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 September 30, 1997
                                            ------------------

                                     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 September 30, 1997 was
3,135,795.                                   ------------------
----------
<PAGE>
                    APPALACHIAN OIL & GAS COMPANY, INC.
                                 Form 10-Q
                   Three Months Ended September 30, 1997
<TABLE>
<CAPTION>
                                   INDEX
                                  -------
<S>                                                                 <C>    
                                                                      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
                       September 30, 1997 & June 30, 1997


</TABLE>
<TABLE>
<CAPTION>
                                                          September          June 
                                                           30, 1997      30, 1997 
                                                        ------------  ------------
<S>                                                     <C>           <C>
Current Assets
---------------
  Cash & Cash Equivalents                               $    27,094   $    36,954 
  Accounts Receivable - Trade                                19,844        17,855 
                                                        ------------  ------------
      Total Current Assets                                   46,938        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                              334,933       330,692 
                                                        ------------  ------------
      Net Property & Equipment                              131,825       136,066 
                                                        ------------  ------------
      Total Assets                                      $   178,763   $   190,875 
                                                        ============  ============

</TABLE>

                             See Accompanying Notes<PAGE>
                      Appalachian Oil & Gas Company, Inc.
                           Balance Sheets -Continued-
                       September 30, 1997 & June 30, 1997

<TABLE>
<CAPTION>
                                                          September          June 
                                                           30, 1997      30, 1997 
                                                        ------------  ------------
<S>                                                     <C>           <C>
Current Liabilities
-------------------
  Accounts Payable - Trade                              $       -0-   $       338 
                                                        ------------  ------------
      Total Current Liabilities                                 -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                                      ( 1,666,937)  ( 1,655,163)
                                                        ------------  ------------
      Total Stockholders' Equity                            178,763       190,537 
                                                        ------------  ------------
      Total Liabilities & Stockholders' Equity          $   178,763   $   190,875 
                                                        ============  ============

</TABLE>

                             See Accompanying Notes
<PAGE>
                      Appalachian Oil & Gas Company, Inc.
                            Statement of Operations
             For the Three Month Periods September 30, 1997 & 1996

<TABLE>
<CAPTION>
                                                                      Three Month Periods Ended 
                                                          September     September 
                                                           30, 1997      30, 1996 
                                                        ------------  ------------
<S>                                                     <C>           <C>
Revenues
--------
  Oil & Gas Sales                                       $    13,625   $    10,629 
  Other                                                         322         1,098 
                                                        ------------  ------------
      Total Revenues                                         13,947        11,727 

Costs & Expenses
----------------
  Other Operating Expenses                                    7,445         3,008 
  Depreciation, Depletion & Amortization                      4,241         4,241 
  General & Administrative                                   14,035        19,341 
                                                        ------------  ------------
      Total Costs & Expenses                                 25,721        26,590 
                                                        ------------  ------------
      Net Income (Loss)                                 ($   11,774)  ($   14,863)
                                                        ============  ============
      Earnings Per Share                                $       .00   $       .00 

</TABLE>

                             See Accompanying Notes<PAGE>
                      Appalachian Oil & Gas Company, Inc.
                            Statement of Cash Flows
              For the Three Months Ended September 30, 1997 & 1996

<TABLE>
<CAPTION>
                                                                      Three Months Periods Ended 
                                                          September     September 
                                                           30, 1997      30, 1996 
                                                        ------------  ------------
<S>                                                     <C>           <C>
Cash Flows from Operating Activities
------------------------------------
  Net Income (Loss)                                     ($   11,774)  ($   14,863)
  Adjustments to Reconcile Net Income
   (Loss) to Net Cash Provided by Operating
   Activities
   Depreciation, Depletion, & Amortization                    4,241         4,241 
  Changes in Operating Assets & Liabilities
   (Increase) Decrease in Accounts Receivable           (     1,989)       18,429 
   Increase (Decrease) in Accounts Payable              (       338)  (    12,345)
   Increase (Decrease) in Accrued Expenses                      -0-   (     1,500)
                                                        ------------  ------------
      Net Cash Provided by Operating Activities         (     9,860)  (     6,038)

Cash Flows from Investing Activities
------------------------------------
  Purchases of Property & Equipment                             -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    (     9,860)  (     6,038)
                                                        ------------  ------------
      Cash & Cash Equivalents, Beginning of Period           36,954       104,123 
                                                        ------------  ------------
      Cash & Cash Equivalents, End of Period            $    27,094   $    98,085 
                                                        ============  ============

</TABLE>

                           See Accountant's Notes

<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 21, 1999                         /S/ Raymond A. Connelly
Date:------------------                     By:-----------------------
                                                Raymond A. Connelly