FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

[ X ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 1998
                               --------------

                                       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: 0-7261


                           CHAPARRAL RESOURCES, INC.
                           -------------------------
             (Exact name of registrant as specified in its charter)


           Colorado                                    84-0630863
------------------------------               -----------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)


                            2211 Norfolk, Suite 1150
                              Houston, Texas 77098
                     --------------------------------------
                    (Address of principal executive offices)


       Registrant's telephone number, including area code: (713) 807-7100


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 and,  (2) has been subject to such filing  requirements
for the past 90 days.

                             YES   [ x ]     NO   [   ]

     As of May 15, 1998, Registrant had 51,215,456 shares of its $0.10 par value
common stock issued and outstanding.


<PAGE>




                   Part I - Summarized Financial Information

Item 1 - Financial Statements


                           Chaparral Resources, Inc.
                          Consolidated Balance Sheets
                                  (Unaudited)


                                                   March 31,       December 31,
                                                     1998              1997
                                                 ------------     --------------
Assets
Current assets:
  Cash and cash equivalents                      $    593,000      $  3,423,000
  Accounts receivable:
   Other                                               34,000           102,000
  Prepaid expenses                                     63,000            62,000
                                                 ------------      ------------
Total current assets                                  690,000         3,587,000

Oil and gas properties and investments
   - full cost method Republic of
   Kazakhstan (Karakuduk Field)
   not subject to depletion:                       22,544,000        19,922,000
Furniture, fixtures and equipment                      59,000            13,000
Less accumulated depreciation                          (5,000)           (3,000)
                                                 ------------      ------------
                                                       54,000            10,000
                                                 ------------      ------------
Total assets                                     $ 23,288,000      $ 23,519,000
                                                 ============      ============


See accompanying notes to financial statements


                                      -2-


<PAGE>
<TABLE>
<CAPTION>

                                   Chaparral Resources, Inc.
                            Consolidated Balance Sheets (continued)
                                          (Unaudited)

                                                          March 31,     December 31,
                                                            1998            1997
                                                        ------------    ------------
<S>                                                    <C>                <C>   
Liabilities and stockholders' equity
Current liabilities:
  Accounts payable:
    Trade                                               $    247,000    $    177,000
  Accrued liabilities                                        152,000          54,000
                                                        ------------    ------------
Total current liabilities                                    399,000         231,000

Long-term obligations:
  Accrued  compensation                                      210,000         210,000
Redeemable  preferred  stock
  - cumulative, convertible:
    Series A, 50,000 shares issued
     and outstanding, at stated value,
     includes $5.00 cumulative annual
     dividend, less $500,000 cost of
     issuance, $5,000,000 redemption value                 4,525,000       4,500,000
Stockholders' equity:
  Common stock authorized, 100,000,000 shares
     at March 31, 1998 and December 31, 1997, of
     $.10 par value; issued and outstanding,
     49,965,456 and 49,720,456 shares a
     March 31, 1998 and December 31, 1997,
     respectively                                          4,996,000       4,971,000
  Capital in excess of par value                          30,988,000      30,340,000
   Unearned portion of restricted stock awards              (169,000)       (109,000
   Stock subscription receivable                          (1,770,000)     (1,770,000)
   Accumulated Deficit                                   (15,891,000)    (14,854,000)
                                                        ------------    ------------
Total stockholders' equity                                18,154,000      18,578,000
                                                        ------------    ------------
Total liabilities and stockholders'equity                $23,288,000    $ 23,519,000
                                                        ============    ============


 See accompanying notes to financial statements

                                                -3-

</TABLE>


<PAGE>

                          Chaparral Resources, Inc.
                      Consolidated Statements of Operations
                                  (Unaudited)


                                                  For the Three Months Ended 
                                                  March 31,          March 31, 
                                                    1998               1997
                                                 -----------        -----------
Revenue:
  Oil and gas sales                              $      --          $      --
Costs and expenses:
  Depreciation and depletion                           2,000               --
  General and administrative                         880,000            220,000
                                                 -----------        -----------
                                                     882,000            220,000
                                                 -----------        -----------

