1
As filed with The Securities and Exchange Commission on June 13, 1996.
REGISTRATION NO. 33-98042
================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

AMENDMENT NO. 1
TO FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

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

NATIONAL ENERGY RESOURCES TRUST SERIES
A THROUGH L
(Exact Name of Registrant as Specified in its Charter)

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

CALIFORNIA 1300 APPLIED FOR
(State of Incorporation (Primary Standard Industrial (I.R.S. Employer
or Organization) Classification Code No.) Identification No.)
21800 BURBANK BLVD, SUITE 100
WOODLAND HILLS, CALIFORNIA 91364
(800) 201-8666
(Name, address, including zip code and telephone number,
including area code, of Registrant's principal executive office)

MARSHALL J. FIELD WITH COPIES TO:
President MARK A. ROBERTSON, ESQ.
NATIONAL ENERGY RESOURCES, INC. ROBERTSON & WILLIAMS
21800 BURBANK BLVD., SUITE 100 3033 N.W. 63RD ST., SUITE 160
WOODLAND HILLS, CALIFORNIA 91364 OKLAHOMA CITY, OK 73116
(800) 201-8666 (405) 848-1944
(Name, address, including zip code and telephone number,
including area code, of agent for service)

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as possible after the Effective Date of the Registration Statement.

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

If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [x]

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
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NATIONAL ENERGY RESOURCES TRUST SERIES
A THROUGH L

CROSS REFERENCE SHEET
SHOWING LOCATION IN PROSPECTUS,
FILED AS PART OF REGISTRATION STATEMENT, OF
INFORMATION REQUIRED BY FORM S-1

ITEM
NUMBER IN
FORM S-1 ITEM CAPTION IN FORM S-1 LOCATION IN PROSPECTUS
- -------- ------------------------ ----------------------

1. Forepart of Registration Statement and Outside
Front Cover Page of Prospectus . . . . . . . . . . . Front Cover Page

2. Inside Front and Outside Back
Cover Pages of Prospectus . . . . . . . . . . . . . . Back Cover Page

3. Summary Information, Risk Factors and Ratio of
Earnings to Fixed Changes . . . . . . . . . . . . . . Summary of Prospectus; Risk
Factors

4. Use of Proceeds . . . . . . . . . . . . . . . . . . . . Use of Proceeds

5. Determination of Offering Price . . . . . . . . . . . . Front Cover Page

6. Dilution . . . . . . . . . . . . . . . . . . . . . . . Not Applicable

7. Selling Security Holders . . . . . . . . . . . . . . . Not Applicable

8. Plan of Distribution . . . . . . . . . . . . . . . . . Front Cover Page; Plan of
Distribution

9. Description of the Securities . . . . . . . . . . . . Summary of Prospectus;
Description of Trust Units

10. Interest of Named Experts and Counsel . . . . . . . . . Not Applicable

11. Information with Respect to Registrant . . . . . . . . The Trust; National Energy;
The Production Payment and
Underlying Properties

12. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities . . . . . . . . . . . . . . . . . . . . . National Energy

13. Expenses of Issuance and
Distribution . . . . . . . . . . . . . . . . . . . . Part II of Registration Statement

14. Indemnification of Directors and Officers . . . . . . . Part II of Registration Statement

15. Recent Sales of Unregistered Securities . . . . . . . . Part II of Registration Statement

16. Exhibits; Financial Statement Schedules . . . . . . . . Exhibits to Registration Statement

17. Undertakings . . . . . . . . . . . . . . . . . . . . . Part II of Registration Statement

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PROSPECTUS

NATIONAL ENERGY RESOURCES TRUST SERIES
6,000 TRUST UNITS

Each unit of beneficial interest ("Trust Unit") offered by National
Energy Resources, Inc. ("National Energy") the sponsor of the Trusts, evidences
an undivided interest in the National Energy Resources Trusts ("Trusts"), a
series of grantor trusts to be formed for the purpose of acquiring oil and gas
production payments. The assets of each Trust will consist of defined
production payments ("Production Payments") from working interests in producing
properties located in Texas, Oklahoma, Louisiana and Mississippi (collectively,
the "Underlying Properties"). The Trusts will receive the proceeds of the
offering.

This Prospectus describes the 500 Trust Units offered in National
Energy Resources Trust-A ("Trust-A") on an all-or-none basis. The Production
Payment to be purchased by Trust-A will entitle the Trust to receive 78% of the
Net Cash Flow from the Underlying Properties until the Trust has received
$500,000 plus an amount equal to 12 1/2% per annum of the principal sum.
Additional Trust Units may be offered in Trust B through L only upon the
closing of this offering, up to a total of 6,000 Trust Units for the entire
Series A though L. Each offering including the offering in Trust A, will be
for a period of 3 months from the date of its Prospectus, which period may be
extended by National Energy for 60 days (the "Offering Period"). Units in only
one Trust will be offered at a time. Each Trust will include a minimum of 500
Trust Units and may include a maximum number of Trust Units if the identified
underlying properties permit a larger Production Payment. Except for the 500
Trust Units to be issued by Trust-A, no Trust Units are offered by this
Prospectus unless it is accompanied by a Supplemental Prospectus relating to
the Trust for which Trust Units are then being sold. There is no assurance
that any additional Trust Units will be offered after the 500 Trust Units for
Trust-A.

Each Trust will be terminated (i) when investors have received from
the Production Payment their original investment plus interest at a rate per
annum specified for that trust anticipated to occur 5 years from the date of
formation of the Trusts; (ii) upon sale of the Production Payment which may
occur at any time after 2 years from the date of formation of the Trusts by
exercise of the Option by National Energy or a vote of 80% of the Trust
Unitholders; (iii) upon expiration of the number of years specified to comply
with the rule against perpetuities; or (iv) by vote of 80% of the Trust
Unitholders.

1. INVESTMENT IN THE SECURITIES IS SPECULATIVE AND INVOLVES A HIGH DEGREE
OF RISK.

2. SEE "RISK FACTORS" AT PAGE 10 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY EACH PROSPECTIVE INVESTOR.

3. THERE IS NO PUBLIC MARKET FOR THE TRUST UNITS.

4. ASSETS OF THE TRUSTS WILL BE LIMITED TO THE PRODUCTION PAYMENT
DESCRIBED IN THE PROSPECTUS FOR EACH TRUST.

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

==========================================================================================================
Initial Public Underwriting Proceeds to
Offering Price Commission (1) Trust (2)(3)
- ----------------------------------------------------------------------------------------------------------

Per Trust Unit . . . . . . . $1,000.00 $80.00 $920.00
------------------------------------------------------------------------
Total Trust-A . . . . . . $500,000.00 $40,000.00 $460,000.00
Total Series . . . . . . $6,000,000.00 $480,000.00 $5,520,000.00
==========================================================================================================

(See Footnotes on the following page)

The date of this Prospectus is ____________, 1996.

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(1) There is no firm commitment underwriting. The Trust Units are being
offered on a best efforts basis by members of the National Association
of Securities Dealers, Inc. (the "Soliciting Dealers"). National
Energy Resources, Inc. ("Sponsor") has agreed to indemnify the
Soliciting Dealers against certain liabilities including liabilities
under the Securities Act of 1933, as amended. See "PLAN OF
DISTRIBUTION."

(2) All subscriptions will be payable to Boatmen's Trust Company ("Escrow
Agent") and will be held along with the Subscription Agreements in
escrow by the Escrow Agent until the offering is closed or terminated.
Subscription funds will earn interest during the escrow which will be
paid to the subscribers promptly after the closing or termination of
the offering. Subscription funds will be returned promptly to
subscribers by the Escrow Agent if an offering fails to raise $500,000
within the Offering Period. Subscription Agreements may be revoked by
subscribers until they are counter signed by National Energy which has
15 days after receipt of the Subscription Agreements by the Escrow
Agent to accept them.

(3) Before deducting expenses of the offering payable by Trust estimated
at $30,000 for the Trust-A and $360,000 for the entire Series.

_____________________

AVAILABLE INFORMATION

National Energy Resources Trust Series has filed with the Securities
and Exchange Commission, Washington, D.C. ("SEC"), a registration statement on
Form S-1, Registration No. 33-98042 ("Registration Statement), under the
Securities Act of 1933, as amended ("Securities Act"), with respect to the
Trust Units offered hereby. This prospectus (together with any supplement)
which is a part of the Registration Statement ("Prospectus"), omits certain of
the information contained in the Registration Statement in accordance with the
rules and regulations of the SEC, and reference is hereby made to the
Registration Statement and the exhibits thereto for further information with
respect to the Trusts and the Trust Units. Statements made in this Prospectus
concerning the provisions of any document are not necessarily complete and, in
each instance, reference is made hereby to the copy of such document filed as
an exhibit to the Registration Statement. Each such statement is qualified in
its entirety by such references. Items of information omitted from this
Prospectus but contained in the Registration Statement may be inspected and
copies at the public reference facilities maintained by the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549; Everett McKinley Dirksen Building, 219
South Dearborn Street, Room 1204, Chicago, Illinois 60604; and 75 Park Place,
Room 1228, New York, New York 10007, at prescribed rates.

This Prospectus does not constitute an offer to sell or the
solicitation of an offer to buy the Trust Units offered hereby in jurisdictions
in which such offer or solicitation is unlawful.

PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
THE TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
THE PRODUCTION PAYMENT AND THE UNDERLYING PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
NATIONAL ENERGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
FEDERAL INCOME TAX CONSEQUENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ERISA CONSIDERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
DESCRIPTION OF THE TRUST AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
DESCRIPTION OF THE TRUST UNITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
VALIDITY OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
INDEX TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

RESERVE REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit A

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more
detailed information appearing elsewhere in this Prospectus. See "Risk
Factors" for considerations relevant to an investment in the Trust Units.

THE OFFERING

Trust Units offered . . . . . . . . . . . . A total of 6,000 Trust Units is being offered of which only 500 to be
issued by Trust-A are being offered by means of this Prospectus. The
additional Trust Units will be offered only by this Prospectus when
accompanied by a Supplemental Prospectus relating to the Trust in
which Trust Units are then being offered.

Purchase Price . . . . . . . . . . . . . . $1,000 per Trust Unit with a minimum of Ten (10) Trust Units ($10,000)
per investor and a minimum of 500 ($500,000) total Trust Units per
Trust. Trust A will consist of 500 Trust Units. Trusts offered later
may include additional Trust Units.

Production Payment . . . . . . . . . . . . For Trust A, the Production Payment will be equal to 78% of the Net
Cash Flow from the Underlying Properties consisting of 5 producing
natural gas wells in Oklahoma until Trust A receives $500,000 plus 12
1/2% per annum. For the other Trusts the percentage of Net Cash Flow
will vary depending on the estimated future net revenues of the wells
selected and the interest rate may vary from 12 to 14%.

Use of Proceeds . . . . . . . . . . . . . . 8% commission payable to the selling broker dealer; up to 6% as a
reimbursement of offering expenses to National Energy; 86% to the
Trust for the purchase of the Production Payment from National Energy.

Sponsor . . . . . . . . . . . . . . . . . National Energy Resources, Inc.
21800 Burbank Blvd., Suite 100
Woodland Hills, California 91364
(800) 201-8666

Trustee . . . . . . . . . . . . . . . . . Boatmen's Trust Company, an Oklahoma trust company

Cash Distributions . . . . . . . . . . . . Semi-annual distributions will be made to Trust Unitholders in an
amount equal to 12 1/2% per annum on the amount of their investment.
The excess of receipts from the Production Payment over the
distribution will be used to establish a Reserve Fund to pay the
amount of Unitholder's investment upon the termination of the Trust.

Trust Term . . . . . . . . . . . . . . . . The Trust will terminate when the Production Payment is paid in full
which is expected to occur in 5 years. The Trust will also terminate
if National Energy exercises its option to repurchase the Production
Payment which is may occur at any time after 2 years from the
effective date of

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the Production Payment. Otherwise the Trust will terminate upon vote
of 80% of the Unitholders or the lapse of years specified in the Trust
Agreement to avoid violation of the rule against perpetuities.

