UNITED STATES OF AMERICA
                                      before the
                          SECURITIES AND EXCHANGE COMMISSION

     Securities Exchange Act of 1934
     Release No.  39507 / December 31, 1997

     Accounting and Auditing Enforcement
     Release No.  1003 / December 31, 1997

     Administrative Proceeding
     File No. 3-9522  

                                   
                                   :
                                   :
     In the Matter of              :    ORDER INSTITUTING 
                                   :    PROCEEDINGS PURSUANT TO 
     Oliver G. Richard III, and    :    SECTION 21C OF THE
     Jay B. Corn                   :    SECURITIES EXCHANGE ACT
                                   :    OF 1934, MAKING FINDINGS AND 
                                   :    ISSUING CEASE-AND-DESIST ORDER 
     Respondents.  		   :
                                   :
                                   

                                          I.

          The Commission deems it appropriate and in the public interest that
     public proceedings be, and they hereby are, instituted pursuant to Section
     21C of the Securities Exchange Act of 1934 ("Exchange Act") to determine
     whether Oliver G. Richard III and Jay B. Corn caused the violations of
     Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder of
     New Jersey Resources Corp. ("NJR") described in Exchange Act Rel. No. 34-
     39506, AAER No. 1002,  Admin. Proc. No. 9522.

                                         II.

          Simultaneously with the institution of these proceedings, Richard and
     Corn have submitted Offers of Settlement, which the Commission has
     determined to accept.  Richard and Corn, without admitting or denying the
     findings herein, except the jurisdiction of the Commission with respect to
     the matters set forth herein, which is admitted, have consented to the
     issuance of this Order Instituting Proceedings Pursuant to Section 21C of
     the Securities Exchange Act of 1934, Making Findings and Issuing Cease-and-
     Desist Order ("Order").  

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                                         III.

          Accordingly, IT IS ORDERED that proceedings pursuant to Section 21C of
     the Exchange Act be, and hereby are, instituted.  On the basis of this
     Order, and the Offers submitted by Respondents, the Commission makes the
     following findings:<(1)>

          A.   Summary

          This matter involves a transaction between affiliates that allowed NJR
     to avoid a material write-down.  More specifically, this matter concerns
     the valuation of oil and gas properties on the basis of long-term natural
     gas supply and purchase contracts, which, taken together, provided for the
     delivery of gas between affiliates of the issuer.  The supply contracts
     contained initial prices that were above the then-prevailing spot price for
     gas and that subsequently escalated, with seasonal variation, over the 18-
     year life of the supply contracts.  The terms of the supply and purchase
     contracts mirrored each other, except as to quantity, so that an
     unaffiliated middleman inserted into the transaction incurred no
     significant economic risk.  Richard and Corn knew or should have known that
     NJR utilized the contract prices to avoid a write-down under the full-cost
     ceiling test set out in Regulation S-X.  This improper accounting for the
     transaction caused a material misstatement in NJR's consolidated financial
     statements.

          B.   Respondents

          A.   Oliver G. Richard III, 45, became NJR's CEO and president in May
     1991 and a director in July 1991.  He was elected chairman of the board in
     January 1992.

          B.   Jay B. Corn, 38, was vice president and treasurer of NJR Energy
     and its subsidiaries during all relevant times and is a certified public
     accountant.

                              

          <(1)>   The findings herein are made pursuant to Respondents
                                                                               Offers of Settlement and are not        binding
                 on any other person or entity in this or any other proceeding.
                 

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          C.   New Jersey Resources Corp.

          A.   New Jersey Resources Corporation is a New Jersey holding company. 
     NJR's common stock is registered pursuant to Section 12(b) of the Exchange
     Act and is traded primarily on the New York Stock Exchange. 

          D.   Facts

          During its fiscal year ended September 30, 1992 ("FY 1992"), NJR was
     engaged primarily in natural gas distribution through one of its
     subsidiaries.  Other subsidiaries engaged in oil and gas exploration and
     production, and cogeneration and independent power production.  NJR's sub-
     sidiaries included NJR Energy Corporation ("NJR Energy"), an oil and gas
     exploration and production company, and New Jersey Natural Gas Company
     ("NJNG"), a public utility with over 320,000 customers.  NJR's financial
     statements, as incorporated in its Commission filings, were consolidated
     with those of its subsidiaries, including NJNG and NJR Energy.

          NJR Energy utilized the full-cost method of accounting for oil and gas
     producing activities as set forth in Rule 4-10 of Regulation S-X.<(2)>  In
     essence, this rule permits the capitalization of exploration and
     development costs, subject to a full-cost ceiling test.<(3)>  This ceiling
     test requires a company to perform a calculation in order to test for
     impairment of value of the capitalized costs associated with its oil and
     gas properties.  In performing this quarterly test, the present value of
     estimated future net revenues from the oil and gas properties was to be
     "computed by applying current prices of oil and gas (with consideration of
     price changes only to the extent provided by contractual arrangements)."
     Regulation S-X, 4-10(k)(6)(1992).  If the capitalized costs associated with
     its oil and gas properties are impaired, then the company is required to
     write down the recorded value of these properties by the amount of the
     impairment, with a corresponding charge to operations. 

