SECURITIES AND EXCHANGE COMMISSION
                    Washington, D.C.  20549

                          FORM 10-QSB

[X]   QUARTERLY REPORT UNDER SECTION 12(g) OF THE
                SECURITIES EXCHANGE ACT OF 1934

     For the quarterly period ended:  September 30, 2004

OR

[  ]  TRANSITION REPORT UNDER SECTION 12(g)
                  OF THE EXCHANGE ACT

For the transition period from __________ to __________

             Commission File No. 33-55254-32

                  CHANCELLOR GROUP, INC.
 __________________________________________________________
  (Exact name of small business issuer as specified in its
                         charter)

Nevada                                   87-0438647
________                                 ____________
(State or other jurisdiction of         (I.R.S. Employer
Incorporation or organization)           Identification  No.)

     1800 E. Sahara, Suite 107, Las Vegas, Nevada  89104
_____________________________________________________________
 (Address of principal executive offices, including zip code)


Issuer's Telephone Number:  (702) 938-0261


______________________________________________________
 (Former name, former address and former fiscal year,
              if changed since last report)


Check whether the Issuer (1) filed all
reports required to be filed by Section 12(g)
of the Exchange Act during the past 12
months (or for such shorter period that the
registrant was required to file such
reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes   X      No
    ____       ____

As of September 30, 2004, 54,890,461 shares of common stock
were outstanding.

Transitional Small Business Disclosure Format:

Yes    X   No
     ____    ____





TABLE OF CONTENTS
Form 10-QSB
3rd Quarter Ended September 30, 2004


Chancellor Group, Inc.

                                                           Page

PART I:  FINANCIAL INFORMATION

            Item 1.

            Consolidated Balance Sheet                       2
            Consolidated Statement Of Operations             3
            Consolidated Statement Of Cash Flows             4
            Notes To Consolidated Financial Statements       5


            Item 2.

            Management's Discussion And
            Analysis Or Plan Of Operation                    8

PART II:  OTHER INFORMATION                                  9


SIGNATURES                                                  10





<PAGE>



              PART I.   FINANCIAL INFORMATION


<PAGE>                              1




ITEM 1.                CHANCELLOR GROUP, INC.
                     CONSOLIDATED BALANCE SHEET
                          SEPTEMBER 30, 2004
                             (UNAUDITED)

                               ASSETS


Total Assets                          $         -
                                    =============


            LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

     Accounts payable                 $    88,828
     Stock subscription payable             1,500
                                     ____________
       Total current liabilities           90,328
                                     ____________
Total Liabilities                          90,328
                                     ____________


Stockholders' equity

     Common stock: $.001 par
       value, 250,000,000 shares
       authorized, 54,890,461
       shares issued
       & outstanding                      54,890
     Preferred Series B stock:
       $1,000 par value,
       250,000 shares authorized,
       none issued and outstanding             -

     Paid in capital                   3,099,302

     Accumulated deficit              (3,244,520)
                                    ____________

Total Stockholders' Equity               (90,328)
                                    ____________
Total Liabilities And
 Stockholders' Equity               $          -
                                    ============

See Notes to Consolidated Financial Statements


<PAGE>	                               2



                         CHANCELLOR GROUP, INC.
                  CONSOLIDATED STATEMENT OF OPERATIONS
                              (UNAUDITED)



                                Three Months Ended        Nine Months Ended
                                   September 30,             September 30,
                                2004          2003        2004          2003
                                ____          ____        ____          ____


Sales                        $       -    $       -    $       -    $       -

Operating expenses               6,840        1,500       18,855       16,802
                             _________    _________    _________    _________
Income (loss) from
 operations                     (6,840)      (1,500)     (18,855)     (16,802)

Other revenues and expenses:
  Gain on debt reversal                     149,609                   149,609

                             _________    _________    _________    _________

Income (loss) before provision
 for income taxes               (6,840)     148,109      (18,855)     132,807

Provision for income tax             -            -            -            -
                             _________    _________    _________    _________

Net income (loss)            $  (6,840)   $ 148,109   $  (18,855)  $  132,807
                             =========    =========    =========    =========

Net income (loss) per share
(Basic and fully diluted)    $(     *)    $(     *)    $(     *)    $(     *)
                             =========    =========    =========    =========

