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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2004

Commission file number

PETRO, INC.

(Exact name of each registrant as specified in its charter)

Registrant’s telephone number, including area code: (915) 860-4480

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement 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.    x

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. Not Applicable

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of December 31, 2004, the number of shares outstanding of the registrant’s only class of common stock was 99,500.

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Forward Looking Statements

Certain sections of this Form 10-K, including “Business,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Quantitative and Qualitative Disclosures about Market Risk,” contain various forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended (the “Exchange Act”), which represent management’s expectations or beliefs concerning future events that involve risks and uncertainties. These statements may be accompanied by words such as “believe,” “intend,” “estimate,” “may,” “could,” “project,” “anticipate,” “expect,” or “predict,” that convey the uncertainty of future events or outcomes. These statements are based on assumptions that we believe are reasonable; however, many important factors could cause our actual results in the future to differ materially from the results referred to in the forward-looking statements. These forward-looking statements are subject to numerous assumptions, risks, and uncertainties that may cause our actual results to be materially different from any future results expressed or implied by us in those statements. In addition to the factors described in this Form 10-K, important factors that could cause our actual results to differ materially from the results referred to in the forward-looking statements include, among others, the following:

All statements, other than statements of historical facts included in this Form 10-K, may be considered forward-looking statements.

PART I

Item 1. Business

Petro, Inc.

In December 1974, we were formed as a Texas corporation. We own investments in certain oil and gas operations and real estate joint ventures located in the Southwest United States. In addition, we own an interest in Petro Stopping Centers Holdings, L.P. (“Holdings”), a Delaware limited partnership, which, in turn, owns an operating partnership that operates a nationwide network of truck stopping centers. We are a wholly owned subsidiary of Nevada Trio, Inc.

Oil and Gas

We have owned a small working interest in two oil and gas wells for over 20 years. Revenues are netted against expenses and are expected to continue to decline year over year.

Real Estate Joint Venture

We own approximately 20% of common stock of Hueco Mountain Estates, Inc. (“Hueco”). Hueco sells land in west Texas for residential use and in most instances carries the sale contract for the benefit of the purchaser. We own a 10% interest in Trevino Properties (“Trevino”), a real estate general partnership, which holds undeveloped commercial land for sale in El Paso, Texas.

Investments

On July 23, 1999, we and certain other parties exchanged our interests in Petro Stopping Centers, L.P. (the “Operating Partnership”) for identical interests in Holdings and became owners of Holdings. At this time, we became the sole general partner in both Holdings (1.1%) and the Operating Partnership (0.25%). In addition, we hold an 11% common

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limited partnership interest and mandatorily redeemable preferred partnership interests in Holdings. The mandatorily redeemable preferred partnership interests of $3,490,069 are entitled to cumulative preferred returns of 8% and are subject to mandatory redemption in October 2008. The preferred returns accrue but are only payable in cash if permitted by the Operating Partnership’s then existing debt instruments. At December 31, 2003 and 2004, we had accrued preferred returns on the mandatorily redeemable preferred partnership interest amounting to $1,351,369 and $1,614,672, respectively.

In early 2004, the Operating Partnership and Holdings completed their 2004 Refinancing Transactions in which both companies refinanced substantially all of their existing indebtedness.

We do not own any assets other than the investments in Hueco, Trevino, Holdings, and the Operating Partnership; and apart from our general partnership interests, we are not otherwise actively engaged in any business.

Employees

We do not conduct any operations and therefore we do not have any employees.

Item 2. Properties

We lease commercial space under an operating lease based on a fixed charge. Total rent expense amounted to $150,000 for each of the years ending December 31, 2002, 2003, and 2004.

Item 3. Legal Proceedings

We are involved in various litigation incidental to our business for which an estimate of the possible loss or range of loss cannot be made at this time. In our opinion, such proceedings will not have a material adverse effect on our financial position or results of operations.

Item 4. Submission of Matters to a Vote of Security Holders

None

PART II

Item 5. Market of Registrant’s Common Equity and Related Stockholder Matters

We are a wholly owned subsidiary of Nevada Trio, Inc. Consequently, there is no established trading market for our equity.

Item 6. Selected Financial Data

The information set forth below should be read in conjunction with both “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 and the financial statements and notes thereto included in Item 8. The selected financial data as of and for the year ended December 31, 2000 has been derived from our unaudited financial statements, while the financial data as of and for the years ended December 31, 2001, 2002, 2003, and 2004, have been derived from our audited financial statements. In the opinion of management, the unaudited and audited financial data contain all adjustments necessary to present fairly the selected historical financial data.