          During the winter of 1991-92,  NJR and NJR Energy learned that valuing
     NJR Energy's oil and gas properties on the basis of spot market prices
     might result in a multimillion dollar write-down of those properties for
     the quarter ending March 31, 1992.  Such an amount would have been material
     to NJR's consolidated financial statements at March 31, 1992.

          NJR and NJR Energy avoided this result by implementing a plan under
     which NJR Energy would sell gas to a third party middleman under the terms
                              

          <(2)>  Alternatively, oil  and gas companies can  account for their
               exploration  and production activities  under the successful
               efforts   method  of   accounting,  which   requires  failed
               exploration  costs  to   be  reported   as  current   period
               expenditures  and permits the  capitalization of exploration
               and  development  costs   related  to  commercially   viable
               reserves.

          <(3)>  Rule 4-10(i)(4)(1992); now Rule 4-10(c)(4).

                              ======END OF PAGE 3======


     of a long term contract that provided for initial and subsequent prices
     sufficient to avoid a write-down.  The middleman would, in turn, sell the
     gas to NJNG under another long-term contract incorporating a predetermined
     margin over the price at which it had acquired the gas from NJR Energy.

          During the first quarter of calendar 1992, NJNG, NJR Energy and NJR
     concluded such an arrangement with a third party, to begin April 1, 1992
     with respect to certain production and October 1, 1992 with respect to
     other production, and to extend for eighteen years. The arrangement was
     reflected in three contracts; the first two called for NJR Energy and one
     of its subsidiaries to supply a certain quantity of gas to the middleman
     (collectively, the "supply contracts"), and the third provided for the
     further transfer of that and other gas from the middleman to NJNG ("the
     purchase contract").  The initial and subsequent prices enabled NJR Energy
     to avoid recognizing an impairment under the full-cost ceiling test at
     March 31, 1992.  The price paid by NJNG to the middleman exceeded, by a set
     margin, the price at which the middleman purchased the gas from NJR Energy.
     Richard and Corn participated in the negotiation of the arrangement, and
     Corn performed the full cost ceiling calculations used by NJR in connection
     with the Form 10-Q for the second quarter ended March 31, 1992.

          NJR, in that Form 10-Q, reported total assets of $723,076,000, net
     income of $20,391,000 and earnings per share of $1.43.  Had NJR Energy
     valued its oil and gas properties at spot prices, and recognized an
     impairment under the full-cost ceiling test, the company would have been
     required to write down the value of its assets by what the company
     calculates to be approximately $6.3 million.  This would have resulted in
     the company's reported net income for that quarter being reduced by a
     similar amount and its $1.43 per share reported earnings for the quarter
     being reduced by 44 cents per share to 99 cents per share.

          Note 6 to NJR's consolidated financial statements for the second
     quarter ended March 31, 1992 stated: "NJR Energy satisfied the requirements
     of the full-cost ceiling test as of March 31, 1992 due primarily to long-
     term gas contracts covering about 60% of NJR Energy's current production." 
     This note made no reference to the fact that the NJR subsidiaries were
     involved in the transaction, or to the lack of significant risk assumed by
     the middleman.  It did not disclose that one of the agreements was not, at
     that time, performing, because payments and deliveries were not scheduled
     to begin until October.  Similarly, these consolidated financial statements
     contained in NJR's second quarter Form 10-Q did not disclose the magnitude
     of the write-down NJR would have faced had it recognized an impairment of
     assets under the full-cost ceiling test, or what such an effect on net
     income and earnings-per-share would have been.  

          NJR's accounting treatment of its subsidiary's oil and gas properties
     also materially affected its year-end consolidated financial

                              ======END OF PAGE 4======


     statements.<(4)>  In its annual report on Form 10-K for FY 1992, NJR
     reported total assets of $693,548,000, net income of $23,459,000 and
     earnings per share of $1.64.  NJR Energy's failure to recognize an
     impairment of the carrying value of its oil and gas properties during that
     fiscal year of approximately $6.3 million increased the company's net
     income by the same amount and its earnings per share by 44 cents. 
     Moreover, the disclosure omissions in the March 31, 1992 Form 10-Q
     concerning, among other things, the related party nature of the arrangement
     with the middleman were repeated in NJR's 1992 Form 10-K.

