FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 2054

          (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
                 For the quarterly period ended March 31, 1998
                                                --------------

                                       OR

         ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
            For the transition period from __________ to ___________

                         Commission file number 0-11732
                                               --------
                       APPALACHIAN OIL & GAS COMPANY, INC
             (Exact name of registrant as specified in its charter)
             -----------------------------------------------------
      UTAH                                                  87-0382031  
     ------                                                 ----------
(State or other jurisdiction of                        (IRS Employer
Incorporation or organization)                           identification No.)

511 Second Avenue North, Nashville, TN                      37201 
----------------------------------------                    ------
(Address of principal executive offices)                  (Zip Code)

Registrants telephone number, including area code (615) 254-4789
                                                  --------------

Former name, former address and former fiscal year, if changed since last
report.

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 such shorter period that the registrant
was required to file such report(s), and (2) has been subject to such filing
requirements for the past 90 days.

Yes    X       No
     ------         ------

The total number of shares outstanding as of March 31, 1998  was 3,135,795.
                                             --------------      ----------
<PAGE>
                      APPALACHIAN OIL & GAS COMPANY, INC.
                                   Form 10-Q
                        Nine Months Ended March 31, 1998


                                     INDEX
                                     -----

                                                                      Page 
                                                                     ------
PART I      Financial Information

     ITEM 1 Financial Statements

        Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . 2 

        Statements of Operations . . . . . . . . . . . . . . . . . . . 4 

        Statements of Cash Flows . . . . . . . . . . . . . . . . . . . 5 

        Note to Financial Statements . . . . . . . . . . . . . . . . . 6 

        Management's Discussion and Analysis of
        the Statement of Income. . . . . . . . . . . . . . . . . . . . 7 

PART II Other Information

     ITEM 1 Legal Proceedings. . . . . . . . . . . . . . . . . . . . . 8 

     ITEM 2 Changes in Securities. . . . . . . . . . . . . . . . . . . 8 

     ITEM 3 Defaults upon Senior Securities. . . . . . . . . . . . . . 8 

     ITEM 4 Submission of Matters to a Vote of Security Holders. . . . 8 

     ITEM 5 Other Information. . . . . . . . . . . . . . . . . . . . . 8 

     ITEM 6 Exhibits and Reports on Form 8-K . . . . . . . . . . . . . 8 


SIGNATURES   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 
<PAGE>
                      Appalachian Oil & Gas Company, Inc.
                                 Balance Sheets
                         March 31, 1998 & June 30, 1997

<TABLE>
<CAPTION>

                                                           March           June 
                                                        31, 1998       30, 1997 
                                                     ------------   ------------
<S>                                                 <C>            <C>          
Current Assets
--------------
     Cash & Cash Equivalents                         $     1,713    $    36,954 
     Accounts Receivable - Trade                           8,361         17,855 
                                                     ------------   ------------
          Total Current Assets                            10,074         54,809 

Property & Equipment
--------------------
     Oil & Gas Properties                                140,184        140,184 
     Other Property & Equipment                          326,574        326,574 
                                                     ------------   ------------
          Total Property & Equipment                     466,758        466,758 

       Less Accumulated Depreciation, Depletion
       & Amortization                                    343,416        330,692 
                                                     ------------   ------------
          Total                                          123,342        136,066 
                                                     ------------   ------------
          Total Assets                               $   133,416    $   190,875 
                                                     ============   ============
</TABLE>

                           See Accountant's Note
<PAGE>
                      Appalachian Oil & Gas Company, Inc.
                           Balance Sheets -Continued-
                         March 31, 1998 & June 30, 1997

<TABLE>
<CAPTION>
                                                           March           June 
                                                        31, 1998       30, 1997 
                                                     ------------   ------------
<S>                                                 <C>            <C>          
Current Liabilities
-------------------
     Accounts Payable - Trade                        $       -0-    $       338 
                                                     ------------   ------------
Commitments & Contingencies
---------------------------
     Stockholders' Equity
     Common Stock, Par Value $0.01 Per Share, 
       100,000,000 Shares Authorized, 3,135,795 
       Shares Issued & Outstanding                        31,358         31,358 
     Additional Paid In Capital                        1,814,342      1,814,342 
     Retained Deficit                                ( 1,712,284)   ( 1,655,163)
                                                     ------------   ------------
          Total Stockholders' Equity                     133,416        190,537 
                                                     ------------   ------------
          Total Liabilities & Stockholders' Equity   $   133,416    $   190,875 
                                                     ============   ============
</TABLE>

                           See Accountant's Notes
<PAGE>
                      Appalachian Oil & Gas Company, Inc.
                            Statement of Operations
            For the Three Month Periods Ended March 31, 1998 & 1997
             and the Nine Month Periods Ended March 31, 1998 & 1997
<TABLE>
<CAPTION>
                                  For the Three Month         For the Nine Month 
                                Periods Ended March 31,    Periods Ended March 31,
                                     1998          1997          1998         1997 
                              ------------  ------------  ------------ ------------
<S>                          <C>           <C>           <C>          <C>          
Revenues
--------
  Oil & Gas Sales             $       -0-   $     7,311   $    16,930  $    26,749 
  Other                                37           600           550        2,855 
                              ------------  ------------  ------------ ------------
     Total Revenues                    37         7,911        17,480       29,604 