Weighted average number of
common shares outstanding   54,890,461   51,837,461   52,855,128   49,842,483
                            ==========   ==========   ==========   ==========
*less than $.01 per share

See Notes to Consolidated Financial Statements


<PAGE>	  	                            3


                       CHANCELLOR GROUP, INC.
                 CONSOLIDATED STATEMENT OF CASH FLOWS
                             (UNAUDITED)

                                                Nine Months Ended
                                                   September 30,
                                                2004         2003
                                                ____          ____

Cash Flows From Operating Activities:

   Net income (loss)                         $ (18,855)   $  132,807

   Adjustments to reconcile net
   income (loss) to net cash
   provided by (used for)
   operating activities:

       Compensatory stock issuances              5,500           500
       Accounts pay. and accrued expenses          270      (149,609)

                                             _________     _________
         Net cash provided
         by (used for)
         operating activities                  (13,085)      (16,302)
                                             _________     _________


Cash Flows from Financing Activities:

       Stock subscriptions payable              13,085         9,415
       Sales of common stock                                   6,887

                                             _________     _________
         Net cash provided
         by (used for)
         financing activities                   13,085        16,302
                                             _________     _________

Net Increase (Decrease) In Cash                      -             -

Cash At The Beginning Of The Period                  -             -
                                             _________     _________

Cash At The End Of The Period                $       -     $       -
                                             =========     =========

See Notes to Consolidated Financial Statements


<PAGE>                           4

                      CHANCELLOR GROUP, INC.
            Notes to Consolidated Financial Statements
                           (Unaudited)


Note 1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited financial statements have been
prepared in accordance with the instructions to
Form 10-QSB and do not include all of the information and
disclosures required by generally accepted accounting
principles for complete financial statements. All
adjustments which are, in the opinion of management,
necessary for a fair presentation of the results of
operations for the interim periods have been made and are
of a recurring nature unless otherwise disclosed herein.
The results of operations for such interim periods are not
necessarily indicative of operations for a full year.

Principles of consolidation

The accompanying consolidated financial statements include the accounts of
Chancellor Group, Inc., and its wholly owned subsidiaries Radly Petroleum, Inc.
("Radly"), Lichfield Petroleum America, Inc. ("Lichfield"), and Getty
Petroleum, Inc. ("Getty"). These entities are collectively hereinafter
referred to as "the Company". All intercompany accounts and transactions
have been eliminated.

Net income (loss) per share

The net income (loss) per share is computed by dividing the net income (loss)
by the weighted average number of shares of common outstanding. Warrants,
stock options, and common stock issuable upon the conversion of the Company's
preferred stock (if any), are not included in the computation if the effect
would be anti-dilutive and would increase the earnings or decrease loss per
share.

Note 2. Related Party Transactions

In August, 2004 the Chancellor Group, Inc. signed an agreement with a
company controlled by a major shareholder to pay the company overriding
royalty success fees and profit sharing fees for oil and gas projects
brought to Chancellor Group, Inc. by the company.

<PAGE>                           5

                      CHANCELLOR GROUP, INC.
                Supplemental Information (Unaudited)

                    Period Ended September 30, 2004

Capitalized Costs Relating to Oil and Gas
Producing Activities at September 30, 2004
------------------------------------------

Unproved oil and gas properties          $         -
Proved oil and gas properties                      -
Support equipment and facilities                   -
                                         -----------
                                                   -
Less accumulated depreciation,
depletion, amortization, and
impairment                                (        -)
                                         -----------
Net capitalized costs                    $         -
                                         ===========


Costs Incurred in Oil and Gas Producing
Activities for the Period
Ended September 30, 2004
---------------------------------------

Property acquisition costs
     Proved                              $         -
     Unproved                                      -
Exploration costs                                  -
Development costs                                  -


Results of Operations for Oil and Gas Producing
Activities for the Period Ended September 30, 2004
-------------------------------------------------

Oil and gas sales                        $         -
Gain on sale of oil and gas properties             -
Gain on sale of oil and gas leases                 -
Production costs                                   -
Exploration expenses                               -
Depreciation, depletion,
  and amortization                                 -
                                         -----------
                                                   -
Income tax expense                                 -
                                         -----------
Results of operations for oil and gas
  producing activities (excluding
  corporate overhead and financing
  costs)                                 $         -
                                         ===========


Reserve Information

     The following estimates of proved and proved developed reserve
quantities and related standardized measure of discounted net cash flow
are estimates only, and do not purport to reflect realizable values or
fair market values of the Company's reserves. The Company emphasizes that
reserve estimates are inherently imprecise and that estimates of new
discoveries are more imprecise than those of producing oil and gas
properties. Accordingly, these estimates are expected to change as future
information becomes available. All of the Company's reserves are located
in the United States.
     Proved reserves are estimated reserves of crude oil (including
condensate and natural gas liquids) and natural gas that geological and
engineering data demonstrate with reasonable certainty to be recoverable
in future years from known reservoirs under existing economic and operating
conditions. Proved developed reserves are those expected to be recovered
through existing wells, equipment, and operating methods.
     The standardized measure of discounted future net cash flows is
computed by applying year end prices of oil and gas (with consideration of
price changes only to the extent provided by contractual arrangements)
to the estimated future production of proved oil and gas reserves, less
estimated future expenditures (based on year end costs) to be incurred in
developing and producing the proved reserves, less estimated future income
tax expenses (based on year end statutory tax rates, with consideration of
future tax rates already legislated) to be incurred on pretax net cash flows
less tax basis of the properties and available credit, and assuming
continuation of existing economic conditions. The estimated future net cash
flows are then discounted using a rate of 10 percent a year to reflect
the estimated timing of the future cash flows.

<PAGE>                                 6

                        CHANCELLOR GROUP, INC.
           Supplemental Information (Unaudited) - Continued
                      Period Ended September 30, 2004

Reserve Information
-------------------
                                                Oil            Gas
                                               (Bbls)         (Bcf)
                                               ------         ------
Proved developed and undeveloped reserves
     Beginning of period                            -              -
     Revisions of previous estimates                -              -
     Improved recovery                              -              -
     Purchases of minerals in place                 -              -
     Extensions and discoveries                     -              -
     Production                                     -              -
     Sales of minerals in place                     -              -
                                              -------        -------
     End of period                                  -              -
                                              =======        =======
Proved developed reserves
     Beginning of period                            -              -
     End of period                                  -              -

Standardized Measure of Discounted Future
     Net Cash Flows at September 30, 2004

     Future cash inflows                               $
     Future production costs
     Future development costs
     Future income tax expenses
                                                        -------------

     Future net cash flows (10% annual discount for
         estimated timing of cash flows)
                                                        -------------
Standardized measures of discounted future net cash
     flows relating to proved oil and gas reserves      $
                                                        =============

The following reconciles the change in the standardized measure of
discounted future net cash flow during the three months
ended September 30, 2004.

Beginning of period                                     $
Sales of oil and gas produced, net of production costs         (   xx)
Net changes in prices and production costs                     (   xx)
Extensions, discoveries, and improved recovery,
   less related costs                                              xx
Development costs incurred during the period which
   were previously estimated                                       xx
Net change in estimated future development costs                   xx
Revisions of previous quantity estimates                       (   xx)
Net change from purchases and sales of minerals in place       (   xx)
Accretion of discount                                              xx
Net change in income taxes                                     (   xx)
Other                                                          (   xx)
                                                        -------------
End of period                                           $
                                                        =============

<PAGE>                                  7

                       CHANCELLOR GROUP, INC.

ITEM 2.  Management's Discussion and Analysis or Plan of
         Operation

Chancellor Group, Inc. (formerly Nighthawk Capital, Inc.)("Nighthawk",
the "Company", the "Registrant") was organized under the laws of the state
of Utah in 1986 and subsequently reorganized under the laws of Nevada in 1993.
In September, 1997 the Company acquired 100% ownership of Radly Petroleum, Inc.
("Radly"), a Texas corporation, in exchange for approximately 80% of the
Company's outstanding common stock. In July, 1998 the Company acquired 100%
ownership in Lichfield Petroleum America, Inc., ("Lichfield") a Texas
corporation. In October of 2000, the Company acquired 100% ownership of Getty
Petroleum, Inc. ("Getty") in exchange for 4,500,000 shares of restricted
common stock. Chancellor Group,Inc., Getty, Radly, Lichfield, DGS, NGS,
and DRI remain as separate legal entities and and operate as separate legal
entities.

Results of Operations

The Company's new Board of Directors is currently seeking viable opportunities
in the oil and gas business, primarily in the areas of acquisition and
development of producing properties. The Company's activities in the first
nine months of 2004 were limited, resulting in an operating deficit of
$18,855 for normal and recurring expenditures.

<PAGE>	                               	8


PART II.  OTHER INFORMATION


Item 1.	Legal Proceedings

A shareholder derivative action brought against the Company because of
its then CEO, Shane Xavier Gabriel Rodgers resulted in the District Court of
Clark County, Nevada placing the Company into receivership in October, 2001.
The receivership was subsequently lifted and on April 5, 2002 Rodgers was
fired from the Board of Directors for breaching his fiduciary duty and a new,
interim Board appointed until a shareholder meeting is held.

Chancellor Group, Inc. shareholders Lichfield Petroleum, Ltd. and Graham
Energy, Inc. also brought a legal action against Rodgers, Chancellor
Group, Inc. and Chancellor Group Inc.'s wholly owned subsidiary Getty
Petroleum, Inc. in Texas, which was subsequently settled in 2002 with no
adverse effects on the Company.


Item 2.	Changes in Securities - None

Item 3.	Defaults Upon Senior Securities - None

Item 4.	Submission of Matters To A Vote of Securities Holders - None

Item 5.	Other Information - None

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

Item 7.     Controls and Procedures

(a) Evaluation of disclosure controls and procedures.
Robert Gordon, who serves as the Company's Chief Executive Officer, after
evaluating the effectiveness of the Company's disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14(c) and 15d-14(c) as of
a date within 90 days of the filing date of the quarterly report (the
"Evaluation Date") concluded that as of the Evaluation Date, the Company's
disclosure controls and procedures were adequate and effective to ensure
that material information relating to the Company and its consolidated
subsidiaries would be made known to them by individuals within those
entities, particularly during the period in which this quarterly report was
being prepared.

(b) Changes in internal controls.
There were no significant changes in the Company's internal controls or in
other factors that could significantly affect the Company's disclosure
controls and procedures subsequent to the Evaluation Date, nor any
significant deficiencies or material weaknesses in such disclosure controls
and procedures requiring corrective actions. As a result, no corrective
actions were taken.


<PAGE>                                 9


                         SIGNATURES

Pursuant to the requirements of Section 12(g) the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized,
on November 8, 2004.

CHANCELLOR GROUP, INC.

By: /s/Robert Gordon
Robert Gordon
Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant in the capacities indicated, on November 8, 2004.

Director:
/s/Robert Gordon
Robert Gordon

Director:
/s/John C.Y. Lee
John C.Y. Lee

Director:
/s/Dudley Muth
Dudley Muth



<PAGE>                                  10


EX-31.1   CERTIFICATIONS OF CEO AND CFO PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

Exhibit 31.1

                               CERTIFICATIONS


I, Robert Gordon, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Chancellor
Group,Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under my supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to me by others within those entities, particularly
during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report my conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent fiscal
quarter (the registrant's fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.

Date: November 8, 2004

/s/Robert Gordon
Robert Gordon
Chief Financial Officer &
Chief Executive Officer


<PAGE>                                  11



EX-32  CERTIFICATIONS OF CEO AND CFO PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT

Exhibit 32

                     CERTIFICATION PURSUANT TO
           SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
                     (18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of Chancellor Group, Inc., a Nevada
corporation (the "Company"), on Form 10-QSB for the Quarter ending June 30,
2004, as filed with the Securities and Exchange Commission (the "Report"),
Robert Gordon, Chief Executive Officer and Chief Financial Officer of the
Company, does hereby certify, pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (18 U.S.C. Section 1350), that to his knowledge:

1) The Report fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.


Date: November 8, 2004

/s/Robert Gordon
Robert Gordon
Chief Financial Officer &
Chief Executive Officer


[A signed original of this written statement required by Section 906 has been
provided Chancellor Group, Inc. and will be retained by Chancellor Group, Inc.
and furnished to the Securities and Exchange Commission or its staff upon
request.]


<PAGE>                                  12