FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended November 30, 1996

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to .
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Commission file number: 0-7261

CHAPARRAL RESOURCES, INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)

Colorado 84-0630863
------------------------------ ------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)

3400 Bissonnet Street, Suite 135
Houston, Texas 77005
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(Address of principal executive offices)

Registrant's telephone number, including area code: (713) 669-0932

Securities registered pursuant to Section 12(g) of the Act:

$0.10 Par Value Common Stock
----------------------------
(Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and, (2) has been subject to such filing requirements
for the past 90 days.

YES [X] NO [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.

[ ]

As of April 7, 1997, the aggregate market value of the Registrant's voting
stock held by nonaffiliates was approximately $24,427,197.

As of April 7, 1997, Registrant had 37,526,517 shares of its $0.10 par
value common stock issued and outstanding.

Total Pages ___
Exhibit Index ___

PART I

ITEM 1. BUSINESS

Chaparral Resources, Inc. ("Company"), which was incorporated under the
laws of the state of Colorado in 1972, is an independent oil and gas exploration
and production company that was based in Denver, Colorado, until March 1, 1997,
when the Company moved its headquarters to Houston, Texas.

Until 1994, the Company's oil and gas activities were concentrated solely
in the United States. During early 1994, the management of the Company made a
strategic decision to pursue international oil and gas projects, with initial
emphasis on the Commonwealth of Independent States (the former Soviet Union)
and, in early 1997, the Company divested itself of all of its remaining oil and
gas properties in the United States.

Karakuduk Project

The Company currently owns 90% of the outstanding common stock of Central
Asian Petroleum Guernsey Limited ("CAP-G") which has a 50% interest in
Karakuduk-Munay, Inc. ("KKM"), which holds 100% of the right to develop the
Karakuduk Oil Field Project in Kazakstan ("Karakuduk Field" or "Karakuduk
Project").

The Company acquired 45% of the outstanding stock of CAP-G prior to
December 1, 1995. In January and February 1996, the Company entered into
agreements to acquire, for a total of $5,850,000 cash and 1,785,000 shares of
the Company's restricted common stock, up to an additional 55% of the
outstanding stock of CAP-G. The Company consummated the purchase of 25% of the
outstanding stock of CAP-G in April 1996 by paying $2,000,000 in cash and
issuing 685,000 shares of the Company's common stock. The Company acquired an
additional 5% of the outstanding stock of CAP-G in April 1996 for $250,000 cash.

To acquire an additional 15% of the outstanding common stock of CAP-G, the
Company agreed to pay $1,975,000 in cash and issue 900,000 shares of the
Company's common stock. This purchase was consummated on March 11, 1996, when
the Company paid $750,000 in cash and issued 900,000 shares of the Company's
common stock. The remaining cash balance of $1,225,000 for the purchase was to
be paid in four quarterly equal payments of $306,250 between June 11, 1996 and
March 11, 1997. The first payment of $306,250 was paid in June 1996 and an
additional $175,000 was paid in September 1996. The agreement was subsequently
revised so that the Company paid $200,000 in December 1996. The Company was to
pay $543,750 on or before March 11, 1997. The Company is currently negotiating
to obtain an extension of the due date of the remaining payment. In addition,
the Company has an option to purchase the remaining 10% of the outstanding
common stock of CAP-G for an additional $1,625,000 and 200,000 shares of the
Company's common stock at any time following completion of the initial purchase
and prior to December 11, 1997.

Uzbekistan Project

The Company has been negotiating an agreement pursuant to which the Company
would acquire 100% of the issued and outstanding capital stock of MD
International Petroleum, Inc. ("MDI"), a private company of which the
shareholders include two directors of the Company (Messrs. Dilling and McGee).
At the time of the acquisition, the only asset that MDI would have would be a 5%
interest in a joint venture that Enron Oil & Gas Uzbekistan Ltd. is attempting
to negotiate for the development of natural gas fields in Uzbekistan. It is
currently contemplated that, if the agreement is consummated, the Company would
issue MDI's shareholders an as of yet undetermined number of shares of the
Company's restricted common stock in exchange for their MDI shares. Of these
shares, the Company anticipates that a percentage of the shares would be issued
at closing and the balance upon the occurrence of certain events. On January 8,
1997, the Company agreed to issue 180,000 shares of the Company's common stock
to Enron Oil & Gas Uzbekistan, Ltd. ("EOGU") to obtain an option to acquire MDI.
The Company also granted EOGU registration rights with respect to the 180,000
shares. In the interim, the principal shareholders of MDI, including Messrs.
Dilling and McGee, have agreed that if the Company does not acquire MDI within a
specified time period, the principal shareholders will transfer 180,000 shares
of the Company's common stock owned by them to the Company to replace the
180,000 shares issued by the Company to EOGU. Such principal shareholders also
agreed to place the 180,000 shares in escrow to ensure compliance with their
obligation. There are no assurances that the Company will be able to consummate
the agreement to acquire the shares of MDI or that EOGU will be able to
consummate a joint venture or other arrangement for the development of the
natural gas fields in Uzbekistan.

Venezuela Project

In January, 1997 the Company was pre-qualified by PDVSA, the Venezuelan
state oil company, to submit a bid with others on certain oil fields. It is
contemplated that the Company will be part of a consortium of oil and gas
companies that will place a bid or bids to acquire one or more of the 21 oil
fields that have been put up for auction. The auction is expected to be highly
competitive and is expected to be completed by the summer of 1997. There are no
assurances that the Company will be successful in joining a consortium to bid on
the oil fields or that any such consortium will be a successful bidder.

Risks of Foreign Operations. As a result of the Company's interest in KKM
and the Karakuduk Field, the Company will be subject to certain risks inherent
in the ownership and development of foreign properties, including without
limitation, cancellation or renegotiation of contracts, royalty increases, tax
increases, retroactive tax claims, expropriation, adverse changes in currency
values, foreign exchange controls, import and export regulations, environmental
controls, and other laws and regulations which may adversely affect the
Company's interest in the Karakuduk Field. The Company's operations and
agreements will also be governed by foreign laws. In the event of a dispute, the
Company may be subject to arbitration in a foreign country or the jurisdiction
of foreign courts or may not be successful in subjecting foreign persons to the

jurisdiction of courts in the United States. In addition, the Company might be
hindered or prevented from enforcing its rights with respect to a government
instrumentality because of the doctrine of sovereign immunity.

Although certain members of management of the Company have had prior
experience operating in foreign countries, the Company has no prior experience
operating in any foreign country, including the Republic of Kazakstan, and may
encounter unexpected difficulties in conducting foreign operations. Although the
recent and continuing political, social and economic upheavals in Kazakstan have
created opportunities for foreign investment, substantial uncertainty exists
about the stability of the central Kazakstan government, the status of Kazakstan
law and the autonomy of the parties involved with the Company in Kazakstan.

The Company has endeavored to protect itself against the political and
commercial risks, but there is no certainty that the steps taken will provide
adequate protection. In this regard, the Company has applied with Overseas
Private Investment Corporation ("OPIC") for political risk insurance. OPIC
insurance can cover the following political risks:

o Currency Inconvertibility--deterioration of the investor's ability to
convert profits, debt service and other remittances from local currency
unto U.S. dollars;

o Expropriation--loss of an investment due to expropriation, nationalization
or confiscation by a foreign government;

o Political Violence--loss of assets or income due to war, revolution,
insurrection or politically motivated civil strife, terrorism and sabotage;
and

o Interference With Operations--loss of assets or income due to cessation of
operations lasting six months or more caused by political violence.

The coverage elections for each category of insurance are computed on a
ceiling and an active amount. The coverage ceiling represents the maximum
insurance available for the insured investment and future earnings under an
insurance contract. The premiums for each category are based on a maximum
insured amount ("MIA"), a current insured amount ("CIA") and a standby amount.
The MIA represents the maximum insurance available for the insured investment
under an insurance contract. The CIA represents the insurance actually in force
during the contract period. The difference between the CIA and the MIA is the
standby amount. There is a charge for standby coverage.

The Company has applied with OPIC for all four political risk coverages on
the Company's investment in the Karakuduk Field in western Kazakstan. The MIAs
sought for each coverage range from $23.4 to $40.2 million. The estimated yearly
premium amounts for the CIAs for each coverage range up to $84,000. The
estimated yearly standby premiums for each coverage range up to $88,000. The

actual premium values may be higher or lower depending on the contract offered
to the Company by OPIC.

The Investment Committee of OPIC approved the Company's Karakuduk
operations for political risk insurance coverage by OPIC on December 19, 1995.
The Company has received an executed Letter of Commitment on September 25, 1996,
from OPIC binding issuance of Political Risk Insurance for the Karakuduk
project. Currently, the Company has a standby facility for which it has made
three previous payments of $31,250 and has a fourth payment of $31,250 due on
June 30, 1997. In July 1997, the Company expects to receive the actual contract
offered to the Company by OPIC.

Under the terms of OPIC's Expropriation and Interference With Operations
insurance coverage, the Company must be able to transfer to OPIC the shares of
beneficial interests related to the insured investment, free and clear of all
encumbrances. There are certain restrictions on the transfer of shares and
assignment of the Company's beneficial interests in KKM. At such time as the
Company obtains coverage, the Company will seek a waiver of the transfer
restrictions from the shareholders of KKM. The Company does not anticipate
problems in obtaining the waiver.

On February 1, 1997, the Company was informed that a Kazakstan Presidential
Edict had been issued announcing the liquidation of Munaygaz, the
government-owned company which holds a 20% interest in KKM. As a result of this
action, KKM was unable to complete its re-registration as required by Kazakstan
regulations, resulting in the risk that applicable judicial bodies could
initiate legal proceedings to declare KKM invalid. On March 4, 1997, another
Kazakstan Presidential Edict was issued announcing the formation of "Kazakoil,"
the Kazakstan National Petroleum Company, which will take over the interests of
the government of Kazakstan in all hydrocarbon ventures. Kazakoil will be
assigned the shares of KKM held by Munaygaz within the next few weeks. At that
time, the shareholders of KKM will be complete and KKM can commence the
re-registration process, thus avoiding the risk that applicable judicial bodies
could initiate legal proceedings to declare KKM invalid. Management of the
Company has assurances from the appropriate authorities that such action would
not be taken.

Markets

In fiscal 1996, the only customer having purchases which accounted for 10%
or more of the Company's revenue was Conoco Inc. which accounted for 32% of the
Company's revenue. In early 1997, the Company divested itself of all of its
remaining oil and gas properties in the United States.

The Company's business is not seasonal, except that severe weather
conditions could limit the Company's exploration and drilling activities.
However, severe cold weather increases the demand for oil and natural gas which
are used for heating purposes.

There is substantial uncertainty as to the prices at which any oil reserves
produced by the Company from the Karakuduk Field could be sold. It is possible
that, under the market conditions prevailing in the future, the production and
sale of oil from the Karakuduk Field may not be commercially feasible. The
availability of ready markets and the price obtained for oil produced depends
upon numerous factors beyond the control of the Company. The current market for
oil is characterized by instability which has caused dramatic declines as well
as increases in world oil prices in recent years and there can be no assurance
of any price stability. See also "Item 2. Properties--The Karakuduk Field."

Competition

Foreign oil and gas exploration and the acquisition of producing and
undeveloped properties is a highly competitive and speculative business. In
seeking suitable opportunities, the Company competes in all areas of the oil and
gas industry with a number of other companies, including large multi-national
oil and gas companies and other independent operators with greater financial
resources and, in some cases, with more experience than the Company. The Company
does not hold a significant competitive position in the oil and gas industry.

Regulation

General. The Company's operations may be subject to regulation by
governments or other regulatory bodies governing the area in which the Company's
overseas operations are located. Regulations govern such things as drilling
permits, production rates, and environmental protection and pollution control,
royalty rates and taxation rates among others. These regulations may
substantially increase the costs of doing business and sometimes may prevent or
delay the starting or continuing of any given exploration or development
project. Moreover, regulations are subject to future changes by legislative and
administrative action and by judicial decisions which may adversely affect the
petroleum industry in general and the Company in particular. At the present
time, it is impossible to predict the effect any current or future proposals or
changes in existing laws or regulations will have on the Company's operations.
Subject to the matter described in the next paragraph, the Company believes that
it complies with all applicable legislation and regulations in all material
respects.

could initiate legal proceedings to declare KKM invalid. Management of the
Company has written assurances from the appropriate authorities that such action
would not be taken.

Environmental. The Company does not believe that its business operations
presently impair environmental quality. However, compliance with foreign laws
and regulations which have been enacted or adopted regulating the discharge of
materials into the environment could have an adverse effect upon the Company,
the extent of which the Company is unable to assess. Since inception the Company
has not made any material capital expenditures for environmental control
facilities and has no plans to do so.

Employees

The Company operates through its officers, directors and consultants. Such
persons are not yet employees of the Company but certain of such officers,
directors and consultants may become employees of the Company in the near
future. The Company employs one person on a full-time basis in Kazakstan. The
Company also has four part-time employees.

ITEM 2. PROPERTIES

The Karakuduk Field

The Karakuduk Field is located in the Mangistau Region of the Republic of
Kazakstan. KKM's license to develop the Karakuduk Field covers an area of
approximately 16,922.5 acres and has been granted to KKM for a period of 25
years. The agreement granting KKM the right to develop the Karakuduk Field was
approved by the Ministry of Oil and Gas Industries of the Republic of Kazakstan
on August 30, 1995. CAP-G's share of the initial capitalization of KKM is
$100,000, of which the Company's share has been paid.

The Karakuduk Field is geographically located, approximately 227 miles
northeast of the regional capital city of Aqtau, on the Ust-Yurt Plateau. The
closest settlement is the Say-Utes Railway Station approximately 38 miles
southeast of the field. The ground elevation varies between 590 and 656 feet
above sea level. The region has a dry, continental climate, with fewer than 10
inches of rainfall per year. Mean temperatures range from -25 degrees Fahrenheit
in January to 100 degrees Fahrenheit in July. The operating environment is
similar to that found in northern Arizona and New Mexico in the United States.

The Karakuduk structure is an asymmetrical anticline located on the Aristan
Uplift in the North Ustyurt Basin. Oil was discovered on the structure in 1972,
when Kazakstan was a republic of the former Soviet Union, from Jurassic age
sediments between 8,500 and 10,000 feet. Twenty-two exploratory and development
wells were drilled to delineate the field, however, none of the wells was ever
placed on production. The productive area of the Karakuduk Field is 11,300
acres, with a minimum of seven separate productive horizons present in the
Jurassic formation. Oil has been recovered in tests from all seven horizons
within the Jurassic formation with flow rates ranging from 3 to 966 barrels per
day. The Company estimates that the drilling of approximately 90 additional oil
wells and 26 water injection wells may be required to fully develop the field.
Peak oil production from the field is expected to occur within seven years after
start-up, although time or amount of development or production cannot presently
be assured.

In January 1995, Ryder Scott Company Petroleum Engineers ("Ryder Scott"),
an internationally recognized petroleum engineering group retained by the
Company, has stated that in its opinion, after review, a reserve report
commissioned by the Company which estimated that the Karakuduk Field has
estimated recoverable oil of 74 million barrels which could be considered proved
undeveloped, is reasonable. However, neither the Ryder Scott opinion or the
reserve report considered the potential adverse impact of marketability on price
of any oil which might be produced due to the remote location of the field or
potential political instability and, therefore, none of the reserves can
presently be considered proven. The production and marketing of the oil reserves
will be subject to a number of political, economic and other risks. See
"--Markets and --Competition."

