We are pleased to submit the financial statements of the Corporation for the three months ended March 31, 2000. In addition, there is a schedule of investments provided along with other financial information.

Net assets of the Company at March 31, 2000 were $43.30 per share on 53,204,227 shares outstanding, compared with $40.28 per share at December 31, 1999, on 53,894,827 shares outstanding. On March 1, 2000, a distribution of $0.12 per share was paid consisting of $0.07 from 1999 long-term capital gain and $0.05 from 2000 investment income. All are taxable in 2000. A 2000 invest- ment income dividend of $0.12 per share has been declared to shareholders of record May 19, 2000, payable June 1, 2000.

Net investment income for the three months ended March 31, 2000 amounted to $3,425,653, compared with $4,955,572 for the same period in 1999. These earn- ings are equal to $0.06 and $0.10 per share, respectively, on the average num- ber of shares outstanding during each period.

Net capital gain realized on investments for the three months ended March 31, 2000 amounted to $63,880,311, the equivalent of $1.20 per share.

We are pleased to announce the election of Dr. Susan C. Schwab to the Board of Directors, effective January 13, 2000. Dr. Schwab is currently the Dean of the School of Public Affairs at the University of Maryland, College Park, Maryland.

The Annual Meeting, held on March 28, 2000 in Palm Beach, Florida, was well attended by shareholders. Upon conclusion of the formal segment of the meeting, management reviewed the portfolio’s performance in 1999 and discussed the outlook for the future. The results of the voting at the Annual Meeting are shown on page 10.

Current and potential shareholders can find information about the Corporation, including the daily net asset value (NAV) per share, the market price, and the discount/premium to the NAV, at its site on the Internet. The address for the site is www.peteres.com. Also available at the website are a brief history of the Corporation, historical financial information, and more general industry material. Further information regarding shareholder services is located on page 11 of this report.

The Corporation is an internally-managed equity fund emphasizing petroleum and other natural resource investments. The investment policy of the fund is based on the primary objectives of preservation of capital, the attainment of reasonable income from investments and, in addition, an opportunity for capital appreciation.

By order of the Board of Directors,

Douglas G. Ober,
Chairman and
Chief Executive Officer

Richard F. Koloski,
President

April 21, 2000