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, 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 March 31, 1997  was 3,135,795.
                                                  --------------      ---------
<PAGE>
                       APPALACHIAN OIL & GAS COMPANY, INC.
                                    Form 10-Q
                        Nine Months Ended March 31, 1997


                                      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, 1997 & June 30, 1996
<TABLE>
<CAPTION>

                                                      March           June 
                                                   31, 1997       30, 1996 
                                                ------------   ------------
<S>                                            <C>            <C>          
Current Assets
--------------
  Cash & Cash Equivalents                       $    66,793    $   104,123 
  Accounts Receivable - Trade                         2,653         30,437 
                                                ------------   ------------
      Total Current Assets                           69,446        134,560 

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                         326,451        313,727 
                                                ------------   ------------
      Net Property & Equipment                      140,307        153,031 
                                                ------------   ------------
      Total Assets                              $   209,753    $   287,591 
                                                ============   ============
</TABLE>
                           See Accompanying Note<PAGE>
                       Appalachian Oil & Gas Company, Inc.
                           Balance Sheets -Continued-
                         March 31, 1997 & June 30, 1996
<TABLE>
<CAPTION>

                                                      March           June 
                                                   31, 1997       30, 1996 
                                                ------------   ------------
<S>                                            <C>            <C>          
Current Liabilities
-------------------
   Accounts Payable:
     Trade                                      $       -0-    $    12,345 
   Accrued Expenses                                     338          2,000 
                                                ------------   ------------
       Total Current Liabilities                        338         14,345 

Commitments & Contingencies
---------------------------
   Stockholders' Equity
   Common Stock, Par Value $0.01 Per Share, 
     100,000,000 Shares Authorized, 3,235,795 
     Shares Issued & Outstanding                     32,358         32,358 
   Additional Paid In Capital                     1,813,342      1,813,342 
   Retained Deficit                             ( 1,636,285)   ( 1,572,454)
                                                ------------   ------------
       Total Stockholders' Equity                   209,415        273,246 
                                                ------------   ------------
       Total Liabilities &
        Stockholders' Equity                    $   209,753    $   287,591 
                                                ============   ============
</TABLE>

                              See Accompanying Note<PAGE>
                       Appalachian Oil & Gas Company, Inc.
                             Statement of Operations
             For the Three Month Periods Ended March 31, 1997 & 1996
             and the Nine Month Periods Ended March 31, 1997 & 1996
<TABLE>
<CAPTION>

                                                For the Three Month                  For the Nine Month    
                                               Periods Ended March 31,              Periods Ended March 31,
                                        1997        1996         1997        1996 
                                  ----------- -----------  ----------- -----------
<S>                              <C>         <C>          <C>         <C>         
Revenues
--------
  Oil & Gas Sales                 $    7,311  $   45,931   $   26,749  $  261,316 
  Other                                  600          12        2,855       1,764 
  Gain on Sale of Assets                 -0-     170,051          -0-     170,051 
                                  ----------- -----------  ----------- -----------

     Total Revenues                    7,911     215,994       29,604     433,131 

Costs & Expenses
----------------
  Other Operating Expenses               609     168,651        8,793     229,967 
  Depreciation, Depletion & 
   Amortization                        4,241      10,417       12,723      45,141 
  Interest                               -0-       4,821          -0-      14,323 
  General & Administrative            23,635      22,180       71,919      93,761 
                                  ----------- -----------  ----------- -----------
     Total Costs & Expenses           28,485     206,069       93,435     383,192 
                                  ----------- -----------  ----------- -----------
     Net Income (Loss)            ($  20,574) $    9,925   ($  63,831) $   49,939 
                                  =========== ===========  =========== ===========
     Earnings Per Share            $          $      .00    $          $     0.01 

</TABLE>
                              See Accmpanying Note<PAGE>
                       Appalachian Oil & Gas Company, Inc.
                             Statement of Cash Flows
             For the Nine Month Periods Ended March 31, 1997 & 1996
<TABLE>
<CAPTION>
                                                                 For the Nine Month    
                                                                 Periods Ended March 31, 
                                                            1997           1996 
                                                     ------------   ------------
<S>                                                 <C>            <C>          
Cash Flows from Operating Activities
------------------------------------
 Net Income (Loss)                                   ($   63,831)   $    49,939 
 Adjustments to Reconcile Net 
  Income (Loss) to Net Cash 
  Provided by Operating Activities
   Depreciation, Depletion, &
   Amortization                                           12,723         45,141 
   Rounding                                                    1            -0- 
   (Gain) Loss on Sale of Assets                             -0-    (   170,051)
 Changes in Operating Assets & Liabilities
  (Increase) Decrease in Accounts Receivable              27,784    (   209,904)
  Increase (Decrease)in Accounts Payable             (    12,345)   (   100,423)
  Increase (Decrease) in Accrued Expenses            (     1,662)   (     1,117)
                                                     ------------   ------------
     Net Cash Provided by Operating 
     Activities                                      (    37,330)   (   386,415)

Cash Flows from Investing Activities
------------------------------------
 Proceeds from Sale of Assets                                -0-        450,000 
                                                     ------------   ------------
     Net Cash Used in Investing Activities                   -0-        450,000 

Cash Flows from Financing Activities
------------------------------------
 Proceeds from Notes Payable                                 -0-         96,991 
 Principal Payments on Notes Payable                         -0-    (   129,490)
                                                     ------------   ------------
     Net Cash Used in Financing Activities                   -0-    (    32,499)

     Increase (Decrease) in Cash & Cash Equivalents  (    37,330)        31,086 

     Cash & Cash Equivalents, Beginning of Period        104,123         12,602 

     Cash & Cash Equivalents, End of Period          $    66,793    $    43,688 
                                                     ============   ============
</TABLE>

                              See Accompanying Note<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, 1996 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