The Karakuduk Field is approximately 18 miles north of the Mukat-Mangishlak
railroad, the Mangishlak-Astraghan water pipeline, the Beyneu-Uzen high voltage
utility lines, and the Uzen-Atrau-Samara oil and gas pipelines. KKM has the
right of priority to use the existing oil and gas pipeline facilities to
transport produced oil from the Karakuduk Field to the Baltic Sea ports of
Kaliningrad and Ventspils and/or the Black Sea port of Novorsiysk, thus offering
a potential world market for the produced crude oil. This priority use of
existing facilities is granted within the guarantee issued by the Ministry of
Oil and Gas Industry of the Republic of Kazakstan. The planned development
program for the Karakuduk Field will include a secondary recovery operation that
the Company believes could result in additional recoverable reserves.

The ability of the Company to realize the carrying value of its assets is
dependent on being able to extract and transport hydrocarbons and finding
appropriate markets for their sale. Currently, exports from the Republic of
Kazakstan are restricted since they are dependent on limited transport routes
and, in particular, access to the Russian pipeline system. Access to such routes
is currently restricted. Domestic markets in the Republic of Kazakstan currently
do not permit world market price to be obtained. Management believes, however,
that over the life of the project, transportation restrictions will be
alleviated and prices will be achievable for hydrocarbons extracted to allow
full recovery of the carrying value of its assets.

Because of uncertainties surrounding the Karakuduk Project, no proved
reserves have been attributed to the field. The Karakuduk Project will require
significant development costs for which the financing is not complete. There can
be no assurance that the project will be adequately financed or that the field
will be successfully developed. The license requires minimum work plans of
approximately $10 million by August 31, 1997, of approximately $35 million by
August 31, 1998 and of approximately $12 million by August 31, 1999. The
agreement provides KKM with the right to defer the minimum work program under
certain conditions. As part of the minimum work plan requirement, the Company
has loaned CAP-G more than $4 million to fund KKM's current operations. KKM's
1997 budget, which has not been approved, would entail a minimum expenditure of
$6 million through August 31, 1997. Subject to the receipt of additional
financing by the Company, this requirement will be funded by the Company through
loans by its subsidiary CAP-G to KKM.

The Karakuduk Field will be developed in phases. Phase I, expected to
require at least one year, began during 1996. Phase I expenditures are to
include the recompletion of four existing wells. Also, subject to the receipt of
additional financing by the Company, a new development well will be drilled in
the Karakuduk Field during 1997.

Total costs, including engineering design, well recompletions, drilling and
completion costs, storage tanks and facilities, oil transport trucks, roads,
camp facilities, communication facilities, field transportation, office overhead
and personnel costs, for Phase I are estimated to be $8 million.

Unless and until the Company exercises its option to acquire the remaining
10% of the outstanding common stock of CAP-G, the Company will be responsible
for providing 90% of the funding necessary for the completion of Phase I of the
development of the Karakuduk Field. If the Company exercises the option, the
Company will be responsible for providing 100% of the funding.

The Company anticipates that produced crude oil from Phase I development
would be sold beginning within five to six months after start-up of this phase.
The produced oil will be transported by pipeline from the field to a storage
terminal to be built at Railroad Station #6 or to a railroad boarding facility
at the same location or to both approximately 18 miles from the Karakuduk Field.
The oil will be transported by railroad or via the Uzen-Atrau- Samara pipeline

to the Black Sea ports described above for sale to either domestic or
international consumers.

The Company has established oil production at a rate of approximately 400
barrels of oil per day from the first well to be re-entered in the Karakuduk Oil
Field. The well is one of 22 wells drilled between 1972 and 1992 to delineate
the Karakuduk Oil Field. None of such wells were then placed on production.
Production now has been established from one of six zones in the first well to
be reentered and the remaining five zones will be tested at a later date, when
additional oil storage and upgraded workover equipment have been provided. The
well is now shut in and operations have been suspended because of winter
conditions and lack of ability to market the test oil. It is currently planned
that recommencement of work-over operations and infrastructure construction will
begin in May, 1997.

Management of the Company believes the risk-to-reward considerations
involved with the development of the Karakuduk Field are very positive and may
lead to substantial growth of the Company over the next several years. However,
the Company can provide no assurances that the Karakuduk Field will produce oil
in any amounts or that the Company will ever realize a profit as a result of the
Company's interest in the field.

The exploration and development of the Karakuduk Field is governed by the
terms of the agreements with the other shareholders in CAP-G and KKM. There can
be no assurance that such shareholders, or any successor thereto, will
contribute or will be in a position to contribute its proportionate share of
costs and expenses for either entity for which it is responsible without raising
additional capital.

While a majority of the permits and licenses required to develop the
Karakuduk Field are in place, there is no assurance that all of them will be
obtained. Also, because of uncertainties surrounding the project, no proved
reserves have been attributed to the field. The project will require significant
development costs for which the financing is not in place. There can be no
assurance that the project will be financed or that the Karakuduk Field will be
successfully developed. Further, the Company will face all of the risks inherent
in attempting to develop an oil and gas property in a foreign country.

See also Item 7--Management's Discussion and Analysis of Financial
Condition and Results of Operations.

In the first quarter of calendar 1997, the Company disposed of all of its
remaining interests in oil and gas properties in the United States. Accordingly,
the following is provided for information purposes even though it relates solely
to those properties.

Reserves. As detailed in "Disclosures About Oil and Gas Producing
Activities" following the Notes to Consolidated Financial Statements in this
Annual Report on From 10- K, estimated quantities of the Company's proved oil
reserves decreased 100% for the fiscal year ended November 30, 1996, as compared
to the previous fiscal year and natural gas reserves decreased 100%. Reserves
decreased due to production during the year, the sale of all producing

properties and the abandonment of certain properties which produced at
uneconomic rates. The present value of the Company's proved reserves decreased
100% as of November 30, 1996, as compared to the end of the previous fiscal
year, due to lower natural gas prices, production, the sale of proved reserves
and abandonment of proved reserves.

Net Quantities of Oil and Gas Produced. The Company's net oil and gas
production for each of the last three years (all of which was from properties
located in the United States) was as follows:

Year Ended November 30,
--------------------------------
1996 1995 1994
---- ---- ----

Oil (Bbls) ........... 1,737 8,224 11,286

Gas (Mcf) ........... 96,906 132,924 159,041

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

Average Average Average
Year Ended Sales Price Sales Price Production
November 30 Oil (Bbls) Gas (Mcf) Cost Per BOE
----------- ------------ ----------- ------------

1996 ............... 17.53 1.17 2.07

1995 ............... 14.27 1.02 3.78

1994 ............... 12.75 1.44 6.06

The above table represents activities related only to oil and gas
production.

Productive Wells and Acreage. As of November 30, 1996, the Company had
interests in 65 gross productive oil wells (1.73 net oil wells) and 62 gross
productive gas wells (4.61 net gas wells). There are no multiple completion
wells. Production was from 45,775 gross (2,793) developed acres.

Undeveloped Acreage. The Company on November 30, 1996, held interests in
2,500 gross (690 net) undeveloped oil and gas leases, all located within the
State of Wyoming.

Drilling Activity. During the last three fiscal years ended November 30,
1996, the Company participated in the drilling of the following productive
exploratory and development wells in the United States. This table does not
include any wells in which the Company had a carried or overriding royalty
interest, nor any wells that were recompleted.

Fiscal Year Exploratory Wells Development Wells
Ended ----------------------------------- ---------------------------------
November 30, Productive Dry Productive Dry
------------ --------------- -------------- -------------- -------------
Gross Net Gross Net Gross Net Gross Net
----- --- ----- --- ----- --- ----- ---

1996 ..................... 0 0 0 0 0 0 0 0
1995 ..................... 0 0 0 0 0 0 0 0
1994 ..................... 1 .11 0 0 5 .81 1 .15

Present Activities. As of April 7, 1997, the Company was not participating
in the drilling of any oil or natural gas wells.

Offices. The Company's offices comprise 1,746 square feet and are rented
for $1,920 per month, under a lease which expires in November 1997.

ITEM 3. LEGAL PROCEEDINGS

The Company is not involved in any material pending legal proceedings.

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

No matter was submitted to a vote of the Company's security holders during
the Company's fiscal quarter ended November 30, 1996.

PART II

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

The Company's $0.10 par value common stock is listed on the Nasdaq
Small-Cap Market under the symbol CHAR.

At March 7, 1997, the Company had approximately 2,061 shareholders of
record of its $0.10 par value common stock. No dividends have been paid on the
Company's common stock and there are no plans to pay dividends in the
foreseeable future.

The following table shows the range of high and low "real-time" trade
prices for each quarter during the Company's last two fiscal years ended
November 30, 1996, as reported by the National Association of Securities
Dealers, Inc.

Price Range
Trading Range -------------------
Fiscal Quarter Ended High Low
-------------------- ---- ---

February 28, 1995................................ 23/32 5/8
May 31, 1995..................................... 7/8 21/32
August 31, 1995.................................. 11/16 15/32
November 30, 1995................................ 1 1/2
February 29, 1996................................ 1 11/32 11/16
May 31, 1996..................................... 1 11/32 1 1/32
August 31, 1995.................................. 1 3/4 1 1/16
November 30, 1996................................ 1 15/32 29/32

The following is information as to all securities of the Company sold by
the Company during the fiscal year ended November 30, 1996, which were not
registered under the Securities Act of 1933, as amended ("Securities Act").

Between September 13, 1994 and June 1, 1996, the Company issued 1,448,325
shares of its Common Stock to 37 persons which exercised stock purchase warrants
issued by the Company in a private offering completed on May 31, 1993. The
exercise price of the warrants was $0.40 per share, paid at the time of
exercise. The certificates evidencing the shares issued bear appropriate
restrictive legends under the Securities Act and stop transfer instructions have
been placed with the Company's stock transfer agent. No underwriter was involved
in the transaction. The Company issued the shares in reliance upon exemptions
from registration under Section 4(2) of the Securities Act and Regulation D
thereunder. All of such persons had available to them material information
concerning the Company. A Form D was filed in connection with the issuances.

Between March 8, 1996 and April 5, 1996, Company issued 14,000,000 shares
of its Common Stock to 32 persons in a private placement. The purchase price for
the shares was $0.50 per share. Allen & Company Incorporated served as placement
agent in the private offering and received the compensation described below. The
Company issued the shares in reliance upon exemptions from registration provided
by Regulation D and Section 4(2) of the Securities Act. All of such persons had
available to them material information concerning the Company. A Form D was
filed in connection with the issuances. All purchasers represented that they
were accredited investors as defined in Regulation D, and that the shares were
being acquired for the investors' own account and not with a view to
distribution. The certificates evidencing the shares issued bear appropriate

restrictive legends under the Securities Act and stop transfer instructions have
been placed with the Company's stock transfer agent.

On April 5, 1996, Company issued 600,000 shares of its Common Stock to two
persons upon conversion of two outstanding unsecured promissory notes of the
Company in the total principal amount of $300,000. Allen & Company Incorporated
assisted the Company in connection with the conversion and received the
compensation described below. The Company relied upon exemptions from
registration under Section 4(2) of the Securities Act. All of such persons had
available to them material information concerning the Company. Each of the
persons represented that such person acquired the shares for the person's
account and not with a view to distribution and that the investor is an
accredited investor. The certificates evidencing the shares issued bear
appropriate restrictive legends under the Securities Act and stop transfer
instructions have been placed with the Company's stock transfer agent.

On March 4, 1996, the Company issued 625,000 shares and on March 21, 1996,
the Company issued an additional 60,000 shares to four persons in consideration
for 25% of the outstanding shares of CAP-G owned by Darka Petrol Ticaret Ltd.
Sti. ("DARKA"), controlled by the persons. The Company issued the shares in
reliance upon the exemption from registration under Section 4(2) of the
Securities Act. The persons represented to the Company that they acquired the
shares for their own accounts and not with a view to distribution. Such persons
had available to them material information concerning the Company. The
certificates evidencing the shares issued bear appropriate restrictive legends
under the Securities Act and stop transfer instructions have been placed with
the Company's stock transfer agent. No underwriter was involved in the
transaction.

On March 6, 1996, the Company issued 900,000 shares to two persons in
consideration for the acquisition by the Company of 15% of the outstanding
shares of CAP-G owned by the persons. The Company issued the shares in reliance
upon the exemption from registration under Section 4(2) of the Securities Act.
The persons represented to the Company that they acquired the shares for their
own accounts and not with a view to distribution. Such persons had available to
them all material information concerning the Company. The certificates
evidencing the shares issued bear appropriate restrictive legends under the
Securities Act and stop transfer instructions have been placed with the
Company's stock transfer agent. No underwriter was involved in the transaction.

Effective April 8, 1996, the Company issued stock purchase warrants
entitling the holder to purchase 1,022,000 shares of the Company's Common Stock
for $10.00 consideration to Allen & Company Incorporated, the placement agent in
the Company's 1996 private placement described above and as compensation for
assistance by the placement agent in the conversion of $300,000 of the Company's
outstanding promissory note described above. The Company issued the warrants in
reliance upon the exemption from registration under Section 4(2) of the
Securities Act. Allen & Company Incorporated represented to the Company that it
acquired the warrants for its own account and not with a view to distribution.

Such person had available to it all material information concerning the Company.
The certificate evidencing the warrants bears an appropriate restrictive legend
under the Securities Act. No underwriter was involved in the transaction.

Between December 1995 and January 1996, the Company issued stock purchase
warrants entitling the holders to purchase up to 780,000 shares of the Company's
Common Stock at an exercise price of $0.25 per share to one individual, one
pension plan, Brae Group, Inc., and Allen & Company, Incorporated in
consideration for the making of loans to the Company by the individual, the plan
and Brae Group, Inc. and Allen & Company totaling $1,050,000 in November and
December 1995. The Company issued the warrants in reliance upon the exemption
from registration under Section 4(2) of the Securities Act. The persons
represented to the Company that they acquired the warrants for their own
accounts and not with a view to distribution. Such persons had available to them
all material information concerning the Company. The certificates evidencing the
warrants bears an appropriate restrictive legend under the Securities Act.

In connection with such borrowings, the Company issued the lenders stock
purchase warrants that terminate on November 30, 1999, to purchase a total of
462,500 shares of the Company's common stock at $0.25 per share. The Company
further agreed that the Company would issue the lenders warrants to purchase an
additional 185,000 shares of the Company's common stock if the promissory notes
are not paid or converted by May 29, 1997, and warrants to purchase an
additional 370,000 shares of the Company's common stock if the promissory notes
are not paid or converted by November 30, 1997. Such warrants would be
exercisable for a period of three years at $0.25 per share. The Company issued
the notes and warrants in reliance upon the exemption from registration under
Section 4(2) of the Securities Act. The persons represented to the Company that
they acquired the notes and warrants for their own accounts and not with a view
to distribution. Such persons had available to them all material information
concerning the Company. The certificates evidencing the notes and warrants bear
an appropriate restrictive legend under the Securities Act.

ITEM 6. SELECTED FINANCIAL DATA

The following is selected consolidated financial information concerning the
Company. This information should be read in conjunction with the Consolidated
Financial Statements appearing elsewhere in this Annual Report on Form 10-K.