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SELECTED HISTORICAL FINANCIAL DATA

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Explanation of Reporting Format

We own investments in certain oil and gas operations, real estate joint ventures, and our interests in Holdings and its related entities. We do not have any employees; we do not own any assets other than the investments in these entities; and, apart from our general partnership interests, we are not otherwise actively engaged in any business.

We have owned a small working interest in two oil and gas wells for over 20 years. Revenues are netted against expenses and are expected to continue to decline year after year. We own approximately 20% of the common stock of Hueco. Hueco sells land in west Texas for residential use and in most instances carries the sale contract for the benefit of the purchaser. We own a 10% interest in Trevino, a real estate general partnership, which holds undeveloped commercial land for sale in El Paso, Texas.

Effective July 23, 1999, Holdings was formed as a Delaware limited partnership. Certain other partners and we exchanged our interests in the Operating Partnership for identical interests in Holdings. As a result of the Recapitalization, we became the sole general partner in both Holdings (1.1%) and the Operating Partnership (0.25%). In addition, we hold an 11% common limited partnership interest and mandatorily redeemable preferred partnership interests in Holdings. The mandatorily redeemable preferred partnership interests are entitled to cumulative preferred returns of 8% and are subject to mandatory redemption in October 2008. The preferred returns accrue, but are only payable in cash if permitted by the Operating Partnership’s and Holding’s then existing debt instruments. At December 31, 2003 and 2004, we have accrued preferred returns amounting to $1,351,369 and $1,614,672, respectively.

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We derive our revenues from:

The following table sets forth our total loss by major source:

Results of Operations

Year Ended December 31, 2004 Compared to Year Ended December 31, 2003

Revenue (Loss). Net loss increased for the year ended December 31, 2004 to $1.8 million compared to a loss of $1.0 million for the year ended December 31, 2003, due to increased losses from our investment in limited partnerships. Those losses were due primarily to costs associated with the debt refinancing by the Operating Partnership and Holdings during the reporting period. Our income from oil and gas operations declined to $8,772 from $10,274. We recognized losses of $22,960 and $23,824 related to our investment in Hueco for the years ended December 31, 2004 and 2003, respectively, and recognized income of $19,742 and $18,052 related to our investment in Trevino for the years ended December 31, 2004 and December 31, 2003, respectively.

General and Administrative Expenses. General and administrative expenses decreased 12.5% to $258,477 for the year ended December 31, 2004 compared to $295,302 for the year ended December 31, 2003 due to reduced property tax expense on previously unoccupied income property.

Interest Expense. Interest expense decreased 10.9% or $4,652 to $37,967 compared to the year ended December 31, 2003, due primarily to the decrease in interest bearing debt obligations.

Year Ended December 31, 2003 Compared to Year Ended December 31, 2002

Revenue (Loss). Net loss increased for the year ended December 31, 2003 to $1.0 million compared to a loss of $864,000 for the year ended December 31, 2002, due to increased losses from our investment in limited partnerships. Our income from oil and gas operations declined to $10,274 from $13,924. We recognized a loss of $23,824 and $13,963 related to our investment in Hueco for the years ended December 31, 2003 and 2002, respectively, and recognized income of $18,052 and a loss of $7,589 related to our investment in Trevino for the year ended December 31, 2003 and December 31, 2002, respectively.

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General and Administrative Expenses. General and administrative expenses increased 27.4% to $295,302 for the year ended December 31, 2003 compared to $231,710 for the year ended December 31, 2002 due mainly to increased professional fees.

Interest Expense. Interest expense decreased 9.2% or $4,341 to $42,619 compared to the year ended December 31, 2002, due primarily to the decrease in interest bearing debt obligations.

Liquidity and Capital Resources

Our principal sources of liquidity are:

The following is a summary of our contractual obligations as of December 31, 2004:

We anticipate having cash requirements for operations and debt service in excess of expected available funds in the amount of $134,000 through 2005, and a lower amount thereafter. Our parent, Nevada Trio, Inc., will provide or make available any necessary funds to meet our obligations.

Off-Balance Sheet Arrangements

Concurrent with the 2004 Refinancing Transactions described above, we, together with certain other parties, each entered into an indemnity agreement under which each agreed to indemnify Holdings, the Operating Partnership, and the general and limited partners thereof, for a definitive amount of debt arising out of the 2004 Refinancing Transactions. The indemnity agreements were entered into by the parties to address specific income tax issues arising out of the 2004 Refinancing Transactions under the “at-risk” limitation rules, the partnership basis rules, and the liability allocation rules found in the Internal Revenue Code and the Treasury regulations. Consequently, each party’s obligation under its respective indemnity agreement is determined by taking into account that party’s basis in its partnership interest and the applicable “at-risk” rules and liability allocation rules. No demand for payment under the indemnity agreement has been made.