Redemption of
Trust Units . . . . . . . . . . . . . . . No Trust Units will be redeemed except in connection with the
termination of the Trust when all Trust Units will receive
distributions in complete payment of Unitholders initial investment
(or partial payment if cash proceeds of Trust Assets are insufficient
to make full payment).

NATIONAL ENERGY RESOURCES TRUST SERIES

National Energy Resources, Inc. ("National Energy") is the sponsor of a
series of trusts offering up to 6,000 units of beneficial interests ("Trust
Units"). Certificates evidencing the Trust Units will be issued on the Closing
Date of each trust. Each trust will offer a minimum of 500 Trust Units for a
possible total of 12 grantor trusts to be formed during the 12 month period
following the effective date of registration of the Trust Units.

Each trust will be a grantor trust formed pursuant to a Trust Agreement
in substantially the form of agreement included in the Registration Statement
filed with the SEC. Boatmen's Trust Company will serve as the trustee of each
trust and subscribers to Trust Units will be the grantors and the beneficiaries
of the trusts. The name of the trusts will be National Energy Resources Trust
plus the designation of a letter from A through L to indicate the specific
trust. Subscribers to the first 500 Trust Units will be grantors and
beneficiaries of National Energy Resources Trust-A ("Trust-A"), subscribers to
the second 500 Trust Units will be grantors and beneficiaries of National
Energy Resources Trust B and so forth unless in the discretion of National
Energy a trust should be formed with more than the minimum 500 Trust Units. In
no event will a trust be formed with less than 500 Trust Units. The term
"Trust" as used hereafter shall refer to all the trusts together or to a single
trust as the context may require.

This Prospectus describes only the Underlying Properties and Production
Payment which will be included in the first trust to be formed after the
commencement of this offering. Thereafter a Supplemental Prospectus will
describe the Underlying Properties and Production Payment to be included in the
Trust to be formed on the closing of the next group of Trust Units sold.
Except for the 500 Trust Units to be issued by Trust-A, no Trust Units are
offered by this Prospectus unless it is accompanied by a Supplemental
Prospectus relating to the Trust for which Trust Units are then being sold.
There is no assurance that any additional Trust Units will be offered after the
500 Trust Units for Trust- A.

The Trust will be a passive entity and will not engage in business.
The Trustee will have only such powers as are necessary for the collection and
distribution of the proceeds received by the fund, the establishment,
maintenance and final distribution of a Reserve Fund and the payment of Trust
liabilities and expenses.

TRUST ASSETS

After the completion of the offering for each Trust, the Trust will
purchase from National Energy a production payment from a group of oil and gas
properties (the "Underlying Properties") which will entitle the Trust to
receive a specified percentage of net cash flow from the Underlying Properties
until the Trust has received a sum of money equal to the total contributions of
Trust Unitholders (at least $500,000 for each trust) plus a specified annual
rate of return which is expected to range from 12% to 14%. The exact rate of
return, the specific terms of the Production Payment, a description of the
Underlying Properties from

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which a Production Payment is carved and an estimate of the reserves
attributable to the Underlying Properties as well as to the Production Payment
as they relate to a particular Trust will be described in a Supplement to this
Prospectus except as to Trust-A which is described below.

The Production Payment owned by the Trust and the Reserve Fund
established by the Trustee out of part of the receipts of the Production
Payment will be the sole assets of a Trust. The Underlying Properties from
which a Production Payment is carved will be completely separate from the
Underlying Properties burdened by a Production Payment payable to another
Trust.

PRODUCTION PAYMENT. A production payment is a right to a specified
share of the production from minerals in place or the proceeds from production
which has an expected economic life at the time of its creation of shorter
duration than the economic life of one or more of the mineral properties
burdened by the payment. The share of production may be limited in time by
dollar amount or amount of production. The Production Payment owned by a Trust
will be limited by the dollar amount of the total contributions ($500,000 or
more) to the Trust by its grantors (the subscribers to Trust Units) plus a
specified percentage (from 12% to 14%) per annum of the total contributions.
The Production Payment will be payable by National Energy out of a specified
percentage of the net cash flow from the Underlying Properties. "Net Cash
Flow" is defined in the Conveyance of Production Payment as the total revenues
received from the sale of production less all costs and expenses, including
gross production taxes, lease operating expenses, workover costs, development
costs, and any other expenses directly attributable to ownership of the working
interest in the Underlying Properties other than Federal and state income tax.
National Energy expects to acquire only those Underlying Properties which have
estimated reserves sufficient to create a Production Payment which will reach
its term in 5 years or less, but there can be no assurances that any Production
Payment will be paid in full in the expected time period or any time period.
See "Risk Factors."

Under the terms of the Conveyance of Production Payment, National
Energy will have the right to repurchase the Production Payment at any time
after 2 years from the Effective Date at a purchase price equal to an amount
sufficient to pay the amount of the total contributions of the Trust
Unitholders plus the specified annual rate of return for that Trust, less
amounts already distributed to the Unitholders and the amount held in the
Reserve Fund. In this event, the Trustee would distribute the cash to the
Trust Unitholders and terminate the Trust.

UNDERLYING PROPERTIES. National Energy will acquire working interests
in a group of oil and gas leases on which are located producing oil and gas
wells from Blackjack Oil & Gas, Inc. ("Blackjack") an Oklahoma corporation
which is not affiliated with National Energy or the Trust, or from other
independent oil and gas operators. Blackjack owns, operates and acquires oil
and gas properties located principally in Oklahoma, Texas, Louisiana and
Mississippi. A "working interest" is an interest in an oil and gas leasehold
which is subject to some portion of the cost of development, operation, or
maintenance. Although National Energy will be responsible for development
costs, and such costs would be deducted in calculating Net Cash Flow out of
which the Production Payment is paid, National Energy will not acquire working
interests in Underlying Properties where additional wells are expected to be
drilled. There will be, however, some workover costs associated with the wells
to be acquired, which will be paid by National Energy and deducted from gross
revenues in calculating Net Cash Flow. National Energy will own the Underlying
Properties subject to and burdened by the Production Payment, and is entitled
to any Net Cash Flow received by reason of such ownership in excess of the
percentage of Net Cash Flow paid to the Trust in satisfaction of the Production
Payment.

RESERVE FUND. The Production Payment owned by a Trust will entitle
the Trust to receive a specified percentage of the Net Cash Flow from the
Underlying Properties until the Trust has received the total investment in the
Trust made by Trust Unitholders plus a specified rate of return (from 12% to
14% per annum). Therefore, a portion of each payment received by the Trust
represents a return of capital. That part of the Production Payment which
represents a return of capital will be set aside in a separate interest bearing
account as a sinking fund (the "Reserve Fund"). Upon the full payment of the
Production Payment,

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the Trust will terminate and amounts in the Reserve Fund will be distributed to
Trust Unitholders as a return of their investment. The Trustee will manage the
Reserve Fund and will make all investment decisions with regard to the funds;
however, National Energy has the right to make recommendations to the Trustee
concerning investments of the Reserve Fund. Interest received on the Reserve
Fund will be used to pay general and administrative expenses of the Trust and
the Trustee's fees. Interest in excess of Trust expenses will reduce the
amount owed under the Production Payment and will be distributed to Trust
Unitholders upon termination of the Trust.

NATIONAL ENERGY RESOURCES TRUST-A

The Production Payment which will be purchased by Trust-A will entitle
the Trust to receive 78% of the Net Cash Flow from the Underlying Properties
until the Trust has received $500,000 plus an amount equal to 12 1/2% per annum
of the principal sum. The Underlying Properties to which this Production
Payment will be attributable are five (5) producing gas wells which have
well-established production histories and are operated by Blackjack. They are
located in the following named counties in Oklahoma and National Energy will
acquire the interests set forth below:

Action #2 in Logan County, Oklahoma. National Energy will acquire a
100% working interest burdened by a 23% royalty and overriding royalty
interest resulting in a 77% net revenue interest. Gas is being
purchased by Conoco, Inc.

Bryan #1-6 in Pawnee County, Oklahoma. National Energy will acquire a
100% working interest burdened by a 23% royalty and overriding royalty
interest resulting in a 77% net revenue interest. Gas is being
purchased by Conoco, Inc.

Davis #1-A in Oklahoma County, Oklahoma. National Energy will acquire
a 75% working interest burdened by a 28% royalty and overriding royalty
interest resulting in a 47% net revenue interest. Gas is being
purchased by GPM.

Enoch #1 in Blaine County, Oklahoma. National Energy will acquire a
100% working interest burdened by a 23% royalty and overriding royalty
interest resulting in a 77% net revenue interest. Gas is being
purchased by Trident NGL.

Phillips #1 in Ellis County, Oklahoma. National Energy will acquire a
100% working interest burdened by a 21% royalty and overriding royalty
interest resulting in a 79% net revenue interest. Gas is being
purchased by Midland Marketing Corp.

SUMMARY RESERVE INFORMATION. The following table sets forth, as of
April 17, 1996, the estimated proved producing oil and gas reserves, prices
used to estimate future net revenues, estimated future net revenues and
discounted estimated future net revenues attributable to the Underlying
Properties. The reserve report dated April 17, 1996, from which the following
information is derived was prepared by F. W. Elton, Petroleum Engineer, and is
attached to this Prospectus as Exhibit "A."

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Reserve to Proved Proved Nat- Discounted
Name Production Producing Producing ural Estimated Estimated
of Index Reserves Reserves Oil Gas Future Net Future Net
Well (Years) Oil (Bbls) Gas (Mcf) Price Price Revenues Revenues*

Bryan #1-6 15 0 1,165,226 -- .70 $ 475,496 $ 283,445
Enoch #1 10 0 226,590 -- 1.60 184,953 131,045

Action #2 11 0 370,295 -- 1.60 357,836 188,620

Davis #1 12 12,391 226,422 17.00 1.60 220,976 144,348
Phillips #1 13 0 242,406 -- 1.60 193,456 127,086

TOTALS 12,391 2,430,932 $1,432,717 $ 874,544

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

*The Discount rate of 10% was used.

NET CASH FLOW. The following table sets forth the Net Cash Flow
allocable to Trust-A and to National Energy based on the Estimated Future Net
Revenues set forth in the Summary Reserve Table above. There are no assurances
that Trust Unitholders will receive the total cash distributions set forth
below due to fluctuations in oil and gas prices, seasonal demand for natural
gas, natural production declines and other risk factors inherent in any
investment in oil and gas. See "Risk Factors."

Net Cash Allocation of
Flow Net Cash Flow to Trust Revenues Cash
Year to Trust National Energy Reserve Fund Distributions

1st $220,240 $ 22,740 $135,000 $ 62,500

2nd 204,235 16,735 125,000 62,500

3rd 176,177 8,677 105,000 62,500

4th 154,494 11,994 80,000 62,500

5th 137,106 19,606 55,000 62,500

TOTALS $892,252 $ 79,752 $500,000 $312,500

NATIONAL ENERGY

National Energy Resources, Inc. is a California corporation formed in
August, 1994 for the purpose of engaging in the development and ownership of
oil and gas and for forming the Trusts and conducting this offering. Its
shareholder is Marshall J. Field who owns 100% of the issued and outstanding
stock of National Energy. Its only officer is Marshall J. Field. National
Energy was formed with minimum capital and its initial capital has been
substantially used in the up front costs of the offering for which it will be
reimbursed out of the proceeds of sale of Trust Units. The principal executive
offices of National Energy are located at 21800 Burbank Blvd., Suite 100,
Woodland Hills, California 91364 and its telephone number is (800) 201-8666.
See "National Energy."

National Energy has no prior experience in the oil and gas industry nor
does it have prior experience in sponsoring oil and gas investments such as the
Trust Units.

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SUMMARY OF RISK FACTORS

An investment in the Units is subject to certain risk factors that
should be evaluated by prospective investors before purchasing the Units. Such
risk factors include:

Risks associated with the oil and gas industry generally, including:

(a) decreased revenues and reduced production due to volatility of
oil and natural gas prices;

(b) increased production expenses which could result in reduced oil
or gas production volumes;

(c) reduced value of the Units if the reserve estimates of
quantities and values of natural gas differ materially from
actual quantities and values of reserves;

(d) risks of reduced distributions to Unitholders if production
were interrupted for any reason;

(e) entities not controlled by National Energy could curtail
production on the Underlying Properties or excess production
capacity could reduce natural gas prices, either of which could
adversely affect the Trust distributions;

(f) the amount of cash distributions throughout the year may vary
substantially due to the seasonal nature of demand;

(g) decisions regarding operations, future development and
production levels are made by an independent entity and such
decisions may result in decreased cash distributions; and

(h) the operator of the Underlying Properties has no contractual or
fiduciary duty to protect the interests of the Unitholders.

Risks associated with the Trust and the Trust Units in particular,
include:

(a) Trustee is not personally liable to Unitholders under terms of
Trust Agreement unless it acts in bad faith;

(b) Transfer of Underlying Properties in violation of Conveyance
could result in delay of distribution;

(d) Trust Unitholders have limited voting rights.

(e) No secondary market for Trust Units and illiquid investment;
and

(f) Trust Unitholders will not participate in revenues in excess of
Production Payment.

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SUMMARY FEDERAL INCOME TAX CONSEQUENCES

THE TAX CONSEQUENCES OF AN INVESTMENT IN TRUST UNITS TO A PARTICULAR
INVESTOR WILL DEPEND IN PART ON THE INVESTOR'S OWN TAX CIRCUMSTANCES. EACH
PROSPECTIVE INVESTOR SHOULD THEREFORE CONSULT HIS OWN TAX ADVISOR ABOUT THE
FEDERAL, STATE AND LOCAL TAX CONSEQUENCES TO SUCH INVESTOR IN TRUST UNITS.

The following is a summary of certain Federal income tax consequences of
acquiring, owning and disposing of Trust Units and is based on the opinion of
Robertson & Williams, counsel to National Energy Resources, Inc. ("Counsel").
For a more detailed discussion of these consequences and the qualifications to
and limitations of the opinions of Counsel, see "Federal Income Tax
Consequences" and "Risk Factors -- Tax Considerations."

Classification and Taxation
of the Trust . . . . . . . . . . . The Trust will be treated as a grantor trust and not as an association
taxable as a corporation. As a grantor trust, the Trust will not be
subject to tax. If the Trust were treated as an association taxable
as a corporation, it would be treated as a separate entity subject to
corporate tax on its taxable income.

Taxation of Holders . . . . . . . . . . . . Because the Trust will be treated as a grantor trust for Federal
income tax purposes, and because a Trust Unitholder will be treated,
for Federal income tax purposes, as directly owning an interest in the
assets of the Trust, each Trust Unitholder will be taxed directly on
his pro rata share of income attributable to the assets of the Trust
consistent with the Trust Unitholder's method of accounting and
without regard to the taxable year or accounting method employed by
the Trust.

Interest Income . . . . . . . . . . . . . . For Federal income tax purposes, the Production Payment will be
treated as a debt obligation. As a result, each purchaser of a Trust
Unit will be required to treat that portion of each payment received
by the Trust and distributed monthly to Trust Unitholders as interest
income.

Holder Reporting Information . . . . . . . Year-end tax information will be furnished to Trust Unitholders no
later than March 31 of the following year.

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RISK FACTORS

An investment in the Trust is speculative and involves a high degree
of risk. Prior to making an investment, prospective investors should carefully
consider the following risk factors inherent in and affecting the business of
the Trust and this offering.

RISK ASSOCIATED WITH OIL AND GAS INDUSTRY GENERALLY

POTENTIAL DECREASE IN REVENUES DUE TO VOLATILITY OF OIL AND NATURAL
GAS PRICES AND PRODUCTION. The Trust's revenues will be dependent on the
prices received for oil and natural gas production from the Underlying
Properties and, in the case of Underlying Properties that are working
interests, the costs of producing and developing such oil and natural gas.
Prices for oil and natural gas are subject to wide fluctuations in response to
relatively minor changes in supply, market uncertainty and a variety of
additional factors that are beyond the control of the Trust and National
Energy. These factors include political conditions in the Middle East, the
foreign supply of oil and natural gas, the price of foreign imports, the level
of consumer product demand, the severity of weather conditions, government
regulations, the price and availability of alternative fuels and overall
economic conditions. In recent years, natural gas prices have been more
depressed than they have been historically when compared (on a net equivalent
barrel basis) to the price of oil. Although National Energy believes that in
the long-term prices for natural gas will increase in relation to oil prices,
no assurances can be made that natural gas prices will increase in relation to
oil prices or that the price of natural gas will increase at all.
Additionally, lower oil and natural gas prices may reduce the amount of oil and
natural gas that is economic to produce.

Oil and natural gas prices have historically been volatile and are
likely to continue to be volatile in the future. Such volatility makes it
difficult to estimate the future levels of cash distributions to Trust
Unitholders or the value of the Trust Units.

PRODUCTION EXPENSES - MAY AFFECT PRODUCTION AND REVENUES TO TRUST.
Production expenses typically include labor, fuel, repairs, hauling, pumping,
insurance, storage, and supervision and administration. Production expenses
may influence the decision of the operator as to the volume of oil or natural
gas to produce from a property or the decision to shut-in or abandon a well. A
working interest owner is obligated for its proportionate share of production
expenses. Accordingly, higher or lower production expenses on the Underlying
Properties may directly decrease or increase the amount received by the Trust
from the Production Payment. All of the Underlying Properties are in
productive fields where, based on information provided by Blackjack, material
increases in production expenses are currently not expected to occur in the
next several years.

REDUCED VALUE OF UNITS IF RESERVE ESTIMATES ARE INACCURATE. The value
of the Trust Units will be substantially dependent upon the proved producing
reserves attributable to the Production Payments owned by the Trust. There are
many uncertainties inherent in estimating quantities and value of proved
reserves and in projecting future rates of production. The reserve data set
forth herein, although prepared by independent consultants in a manner
customary in the industry, are estimates only, and quantities and estimated
values of oil and gas may differ from the amounts set fort herein. The Reserve
Report of F. W. Elton, Inc., appears as Exhibit "A." In
addition, the present values shown herein were prepared using guidelines
established for disclosure of reserves with the SEC and should not be
considered representative of the market value of such reserves or the Trust
Units. A market value determination would include many additional factors. As
of April, 1996, the estimated future net revenues from proved producing
reserves, attributable to the Production Payment, discounted at 10% per annum,
was $1,749 per Trust Unit.

DISTRIBUTION COULD BE AFFECTED IF PRODUCTION IS INTERRUPTED. Trust
distributions could be adversely affected if any of the hazards typically
associated with the production and transportation of oil and natural gas were
to occur, including personal injuries, property damage, damage to productive
formations or equipment and environmental damages. Uninsured costs for damages
for any of the foregoing will directly reduce the Production Payments from the
Underlying Properties to the extent such damages reduce the volume of oil and
natural gas produced.

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PRODUCTION COULD BE VOLUNTARILY CURTAILED, REDUCING TRUST
DISTRIBUTION. Approximately 97% of the estimated proved reserves of the
Underlying Properties at April, 1996, are comprised of natural gas, based on
the discounted present value of estimated future net revenues of proved
reserves. The revenues of the Trust and the amount of cash distributions made
by the Trust will be dependent upon, among other things, the volume of nature
gas produced and the price at which such natural gas is sold. Since the early
1980's, the available natural gas production capacity nationwide has exceeded
the demand by users of such gas, resulting in demand-related production
curtailments. In addition, existing gathering systems and pipelines
transporting natural gas to the users of such gas may not have sufficient
capacity to transport the entire allowable production from a field, resulting
in production from the Underlying Properties being curtailed. Curtailment may
exist for demand-related reasons. See "The Production Payments and the
Underlying Properties."

In addition, during the 1980's and early 1990's, excess natural gas
production capacity in the United States has generally resulted in downward
pressure on natural gas prices. The effect of any excess production capacity
which exists in the future cannot be predicted with certainty; however, any
such excess capacity may have a material adverse effect on Trust distributions
through its impact on prices and volumes.

SEASONAL DEMAND MAY CAUSE DISTRIBUTION TO VARY SUBSTANTIALLY. Due to
the seasonal nature of demand for natural gas and its effect on sales prices
and production volumes, the cash distributions by the Trust may vary
substantially on a seasonal basis. Generally, natural gas production volumes
and prices tend to be higher during the first and fourth quarters of the
calendar year. Because of the lag between National Energy's receipt of
revenues related to the Underlying Properties and the dates on which
distributions are made to Trust Unitholders, however, the seasonality that
affects production and prices generally should be reflected in distributions by
the Trust in later periods.

NATIONAL ENERGY AND THE TRUST EXERCISE LIMITED CONTROL OF OPERATIONS
AND DEVELOPMENT OF THE UNDERLYING PROPERTIES. Under the terms of the
Production Payment, neither the Trustee nor the Trust Unitholders will be able
to influence or control the operations or future development of the Underlying
Properties. Additionally, National Energy, which is the owner of the
Underlying Properties, will not operate or be able to significantly influence
the operations or future development of such Underlying Properties. All such
operations will be controlled by persons unaffiliated with the Trustee and
National Energy.

The Underlying Properties include National Energy's working interests
in producing properties located in Oklahoma, as described in "The Production
Payment and Underlying Properties". Each of these properties has an operating
agreement whereby, if the requisite percentage of working interest holders
approve a development project, all such holders are required to pay their
proportionate share of development costs. The working interests owned by
National Energy may not constitute a sufficient interest in any property to
veto or control a development decision. Under the terms of the Conveyance
creating the Production Payment in these Underlying Properties, the Trust will
not be liable for any development costs, but the amount of such development
costs will be deducted when computing Net Cash Flow payable to the Trust from
such properties.

THE OPERATOR OF THE UNDERLYING PROPERTIES HAS NO DUTY TO PROTECT
INTERESTS OF UNITHOLDERS. Under the terms of the operating agreements relating
to the Underlying Properties, Blackjack owes a duty to National Energy and the
other working interest owners to conduct the operations on the Underlying
Properties in a good and workmanlike manner and in accordance with its best
judgment of what a prudent operator would do under the same or similar
circumstances. Blackjack has no contractual or fiduciary duty to protect the
interest of the Trust or the Unitholders.

RISKS ASSOCIATED WITH TRUST AND TRUST UNITS IN PARTICULAR

FIDUCIARY RESPONSIBILITY OF TRUSTEE. The Trustee is responsible to
the Trust Unitholders as a fiduciary and, as such, under Oklahoma law is
required to act in the best interests of the Trust Unitholders at all times and
to exercise the judgment and care in supervising and managing the Trust's
assets exercised by persons of ordinary prudence, discretion and intelligence.
The Trust Agreement ("Agreement") provides, however, that the Trustee will

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not be personally liable to the Trust Unitholders for the failure to exercise
such standard of judgment and care, unless such failure is the result of bad
faith.

Due to the passive nature of the Trust, the Trustee is not required to
make business decisions affecting the assets of the Trust. Therefore, the
Trustee's primary functions under the Agreement are anticipated to be
ministerial. Under certain circumstances, however, the Trustee may be required
to approve or disapprove an extraordinary transaction affecting the Trust and
Trust Unitholders. These transactions include a sale of the Production
Payment, termination of the Trust and amendment of the Agreement. The Trustee
is required to act in the best interests of Trust Unitholders in connection
with any future extraordinary transactions but is not required to retain an
unaffiliated person to represent the Trust Unitholders.

Under Oklahoma law, if the Trustee, in bad faith, were to fail to
collect amounts owed to the Trust or distribute cash held by the Trust for
distribution, or otherwise, in bad faith, take or omit to take any action that
is in the best interest of the Trust Unitholders, the Trustee would be liable
to the Trust Unitholders for damages caused by any such act or omission,
including any loss or depreciation in value of the Trust assets or failure to
make a profit from such assets caused by such act or omission. Oklahoma law
permits the Trust Unitholders to file an action seeking other remedies for such
acts or omissions in addition to damages, including removal of the Trustee,
specific performance, appointment of a receiver, an accounting by the Trustee
to the Trust Unitholders, exemplary damages and other remedies. The
availability of these remedies provided by Oklahoma law is explicitly
incorporated into the Agreement.

TRANSFER OF UNDERLYING PROPERTIES IN VIOLATION OF CONVEYANCE COULD
RESULT IN DELAYED DISTRIBUTION. National Energy currently owns or has under
contract to purchase the Underlying Properties from which will be conveyed the
Production Payment to Trust-A. Under the terms of the Conveyance, National
Energy will have no right to transfer all or any portion of its working,
royalty, overriding royalty or fee mineral interests comprising the Underlying
Properties as long as they are burdened by the Production Payment without the
consent of the Trustee. The Production Payment constitutes a real property
interest. The Conveyances will be recorded in the appropriate real property
records so as to give notice of the Production Payments to National Energy's
creditors and transferees, whose rights would be subject to the Production
Payments and whose interests would be subsequent and inferior to the Production
Payments. Any transferee will succeed to the responsibilities of National
Energy as to the interests so transferred, including the payment duties and
corresponding liabilities to the Trust for damages caused by breach of such
responsibilities. The Agreement does not provide a specific mechanism whereby
Trust Unitholders may compel the Trustee to institute action against National
Energy or a transferee of an Underlying Property for damages caused by a delay
or reduction in the payment of Production Payments to the Trust. As discussed
under "-- Fiduciary Responsibility of Trustee," above, if the Trustee were to
refuse in bad faith to enforce such damage remedies, the Trustee would be
liable to the Trust Unitholders.

The Trustee may cause the sale of the Production Payments if the
holders of 80% or more of the Trust Units approve such sale or if National
Energy exercises its option to purchase the Production Payment after two years.
The net proceeds of any sale will be distributed to the Trust Unitholders and
the Trust would be terminated. See "Description of the Trust Agreement --
Duration of the Trust; Sale of Production Payments."

ABANDONMENT OF A WELL WILL EXTINGUISH PORTION OF PRODUCTION PAYMENT.
National Energy and any transferees will have the right to abandon any well or
property on an Underlying Property that is a working interest if, in its
opinion, such well or property ceases to produce or is not capable of producing
in commercially paying quantities, and upon termination of any such lease, that
portion of the Production Payments relating thereto will be extinguished.

The Underlying Properties are currently operated by Blackjack and
National Energy does not anticipate any change in operations. The current
operator of the Underlying Properties is under no obligation to continue
operating the properties, and the Trustee, Trust Unitholders and National
Energy may be unable to appoint or control the appointment of a replacement
operator. See "Production Payments and the Underlying Properties --
Description of the Underlying Properties."

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LIMITED VOTING RIGHTS OF TRUST UNITHOLDERS. While Trust Unitholders
will have certain voting rights pursuant to the terms of the Trust Agreement,
these rights are more limited than those of stockholders of most public
corporations. For example, there is no requirement for annual meetings of
Trust Unitholders or for an annual or other periodic re-election of the
Trustee. See "Description of the Trust Units -- Voting Rights of Trust
Unitholders."

TAX CONSIDERATIONS. The Trust has received an opinion of Counsel that
the Trust is a "grantor trust" for Federal income tax purposes, and that each
Trust Unitholder will be taxed directly on his pro rata share of the income of
the Trust and his pro rata share of other deductions of the Trust. Counsel
believes that its opinion is in accordance with the present position of the IRS
regarding these tax questions. There can be no assurances that National Energy
or the Trust would be granted such a ruling if requested or that the IRS will
not change it position in the future. The tax treatment of the Trust and Trust
Unitholders could be materially different from that described above if the IRS
were to successfully challenge that treatment. See "Federal Income Tax
Consequences."

LACK OF SECONDARY MARKET AND ILLIQUID INVESTMENT. There is no
secondary market for the Trust Units and none is anticipated. Trust
Unitholders will therefore, not be able to liquidate their investment readily
and should expect to hold the Trust Units for the duration of the Trust.

TRUST UNITHOLDERS WILL NOT PARTICIPATE IN EXCESS REVENUES. The Trust
will receive from the Production Payment only the amounts specified in the
Conveyance which for Trust A is $500,000 plus 12 1/2% per annum. This amount
will be paid out of 78% of the Net Cash Flow from the sale of oil and gas
produced by the Underlying Properties (which may be a different percentage for
other Trusts) which is anticipated to be accomplished in 5 years based on the
reserve reports. If gas prices or production increase, the Trust will not
receive a larger total sum but the Production Payment will be paid in a shorter
time period. If gas prices or production decrease, the Production Payment will
be paid over a longer period and there is the risk that it will not be paid in
full.

USE OF PROCEEDS

The Trust will receive all the proceeds from the sale of the Trust
Units, all of which will be paid to National Energy for the Production Payment.
National Energy will apply the proceeds from the sale of Trust Units in Trust-A
in the approximate amounts set forth in the table below although there can be
no assurance that the actual amounts will not vary from those set forth below:

Commissions $ 40,000
Offering Expenses(1) 30,000
Acquisition of Production Payment 430,000

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

(1) Includes legal and accounting fees, consulting fees, Federal and state
securities registration fees, escrow fees, printing and copying
charges, telephone expense and miscellaneous costs.

THE TRUST

Trust-A will be formed pursuant to the Trust Agreement between
Boatmen's Trust Company as trustee, and National Energy upon the deposit into
escrow of $500,000 in payment for 500 Trust Units.

National Energy currently owns or has under contract to purchase, the
Underlying Properties which will be subject to and burdened by the Production
Payment to be purchased by Trust-A from the proceeds of this offering.
Accordingly, National Energy, as owner of the Underlying Properties, will
receive payments from purchasers of production or the operators of such
properties. National Energy will aggregate these payments, deduct operating
costs and other expenses related to the Underlying Properties, and make payment
to the Trustee each month for the amounts due to Trust-A under the Production
Payment.

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FEES AND EXPENSES

The following is a description of certain fees and expenses
anticipated to be paid or borne by Trust-A, including all fees expected to be
paid to National Energy, the Trustee or their affiliates.

ORGANIZATIONAL AND OFFERING EXPENSE. The organization and offering
expenses allocable to Trust-A are $30,000 (6% of the subscription proceeds) for
legal and accounting fees, consulting and engineering fees, registration fees,
printing and miscellaneous costs, which will be reimbursed to National Energy
upon the close of the offering of Trust Units in Trust-A. Each subsequent
trust will bear the same percentage (6%) for organizational and offering
expenses. National Energy has borne and paid the expenses of the entire
offering of Units in the Trust Series but each trust will reimburse National
Energy only one-twelfth (1/12) of such expenses or if more than 500 Units are
offered by a Trust, that Trust will bear expenses in proportion to the number
of Units issued by it bears to the total number of Units included in the
registration.

INTEREST. National Energy will not pay interest on any amounts
received from the Underlying Properties prior to payment to Trust-A.

TRUST ADMINISTRATIVE EXPENSES. The Trustee will be paid a trustee fee
of $1,200 per year per trust and an escrow fee of $600 per account. See
"Description of the Trust Agreement -- Compensation of the Trustee." The Trust
will also incur legal, accounting and engineering fees, mailing and printing
costs and other expenses which will be reimbursed to the Trustee at cost.

THE PRODUCTION PAYMENT AND THE UNDERLYING PROPERTIES

GENERAL

The Production Payments will be carved out of the Underlying
Properties which will consist of working interests in producing oil and gas
properties acquired by National Energy from Blackjack or other independent oil
and gas operators. The Production Payment to be acquired by Trust-A will
entitle Trust-A to receive 78% of the Net Cash Flow from the sale of oil and
gas produced from the Underlying Properties until the Trust has received
generally the total investment made by its Trust Unitholders ("Primary Sum") as
adjusted for potential expenses, interest income on reserves and general and
administrative expenses, plus interest at the rate of 12 1/2% per annum on the
Primary Sum. The Primary Sum will be increased if the Trust should be
compelled for any reason to make payments on account of ownership of the
Production Payment and will be decreased by the amount of interest income on
the Reserve Account in excess of general and administrative expenses, if any.
The net effect of these adjustments is to maintain the Primary Sum at $500,000.
In general, Net Cash Flow equals the gross proceeds received by National Energy
from the sale of production less designated costs, including transportation and
marketing costs, applicable production and property taxes, operating and
development costs. The computation of the Production Payment and its repayment
is more specifically described in the Conveyance.

DESCRIPTION OF UNDERLYING PROPERTIES

Davis #1-A in Oklahoma County, Oklahoma. National Energy will acquire
a 75% working interest burdened by a 28% royalty and overriding
royalty interest resulting in a 47% net revenue interest. Gas is
being purchased by GPM.

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None of the royalty or overriding royalty interests burdening the above
described properties is owned by an affiliate of National Energy or the Trust.

RESERVES

The following table summarizes estimated proved producing reserves
attributable to the Production Payment and the Underlying Properties to be
included in Trust-A as of April, 1996 as set forth in the Reserve Report
attached as Exhibit "A."

Production Payment Underlying Properties
------------------ ---------------------
Proved Producing

Oil (Bbls) 4,540 5,821
Gas (Mcf) 1,360,170 1,743,808

Future net revenues $812,500 $1,432,717

Present value discounted
at 10% per annum $682,144 $ 874,544

The reserve estimates were prepared using assumptions required by the
Financial Accounting Standards Board. Such assumptions include the use of
period-end prices for oil and natural gas and period-end costs for estimated
future development and production expenditures to produce the proved reserves.
Future net cash flows are discounted at a 10% per annum rate. Because the
Trust and National Energy (as owner of the Underlying Properties) are not
subject to Federal income taxation, no provision is included for Federal income
taxes.

Proved reserve quantities are estimates based on information
available, including prices and costs, at the time of preparation. Such
estimates are by their very nature imprecise and subject to change as
additional information becomes available. The Reserve Report uses prices for
natural gas in effect at the time the reserve report was prepared. Such prices
are influenced by seasonal demand for natural gas and may not be the most
appropriate or representative prices to use in estimating future revenues or
reserve data. See " -- Oil and Gas Sales Prices," below for a description of
average gas prices received by the owner of the Underlying Properties. The
reserves actually recovered and the timing of production of those reserves may
be substantially different from the foregoing estimates. Moreover, the present
values shown above should not be considered representative of the market value
of such reserves. A market value determination would include many additional
factors.

Proved reserve quantities set forth in the foregoing table are
calculated in accordance with the SEC's guidelines for disclosure of oil and
natural gas reserves and assume that oil and natural gas prices, production
expenses and development costs in effect on the date of the report remain
constant over the economic life of the property. Proved reserve quantities for
the Underlying Properties are calculated by multiplying the net revenue
interest applicable to the Underlying Properties by the total amount of oil and
natural gas estimated to be economically recoverable from the properties.
Reserve quantities are calculated differently for the Production Payment
because such interests do not entitle the Trust to a specific quantity of oil
or gas. Proved reserves attributable to the Production Payment, which are
carved out of the Underlying Properties are calculated by deducting an amount
of oil or gas sufficient, if sold at the prices used in preparing the reserve
estimates for the Underlying Properties, to pay the Primary Sum, as adjusted
for interest earned, less general and administrative expenses, plus

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interest at an annual rate of 12-1/2% over a term of 5 years. As oil and
natural gas prices vary from those used to calculate the applicable reserve
estimate, more or less quantities of oil and natural gas are required to pay in
full the Production Payment.

The underlying properties were selected for their consistent
production history and for estimated future net revenues in the amounts
sufficient to return $500,000 plus 12.5% per annum in 5 years without depleting
reserves since it is a requirement for production payments that they be paid
solely out of reserves in a period less that the life of the properties as
estimated at the time the production payment is created. The Company has no
interest in any adjacent properties; however, the operator may. The trusts
would not be entitled to participate in any other wells in the area as the
Production Payment is limited to the wells identified. Oklahoma's spacing laws
would prevent the operator from drilling additional wells which would
jeopardize production from the Underlying Properties. If drainage occurs, the
trusts would have legal rights to damages.