          Richard and Corn knew or should have known that the financial
     statements included in the Form 10-Q for the period ending March 31, 1992,
     and in its annual report on Form 10-K for FY 1992 did not reflect any
     impairment of NJR Energy's oil and gas properties and that this was the
     result of NJR's reliance on the arrangement described above to satisfy the
     requirements of the full-cost ceiling test.  Both either knew or should
     have known that neither in the notes to the financial statements, nor
     elsewhere in that report did the company provide appropriate disclosure of
     the actual nature of the arrangement described above.  Richard signed NJR's
     Form 10-K for the year ending September 30, 1992.

          E.   Violations

               1.   Richard and Corn caused NJR's violations of Section 13(a) of
                    the Exchange Act and Rules 13a-1 and 13a-13 thereunder. 

          The Commission has simultaneously with this proceeding issued an Order
     containing findings, among other things, that NJR violated Section 13(a) of
     the Exchange Act and Rules 13a-1 and 13a-13 thereunder, which require
     issuers of securities registered pursuant to Section 12 of the Exchange Act
     to file certain annual and quarterly reports with the Commission.  Implicit
     in these rules is the requirement that the reports be true and correct. 
     SEC v. IMC International, Inc., 384 F. Supp. 889, 893 (N.D. Tex.), aff'd
     mem., 505 F.2d 733 (5th Cir. 1974), cert. denied sub nom. Evans v. SEC, 420
     U.S. 930 (1975).

          The financial statements contained in NJR's March 31, 1992 Form 10-Q
     and FY 1992 Form 10-K materially overstated net income and earnings per
     share as a result of the company's failure to recognize the impairment of
     NJR Energy's oil and gas properties, as required by Regulation S-X, Rule 4-
     10.  That rule requires that the value of reserves underlying the oil and
     gas properties be based on current (spot market) prices except "to the
     extent provided by contractual arrangements."  Regulation S-X, Rule 4-
     10(k)(6)(1992).  The contractual arrangements contemplated by the Rule are
     bona fide agreements that shift the risk of changes in oil or gas prices to
     a third party purchaser.  An agreement between subsidiaries of the
                              

          <(4)>  The  consolidated financial statements  included in the Form
               10-Q for the intervening quarter, that ended June  30, 1992,
               were  also inaccurate  in that  they  reflected oil  and gas
               properties overstated by $6.3 million.

                              ======END OF PAGE 5======


     reporting entity does not achieve this purpose.

          The contracts in this matter, taken together, did no more than provide
     for the delivery from NJR Energy to NJNG of quantities of gas and allowed
     NJR Energy to receive initial and subsequent prices sufficient to avoid a
     write-down.  The terms of the supply contracts mirror those of the purchase
     contract, except as to quantity, so that the middleman assumed no
     significant risk in connection with the arrangement.  Furthermore,
     performance under one of the contracts with respect to the delivery of
     certain gas production was not to begin until October 1, 1992, so that the
     contract was not fully performing by the end of the March 31, 1992 quarter. 
     In sum, this arrangement which was entered into for the specific purpose of
     avoiding a write-down under the full-cost ceiling test, failed to transfer
     significant risk to a bona fide third party, and therefore did not comport
     with the requirements of Regulation S-X.

          Furthermore, the description of the arrangement for the sale of NJR
     Energy's gas production contained in those filings was materially false and
     misleading in that it did not disclose, among other things, the underlying
     related party nature of the transactions as required by generally accepted
     accounting principles<(5)> and that the effects of the contracts were not
     eliminated in consolidation.  These omissions, among other things, violated
     Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder.

          By virtue of their involvement in the events described above and their
     training, professional experience, and position within the company, Richard
     and Corn knew or should have known that the contractual arrangement did not
     comport with the requirements of Regulation S-X, and was not reported in
     accordance with the periodic reporting requirements of the Exchange Act. 
     As a result, Richard and Corn both caused NJR's violations of Section 13(a)
     and Rules 13a-1 and 13a-13 thereunder by assisting in the preparation of,
     and/or signing and causing to be filed NJR's Form 10-Q for the quarter
     ended March 31, 1992, and its Form 10-K for FY 1992.

                                         IV.

          Based upon the foregoing, the Commission finds that:

          A.   Oliver G. Richard III and Jay B. Corn caused NJR's violations of
               Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13.

                                          V.

          In view of the foregoing, the Commission deems it appropriate and in
     the public interest to accept the Respondents' Offers of
     Settlement.

     VI.

                              

          <(5)>  Statement of Financial Accounting Standards No. 57

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          Accordingly, IT IS HEREBY ORDERED, pursuant to Section 21C of the
     Exchange Act, that 

          A.   Oliver G. Richard, III and Jay B. Corn cease and desist from
               causing any violations, and any future violations, of Section
               13(a) of the Exchange Act and Rules 13a-1 and 13a-13.

          By the Commission.

                                                  Jonathan G. Katz
                                                  Secretary

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