Costs & Expenses
----------------
  Other Operating Expenses            -0-           609        18,321        8,793 
  Depreciation, Depletion &
   Amortization                     4,241         4,241        12,724       12,723 
  General & Administrative         13,724        23,635        43,555       71,919 
                              ------------  ------------  ------------ ------------
     Total Costs & Expenses        17,965        28,485        74,600       93,435 
                              ------------  ------------  ------------ ------------
     Net Income (Loss)       ($    17,928) ($    20,574) ($    57,120)($    63,831)
                              ============  ============  ============ ============
     Earnings Per Share       $       .00   $       .00   $       .00  $       .00 

</TABLE>

                           See Accompanying Notes
<PAGE>
                    Appalachian Oil & Gas Company, Inc.
                          Statement of Cash Flows
           For the Nine Month Periods Ended March 31, 1998 & 1997

<TABLE>
<CAPTION>
                                                               For the Nine Month 
                                                           Periods Ended March 31,
                                                                 1998         1997 
                                                          ------------ ------------
<S>                                                      <C>          <C>          
Cash Flows from Operating Activities
------------------------------------
  Net Income (Loss)                                       ($   57,120) ($   63,831)
  Adjustments to Reconcile Net Income
   (Loss) to Net Cash Provided by 
   Operating Activities
    Depreciation, Depletion, & Amortization                    12,724       12,723 
  Rounding                                                (         1)           1 
  Changes in Operating Assets & Liabilities
   (Increase) Decrease in Accounts Receivable                   9,494       27,784 
  Increase (Decrease)in Accounts Payable                  (       338) (    12,345)
  Increase (Decrease) in Accrued Expenses                         -0-  (     1,662)
                                                          ------------ ------------
     Net Cash Provided by Operating Activities            (    35,241) (    37,330)

Cash Flows from Investing Activities
------------------------------------
  Proceeds from Sale of Assets                                    -0-          -0- 
                                                          ------------ ------------
     Net Cash Used in Investing Activities                        -0-          -0- 

Cash Flows from Financing Activities                              -0-          -0- 
------------------------------------                      ------------ ------------
     Net Cash Used in Financing Activities                        -0-          -0- 

     Increase (Decrease) in Cash & Cash Equivalents       (    35,241) (    37,330)

     Cash & Cash Equivalents, Beginning of Period              36,954      104,123 
                                                          ------------ ------------
     Cash & Cash Equivalents, End of Period               $     1,713  $    66,793 
                                                          ============ ============

</TABLE>
<PAGE>
                    Appalachian Oil & Gas Company, Inc.
                        Note to Financial Statements


NOTE #1 - Statement Preparation
-------------------------------
The Company has prepared the accompanying financial statements with interim
financial reporting requirements promulgated by the Securities & Exchange
Commission.  The information furnished reflects all adjustments which
are, in the opinion of management, necessary for a fair presentation of
financial position and results of operations. 

The financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in the
Company's June 30, 1997 10-K report. 

<PAGE>
                    MANAGEMENT'S DISCUSSION AND ANALYSIS


Liquidity and Capital Resources
-------------------------------

On February 1, 1996, the Company sold 60.00% of all its rights, title and
interest to its oil leases and related equipment to K. Petroleum, Inc., an
Ohio Corporation.  It is the Company's intention to sell the remaining
40.00% of these assets as well. 

The Company no longer operates or directs the operations of the oil and gas
wells and is dependent upon K-Petroleum, Inc., for its 40% of revenues
(royalties) from the well production.

The Company hopes to sell the remaining 40% and seeks to find a new
business activity.  The Company believes it has sufficient cash for the
next years operations.


Results of Operations
---------------------

The Company now has limited cash flows from its 40% interest in the oil and
gas wells.  It seeks to obtain from K-Petroleum, Inc., production report to
explain the dramatic decrease in gross revenues.  To date K-Petroleum,
Inc., has resisted releasing these reports.  The Company continues to use,
as frugally as possible, its cash reserves to meet the current expenses.





<PAGE>
                          PART II - OTHER INFORMATION
                          ----------------------------

Item 1    Legal Proceedings. . . . . . . . . . . . . . . . . . . . None 

Item 2    Changes in the Rights of the 
          Company's Security Holders . . . . . . . . . . . . . . . None 

Item 3    Defaults by the Company on its Senior Securities . . . . None 

Item 4    Results of Votes of Security Holders . . . . . . . . . . None 

Item 5    Other Information. . . . . . . . . . . . . . . . . . . . None 

Item 6    Exhibits and Reports on Form 8-K . . . . . . . . . . . . None 
<PAGE>
                                   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.


     /S/ April 20, 1999                  /S/ Raymond A. Connelly
Date:------------------              By: ------------------------     
                                         Raymond A. Connelly