Loss from operations                                (882,000)          (220,000)
  Other income (expense):
  Interest income                                    202,000             73,000
  Interest expense                                      --              (70,000)
  Equity in loss from investment                    (332,000)          (174,000)
                                                 -----------        -----------
                                                    (130,000)          (171,000)
                                                 -----------        -----------
Loss before extraordinary item                    (1,012,000)          (391,000)
Extraordinary loss on sale of
 domestic oil & gas properties                          --              (36,000)
                                                 -----------        -----------
Net loss                                         $(1,012,000)       $  (427,000)
                                                 ===========        ===========


Basic and Diluted Earnings per Share:
Net loss per share before extraordinary item     $     (.020)       $     (.010)
Extraordinary loss per share                     $      --          $     (.001)
Net loss per share~                              $     (.020)       $     (.011)
Weighted average number of shares
  outstanding                                     49,900,845         37,709,449




See accompanying notes to financial statements


                                      -4-


<PAGE>
<TABLE>
<CAPTION>
                                        Chaparral Resources, Inc.
                                  Consolidated Statements of Cash Flows
                                                  (Unaudited)


                                                            For the Three Months Ended
                                                         March 31,                March 31,
                                                            1998                    1997
                                                        -----------              ----------
<S>                                                    <C>                       <C>    
Cash flows from operating activities
Net loss                                                $(1,012,000)             $  (427,000)
Adjustments to reconcile net loss to
 net cash used in operating activities:
   Depreciation and depletion                                 2,000                     --
   Stock issued for services and bonuses                    614,000                     --   
   Changes in assets and liabilities:
     Accounts receivable                                    (22,000)                (272,000)
     Prepaid expenses                                        (1,000)                (123,000)
     Other                                                     --                    306,000
     Accounts payable & Accrued Liabilities                 167,000                  123,000
                                                        -----------              -----------
 Net cash used in operating activities                     (252,000)                (393,000)
 Cash flows from investing activities
 Additions to property  and  equipment                      (45,000)                    --   
 Investment  in and advances to
   foreign oil and gas properties                        (2,533,000)                (131,000)
                                                        -----------              -----------
 Net cash used in investing activities                   (2,578,000)                (131,000)
 Cash flows from financing activities
 Proceeds from sale of stock                                   --                     90,000
                                                        -----------              -----------
 Net cash provided by financing activities                     --                     90,000
                                                        -----------              -----------

 Net decrease in cash and cash equivalents               (2,830,000)                (434,000)
 Cash and cash equivalents at beginning
   of period                                              3,423,000                  651,000
                                                        -----------              -----------
 Cash and cash equivalents at end of period             $   593,000              $   217,000
                                                        ===========              ===========



See accompanying notes to financial statements


                                                 -5-

</TABLE>

<PAGE>

                           Chaparral Resources, Inc.
                   Notes to Consolidated Financial Statements
                                  (Unaudited)

1.  General

     Management  has elected to omit  substantially  all notes to the  Company's
financial  statements.  Reference  should be made to the notes to the  financial
statements in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.

2.  Unaudited Information

     The  information  furnished  herein was taken from the books and records of
the Company without audit.  However,  such information reflects all adjustments,
which are, in the opinion of  management,  necessary to a fair  statement of the
results for the interim  period  presented.  The results of  operations  for the
interim period are not necessarily  indicative of the results to be expected for
the year.

3. Going Concern

     The Company's financial statements have been presented on the basis that it
is a going  concern,  which  contemplates  the  realization  of  assets  and the
satisfaction  of liabilities  in the normal course of business.  As of March 31,
1998,  substantially all of the Company's assets are invested in the development
of the Karakuduk  Field,  a shut-in oil field in the central  Asian  Republic of
Kazakhstan, which will require significant additional funding.