We are a guarantor on a full, joint and several and senior secured basis, of $225,000,000 aggregate principal amount of 9% Senior Secured Notes due 2012 and of $61,300,000 aggregate principal amount of Senior Secured Credit Facilities due 2008, which were issued by the Operating Partnership. Payments would be due if the Operating Partnership were to become insolvent and/or entered into default of any debt covenant or indenture. No collateral secures our guarantee.

Critical Accounting Policies

The preparation of our financial statements in conformity with generally accepted accounting principles requires us to make estimates and assumptions that affect our reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and

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liabilities in our financial statements and accompanying notes. The Securities and Exchange Commission has defined a company’s critical accounting policies as the ones that are most important to the portrayal of the company’s financial condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates about matters that are inherently uncertain. Based on this definition, we have identified our critical accounting policies as including those addressed below. We also have other key accounting policies that involve the use of estimates, judgments, and assumptions. See Note 2 of notes to financial statements included herein for additional discussion of these accounting policies. We believe that our estimates and assumptions are reasonable, based upon information presently available, however, actual results may differ from these estimates under different assumptions or conditions.

Income Taxes

Our parent files a consolidated tax return that includes our and other subsidiaries results of operations. Deferred income tax assets and liabilities are recognized for the future tax consequences of temporary differences between the book and tax bases of assets and liabilities, except for net operating losses for tax purposes and tax credits. Potential benefits of net operating losses and tax credits resulting from our operations are not allocated to us. Deferred tax assets are reduced by a valuation allowance when, in our opinion, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets are adjusted for the effects of changes in tax law and rates on the date of enactment.

Recently Issued Accounting Pronouncements

In December 2003, the Financial Accounting Standards Board issued Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51,” which replaces the original Interpretation No. 46 issued in January 2003. This Interpretation addresses the consolidation by business enterprises of variable interest entities as defined in the Interpretation. The effective dates vary depending on the type of reporting company and the type of entity that the company is involved with. Non-public companies, such as us, must apply the revised Interpretation immediately to all entities created after December 31, 2003, and to all other entities no later than the beginning of the first reporting period beginning after December 15, 2004. We do not believe that the adoption of this revised Interpretation will have a significant impact on our consolidated financial position or results of operations.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

As of December 31, 2003 and 2004, the carrying amounts of certain financial instruments employed by us, including cash and cash equivalents, investment in affiliated entities, accounts payable, advances due from/amounts due to related party, and related party note payable are representative of fair value because of the short-term maturity of these instruments.

The following table reflects the carrying amount and estimated fair value of our financial instruments, as of December 31:

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Item 8. Financial Statements and Supplementary Data

PETRO, INC.

BALANCE SHEETS

See accompanying notes to financial statements.

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PETRO, INC.

STATEMENTS OF OPERATIONS

See accompanying notes to financial statements.

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PETRO, INC.

STATEMENTS OF CHANGES IN STOCKHOLDER’S EQUITY (DEFICIT)

AND COMPREHENSIVE LOSS

See accompanying notes to financial statements.

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PETRO, INC.

STATEMENTS OF CASH FLOWS

See accompanying notes to financial statements.

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PETRO, INC.

NOTES TO FINANCIAL STATEMENTS

(1) Company Formation and Description of Business

Company Formation

Petro, Inc. (the “Company”) owns investments in certain oil and gas operations and real estate joint ventures located in the Southwest United States. In addition, the Company owns an interest in Petro Stopping Centers Holdings, L.P. (“Holdings”), a Delaware limited partnership, which, in turn, owns an operating partnership that operates a nationwide network of truck stopping centers. The Company is a wholly owned subsidiary of Nevada Trio, Inc.

(2) Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles.

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 and 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.

Cash and Cash Equivalents

The Company considers all cash accounts, which are not subject to withdrawal restrictions or penalties and all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company maintains its cash in bank deposit accounts, which at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. Cash equivalents at December 31, 2003 and 2004 totaled $21,907 and $1,773, respectively.