AVERAGE PRICES ON UNDERLYING PROPERTIES

Year to year changes in oil prices relate directly to changes in
posted prices. The average wellhead price received in 1995 was $17.00 per
barrel. The posted price for crude oil in Oklahoma on June 6, 1996 was $18.50
per barrel.

Year to year changes in gas prices relate directly to changes in
posted prices. The average natural gas price for production from the five
wells included in the Underlying Properties during 1992 was $1.76 per Mcf. The
average natural gas price for production from these properties during 1993 was
$2.03 per Mcf, and was $1.70 per Mcf for 1994, and $1.42 per Mcf for 1995.

PRODUCTION HISTORY FOR UNDERLYING PROPERTIES

The Action #2 well was recompleted by Maze Oil & Gas in March 1993.
It is located in Logan County, Oklahoma. The initial production was
500 Mcf of gas per day and produces from the Hoover Zone. It has
produced for three years and has another eleven years of economic life.

The Bryan #1 well was drilled and completed by Blackjack Oil in 1994.
It is located in Pawnee County, Oklahoma. The initial production was
750 Mcf of gas per day and produces from the Tonkawa Sand. It has
produced for two years and has another fifteen years of economic life.

The Davis well was drilled by J.L. Thomas in 1953. It is located in
Oklahoma County, Oklahoma. The initial production was 1.7 Mmcf of gas
per day and produces from the Bartlesville Zone. It has produced for
thirty-three years and has another twelve years of economic life.

The Enoch well was drilled by Heffel Resources in 1989. It is located
in Blaine County, Oklahoma. The initial production was 275 Mcf of gas
per day and produces from the Morrow Zone. It has an economic life of
ten years.

The Phillips #1 well was drilled by Phillips Petroleum in 1962. It is
located in Ellis County, Oklahoma. The initial production was 1.8
Mmcf of gas per day and produces from the Morrow Zone. It has an
economic life of thirteen years.

COMPETITION, MARKETS AND REGULATIONS

COMPETITION. The oil and natural gas industry is highly competitive
in all of its phases. National Energy will encounter competition from major
oil and natural gas companies, independent oil and natural gas concerns, and
individual producers and operators. Many of these competitors have greater
financial and other resources than National Energy. Competition may also be
presented by alternative fuel sources, including heating oil and other fossil
fuels.

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MARKETS. Where the Underlying Properties consist of royalty or
royalty interests in properties, the operators of the properties will make all
decisions regarding the marketing and sales of oil and natural gas production.
Although National Energy generally has the right to market oil and natural gas
produced from the Underlying Properties that are working interests, National
Energy will generally rely on the operators of the properties to market the
production. The ability of the operators to market the oil and natural gas
from the Underlying Properties will depend upon numerous factors beyond their
control, including the extent of domestic production and imports of oil and
natural gas, the proximity of the natural gas production to gas pipelines, the
availability of capacity in such pipelines, the demand for oil and natural gas
by utilities and other end-users, the effects of inclement weather, state and
Federal regulation of oil and natural gas production and Federal regulation of
natural gas sold or transported in interstate commerce. There is no assurance
that such operators will be able to market all of the oil or natural gas
produced on the Underlying Properties or that favorable prices can be obtained
for the oil and natural gas produced.

The supply of natural gas capable of being produced in the United
States has exceeded demand in recent years as a result of decreased demand for
natural gas in response to economic factors, conservation, lower prices for
alternative energy sources and other factors. As a result of this excess
supply of natural gas, natural gas producers have experienced increased
competitive pressure and significantly lower prices. Many natural gas
pipelines have reduced their takes from producers below the amount they were
contractually obligated to take or pay at fixed prices in excess of spot prices
or have renegotiated their obligations to reflect more market responsive terms.
The decline in demand for natural gas resulted in many pipelines reducing or
ceasing altogether their purchases of new natural gas. Substantially all of
National Energy's natural gas production is sold at market responsive prices.

Demand for natural gas production has historically been seasonal in
nature. Due to unseasonably warm weather over the last several years the
demand for natural gas has decreased, resulting in lower prices received by
producers during the winter months than in prior years. Consequently, on an
energy equivalent basis, natural gas has sold at a discount to oil for the past
several years. Such price fluctuations will directly impact Trust
distributions, estimates of Trust reserves and estimated future net revenue
from Trust reserves.

In view of the many uncertainties affecting the supply and demand for
crude oil, natural gas and refined petroleum products, National Energy is
unable to make reliable predictions of future oil and natural gas prices and
demand or the overall effect they will have on the Trust. National Energy does
not believe that the loss of any of its purchasers would have a material
adverse effect on the Trust, since substantially all of the natural gas sales
from Underlying Properties are made on the spot market.

REGULATION

The production, transportation and sale of oil and gas from the
Underlying Properties are subject to Federal and state governmental regulation,
including regulations concerning the ceiling prices at which certain categories
natural gas may be sold, regulation of tariffs charged by pipelines, taxes, the
prevention of waste, the conservation of oil and natural gas, pollution
controls and various other matters. The United States has power to permit
increases in the amount of oil imported from other countries and to impose
pollution control measures.

FEDERAL REGULATION OF NATURAL GAS. The Underlying Properties will be
subject to the jurisdiction of the Federal Energy Regulatory Commission
("FERC") and the Department of Energy ("DOE") with respect to various aspects
of oil and natural gas operations including marketing and production of oil and
natural gas. The Natural Gas Act and the Natural Gas Policy Act of 1978
("Policy Act") mandate federal regulation of interstate transportation of
natural gas and of wellhead pricing of certain domestic natural gas, depending
on the category of the natural gas and the nature of the sale. In July 1989,
however, Congress enacted legislation that terminated wellhead price controls
on all domestic natural gas as of January 1, 1993, with price-decontrol
effective immediately for certain gas, and effective for other gas as contracts
expire or are terminated. Natural gas from newly spudded wells was
price-decontrolled on May 15, 1991. In addition, parties may voluntarily agree
in writing, as of July 26, 1989 and thereafter, to effect decontrol of natural
gas.

In April 1992, the FERC issued Order No. 636, which provides for the
fundamental restructuring of interstate pipeline sales and transportation
services. Among other things, Order No. 636 requires interstate pipelines

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to "unbundle" their merchant sales functions from their transportation and
storage functions, requires interstate pipelines to assign capacity rights they
have on upstream pipelines to the pipelines' former sales customers and
provides for the recovery by interstate pipelines of costs associated with the
pipelines' transition from providing bundled sales services to providing
unbundled transportation and storage services. In August 1992, the FERC issued
an Order on Rehearing ("Order No. 636-A"), largely upholding the regulations
and requirements of Order No. 636. While Order Nos. 636 and 636-A would not
directly regulate National Energy's activities, the wide ranging implications
of those orders for the natural gas industry may have an indirect effect on
such activities. Among other things, Order No. 636 may increase
transportation costs and tariffs on interstate pipelines and cause interstate
pipelines to seek to renegotiate or terminate certain of their existing
purchase contracts, but ultimately may enhance gas marketing opportunities and
transportation availability.

Order Nos. 636 and 636-A are subject to further rehearing by the FERC
and court challenges. Although the outcome of these proceedings and the
various individual interstate pipeline restructuring proceedings required by
those Orders cannot be predicted with certainty, National Energy does not
believe the Orders will have an adverse effect on its operations or the Trust.
Nevertheless, the Orders have resulted in a degree of uncertainty with respect
to interstate natural gas sales and transportation because the precise effects
of the Orders will remain unknown for some time.

NO PRICE CONTROLS ON LIQUID HYDROCARBONS. Sales of crude oil,
condensate and natural gas liquids can be made at uncontrolled prices. There
are currently no price controls on crude oil, condensate or natural gas
liquids.

LEGISLATIVE PROPOSALS. In the past, Congress has been very active in
the area of natural gas regulation. Legislation recently enacted repeals
incremental pricing requirements and gas use restraints previously applicable.
There are other legislative proposals pending in the Federal and state
legislatures, which, if enacted, would significantly affect the petroleum
industry. At the present time it is impossible to predict what proposals, if
any, might actually be enacted by Congress or the various state legislatures
and what effect, if any, such proposals might have on the Underlying Properties
and Trust.

STATE REGULATION. Many state jurisdictions have at times imposed
limitations on the production of natural gas by restricting the rate of flow
for natural gas wells below their actual capacity to produce and by imposing
acreage limitations for the drilling of a well. States may also impose
additional regulation of these matters. Most states regulate the production
and sale of oil and natural gas, including requirements for obtaining drilling
permits, the method of developing new fields, the spacing and operation of
wells and the prevention of waste of oil and gas resources. The rate of
production may be regulated and the maximum daily production allowable from oil
and natural gas wells may be established on a market demand or conservation
basis or both.

ENVIRONMENTAL REGULATION

GENERAL. Activities on the Underlying Properties are subject to
existing federal, state and local laws and regulations governing environmental
quality and pollution control. It is anticipated that, absent the occurrence
of an extraordinary event, compliance with existing federal, state and local
laws, rules and regulations regulating the discharge of materials in the
environment or otherwise relating to the protection of the environment will not
have a material effect upon the Trust. National Energy cannot predict what
effect additional regulation or legislation, enforcement policies thereunder,
and claims for damages to property, employees, other persons and the
environment resulting from operations on the Underlying Properties could have
on the Trust.

SOLID AND HAZARDOUS WASTE. The Underlying Properties have produced
oil and natural gas for several years and will be purchased by National Energy
only upon completion of the offering for Trust-A. Although, to National
Energy's knowledge, the operators have utilized operating and disposal
practices that were standard in the industry at the time, hydrocarbons or other
solid wastes may have been disposed or released on or under the Underlying
Properties by the current or previous operator. State and federal laws
applicable to oil and gas wastes and properties have become increasingly more
stringent. Under these new laws, National Energy or an operator of the
Underlying Properties could be required to remove or remediate previously
disposed wastes or property contamination (including groundwater contamination)
or to perform redial plugging operations to prevent future contamination.

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The operators of the Underlying Properties may generate wastes that
are subject to the Federal Resource Conservation and Recovery Act and
comparable state statutes. The Environmental Protection Agency ("EPA"), the
Oklahoma Corporation Commission and the Texas Railroad Commission have limited
the disposal options for certain hazardous wastes and are considering the
adoption of more stringent disposal standards for nonhazardous wastes.
Furthermore, it is anticipated that additional wastes (which could include
certain wastes generated by oil and gas operations) will be designated as
"hazardous wastes," which are subject to more rigorous an costly disposal
requirements.

SUPERFUND. The Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), also known as the "superfund" law, imposes liability,
without regard to fault of the legality of the original conduct, or certain
classes of persons that contributed to the release of a "hazardous substance"
into the environment. These persons include the owner and operator of a site
and companies that disposed or arranged for the disposal of the hazardous
substance found at a site. CERCLA also authorizes the EPA and, in some cases,
third parties to take actions in response to threats to the public health or
the environment and to seek to recover from the responsible classes of persons
the costs of such action. In the course of their operations, the operators of
the Underlying Properties have generated and will generate wastes that may fall
within CERCLA's definition of "hazardous substances." National Energy or
operator of the Underlying Properties may be responsible under CERCLA for all
or part of the costs to clean up sites at which such wastes have been disposed.
National Energy has not been named a potentially responsible party in any
action brought under CERCLA.

AIR EMISSIONS. The operators of the Underlying Properties are subject
to federal, state and local regulations for the control of emissions from
sources of air pollution. Administrative enforcement actions for failure to
comply strictly with air regulations or permits are generally resolved by
payment of a monetary penalty and correction of any identified deficiencies.
Alternatively, regulatory agencies could require the operators to forego
construction or operation of certain air emission sources.

OSHA. The operators of the Underlying Properties are subject to the
requirements of the Federal Occupational Safety and Health Act ("OSHA") and
comparable state statutes. The OSHA hazard communication standard, the EPA
community right-to-know regulations under Title III of the federal Superfund
Amendment and Reauthorization Act, and similar state statutes require an
operator to organize information about hazardous materials used or produced in
its operations. Certain of this information must be provided to employees,
state and local governmental authorities and local citizens.

