair market value of the Company's common stock on the date
        of grant.  The maximum term of options granted under the plan is 10 years and options granted
        to employees expire three months after the termination of employment.  No options may be
        exercised during the first six months of the option term.  No options may be granted after 10 years
        from the adoption date of each plan.  The following is a summary of activity under these stock
        option plans for the years ended December 31, 2001 and 2000:

	2001		2000
	Number	Weighted Average Exercise	Number	Weighted Average Exercise
	Of Shares	Price	Of Shares	Price
Outstanding, beginning of year	67,515	$    10.92	64,780	$    13.86
Canceled	-	-	-	-
Expired	(16,515)	10.61	(22,265)	7.77
Granted	-	-	25,000	0.50
Exercised	(10,000)	0.50	-	-
Outstanding, end of year	41,000	$    13.58	67,515	$    10.92

        All options are currently exercisable and if not previously exercised, will expire as follows:

Year Ended December 31,	Range of  Exercise Prices		Weighted Average Exercise	Number
	Low	High	Price	Of Shares
2002	29.70	29.70	$   29.70	11,000
2003	0.50	0.50	0.50	10,000
2007	5.00	17.50	11.25	20,000
			$   13.58	41,000

        Warrants and Non-Qualified Stock Options - The Company has also granted warrants and
        non-qualified options which are summarized as follows for the years ended December 31, 2001
        and 2000:

	2001		2000
	Number Of Shares	Weighted Average Exercise    Price	Number Of Shares	Weighted Average Exercise    Price
Outstanding, beginning of year	2,527,480	$      1.45	230,525	$    16.21
Granted to the Preferred Stockholders	-	-	1,763,800	0.50
Granted to the Company's President	-	-	600,000	0.50
Granted to the Company's Directors	200,000	1.05	-	-
Expired	(98,900)	10.79	(66,845)	16.30
Exercised	(1,005,417)	0.50	-	-
Outstanding, end of year	1,623,163	$      1.43	2,527,480	$      1.45

        All the warrants and non-qualified options have been issued with exercise prices that were either
equal to or greater than the market price on the date of grant.  The warrants were valued as follows: a)
the warrants granted to the preferred stockholders were valued at their estimated fair value of $481,612
in accordance with SFAS 123 (accordingly this amount is included as a component in the reconciliation
between net income and the net income available to common stockholders); and b) the warrants granted
to the Company's Directors and President were valued using the intrinsic method (accordingly Directors
and President were valued using the intrinsic method (accordingly there was no impact on the
Company's statement of operations for 2001 or 2000 - however, the pro forma effect is illustrated
below under the caption "Pro Forma Stock-Based Compensation Disclosures").  If not previously
exercised, the warrants and non-qualified options will expire as follows:

Year Ended December 31,	Range of  Exercise Prices		Weighted Average Exercise	Number
	Low	High	Price	Of Shares
2002	$17.50	$ 30.30	$   22.05	64,780
2003	0.50	1.05	0.61	958,383
2005	0.50	0.50	0.50	600,000
			$     1.43	1,623,163

        Pro Forma Stock-Based Compensation Disclosures - The Company applies APB Opinion
        25 and related interpretations in accounting for stock options and warrants which are granted to
        employees.  Accordingly, no compensation cost has been recognized for grants of options and
        warrants to employees since the exercise prices were not less than the fair value of the Company's
        common stock on the grant dates.  Had compensation cost been determined based on the fair
        value at the grant dates for awards under those plans consistent with the method of FAS 123, the
        Company's net loss and loss per share would have been changed to the pro forma amounts
        indicated below.

	Year Ended December 31,
	2001	2000
Net Income (Loss) applicable to common stockholders:
As reported	$(4,083,157)	$1,188,517
Pro forma	(4,157,995)	1,140,232
Net Income (Loss) per common share:
As reported	$        (1.64)	$         0.68
Pro forma	(1.67)	0.68

        The weighted average fair value of options and warrants granted to employees for the years ended
December 31, 2001 and 2000 was $.88 and $0.33 per share, respectively.  The fair value of each
employee option and warrant granted was estimated on the date of grant using the Black-Scholes
option-pricing model with the following weighted average assumptions:

	For the Year Ended       December 31,
	2001	2000
Expected volatility	169.0%	152.2%
Risk-free interest rate	5.5%	6.5%
Expected dividends	-	-      x
Expected terms (in years)	2.5	3.1

10.  FINANCIAL INSTRUMENTS

        Statement of Financial Accounting Standards No. 107 requires all entities to disclose the fair value
of certain financial instruments in their financial statements.  Accordingly, at December 31, 2001,
management's best estimate is that the carrying amount of cash, receivables, notes payable to unaffiliated
parties, accounts payable, and accrued expenses approximates fair value due to the short maturity of
these instruments.  Management estimates that fair value of the convertible debentures is approximately
equal to their carrying value because; a) market interest rates for this type of debenture have not changed
significantly since they were issued; and b) based on the terms of the exchange offer submitted to
the convertible debenture holders in connection with the asset sale discussed in Note 12.

11.  SIGNIFICANT CONCENTRATIONS:

        Substantially all of the Company's accounts receivable at December 31, 2001, resulted from crude oil
and natural gas sales to companies in the oil and gas industry.  This concentration of customers and joint
interest owners may impact our overall credit risk, either positively or negatively, since these entities may be
similarly affected by changes in economic or other conditions.  In determining whether to require collateral
from a significant customer or joint interest owner, the Company analyzes the entity's net worth, cash flows,
earnings, and/or credit ratings.  Receivables&nb sp;are generally not collateralized; however, receivables from joint
interest owners are subject to collection under operating agreements which generally provide lien rights.
Historical credit losses incurred on trade receivables by the Company have been insignificant.

        For the years ended December 31, 2001 and 2000, the Company had oil sales to a single customer
which accounted for 33% and 62% of total revenues, respectively.

        At December 31, 2001, substantially all of the Company's cash and temporary cash investments were
held at a single financial institution.  The Company does not maintain insurance to cover the risk that cash
and temporary investments with a single financial institution may be in excess of amounts insured by federal
deposit insurance.

12.  SUBSEQUENT EVENTS

        Subsequent to December 31, 2001, the Company entered into an agreement to sell substantially all
its oil and gas properties to a public company for common stock of the public company.  In addition  to
the shares, the public company is obligated to pay the Company a contingent payment, in 2004,
determined based upon an agreed upon formula for drilling and development activities on certain
exploratory (non-producing) prospects that are included in the sale.

        The Company intends to distribute this stock, as well as 1.0 million shares of Republic Resources
common stock to the debenture holders in exchange for surrender and cancellation of the debentures.
The fair value of the 1.0 million shares and common stock of the public Company is expected to approximate $2,645,000 which is the face value of the debentures.  The sale to the public company is
dependent upon 90% of the debenture holders agreeing to the above exchange.

        Upon completion of the Asset Sale the Company expects to incur a non-cash charge estimated at
approximately $1.4 million.  This amount, to be reflected as a "loss on sale of assets", is a result of the
carrying value of the corresponding assets will exceed the anticipated  fair value of the Harken common
stock on to be received in the transaction.  This estimated loss assumes the fair value of Harken's
common stock aggregated $2,445,500.  The actual loss may be different from this estimate if the fair
value of Harken's common stock is more or less than that amount when the transaction is actually
completed.

        Also, subsequent to December 31, 2001, the Series C Preferred shareholders agreed to convert their
preferred shares into 3.4 million of the Company's common shares.  The right to the contingent payment
was also transferred to the holders of the preferred stock.  The value of this contingent payment can not
be estimated and therefore will not be recorded in the financial statements.  In the event the asset sale
is not completed, the Company is committed to convey to the former preferred shareholders an interest
in the exploratory properties equivalent to what such shareholders would have received from Harken had
the Asset sale closed.

        The preferred shareholders, who subsequently converted their shares into 3,400,000 shares of 
common stock, have signed an irrevocable proxy to approve the Asset Sale, including the convertible 
debenture exchange discussed above.  However, this exchange is still subject to approval of 90% of  
the debenture holders.  If the debenture holders do not approve the exchange, the Company believes 
it will not have adequate resources to repay the debenture holders when the notes are due.  If the 
exchange does occur, the Company will sell all of its revenue producing assets.  In either event, these
circumstances raise substantial doubt as to the Company's ability to continue operations as a going 
concern, which contemplates the realization of assets and liquidation of liabilities in the normal course
of business.  The continuation of the Company is dependent upon the success of the exchange offer
and the Company's ability to complete a successful merger, or find a strategic partner or acquire other
revenue producing assets having positive cash flows and ultimately achieving profitable operations.

13.  OIL AND GAS PRODUCING ACTIVITIES:

        Property Acquisitions - In January 1997, the Company completed the acquisition of a 7.8125%
        after prospect payout working interest in a producing oil and gas prospect in Louisiana.  The
        prospect is operated by National Energy Group, Inc. (NEGX), an independent oil and gas
        producer.  The purchase price was $1,750,000 which consisted of $875,000 in cash and the
        issuance of 31,500 shares of the Company's common stock with a fair value of $875,000.  In
        February 1997, the Company entered into agreements with unaffiliated parties for the purchase
        of a 10% working interest in this prospect for $2.5 million.  The assets acquired from this
        acquisition account for approximately 25% of the Company's proved reserves at December 31, 
        2001.