November 30,
---------------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----

Oil and gas sales ............................. $ 147,000 $ 255,000 $ 374,000 $ 414,000 $ 492,000
Total revenues* ............................... 147,000 255,000 374,000 414,000 492,000
Noncash write-down of oil
and gas properties .......................... --- 619,000 416,000 230,000 ---
Loss before extraordinary item ................ (2,179,000) --- --- --- ---
Net loss per share before extraordinary
item ........................................ (0.07) --- --- --- ---
Net (loss) .................................... (2,416,000) (704,000) (474,000) (123,000) (121,000)
Net (loss) per common share ................... (0.08) (0.04) (0.02) (0.01) (0.01)
Working capital ............................... 52,000 366,000 497,000 709,000 357,000
Total assets .................................. 14,760,000 5,595,000 2,388,000 2,597,000 2,292,000
Long-term obligations ......................... 1,106,000 461,000 -- 115,000 135,000
Stockholders' equity .......................... 12,114,000 4,920,000 2,035,000 2,167,000 1,880,000
Present value of proved reserves .............. -0-** 427,000 1,084,000 1,360,000 1,429,000
Proved oil reserves (bbls) .................... -0-** 66,185 111,690 141,748 105,973
Proved gas reserves (mcf) ..................... -0-** 3,062,417 3,294,730 2,305,142 1,485,556

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

*Certain reclassifications have been made to conform prior years'
information with the current year presentation.

**Reflects the divestiture by the Company of all of its remaining oil and
gas properties in the United States in early 1997.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

Until 1996, the Company's primary source of capital historically had been
from oil and gas sales. The Company had working capital of approximately $52,000
at November 30, 1996. Total current assets were $1,207,000 and total current
liabilities were $1,155,000 for a working capital ratio of approximately 1.05 to
1.

Net cash and cash equivalents increased by $299,000 from November 30, 1995
to November 30, 1996, primarily due to funds received from the completion of a
private placement of 14,000,000 shares of the Company's common stock for gross
proceeds of $7,000,000 in April, 1996.

outstanding stock of CAP-G. The Company consummated the purchase of 25% of the
outstanding stock of CAP-G in April 1996 by paying $2,000,000 in cash and
issuing 685,000 shares of the Company's common stock. The Company acquired an
additional 5% of the outstanding stock of CAP-G in April 1996 for $250,000 cash.

The Company does not have any income producing properties and the Karakuduk
Oil Field is substantially undeveloped. The Karakuduk Project will require
significant development costs for which the financing is not complete. There can
be no assurance that the project will be adequately financed or that the field
will be successfully developed. The license requires minimum work plans of
approximately $10 million by August 31, 1997, of approximately $35 million by
August 31, 1998 and of approximately $12 million by August 31, 1999. The
agreement provides KKM with the right to defer the minimum work program under
certain conditions. As part of the minimum work plan requirement, the Company
has loaned CAP-G $4 million to fund KKM's current operations. KKM's 1997 budget,
which has not been approved, would entail a minimum expenditure of $6 million
through August 31, 1997. Subject to the receipt of additional financing by the
Company, this requirement will be funded by the Company through loans by its
subsidiary CAP-G to KKM.

The Company has applied with Overseas Private Investment Corporation
("OPIC") for four political risk coverages on the Company's investment in the
Karakuduk Field in western Kazakstan. The maximum insured amounts sought for
each coverage range from $23.4 to $40.2 million. The estimated yearly premium
amounts for the current insured amounts for each coverage range up to $84,000.
The estimated yearly standby premiums for each coverage range up to $88,000. The
actual premium values may be higher or lower depending on the contract offered
to the Company by OPIC.

project. Currently, the Company has a standby facility for which it has made
three previous payments of $31,250 and has a fourth payment of $31,250 due on
June 30, 1997. In July 1997, the Company expects to receive the actual contract
offered to the Company by OPIC.

The Company completed a private placement of 14,000,000 shares of the
Company's common stock for gross proceeds of $7,000,000 in April, 1996. To date,
the Company has used the approximately $6,907,000 of net proceeds from the
private placement to complete the acquisition of the additional 55% of CAP-G, to
repay borrowings, to pay CAP-G's share of the second quarter budget and third
quarter budget for the Karakuduk Field, for working capital and for other
corporate purposes.

In November and December, 1996, the Company borrowed $1,850,000 for interim
financing pursuant to unsecured convertible promissory notes that bear interest
at 8% per annum, which is payable monthly, and that are due and payable on or
before May 29, 1998. The promissory notes are convertible into the Company's
common stock at the lower of $0.75 per share or 75% of the market price of the
common stock on the date of the conversion if the market price is less than
$1.00 per share on such date. The proceeds from the first of such loans was
received on November 22, 1996. The Company used the funds from the loans
primarily for the Company's obligations to provide financing for the Company's
Karakuduk Project in Kazakstan and to make a payment of $200,000 due in
connection with the Company's previous purchase of 15% of the outstanding shares
of CAP-G.

Without additional financing, the Company's present cash and other capital
resources are not sufficient to fund the obligations of CAP-G to pay the
Karakuduk Field development expenses incurred by KKM for the balance of 1997, to
make the balance of the payments to complete the purchase of 15% of the CAP-G
stock and to provide working capital for the Company.

The Company has raised capital to finance a portion of its obligations in
connection with the acquisition of its interest in CAP-G and the development of
the Karakuduk Field and to satisfy working capital needs in the short term. The
Company plans to meet its additional capital needs through debt or equity
offerings, encumbering properties, entering into arrangements whereby certain
costs of development will be paid by others to earn an interest in the
properties, or sale of a portion of the Company's interests in the Karakuduk
Field. The present environment for financing the acquisition of oil and gas
properties or the ongoing obligations of the oil and gas business is uncertain
due, in part, to instability in oil and gas pricing in recent years. The
Company's small size and the early stage of development of the Karakuduk Field
may also increase the difficulty in raising needed financing. There can be no
assurance that debt or equity financing anticipated to be necessary to continue
to fund the Company's operations and obligations will be available to the
Company on economically acceptable terms, if at all. If sufficient funds cannot
be raised to meet the continuing obligations with respect to the Karakuduk Field
development, the Company's interest in such property may be lost. Also, if

sufficient funds cannot be raised to provide additional working capital, it is
likely that the Company will not be able to continue operations.

The Company has no other material commitments for cash outlay and capital
expenditures other than for normal operations.

Results of Operations Fiscal 1996 Compared with Fiscal 1995

The Company's operations during fiscal 1996 resulted in a loss before
extraordinary item of $2,179,000 primarily due to the move from domestic
operations into an international operation. Production costs were down from
$115,000 in 1995 to $37,000 in 1996 as a result of continued decreased
production from the Company's domestic operations. General and administrative
expenses increased from $166,000 in 1995 to $2,336,000 in 1996 as a result of
consulting fees to MDI of approximately $500,000, additional compensation
recorded of approximately $385,000, consisting of $210,000 for bonuses to the
former Chief Executive Officer and the former Chief Financial Officer of the
Company and $175,000 for compensation related to 350,000 shares of the Company's
common stock granted to the Chairman of the Board of the Company, and additional
expenses for start-up costs in Kazakstan relating to the proportionate
consolidation of KKM into the Company, which began in 1996. Interest expense
also increased in relation to the financing of the projects. In 1996, there was
no write down of oil and gas properties as there had been in 1995 which had
totaled $619,000. The result of these changes was a loss of $2,416,000 or $0.08
per share for 1996 as compared to a loss of $704,000 or $0.04 per share for
1995, before extraordinary loss.

For 1996, there was a $237,000 or $0.01 extraordinary per share loss on the
extinguishment of long term debt which resulted in a net loss of $2,416,000 or
$0.08 per share for 1996.

Results of Operations Fiscal 1995 Compared with Fiscal 1994

The Company's operations during fiscal 1995 resulted in a loss of $719,000
primarily due to a noncash write-down of oil and gas properties of $619,000 for
fiscal 1995. Due to the noncash write-down, the net loss for fiscal 1995 was
$704,000 compared to a net loss of $474,000 during fiscal 1994. The noncash
write-down was primarily the result of the decreased value of estimated future
net values of proved reserves due to lower gas prices during the fourth quarter
of fiscal 1995 and the sale of proved reserves during 1995.

Revenue from oil and gas sales decreased $119,000 or 31.8% from $374,000 in
fiscal 1994 due to lower production, lower crude oil and natural gas prices and
sale or abandonment of certain producing properties.

Costs and expenses increased $91,000, or 20.4% during fiscal 1995,
excluding the noncash write-down of oil and gas properties. Production costs
decreased by 50.4% to $115,000 in fiscal 1995 due to the sale of certain
properties and shut-in of certain properties due to lower natural gas prices.
Depreciation and depletion also decreased by 38.3% to $74,000 for the same

reasons that production decreased. General and administrative expenses increased
$72,000, or 76.6% in fiscal 1995 due to the costs related to the acquisition and
operation of the Company's interest in the Karakuduk Field.

Inflation. The Company cannot control prices in its oil and gas sales and
to the extent the Company is unable to pass on increases in operating costs, it
may be affected by inflation.

Management's Discussion of Changes in Standardized Measure

Standardized measure of discounted future net cash flows decreased 100% in
fiscal 1996 as compared to fiscal 1995. This decrease was the result of
production in 1996, lower oil and gas prices, the sale of proved reserves, and
the abandonment of proved reserves during the year.

The forward-looking statements herein are based on current expectations
that involve a number of risks and uncertainties. Such forward-looking
statements are based on assumptions that the Company will have adequate
financial resources to fund the development of the Karakuduk Field, that
significant reserves of oil will be developed in the Karakuduk Field which can
be readily and profitably marketed, and that there will be no material adverse
change in the Company's operations or business. The foregoing assumptions are
based on judgment with respect to, among other things, oil and natural gas
reserve information available to the Company, future economic, competitive and
market conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the Company's
control. Accordingly, although the Company believes that the assumptions
underlying the forward-looking statements are reasonable, any such assumption
could prove to be inaccurate and therefore there can be no assurance that the
results contemplated in forward-looking statements will be realized. There are a
number of other risks presented by the Company's business and operations which
could cause the Company's financial performance to vary markedly from prior
results or results contemplated by the forward-looking statements. Management
decisions, including budgeting, are subjective in many respects and periodic
revisions must be made to reflect actual conditions and business developments,
the impact of which may cause the Company to alter its capital investment and
other expenditures, which may also adversely affect the Company's results of
operations. In light of significant uncertainties inherent in forward-looking
information included in this Annual Report on Form 10-K, the inclusion of such
information should not be regarded as a representation by the Company or any
other person that the Company's objectives or plans will be achieved.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Item 14(a) for a list of the Financial Statements and the supplementary
financial information included in this report following the signature page.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

On January 16, 1997, the Company engaged Ernst & Young LLP as the Company's
principal independent accountant in place of Grant Thornton LLP. On July 23,
1996, the Company requested and received the resignation of Grant Thornton LLP.
There were no disagreements during the Company's two fiscal years ended November
30, 1995, or any interim period subsequent thereto between the Company and Grant
Thornton LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure which, if not resolved to
the satisfaction of Grant Thornton LLP, would have caused Grant Thornton LLP to
make reference in its reports to the subject matter of such disagreements. The
opinions of Grant Thornton LLP on the Company's financial statements for the
fiscal years ended November 30, 1995 and 1994, contain no adverse opinion or
disclaimer of opinion, nor were such opinions qualified as to uncertainty, audit
scope or accounting principles, except that the opinion on the Company's
financial statements for the fiscal year ended November 30, 1995, raised
substantial doubt about the Company's ability to continue as a going concern.
The decision to change accountants was approved by the Company's Board of
Directors.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The name, position with the Company, age of each director and executive
officer and the period during which each director and executive officer of the
Company has served are as follows:

Name of Director and Executive Director Principal Occupation
Officer and Position, in the Company Since Age During the last Five Years
- ------------------------------------ -------- --- --------------------------

Howard Karren....................... 1996 66 Chairman of the Board of the Company since 1996; Chief
Executive Officer of the Company since January 1997 and
President since February 1997. Senior Advisor to the
Chairman and Chief Executive Officer of Enron Oil & Gas
Co., an oil and gas company, from 1994 to 1996. President
and Vice Chairman of Enron Oil & Gas International Co.
from 1984 until 1994.

Peter G. Dilling.................... 1995 47 Vice Chairman of the Board of the Company since March
1997; President and a director of M-D International
Petroleum, Inc., an oil and gas company, since September
1994. A partner of M-D International, an unincorporated
oil and gas business, from March 1993 to the present.

Jay W. McGee........................ 1995 49 Executive Vice President of Exploration and Production of
the Company since March 1997; Director of M-D
International Petroleum, Inc., an oil and gas company,
since September 1994. Manager of M-D International, an
unincorporated oil and gas entity, from March 1993 to the
present. Vice President of Anglo Suisse L.P., an oil and
gas company, from September 1990 to February 1993. Prior
thereto, Director of Exploration of Anglo Suisse, Inc., an
oil and gas company.

Alan D. Berlin...................... 1997 57 A partner of Aitken Irvin Lewin Berlin Vrooman & Cohn,
LLP since 1995. Engaged in the private practice of law for
over five years prior to joining Aitken Irvin Lewin Berlin
Vrooman & Cohn LLP. A director of Belco Oil & Gas Corp.

David A. Dahl....................... 1997 35 President of Whittier Energy Company, an oil and gas
exploration and production company, since 1997, President
of Whittier Ventures, LLC, a private investment entity,
since January 1996, and a Vice President of Whittier
Trust Company, a trust company, since April 1993, a Vice
President of Merus Capital Management, an investment
manager, from 1990 to 1993.

Arlo G. Sorensen.................... 1996 56 Chief Financial Officer and Principal Accounting Officer
of the Company since March 1997. Trustee of M.H. Whittier
Corporation, a private investment entity, since 1985.
Chairman of the Board and a director of Whittier Trust
Company, a trust company since 1988.

Charles P. Karren................... -- 30 Vice President of Business Development of the Company
since March 1997; Consultant to the Company from May 1996
to March 1997; Consultant to M-D International Petro-
leum, Inc., an oil and gas company, since May 1996;
employed in various capacities with Enron Development
Corp., an energy development company, from 1992 to 1996;
Associate with Hill Samuel-Middle East, an English
merchant bank, from 1990 to 1992.

Howard Karren and Charles P. Karren are father and son.

The present term of office of each director will expire at the next annual
meeting of shareholders.

Each executive officer will hold office until his successor duly is elected
and qualified, until his resignation or until he is removed in the manner
provided by the Company's Bylaws.

In connection with the Company's acquisition of all of the stock of Central
Asian Petroleum, Inc. ("CAP-D") in 1994, the former shareholders of CAP-D
acquired certain rights to nominate directors of their choosing for election to
the Company's Board of Directors. Pursuant to these rights, the former CAP-D
shareholders caused the nomination of Jay W. McGee, who was elected a director
at the 1995 annual meeting of shareholders. If by June 30, 2000, the Karakuduk
Field obtains 5,000 barrels of oil production per day averaged over any sixty
(60) day period, or the Company's beneficial interest in the field is sold or
the Company and the former shareholders jointly participate in a new exploratory
development project, the former shareholders have the right to cause the Company
to nominate one additional director at the Company's 2000 annual meeting of
shareholders.

