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   December 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 December 31, 1997 was
3,135,795.                                   -----------------
----------
<PAGE>
                    APPALACHIAN OIL & GAS COMPANY, INC.
                                 Form 10-Q
                     Six Months Ended December 31, 1997
<TABLE>
<CAPTION>

                                   INDEX
                                   -----
                                                                      Page 
                                                                     ------
<S>                                                                <C>     

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
                     December 31, 1997 & June 30, 1997

</TABLE>
<TABLE>
<CAPTION>
                                                           December          June 
                                                           31, 1997      30, 1997 
                                                        ------------  ------------
<S>                                                     <C>           <C>
Current Assets
--------------
   Cash & Cash Equivalents                              $    14,616   $    36,954 
   Accounts Receivable - Trade                                9,145        17,855 
                                                        ------------  ------------
       Total Current Assets                                  23,761        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                                       339,175       330,692 
                                                        ------------  ------------
       Total                                                127,583       136,066 
                                                        ------------  ------------
       Total Assets                                     $   151,344   $   190,875 
                                                        ============  ============

</TABLE>

                             See Accompanying Notes
<PAGE>
                      Appalachian Oil & Gas Company, Inc.
                           Balance Sheets -Continued-
                       December 31, 1997 & June 30, 1997

<TABLE>
<CAPTION>
                                                           December          June 
                                                           31, 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                                     ( 1,694,356)  ( 1,655,163)
                                                        ------------  ------------
       Total Stockholders' Equity                           151,344       190,537 
                                                        ------------  ------------
       Total Liabilities & Stockholders' Equity         $   151,344   $   190,875 
                                                        ============   ===========

</TABLE>

                             See Accompanying Notes

<PAGE>
                      Appalachian Oil & Gas Company, Inc.,
                Consolidated Statement of Operations (Unaudited)
            For the Six Month Periods Ended December 31, 1997 & 1996
           and the Three Month Periods Ended December 31, 1997 & 1996
<TABLE>
<CAPTION>
                                Six Month Periods Ended  Three Month Periods Ended 
                                 December      December      December     December 
                                 31, 1997      31, 1996      31, 1997     31, 1996 
                              ------------  ------------  ------------ ------------
<S>                           <C>          <C>           <C>           <C>
Revenues
--------
  Oil & Gas Sales             $    16,930  $     19,438   $     3,305  $     8,809 
  Other                               514         2,255           192        1,157 
                              ------------  ------------  ------------ ------------
       Total Revenues              17,444        21,693         3,497        9,966 
                              ------------  ------------  ------------ ------------
Costs & Expenses
----------------
  Other Operating Expenses         18,321         8,184        10,876        5,176 
  Depreciation, Depletion
   & Amortization                   8,483         8,482         4,241        4,241 
  General & Administrative         29,832        48,284        15,799       28,941 
                              ------------  ------------  ------------ ------------
       Total Costs &
        Expenses                   56,636        64,950        30,916       38,358 
                              ------------  ------------  ------------ ------------
       Net Income (Loss)      ($   39,192) ($    43,257) ($    27,419) ($   28,392)
                              ============  ============  ============ ============
       Earnings (Loss)
       Per Share              $       .00  $        .00  $        .00  $       .00 

</TABLE>

                             See Accompanying Notes


<PAGE>
               Appalachian Oil & Gas Company, Inc., and Subsidiary
                 Consolidated Statement of Cash Flows (Unaudited)
            For the Six Month Periods Ended December 31, 1997 & 1996
<TABLE>
<CAPTION>
                                                               Six-Month Periods  
                                                               Ended December 31, 
                                                               1997          1996 
                                                        ------------  ------------
<S>                                                     <C>           <C>
Cash Flows from Operating Activities
------------------------------------
  Net Income (Loss)                                     ($   39,192)  ($   43,257)
  Adjustments to Reconcile Net Income (Loss) to 
     Net Cash Provided by Operating Activities:
       Depreciation, Depletion & Amortization                 8,483         8,482 
       Rounding                                         (         1)            0 
  Changes in Operating Assets & Liabilities:
     (Increase) Decrease in Accounts Receivable               8,710        22,575 
     Increase (Decrease) in Accounts Payable            (       338)  (    12,345)
     Increase (Decrease) in Accrued Expenses                    -0-   (     1,500)
                                                        ------------  ------------
       Net Cash Provided by Operating Activities        (    22,338)  (    26,045)
                                                        ------------  ------------
Cash Flows from Investing Activities                            -0-           -0- 
------------------------------------                    ------------  ------------

       Net Cash Used in Operating Activities                    -0-           -0- 

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

       Increase (Decrease) in Cash & 
       Cash Equivalents                                 (    22,338)  (    26,045)

       Cash & Cash Equivalents,
       Beginning of Period                                   36,954       104,123 
                                                        ------------  ------------
       Cash & Cash Equivalents,
       End of Period                                    $    14,616   $    78,078 
                                                        ============  ============
</TABLE>
                             See Accompanying Notes
<PAGE>
                    Appalachian Oil & Gas Company, Inc.
                       Notes 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

/TEXT>