        Capitalized Costs Incurred - The following table sets forth the capitalized costs incurred in our oil
        and gas activities during the last three years:

Description	2001	2000	1999	1998
Acquisition of proved properties	$         -	$         -	$      -	$        -
Acquisition of unproved properties	310,462	431,103	76,912	507,307
Exploration	1,846,682	711,000	314,997	5,439,095
Development and workovers	260,555	159,489	239,276	13,468
Capitalized interest	287,048	278,250	278,250	852,980
Total	$2,704,747	$1,579,842	$ 909,435	$6,812,850

        Unevaluated Oil and Gas Properties - The following table sets forth a summary of oil and gas
        property costs not being amortized at December 31, 2001, by the year in which such costs were
        incurred:

	2001
Property acquisition costs	$  105,925
Exploration costs	23,367
Total	$  129,292

        Substantially, all  of the Company's unevaluated costs at December 31, 2001 relate to geological
        and leasehold costs incurred for two prospect areas located in Grand County, Utah.  Several
        prospects have been identified and the Company intends to either drill or farmout these prospects
        sometime in 2002.  Accordingly the Company expects these costs can be fully evaluated by the
        end of 2003.        

        Capitalization of Interest - For the years ended December 31, 2001 and 2000, the Company
        capitalized interest costs of $287,048, and $278,250, respectively, related to unevaluated oil and
        gas properties and other exploration activities.

        Full Cost Ceiling - During 2001, the Company incurred an impairment charge of $3,875,048,
        of which $2,947,048 was recorded in the fourth quarter, due to a full cost ceiling limitation.

        Full Cost Amortization Expense - Amortization expense amounted to $1,109,405 and
        $998,249 for the years ended December 31, 2001 and 2000, respectively.  Amortization
        expense per equivalent units of oil and gas produced amounted to $12.37 and $7.95 for the
        years ended December 31, 2001 and 2000 respectively.  Natural gas is converted to equivalent
        units of oil on the basis of six Mcf of gas is equivalent to one barrel of oil.

        Results of Operations from Oil and Gas Producing Activities - Results of operations from oil
        and gas producing activities (excluding well administration fees, general and administrative
        expenses, and interest expense) for the years ended December 31, 2001 and 2000 are
        presented below.

	2001	2000
Oil and gas sales	$ 2,390,580	$3,585,245
Production costs	(451,044)	(565,441)
Amortization expense	(1,109,405)	(998,249)
Impairment expense	(3,875,048)	-
Results of operations from oil/gas producing activities	$(3,044,917)	$2,021,555

        No provision for income taxes was provided in determining the Results of Operations from Oil
        and Gas Producing Activities because: a) no income tax expense was incurred during the periods
        presented; and b) the Company's substantial net operating loss carry-forwards and the tax
        deductions and tax credits and allowances relating to the Company's proved oil and gas reserves
        would have eliminated any corresponding tax liability.

        Oil and Gas Reserve Quantities (Unaudited) - Proved oil and gas reserves are the estimated
        quantities of crude oil, natural gas, and natural gas liquids which geological and engineering data
        demonstrate with reasonable certainty to be recoverable in future years from known reservoirs
        under existing economic and operating conditions.  Proved developed oil and gas reserves are
        those reserves expected to be recovered through existing wells with existing equipment and
        operating methods.  The reserve data is based on studies prepared by the Company's consulting
        petroleum engineers, Netherland, Sewell & Associates, Inc.  Reserve estimates require substantial
        judgment on the part of petroleum engineers resulting in imprecise determinations, particularly
        with respect to new discoveries.  Accordingly, it is expected that the estimates of reserves will
        change as future production and development information becomes available.  All proved oil
        and gas reserves are located in the United States.  The following table presents estimates of our
        net proved oil and gas reserves, and changes therein for the years ended December 31, 2001
        and 2000.

	2001		2000
	Oil   (Bbls)	Gas     (Mcf)	Oil   (Bbls)	Gas     (Mcf)
Proved reserves, beginning of year	377,000	1,498,000	334,000	1,359,000
Purchase of minerals in place	-	-	-	-
Sale of minerals in place	-	-	-	-
Extensions, discoveries, and other additions	10,000	447,000	130,000	534,000
Revisions of previous estimates	(112,000)	(371,000)	(7,000)	(121,000)
Production	(38,000)	(311,000)	(80,000)	(274,000)
Proved reserves, end of year	237,000	1,263,000	377,000	1,498,000
Proved developed reserves, beginning of year	352,000	695,000	310,000	648,000
Proved developed reserves, end of year	220,000	769,000	352,000	695,000

        The downward revisions of "previous estimates" in 2001 were primarily related to: a) the loss of
        one well in the Maurice field due to apparent down-hole mechanical failure; and b) the unexpected
        loss of a producing interval in one well in the East Bayou Sorrel field due to apparent formation
        damage and other geologic factors.  The downward revisions of "previous estimates" in 2000
        were primarily attributable to previously recorded "behind pipe" reserves in two wells in the
        Maurice field were removed after attempts to recomplete those sand intervals in one of those wells
        failed due to poor porosity and other rock quality factors.

        Standardized Measure of Discounted Future Net Cash Flows (Unaudited) - SFAS No. 69
        prescribes guidelines for computing a standardized measure of future net cash flows and changes
        therein relating to estimated proved reserves.  We have followed these guidelines which are briefly
        discussed below.

        Future cash inflows and future production and development costs are determined by applying year-
        end prices and costs to the estimated quantities of oil and gas to be produced.  Estimated future
        income taxes are computed using current statutory income tax rates including consideration for
        estimated future statutory depletion and tax credits and the utilization of net operating loss
        carryforwards.  The resulting future net cash flows are reduced to present value amounts by
        applying a 10% annual discount factor.

        The assumptions used to compute the standardized measure are those prescribed by the FASB and,
        as such, do not necessarily reflect our expectations for actual revenues to be derived from those
        reserves nor their present worth.  The limitations inherent in the reserve quantity estimation
        process, as discussed previously, are equally applicable to the standardized measure computations
        since these estimates are the basis for the valuation process.

        The following summary sets forth the Company's future net cash flows relating to proved oil and
        gas reserves as of December 31, 2001 and 2000 based on the standardized measure prescribed
        in SFAS No. 69. 

	2001	2000
Future cash inflows	$  8,109,000	$24,936,000
Future production costs	(2,404,000)	(3,343,000)
Future development costs	(687,000)	(1,164,000)
Future income tax expense	-	-
Future net cash flows	5,018,000	20,429,000
10% annual discount for estimated timing of cash flow	(1,193,000)	(5,298,000)
Standardized Measure of Discounted Future Net Cash Flows	$  3,825,000	$15,131,000
Average prices used to estimate the reserves:
Oil (per bbl)	$         18.51	$         25.81
Gas (per Mcf)	$           2.95	$         10.15

        Changes in Standardized Measure (Unaudited) - The following are the principal sources of change
        in the standardized measure of discounted future net cash flows for the years ended December 31,
        2001 and 2000:

	2001	2000
Standardized measure, beginning of year	$15,131,000	$  6,270,000
Sale of oil and gas produced, net of production costs	(1,940,000)	(3,020,000)
Sale of minerals in place	-	-
Net changes in prices and production costs	(7,461,000)	8,023,000
Net changes in estimated development costs	338,000	(221,000)
Revisions of previous quantity estimates	(3,330,000)	(235,000)
Discoveries, extensions and other additions	790,000	4,256,000
Accretion of discount	297,000	58,000
Standardized Measure, end of year	$ 3,825,000	$15,131,000

PART II (Continued)

ITEM 8 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

This item is not applicable to the Registrant.

PART III

ITEM 9 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Directors and Executive Officers
The following table sets forth the names and ages of the current directors and executive officers of the Company, the principal offices and positions with the Company held by each person and the date such person became a director or executive officer of the Company. The executive officers of the Company are elected annually by the Board of Directors. The Board of Directors is divided into three approximately equal classes. The directors serve three year terms and until their successors are elected. Each year the stockholders elect one class of directors. The executive officers serve terms of one year or until their death, resignation or removal by the Board of Directors. There are no family relationships between any of the directors and executive officers. In addition, there was no arrangement or understanding between any executive officer and any other person pursuant to which any person was selected as an executive officer.

The directors and executive officers of the Company are as follows:

Name	Age	Position	Served as Director Since
Patrick J. Duncan	39	President, Chief Financial   Officer, and Director	1995
David A. Melman	59	Director	2001
Homer C. Osborne	72	Director	1994
J. Peter Koonce	70	Director	2001

        The Company currently has one vacant seat on its board because Steve Antry resigned as a director on March 12, 2002. The Company anticipates this board position will be filled by appointment of the other directors when a qualified candidate can be found.

        The Company's Board of Directors held nine (9) meetings during 2001. Five (5) of these were actual meetings at which all of the above directors attended. The other four(4) meetings were held by unanimous written consent.

