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                  [ALVIN L. DAHL & ASSOCIATES, PC LETTERHEAD]

March 30, 1998

Mr. George Sutherland, President
National Equities Holdings, Inc.
616 FM 1960 West, Suite 222
Houston, TX 77090

Dear George:

This letter will confirm that our audit of the financial statements of National
Equities Holdings, Inc. as of and for the year ended December 31, 1997 is in
process and is nearing completion. However, we will be unable to issue our audit
report on those financial statements by the due date of the Form 10-KSB, March
31, 1998. It is our understanding that the Company has proven oil and gas
reserves which requires an independent oil and gas reserve study to meet the
accounting and disclosure requirements of generally accepted accounting
principles. On Wednesday March 25, we were faxed a preliminary report with the
indication that the final report will be issued soon.

We are also requesting confirmation of ownership of these oil and gas reserves
and the valuation of the ownership interest in a new oil field tool.

Once we have had the opportunity to examine and perform appropriate audit work
related to the above areas and the corresponding implications on the financial
statements of the Company and the cash flow issues have been settled, we will
then be able to issue our audit report which should be able to be done by April
21, 1998.

Should you have any questions or wish to discuss this matter further, please
feel free to contact us.


Sincerely, 


/s/ Alvin L. Dahl
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Alvin L. Dahl, CPA