In connection with a loan to the Company from the Brae Group, Inc.
("Brae"), in November 1995, the Company was required to appoint Messrs. Karren
and Dilling as directors of the Company and to appoint Mr. Karren as Chairman of
the Board of Directors of the Company. The Company borrowed $750,000 represented
by an unsecured promissory note with interest at 8% per annum. The note was
repaid on April 30, 1996. As a result of the repayment of the note, the Company
is no longer required to continue to nominate such persons as directors.

In connection with borrowings in August 1996, the Company agreed to add two
directors selected by two of the lenders, Whittier Ventures LLC and Whittier
Energy Company (collectively "Whittiers"). In connection with the transactions,
James A. Jeffs resigned from the Company's Board of Directors. At the request of
the Whittiers, on December 2, 1996, Arlo G. Sorensen replaced Mr. Jeffs on the
Company's Board of Directors and on January 3, 1997, David A. Dahl was appointed
to the Company's Board of Directors. The Whittiers will have the right to have
their two representatives nominated for directors of the Company until the later
of the date their promissory notes are paid in full or the date the Whittiers no
longer have any investment in the Company.

There are no other arrangements or understandings between any executive
officer and any director or other person pursuant to which any person was
selected as a director or an executive officer.

Except as set forth above, no director of the Company is a director of an
entity that has its securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934.

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely upon a review of the Forms 3 and 4 and any amendments thereto
furnished to the Company during the Company's fiscal year ended November 30,
1996, and Form 5 and amendments thereto furnished to the Company with respect to
such fiscal year, during the Company's fiscal year ended November 30, 1996, no
persons who were directors, officers or beneficial owners of more than 10% of
the Company's outstanding Common Stock during such fiscal year filed late
reports on Form 3, 4, or 5 except for Howard Karren, Peter G. Dilling and James
A. Jeffs who did not timely file their Forms 3 during the fiscal year ended
November 30, 1996, Howard Karren and Peter G. Dilling who have not yet filed
needed amendments to their Forms 3, and Jay W. McGee who did not timely file his
Form 3 during the fiscal year ended November 30, 1995.

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth for the Company's last three fiscal years
ended November 30, 1996, 1995 and 1994, the compensation paid by the Company for
services rendered in all capacities to the Company by Paul V. Hoovler, who was
the chief executive officer of the Company during the Company's three fiscal
years ended November 30, 1996. No other person who served as an executive
officer of the Company during the Company's fiscal year ended November 30, 1996
received total annual salary and bonus in excess of $100,000 from the Company
during the Company's fiscal year ended November 30, 1996:

SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Compensation Awards
----------------------------------------- ------------
Year Other
Ended Annual Securities All Other
Name and November Compen- Underlying Compen-
Principal Position 30, Salary($) Bonus($) sation($) Options(#) sation($)
- ------------------ -------- -------- ------- -------- ---------- --------

Paul V. Hoovler .............. 1996 .......... $60,000(1) -- $ 4,937(2) -- $40,000(3)
Chief Executive 1995 .......... $60,000 -- $ 4,413(2) -- $40,000(3)
Officer and Presi- 1994 .......... $60,000 -- $ 3,518 (2) -- $40,000(3)
dent until January
1997 and February
1997, respectively

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

(1) In addition, on August 19, 1996, the Company's board of directors awarded
Mr. Hoovler a cash b nus of $140,000 as recognition of past and present
services to the Company to be used by Mr. Hoovler to exercise certain
warrants, granted to Mr. Hoovler pursuant to the Company's 1989 Stock
Warrant Plan, to purchase 500,000 shares of the Company's common stock at
an exercise price of $0.28 per share. This bonus will not become payable
until receipt of notice from Mr. Hoovler, which notice may not be given and
shall not be effective, until the earlier of (i) completion of a sale or
farmout by the Company of all or a portion of its interest in the Karakuduk
Project, or (ii) the date when the Company makes a public disclosure of a
sale or farmout of the Karakuduk Project. At its sole option and
discretion, the Company may, in lieu of making payment of such bonus to Mr.
Hoovler, use all or a portion of such bonus as a direct offset to Mr.
Hoovler's obligation to make any payment due to the Company upon exercise
of the warrant. Anything mentioned above to the contrary notwithstanding,
in the event Mr. Hoovler has exercised and paid for the warrant prior to
the date the bonus becomes payable, the Company shall pay such bonus
directly to Mr. Hoovler, but only upon completion of a sale or farmout of
all or a portion of its interest in the Karakuduk Project.

(2) Represents the amounts distributed pursuant to a royalty participation plan
to Paul V. Hoovler.

(3) The Company has a Deferred Compensation and Death Benefit Plan for Paul V.
Hoovler. The plan allows for Mr. Hoovler to continue in active employment
of the Company until age 70.5. The Company pays Mr. Hoovler $40,000
annually from this plan. If Mr. Hoovler voluntarily terminates his
employment prior to his retirement, disability, or death, he or his estate
will receive the remaining residual funds to be disbursed from the plan. If
Mr. Hoovler dies prior to retirement or other termination of employment,
Mr. Hoovler's estate will receive the remaining residual funds to be
disbursed from the plan. The plan is funded by a life insurance policy on
the life of Mr. Hoovler which provides for the major portion of any costs

to the Company. The plan was fully funded when the Company paid, during the
Company's fiscal year ended November 30, 1991, the final payment of a
premium of $18,000 on a life insurance policy insuring the life of Paul V.
Hoovler. See "Termination of Employment Arrangements."

Option Grants in Fiscal Year Ended November 30, 1996

No options were granted by the Company to Paul V. Hoovler during the
Company's fiscal year ended November 30, 1996.

FISCAL YEAR-END OPTION VALUES

The following table sets forth information concerning unexercised options
(warrants) held by Paul V. Hoovler at November 30, 1996:

Number of Securities
Underlying Unexercised Value of Unexercised
Options as of In-the-Money Options at
November 30, 1996(#) November 30, 1996($)
--------------------------- --------------------------
Name Exercisable/ Unexercisable Exercisable/ Unexercisable
- ---- ----------- ------------- ----------- -------------

Paul V. Hoovler ............. 500,000 - 0 - $406,875(1) - 0 -

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

(1) The value was determined by multiplying the number of shares underlying the
warrants by the difference between the exercise price and the closing sale
price of the Company's Common Stock on November 30, 1996. No options
(warrants) were exercised by Paul V. Hoovler during the Company's fiscal
year ended November 30, 1996.

Compensation of Directors

There were no standard or other arrangements for the compensation of the
Company's directors in effect for the Company's fiscal year ended November 30,
1996. The Board of Directors also agreed to pay to Frank H. Gower, Jr., who
served as a director of the Company from 1972 to 1997, a cash bonus of $28,000
that was paid in July 1996 and was used by Mr. Gower to purchase 100,000 shares
of the Company's Common Stock upon exercise of a stock purchase warrant held by
him.

There are no employment contracts between the Company and any executive
officer.

Termination of Employment Arrangements

Paul V. Hoovler, the former Chief Executive Officer and President of the
Company, entered into a severance agreement ("Agreement") with the Company
effective February 12, 1997. Pursuant to the Agreement, Mr. Hoovler receives his
salary and unpaid vacation time accrued through February 12, 1997. Also, the

Company agreed to amend the Company's 1989 Stock Warrant Plan to enable Mr.
Hoovler to transfer the warrants granted to him in 1996 to a member of his
family or a trust created by him.

Further, Mr. Hoovler was granted warrants to purchase 100,000 shares of the
Company's common stock at an exercise price of $0.85 per share, for a period of
four years and warrants to purchase 100,000 shares of the Company's common stock
at an exercise price of $1.25 per share that become exercisable on January 1,
1998, and remain exercisable for a period of four years from such date.

Also, pursuant to the Agreement, the Company agreed to assign to Mr.
Hoovler, or an entity controlled by Mr. Hoovler, the existing overriding royalty
interest ("ORRI") that the Company holds in approximately 89 wells. Such
assignment will be for a three-year period. In exchange for the assignment, Mr.
Hoovler agreed to pay a former employee of the Company ten percent (10%) of the
net revenues received from such ORRI during the three-year period. In addition,
upon Mr. Hoovler's request, the Company agreed to assign its interest in the
Company's royalty participation plan to Mr. Hoovler or an entity controlled by
Mr. Hoovler. The Company also agreed to assign to Mr. Hoovler the Company's
ownership interest in two life insurance policies that the Company held on Mr.
Hoovler's life. Finally, pursuant to the Agreement, Mr. Hoovler was allowed to
bid on or retain certain office furniture and equipment of the Company.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.

The following persons are the only persons known to the Company who on
April 2, 1997, owned beneficially 5% or more of the Company's 37,526,517
outstanding shares of $0.10 par value common stock:

Name and Address of Beneficial Owner Amount and Nature of Percent
or Name of Officer or Director Beneficial Ownership(1) of Class
- ------------------------------------ ---------------------- --------

Drake and Company .................................................... 3,000,000 8.0%
Citibank Performance Portfolio A.A.
c/o Citibank, N.A.
153 E. 53rd Street, 21st Floor
New York, New York 10043

Allen & Company Incorporated ......................................... 2,962,000(2) 7.7%
711 Fifth Avenue
New York, New York 10022

Crescent Investment .................................................. 2,000,000 5.3%
865 Figueroa Street, Suite 1500
Los Angeles, California 90017

Whittier Ventures, LLC ............................................... 3,187,000(3) 8.2%
1600 Huntington Drive
So. Pasadena, California 91030

Howard Karren ........................................................ 350,000(4) 0.9%

Peter G. Dilling ..................................................... 753,000(5) 2.0%

Jay W. McGee ......................................................... 930,678(6) 2.5%

Alan D. Berlin ....................................................... -0- --

David A. Dahl ........................................................ 3,582,833(7) 9.2%

Arlo G. Sorensen ..................................................... 11,242(8) 0.03%

Charles P. Karren .................................................... 75,000 0.2%

All Directors and Officers as a Group (seven
persons) ............................................................. 5,702,753(9) 14.9%

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

(1) To the knowledge of the Company's management, the beneficial owners listed
have sole voting and investment power with respect to the shares shown
unless otherwise indicated.

(2) Includes 1,022,000 shares underlying unexercised warrants.

(3) Includes 1,000,000 shares underlying a convertible note and 187,500 shares
underlying unexercised warrants. Does not include shares underlying
additional warrants that will be issued if the debt to Whittier Ventures,
LLC is not repaid by May 31, 1997 or by November 30, 1997.

(4) The 350,000 shares are reserved to be issued to Mr. Karren. See "Certain
Relationships and Related Transactions."

(5) All 753,000 shares are owned directly by Spectrum Development, Inc. which
is controlled by Mr. Dilling, and the 753,000 shares include 301,618 of a
total of 1,250,000 shares being held in escrow in connection with the
acquisition of Central Asian Petroleum, Inc. as described under "Certain
Relationships and Related Transactions."

(6) Includes 272,205 of a total of 1,250,000 shares being held in escrow in
connection with the acquisition of Central Asian Petroleum, Inc. as
described under "Certain Relationships and Related Transactions." Also
includes 2,589 shares owned in Mr. McGee's Individual Retirement Account
and 2,589 shares owned by Mr. McGee's wife.

(7) Includes the shares beneficially owned by Whittier Ventures LLC and
includes 333,333 shares underlying a convertible note and 62,500 shares
underlying unexercised warrants owned by Whittier Energy Company. David A.
Dahl has no pecuniary interest in such shares but, as the President of
each, Mr. Dahl has voting power and investment power over such shares and,
thus, may be deemed to beneficially own such shares pursuant to Rule 13d-3
adopted under the Securities Exchange Act of 1934, as amended. Does not
include shares underlying additional warrants that will be issued if the
debt to Whittier Ventures, LLC and Whittier Energy Company is not repaid by
May 29, 1997 or by November 30, 1997.

(8) The 11,242 shares are owned by Whittier 1982 Oil Trust for which Mr.
Sorensen is the trustee and has voting and investment power over such
shares.

(9) Includes the shares as described in notes (2) through (8) above.

There are presently no arrangements of any kind which may at a subsequent date
result in a change in control of the Company.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In early September 1994, the Company signed a letter of intent with Central
Asian Petroleum, Inc., a Delaware corporation ("CAP-D"), and Overseas Consulting
Services Company, Inc. ("OCSCO"), both private companies based in Houston,
Texas, to jointly pursue the registration and development of the Karakuduk
Field, a shut-in oil field in the central Asian Republic of Kazakstan, that was
discovered in the early 1970s but never placed on production.

In mid-September 1994, the Company acquired a 25% interest in Central Asian
Petroleum (Guernsey) Limited ("CAP-G"), with headquarters in Ankara, Turkey,
which holds a 50% interest in KKM. In April 1995, the Company acquired all of
the stock of CAP-D, which also owned an interest in CAP-G. Following the
acquisition of CAP-D, the Company's beneficial interest in CAP-G increased to
45%, giving the Company a 22.5% beneficial interest in KKM and the Karakuduk
Field. Under terms of the acquisition, the former shareholders of CAP-D have
certain rights to cause the Company to nominate persons selected by the former
shareholders to the Company's Board of Directors. Jay W. McGee, a former
shareholder of CAP-D, was first elected at the 1995 Company's Annual Meeting of
Shareholders under the arrangement. Additionally, in connection with the
acquisition, the Company may be required to pay a brokerage fee to Mr. McGee in
the amount of up to $175,000. The Company paid Mr. McGee $50,000 in 1995 and the
balance is payable upon the occurrence of certain milestones in development of
the Karakuduk Field. The Company issued 4,250,000 shares of restricted common
stock for CAP-D which will be held in escrow and released to the former

shareholders of CAP-D, including Messrs. McGee and Dilling, or affiliates of
them, from time to time in connection with development of the Karakuduk Field.
Of the shares held in escrow, 3,000,000 shares have been released and delivered
to the former shareholders of CAP-D.

The Company has agreed to issue a minimum of 350,000 shares of the
Company's restricted common stock to Howard Karren, a director of the Company,
or his designee at a future date selected by Mr. Karren. The Company is
negotiating to acquire MDI, and has issued 180,000 shares of the Company's
restricted common stock to Enron to facilitate the participation of MDI in the
Uzbekistan Project. See "Business." The Company paid Mr. Karren a fee of $4,000
per month for the four month period ending August 31, 1996, for office expenses
and travel expenses in connection with the Company's efforts to satisfy its
funding obligations for the Karakuduk Project.

Beginning in May 1996 through February 1997, the Company paid a base
consulting fee of $60,000 per month to MDI for assistance by MDI in seeking
means for meeting the Company's funding obligations for the Karakuduk Project.
The Company also assumed obligations of MDI to pay up to $42,000 during the six
month period ending September 30, 1996 to two other unaffiliated consultants
engaged to assist MDI and the Company to acquire and review oil and natural gas
exploration or development projects in countries of the former Soviet Union.
Commencing in March 1997, the Company began to reimburse MDI for MDI's expenses
incurred in connection with the Karakuduk Project.

On April 5, 1996, the Company completed a private placement of 14,000,000
shares of the Company's common stock at $0.50 a share for gross proceeds of
$7,000,000. In connection with the private placement, the Company issued a five
year warrant to purchase 1,022,000 shares of the Company's common stock for, a
nominal amount, to Allen & Company Incorporated ("Allen") and paid $21,849 of
Allen's expenses. The Company paid additional miscellaneous expenses related to
the offering of $71,363. Allen also purchased shares of the Company's common
stock in the private placement on the same terms and conditions as other
purchasers thereof. The Company also issued Allen a three year warrant to
purchase 200,000 shares of the Company's common stock at $0.25 per share, in
connection with the $750,000 loan referred to above. Drake and Company, Crescent
Investment and Whittier Ventures, LLC also purchased shares of the Company's
common stock, in the above described private placement on the same terms and
conditions as other purchasers thereof. See "Security Ownership of Certain
Beneficial Owners and Management."

received on November 22, 1996. Whittier Ventures, LLC and Whittier Energy
Company loaned $1,000,000 of the $1,850,000 that was loaned to the Company.

In connection with such borrowings, the Company agreed to issue the lenders
warrants that terminate on November 30, 1999, to purchase a total of 462,500
shares of the Company's common stock at $0.25 per share and agreed to add two
directors selected by two of the lenders, Whittier Ventures LLC and Whittier
Energy Company, to the Company's Board of Directors. See "Item 10. Directors and
Executive Officers of the Registrant." The Company further agreed that the
Company would issued the lenders warrants to purchase an additional 185,000
shares of the Company's common stock if the promissory notes are not paid or
converted by May 31, 1997, and warrants to purchase an additional 370,000 shares
of the Company's common stock if the promissory notes are not paid or converted
by November 30, 1997. Such warrants would be exercisable for a period of three
years at $0.25 per share.

Matthew R. Hoovler, the former Vice President and Treasurer of the Company,
was awarded on August 19, 1996 a cash bonus of $70,000 as recognition for past
and present services to the Company to be used solely and exclusively by Mr.
Hoovler to exercise certain warrants granted to him pursuant to the Company's
1989 Stock Warrant Plan, to purchase 250,000 shares of the Company's common
stock at an exercise price of $0.28 per share. The bonus will not become payable
until receipt of notice from Mr. Hoovler, which notice may not be given and
shall not be effective until the earlier of (i) completion of a sale or farmout
by the Company of all or a portion of its interest in the Karakuduk Project, or
(ii) the date when the Company makes a public disclosure of a sale or farmout of
the Karakuduk Project. At its sole option and discretion, the Company may, in
lieu of making payment of such bonus to Mr. Hoovler, use all or a portion of
such bonus as a direct offset to Mr. Hoovler's obligation to make any payment
due to the Company upon exercise of the Warrant. Anything mentioned above to the
contrary notwithstanding, in the event Mr. Hoovler has exercised and paid for
the warrant prior to the date the bonus becomes payable, Chaparral will pay such
bonus directly to Mr. Hoovler, but only upon completion of a sale or farmout of
all or a portion of its interest in the project. The Company amended its 1989
Stock Warrant Plan to enable Mr. Hoovler to transfer the warrants granted to him
in 1996 to a member of his family or a trust created by him.

See "Termination Arrangements with Previous Officers and Directors" set
forth in Item 11 for a description of the termination agreement between the
Company and Paul V. Hoovler.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K

(a)(1) Financial Statements.

Table of Contents
Reports of Independent Auditors
Balance Sheets--As of November 30, 1996 and 1995

Consolidated Statements of Operations--Years ended November 30, 1996,
1995 and 1994
Consolidated Statements of Cash Flows--Years ended November 30, 1996,
1995, and 1994
Consolidated Statements of Changes in Stockholders' Equity--Years
ended November 30, 1996, 1995 and 1994
Notes to Consolidated Financial Statements
Supplemental Information Disclosures About Oil and Gas Producing
Activities (Unaudited)

(a)(2) Financial Statement Schedules.

None.

(b) Current Reports on Form 8-K:

The Company filed no reports on Form 8-K during the last fiscal quarter
ended November 30, 1996:

2.1 Stock Acquisition Agreement and Plan of Reorganization dated
April 12, 1995 between Chaparral Resources, Inc., and the
Shareholders of Central Asian Petroleum, Inc., incorporated by
reference to Exhibit 2.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended May 31, 1995.

2.2 Escrow Agreement dated April 12, 1995 between Chaparral
Resources, Inc., the Shareholders of Central Asian Petroleum,
Inc. and Barry W. Spector, incorporated by reference to Exhibit
2.2 to the Company's Quarterly Report on Form 10-Q for the
quarter ended May 31, 1995.

2.3 Amendment to Stock Acquisition Agreement and Plan of
Reorganization dated March 10, 1996 between Chaparral Resources,
Inc., and the Shareholders of Central Asian Petroleum, Inc.

3.1 Restated Articles of Incorporation and Amendments, incorporated
by reference to Exhibit 3.1 to the Company's Annual Report on
Form 10-K for the fiscal year ended November 30, 1993.

3.2 Articles of Amendment to the Restated Articles of Incorporation
dated April 20, 1988, incorporated by reference to Exhibit 3.2 to
the Company's Annual Report on Form 10-K for the fiscal year
ended November 30, 1993.

3.3 Bylaws, as amended through January 3, 1997.

3.4 Articles of Amendment to the Restated Articles of Incorporation
and Amendments dated June 21, 1995, incorporated by reference to
Exhibit B to the Company's Quarterly Report on Form 10-Q for the
quarter ended May 31, 1995.

3.5 Articles of Amendment to the Restated Articles of Incorporation
and Amendments dated July 17, 1996, incorporated by reference
to Exhibit 3.5 to the Company's Registration Statement No.
333-7779.

10.1 Royalty Participation Plan dated June 15, 1982, incorporated by
reference to Exhibit 10.1 to the Company's Annual Report on Form
10-K for the fiscal year ended November 30, 1993.

10.2 Chaparral Resources, Inc. 1989 Stock Warrant Plan effective May
1, 1989, incorporated by reference to Exhibit 10.3 to the
Company's Annual Report on Form 10-K for the fiscal year ended
November 30, 1993.

10.3 Target Benefit Plan effective December 1, 1990 incorporated by
reference to Exhibit 10.9 to the Company's Annual Report on Form
10-K for the fiscal year ended November 30, 1991.

10.4 Deferred Compensation and Death Benefit Plan as amended November
15, 1991 incorporated by reference to Exhibit 10.10 to the
Company's Annual Report on Form 10-K for the fiscal year ended
November 30, 1991.

10.5 Promissory Note dated November 1, 1995 from Chaparral Resources,
Inc., to Brae Group, Inc., incorporated by reference to Exhibit
10.1 to the Company's Current Report on Form 8-K dated November
1, 1995.

10.6 Purchase Agreement, dated effective January 12, 1996, between the
Company and Guntekin Koksal (purchase of CAP-G shares)
incorporated by reference to Exhibit 10.6 to the Company's Annual
Report on Form 10-K for the fiscal year ended November 30, 1995.

10.7 Letter Agreement, dated January 3, 1996, between the Company and
certain stockholders of Darka Petrol Ticaret Ltd. Sti., together
with Exhibits A--E, incorporated by reference to Exhibit 10.7 to
the Company's Annual Report on From 10-K for the fiscal year
ended November 30, 1995.

10.8 Amendment, effective March 4, 1996, to the Letter Agreement
revising the terms pursuant to which the Company is to acquire
all shares of CAP(G) stock owned by Darka Petrol Ticaret Ltd.
Sti., incorporated by reference to Exhibit 10.8 to the Company's
Annual Report on From 10-K for the fiscal year ended November 30,
1995.

10.9 Warrant Certificate entitling Allen & Company to purchase up to
1,022,000 shares of Common Stock of Chaparral Resources, Inc.,
incorporated by reference to Exhibit 10.1 to the Company's
Current Report on Form 8-K dated April 1, 1996.

10.10 Consulting Agreement dated May 14, 1996 with M-D International
Petroleum, Inc., incorporated by reference to Exhibit 10.10 to
the Company's Registration Statement No. 333-7779.

10.11 Promissory Notes and Modification of Promissory Notes
incorporated by reference to Exhibit (3) to the Company's Current
Report on Form 8-K dated November 22, 1996.

10.12 Amendment effective December 6, 1996 to Purchase Agreement dated
effective January 12, 1996 between the Company and Guntekin
Koksal.

10.13 Severance Agreement dated February 12, 1997 between the Company
and Paul V. Hoovler.

10.14 Severance Agreement dated February 12, 1997 between the Company
and Matthew R. Hoovler.

10.15 Purchase and Sale Agreement effective January 1, 1997 between
the Company and Conoco Inc.*

10.16 Amendments to Chaparral Resources, Inc. Stock Warrant Plan.

10.17 Agreement dated August 30, 1995 for Exploration Development and
Production of Oil in Karakuduk Oil Field in Mangistan Oblast of
the Republic of Kazakhstan between Ministry of Oil and Gas
Industries of the Republic of Kazakhstan for and on Behalf of the
Government of the Republic of Kazakhstan and Joint Stock Company
of Closed Type Karakuduk Munay Joint Venture.

10.18 License for the Right to Use the Subsurface in the Republic of
Kazakhstan.

16 Letter dated July 23, 1996 from Grant Thornton LLP confirming the
circumstances pursuant to which Grant Thornton resigned as
Registrant's principal independent accountants, incorporated by
reference to Exhibit 16 to the Company's Current Report on Form
8-K dated July 23, 1996.

21 List of Subsidiaries of the Registrant.

23.1 Consent of Grant Thornton LLP for S-8.

23.2 Consent of Ernst & Young LLP for S-8.

27 Financial Data Schedule.

*The Exhibits to the Purchase and Sale Agreement have been omitted and will
be provided to the United States Securities and Exchange Commission upon
request.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

CHAPARRAL RESOURCES, INC.
a Colorado corporation

By /s/ Howard Karren
----------------------------------------
Howard Karren,
President, Principal Executive Officer

By /s/ Arlo G. Sorensen
----------------------------------------
Arlo G. S rensen,
Chief Financial Officer and
Principal Accounting Officer

Dated: April 11, 1997

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:

Date Name and Title Signature

April 11, 1997 Howard Karren, /s/ Howard Karren
Director --------------------------

April 11, 1997 Peter G. Dilling,
Director

April 11, 1997 Jay W. McGee, /s/ Jay W. McGee
Direct --------------------------

April 11, 1997 Alan D. Berlin, /s/ Alan D. Berlin
Director --------------------------

April 11, 1997 David A. Dahl, /s/ David A. Dahl
Director --------------------------

April 11, 1997 Arlo G. Sorensen, /s/ Arlo G. Sorensen
Director --------------------------

Contents

Reports of Independent Auditors ...............................................1

Audited Consolidated Financial Statements

Consolidated Balance Sheets ...................................................3
Consolidated Statements of Operations..........................................5
Consolidated Statements of Cash Flows..........................................6
Consolidated Statements of Changes in Stockholders' Equity.....................8
Notes to Consolidated Financial Statements.....................................9

Supplemental Information - Disclosures About Oil and Gas
Producing Activities - Unaudited...........................................24

Report of Independent Auditors

The Board of Directors and Stockholders
Chaparral Resources, Inc.

We have audited the accompanying consolidated balance sheet of Chaparral
Resources, Inc. as of November 30, 1996, and the related consolidated statements
of operations, cash flows and changes in stockholders' equity 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 consolidated financial position of Chaparral
Resources, Inc. as of November 30, 1996, and the consolidated results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company has incurred recurring operating losses and has no
operating assets which are presently generating cash to fund its operating and
capital requirements. The Company requires significant additional financing to
meet its financial requirements through fiscal 1997. In addition, as discussed
in Note 2, the Company's investee, Karakuduk-Munay, Inc. (KKM), has been unable
to reregister with the Republic of Kazakstan, which may cause KKM to be declared
invalid and be liquidated. These conditions raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 2. The financial statements do not
include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and classification of
liabilities that may result from the outcome of this uncertainty.

/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Denver, Colorado
April 8, 1997
1

REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors and Stockholders
Chaparral Resources, Inc.

We have audited the accompanying consolidated balance sheet of Chaparral
Resources, Inc. as of November 30, 1995, and the related consolidated statements
of operations, cash flows and changes in stockholders' equity for each of the
two years in the period ended November 30, 1995. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Chaparral
Resources, Inc. as of November 30, 1995, and the consolidated results of its
operations and its cash flows for each of the two years in the period ended
November 30, 1995, in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As shown in the financial statements, the
Company incurred a net loss of $704,000 during the year ended November 30, 1995.
As discussed in Note 2 to the financial statements, the Company requires
significant additional financing to meet its financial requirements. These
factors raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans in regard to these matters are also described
in Note 2. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

/s/ Grant Thornton LLP
GRANT THORNTON LLP

Denver, Colorado
January 19, 1996
2

Chaparral Resources, Inc.

Consolidated Balance Sheets

November 30
-------------------------------------
1996 1995
-------------------------------------

Assets
Current assets:
Cash and cash equivalents ............................. $ 800,000 $ 501,000
Accounts receivable:
Joint interest participants ......................... 8,000 31,000
Oil and gas purchasers .............................. 53,000 46,000
Prepaid expenses ...................................... 40,000 2,000
Oil and gas properties under agreement for sale ....... 306,000 --
------------ -----------
Total current assets ..................................... 1,207,000 580,000

Property and equipment--at cost:
Oil and gas properties--full cost:
United States:
Subject to depletion .............................. -- 16,149,000
Not subject to depletion .......................... -- 40,000
Republic of Kazakstan (Karakuduk Field)--
not subject to depletion .......................... 11,189,000 --
Less accumulated depletion and depreciation
and impairment .................................... -- (15,722,000)
------------ -----------
11,189,000 467,000

Furniture, fixtures and equipment ..................... 441,000 197,000
Less accumulated depreciation ......................... (198,000) (177,000)
------------ -----------
243,000 20,000
------------ -----------
11,432,000 487,000

Other assets:
Investment in and advances to affiliates .............. -- 4,507,000
Cash value of insurance and annuities ................. 8,000 8,000
Due from Karakuduk-Munay, Inc. ........................ 2,012,000 --
Equipment inventory ................................... 27,000 13,000
Other ................................................. 74,000 --
------------ -----------
2,121,000 4,528,000
------------ -----------
Total assets ............................................. $ 14,760,000 $ 5,595,000
============ ===========

November 30
-------------------------------
1996 1995
-------------------------------

Liabilities and stockholders' equity Current liabilities:
Accounts payable:
Trade .............................................................. $ 278,000 $ 102,000
Joint interest participants--revenue ............................... 42,000 26,000
Accrued liabilities .................................................. 91,000 86,000
Accounts payable--CAP-G shares ....................................... 744,000 --
------------ -----------
Total current liabilities ............................................... 1,155,000 214,000

Long-term obligations:
Notes payable (including $1,000,000 to related
party) ............................................................. 1,106,000 461,000
Accrued compensation ................................................. 385,000 --

Stockholders' equity:
Common stock - authorized, 100,000,000
shares and 25,000,000 shares at November 30,
1996 and 1995, respectively, of $.10 par value;
issued and outstanding, 37,526,517 and
20,484,192 shares at November 30, 1996 and
1995, respectively ................................................. 3,753,000 2,048,000
Capital in excess of par value ....................................... 20,482,000 12,577,000
Preferred stock - authorized, 1,000,000
shares, no shares issued or outstanding ........................... -- --
Retained earnings (deficit) .......................................... (12,121,000) (9,705,000)
------------ -----------
Total stockholders' equity .............................................. 12,114,000 4,920,000

------------ -----------
Total liabilities and stockholders' equity .............................. $ 14,760,000 $ 5,595,000
============ ===========

See accompanying notes.

Chaparral Resources, Inc.

Consolidated Statements of Operations

Year ended November 30
------------------------------------------------------------
1996 1995 1994
------------------------------------------------------------

Revenue:
Oil and gas sales ....................................... $ 147,000 $ 255,000 $ 374,000

Costs and expenses:
Production costs ........................................ 37,000 115,000 232,000
Write-down of oil and gas properties .................... -- 619,000 416,000
Depreciation and depletion .............................. 25,000 74,000 120,000
General and administrative .............................. 2,336,000 166,000 94,000
------------ ---------- ------------
2,398,000 974,000 862,000
------------ ---------- ------------
Loss from operations ....................................... (2,251,000) (719,000) (488,000)

Other income (expense):
Interest income ......................................... 85,000 25,000 13,000
Interest expense ........................................ (90,000) (17,000) (4,000)
Exchange loss ........................................... (12,000) -- --
Other, net .............................................. 89,000 7,000 5,000
------------ ---------- ------------
72,000 15,000 14,000
------------ ---------- ------------
Loss before extraordinary item ............................. (2,179,000) (704,000) (474,000)

Extraordinary loss on extinguishment of
long-term debt .......................................... (237,000) -- --
------------ ---------- ------------
Net loss ................................................... $ (2,416,000) $ (704,000) $ (474,000)
============ ========== ============
Net loss per share before extraordinary
item .................................................... $ (.07) $ (.04) $ (.02)

Extraordinary loss per share ............................... $ (.01) $ -- $ --

Net loss per share ......................................... $ (.08) $ (.04) $ (.02)

Weighted average number of shares
outstanding ............................................. 32,081,382 18,865,454 15,064,856

See accompanying notes.

Chaparral Resources, Inc.

Consolidated Statements of Cash Flows

Year ended November 30
-------------------------------------------------------
1996 1995 1994
-------------------------------------------------------
Cash flows from operating activities
Net loss ......................................................... $(2,416,000) $ (704,000) $ (474,000)
Adjustments to reconcile net loss to
net cash provided by (used in) operating
activities:
Depreciation and depletion .................................. 25,000 74,000 120,000
Decrease in deferred compensation ........................... -- -- (40,000)
Write-down of oil and gas properties ........................ -- 619,000 416,000
Stock issued for services and bonuses ....................... -- 27,000 8,000
Amortization of note discount ............................... -- 17,000 --
Loss on extinguishment of debt .............................. 237,000 -- --
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable ..................................... 16,000 218,000 22,000
Prepaid expenses ........................................ 10,000 -- --
Increase (decrease) in:
Accounts payable ........................................ 108,000 (64,000) 47,000
Accrued liabilities ..................................... (355,000) (59,000) (9,000)
Accrued compensation .................................... 385,000 -- --
----------- ---------- -----------
Net cash provided by (used in) operating
activities .................................................... (1,990,000) 128,000 90,000

Cash flows from investing activities
Additions to property and equipment .............................. (208,000) (86,000) (255,000)
Additions to oil and gas properties .............................. (652,000) -- --
Acquisition of additional interest in
CAP-G, net of cash acquired ................................... (3,269,000) -- --
Investment in foreign oil and gas properties ..................... -- (1,088,000) (256,000)
Proceeds from sale of interest in oil and gas
properties .................................................... 161,000 41,000 71,000
Decrease in cash value of insurance
and annuities ................................................. -- 40,000 40,000
Decrease in minority interest .................................... -- (16,000) (1,000)
(Increase) decrease in equipment inventory ....................... (14,000) 1,000 --
Sale (purchase) of bonds ......................................... -- 299,000 (299,000)
Advances to Karakuduk-Munay, Inc. ................................ (1,778,000) -- --
Redemption of certificates of deposit ............................ -- 20,000 146,000
Increase in other assets ......................................... (74,000) -- --
----------- ---------- -----------
Net cash used in investing activities ............................ (5,834,000) (789,000) (554,000)

Chaparral Resources, Inc.

Consolidated Statements of Cash Flows (continued)

Year ended November 30
-----------------------------------------------------------
1996 1995 1994
-----------------------------------------------------------

Cash flows from financing activities
Proceeds from notes payable ................................. $ 1,650,000 $ 750,000 $ --
Repayment of note payable ................................... (750,000) -- --
Proceeds from warrant exercise .............................. 316,000 -- --
Proceeds from issuance of capital stock ..................... -- 94,000 260,000
Net proceeds from private placement ......................... 6,907,000 -- --
----------- ---------- -----------
Net cash provided by financing
activities ............................................... 8,123,000 844,000 260,000
----------- ---------- -----------
Net increase (decrease) in cash and
cash equivalents ......................................... 299,000 183,000 (204,000)
Cash and cash equivalents at beginning
of year .................................................. 501,000 318,000 522,000
----------- ---------- -----------
Cash and cash equivalents at end of year .................... $ 800,000 $ 501,000 $ 318,000
=========== ========== ===========

Supplemental cash flow disclosure
Interest paid ............................................ $ 36,000 $ 5,000 $ 4,000

Supplemental schedule of noncash
investing and financing activities
Common stock issued for acquisition
of CAP-G ............................................. $ 1,833,000 $ -- $ --
Accounts payable--CAP-G shares ......................... 744,000 -- --
Common stock issued for investment
in affiliate ......................................... -- 3,162,000 --
Discount recognized for note issued
with detachable stock warrants ....................... 290,000 306,000 --
Common stock issued upon
conversion of debentures ............................. 264,000 -- 75,000

See accompanying notes.

Chaparral Resources, Inc.

Consolidated Statements of Changes in Stockholders' Equity

Capital
Common Stock in Excess Retained
---------------------------- of Par Earnings
Shares Amount Value (Deficit) Total
--------------------------------------------------------------------------------

Balance at November 30, 1993 ................ 14,923,625 $ 1,492,000 $ 9,202,000 $ (8,527,000) $ 2,167,000
Warrants exercised for capital
stock .................................... 650,625 65,000 195,000 -- 260,000
Conversion of debentures for
capital stock ............................ 200,067 20,000 55,000 -- 75,000
Capital stock issued for services ........... 8,000 1,000 6,000 -- 7,000
Net loss .................................... -- -- -- (474,000) (474,000)
------------ ----------- ----------- ------------ -----------
Balance at November 30, 1994 ................ 15,782,317 1,578,000 9,458,000 (9,001,000) 2,035,000
Warrants exercised for capital
stock .................................... 265,375 27,000 67,000 -- 94,000
Capital stock issued for
investment in affiliate .................. 4,400,000 440,000 2,722,000 -- 3,162,000
Capital stock issued for services ........... 12,500 1,000 9,000 -- 10,000
Capital stock issued for
employee and director bonuses ............ 24,000 2,000 15,000 -- 17,000
Debt issuance costs--stock
warrants issued .......................... -- -- 306,000 -- 306,000
Net loss .................................... -- -- -- (704,000) (704,000)
------------ ----------- ----------- ------------ -----------
Balance at November 30, 1995 ................ 20,484,192 2,048,000 12,577,000 (9,705,000) 4,920,000
Warrants exercised for capital
stock .................................... 857,325 86,000 230,000 -- 316,000
Conversion of debentures for
capital stock ............................ 600,000 60,000 204,000 -- 264,000
Capital stock issued for
acquisition of additional
interest in CAP-G ........................ 1,585,000 159,000 1,674,000 -- 1,833,000
Capital stock issued in private
placement ................................ 14,000,000 1,400,000 5,507,000 -- 6,907,000
Debt issuance costs--stock
warrants issued .......................... -- -- 290,000 -- 290,000
Net loss .................................... -- -- -- (2,416,000) (2,416,000)
------------ ----------- ----------- ------------ -----------
Balance at November 30, 1996 ................ 37,526,517 $ 3,753,000 $ 20,482,000 $(12,121,000) $ 12,114,000
============ =========== =========== ============ ===========

See accompanying notes.

Chaparral Resources, Inc.

Notes to Consolidated Financial Statements

November 30, 1996

1. Summary of Significant Accounting Policies

Organization

Chaparral Resources, Inc. was incorporated in the state of Colorado on January
13, 1972, principally to engage in the exploration, development and production
of oil and gas properties. During 1996, Chaparral Resources, Inc. focused
substantially all of its efforts on the exploration and development of the
Karakuduk Field, located in the central Asian Republic of Kazakstan.

Principles of Consolidation and Basis of Presentation

The November 30, 1996 consolidated financial statements include the accounts of
Chaparral Resources, Inc. and its 90% owned subsidiary, Central Asian Petroleum
(Guernsey) Limited ("CAP-G") (see Note 3). Hereinafter, Chaparral Resources,
Inc. and CAP-G are collectively referred to as "the Company." CAP-G has a fiscal
year end of December 31. All significant intercompany transactions have been
eliminated.

In 1995, the Company's ownership in CAP-G increased from 25% to 45%. The Company
accounted for its investment in CAP-G on the equity method in the 1994 and 1995
financial statements.

CAP-G owns a 50% interest in Karakuduk-Munay, Inc. ("KKM"), a Kazakstan Joint
Stock Company, which is a participant in an agreement for the exploration,
development and production of oil in the Karakuduk Field. CAP-G, and therefore
the Company, beginning in 1996 when the Company's ownership in CAP-G exceeded
50%, accounts for its investment in KKM using proportionate consolidation.

The 1994 consolidated financial statements include the accounts of Chaparral
Resources, Inc. and its 87% owned joint venture, Reservoir Creek Gathering
System. All significant intercompany transactions have been eliminated. On April
15, 1995, Chaparral Resources, Inc. sold its 87% interest in this joint venture.

Cash and Cash Equivalents

Cash equivalents are defined as highly liquid investments purchased with an
original maturity of three months or less.

Chaparral Resources, Inc.

Notes to Consolidated Financial Statements (continued)

1. Summary of Significant Accounting Policies (continued)

Oil and Gas Property and Equipment

The Company uses the full cost method of accounting for its oil and gas
properties. All costs incurred directly associated with the acquisition,
exploration and development of oil and gas properties are capitalized in cost
pools for each country in which the Company operates. The limitation on such
capitalized costs is determined in accordance with rules specified by the
Securities and Exchange Commission. Capitalized costs are depleted using the
units of production method.

Sales of Proved Oil and Gas Property

Sales of oil and gas properties, whether or not being amortized currently, are
accounted for as adjustments of capitalized costs, with no gain or loss
recognized unless such adjustments significantly alter the relationship between
capitalized costs and proved reserves of oil and gas. A significant alteration
would not ordinarily be expected to occur for sales involving less than 25% of
the reserve quantities of a given cost center. If gain or loss is recognized on
such a sale, total capitalized costs within the cost center are allocated
between the reserves sold and reserves retained on the same basis used to
compute amortization, unless there are substantial economic differences between
the properties sold and those retained, in which case capitalized costs are
allocated on the basis of the relative fair values of the properties.

Oil and Gas Properties Not Subject to Depletion

Costs associated with acquisition and evaluation of unproved properties are
excluded from the amortization computation until it is determined if proved
reserves can be attributed to the properties. These unevaluated properties are
assessed annually for possible impairment and the amount impaired, if any, is
added to the amortization base. Costs of exploratory dry holes and geological
and geophysical costs not directly associated with specific unevaluated
properties are added to the amortization base as incurred.

Sales of Unproved Properties

Proceeds received from drilling arrangements are credited to the appropriate
cost center and recognized as a lower amortization provision as reserves are
produced.

Chaparral Resources, Inc.

Notes to Consolidated Financial Statements (continued)

1. Summary of Significant Accounting Policies (continued)

Depreciation of Other Property and Equipment

Furniture, fixtures and equipment are depreciated using the straight-line method
over estimated useful lives which range from three to ten years.

Administrative Overhead Reimbursement

The Company, as operator of drilling and/or producing properties, was reimbursed
by the nonoperators for administration, supervision, office services and
warehousing costs on an annually adjusted fixed rate basis per well per month.
These charges are applied as a reduction of general and administrative expenses
for purposes of the statement of operations.

Income Taxes

The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards ("SFAS") Statement No. 109, Accounting for Income
Taxes, which require that taxes be provided on the liability method based upon
the tax rate at which items of income and expense are expected to be settled in
the Company's tax return.

Earnings Per Common Share

Earnings (loss) per common and common equivalent share is based on the weighted
average number of shares outstanding. Fully diluted earnings per share are not
presented because the exercise of stock warrants would be antidilutive.

New Accounting Standards

In March 1995, the Financial Accounting Standards Board ("FASB") issued
Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, which requires impairment losses to be
recorded on long-lived assets used in operations when indicators of impairment
are present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets' carrying amount. Statement No. 121 also
addresses the accounting for long-lived assets to be disposed of. The Company
will adopt Statement No. 121 in the first quarter of 1997 and, based on current
circumstances, does not believe the effect of adoption will be material.

Chaparral Resources, Inc.

Notes to Consolidated Financial Statements (continued)

1. Summary of Significant Accounting Policies (continued)

In October 1995, the FASB issued Statement No. 123, Accounting for Stock-Based
Compensation. Statement No. 123 is applicable for fiscal years beginning after
December 15, 1995 and gives the option to follow either fair value accounting or
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees ("APB 25"), and related Interpretations.

The Company has elected to continue to follow APB 25 and related Interpretations
in accounting for outstanding stock options. Under APB 25, because the exercise
price of the Company's stock options equals or exceeds the market price of the
underlying stock on the date of grant, no compensation is recognized. However,
the Company will be required to provide fair value disclosures relating to stock
options effective with the year ending November 30, 1997.

Fair Value of Financial Instruments

All of the Company's financial instruments, including cash and cash equivalents,
trade receivables, notes receivable, and notes payable, have fair values which
approximate their recorded values as they are either short-term in nature or
carry interest rates which approximate market rates.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.

Risks and Uncertainties

The ability of KKM to realize the carrying value of its assets is dependent on
being able to extract, transport and market hydrocarbons. Currently, exports
from the Republic of Kazakstan are restricted since they are dependent on
limited transport routes and, in particular, access to the Russian pipeline
system. Access to such routes is currently restricted. Domestic markets in the
Republic of Kazakstan currently do not permit world market price to be obtained.
Management believes, however, that over the life of the project, transportation
restrictions will be alleviated and prices will be achievable for hydrocarbons
extracted to allow full recovery of the carrying value of its assets.

Chaparral Resources, Inc.

Notes to Consolidated Financial Statements (continued)

2. Going Concern

The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. As of November 30, 1996,
substantially all of the Company's assets are invested in the development of the
Karakuduk Field, a shut-in oil field in the central Asian Republic of Kazakstan,
which will require significant additional funding.

The Company has incurred recurring operating losses and has no operating assets
which are presently generating cash to fund its operating and capital
requirements. The Company does not anticipate that its current cash reserves and
cash flow from operations will be sufficient to meet its capital requirements
through fiscal 1997. Should the Company not meet its capital requirements under
the license agreement to develop the Karakuduk Field, the Company's rights under
the agreement may be terminated. The Company believes that additional financing
will be available; however, there is no assurance that additional financing will
be available, or if available, that it can be obtained on terms favorable or
affordable to the Company.

The Company has a 45% beneficial interest in KKM, which owns 100% of the right
to develop the Karakuduk Field (Note 4). The Company's continued existence as a
going concern is dependent upon the success of future operations, which is, in
the near term, dependent on the successful financing and development of the
Karakuduk Field, of which there is no assurance.

On February 1, 1997, KKM was informed that a Kazakstan Presidential Edict had
been issued announcing the liquidation of Munaygaz, the government-owned company
which holds a 20% interest in KKM. As a result of this action, KKM was unable to
complete its re-registration as required by Kazakstan regulations, resulting in
the risk that applicable judicial bodies could initiate legal proceedings to
declare KKM invalid, which could lead to liquidation. Management of the Company
believes, based on verbal assurances from Kazakstan authorities, the Kazakstan
government will allow the assignment of the Munaygaz interests and allow the
re-registration to occur and that KKM will not be declared invalid.

These conditions raise substantial doubt about the Company's ability to continue
as a going concern. The financial statements do not include any adjustments to
reflect the possible future effects on the recoverability and classification of
assets or the amounts and classification of liabilities that may result from the
outcome of this uncertainty.

Chaparral Resources, Inc.

Notes to Consolidated Financial Statements (continued)

3. Acquisition of Additional Interest in CAP-G

In September 1994, the Company acquired a 25% interest in CAP-G, with
headquarters in Ankara, Turkey. CAP-G has a 50% interest in KKM, which owns 100%
of the right to develop the Karakuduk Field.

In April 1995, the Company acquired all of the stock of Central Asian Petroleum,
Inc. ("CAP-D"), in exchange for 4,400,000 shares of the Company's common stock.
Of the 4,400,000 shares issued, 4,250,000 shares were to be held in escrow and
released from time to time in connection with the development of the Karakuduk
Field. Of the shares held in escrow, 3,000,000 shares have been released and
delivered. As a result of the acquisition, the Company's beneficial interest in
CAP-G increased to 45%.

During 1996, the Company acquired an additional 45% interest in CAP-G from
various entities, increasing the Company's ownership interest in CAP-G to 90%
and its beneficial interest in KKM to 45%. Total consideration for this
acquisition was approximately $6,058,000, consisting of $3,481,000 in cash,
$1,833,000 from the issuance of 1,585,000 shares of its common stock and a
purchase commitment for the remaining $744,000. The Company paid $200,000 of
this commitment in December 1996. The Company was to pay the remaining amount on
or before March 11, 1997. The Company is currently negotiating to obtain an
extension of the due date of the remaining payment. The Company has accounted
for this increase in ownership percentage in CAP-G under the purchase method of
accounting, and has allocated substantially all the purchase price to the
Karakuduk Field.

The Company has the option to acquire the remaining 10% interest of CAP-G shares
for an additional $1,625,000 and 200,000 shares of the Company's common stock at
any time following completion of the initial purchase, and prior to December 11,
1997.

4. Oil and Gas Properties--Full Cost

KKM has undertaken certain appraisal and feasibility work in 1996 in order to
ascertain the most appropriate future development and drilling program for the
Karakuduk Field in Kazakstan. The results are still being analyzed. Until the
future program has been agreed upon, no additional development work or
hydrocarbon production will occur. The estimated future development expenditure
is significant in order to ascertain the quantities of proved reserves
attributable to the Karakuduk Field.

All costs capitalized related to the Karakuduk license are included in oil and
gas properties not subject to depletion.

Chaparral Resources, Inc.

Notes to Consolidated Financial Statements (continued)

4. Oil and Gas Properties--Full Cost (continued)

Management fees related to salary costs of individuals directly associated with
exploration activity on the Karakuduk Field have been capitalized along with the
license acquisition costs and geological and geophysical expenditures. No basis
for allocation of other overhead costs has been developed by the management of
KKM and hence such overhead costs are expensed as incurred.

While the future ability of the Company to export hydrocarbons and therefore
realize world market prices is uncertain under current restricted transport
options in the Republic of Kazakstan, management believes that over the life of
the project as a whole, future cash flows justify the carrying amount of the oil
and gas properties. Therefore, no impairment provision has been reflected in
these financial statements.

5. Long-Term Debt

Long-term obligations at November 30, 1996 consisted of convertible notes
payable to private corporations and individuals in the amount of $1,350,000. Of
the $1,350,000, $1,000,000 was received from two private companies, one of which
is a beneficial owner of over 5% of the outstanding common stock of the Company.
Under the terms of the notes, the Company agreed to add two directors selected
by the private companies to the Company's Board of Directors. The notes are due
on the earlier of May 31, 1998 or the third business day following the receipt
by the Company of any proceeds from one of the following sources: (1) the sale
or issuance of its securities, or (2) any debt financing provided or guaranteed
by the Overseas Private Investment Corporation or other governmental entity.
Interest is payable monthly at a rate of 8%.

As additional consideration for these notes, the Company issued to the holders,
warrants to purchase 337,500 shares of the Company's common stock at $.25 per
share, exercisable at any time, but no later than November 30, 1999. The notes
have been discounted by the fair value of the warrants. The discount will be
amortized over the life of the notes. The following is a summary of the notes
payable at November 30, 1996:

Notes payable $1,350,000
Less unamortized discount 244,000
----------
$1,106,000
==========

Chaparral Resources, Inc.

Notes to Consolidated Financial Statements (continued)

5. Long-Term Debt (continued)

The notes are subject to a provision whereby, if they are not repaid by May 31,
1997, the Company will issue 135,000 additional warrants to the holders.
Furthermore, if the notes are not repaid before November 30, 1997, the Company
is required to issue 270,000 additional warrants to the holders.

Aggregate maturities of long-term debt as of November 30, 1996 are as follows:

1997 $ --
1998 1,350,000

During 1995, the Company issued a note payable to a private corporation in the
amount of $750,000. As additional consideration for this note, the Company
issued to the holder warrants to purchase 500,000 shares of the Company's common
stock, and to a private corporation, as a finder's fee, warrants to purchase
200,000 shares, at $.25 per share, exercisable at any time, but no later than
October 30, 1998. The note was discounted by the difference between the market
value of the Company's common stock on the date of issuance and the exercise
price of the warrants. During 1996, the note was repaid by the Company at the
face value of $750,000. The Company has recorded an extraordinary loss on
extinguishment of debt for the unamortized discount of approximately $237,000.

6. Common Stock and Stock Warrants

Stock Warrant Plan

During 1989, the Board of Directors approved a stock warrant plan for key
employees and directors. The Company has reserved 1,175,000 shares of its common
stock for issuance under the plan. Warrants must be granted and exercised within
a 10-year period ending April 30, 1999. The exercise price must be at least
equal to the fair market value of the Company's common stock on the date of
grant.

Immediately following approval of the plan by the Board of Directors, warrants
for 1,175,000 shares were granted with an exercise price of $.28 per share. The
plan was approved in 1990 by the Company's stockholders. Warrants for 225,000
and 100,000 shares were exercised for values of $63,000 and $28,000 during 1996
and 1995, respectively.

Chaparral Resources, Inc.

Notes to Consolidated Financial Statements (continued)

6. Common Stock and Stock Warrants (continued)

Stock Offering

During 1994, 650,625 of the warrants issued in the Company's 1993 private
placement were exercised for the purchase of shares of common stock. The
exercise price was $.40 per share, for a total of $260,000.

During 1995, 165,375 of the warrants issued in the private placement were
exercised for the purchase of shares of common stock. The exercise price was
$.40 per share, for a total of $66,000.

During 1996, 632,325 of the warrants issued in the private placement were
exercised at an exercise price of $.40 per share, for a total of $252,930. As of
November 30, 1996, all warrants issued in connection with the 1993 private
placement have been exercised.

During 1996, the Company sold 14,000,000 shares of common stock in a private
placement at a price of $.50 per share. In connection with the private
placement, the Company issued warrants to purchase 1,022,000 shares to the sales
agent as a commission, at an exercise price of $.25 per share. As of November
30, 1996, no warrants have been exercised.

The following table summarizes all stock purchase warrant activity for the year
ended November 30, 1996:

Number of Exercise
Stock Price
Warrants Range
----------------------------

Outstanding, November 30, 1995 ............. 2,407,325 $.25 - $.40
Granted .................................... 1,439,500 $.25 - $.40
Exercised .................................. (857,325) $.28 - $.40
---------- ----------
Outstanding, November 30, 1996 ............. 2,989,500 $.25 - $.28
========== ==========

Chaparral Resources, Inc.

Notes to Consolidated Financial Statements (continued)

7. Income Taxes

The following is a summary of the provision for income taxes:

Year ended November 30
-------------------------------------
1996 1995 1994
-------------------------------------

Income taxes (benefit) computed
at federal statutory rate .......... $(762,000) $(241,000) $(161,000)
Change in asset valuation
allowance .......................... 848,000 298,000 256,000
Other ................................ (86,000) (57,000) (95,000)
--------- -------- ---------
Income taxes ......................... $ -- $ -- $ --
========= ======== =========

The components of the Company's deferred tax assets and liabilities under FASB
No. 109 are as follows:

Year ended November 30
-------------------------------------
1996 1995 1994
-------------------------------------

Deferred tax assets:
Net operating loss
carryforwards ................ $ 4,958,000 $ 4,131,000 $ 3,934,000
Full cost pool capitalization ... 267,000 246,000 145,000
Valuation allowance ............. (5,225,000) (4,377,000) (4,079,000)
----------- ---------- ----------
Deferred tax assets ............... $ -- $ -- $ --
=========== ========== ==========

There were no deferred tax assets or income tax benefits recorded in the
financial statements for net deductible temporary differences or net operating
loss carryforwards due to the fact that the realization of the related tax
benefits is not considered likely.

At November 30, 1996, the Company has tax loss carryforwards of approximately
$14,500,000 available to offset future taxable income. These carryforwards will
expire at various times between 1997 and 2011. The Company has issued a
significant number of shares of common stock during the year ended November 30,
1996 and has also issued warrants. The Company is also currently negotiating for
additional capital which, if successful, will require additional shares of stock
to be issued. The changes in ownership may significantly restrict the use of net
operating loss carryforwards. At November 30, 1996, unused statutory depletion

Chaparral Resources, Inc.

Notes to Consolidated Financial Statements (continued)

7. Income Taxes (continued)

carryforwards, which have unlimited duration, are approximately $567,000. The
unused investment tax credit carryover was approximately $86,000 at November 30,
1996 and expires through 2000. The loss carryforward at November 30, 1996 for
financial reporting purposes is approximately $11,264,000. The difference
between the loss carryforward for financial reporting and income tax purposes
results principally from the difference in book and tax basis of oil and gas
properties.

8. Related Party Transactions

The Company paid a director $24,000 during 1995 and 1994 for public relations
consulting services.

During 1996, the Company paid a basic consulting fee of approximately $500,000
to MD Petroleum ("MDI"), a private company of which the stockholders include two
directors of the Company, for assistance in seeking means for meeting the
Company's funding obligation for the Karakuduk Project.

The Company leased office space under a noncancelable operating lease which
expired on March 31, 1997. Beginning April 1, 1997, the Company leases office
space with MDI at a rate of approximately $2,000 per month. This lease expires
in November 1997.

Net rent expense was $46,000 for 1996, $36,000 for 1995, and $37,000 for 1994.
Related party sublease income included in rent expense was $6,000 for 1994.
There was no sublease income in 1995 or 1996.

9. Major Customers

The Company is presently engaged in exploration for and development of oil and
gas. The Company sells its production under contracts with various purchasers,
with certain domestic purchasers accounting for sales of 10% or more per year as
follows:

1996 32%
1995 16%
1994 15%, 13% and 11%

Chaparral Resources, Inc.

Notes to Consolidated Financial Statements (continued)

10. Royalty Participation Plan

During 1982, the Company adopted a Royalty Participation Plan for the employees
of the Company. Under the plan, the Company may contribute to a trust fund,
royalty interests acquired by the Company together with any proceeds of
production received by the Company which are attributable to such royalty
interests. The net income of the trust fund will be distributed yearly to the
participants based on years of service and position in the Company.
Distributions were $12,000 for 1996, $12,000 for 1995 and $10,000 for 1994.

In February 1997, as part of the severance agreement with the former Chief
Executive Officer of the Company (see Note 14), the Company assigned its
interest in the Royalty Participation Plan to the former Chief Executive
Officer.

11. Accrued Compensation

On August 19, 1996, the Company's Board of Directors awarded the former Chief
Executive Officer and the former Vice President of the Company cash bonuses
totaling $210,000 as recognition for past and present services to be used to
exercise certain warrants granted in connection with the Company's 1989 Stock
Warrant Plan. These bonuses will not become payable until the earlier of (i)
completion of a sale or farmout by the Company of all or a portion of its
interest in the Karakuduk Project, or (ii) the date when the Company makes a
public disclosure of a sale or farmout of the Karakuduk Project.

In connection with the appointment of Mr. Howard Karren as the Chairman of the
Board of Directors of the Company during fiscal 1996, the Company agreed to
transfer to Mr. Karren, or his designee, 350,000 shares of restricted stock of
the Company at a future date selected by Mr. Karren. The Company has recorded
accrued compensation for this transaction in the amount of $175,000.

12. Defined Contribution Plans

Effective December 31, 1990, the Company adopted a new defined contribution plan
(the "Plan") which covers all full-time eligible employees. Contributions are
determined as a percent of each covered employee's salary and are funded as
accrued. Plan contributions for the Company were $27,000 in 1995 and $26,000 in
1994, of which $20,000 in 1995 and $20,000 in 1994 was attributable to the
President of the Company.

Chaparral Resources, Inc.

Notes to Consolidated Financial Statements (continued)

12. Defined Contribution Plans (continued)

The Company also adopted a 401(k) plan covering all full-time employees,
effective January 1, 1991. Employee contributions are in the form of salary
reductions up to the maximum percentage allowable under the Internal Revenue
Code. There are no employer matching contributions. During 1996, the Plan merged
into the 401(k) plan; as such, there were no contributions made by the Company
during 1996.

13. Commitments and Contingencies

Under the terms of the license agreement, approved by the Ministry of Oil and
Gas Industries of the Republic of Kazakstan, granting KKM the right to develop
the Karakuduk Field, KKM has committed to minimum capital expenditures of
approximately $10 million by August 31, 1997, $35 million by August 31, 1998 and
$12 million by August 31, 1999.

14. Subsequent Events

Issuance of Note Payable

On December 6, 1996, the Company entered into a $500,000 note payable agreement
with a private company. The note is due by May 29, 1998, or the third business
day following the Company's receipt of a minimum of $1,850,000 from one of the
following sources: (1) the sale or issuance of its securities; (2) any debt
financing provided or guaranteed by the Overseas Private Investment Corporation
or other governmental entity; (3) the sale or farmout of assets for cash; or (4)
any other form of financing. Interest is payable monthly at a rate of 8%. In
connection with the issuance of this note, the Company issued warrants to
purchase 125,000 shares of the Company's common stock to the holder. The
exercise price of the warrants is $.25 per share, exercisable at any time, but
no later than November 30, 1999. The note is also subject to a provision
whereby, if the note is not repaid by May 31, 1997 and November 30, 1997, the
Company is required to issue 50,000 and 100,000 additional warrants,
respectively, to the holder.

Severance Agreement

Chaparral Resources, Inc.

Notes to Consolidated Financial Statements (continued)

14. Subsequent Events (continued)

Company agreed to amend the Company's 1989 Stock Warrant Plan to enable Mr.
Hoovler to transfer the warrants granted to him in 1996 to a member of his
family or a trust created by him.

Further, Mr. Hoovler was granted warrants to purchase 100,000 shares of the
Company's common stock at an exercise price of $.85 per share, for a period of
four years, and warrants to purchase 100,000 shares of the Company's common
stock at an exercise price of $1.25 per share that become exercisable on January
1, 1998, and remain exercisable for a period of four years from such date.

Uzbekistan Project

The Company has been negotiating an agreement pursuant to which the Company
would acquire 100% of the issued and outstanding capital stock of MDI. At the
time of the acquisition, the only asset that MDI would have would be a 5%
interest in a joint venture that Enron Oil & Gas Uzbekistan, Ltd. is attempting
to negotiate for the development of natural gas fields in Uzbekistan. It is
currently contemplated that if the agreement is consummated, the Company would
issue MDI's stockholders an as of yet undetermined number of shares of the
Company's common stock in exchange for their MDI shares. On January 8, 1997, the
Company agreed to issue 180,000 shares of the Company's common stock in
consideration for the exclusive right, until July 7, 1997, to acquire MDI. The
Company also granted Enron Oil & Gas Uzbekistan, Ltd. registration rights with
respect to the 180,000 shares. In the interim, the principal shareholders of MDI
have agreed that if the Company does not acquire MDI by July 7, 1997, the
principal stockholders will transfer 180,000 shares of the Company's common
stock owned by them to the Company to replace the 180,000 shares issued by the
Company to Enron Oil & Gas Uzbekistan, Ltd.

Chaparral Resources, Inc.

Notes to Consolidated Financial Statements (continued)

14. Subsequent Events (continued)

Sale of Domestic Oil and Gas Properties

Effective January 1, 1997, the Company entered into an agreement to sell its
domestic oil and gas properties for a sales price of approximately $270,000.
Accordingly, the Company's domestic oil and gas properties have been classified
as oil and gas properties under agreement for sale in the balance sheet at
November 30, 1996.

Supplemental Information - Disclosures About Oil and Gas
Producing Activities - Unaudited

The following supplemental information regarding the oil and gas activities of
the Company is presented pursuant to the disclosure requirements promulgated by
the Securities and Exchange Commission and Statement of Financial Accounting
Standards ("SFAS") No. 69, Disclosures About Oil and Gas Producing Activities.

As discussed in Note 14, the Company entered into an agreement effective January
1, 1997 to sell its domestic oil and gas properties. Accordingly, the Company's
domestic oil and gas properties have been classified as oil and gas properties
under an agreement for sale at November 30, 1996 and no disclosures for proved
reserves or future cash flows have been made at November 30, 1996. In addition,
because of the uncertainties surrounding the development of the Karakuduk Field,
no proved reserves have been attributed to the field.

The following estimates of reserve quantities and related standardized measure
of discounted net cash flow are estimates only, and do not purport to reflect
realizable values or fair market values of the Company's reserves. The Company
emphasizes that reserve estimates are inherently imprecise and that estimates of
new discoveries are more imprecise than those of producing oil and gas
properties. Additionally, the price of oil has been very volatile and downward
changes in prices can significantly affect quantities that are economically
recoverable. Accordingly, these estimates are expected to change as future
information becomes available and the changes may be significant. All of the
Company's proved reserves are located in the United States.

Proved reserves are estimated reserves of crude oil and natural gas that
geological and engineering data demonstrate with reasonable certainty to be
recoverable in future years from known reservoirs under existing economic and
operating conditions. Proved developed reserves are those expected to be
recovered through existing wells, equipment and operating methods.

The standardized measure of discounted future net cash flows is computed by
applying year-end prices of oil and gas (with consideration of price changes
only to the extent provided by contractual arrangements) to the estimated future
production of proved oil and gas reserves, less estimated future expenditures
(based on year-end costs) to be incurred in developing and producing the proved
reserves, less estimated future income tax expenses. The estimated future net
cash flows are then discounted using a rate of 10% a year to reflect the
estimated timing of the future cash flows.

Supplemental Information - Disclosures About Oil and Gas
Producing Activities - Unaudited (continued)

Proved Oil and Gas Reserve Quantities
(All Within the United States)

Oil Gas
reserves reserves
(bbls.) (Mcf.)
-----------------------

Balance November 30, 1993 .......................... 141,748 2,305,142
Revisions of previous estimates .................... (125) (455,946)
Sales of reserves .................................. (20,392) (95,714)
Extensions, discoveries and other additions ........ 1,745 1,700,289
Production ......................................... (11,286) (159,041)
---------- ----------
Balance November 30, 1994 .......................... 111,690 3,294,730
Revisions of previous estimates .................... (1,438) (98,536)
Sales of reserves .................................. (36,425) (10,228)
Extensions, discoveries and other additions ........ 582 9,375
Production ......................................... (8,224) (132,924)
---------- ----------
Balance November 30, 1995 .......................... 66,185 3,062,417
Revisions of previous estimates .................... (58,749) 18,703
Sales of reserves .................................. (531) (34,417)
Extensions, discoveries and other additions ........ 267 6,638
Production ......................................... (1,737) (96,906)
Transfer to oil and gas properties under agreement
for sale ........................................ (5,435) (2,956,435)
---------- ----------
Balance November 30, 1996 .......................... -- --
========== ==========

Proved developed reserves:
November 30, 1994 ............................... 52,740 1,103,203
November 30, 1995 ............................... 7,235 870,890
November 30, 1996 ............................... -- --

Supplemental Information - Disclosures About Oil and Gas
Producing Activities - Unaudited (continued)

Standardized Measure of Discounted Future Net Cash Flows
and Changes Therein Relating to Proved Oil and Gas Reserves

Year ended November 30
-----------------------------------------
1996 1995 1994
-----------------------------------------

Future cash inflows .............. $ -- $ 3,449,000 $ 5,041,000
Future production and development
costs ......................... -- (2,478,000) (3,051,000)
Future income tax expenses ....... -- -- --
----------- ---------- ----------
Future net cash flows ............ -- 971,000 1,990,000
10% annual discount for estimated
timing of cash flows .......... -- (544,000) (907,000)
----------- ---------- ----------
Standardized measure of discounted
future net cash flows ......... $ -- $ 427,000 $ 1,083,000
=========== ========== ==========

The following are the principal sources of changes in the standardized measure
of discounted future net cash flows:

Year ended November 30
----------------------------------------
1996 1995 1994
----------------------------------------

Beginning balance .................. $ 427,000 $ 1,084,000 $ 1,360,000
Expenditures which reduced future
development costs ............... -- (3,000) (146,000)
Acquisition of proved reserves ..... -- -- --
Sale of proved reserves ............ (54,000) (81,000) (102,000)
Sales and transfers of oil and gas
produced, net of production costs (110,000) (140,000) (143,000)
Net increase (decrease) in price ... 860,000 (593,000) (568,000)
Net decrease in costs .............. -- 247,000 3,000
Extensions and discoveries ......... 17,000 165,000 526,000
Revisions of previous quantity
estimates ....................... (91,000) (38,000) (214,000)
Accretion of discount .............. 99,000 108,000 136,000
Effect of change in timing and other 253,000 (322,000) 232,000
Transfer to oil and gas properties
under agreement for sale ........ (1,401,000) -- --
----------- ---------- ----------
Ending balance ..................... $ -- $ 427,000 $ 1,084,000
=========== ========== ==========

Supplemental Information - Disclosures About Oil and Gas
Producing Activities - Unaudited (continued)

Standardized Measure of Discounted Future Net Cash Flows and Changes
Therein Relating to Proved Oil and Gas Reserves (continued)

Year ended November 30
--------------------------------------
1996 1995 1994
--------------------------------------

Costs Incurred
Property acquisition costs--
unproved leases .................... $ -- $ -- $ 7,000
Property acquisition costs--
proved properties .................. -- 30,000 37,000
Exploration costs ..................... -- --
Development costs ..................... -- 30,000 146,000

Production Costs
Lease operating expense ............... $ 26,000 $ 95,000 $ 176,000
Production tax ........................ 11,000 20,000 56,000
----------- ---------- -----------
$ 37,000 $ 115,000 $ 232,000
=========== ========== ===========

Other Information
Net revenue (revenue less production
costs, ad valorem and severance
taxes) ............................. $ 110,000 $ 140,000 $ 142,000
Amortization per equivalent barrel
of production* ..................... 1.40 2.33 3.18
Price per bbl. (oil) .................. 17.53 14.27 12.75
Production cost per bbl. (oil) ........ 2.13 6.34 8.21
Price per Mcf. (gas) .................. 1.17 1.02 1.44
Production cost per Mcf. (gas) ........ .34 .47 .86
Price per net equivalent bbl.* ........ 8.22 8.33 9.86
Production cost per net equivalent bbl 2.07 3.78 6.06

* Natural gas converted to equivalent barrels using conversion ratio of 6:1.

Supplemental Information - Disclosures About Oil and Gas
Producing Activities - Unaudited (continued)

Standardized Measure of Discounted Future Net Cash Flows and Changes
Therein Relating to Proved Oil and Gas Reserves (continued)

Year ended November 30
--------------------------------------
1996 1995 1994
--------------------------------------

Present value of proved reserves:
Proved developed ...................... $ -- $ 266,000 $ 650,000
Proved undeveloped .................... -- 161,000 433,000
---------- --------- ---------
Total ................................. $ -- $ 427,000 $1,083,000
========== ========= =========

Future net revenues of proved reserves:
Proved developed .................... $ -- $ 383,000 $ 950,000
Proved undeveloped .................. -- 588,000 1,040,000
---------- --------- ----------
Total ............................... $ -- $ 971,000 $1,990,000
========== ========= ==========

EXHIBIT INDEX

Exhibit Description Page No.
- ------- ----------- --------

2.1 Stock Acquisition Agreement and Plan of Reorganization dated N/A
April 12, 1995 between Chaparral Resources, Inc., and the
Shareholders of Central Asian Petroleum, Inc., incorporated by
reference to Exhibit 2.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended May 31, 1995.

2.2 Escrow Agreement dated April 12, 1995 between Chaparral N/A
Resources, Inc., the Shareholders of Central Asian Petroleum,
Inc. and Barry W. Spector, incorporated by reference to Exhibit
2.2 to the Company's Quarterly Report on Form 10-Q for the
quarter ended May 31, 1995.

2.3 Amendment to Stock Acquisition Agreement and Plan of N/A
Reorganization dated March 10, 1996 between Chaparral Resources,
Inc., and the Shareholders of Central Asian Petroleum, Inc.

3.1 Restated Articles of Incorporation and Amendments, incorporated N/A
by reference to Exhibit 3.1 to the Company's Annual Report on
Form 10-K for the fiscal year ended November 30, 1993.

3.2 Articles of Amendment to the Restated Articles of Incorporation N/A
dated April 20, 1988, incorporated by reference to Exhibit 3.2 to
the Company's Annual Report on Form 10-K for the fiscal year
ended November 30, 1993.

3.3 Bylaws, as amended through January 3, 1997.

3.4 Articles of Amendment to the Restated Articles of Incorporation N/A
and Amendments dated June 21, 1995, incorporated by reference to
Exhibit B to the Company's Quarterly Report on Form 10-Q for the
quarter ended May 31, 1995.

3.5 Articles of Amendment to the Restated Articles of Incorporation N/A
and Amendments dated July 17, 1996, incorporated by reference
to Exhibit 3.5 to the Company's Registration Statement No.
333-7779.

10.1 Royalty Participation Plan dated June 15, 1982, incorporated by N/A
reference to Exhibit 10.1 to the Company's Annual Report on Form
10-K for the fiscal year ended November 30, 1993.

10.2 Chaparral Resources, Inc. 1989 Stock Warrant Plan effective May N/A
1, 1989, incorporated by reference to Exhibit 10.3 to the
Company's Annual Report on Form 10-K for the fiscal year ended
November 30, 1993.

10.3 Target Benefit Plan effective December 1, 1990 incorporated by N/A
reference to Exhibit 10.9 to the Company's Annual Report on Form
10-K for the fiscal year ended November 30, 1991.

10.4 Deferred Compensation and Death Benefit Plan as amended November N/A
15, 1991 incorporated by reference to Exhibit 10.10 to the
Company's Annual Report on Form 10-K for the fiscal year ended
November 30, 1991.

10.5 Promissory Note dated November 1, 1995 from Chaparral Resources, N/A
Inc., to Brae Group, Inc., incorporated by reference to Exhibit
10.1 to the Company's Current Report on Form 8-K dated November
1, 1995.

10.6 Purchase Agreement, dated effective January 12, 1996, between the N/A
Company and Guntekin Koksal (purchase of CAP-G shares)
incorporated by reference to Exhibit 10.6 to the Company's Annual
Report on Form 10-K for the fiscal year ended November 30, 1995.

10.7 Letter Agreement, dated January 3, 1996, between the Company and N/A
certain stockholders of Darka Petrol Ticaret Ltd. Sti., together
with Exhibits A--E, incorporated by reference to Exhibit 10.7 to
the Company's Annual Report on From 10-K for the fiscal year
ended November 30, 1995.

10.8 Amendment, effective March 4, 1996, to the Letter Agreement N/A
revising the terms pursuant to which the Company is to acquire
all shares of CAP(G) stock owned by Darka Petrol Ticaret Ltd.
Sti., incorporated by reference to Exhibit 10.8 to the Company's
Annual Report on From 10-K for the fiscal year ended November 30,
1995.

10.9 Warrant Certificate entitling Allen & Company to purchase up to N/A
1,022,000 shares of Common Stock of Chaparral Resources, Inc.,
incorporated by reference to Exhibit 10.1 to the Company's
Current Report on Form 8-K dated April 1, 1996.

10.10 Consulting Agreement dated May 14, 1996 with M-D International N/A
Petroleum, Inc., incorporated by reference to Exhibit 10.10 to
the Company's Registration Statement No. 333-7779.

10.11 Promissory Notes and Modification of Promissory Notes N/A
incorporated by reference to Exhibit (3) to the Company's Current
Report on Form 8-K dated November 22, 1996.

10.12 Amendment effective December 6, 1996 to Purchase Agreement dated
effective January 12, 1996 between the Company and Guntekin
Koksal.

10.13 Severance Agreement dated February 12, 1997 between the Company
and Paul V. Hoovler.

10.14 Severance Agreement dated February 12, 1997 between the Company
and Matthew R. Hoovler.

10.15 Purchase and Sale Agreement effective January 1, 1997 between
the Company and Conoco Inc.*

10.16 Amendments to Chaparral Resources, Inc. Stock Warrant Plan.

10.18 License for the Right to Use the Subsurface in the Republic of
Kazakhstan.

16 Letter dated July 23, 1996 from Grant Thornton LLP confirming the N/A
circumstances pursuant to which Grant Thornton resigned as
Registrant's principal independent accountants, incorporated by
reference to Exhibit 16 to the Company's Current Report on Form
8-K dated July 23, 1996.

21 List of Subsidiaries of the Registrant.

23.1 Consent of Grant Thornton LLP for S-8.

23.2 Consent of Ernst & Young LLP for S-8.

27 Financial Data Schedule.