        The Board of Directors does not have an audit committee. However, the entire board reviews the Company's quarterly and annual financial statements and meets with the Company's independent auditors to review the results of the annual audit and address any accounting matters or questions raised by the auditors.

        The Board of Directors does not have a compensation committee. The entire board periodically reviews the compensation of the Company's officers and administers the award of options under all the Company's stock option plans.

        Patrick J. Duncan has been the Company's President since November 1998, the Company's Chief Financial Officer since September 1994, and the Company's Treasurer since March 1996. In addition to managing the day-do-day activities of the Company, Mr. Duncan is responsible for all the financial, accounting and administrative reporting and compliance required by his individual job titles. Mr. Duncan was an Audit Manager with HEIN + ASSOCIATES LLP, Certified Public Accountants, from 1991 until joining the Company as our Controller in April 1994. From 1988 until 1991, Mr. Duncan was an Audit Supervisor with Coopers & Lybrand, Certified Public Accountants. Mr. Duncan received a B.S. degree from the University of Wyoming in 1985.

        David A. Melman has served as a consultant and a director of Carpatsky Petroleum, Inc. from October, 1998 until the present. He served as Executive Vice President and Director of XCL, Ltd., a Louisiana based exploration and development company with properties and operations in the People's Republic of China (1984-1997) and as a consultant from 2000 until the present. From June 1997 until October 1998 Mr. Melman was an independent consultant to Cadiz Land Co. Inc. (NASDAQ) and Saba Oil Company (AMEX). He has been a member of the boards of directors of oil and gas companies listed on the American Stock Exchange, the London Stock Exchange, the Canadian Venture Exchange and NASDAQ. Melman holds a B.S. (Economics and accounting) from Queens College of the City University of New York, a law degree from Brooklyn Law School (J.D.) and a Masters of Law-Taxation from New York University Graduate School of Law (LLM).

        J. Peter Koonce has been a registered general securities principal with GBS Financial Corp., a registered broker dealer, since 1988. Prior to that he was a senior investment executive with Wedbush Morgan Securities, a NYSE firm. Mr. Koonce held various positions in the oil and gas financing industry from 1982 through 1986 when he was president of Argo Financial, a division of Argo Petroleum Inc. He holds a MS in Operations Research from the Florida Institute of Technology.

        Homer C. Osborne is a registered petroleum engineer and holds a B.S. degree in Mechanical and Petroleum Engineering from Texas A&M. Mr. Osborne has spent most of his adult life in the oil and gas industry. After serving his country in the Korean war, Mr. Osborne began his career in the oil and gas industry with the Superior Oil Company in 1953. During the course of his career, Mr. Osborne has held engineering positions with several domestic and international oil companies evaluating, developing and supervising a variety of oil and gas projects - both large and small. In 1976, Mr. Osborne organized and managed his own E & P company, Osborne Oil Company, to develop and participate in domestic oil and gas projects. Mr. Osborne sold the assets of Osborne Oil Company in 1998. Since then he has participated in and provided various engineering and consulting services, including the evaluation of potential acquisition, development and exploratory prospects, in the U.S. and abroad, both onshore and offshore, for a variety of oil and gas projects.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 requires our officers and directors, and persons who own more than ten percent of our common stock, to file reports of ownership and changes in ownership with the Securities and Exchange Commission ("SEC"). Officers, directors and greater than ten percent stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.

The following disclosure is based solely upon a review of the Forms 3 and 4 and any amendments thereto furnished to the Company during our fiscal year ended December 31, 2001, and Forms 5 and amendments thereto furnished to us with respect to such fiscal year, or written representations that no Forms 5 were required to be filed by such persons. Based on this review Messrs. Melman, Osborne and Koonce filed one late report on Form 4 in connection with reporting the issuance of warrants in July 2001. Our review found no other person who was a director, officer or beneficial owner of more than 10% of the Company's outstanding common stock during such fiscal year filed any late reports on Forms 3 and 4.

ITEM 10 - EXECUTIVE COMPENSATION

Summary Compensation Table
The Summary Compensation Table shows certain compensation information for services rendered in all capacities during each of the last three fiscal years by the Chief Executive Officer and those executive officers who received salary, bonus or other compensation in excess of $100,000 (these individuals are collectively referred to herein as the "Named Executive Officers"). The following information for the Named Executive Officers includes the dollar value of base salaries, bonus awards, the number of stock options granted and certain other compensation, if any, whether paid or deferred.

SUMMARY COMPENSATION TABLE

		Annual Compensation			Long-Term     Compensation Awards
Name and Principle          Position	Year	Salary	Bonus	Other Annual Compensation	Restricted Stock Awards	Securities Underlying Options/SARs
Patrick J. Duncan	2001	$97,500	$30,000	None(1)	None	None
President and CFO	2000	$97,500	$50,000	None(1)	150,000	600,000
	1999	$97,957	None	None(1)	None	None

(1)    No additional amounts have been shown as Other Annual
        Compensation because the aggregate incremental cost to us for
        personal benefits provided to Mr. Duncan did not exceed the
        lesser of $50,000 or 10% of his annual salary in any given year.
                

Option Grants in the Last Fiscal Year
There were no option grants to the Named Executive Officer during the fiscal year ended December
31, 2001.

Aggregated Option Exercises in the Last Fiscal Year and the Fiscal Year-End Option Values

The table below provides information with respect to the unexercised options to purchase the Company's common stock held by the Named Executive Officer at December 31, 2001. No options were exercised
during fiscal 2001.

Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values

Name	Shares Acquired on Exercise (#)	Value Realized ($)	Number of Securities Underlying Unexercised Options/SARs at FY-End (#) Exercisable/ Unexercisable	Value of Unexercised In-the-Money Options/SARs at FY-End ($) Exercisable/ Unexercisable
Patrick J. Duncan	None	None	320,000/300,000	$ 0/0 (1)
President and CFO

(1)    The value of the unexercised In-the-Money Options was determined by
        multiplying the number of unexercised warrants or options (that were
        in-the-money on December 31, 2001) by the closing sales of the
        Company's common stock on December 31, 2001 (as reported by
        OTCBB) and from that total, subtracting the total exercise price.  No
        options were in-the-money of December 31, 2001.

Employment Contract
The Board of Directors have approved an Employment Agreement for Patrick J. Duncan which, among other things, appoints Mr. Duncan as the Companys President and Chief Financial Officer, provides for an annual salary of $97,500 and provides for a severance payment of $175,000 should he be terminated without cause or in the event of a change of control of the Company.

Compensation of Directors
Directors who are employees or otherwise receive compensation from us do not receive additional compensation for service as directors. Outside directors each receive a $2,500 annual retainer fee (prorated over the length of service during the year), plus $50.00 per hour, up to $400.00 per day, for time devoted to the Company's business including attending meetings or other matters. Each director can elect to receive their fees in either cash or stock or a combination thereof. All of the directors fees in 2001 were paid in cash.ITEM 11 - SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS

The following table sets forth certain information regarding the beneficial ownership of the Company's common stock, its only class of outstanding voting securities as of April 15, 2002, by (i) each of the Company's directors and officers, and (ii) each person or entity who is known to the Company to own beneficially more than 5% of the outstanding common stock with the address of each such person or entity. Beneficial owners listed have sole voting and investment power with respect to the shares unless otherwise indicated. On April 15, 2002, there were 7,331,240 shares of our common stock issued and outstanding.

Name of Officer or Director	Amount and Nature of Beneficial Ownership(1)	Percent of Class (12)
Patrick J. Duncan	471,564 Shares (2)	6.16%
J. Peter Koonce	55,000 Shares (3)	0.75%
David A. Melman	50,000 Shares (4)	0.68%
Homer C. Osborne	74,759 Shares (5)	0.98%
All Officers and Directors as   a group (six persons)	648,840 Shares (6)	8.31%
Kayne Anderson, Investment   Management, Inc.   1800 Avenue of the Stars   Second Floor   Century City, CA 90067	3,001,590 Shares (7)	37.26%
State Street, Research and   Management Company   One Financial Center   38th Floor   Boston, MA 02111	2,033,460 Shares (8)	27.74%

(1)     Shares are owned directly and beneficially unless stated otherwise.

(2)     Includes 151,564 shares owned directly by Mr. Duncan, 20,000 shares underlying
         presently ercisable options, and 300,000 shares underlying presently exercisable
         warrants.  Does not include 300,000 shares underlying warrants which are not
         presently exercisable.

(3)     Includes 5,000 shares owned directly by Mr. Koonce and 50,000 shares underlying
         presently exercisable warrants.

(4)     Includes 50,000 shares underlying presently exercisable warrants.

(5)     Includes 17,276 shares owned directly by Mr. Osborne, 5,000 shares underlying
         presently exercisable options, and 50,000 shares underlying presently exercisable
         warrants.

(6)     Includes 173,840 shares owned directly, 25,000 shares underlying presently
         exercisable options, and 450,000 shares underlying presently exercisable warrants.

