SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


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

For the quarterly period ended September 30, 1997

[   ]    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)

                        3400 Bissonnet Street, Suite 135
                              Houston, Texas 77005
                     --------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (713) 669-0932
               --------------------------------------------------
              (Registrant's telephone number, including area code)


     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 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 November 5, 1997, the  Registrant had 44,470,731  shares of its $0.10
par value common stock issued and outstanding.


<PAGE>
<TABLE>
<CAPTION>



                                 PART I--SUMMARIZED FINANCIAL INFORMATION
                                         CHAPARRAL RESOURCES, INC.
                                        Consolidated Balance Sheets


                                                           September 30,                November 30,
                                                           1997 (unaudited)                 1996
                                                           ----------------             ------------

<S>                                                          <C>                       <C>
ASSETS
------
CURRENT ASSETS
  Cash and cash equivalents                                   $     94,000              $    800,000
  Accounts receivable
    Joint interest participants                                       --                       8,000
    Oil and gas purchasers                                            --                      53,000
  Prepaid expenses                                                 140,000                    40,000
  Oil and gas properties under agreement for sale                     --                     306,000
                                                              ------------              ------------
    Total current assets                                           234,000                 1,207,000


PROPERTY AND EQUIPMENT - AT COST
  Oil and Gas Properties - full cost:
  Republic of Kazakhstan (Karakuduk Field) not
    subject to depletion                                        12,692,000                11,189,000
                                                              ------------              ------------
                                                                12,692,000                11,189,000

  Furniture, fixtures and equipment                                275,000                   441,000
  Less accumulated depreciation                                     17,000                   198,000
                                                              ------------              ------------
                                                                   258,000                   234,000
                                                              ------------              ------------

                                                                12,950,000                11,432,000
OTHER ASSETS
  Cash value of insurance and annuities                               --                       8,000
  Due from Karakuduk-Munay, Inc.                                 3,174,000                 2,012,000
  Equipment inventory                                                 --                      27,000
  Other                                                            130,000                    74,000
                                                              ------------              ------------
                                                                 3,304,000                 2,121,000
                                                              ------------              ------------
                                                              $ 16,488,000              $ 14,760,000
                                                              ------------              ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
  Accounts payable
    Trade                                                     $    665,000              $    278,000
    Joint interest participants - revenue                             --                      42,000
  Accrued liabilities                                               21,000                    91,000
  Accounts payable CAP-G shares                                    444,000                   744,000
                                                              ------------              ------------
    Total current liabilities                                    1,130,000                 1,155,000
                                                              ------------              ------------
LONG TERM OBLIGATIONS
  Notes payable (including $1,100,000 to related party)          1,240,000                 1,106,000
  Accrued compensation                                             412,000                   385,000
                                                              ------------              ------------
                                                                 1,652,000                 1,491,000
STOCKHOLDERS' EQUITY
  Common stock - authorized, 100,000,000 shares of
    $0.10 par value, issued and outstanding; 42,392,965          4,239,000                 3,753,000
    and 37,526,517 shares at September 30, 1997 and
    November 30, 1996, respectively
  Capital in excess of par value                                23,070,000                20,482,000

  Preferred  stock - authorized, 1,000,000 shares
    as of September 30, 1997 and November 30, 1996
   (no shares issued or outstanding)

  Retained earnings (deficit)                                  (13,603,000)              (12.121,000)
                                                              ------------              ------------
  Total shareholders' equity                                    13,706,000                12,114,000
                                                              ------------              ------------
    Total liabilities and stockholders' equity                $ 16,488,000              $ 14,760,000
                                                              ------------              ------------


                         See accompanying notes to financial statements.

                                                2
</TABLE>

<PAGE>
<TABLE>
<CAPTION>



                                            CHAPARRAL RESOURCES, INC.
                                     Consolidated Statements of Operations
                                                   (Unaudited)



                                                   For the Three Months Ended        For the Nine Months Ended
                                                   --------------------------        -------------------------
                                                  September         August 31,     September 30,      August 31,
                                                     1997              1996           1997               1996
                                                     ----              ----           ----               ----

<S>                                             <C>              <C>              <C>              <C>    
Revenue:

  Oil and gas sales                              $       --       $     35,000     $     52,000     $    116,000
                                                 ------------     ------------     ------------     ------------
Cost and expenses:
  Production costs                                       --             17,000           18,000           25,000
  Loss on sale of domestic oil and gas                   --               --             36,000             --
    properties
  Depreciation and depletion                            7,000           41,000            8,000           80,000
  General and administrative                          474,000          339,000        1,424,000          688,000
                                                 ------------     ------------     ------------     ------------
                                                      481,000          397,000        1,486,000          793,000
                                                 ------------     ------------     ------------     ------------
(Loss) from operations                               (481,000)        (362,000)      (1,434,000)        (677,000)
Other income (expenses):
  Interest income                                      58,000            9,000          142,000           11,000
  Interest expense                                    (59,000)            --           (189,000)         (28,000)
  Other, net                                             --             21,000           (1,000)          22,000
                                                 ------------     ------------     ------------     ------------
                                                       (1,000)          30,000          (48,000)           5,000
                                                 ------------     ------------     ------------     ------------
  Net (loss)                                     $   (482,000)    $   (332,000)    $ (1,482,000)    $   (672,000)
                                                 ------------     ------------     ------------     ------------
Earnings (loss) per common share                 $     (0.011)    $     (0.009)    $     (0.037)    $     (0.022)
                                                 ============     ============     ============     ============
Average number of outstanding shares               42,508,350       37,409,850       39,608,833       30,277,448
                                                 ------------     ------------     ------------     ------------


                                  See accompanying notes to financial statements 

                                                     3
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<PAGE>
<TABLE>
<CAPTION>



                               CHAPARRAL RESOURCES, INC.
                         Consolidated Statements of Cash Flows
                                     (Unaudited)


                                                           For the Nine Months Ended
                                                       --------------------------------
                                                       September 30,         August 31,
                                                           1997                 1996
                                                           ----                 ----
<S>                                                    <C>                <C>    
Cash flows from operating activities:
  Net (loss)                                            $(1,482,000)       $  (672,000)
  Adjustments to reconcile net (loss) to net
   cash used by operating activities:
    Depreciation and depletion                                8,000             80,000
    Amortization of note discount                            99,000               --
    Loss on the sale of domestic oil and gas
     property                                                33,000               --
    Changes in assets and liabilities:
      (increase) in:
        Accounts receivable                                  10,000             18,000
        Notes receivable                                                       (35,000)
        Prepaid expenses                                   (100,000)             2,000
        Other assets                                        (28,000)          (650,000)
        Equipment inventory                                                      3,000
      Increase (decrease) in:
        Accounts payable                                    389,000          1,611,000
         Accrued liabilities                                 51,000            (26,000)
                                                        -----------        -----------
   Net cash (used in) operating activities               (1,020,000)           331,000

Cash flows from investing activities:
  Additions to property and equipment                       (23,000)            56,000
  Investment in foreign oil and gas properties                 --           (3,855,000)
  Additions to Republic of Kazakhstan (Karakuduk
   Field) not subject to depletion                       (1,487,000)        (3,195,000)
  Advances to Karakuduk-Munay, Inc.                      (1,162,000)              --
  Increase (decrease) in minority interest                                      50,000
  Proceeds from sale of interest in oil & gas
   properties                                               273,000             19,000
                                                        -----------        -----------
   Net cash provided from (used in) investing
    activities                                           (2,399,000)        (6,925,000)

Cash flows from financing activities:
  Payment of Note                                          (600,000)          (750,000)
  Proceeds from notes payable                               100,000               --
  Proceeds from sale of stock                             3,074,000          7,552,000
                                                        -----------        -----------
    Net cash provided by financing activities             2,574,000          6,802,000
                                                        -----------        -----------
    Net (decrease) in cash and cash equivalents            (845,000)           208,000
Cash and cash equivalents at beginning of period            939,000            501,000
                                                        -----------        -----------
Cash and cash equivalents at end of 2nd quarter         $    94,000        $ 2,357,000
                                                        -----------        -----------

                   See accompanying notes to financial statements.

                                        4
</TABLE>

<PAGE>



                            CHAPARRAL RESOURCES, INC.

Notes to Consolidated Financial Information

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
November 30, 1996.

(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
(consisting only of normal recurring  adjustments)  which are, in the opinion of
management, necessary to a fair statement of the results for the interim periods
presented. The results of operations for the interim periods are not necessarily
indicative of the results to be expected for the year.

     The  November  30,  1996  balance  sheet data is derived  from the  audited
financial  statements but does not include all disclosures required by generally
accepted accounting principles.

(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.  The Company has
over 80% of its assets invested in entities that are pursuing 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's  current cash reserves and cash flow from operations will not
be sufficient to meet the Company's  capital  requirements  through fiscal 1997.
While  the  Company  believes  that  additional  funds  will be  available  from
additional  financing,  there  can be no  assurance  that such will be the case.
There is also no assurance  that  additional  financing,  if  available,  can be
obtained on terms favorable or affordable to the Company.

     The Company's continued existence as a going concern in its present form is
dependent  upon the  success of future  operations,  which is, in the near term,
dependent on the successful financing and development of the Karakuduk field, of
which there is no assurance.


                                        5

<PAGE>



                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                                       OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


(1)  Liquidity and Capital Resources

     Previously,  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 Limited  (CAP-G).  KKM is a closed joint stock
company in Kazakhstan.

     Due  to  the  timing  of the  final  payment  of  $443,750  related  to the
acquisition of an interest in CAP-G,  current  liabilities of $1,130,000  exceed
the current  assets of $234,000 at September  30,  1997,  resulting in a current
ratio of 0.21 to 1. Without the purchase payment  obligation,  the current ratio
would be 0.33 to 1. An  extension  of the due date for the final  payment on the
acquisition  of this  interest and the terms of the option for the remaining 10%
interest in CAP-G are currently  being  negotiated.  The Company now owns 90% of
CAP-G,  providing  a 45%  beneficial  interest  in  the  Karakuduk  field.  Upon
exercising the option,  the Company will have a 50%  beneficial  interest in the
Karakuduk  field.  The other 50% is owned by Kazak Oil, the Kazakhstan  national
oil company, and a private Kazakhstan joint stock company.

     Since the Karakuduk field is in the early stage of  development,  the 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. Of this amount, approximately $7,000,000 has been expended to
date and the Company's remaining share through December 31, 1997 is estimated at
$3,000,000. The license, which was amended by the authority of the government of
Kazakhstan,  originally  required  that the work plan be completed by August 31,
1997.  It is  anticipated  that the Company  will either have spent or will have
committed to the required  expenditures  by this date.  Additional  requirements
exist for the year ending December 31, 1998.

     KKM was  re-registered  on July 24, 1997 with the government of Kazakhstan.
The re-  registration was required as a result of new legislation in Kazakhstan.
The Company  believes that KKM is now in compliance with all Kazakhstan laws and
regulations related to the registration requirements relating to legal entities.
The  re-registered  KKM  includes  newly  established  Kazak Oil,  the  national
petroleum  company which holds the majority of the interest of the government of
Kazakhstan in KKM.


                                        6

<PAGE>



     The Company  received an  extension  to December 31, 1997 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. It was to
expire on June 30,  1997.  The Company has a standby  facility  for which it has
made five  previous  payments  of $31,250.  The  Company  expects to execute the
contract in the fourth quarter of 1997.

     The Company has 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. The
amount  raised  since July 1, 1997,  was  approximately  $350,000  in short term
loans,  $450,000  from an expired  option,  $300,000  through the sale of common
stock and $1,499,999.80  through the partial exercise of a warrant.  The Company
plans to meet its  additional  capital needs  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
early  stage  of  development  of the  Karakuduk  field  may also  increase  the
difficulty in raising needed  financing.  There can be no assurance that debt or
equity  financing  anticipated to be necessary to continue to fund the Company's
operations  and  obligations  will be available  to the Company on  economically
acceptable  terms if at all. If  sufficient  funds  cannot be raised to meet the
continuing  obligations  with respect to the Karakuduk  field  development,  the
Company's  interest in such  property may be lost.  Also,  if  sufficient  funds
cannot be raised to provide  additional  working capital,  it is likely that the
Company will not be able to continue operations.

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

(2)  Results of Operations

     ln order to unite  the  reporting  period of the  Company  with that of its
subsidiaries,  the fiscal  year was  changed to a December  31 year end from the
previous  November 30 year end. This change took effect in the second quarter of
1997.  As a result  of this  change,  quarterly  and year to date  data is as of
September 30 for 1997 and as of August 31 for 1996.

Three Months Ended September 30, 1997 vs Three Months Ended August 31, 1996.

     The Company's  operations  resulted in a net loss of $482,000 for the three
month period ended September 30, 1997 compared to a net loss of $332,000 for the
three months ended August 31, 1996. Although the Company  significantly  reduced
its corporate  overhead  costs,  increases in general and  administrative  costs
still  accounted for most of this change.  This was the result of costs incurred



                                        7

<PAGE>

related to the operation of the Company's  beneficial  interest in the Karakuduk
field and  financing  costs for the  project.  The  Company  has  elected not to
capitalize the general and administrative  expense at this time, however,  these
amounts may be  capitalized  upon final  financing  for the project.  Due to the
previous sale of the domestic properties,  there was no revenue during the three
months ended September 30, 1997.  Interest expense during the three months ended
September 30, 1997, was $59,000 which was incurred in connection  with financing
the Company obtained, primarily for the Karakuduk field.

Nine Months Ended September 30, 1997 vs. Nine Months Ended August 31, 1996.

     The Company  realized a loss on the sale of the Company's  domestic oil and
gas  properties  that  totaled  $36,000  during the three months ended March 31,
1997.  There was a $43,000 gain related to subsidiary  billings of related party
transactions.

     General and administrative expenses increased from $688,000 during the nine
months  ended  August  31,  1996 to  $1,424,000,  during the nine  months  ended
September  30, 1997,  an increase of 172%.  Although  the Company  significantly
reduced its corporate  overhead costs,  increases in general and  administrative
costs  still  accounted  for most of this  change.  This was the result of costs
incurred  related to the operation of the Company's  beneficial  interest in the
Karakuduk field and financing costs for the project. Due to the previous sale of
the  domestic  properties,  there was no revenue  during  the six  months  ended
September 30, 1997.

     Interest  expense  during the nine months ended  September  30,  1997,  was
$189,000 which was incurred in connection  with financing the Company  obtained,
primarily for the Karakuduk field.  Interest income is primarily that portion of
interest  undertaken  on  behalf  of the  stockholders  of  Karakuduk  which  is
indirectly owed to the Company.



                                        8

<PAGE>



                           PART II - OTHER INFORMATION

Item 2 - Changes in Securities

     (c) On September 3, 1997,  the Company sold 461,358 shares of the Company's
common stock for $0.65 per share for a total of $300,000 to a private  investor.
In  connection  with the  transaction,  the Company also issued a warrant to the
investor to purchase up to an additional  461,358 shares of the Company's common
stock for $300,000 or $0.65 per share. The warrant expires on December 31, 1997,
if not  previously  exercised.  The  Company  issued  the stock and  warrant  in
reliance  upon  the  exemption  from  registration  under  Section  4(2)  of the
Securities Act of 1933, as amended. The investor represented to the Company that
the investor  acquired the stock and warrant for the  investor's own account and
not with a view to distribution.  The investor had available to the investor all
material  information  concerning the Company.  The certificates  evidencing the
stock and warrant bear or will bear an appropriate  restrictive legend under the
Securities Act of 1933, as amended.

     During the period  from July 1,  1997,  through  September  30,  1997,  the
Company granted five year options to purchase  1,625,000 shares of the Company's
common stock to certain  directors of the Company.  Options  relating to 825,000
shares have an exercise price of $0.75 per share and options relating to 800,000
shares  having  an  exercise  price of $1.50 per  share.  The  Company  does not
consider the grants of the options to be sales under the Securities Act of 1933,
as amended, because the Company received no consideration for the grants.

     No underwriters were involved in the aforementioned transactions.

Item 4 - Submission of Matters to A Vote of Security Holders

     On July 17, 1997 the Company held its Annual Meeting of  Stockholders.  The
Company's stockholders elected the following eight persons as directors, each to
serve until the next Annual  Meeting of  Stockholders  or until his successor is
elected or appointed:  Howard Karren,  Peter G. Dilling,  Jay W. McGee,  Alan D.
Berlin,  Walter  A.  Carozza,  David  A.  Dahl,  John G.  McMillian  and Arlo G.
Sorensen.  The Company's  stockholders also voted to adopt,  separately,  a 1997
Stock Incentive Plan and a 1997 Nonemployee Directors' Stock Option Plan.



                                        9

<PAGE>



     The number of shares voted and withheld  with respect to each director were
as follows:

Election of Directors               For                       Withheld
---------------------               ---                       --------

Howard Karren                       24,756,934                  540,387
Peter G. Dilling                    23,072,406                2,224,915
Jay W. McGee                        22,726,326                2,570,995
Alan D. Berlin                      23,216,656                2,080,665
Walter A. Carozza                   24,660,134                  637,187
David A. Dahl                       23,243,206                2,054,115
John G. McMillian                   24,755,784                  541,537
Arlo G. Sorensen                    23,244,106                2,053,215


     The  number  of shares  voted  with  respect  to the  approval  of the 1997
Incentive Stock Plan was as follows:

For                 Against               Abstain              Broker Non-Votes
---                 -------               -------              ----------------

17,088,991          3,253,159             193,019              4,762,152

     The number of shares with respect to the  approval of the 1997  Nonemployee
Directors' Stock Option Plan was as follows:

For                 Against               Abstain              Broker Non-Votes
---                 -------               -------              ----------------

15,110,428          5,229,093             196,648              4,761,152


Item 6 -  Exhibits and Reports on Form 8-K

(a)  Exhibits

     3(ii)   Bylaws as amended through October 31, 1997

     10.1    Amendment to Common Stock Purchase  Warrant dated December 31, 1997
             entitling  Victory  Ventures,  LLC  to  purchase  up  to  4,615,385
             shares of common stock of Chaparral Resources, Inc.

     10.2    Amendment dated September 11, 1997, to License for Right to Use the
             Subsurface in the Republic of Kazakhstan

     27      Financial Data Schedule

(b)  Reports on Form 8-K.

     None.


                                       10

<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: November 7, 1997



                                  CHAPARRAL RESOURCES, INC.,
                                  a Colorado Corporation




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





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


                                       11

<PAGE>


                                  EXHIBIT INDEX


    3(ii) Bylaws as amended through October 31, 1997

    10.1  Amendment to Common Stock  Purchase  Warrant  dated  December 31, 1997
          entitling Victory Ventures,  LLC to purchase up to 4,615,385 shares of
          common stock of Chaparral Resources, Inc.

    10.2  Amendment  dated  September  11, 1997, to License for Right to Use the
          Subsurface in the Republic of Kazakhstan

    27    Financial Data Schedule



                                       12