     The Company has incurred  recurring  operating  losses and has no operating
assets presently generating cash to fund its operating and capital requirements.
The Company's  current cash reserves and cash flow from  operations  will not be
sufficient to meet the capital  spending  requirements  to develop the Karakuduk
Field through fiscal 1998. Should the Company not meet its capital requirements,
the  Company's  rights to the  Karakuduk  Field can be  terminated.  The Company
believes  that  additional  financing  will be available;  however,  there is no
assurance that additional financing will be available, or if available,  that it
will be timely or on terms  favorable to the Company.  The  Company's  continued
existence as a going concern is dependent upon the success of future operations,
which  are,  in the  near  term,  dependent  on  the  successful  financing  and
development of the Karakuduk Field, of which there is no assurance.

     These conditions  raise  substantial  doubt about the Company's  ability to
continue  as a going  concern.  The  financial  statements  do not  include  any
adjustments  to reflect the possible  future effects on the  recoverability  and
classification  of assets or the amounts and  classification of liabilities that
may result from the outcome of this uncertainty.

4.  Equity Based Compensation

     On January 23, 1998, the Company ratified the grants of options to purchase
257,000  shares of the  Company's  Common  Stock to  various  employees  of, and
consultants  to, the Company,  granted  options to purchase 82,500 shares of the
Company's Common Stock to various employees of, and consultants to, the Company,
granted  90,000  shares of the  Company's  Common Stock to the  directors of the
Company and granted  185,000  shares of the  Company's  Common  Stock to various
employees of, and consultants to, the Company,  of which 30,000 shares will vest
with respect to 10,000  shares on each of January 30, 1999,  2000,  and 2001. On
February 26, 1998,  the Company  granted an option to purchase  10,000 shares of
the Company's Common Stock to a consultant to the Company.

                                      -6-


<PAGE>


                           Chaparral Resources, Inc.
             Notes to Consolidated Financial Statements (continued)
                                  (Unaudited)

5. Redeemable Preferred Stock and Related Common Stock Warrants

     On  November  24,  1997,  the  Company  executed a  Subscription  Agreement
("Agreement") with an unaffiliated  investor for 225,000 shares of three classes
of Redeemable $5.00 Cumulative  Convertible Preferred Stock ("Preferred Stock").
The investor agreed to purchase 75,000 shares of each of the Company's Series A,
B and C Preferred Stock.  Pursuant to the Agreement,  the Company initially sold
to the investor 50,000 shares of the Company's  Series A Preferred Stock, no par
value, for a purchase price of $100.00 per share, equal to the redemption value,
or an aggregate  purchase  price of  $5,000,000.  The number of shares of Common
Stock  issuable  upon  conversion  of each share of Series A Preferred  Stock is
determined  by dividing  $100 by the  conversion  price of $2.25 per share.  The
Company is not  required to establish a sinking  fund,  however,  the  Preferred
Stock  dividends in arrears must be paid before  dividends can be paid on Common
Stock.  The basis  difference  representing  issuance  costs is being  amortized
directly to additional  paid-in-capital  for the period  through the  redemption
date.

     The Series A Preferred Stock has scheduled  redemptions  beginning November
30, 2002.

     The five-year aggregate redemption amounts are as follows:

                        1998                   --
                        1999                   --
                        2000                   --
                        2001                   --
                        2002              $5,000,000
                                          ----------

                       Total              $5,000,000
                                          ==========

     Allen & Company Incorporated (Allen & Company),  a significant  shareholder
of the Company, acted as placement agent in connection with the subscription for
the Series A Preferred  Stock,  Series B Preferred  Stock and Series C Preferred
Stock pursuant to the Agreement.  Allen & Company elected to receive its fees in
the form of warrants to purchase  900,000  shares of the Company's  Common Stock
that were all originally  exercisable  through November 25, 2002, at an exercise
price of $.01 per share.

     In March  1998,  prior  to the  receipt  of the  funds  for any  additional
purchases  the  investor  was to make under the  Agreement,  the Company and the
investor  mutually  released each other from any further  obligations  under the
Agreement. The investor retained the initial 50,000 shares of Series A Preferred
Stock. The Company is not required to issue any additional Preferred Stock under
the Agreement  and the investor has no other  obligation to provide funds to the
Company in exchange for such stock.

     In an agreement dated March 31, 1998, the Company has agreed to allow Allen
& Company to retain,  subject to certain performance  criteria,  the warrants to
purchase 700,000 shares (presented as a $1,770,000 stock subscription receivable
in equity) of the Company's Common Stock related to the $17,500,000 subscription
not received under the original terms of the Agreement. The unearned warrants to
purchase  700,000  shares of the Company's  Common Stock held by Allen & Company
are fully restricted from exercise unless Allen & Company assists the Company in
raising  additional  capital for the Company that is acceptable to the Company's
Board of Directors.  For each $25 of  additional  capital  raised,  a warrant to
purchase  one share of Common  Stock  will be deemed to be  earned.  If,  before
November  25, 1999,  Allen & Company  fails to assist the Company in raising the
additional  capital for the Company under terms  acceptable to the Company,  the
unearned portion of the warrants will expire.


                                      -7-


<PAGE>




                           Chaparral Resources, Inc.
             Notes to Consolidated Financial Statements (continued)
                                  (Unaudited)



6.  Subsequent Events

     Effective  on April 3,  1998,  the  Company  sold  1,250,000  shares of the
Company's  Common  Stock for $2.00  per  share for at total of  $2,500,000  to a
private  investor.  Allen & Company,  Incorporated  acted as placement  agent in
connection with the sale of the 1,250,000 shares. As a result,  Allen & Company,
Incorporated's  warrants  to purchase  900,000  shares of the  Company's  Common
Stock,  originally  issued as commission in connection  with the Preferred Stock
sale on November 24, 1997, became  exercisable for an additional  100,000 shares
of the Company's Common Stock.  The warrants to purchase the additional  100,000
shares of the Company's Common Stock are exercisable  through November 25, 2002,
at an  exercise  price of $0.01 per share.  Of the total  warrants  to  purchase
900,000  shares  of Common  Stock  issued to Allen &  Company,  Incorporated  on
November 24, 1997,  warrants to purchase  300,000 shares of the Company's Common
Stock are currently exercisable.

     On April 15, 1998, the Company granted options to purchase 45,000 shares of
the Company's Common Stock to an employee of, and a consultant to, the Company.



                                      -8-


<PAGE>





                              Karakuduk-Munay Inc
                 Statement of Expenses and Accumulated Deficit
           For the Three Month Periods Ended March 31, 1998 and 1997
                            (Amounts in US Dollars)
                                  (Unaudited)

                                                        March 31,      March 31,
                                                          1998           1997
                                                       ----------     ----------

Management Service Fee                                 $  120,000     $   90,000
General and Administrative Expenses                       363,000        189,000
Interest Expense                                          181,000         70,000
                                                       ----------     ----------

Net Loss                                                  664,000        349,000

Accumulated deficit, beginning of period                4,016,000      2,351,000
                                                       ----------     ----------


Accumulated deficit, end of period                     $4,680,000     $2,700,000
                                                       ==========     ==========





                                      -9-
<PAGE>





Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations


1.  Liquidity and Capital Resources

     Prior to 1997, the Company's primary source of capital was from oil and gas
sales  from  domestic  properties.  All  domestic  properties  have been sold or
otherwise disposed. The only oil and gas interest of the Company at this time is
as a result of the Company's  investment in Karakuduk-Munay,  Inc. (KKM) through
Central Asian Petroleum  (Guernsey) (CAP-G). KKM is a closed joint stock company
in Kazakhstan.

     The  Company  has  previously  raised  capital  to finance a portion of its
obligations in connection  with the acquisition of its interest in CAP-G and the
development of the Karakuduk  Field and to satisfy  working capital needs in the
short term.  Since January 1, 1998,  the Company raised  $2,500,000  through the
sale of Common Stock, The Company may seek to obtain additional  capital through
debt or equity  offerings,  encumbering  properties,  entering into arrangements
whereby certain costs of development  will be paid by others to earn an interest
in the  properties,  or sale  of a  portion  of the  Company's  interest  in the
Karakuduk  Field.  The present  environment for financing the acquisition of oil
and gas  properties  or the ongoing  obligations  of the oil and gas business is
uncertain  due, in part, to  instability in oil and gas pricing in recent years.
The  Company's  small size and the early stage of  development  of the Karakuduk
Field may also  increase the  difficulty  in raising any  financing  that may be
needed  in the  future.  There  can be no  assurance  that  the  debt or  equity
financing  that  might  be  required  to  fund  the  Company's   operations  and
obligations  in the future  will be  available  to the  Company on  economically
acceptable terms if at all.

     The Company's financial statements have been presented on the basis
that it is a going concern, which contemplates the realization of assets and the
satisfaction  of liabilities  in the normal course of business.  The Company has
incurred  recurring  operating  losses  and has no  operating  assets  presently
generating sufficient cash to fund its operating and capital  requirements.  The
Company does not  anticipate  that its current cash  reserves and cash flow from
operations  will be sufficient to meet its capital  requirements  through fiscal
1998.

     As of  March  31,  1998,  substantially  all of the  Company's  assets  are
invested in the development of the Karakuduk Field. Since the Karakuduk Field is
in the early  stage of  development,  the  Karakuduk  Field  does not  currently
produce  revenues  sufficient to meet its cash outflow needs. The development of
the Karakuduk Field, through KKM, will require substantial amounts of additional
capital.  The  terms of the KKM  revised  license  require  a work plan from the
commencement of operations  through December 31, 1997, of at least  $10,000,000,
which has been  satisfied.  Additional  requirements  of $34.5  million  and $12
million  exist for the years ending  December  31, 1998 and 1999,  respectively.
Without  additional  funding and  significant  revenues from oil sales, of which
there are no  assurances,  the  Company  will not be able to provide  sufficient
funds to satisfy these  requirements and the Company's interest in the Karakuduk
Field may be lost.

     The Company received an extension to June 30, 1998, from the Overseas
Private Investment Corp. ("OPIC") for political risk insurance. OPIC granted the
Company a binding  executed  letter of  commitment  on September  25, 1996.  The
Company has a standby  facility for which it has made seven payments of $31,250.
The Company expects to execute the contract on or before June 30, 1998.

     The Company has no other material  commitments  for cash outlay and capital
expenditures other than for normal operations.



                                      -10-


<PAGE>



2.  Results of Operations

     The Company changed to a December 31 year end from the previous November 30
year end,  effective in the second  quarter of 1997. As a result of this change,
quarterly data is as of March 31 for 1998 and as of March 31 for 1997.

     In 1996, the Company accounted for its investment in KKM using pro rata
consolidation.  In 1997,  the Company  changed to the equity  method in order to
reflect  the  legal  ownership  right  of the  other  shareholders  in KKM.  The
consolidated  financial statements for the quarter ended March 31, 1997 reported
herein have been reclassified to reflect the equity method.  There was no impact
on previously reported earnings.

Three Months Ended March 31, 1998 Compared with the Three Months Ended March 31,
1997 

     The  Company's  operations  during the three  months  ended March 31, 1998,
resulted in a net loss of $1,012,000  compared to a net loss of $427,000 for the
three months ended March 31, 1997.  The increase in net loss is primarily due to
$614,000 in stock based compensation paid to officers, directors, employees, and
consultants to the Company and KKM.

     Interest income increased by $129,000 from the three months ended March 31,
1997, due to increased  financing of 100% of KKM's operations in Kazakhstan.  As
of December 31, 1997, the Company held a 50% equity interest in KKM.

     General and  administrative  costs  increased  by  $660,000  from the three
months  ended  March  31,  1997,  primarily  due  to  $614,000  in  stock  based
compensation awarded to officers,  directors,  employees, and consultants to the
Company  and KKM.  Without  consideration  of the stock  based  compensation,  a
non-cash item, general and administrative  costs increased by $46,000 due to the
Company's  management  of  expanding  workover  and  exploration  operations  in
Kazakhstan.  Accordingly, the Company's equity loss in KKM increased by $158,000
from the three months ended March 31, 1997, due to increased  operational  costs
directly related to development of oil and gas properties held by KKM.

     Interest expense decreased by $70,000 from the three months ended March 31,
1997, due to the retirement of all  interest-bearing  obligations of the Company
during 1997. The Company did not have any other debt obligations  outstanding as
of March 31, 1998.

     The Company  recognized  a $36,000  extraordinary  loss in the three months
ended March 31, 1997 from the disposition of the Company's domestic  properties.
No  extraordinary  items were  recognized by the Company during the three months
ended March 31, 1998.

3.  Quantitative and Qualitative Disclosures About Market Risks

     Not Applicable.




                                      -11-

<PAGE>




                          Part II - Other Information

Item 1 - Changes in Securities 

     On January 23, 1998, the Company ratified the grants of options to purchase
257,000  shares of the  Company's  Common  Stock to  various  employees  of, and
consultants  to, the Company,  granted  options to purchase 82,500 shares of the
Company's Common Stock to various employees of, and consultants to, the Company,
granted  90,000  shares of the  Company's  Common Stock to the  directors of the
Company and granted  185,000  shares of the  Company's  Common  Stock to various
employees of, and consultants to, the Company,  of which 30,000 shares will vest
with respect to 10,000 shares on each of January 30, 1999,  2000,  and 2001. The
Company made the grants in reliance upon the exemption from  registration  under
Section  4(2) of the  Securities  Act.  Such  persons had  available to them all
material   information   concerning  the  Company.  The  options  have  and  the
certificates  evidencing the shares  underlying the options and representing the
shares granted bear an appropriate  restrictive legend under the Securities Act.
No underwriter was involved in the transaction.

     On February 26, 1998, the Company granted options to purchase 10,000 shares
of the Company's  Common Stock to a consultant to the Company.  The Company made
the grants in reliance upon the exemption from  registration  under Section 4(2)
of the Securities Act. Such person had available to him all material information
concerning  the  Company.  The option has and the  certificates  evidencing  the
shares  underlying  the  option and  representing  the  shares  granted  bear an
appropriate  restrictive  legend under the Securities  Act. No  underwriter  was
involved in the transaction.

Item 2 - Exhibits  and Reports on Form 8-K

(a)  Exhibits

     27    Financial Data Schedule

(b)  Reports on Form 8-K

     On March 18, 1998, the Company filed a current report on Form 8-K reporting
     under Item 5 thereof the  termination  of the  Subscription  Agreement  for
     shares of the Company's Series A, B, and C Preferred Stock and filing under
     Item 7 a copy of the Termination Agreement.


                                      -12-


<PAGE>





                                   Signatures

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  duly has  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


Dated:   May 19, 1997



                              Chaparral Resources, Inc.,
                              a Colorado corporation



                              By:      /s/  Howard Karren
                                       -----------------------------------------
                                       Howard Karren
                                       President and Chief Executive Officer



                              By:      /s/  Arlo G. Sorensen
                                       -----------------------------------------
                                       Arlo G. Sorensen, Chief Financial Officer
                                       And Principal Accounting Officer



                                      -13-
<PAGE>



                                 Exhibit Index

27       Financial Data Schedule








                                      -14-