(7)     Includes 2,276,540 shares and 725,050 shares underlying presently exercisable
         warrants held by three entities which are effectively controlled by Kayne Anderson
         Investment Management, Inc., a registered investment advisor. The entities which
         beneficially own the shares and warrants are Arbco Associates, L.P., Kayne
         Anderson Non-Tradition Investments, L.P. and KAIFS, L.P.

(8)     Shares are beneficially owned by two entities, Metropolitan Life Insurance Co.
         Separate Account EN, and Bellsouth Master Pension Trust that are controlled by
         State Street Research and Management Company, a registered investment advisor.

ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

There are no relationships or transactions reportable under this item for the period covered by this report.

PART IV

ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:

Exhibit No.	Description and Method of Filing
3.1	Articles of Incorporation. Incorporated by reference to Exhibit 3.1 of the Registrant's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1998.
3.2	Certificate of Amendment to the Articles of Incorporation filed on June 23, 1993. Incorporated by reference to Exhibit 3.2 of the Registrant's Annual Report on Form 10-KSB/A for the fiscal year ended December 31, 1999.
3.3	Certificate of Amendment to the Articles of Incorporation filed on June 29, 1993. Incorporated by reference to Exhibit 3.3 of the Registrant's Annual Report on Form 10-KSB/A for the fiscal year ended December 31, 1999.
3.4	Plan of Recapitalization. Incorporated by reference to Exhibit 3.4 of the Registrant's Annual Report on Form 10-KSB/A for the fiscal year ended December 31, 1999.
3.5	Certificate of Amendment to the Articles of Incorporation filed on July 5, 1994. Incorporated by reference to Exhibit 3.5 of the Registrant's Annual Report on Form 10-KSB/A for the fiscal year ended December 31, 1999.
3.6	Certificate of Amendment to the Articles of Incorporation filed on December 19, 1994. Incorporated by reference to Exhibit 3.4 of the Registrant's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1998.
3.7	Certificate of Amendment to Article IV of the Articles of Incorporation as filed with the Nevada Secretary of State, increasing the authorized shares of common stock of Registrant to 40,000,000 shares, $0.10 par value. Incorporated by reference to Exhibit 3 of the Registrant's Current Report on Form 8-K dated June 11, 1997.
3.8	Certificate of Change in Number of Authorized Shares of Common Stock dated November 18, 1998. Incorporated by reference to Exhibit 3.8 of the Registrant's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1998.
3.9	Amended and Restated Articles of Incorporation as filed July 11, 2001.  Incorporated by reference to Exhibit 3.1 to Registrant's Current Report on Form 8-K filed July 11, 2001.
3.10	Bylaws as amended and restated. Incorporated by reference to Exhibit 3.9 of the Registrant's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1998.
4.1	Certificate of Designation of Series C Redeemable 5% Cumulative Preferred Stock. Incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K dated November 8, 2000.
4.2	Certificate of Amendment to the Certificate of Designation of Series C Redeemable 5% Cumulative Preferred Stock.  Incorporated by reference to Exhibit 4.1 to Registrant's Quarterly Report on Form 10-QSB for quarter ended September 30, 2001.
10.1	1993 Stock Option Plan. Incorporated by reference to Exhibit 10.1 of the Registrant's Annual Report on Form 10-KSB/A for the fiscal year ended December 31, 1999.
10.2	1994 Employee Stock Option Plan.  Incorporated by reference to Exhibit 10.4 of the Registrant's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1998.
10.3	Employment Agreement effective December 27, 1994 between Pease Oil and Gas Company and Patrick J. Duncan.  Incorporated by reference to Exhibit 10.5 of the Registrant's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1998.
10.6	1996 Stock Option Plan.  Incorporated by reference to 10.6 of the Registrant's Annual Report on Form 10-KSB/A for the fiscal year ended December 31, 1999.
10.7	1997 Long Term Incentive Option Plan.  Incorporated by reference to Exhibit 10.7 of the Registrant's Annual Report on Form 10-KSB/A for the fiscal year ended December 31, 1999.
10.9	Exploration Agreement dated 1/1/97 between Parallel Petroleum Corporation, Sue-Ann Production Company, TAC Resources, Inc., Allegro Investments, Inc., Beta Oil and Gas Company, Pease Oil and Gas Company, Meyer Financial Services, Inc., Four-Way Texas, LLC regarding the Ganado Prospect.  Incorporated by reference to Exhibit 10.9 of the Registrant's Annual Report on Form 10-KSB/A for the fiscal year ended December 31, 1999.
10.14	Termination Agreement with Carpatsky Petroleum, Inc. dated November 7, 2000. Incorporated by reference to Exhibit 10.1 of Registrant's Current Report on Form 8-K dated November 8, 2000.
10.15	Certificate of Designation of Series C Redeemable 5% Cumulative Preferred Stock of Republic Resources, Inc., as filed November 8, 2000.  Incorporated by reference to Exhibit 10.2 of Registrant's Current Report on Form 8-K dated November 8, 2000.
10.16	Preferred Stock Exchange Agreement, dated effective November 1, 2000. Incorporated by reference to Exhibit 10.3 of Registrant's Current Report on Form 8-K dated November 8, 2000.
10.17	Preferred Stock Surrender Agreement, dated effective November 1, 2000. Incorporated by reference to Exhibit 10.4 of Registrant's Current Report on Form 8-K dated November 8, 2000.
10.18	Form of Warrant issued in connection with surrender of Series B Preferred Stock. Incorporated by reference to Exhibit 10.5 of Registrant's Current Report on Form 8-K dated November 8, 2000.
10.19	Amended and Restated Termination Agreement with Carpatsky Petroleum, Inc. dated April 3, 2001.  Incorporated by reference to Exhibit 10.19 of the Registrants Annual Report on Form 10-KSB for the fiscal year ended December 31, 2000.
10.20	Employment Agreement with Patrick J. Duncan dated November 2, 2000.  Incorporated by reference to Exhibit 10.20 of the Registrants Annual Report on Form 10-KSB for the fiscal year ended December 31, 2000.
10.21	Form of Warrant issued to Patrick J. Duncan.  Incorporated by reference to Exhibit 10.21 of the Registrants Annual Report on Form 10-KSB for the fiscal year ended December 31, 2000.
10.22	Promissory Note of Carpatsky Petroleum, Inc. dated April 3, 2001.  Incorporated by reference to Exhibit 10.22 of the Registrants Annual Report on Form 10-KSB for the fiscal year ended December 31, 2000.
10.23	Purchase and Sale Agreement dated January 31, 2002 with Harken Energy Corporation. Incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K filed February 8, 2002.
10.24	Form of Preferred Stock Exchange Agreement and Irrevocable Proxy, dated February 11, 2002.

(b)   Reports on Form 8-K: The Company filed the following reports on Form 8-K for the period
October 1, 2001 through March 6, 2002:

        Item Reported                  Date                             Financial Statements

        (1) 1, 5, 7               February 8, 2002          None- Not Applicable

SIGNATURES

        In accordance with Section 13 or 15 (d) of the Exchange Act, the Registrant caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

REPUBLIC RESOURCES, INC.

Date: April 29, 2002                         By: /s/ Patrick J. Duncan                  
                                                         Patrick J. Duncan
                                                         Principal Executive Officer and Principal Accounting Officer

        
        In accordance with the Exchange Act, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the dates indicated.


Date: April 29, 2002                         By:/s/ Patrick J. Duncan                     
                                                         Patrick J. Duncan
                                                         President, Chief Financial Officer, Director

Date: April 29, 2002                         By:/s/ David A. Melman                     
                                                         David A. Melman, Director

Date: April 29, 2002                         By:/s/ Homer C. Osborne                  
                                                         Homer C. Osborne, Director

Date: April 29, 2002                         By:/s/ J. Peter Koonce                       
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REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered into as of the 11th day of February, 2002, by and among Republic Resources, Inc., a Nevada corporation ("Republic"), and the holders of Republic common stock identified on Exhibit A attached hereto ("Holders").

RECITALS:

A. Reference is hereby made to that certain Exchange Agreement and Irrevocable Proxy dated as of the date hereof (the "Exchange Agreement" of which this Registration Right Agreement is Exhibit C) by and among Republic and Holders pursuant to which Holders will upon Closing, receive a certain number of Shares of Republic Common Stock, which Shares are the subject of this Agreement.

B. Pursuant to the terms of the Agreement, Republic has agreed to provide Holders and the holders of the Registrable Securities (as defined herein) with the registration rights set forth herein.

AGREEMENT:

NOW, THEREFORE, for and in consideration of the foregoing Recitals and the mutual agreements contained herein, the sufficiency of which is hereby acknowledged and confirmed, the parties hereto, intending to be legally bound, agree as follows:

Section 1. Definitions and References.

(1) When used in this Agreement, the following terms shall have the respective meanings assigned to them in this Section 1 or in the Sections referred to below:

"Agreement" shall mean this Registration Rights Agreement, as hereafter amended or modified in accordance with the terms hereof.

"Commission" shall mean the Securities and Exchange Commission (or any successor body thereto).

"Common Stock" shall mean the common stock, par value $0.01 per share, of Republic.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and all rules and regulations promulgated under such Act.

"Holder" shall mean any Person that holds Registrable Securities.

"Holder Indemnified Parties" shall have the meaning assigned to it in Section 5(a).

"Person" shall mean any individual, corporation, partnership, joint venture, limited partnership, limited liability company, trust, unincorporated organization, government or

"Prospectus" shall mean the prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement, and all other amendments and supplements to any such prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference, if any, in such prospectus.

"Registrable Securities" shall mean the Republic common stock issued to Holders under the Exchange Agreement.

"Registration Expenses" shall mean all fees and expenses incident to Republic's performance of or compliance with the registration rights granted hereunder, including (without limitation) all registration and filing fees, fees and expenses of compliance with securities and blue sky laws, printing and engraving expenses, messenger, telephone and delivery expenses, fees and disbursements of counsel for Republic, and fees and disbursements of all independent certified public accountants and underwriters (excluding discounts and commissions); provided, however, that Registration Expenses shall not include any Selling Expenses.

"Registration Statement" shall mean any registration statement of Republic that covers any of the Registrable Securities pursuant to this Agreement, including the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference, if any, in such registration statement.

"Republic" shall have the meaning assigned to it in the preamble to this Agreement.

"Republic Indemnified Parties" shall have the meaning assigned to it in Section 5(b).

"Securities Act" shall mean the Securities Act of 1933, as amended, and all rules and regulations promulgated under such Act.

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"Selling Expenses" shall mean underwriting discounts or commissions, any selling commissions and stock transfer taxes attributable to sales of Registrable Securities and the fees and expenses of counsel for any Holder.

(2) All references in this Agreement to sections, subsections and other subdivisions refer to corresponding sections, subsections and other subdivisions of this Agreement unless expressly provided otherwise. Titles appearing at the beginning of any such subdivisions are for convenience only and shall not constitute part of such subdivisions and shall be disregarded in construing the language contained herein. The words "this Agreement", "this instrument", "herein", "hereof", "hereby", "hereunder" and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. Words in the singular form shall be construed to include the plural and vice versa, unless the context otherwise requires.

Section 2. Registration Shares.

Upon the written demand of Holders of at least 40% of the shares of common stock of Republic issued under the Exchange Agreement, Republic shall file, at Republic's expense, a registration statement on Form S-3 or other applicable form if that Form is not available to Republic, to register for resale by Holders under the Securities Act of 1933, as amended, all the shares of Republic common stock to be issued to Holders under the Exchange Agreement. Such registration statement shall be filed within 30 days of receipt of the written demand, but not earlier than June 30, 2002. Republic shall use its reasonable best efforts to have such registration declared effective by the Securities and Exchange Commission as soon as reasonably practicable after the filing thereof and to keep each such Registration Statement effective for no less than 365 days.

Section 3. Registration Procedures.

(a) In connection with Republic's registration obligations hereunder, Republic will use its reasonable best efforts to effect the registration of the Registrable Securities in accordance with the intended methods of disposition thereof as quickly as practicable, and pursuant thereto Republic will as expeditiously as possible:

(1) prepare and file with the Commission not later than the time specified in this Agreement, a Registration Statement on the appropriate form with respect to the Registrable Securities and use its reasonable best efforts to cause such Registration Statement to become effective as soon as reasonably practicable after the filing thereof (provided, that before filing a Registration Statement or Prospectus or any amendments or supplements thereto, Republic will furnish copies of all such documents proposed to be filed to all Holders of Registrable Securities covered by such Registration Statement);

3

(2) prepare and file with the Commission such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for a period of not less than the period set forth in this Agreement or such shorter period which will terminate when all Registrable Securities covered by such Registration Statement have been sold (but not before the expiration of the applicable Prospectus delivery period) and comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such Registration Statement during such period in accordance with the intended methods of disposition by the Holders thereof set forth in such Registration Statement:

(3) furnish to each Holder of Registrable Securities such number of copies of such Registration Statement, each amendment and supplement thereto, the Prospectus included in such Registration Statement (including, without limitation, each preliminary prospectus) and such other documents as such Holder may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Holder.

(4) use its reasonable best efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions within the United States as any Holder reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such Holder to consummate the disposition in such jurisdictions of the Registrable Securities owned by such Holder (provided that Republic will not be required to qualify generally to do business or subject itself to any general service of process in any jurisdiction where it is otherwise not then so subject);

(5) notify each Holder of such Registrable Securities, at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event which requires the making of any change in the Prospectus included in such Registration Statement so that such document will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and, at the request of any such Holder, Republic will prepare a supplement or amendment to such Prospectus so that such Prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading;

(6) use its reasonable best efforts to cause all such Registrable Securities to be listed on each securities exchange or exchanges, automated quotation system or over-the-counter market upon which securities of Republic of the same class are then listed;

4

(7) enter into such customary agreements (including, without limitation, underwriting agreements in customary form, substance and scope) and take all such other actions as the Holders of a majority of the Registrable Securities being sold or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities;

(8) otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders an earnings statement no later than ninety (90) days after the end of the 12-month period beginning with the first day of Republic's first full calendar quarter after the effective date of the Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;

(9) in the event of the issuance or threatened issuance of any stop order suspending the effectiveness of a Registration Statement, or any order suspending or preventing the use of any related Prospectus or suspending the qualification of any Registrable Securities included in such Registration Statement for sale in any jurisdiction, promptly notify each Holder of Registrable Securities of the issuance or threatened issuance of such order and use its reasonable best efforts promptly to prevent the entry of such order or obtain the withdrawal of such order if issued;

(10) use its reasonable best efforts to cause such Registrable Securities covered by such Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the Holders thereof to consummate the disposition of such Registrable Securities;

(11) make available at all reasonable times and in a reasonable manner for inspection by any Holder of Registrable Securities, any underwriter participating in any disposition pursuant to such Registration Statement, and any attorney, accountant or other agent retained by any such Holder or underwriter (collectively, the "Inspectors"), all financial and other records, corporate documents and properties of Republic (collectively, the "Records"), and cause the officers, directors and employees of Republic to supply all information reasonably requested by any such Inspector in connection with such Registration Statement prior to its effectiveness, in each case to the extent that such Records and information are pertinent to the information disclosed in the Registration Statement; provided, that each such Inspector shall execute and deliver to Republic a confidentiality agreement mutually agreeable to the parties. Records which Republic determines, in good faith, to be confidential and which Republic notifies the Inspectors are confidential shall not be disclosed by the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in the Registration Statement or (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction; each Holder of Registrable Securities agrees that it will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to Republic and allow Republic, at Republic's expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential; and

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(12) use its reasonable best efforts to obtain, if required by said underwriters in connection with an underwritten offering, a comfort letter from Republic's independent public accountants in customary form and covering such matters of the type customarily covered by comfort letters with respect to offerings of the type being made pursuant to the Registration Statement as the Holders of the Registrable Securities reasonably request.

(b) In connection with each Registration Statement, Republic agrees and each Holder of Registrable Securities (including Registrable Securities in any Registration Statement filed pursuant to this Agreement) will be deemed to have agreed, as follows:

(1) upon receipt of any notice from Republic of the happening of any event of the kind described in Section 3(a)(5) or the issuance of any order of the kind described in Section 3(a)(9), the Holders of Registrable Securities covered by such Registration Statement will forthwith discontinue disposition of such Registrable Securities until the Holders of Registrable Securities receive copies of the supplemented or amended Prospectus contemplated by Section 3(a)(5), or until they are advised in writing by Republic that the use of the applicable Prospectus may be resumed, and they have received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus (it being the agreement of the parties hereto, however, that the obligation of Republic with respect to maintaining the subject Registration Statement current and effective with respect to such Registrable Securities, shall be extended by a number of trading days equal to the period the Holders of Registrable Securities are required by this Section 3(b)(1) to discontinue disposition of such Registrable Securities); and

(2) furnish to Republic such information regarding each Holder, the Registrable Securities held by such Holder and the intended method of disposition thereof as Republic shall reasonably request and as shall be reasonably required in connection with the preparation of the applicable Registration Statement and other actions taken by Republic under this Agreement, and it shall be a condition precedent to the obligation of Republic to take any action pursuant to this Agreement in respect of the Registrable Securities that such information has been furnished to Republic by the Holders of Registrable Securities.

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Section 4. Expenses. Republic shall pay all Registration Expenses whether or not any Registration Statement is filed or becomes effective and whether or not any securities are sold pursuant to any Registration Statement and, in any event, shall pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal and accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the securities to be registered on each securities exchange on which similar securities of Republic are then listed. All Selling Expenses incurred in connection with a registration effected pursuant to the terms hereof shall be borne by the seller or sellers of Registrable Securities pro rata based upon the number of Registrable Securities included in such registration.

Section 5. Indemnification.