Investments

A 20% interest in Hueco Mountain Estates, Inc. (“Hueco”), a 10% interest in Trevino Properties (“Trevino”), a 0.25% general partner interest in Petro Stopping Centers, L.P. (the “Operating Partnership”), and 12.1% general and limited partner interests in Holdings are accounted for using the equity method. The equity method of accounting is used since the ability to exercise significant influence over these entities exists due to the material related party ownership interests in these entities. Trevino is a joint venture in the form of a general partnership.

Income Taxes

Nevada Trio, Inc., the Company’s parent, files a consolidated tax return that includes the results of operations of the Company and other subsidiaries. Deferred income tax assets and liabilities are recognized for the future tax consequences of temporary differences between the book and tax bases of assets and liabilities, except for net operating losses for tax purposes and tax credits. Potential benefits of net operating losses and tax credits resulting from the operations of the Company are not allocated to the Company. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets are adjusted for the effects of changes in tax law and rates on the date of enactment.

(continued)

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PETRO, INC.

NOTES TO FINANCIAL STATEMENTS

Leasehold improvements

Leasehold improvements are stated at acquisition cost. Depreciation is computed by the straight-line method. Improvements to leased property are depreciated over the lesser of the life of the lease or life of the improvements.

Revenue recognition

Oil and gas activity net revenues from drilling interests owned by the Company are recognized when earned. Monthly receipts are the net revenues from certain drilling interests owned by the Company. Income and loss from the Company’s investments in Hueco, Trevino, the Operating Partnership, and Holdings are recognized based upon their proportionate ownership rights.

(3) Financial Results and Liquidity

The Company incurred net losses of $863,832, $1,006,171, and $1,822,789 in 2002, 2003, and 2004, respectively. Despite these losses, the Company was able to secure operating capital from affiliates. The affiliates have indicated their commitment to provide additional funding for the Company sufficient to satisfy current and future obligations, on an as-needed basis, at least through December 31, 2005.

(4) Advances Due From Related Party

The Company has a receivable due from J.A. Cardwell in the amount of $267,264 and $280,726 at December 31, 2003 and 2004, respectively. The balance due is related to cash advances made in prior years, and includes interest at the applicable federal rate. The interest rate at December 31, 2004 was 4.68%.

(5) Investments in Affiliated Entities

Hueco Mountain Estates, Inc. (Income Tax Basis)

The Company owns approximately 20% of the common stock of Hueco. The following is a summary of the condensed financial position and results of operations of Hueco, an unconsolidated subsidiary as of and for the fiscal years ended July 31, 2003 and 2004.

The Company’s equity investment in Hueco at December 31, 2003 and 2004 is summarized below:

(continued)

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PETRO, INC.

NOTES TO FINANCIAL STATEMENTS

Trevino Properties (Income Tax Basis)

The Company owns a 10% partnership interest in Trevino. The following is a summary of the condensed financial position and results of operations of the partnership (unincorporated real estate joint venture) accounted for on the equity method as of and for the years ended December 31, 2003, and 2004.

The Company’s equity investment in Trevino at December 31, 2003 and 2004 is summarized below:

(6) Investment in Limited Partnerships

On July 23, 1999, the Company and certain other partners exchanged their interests in the Operating Partnership for identical interests in Holdings and became owners of Holdings. At this time, the Company became the sole general partner in both Holdings (1.1%) and the Operating Partnership (0.25%). In addition, the Company holds an 11% common limited partnership interest and mandatorily redeemable preferred partnership interests in Holdings. The Company’s investments in Holdings and the Operating Partnership are accounted for using the equity method. The Company entered into an indemnity agreement under which it agreed to indemnify the Operating Partnership and Holdings, and the general and limited partners thereof in the event that the indemnified parties are required to pay any current indebtedness or any other liabilities of Holdings or the Operating Partnership after a default, acceleration by the creditor and exhaustion of any collateral securing the credit facility. No payments have been made under this agreement.

The mandatorily redeemable preferred partnership interests are entitled to cumulative preferred returns of 8% and are subject to mandatory redemption in October 2008. The preferred returns accrue but are only payable in cash if permitted by the Operating Partnership’s and Holding’s then existing debt instruments. At December 31, 2003 and 2004, the Company had accrued preferred returns on the mandatorily redeemable preferred partnership interests amounting to $1,351,369 and $1,614,672, respectively.

In early 2004, the Operating Partnership and Holdings completed their 2004 Refinancing Transactions in which both companies refinanced substantially all of their existing indebtedness.

Following is a summary of the financial position of Holdings as of December 31, 2003 and 2004:

(continued)

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PETRO, INC.

NOTES TO FINANCIAL STATEMENTS

The Company’s equity investment in the partnership is summarized below: