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, 1996
                                                --------------
                                     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.)

701 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, 1996 was  
3,135,795.                                   ---------------           
----------<PAGE>
                    APPALACHIAN OIL & GAS COMPANY, INC.
                                 Form 10-Q
                     Three Months Ended March 31, 1996


                                   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, 1996 & June 30, 1995

<TABLE>
<CAPTION>

                                                              March          June 
                                                           31, 1996      30, 1995 
                                                        ------------  ------------
<S>                                                     <C>           <C>
Current Assets
--------------
  Cash & Cash Equivalents                               $    43,668   $    12,602 
  Accounts Receivable - Trade                               282,552        72,648 
                                                        ------------  ------------
       Total Current Assets                                 326,220        85,250 

Property & Equipment
--------------------
  Oil & Gas Properties                                      140,184       626,095 
  Other Property & Equipment                                453,248       747,053 
                                                        ------------  ------------
       Total Property & Equipment                           593,432     1,373,148 

       Less Accumulated Depreciation, Depletion
       & Amortized                                      (   370,219)  (   824,865)
                                                        ------------  ------------
       Net Property & Equipment                             223,213       548,283 
                                                        ------------  ------------
       Total Assets                                     $   549,433   $   633,533 
                                                        ============  ============

</TABLE>

                             See Accompanying Notes
<PAGE>
                      Appalachian Oil & Gas Company, Inc.
                           Balance Sheets -Continued-
                         March 31, 1996 & June 30, 1995

<TABLE>
<CAPTION>

                                                              March          June 
                                                           31, 1996      30, 1995 
                                                        ------------  ------------
<S>                                                     <C>           <C>
Current Liabilities
-------------------
  Current Portion of Long-Term Debt                     $       -0-   $    32,628 
  Notes Payable - Related Party                             235,491       138,500 
  Accounts Payable
     Trade                                                   19,862        24,674 
     Royalties                                                  -0-        44,193 
     Transported Gas                                            -0-        51,418 
  Accrued Expenses                                            4,235         5,352 
                                                        ------------  ------------

       Total Current Liabilities                            259,588       296,765 

       Long Term Debt Less Current Portion                      -0-        96,862 

       Total Liabilities                                    259,588       393,627 

Stockholders' Equity
--------------------
  Common Stock, Par Value $0.01 Per Share,
     10,000,000 Shares Authorized 3,135,795
     Shares Issued & Outstanding                             31,358        31,358 
  Additional Paid In Capital                              1,814,342     1,814,342 
  Retained Deficit                                      ( 1,555,855)  ( 1,605,794)
                                                        ------------  ------------
       Total Stockholders' Equity                           289,845       239,906 
                                                        ------------  ------------
       Total Liabilities & Stockholders' Equity         $   549,433   $   633,533 
                                                        ============  ============
</TABLE>

                             See Accompanying Notes
<PAGE>
                      Appalachian Oil & Gas Company, Inc.
                            Statement of Operations
            For the Three Month Periods Ended March 31, 1996 & 1995
             and the Nine Month Periods Ended March 31, 1996 & 1995
<TABLE>
<CAPTION>
                                   For the Three Month         For the Nine Month    
                                Periods Ended March 31,     Periods Ended March 31,
                                     1996          1995          1996         1995 
                              ------------  ------------  ------------ ------------
<S>                           <C>          <C>           <C>           <C>
Revenues
--------
  Oil & Gas Sales             $    45,931  $    131,579  $    261,316  $   381,642 
  Drilling Programs                   -0-           -0-           -0-        2,418 
  Other                                12  (        892)        1,764        4,976 
  Gain on Sale of Assets          170,051           -0-       170,051          -0- 
                              ------------  ------------  ------------ ------------
     Total Revenues               215,994       130,687       433,131      389,036 

Costs & Expenses
----------------
  Cost of Drilling Programs           -0-           -0-           -0-          -0- 
  Other Operating Expenses        168,651        79,167       229,967      173,317 
  Depreciation, Depletion & 
   Amortization                    10,417        21,559        45,141       64,678 
  Interest                          4,821         6,571        14,323       17,585 
  General & Administrative         22,180        61,306        93,761      221,414 
  Loss on Sale Of Assets              -0-           -0-           -0-       11,545 
                              ------------  ------------  ------------ ------------
     Total Costs & Expenses       206,069       168,603       383,192      488,539 
                              ------------  ------------  ------------ ------------
     Net Income (Loss) Before
     Minority Interest              9,925  (     37,916)       49,939  (    99,503)

     Minority Interest                -0-  (      3,644)          -0-  (     3,654)
                              ------------  ------------  ------------ ------------
     Net Income (Loss)        $     9,925  ($    41,560) $     49,939  ($  103,157)
                              ============  ============  ============ ============

     Minority Interest                -0-  (      3,644)          -0-  (     3,654)
                              ------------  ------------  ------------ ------------
     Earnings Per Share       $       .00  $       0.01  $       0.01  $      0.03 

</TABLE>

                             See Accompanying Notes
<PAGE>
                      Appalachian Oil & Gas Company, Inc.
                            Statement of Cash Flows
             For the Nine Month Periods Ended March 31, 1996 & 1995

<TABLE>
<CAPTION>

                                                             For the Nine Month
                                                          Periods Ended March 31, 
                                                               1996          1995 
                                                        ------------  ------------
<S>                                                     <C>           <C>
Cash Flows from Operating Activities
------------------------------------
 Net Income (Loss)                                      $    49,939   ($  103,157)
 Adjustments to Reconcile Net 
  Income (Loss) to Net Cash 
  Provided by Operating Activities
   Depreciation, Depletion, &
   Amortization                                              45,141        64,678 
   Minority Interest                                            -0-         3,654 
   (Gain) Loss on Sale of Assets                        (   170,051)       11,545 
 Changes in Operating Assets & Liabilities
  (Increase) Decrease in Accounts Receivable            (   209,904)       12,099 
  Increase (Decrease)in Accounts Payable                (   100,423)       34,668 
  Increase (Decrease) in Accrued Expenses               (     1,117)        2,236 
  Increase (Decrease) in Drilling Advances                      -0-           -0- 
                                                        ------------  ------------
     Net Cash Provided by Operating 
     Activities                                         (   386,415)       25,723 

Cash Flows from Investing Activities
------------------------------------
 Purchases of Property & Equipment                              -0-   (    11,810)
 Purchases of Oil & Gas Properties                              -0-   (    11,550)
 Investment in Joint Venture                                    -0-   (   109,000)
 Proceeds from Sale of Assets                               450,000           -0- 
                                                        ------------  ------------
     Net Cash Used in Investing Activities                  450,000   (   132,360)

Cash Flows from Financing Activities
------------------------------------
 Proceeds from Notes Payable                                 96,991        73,500 
 Principal Payments on Notes Payable                    (   129,490)  (     7,500)
 Principal Payments on Long-Term Debt                           -0-   (    21,314)
 Dividends Paid                                                 -0-   (     1,173)
                                                        ------------  ------------
     Net Cash Used in Financing Activities              (    32,499)       43,513 

     Increase (Decrease) in Cash & Cash Equivalents          31,086   (    63,124)

     Cash & Cash Equivalents, Beginning of Period            12,602        66,602 
                                                        ------------  ------------
     Cash & Cash Equivalents, End of Period             $    43,688   $     3,478 
                                                        ============  ============
</TABLE>

                             See Accompanying 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 December 31,
1995 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