NATIONAL ENERGY

GENERAL

National Energy was formed as a California corporation in August,
1994. National Energy's principal executive office is located at 21800 Burbank
Blvd., Suite 100, Woodland Hills, California 91364, and its telephone number is
(800) 201-8666.

BUSINESS

National Energy is a development stage company organized to engage in
the acquisition, exploitation and development of producing properties and
related facilities, the exploration for oil and natural gas and the production,
marketing and transportation of oil and natural gas. National Energy has
entered into contracts to acquire five properties, located in Oklahoma.

National Energy's offices are located in Woodland Hills, California,
in approximately 1,200 square feet of leased space. National Energy also
maintains a leased field office in Enid, Oklahoma with Blackjack.

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MANAGEMENT

The business and affairs of National Energy are controlled by its
Board of Directors which is composed of 1 member. The officers of National
Energy are elected by and serve until their successors are appointed by its
Board of Directors. The directors and executive officers of National Energy
are as follows:

Name Title
---- -----
Marshall J. Field President and Director

Set forth below is the business experience during the past five years
of the directors and executive officers of National Energy.

Marshall J. Field, age 46, has been President and Director of National
Energy Resources, Inc. since its formation in August, 1994. Mr. Field
currently serves as Chief Executive Officer and President of Marshall Field &
Company under Spectrum Securities. Mr. Field was Executive Vice President of
United California Securities, from June of 1994 to January 1996. From December
1993 until June 1994, Mr. Field was with American Business Securities. From
July 1991 until December 1993 Mr. Field was with Southern California
Securities. He has served as a registered representative in several major
brokerage firms, including Prudential Bache from September 1985 to July 1989
and PaineWebber from July 1989 to July 1991. His background in the industry
spans eighteen years of experience in income investments. Mr. Field has been a
regular on "The Interest Rate Report" on KWHY-TV for the past eight years. Mr.
Field was educated at California State Northridge and Santa Monica College in
California.

EMPLOYEES

National Energy had no employees as of May 28, 1996.

CONSULTANTS

F. W. Elton in an independent consulting engineer, performing
engineering and some geological duties depending upon the clients' need and
wishes. Mr. Elton has performed mineral valuations for banks, estate work for
attorneys, valuations for producers and royalty owners. In addition, he does
open hole log and sample interpretations; prepares procedure and cost
estimates; supervises drilling, completion and remedial and day to day
production operations. His work has covered Oklahoma, Central and Southeast
Kansas, Northwest Mississippi and a portion of Arkansas. From July 1949 to
March 1976 Mr. Elton was employed by Shell Oil Company holding the position of
Petroleum Engineer (1949-1958) and Production Foreman (1958-1976). Mr. Elton
retired from Shell Oil Company in 1976. Mr. Elton has an M.E. Degree from the
Colorado School of Mines, Golden, Colorado. Mr. Elton served in the United
States Air Force from 1942 until 1945, in the Colorado National Guard from 1946
until 1949 and the Army Reserve Corps of Engineers from 1949 until 1953.

BLACKJACK

Blackjack Oil & Gas, Inc., which operates all of the Underlying
Properties from which Trust-A will derive its revenues, is a corporation formed
in 1983 in Oklahoma. It employs six people and operates over 65 wells in
Oklahoma. Blackjack's offices are located at 1633 West Garriott Road, Suite D,
Enid, Oklahoma 73703. Its officers and key employees are:

Gary Foster, age 52. Mr. Foster is the owner of Blackjack and prior
to starting Blackjack in 1983, he was the co-owner of Oil Operating Company and
was an independent oil and gas landman. Mr. Foster received a B.A. degree in
1966 and a M.A. degree in 1972 from the University of Northern Colorado and did
post-graduate study at the University of Northern Colorado, University of
Nebraska and Missouri Western.

Tom Gilbert, age 46. Mr. is the Production Superintendent. He has
been engaged in the oil and gas business for 24 years. Mr. Gilbert was the
Area Manager (Rocky Mountain District) for Pool Well Service from

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1986-1994 before being employed at Blackjack. He worked for various other well
service companies from 1972-1986. He has supervised both the drilling and
completion of wells.

CERTAIN TRANSACTIONS

National Energy is purchasing the Underlying Properties from Blackjack
Oil & Gas, Inc. who is the operator of the wells. The purchase price for the
Underlying Properties is $508,000 and is based upon a present value
determination of the wells by National Energy's consulting engineer using
reserve reports, production information and other well data. The purchase
price paid by National Energy to Blackjack is greater than the Production
Payment sales price from National Energy to the Trust. Mr. Marshell, the
principal of National Energy, will contribute sufficient capital to National
Energy to complete the accquisition.

FEDERAL INCOME TAX CONSEQUENCES

GENERAL

This section summarizes the principal Federal income tax consequences
of the ownership and sale of the Trust Units. The laws, regulations, court
decisions and IRS interpretations on which this summary is based are subject to
change by future legislation, regulations or new interpretations by the courts
or the IRS, which could have an adverse effect on the ownership of Trust Units.
National Energy will not request advance rulings from the IRS dealing with the
tax consequences of ownership of Trust Units but will rely on the opinion of
Counsel, Robertson & Williams, Inc., Oklahoma City, Oklahoma, regarding the
classification of the Trust and certain tax consequences described below.
Consummation of the offering is conditioned upon the confirmation of Counsel's
opinion at the time of the closing. Counsel believes that its opinion is in
accordance with the present position of the IRS regarding such trusts. Such
opinion is not binding on the IRS or the courts, however, and no assurance can
be given that the IRS or the courts will agree with such opinion.

CLASSIFICATION AND TAXATION OF THE TRUST

In the opinion of Counsel, under current law, the Trust will be
taxable as a grantor trust and not as an association taxable as a corporation.
As a grantor trust, the Trust will not be subject to tax at the trust level.
For tax purposes, the grantors (in this case, the Trust Unitholders) will be
considered to own the Trust's income and principal as though no trust were in
existence. A grantor trust simply files an information return, reporting all
items of income, credit or deductions which must be included in the tax returns
of the grantors. If, contrary to the opinion of Counsel, the Trust were
determined to be an association taxable as a corporation, it would be treated
as a separate entity subject to normal corporate tax on its taxable income, the
Trust Unitholders would be treated as shareholders, and distribution to Trust
Unitholders would be treated as nondeductible corporate distributions. Such
distributions would be taxable to a Trust Unitholder, first, as dividends to
the extent of the Trust Unitholder's pro rate share of the Trust's deemed
earnings and profits, then as a tax-free return of capital to the extent of his
basis in his Trust Units, and finally as capital gain to the extent of any
excess. In the absence of any legislative change or other development deemed
adverse by the Trustee, the Trustee does not intend to set aside any reserve
for possible Federal income taxes imposed on the Trust.

DIRECT TAXATION OF TRUST UNITHOLDERS

Since the Trust will be treated as a grantor trust for Federal income
tax purposes, each Trust Unitholder will be taxed directly on his pro rata
share of the income of the Trust and will be entitled to claim his pro rata
share of the deductions of the Trust. The income of the Trust will be deemed
to have been received or accrued by the Trust Unitholders at the time such
income is received or accrued by the Trust and not when distributed by the
Trust. Income and expenses of the Trust will be taken into account by Trust
Unitholders consistent with their method of accounting and without regard to
the taxable year or accounting method employed by the Trust.

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INTEREST INCOME

Based on representations made by National Energy, the reserves to be
burdened by each Production Payment acquired by a Trust and the expected term
of each Production Payment will be such that the Production Payments will meet
the definition of a "production payment" under Section 636(a) of the Code.
Thus, each Trust Unitholder will be treated as making a mortgage loan on the
Underlying Properties to National Energy in an amount equal to the purchase
price of each Trust Unit less interest on the Reserve Fund.

REPORTING OF TRUST INCOME AND EXPENSES

Unless otherwise advised by Counsel or the IRS, the Trustee intends to
treat the interest portion of each production payment it receives as the
taxable income of the Trust Unitholders of record on the day of receipt (i.e.,
the first business day of each calendar month). Similarly, the Trustee intends
to pay expenses only on the day it receives a production payment and to treat
all expenses paid on a production payment receipt day as the expenses of the
Trust Unitholder to whom the royalty income received on that date is
distributed. Interest earned on a distribution amount will be treated as
belonging to the Trust Unitholder to whom the distribution amount is paid.
Interest earned on the Reserve Fund will not be distributed and will be
allocated to income. In most cases, therefore, the income and expenses of the
Trust for a period will be reported as belonging to the Trust Unitholder to
whom the distribution is made for such period and the amount of the
distribution for a Trust Unit will equal the net income allocated in respect of
such Trust Unit other than the amount of interest earned on the Reserve Fund.
It is possible that the IRS will attempt to impute income to persons who are
Trust Unitholders when a production payment accrues, to disallow administrative
expenses to persons who are not Trust Unitholders when the expenses are
incurred, or both. If the IRS did attempt to impute such income, an accrual
basis Trust Unitholder might realize royalty income in a tax year earlier than
that reported by the Trustee.

OTHER INCOME AND EXPENSES

It is anticipated that the only other income of the Trust will be
interest income earned on funds held as a reserve for payment of the original
investment by Trust Unitholders on termination of the Trust, or funds held
until the next distribution date. Other expenses of the Trust will include any
state and local taxes imposed on the Trust and administrative expenses of the
Trustee. Although the issue has not been definitely resolved, Tax Counsel
believes that all or substantially all of such expenses are deductible in
computing adjusted gross income and, therefore, are not the type of
miscellaneous itemized deductions that are allowable only to the extent that
the aggregate of such deductions exceeds 2% of adjusted gross income.

NON-PASSIVE ACTIVITY INCOME AND LOSS

The income and expenses of the Trust will not be taken into account in
computing the passive activity losses and income under Code Section 469 for a
Trust Unitholder who acquires and holds Trust Units as an investment.

SALE OF TRUST UNITS

Generally, a Trust Unitholder will realize gain or loss on the sale or
exchange of his Trust Units measured by the difference between the amount
realized on the sale or exchange and his adjusted basis for such Trust Units.
Gain or loss on the sale of Trust Units by a Trust Unitholder who is not a
dealer with respect to such Trust Units and who has a holding period for the
Trust Units of more than one year will be treated as long-term capital gain or
loss. A Trust Unitholder's basis in his Trust Units will be equal to the
amount paid for such Trust Units pursuant to this offering or pursuant to
market transactions. It is possible that the IRS would take the position that
a portion of the sales proceeds is ordinary income to the extent of any accrued
income at the time of sale allocable to the Trust Units sold, but which is not
distributed to the selling Trust Unitholder.

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BACKUP WITHHOLDING

In general, distributions of Trust income will not be subject to
"backup withholding" unless: (i) the Trust Unitholder is an individual or other
noncorporate taxpayer and (ii) such Trust Unitholder fails to comply with
certain reporting procedures.

REGISTRATION PROVISION

Tax shelter offerings must register with the Service on a form which
includes a brief description of the tax shelter and the promoter. National
Energy believes the Trusts are not tax shelters for the purpose of this
registration requirement.

Ownership of the Production Payment by the Trust may subject Trust
Unitholders to tax in states in which the Underlying Properties are located as
well as the state in which a Trust Unitholder resides or is domiciled.
Prospective Trust Unitholders should consult their own tax advisors regarding
the impact of state and local taxes on their proposed investments.

ERISA CONSIDERATION

The Employee Retirement Income Security Act of 1974, as amended
("ERISA"), imposes certain requirements on pension, profit-sharing and other
employee benefit plans to which it applies ("Plans"), and contains standards on
those persons who are fiduciaries with respect to such Plans. In addition,
under the Code, there are similar requirements and standards which are
applicable to certain Plans and individual retirement accounts (whether or not
subject to ERISA) (collectively, together with Plans subject to ERISA, referred
to herein as "Qualified Plans").

A fiduciary of a Qualified Plan should carefully consider fiduciary
standards under ERISA regarding the Plan's particular circumstances before
authorizing an investment in Trust Units. A fiduciary should first consider
(i) whether the investment satisfies the prudence requirements of Section
404(a)(1)(B) of ERISA, (ii) whether the investment satisfies the
diversification requirements of Section 404(a)(1)(C) of ERISA and (iii) whether
the investment is in accordance with the documents and instruments governing
the Plan as required by Section 404(a)(1)(D) of ERISA.

In order to avoid the application of certain penalties, a fiduciary
must also consider whether the acquisition of Trust Units and/or operation of
the Trust might result in direct or indirect nonexempt prohibited transactions
under Section 406 of ERISA and Code Section 4975. In determining whether there
are such prohibited transactions, a fiduciary must determine whether these are
"plan assets" involved in the transaction. On November 13, 1986, the
Department of Labor published final regulations (the "DOL Regulations")
concerning whether or not a Qualified Plan's assets (such as a Trust Unit)
would be deemed to include an interest in the underlying assets of an entity
(such as the Trust) for purposes of the reporting, disclosure and fiduciary
responsibility provisions of ERISA and analogous provisions of the Code, if the
Plan acquires an "equity interest" in such entity. The DOL Regulations provide
that the underlying assets of an entity will not be considered "plan assets" if
the interests in the entity are a publicly offered security. Trust Units are
considered to be "publicly offered" for this purpose if they are part of a
class of securities that is (i) widely held (i.e., owned by more than 100
investors independent of the issuer and each other), (ii) freely transferable,
and (iii) registered under Section 12(b) or 12(g) of the Exchange Act.
Fiduciaries, will need to determine whether the acquisition of Trust Units is a
nonexempt prohibited transaction under the general requirements of ERISA
Section 406 and Code Section 4975.

Due to the complexity of the prohibited transaction rules and the
penalties imposed upon persons involved in prohibited transactions, it is
important that potential Qualified Plan investors consult with their counsel
regarding the consequences under ERISA and the Code of their acquisition and
ownership of Trust Units.

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DESCRIPTION OF THE TRUST AGREEMENT

The following information and the information set forth under
"Description of the Trust Units" are subject to the detailed provisions of the
Trust Agreement between National Energy and Boatmen's Trust Company which acts
as Trustee for the Trust. The following is a general description of the basic
framework of the Trust, and is qualified by the detailed provisions concerning
the Trust set forth in the Agreement, a copy of which was filed as an exhibit
to the Registration Statement. See "Available Information." For a description
of the fiduciary responsibility of the Trustee, including remedies available
for the breach of these duties, see "-- Fiduciary Responsibility and Liability
of the Trustee," below.

CREATION AND ORGANIZATION OF THE TRUST; AMENDMENTS

Pursuant to the Conveyances, the Production Payments will be conveyed
by National Energy to the Trust in exchange for net proceeds from this
offering. The Trust Units are being offered by Trust-A pursuant to this
Prospectus and by Prospectus Supplements relating to Trusts yet to be formed
for the remaining Trust Units.

The Trust will be created under Oklahoma law pursuant to the terms of
the Agreement to acquire and hold the Production Payment for the benefit of the
Trust Unitholders. The Production Payment is passive in nature and the Trustee
will have no control over and no responsibility for costs relating to the
operation of the Underlying Properties. Neither National Energy nor the
operators of the Underlying Properties have any contractual commitments to the
Trust to conduct further drilling on the Underlying Properties nor to maintain
their ownership interest in any of such properties. For a description of the
Underlying Properties and other information relating to such properties, see
"Production Payment and the Underlying Properties."

The beneficial interest in the Trust-A is divided into 500 Trust
Units, which represent equal undivided portions. For additional information
concerning the Trust Units, see "Description of the Trust Units."

The Agreement may be amended by a vote of holders of 80% of the Trust
Units. No provision of the Agreement, however, may be amended that would
increase the power of the Trustee to engage in business or investment
activities or to alter the rights of the Trust Unitholders as among themselves.

ASSETS OF THE TRUST

The only assets of the Trust, other than cash and temporary
investments being held for the payment of expenses, and for distribution to the
Trust Unitholders, are the Reserve Funds and the Production Payments. See "The
Production Payments and the Underlying Properties."

DUTIES AND LIMITED POWERS OF THE TRUSTEE

The duties of the Trustee are specified in the Agreement and by the
laws of Oklahoma. The basic duties of the Trustee are to collect income
attributable to the Production Payment to pay out of the Trust's income and
assets all expenses, charges and obligations and to distribute the
distributable income to the Trust Unitholders. The Trustee is authorized to
take such action as in its judgment is necessary or advisable to best achieve
the purposes of the Trust.

After payment of or provision for Trust expenses and obligations, the
Trustee will make semi-annual distributions to the Trust Unitholders of certain
proceeds received from the Production Payments to pay the interest portion and
reserve the balance in a Reserve Fund to repay the Trust Unit investment amount
at the termination of the Production Payment. The Trustee will submit periodic
financial reports to the Trust Unitholders as described under "Description of
the Trust Units -- Periodic Reports."

The Agreement provides that cash being held by the Trustee as a
reserve for liabilities, the Reserve Fund, or for distribution at the next
distribution date will be invested in interest-bearing obligations of the
United States government, agreements secured by such obligations or
certificates in certain banks or similar investment grade securities which may
be recommended by National Energy, but the Trustee is otherwise prohibited from
acquiring

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any asset other than the Production Payments or engaging in any business or
investment activity of any kind whatsoever.

In the event the Trustee determines it to be in the best interest
Trust Unitholders, the Trustee may sell or dispose of all or any part of the
Production Payments only as authorized by a vote of holders of 80% or more of
the Trust Units, or upon termination of the Trust. However, the Trustee is
directed to effect such a sale (without any such vote) if National Energy
exercises the option to repurchase the Production Payment after 2 years from
the date of formation of the Trust. Any such sale must be for cash and the
Trustee must distribute the net proceeds of such sale to the Trust Unitholders.

The Agreement also provides that in the event of certain judicial or
administrative proceedings seeking the cancellation or forfeiture of any
property included in the Underlying Properties or asserting the invalidity of
or otherwise challenging the Production Payments held by the Trust because of
the nationality, or any other status, of any one or more Trust Unitholders, the
Trustee will have the right to require such holder to dispose of his Trust
Units, and if such person fails to dispose of his Trust Units, the Trustee will
have the right to purchase such Trust Units.

To achieve the purposes of the Trust, the Trustee is also authorized
to agree to modifications of the terms of the Conveyances or to settle disputes
with respect thereto, so long as such modifications or settlements do not alter
the nature of the Production Payments as to rights to receive a share of the
proceeds of oil or natural gas produced from the Underlying Properties, free of
any expense or other cost.

LIABILITIES OF THE TRUST

Because of the passive nature of the Trust assets and the restrictions
on the power of the Trustee to incur obligations, it is anticipated that the
only liabilities the Trust will incur will be those for routine administrative
expenses, such as the Trustee's fees, clerical expenses and accounting, legal
and other professional fees.

FIDUCIARY RESPONSIBILITY AND LIABILITY OF THE TRUSTEE

The Trustee is a fiduciary with respect to the Trust Unitholders and
under Oklahoma law, the Trustee is required to act in the best interests of the
Trust Unitholders at all times and to exercise the judgment and care in
supervising and managing the Trust's assets exercised by persons of ordinary
prudence, discretion and intelligence. Under Oklahoma law, the Trustee's
duties to the Trust Unitholders are similar to the duties of a director of a
corporation to the shareholders of the corporation, except that the legal
presumption protecting business decisions made by directors from challenge,
generally referred to as the business judgment rule, is inapplicable to
decisions by the Trustee.

Due to the passive nature of the Trust, the Trustee is not expected to
make business decisions affecting the assets of the Trust. Therefore,
substantially all of the Trustee's functions under the Trust Agreement are
anticipated to be ministerial in nature. See " -- Duties and Limited Powers of
the Trustee," above. Under Oklahoma law, the Trustee may not profit from any
transaction with the Trust except that the Trust Agreement permits the Trustee
to charge for its services as trustee and as transfer agent (see "--
Compensation of the Trustee"), to retain funds to pay anticipated future
expenses and to deposit such funds with the Trustee and to borrow funds at
commercial rates from the Trustee to pay expenses of the Trust. The Trustee
will also be entitled to receive reimbursement of out-of-pocket expenses
incurred in administering the Trust.

In discharging its fiduciary duty to the Trust Unitholders, the
Trustee may act in its discretion and shall be personally or individually
liable to the Trust Unitholders only for fraud or acts or omissions
constituting bad faith and will not be liable for any act or omission of any
agent or employee of the Trustee unless the Trustee has acted in bad faith in
the selection and retention of such agent or employee. The Trustee will be
indemnified for any liability, expense, claim, damage or other loss incurred by
it individually or as Trustee in the administration of the Trust or for any act
or omission on account of it being Trustee, unless resulting from fraud or bad
faith, and the Trustee will have a lien upon the assets of the Trust as
security for such indemnification and reimbursement and for compensation to be
paid to the Trustee. The Trustee shall not be entitled to indemnification from
Trust Unitholders.

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See "Description of the Trust Units -- Liability of Trust Unitholders." The
Trustee is required to ensure that all contractual liabilities of the Trust are
limited to the assets of the Trust and will be liable to the Trust Unitholders
if it fails to do so.

Under Oklahoma law, if the Trustee, in bad faith, were to fail to
collect amounts owed to the Trust or distribute cash held by the Trust for
distribution, or otherwise, in bad faith, take or omit to take any action that
is in the best interest of the Trust Unitholders, the Trustee would be liable
to the Trust Unitholders for damages caused by any such act or omission,
including any loss or depreciation in value of the Trust Assets or failure to
make a profit from such assets caused by such act or omission. Oklahoma law
permits Trust Unitholders to file an action seeking other remedies for such
acts or omissions in addition to damages, including removal of the Trustee,
specific performance, appointment of a receiver, an accounting by the Trustee
to the Trust Unitholders, exemplary damages and other remedies. The
availability of these remedies provided by Oklahoma law is explicitly
incorporated into the Agreement. Under the Agreement, the Trustee may be
removed by the Trust Unitholders, with or without cause, by the affirmative
vote of the holders of a majority of the Trust Units.

RESERVE FUND

The Agreement requires the Trustee to establish a Reserve Fund for
that portion of the payments received from the Production Payment which are
allocable to the repayment of the Primary Sum or principal amount. The Trustee
may also set aside sums in the Reserve Fund for contingent or future expenses
of the Trust or the Trustee or to fund any account. The amounts included in
the Reserve Fund are to be invested in U. S. government obligations,
certificates of deposit of any bank having capital, surplus and undivided
profits in excess of $100,000,000, including the bank affiliated with the
Trustee or similar investment grade securities which may be recommended by
National Energy to the Trustee.

Upon termination of the Trust, the Reserve Fund, after payment of
Trust liabilities, if any, will be distributed to the Unitholders as a return
of their initial contributions.

DURATION OF THE TRUST; SALE OF PRODUCTION PAYMENT

The Trust will be terminated upon payment in full of the Production
Payment or the sale by the Trust of all or substantially all of the Production
Payments, which sale may be effected only as described under "-- Duties and
Limited Powers of the Trustee," above. The Trust may also be terminated by a
vote of holders of 80% or more of the Trust Units outstanding or upon operation
of the provisions of the Agreement intended to permit the Trust to comply with
the "rule against perpetuities." Upon termination of the Trust, the Trustee
will sell for cash in one or more sales (which may be public auctions) all of
the assets then constituting the Trust estate. After paying all liabilities of
the Trust and establishing any reserves that the Trustee deems appropriate for
contingent liabilities, the Trustee will distribute the proceeds of such sales
and any other cash in the Trust estate to Trust Unitholders according to their
respective interests. The Trustee will not be required to obtain approval of
Trust Unitholders prior to conducting any sales upon termination of the Trust.

The Trustee may cause the sale of the Production Payment held by a
Trust if the holders of 80% or more of the Trust Unitholders of that Trust
approve such sale or if National Energy exercises its option to repurchase the
Production Payment at any time after 2 years from the formation of the Trust.
The net proceeds of such sale will be distributed to the Trust Unitholders.
Sale of the Production Payment will terminate the Trust.

COMPENSATION OF THE TRUSTEE

The Agreement provides that the Trustee will be compensated for its
services, out of the Trust assets, in an annual amount of Twelve Hundred
Dollars ($1200.00). The Trustee will also be entitled to reimbursement for its
out-of- pocket expenses.

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MISCELLANEOUS

The Agreement provides that the Trustee may, but is not required to,
consult with counsel (which may be counsel to National Energy or its
successors), accountants, geologists, engineers and other parties deemed by the
Trustee to be qualified as experts on the matters submitted to them, and the
Trustee will be authorized and protected with respect to any action taken or
suffered by the Trustee in good faith in reliance upon and in accordance with
the opinion of any such party.

DESCRIPTION OF THE TRUST UNITS

GENERAL

National Energy is the sponsor of a series of trusts offering up to
6,000 units of beneficial interests ("Trust Units"). The Trust Units will be
issued on the Closing Date of each Trust. Each Trust Unit represents an
undivided share of beneficial interest in a National Energy Trust and entitles
its holder to the same rights as the holder of any other Trust Unit in that
Trust. Trust-A will be the first trust formed and will have 500 Trust Units
outstanding. Each Trust will offer a minimum of 500 Trust Units for a possible
total of 12 grantor trusts to be formed during the 12 month period following
the effective date of registration of the Trust Units.

DISTRIBUTIONS AND INCOME COMPUTATIONS

The amount received each month by the Trustee on behalf of Trust-A
will be 78% of the Net Cash Flow from the Underlying Properties. Of this
amount, $62,500.00 will be allocated to interest earned on the Production
Payment, one- half of which will be distributed to Trust Unitholders
semi-annually. Excess will be allocated to the repayment of the Primary Sum
and will be added to the Reserve Fund. If at the end of any 12 month period
following the date of the Conveyance of Production Payment the Reserve Fund
does not meet or exceed a specified amount necessary to amortize the Primary
Sum over 5 years, the percentage of Net Cash Flow will increase to 100% until
the Reserve Fund meets or exceeds the required amount.

Unless otherwise advised by counsel or the IRS, the income and expense
of the Trust for each Semi-Annual Period will be reported by the Trustee for
tax purposes as belonging to the Trust Unitholders of record on the Semi-Annual
Record Date, to whom the Semi-Annual Distribution Amount for that Semi-Annual
Period will be distributed. The income and expense will be recognized by the
Trust Unitholders for tax purposes in the Semi-Annual Period received or paid
by the Trust, rather than in the Semi-Annual Period distributed by the Trust.
Net income, apart from any depletion to which a Trust Unitholder may be
entitled, is expected to be essentially the same as the Semi-Annual
Distribution Amount. However, there will be variances because of the
establishment of the Reserve Fund and the possibility that, for example, a
reserve will be established in one Semi-Annual Period that will not give rise
to a tax deduction until a subsequent Semi-Annual Period or an expenditure paid
in one Semi-Annual Period will have to be amortized for tax purposes over
several monthly periods. See "Federal Income Tax Consequences."

TRANSFER OF TRUST UNITS

Trust Units will be transferable on the records of the Trustee upon
the surrender of any Certificate in proper form for transfer as required by the
Trustee. No service charge will be made to the transferor or transferee for
any transfer of a Trust Unit, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with such transfer. Until any such transfer, the Trustee may treat
the owner of any Trust Unit as shown by its records as the owner of the Trust
Units evidenced thereby and the Trustee shall not be charged with notice of any
claim or demand respecting such Certificate or the interest represented thereby
by any other party. Any such transfer of a Trust Unit shall, as to the
Trustee, transfer to the transferee as of the close of business on the date of
transfer, all right, title and interest of the transferor in and to the Trust;
provided, that a transfer of a Trust Unit after any Monthly Record Date shall
not transfer to the transferee the right of the transferor to the Monthly
Distribution Amount relating to such date. As to matters affecting the title,
ownership, warranty or transfer of the Certificates and the Trust Units
represented thereby, the law from time to time in force in the State of
Oklahoma with respect to the transfer of securities shall govern.

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PERIODIC REPORTS

The Trustee will mail to the Trust Unitholders of record as of a date
to be selected by the Trustee an annual report containing audited financial
statements of the Trust.

The Trustee will file such returns for Federal income tax purposes as
in its judgment are required to comply with applicable law, and the Trustee
will prepare and mail to the Trust Unitholders annually such reports as may be
necessary to permit each Trust Unitholder to report correctly his share of the
income and deductions of the Trust. The Trustee intends to treat all income
and deductions recognized during each Semi-Annual Period as having been
recognized by holders of record on the last business day of such Semi-Annual
Period unless otherwise advised by counsel or the IRS.

Each Trust Unitholder and his duly authorized agents and attorneys
shall have the right during reasonable business hours to examine and inspect
records of the Trust and the Trustee including a list of the Trust Unitholders.

LIABILITY OF TRUST UNITHOLDERS

The Trustee is under a duty not to incur any liability without
ensuring that such liability will be satisfied only out of the Trust assets
(regardless of whether the assets are adequate to satisfy the liability) and in
no event out of amounts distributed to, or other assets owned by, Trust
Unitholders. However, under the law of Oklahoma, it is unclear whether a Trust
Unitholder would be jointly and severally liable for any liability of the Trust
in the event that the following conditions were to occur: (a) the satisfaction
of such liability was not by contract limited to the assets of the Trust; and
(b) insurance proceeds and the assets of the Trust or Trustee were insufficient
to discharge such liability. National Energy believes that because of the
value and passive nature of the Trust assets and the restrictions on the power
of the Trustee to incur liabilities, the imposition of any liability on a Trust
Unitholder is remote.

VOTING RIGHTS OF TRUST UNITHOLDERS

While Trust Unitholders will have certain voting rights, such rights
differ from and are more limited than those of stockholders of most public
corporations. For example, there is no requirement for annual meetings of
Trust Unitholders or for annual or other periodic reelection of the Trustee.

Meetings of Trust Unitholders may be called by the Trustee and the
Trust Unitholders owning not less than 15% of the Trust Units outstanding may
direct the Trustee to call a meeting. All such meetings must be held in
Encino, California, and written notice setting forth the time and place of such
meeting and the matters proposed to be acted upon shall be given not more than
60 days nor less than 20 days before such meeting to all of the Trust
Unitholders of record. The presence in person or by proxy of Trust Unitholders
representing a majority of the Trust Units outstanding is necessary to
constitute a quorum. Unless otherwise required by the Trust Indenture, any
matter shall be deemed to have been approved by the Trust Unitholders if it is
approved by the vote of a majority in interest of such Trust Unitholders
constituting a quorum, although less than a majority of the Trust Units then
outstanding. Each Trust Unitholder shall be entitled to one vote for each
Trust Unit owned by such holder.

The Trustee may be removed, with or without cause, by a vote of the
holders of a majority of the outstanding Trust Units. The following matters
require the affirmative vote of the holders of 80% of the outstanding Trust
Units: (i) the termination of the Trust; (ii) the amendment of the Trust
Indenture; and (iii) the approval of the sale of all or any part of the assets
of the Trust.

The sale of all or any part of the assets of the Trust requires the
prior consent of the Trustee except in connection with the termination of the
Trust.

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PLAN OF DISTRIBUTION

COMMISSIONS

Trust Units will be offered on a best efforts basis by a group of
member firms of the National Association of Securities Dealers, Inc. (the
"NASD"), (such member firms hereafter are referred to as "Soliciting Dealers")
which will be selected by National Energy. Each Soliciting Dealer will receive
from the Trust a commission of up to 8% of the purchase price of Trust Units
sold by such Soliciting Dealer on the Closing Date.

INDEMNIFICATION

National Energy, the Trust and the Soliciting Dealers have agreed to
indemnify each other against certain civil liabilities, including liabilities
arising under the 1933 Act.

SUBSCRIPTION PROCEDURES AND PAYMENTS

Persons intending to subscribe should send one signed Subscription
Agreement with the number of Trust Units desired indicated thereon to Boatmen's
Trust Company, Escrow Agent, at P. O. Box 25189, Oklahoma City, Oklahoma 73125-
0189, Attn: Corporate Trust Department, together with a check in the full
amount subscribed payable to Boatmen's Trust Company, Escrow Agent." A
subscription will be binding and enforceable upon a subscriber if within 15
days after the Escrow Agent's receipt of the Subscription Agreement, National
Energy evidences its acceptance by countersigning said Subscription Agreement.
National Energy will not knowingly accept subscriptions from persons who fail
to meet the suitability standards. See "Plan of Distribution -- Suitability
Standards." Each subscription payment will be held by the Escrow Agent in a
trust account until either (1) deposited to the account of the Trust on the
Closing Date or (2) refunded to the subscriber with any interest earned thereon
as soon as possible should it be determined that the offering will not be
consummated.

SUITABILITY STANDARDS

The investment offered hereby represent a long-term investment without
liquidity, which investment involves significant risks, and should be
considered only by persons with substantial financial means who have no need
for liquidity in this investment.

A potential investor will be required to furnish information in the
Subscription Agreement sufficient to satisfy National Energy that the
investment is suitable in light of his or her other security holdings and
financial situation and needs, and that her or she, has such knowledge and
experience in financial and business matters that he or she is capable of
evaluating the merits and risks of the proposed investment.

A potential investor must be able to represent that he or she: (i) has
a net worth of at least $225,000 (exclusive of home, home furnishings and
personal automobiles); or (ii) has a net worth of $75,000 (exclusive of home,
home furnishings and personal automobiles) and has and anticipates that he or
she will continue to have, in the future, annual taxable income of $75,000 or
more, without regard to any taxable income which may be generated by the
investment in the Trust and that the investment will not exceed 10% of his or
her net worth.

VALIDITY OF SECURITIES

The validity of the Trust Units offered hereby will be passed upon for
National Energy by Robertson & Williams, an Oklahoma Professional Corporation.

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EXPERTS

Certain information appearing in this Prospectus regarding the
estimated quantities of reserves of the oil and gas properties owned by the
Trust, the future net revenues from such reserves and the present values
thereof is based on estimates of such reserves and present values prepared by
F.W. Elton, Inc., an independent petroleum engineering firm.

The audited financial statements included in this Prospectus have been
audited by Museck & Museck, independent accountants, as stated in their reports
appearing herein, and have been so included in reliance upon such reports given
upon the authority of that firm as experts in accounting and auditing.

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33
INDEX TO FINANCIAL STATEMENTS

PAGE
----

NATIONAL ENERGY RESOURCES, INC.

Independent Auditor's Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1

Balance Sheet as of July 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2

Income Statement for Year Ended July 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4

Statement of Stockholders' Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6

Statement of Retained Earnings for Year Ended July 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . F-7

Statement of Cash Flows for Year Ended July 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-8

Unaudited Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-9

Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-14

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[MUSECK & MUSECK LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
National Energy Resources, Inc.

We have audited the accompanying balance sheet of National Energy Resources,
Inc. (a development stage company) as of July 31, 1995, and related statements
of income, retained earnings, stockholders' equity, and cash flows for the year
then ended. 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 audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of National Energy Resources as
of July 31, 1995, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.

/s/ MUSECK & MUSECK

New Providence, New Jersey
May 23, 1996

F-1
35
NATIONAL ENERGY RESOURCES, INC.
BALANCE SHEET
JULY 31, 1995

ASSETS

CURRENT ASSETS
PETTY CASH $ 420
---------
TOTAL CURRENT ASSETS $ 420

PROPERTY AND EQUIPMENT
INTANGIBLE ASSETS $ 6,066
LESS-ACCUMULATED AMORTIZATION 708 5,358
-------- ---------
TOTAL PROPERTY AND EQUIPMENT 5,358

OTHER ASSETS
DEFERRED ISSUE COSTS 19,050
---------
TOTAL OTHER ASSETS 19,050
--------
TOTAL ASSETS $ 24,828
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