(a) Republic shall indemnify and hold harmless, with respect to any and all Registration Statements, each Holder of Registrable Securities covered by such Registration Statement, and each other Person, if any, who controls such Holder within the meaning of Section 15 of the Securities Act (collectively, "Holder Indemnified Parties"), against all losses, claims, damages, liabilities and expenses, joint or several, to which any such Holder Indemnified Party may become subject under the Securities Act, the Exchange Act, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement in which such Registrable Securities were included or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary, final or summary Prospectus, together with the documents incorporated by reference therein (as amended or supplemented if Republic shall have filed with the Commission any amendment thereof or supplement thereto), or any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (iii) any violation by Republic of any federal, state or common law rule or regulation applicable to Republic and relating to action of or inaction by Republic in connection with any such registration; and in each such case, Republic shall reimburse each such Holder Indemnified Party for any reasonable legal or other expenses incurred by any of them in connection with investigating or defending any such loss, claim, damage, liability, expense, action or proceeding; provided, however, that Republic shall not be liable to any such Holder Indemnified Party in any such case to the extent that any such loss, claim, damage, liability or expense (or action or proceeding, whether commenced or threatened, in respect thereof) arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in such Registration Statement or amendment thereof or supplement thereto or in any such preliminary, final or summary Prospectus in reliance upon and in conformity with written information furnished to Republic by or on behalf of any such Holder Indemnified Party for use in the preparation thereof. Such indemnity and reimbursement of expenses and other obligations shall remain in full force and effect regardless of any investigation made by or on behalf of the Holder Indemnified Parties and shall survive the transfer of such securities by such Holder Indemnified Parties.

(b) Each Holder of Registrable Securities participating in any registration hereunder shall severally (and not jointly or jointly and severally) indemnify and hold harmless Republic, its directors, officers, employees and agents, and each Person who controls Republic (within the meaning of Section 15 of the Securities Act) (collectively, "Republic Indemnified Parties") against all losses, claims, damages, liabilities and expenses to which any Republic Indemnified Party may become subject under the Securities Act, the Exchange Act, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement in which such Holder's Registrable Securities were included or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary, final or summary Prospectus, together with the documents incorporated by reference therein ( as amended or supplemented if Republic shall have filed with the Commission any amendment thereof or supplement thereto), or the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, to the extent, in the cases described in clauses (i) and (ii), that such untrue statement or omission was furnished in writing by such Holder for use in the preparation thereof, or (iii) any violation by such Holder of any federal, state or common law rule or regulation applicable to such Holder and relating to action of or inaction by such Holder in connection with any such registration. Such indemnity obligation shall remain in full force and effect regardless of any investigation made by or on behalf of the Republic Indemnified Parties (except as provided above) and shall survive the transfer of such securities by such Holder.

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(c) Promptly after receipt by an indemnified party under subsection 5(a) or (b) of written notice of the commencement of any action, suit, proceeding, investigation or threat thereof made in writing with respect to which a claim for indemnification may be made pursuant to this Section 5, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the indemnifying party of the threat or commencement thereof; provided, however, that the failure to so notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party except to the extent that the indemnifying party is actually prejudiced by such failure to give notice. If any such claim or action referred to under subsection (a) or (b) is brought against any indemnified party and it then notifies the indemnifying party of the threat or commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other indemnifying party similarly notified, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party. After notice from the indemnifying party to such indemnified party of its election so to assume the defense of any such claim or action, the indemnifying party shall not be liable to such indemnified party under this Section 5 for any legal expenses of counsel or any other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation unless the indemnifying party has failed to assume the defense of such claim or action or to employ counsel reasonably satisfactory to such indemnified party. Under no circumstances will the indemnifying party be obligated to pay the fees and expenses of more than one law firm for all indemnified parties. The indemnifying party shall not be required to indemnify the indemnified party with respect to any amounts paid in settlement of any action, proceeding or investigation entered into without the written consent of the indemnifying party, which consent shall not be unreasonably withheld. No indemnifying party shall consent to the entry of any judgment or enter into any settlement without the consent of the indemnified party unless (i) such judgment or settlement does not impose any obligation or liability upon the indemnified party other than the execution, delivery or approval thereof, and (ii) such judgment or settlement includes as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a full release and discharge from all liability in respect of such claim for all persons that may be entitled to or obligated to provide indemnification or contribution under this Section 5.

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(d) Indemnification similar to that specified in the preceding subsections of this Section 5 (with appropriate modifications) is hereby given by Republic and each Holder of Registrable Securities with respect to any required registration or qualification of securities under any state securities or blue sky laws.

(e) If the indemnification provided for in this Section 5 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b), then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages, liabilities or expenses (or actions or proceedings in respect thereof) referred to in subsection (a) or (b) in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and the indemnified party on the other in connection with the statements, omissions, actions or inactions which resulted in such losses, claims, damages, liabilities or expenses as well as any other relevant equitable considerations. The relative fault of the indemnifying party and the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or the indemnified party, any action or inaction by any such party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement, omission, action or inaction. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses (or actions or proceedings in respect thereof) pursuant to this subsection (e) shall be deemed to include, without limitation, any reasonable legal or other expenses incurred by such indemnified party in connection with investigating or defending any such action or claim (which shall be limited as provided in subsection (c) if the indemnifying party has assumed the defense of any such action in accordance with the provisions thereof) which is the subject of this subsection (e). No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Promptly after receipt by an indemnified party under this subsection (e) of written notice of the commencement of any action, suit, proceeding, investigation or threat thereof made in writing with respect to which a claim for contribution may be made against an indemnifying party under this subsection (e), such indemnified party shall, if a claim for contribution in respect thereof is to be made against an indemnifying party, give written notice to the indemnifying party in writing of the commencement thereof (if the notice specified in subsection (c) has not been given with respect to such action); provided, however, that the failure to so notify the indemnifying party shall not relieve it from any obligation to provide contribution which it may have to any indemnified party under this subsection (e) except to the extent that the indemnifying party is actually prejudiced by the failure to give notice.

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The parties hereto agree that it would not be just and equitable if contribution pursuant to this paragraph were determined by pro rata allocation or by any other method of allocation which does not take account the equitable considerations referred to in the immediately preceding paragraph.

If indemnification is available under Section 5, the indemnifying parties shall indemnify each indemnified party to the fullest extent provided in subsections (a) or (b), without regard to the relative fault of said indemnifying party or any other equitable consideration provided for in this paragraph. The provisions of this paragraph shall be in addition to any other rights to indemnification or contribution which any indemnified party may have pursuant to law or contract, shall remain in full force and effect regardless of any investigation made by or on behalf of any indemnified party, and shall survive the transfer of securities by any such party.

(f) In connection with any underwritten offering contemplated by this Agreement which includes Registrable Securities, Republic and all Holders of Registrable Securities included in any Registration Statement shall agree to customary provisions for indemnification and contribution (consistent with the other provisions of this Section 5) in respect of losses, claims, damages, liabilities and expenses of the underwriters of such offering.

(g) The indemnification obligations hereunder with respect to any Registration Statement shall terminate three (3) years after the termination of the offering of Registrable Securities covered by such Registration Statement.

Section 6. Selection of Underwriters. The Holders of Registrable Securities shall have the right to elect that the offering of Registrable Securities pursuant to a Registration Statement filed under this Agreement be in the form of an underwritten offering or a best efforts offering. If any registration hereunder is an underwritten offering or a best efforts offering, the investment banker or investment bankers and manager or managers that will administer the offering shall be selected by Republic; provided, that such investment bankers and managers must be reasonably satisfactory to the Holders of a majority of the Registrable Securities to be registered in such registration.

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Section 7. Rule 144. Republic covenants to each Holder that, to the extent that Republic shall be required to do so under the Exchange Act, Republic shall (a) timely file the reports required to be filed by it under the Exchange Act or the Securities Act (including, but not limited to, the reports under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the Commission under the Securities Act) and the rules and regulations adopted by the Commission thereunder, and (b) take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission. Upon the request of any Holder, Republic shall deliver to such Holder a written statement as to whether it has complied with such requirements.

Section 8. Miscellaneous.

(1) From and after the date of this Agreement, Republic will not, without the prior written consent of the Holders of a two-thirds majority of the Registrable Securities then outstanding, enter into any agreement with respect to its securities which is inconsistent with or violates the rights granted to the Holders of Registrable Securities in this Agreement.

(2) Holders agree, and each other Holder of Registrable Securities (including Registrable Securities in any Registration Statement filed pursuant to this Agreement) will be deemed to have agreed, as follows:

(1) if any Registrable Securities are being registered in any registration pursuant to this Agreement, the Holder thereof will comply with all anti-stabilization, manipulation and similar provisions of Section 10 of the Exchange Act, and any rules promulgated thereunder by the Commission, and, at the request of Republic, will execute and deliver to Republic and to any underwriter participating in such offering, an appropriate agreement to such effect; and

(2) at the end of any period during which Republic is obligated to keep a Registration Statement current and effective as described herein, the Holders of Registrable Securities included in this Registration Statement shall discontinue sales thereof pursuant to such Registration Statement.

(3) All questions concerning the construction, validity and interpretation of this Agreement and all actions, proceedings and matters arising out of this Agreement shall be governed by the internal law, and not the law of conflicts, of the state of Colorado.

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(4) All covenants and agreements in this Agreement by or on behalf of any of the parties hereto will bind and inure to the benefit of the respective successors and assigns of the parties hereto whether expressed or not.

(5) This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter herein contained. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein, with respect to the registration rights granted by Republic to the Holders of the Registrable Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

(6) All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered personally or sent by reputable express courier service (charges prepaid), or mailed to the recipient by certified or registered mail, return receipt requested and potage prepaid, or sent by telefax, to the parties at the following address (or to such other address or to the attention of such other person as the recipient party has specified by prior like notice to the sending party):

If to Republic:
                                   Republic Resources, Inc.
                                   743 Horizon Ct., Suite 333
                                   Grand Junction, Colorado 81506-8715
                                   Tel: (970) 245-5917
                                   Telecopier No.: (970) 243-8840
                                   Attention: Patrick J. Duncan, President

With a copy to:
                                   Alan W. Peryam, Esq.
                                   1120 Lincoln Street, Suite 1000
                                   Denver, Colorado 80203
                                   Tel: (303) 866-0900
                                   Telecopier No.: (303) 866-0999

If to Holders:

                                    To the addresses set forth on Exhibit A

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(7) If any provision of this Agreement is held to be unenforceable, this Agreement shall be considered divisible and such provision shall be deemed inoperative to the extent it is deemed unenforceable, and in all other respects of this Agreement shall remain in full force and effect; provided, however, that if any such provision may be made enforceable by limitation thereof, then such provision shall be deemed to be so limited and shall be enforceable to the maximum extent permitted by applicable law.

(8) This Agreement may be executed by the parties hereto in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same agreement. Each counterpart may consist of a number of copies hereof each signed by less than all, but together signed by all, the parties hereto.

(9) Each Holder of Registrable Securities, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. Republic agrees that monetary damages would not be adequate compensation for any loss incurred by reason of breach by it of the provisions of this Agreement and hereby agree to waive (to the extent permitted by law) the defense in any action for specific performance that a remedy of law would be adequate.

(10) In any action or proceeding brought to enforce any provision of this Agreement, or where any provision hereof is validly asserted as a defense, the successful party shall be entitled to recover reasonable attorney's fees in addition to any other available remedy.

(11) Republic agrees to remove any legends on certificates representing Registrable Securities describing transfer restrictions applicable to such securities upon the sale of such securities (i) pursuant to an effective Registration Statement under the Securities Act or (ii) in accordance with the provisions of Rule 144 under the Securities Act.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

                                                                                REPUBLIC RESOURCES, INC.


                                                                                By: /s/ Patrick J. Duncan                  
                                                                                Name: Patrick J. Duncan
                                                                                Title: President

                                                                                Holders:
                                        
                                                                                As set forth on Exhibit A.

EXHIBIT A

                                                                                   Shares of
                                                                               Common Stock
                                                                              to be Issued and
                                                                              Exchange for the
Name and Address                                             Series C Preferred                          Signatures

Kayne Anderson Diversified                                                                                  By: Kayne Anderson
    Capital Partners, L.P.                                                                                              Capital Advisors, L.P.
1800 Avenue of the Stars
Floor 2                                                                                                                 By:/s/ Robert V. Sinnott
Century City, CA 90067                                             666,400                                  Robert V. Sinnott

Arbco Associates, L.P.                                                                                         By: Kayne Anderson
1800 Avenue of the Stars                                                                                           Capital Advisors, L.P.
Floor 2
Century City, CA 90067                                                                                      By:/s/ Robert V. Sinnot
                                                                                  546,720                                 Robert V. Sinnott

Kayne Anderson Non-Traditional                                                                        By: Kayne Anderson
Investments, L.P.                                                                                                       Capital Advisors, L.P.
1800 Avenue of the Stars
Floor 2                                                                                                               By:/s/ Robert V. Sinnot
Century City, CA 90067                                            615,060                               Robert V. Sinnott

Kayne Anderson Capital                                                                                    By: Kayne Anderson
Partners, L.P.                                                                                                          Capital Advisors, L.P.
1800 Avenue of the Stars
Floor 2                                                                                                              By:/s/ Robert V. Sinnot
Century City, CA 90067                                            205,020                               Robert V. Sinnott

Sandpiper & Co. fbo Metropolitan Life Ins  Co                                                 By: State Street Research &
Separate Acct EN                                                                                                   Management Company,
c/o State Street Research  &                                                                                    as Adviser 
Management Company,                                                                                    By:/s/ James M.Weiss
One Financial Center                                                                                             James M. Weiss,
Boston, MA 02111                                                    888,420                              Executive Vice President

Marine Crew & Co. fbo                                                                                  By: State Street Research &
Bellsouth Master Pension Trust                                                                              Management Company,
c/o State Street Research &                                                                                   as Adviser
Management Company,                                                                                   By:/s/ James M. Weiss
as Adviser                                                                                                           James M. Weiss,
One Financial Center                                                                                           Executive Vice President
Boston, MA 02111                                                    478,380

                                                                Total       3,400,000
                                                                               =======

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EXHIBIT C

743 Horizon Court, Suite 333 Grand Junction, Colorado 81506 Phone (970) 245-5917 Fax (970) 243-8840

February 11, 2002

Each Holder of Series C Redeemable Preferred Stock

Re: Exchange Agreement and Irrevocable Proxy Gentlemen:

This letter agreement ("Agreement") is intended to set forth the understandings, representations and agreements by and among Republic Resources, Inc., a Nevada corporation ("Company" or "Republic"), and each undersigned holder (a "Holder") of the Company's Series C 5% Redeemable Preferred Stock ("Series C Preferred") and is made with reference to the following agreed facts.

A. Each Holder is the record and beneficial owner of the number of shares (the "Shares") of the Company's Series C Preferred set forth on Exhibit A attached hereto. There are 99,503 shares of Series C Preferred issued and outstanding. The Company has accrued but has not paid dividends on the Series C Preferred since July 1, 2001.

B. The Company has entered into a Purchase and Sale Agreement dated January 31, 2002 (the "P&S Agreement"), pursuant to which the Company intends to sell, to Harken Energy Corporation ("Harken"), all of the Company's oil and natural gas properties in the states of Texas and Louisiana (the "Properties"). These Properties will include all of the Company's proved reserves of oil and gas and all its revenue producing assets. The Company will also sell to Harken the Company's interest in certain exploratory prospects that have not been given any initial value in the contemplated transaction but will be evaluated at the end of 2003 for payment of additional consideration in early 2004 using a "Lookback" formula as defined in the P&S Agreement. These currently unvalued exploratory assets, hereafter referred to as the "Lookback Properties," are specifically identified as Exhibit D in the P&S Agreement, and consist of certain prospects targeting the Wilcox and Yegua formations in Jackson County, Texas.

C. As payment for the Company's properties, Harken will issue at closing, up to 2,645,500 shares of its common stock ("Harken Common Stock") and has agreed to a potential Contingent Payment that will be based on an evaluation of the Lookback Properties at the end of 2003. This Contingent Payment would be made in 2004 and will be equal to 50% of the Lookback Properties value, as described and calculated in Exhibit D of the P&S Agreement (hereafter referred to as the "Contingent Payment"). A copy of the Contingent Payment Agreement is attached hereto.

D. Republic intends to obtain the consent from the holders of at least 90% of principal balance of the $2,645,500 of outstanding 11% Convertible Debentures, due April 15, 2003 ("Debentures") to accept the Harken Common Stock and 1.0 million Republic common shares in exchange for cancellation of the Debentures at the time of Closing of the P&S Agreement. None of the Harken Common Stock to be delivered at the Closing will be conveyed to the Holders of the Series C Preferred.

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E. By this agreement, the undersigned Holders of the Series C Preferred are agreeing to receive at the time of closing of the P&S Agreement: (i) a total of 3,400,000 shares of newly issued Company common stock, (ii) and assignment to the Holders of all rights to the Contingent Payment in exchange (the "Exchange") for (x) surrender of all outstanding shares of Series C Preferred to Republic for cancellation, and (y) termination of the obligation of Republic to pay accrued but unpaid dividends on the Series C Preferred.

F. Closing of the P&S Agreement is conditional, among other things, upon the holders of all outstanding Series C Preferred agreeing to the terms of the P&S Agreement, and the Exchange described above.

G. The Company and each of the undersigned Holders, as set forth on Exhibit A, intend that this Agreement shall establish the terms and conditions of the agreement to exchange all outstanding shares of Series C Preferred.

FOR CONSIDERATION, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. P&S Agreement. The Company shall diligently pursue the closing of the P&S Agreement and completion of the transactions described therein (the "Closing").

2. Representations and Warranties to Holder. The Representations and Warranties of Republic as set forth in Article 3 of the P&S Agreement, shall be extended to each Holder and each Holder shall be entitled to rely upon such representations and warranties to the same extent as if the Holder was a party to the P&S Agreement. All such representations and warranties shall not survive the Closing except as provided in the P&S Agreement.

3. Exchange of Series C Preferred. At or before the Closing of the P&S Agreement, each Holder of outstanding Series C Preferred shall exchange all Series C Preferred then held, together with all other dividend rights, conversion rights, voting rights or other rights which may be applicable to the Series C Preferred, for that number of shares of Company common stock set forth on Exhibit A attached hereto and incorporated herein by reference, and for an interest in the Contingent Payment as described below (the "Exchange"). At or before the Closing of the P&S Agreement, each Holder shall deliver to the Company, for surrender and exchange, each certificate held by the Holder representing Series C Preferred. At the time of Exchange, and no later than the Closing of the P&S Agreement, the Company shall cause to be issued one certificate representing the appropriate number of shares of Company common stock for each Holder's Series C Preferred and the Series C Preferred shall be canceled. The Company hereby agrees to assign to Holders the appropriate undivided percentage interest in the rights to the future Contingent Payment from Harken as set forth in Column C of Exhibit A.

4. Effect if P&S Agreement Does Not Close.

(A) This Agreement shall be effective as to each Holder at the earlier of the following: (a) The Closing of the P&S Agreement, or (b) the date on which the Holder surrenders its Series C Preferred for the Exchange as described in this Agreement. If the P&S Agreement does not close for any reason, then this Agreement shall be terminated as to any Holder which has not surrendered its Series C Preferred by the date of termination of the P&S Agreement.

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(B) If any Holder has surrendered its Series C Preferred for Exchange under this Agreement and the P&S Agreement is later terminated, this Agreement shall be effective as to such Holder. In such event, the Exchange shall be completed as to such Holder and the Company shall be obligated to pay to such Holder an amount equal to what the Holder would have received as a Contingent Payment if the P&S Agreement had been completed. Within 30 days following abandonment or termination of the P&S Agreement, the Company shall transfer or assign to each such Holder an undivided interest (equal to that shown in Column C of Exhibit A) in the Lookback Properties which will entitle the Holder to receive from the Company in 2004 a payment equivalent in all material respects to what the Holder would have been entitled to receive from Harken under the Contingent Payment Agreement (Exhibit B) had the P&S Agreement been completed.

5. Post-Transaction Limitations; Registration Obligations.

(A) Each Holder agrees not to effect any sales of the Company common stock to be issued in exchange for the Series C Preferred in a manner which does not comply with applicable registration provisions of the Securities Act of 1933. An appropriate legend reflecting this restriction may be placed on certificates representing the Company common stock to be issued in exchange for the Series C Preferred.

(B) Upon the written demand of Holders of at least 40% of the shares of Common stock issued in the Exchange, the Company shall file, at the Company's expense, a registration statement on Form S-3 or other applicable form if that Form is not available to the Company, to register for resale by Holders under the Securities Act of 1933, as amended, all the shares of Company common stock to be issued to Holders under this Agreement. Such registration statement shall be filed within 30 days of receipt of the written demand, but not earlier than June 30, 2002. The Company shall use its reasonable best efforts to have such registration declared effective by the Securities and Exchange Commission. When a registration statement is filed under this section, the Company shall have obligations, and Holders shall have rights as described in the Registration Rights Agreement which is attached as Exhibit C to this Agreement.

6. Termination of Certain Rights. Upon the completion of the Exchange, the rights and privileges of each Holder as described in the Certificate of Designation of Series C Redeemable 5% Cumulative Preferred Stock, as amended, as filed with the Secretary of State of Nevada on November 6, 2000, which designated a total of 99,503 shares of the Company's Series C Preferred and set forth the rights and privileges applicable thereto and the Amendment to the Designation, filed with the Secretary of State of Nevada on or about November 5, 2001 (the "Series C Preferred Designation") shall be terminated. Following the Exchange described in this Agreement, Holders' rights as a security holder of the Company shall be as the holder of common stock of the Company, the Company's Articles of Incorporation shall be amended to delete the Series C Preferred Designation and the Company shall have no obligation to pay accrued unpaid dividends on the Series C Preferred.

7. Irrevocable Proxy. Each undersigned Holder of the number of shares of Series C Preferred set forth on Exhibit A, by signing this Agreement hereby makes, constitutes and appoints the President of Republic Resources, Inc., or his designee, as the true and lawful attorney and proxy of the undersigned Holder, for, and in its name, place and stead, to attend any and all meetings of the stockholders of Republic Resources, Inc. and to vote any and all shares of Series C 5% Redeemable Preferred Stock of the Company standing in the name of the undersigned Holder, or any shares of common stock of Republic Resources, Inc. issued pursuant to the Exchange described in this Agreement, at any meeting of stockholders or any adjournments thereof held on or before July 1, 2002, or to sign any written consent on behalf of Holder, for the following purposes only:

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(1) To vote to approve the P&S Agreement dated effective January 31, 2002 between Republic Resources, Inc. and Harken ("P&S Agreement");

(2) To approve the Amendment of the Articles of Incorporation of the Company to increase the authorized number of shares of Company common stock from 10,000,000 shares to 30,000,000 shares;

(3) To approve, ratify and adopt any and all actions heretofore or hereafter taken by the Company and its management to implement the transactions contemplated by the P&S Agreement and this Agreement other than any amendment to the P&S Agreement or this Agreement that could reasonably be expected to be materially adverse to the undersigned Holders.

The undersigned Holder confirms that this proxy is given in connection with a reorganization of Republic Resources, Inc. and that this proxy is coupled with an interest, is binding on the Holder and its successors and assigns and is irrevocable, provided, however, that this proxy shall be deemed canceled if the parties terminate the P&S Agreement before Closing. The undersigned Holder hereby represents and warrants that the execution, delivery and performance of this Agreement has been duly authorized and is a legally binding obligation of the Holder enforceable in accordance with its terms. The Holder hereby represents and acknowledges that it is familiar with the business and financial condition of the Company and has had access to such information as it has requested to enable it to make an informed decision to acquire Company common stock in exchange for its shares of Series C Preferred Stock. The Holder hereby represents and warrants that it is an "accredited investor," as defined in Rule 501 under the Securities Act of 1933, as amended, and hereby ratifies and confirms all that the said proxy lawfully may do or cause to be done by virtue of this authorization.

8. Other Series C Preferred Holders. This Agreement shall be effective and binding upon each Holder of Series C Preferred only if holders of 100% of the outstanding Series C Preferred, as identified on Exhibit A, enter into this Agreement with the Company.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of February 11, 2002.

                                                                            REPUBLIC RESOURCES, INC.,
                                                                            a Nevada corporation
                                                                            
                                                                            By:/s/ Patrick J. Duncan                   
                                                                            Patrick J. Duncan, President

                                                                            HOLDERS:
                                                                            
                                                                            (as identified and signed on Exhibit A)

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EXHIBIT A

               A                                       B                           C                        D                                  E

                                                                                                           Shares of
                                                                                    % of           Common Stock
                                                                                (Series C)      to be Issued and
                                           Number of Shares           and            Exchange for the
Name and Address         of Series C Preferred    LookBack   Series C Preferred          Signatures

Kayne Anderson Diversified                                                                                                                                  By: Kayne Anderson
Capital Partners, L.P.                                                                                                                                                       Capital Advisors, L.P.
1800 Avenue of the Stars
Floor 2                                                                                                                                                                       By:/s/ Robert Sinnott
Century City, CA 90067                              19,503                              19.60%                       666,400                          Robert V. Sinnott

Arbco Associates, L.P.                                                                                                                                           By: Kayne Anderson
1800 Avenue of the Stars                                                                                                                                              Capital Advisors, L.P.
Floor 2
Century City, CA 90067                                                                                                                                          By:/s/ Robert Sinnott
                                                       16,000                              16.08%                     546,720                          Robert V. Sinnott

Kayne Anderson Non-Traditional                                                                                                                       By: Kayne Anderson
Investments, L.P.                                                                                                                                                           Capital Advisors, L.P.
1800 Avenue of the Stars
Floor 2                                                                                                                                                                      By:/s/ Robert Sinnott
Century City, CA 90067                               18,000                             18.09%                     615,060                           Robert V. Sinnott

Kayne Anderson Capital                                                                                                                                     By: Kayne Anderson
Partners, L.P.                                                                                                                                                                 Capital Advisors, L.P.
1800 Avenue of the Stars
Floor 2                                                                                                                                                                     By:/s/ Robert Sinnott
Century City, CA 90067                                 6,000                               6.03%                     205,020                       Robert V. Sinnott

Sandpiper & Co. fbo                                                                                                                                             By: State Street Research
Metropolitan Life Ins. Co                                                                                                                                            & Management
Separate Acct EN                                                                                                                                                             Company, as Adviser
c/o State Street Research &
Management Company,                                                                                                                                       By:/s/ James M. Weiss 
One Financial Center                                                                                                                                                 James M. Weiss,
Boston, MA 02111                                       26,000                             26.13%                     888,420                       Executive Vice President

Marine Crew & Co. fbo                                                                                                                                        By: State Street Research
Bellsouth Master Pension Trust                                                                                                                               & Management
c/o State Street Research &                                                                                                                                        Company, as Adviser
    Management Company,                                                                                                                                  
    as Adviser                                                                                                                                                          By:/s/ James M. Weiss
One Financial Center                                                                                                                                                  James M. Weiss
Boston, MA 02111                                      14,000                             14.07%                      478,380                        Executive Vice President
                                     Total             99,503                          100.00%                    3,400,000
                                                                       =====                                                            =======

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