SECURITIES AND EXCHANGE COMMISSION   
                    Washington, D.C.  20549   
   
                          FORM 10-QSB   
   
[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE   
                SECURITIES EXCHANGE ACT OF 1934   
   
     For the quarterly period ended:  March 31, 1998   
   
OR   
   
[  ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d)   
                  OF THE EXCHANGE ACT    
   
For the transition period from __________ to __________   
   
             Commission File No. 33-32685   
   
             LEXICO ENERGY EXPLORATION, INC.    
 ___________________________________________________________   
  (Exact name of small business issuer as specified in its      
                         charter)   
   
Delaware                              				84-1080261             
________                                 ____________
(State or other jurisdiction of	         (I.R.S. Employer   
Incorporation or organization)	          Identification  No.) 				   
   
         12835 E. Arapahoe Rd, Tower 1, Ste 210
    	          Englewood, Colorado  80112		     	   
_____________________________________________________________
 (Address of principal executive offices, including zip code)   
   
   
Issuer's Telephone Number:  (303) 792-0416   
   
     
______________________________________________________
 (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 13 or    
15(d) 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 March 31, 1998, 11,277,000 shares of common stock   
were outstanding.   
   
Transitional Small Business Disclosure Format:   

Yes    X   No        
     ____    ____
   
<PAGE>   
   
   
   
TABLE OF CONTENTS   
Form 10-QSB    
2nd Quarter Ended March 31, 1998    
   

Lexico Energy Exploration, Inc.    
										   
                                      						         Page   
   
PART I:  FINANCIAL INFORMATION   
   
            Item 1.    
                      
                   Balance Sheets	                  			2   
                   Statement Of Operations	          		3   
                   Statement Of Cash Flows	 	         	4   
                   Notes To Financial Statements	  	  	5   
   
   
            Item 2.   
   
	                 Management's Discussion And   
                  Analysis Or Plan Of Operation        6   
   
PART II:  OTHER INFORMATION	             	             7   
   
   
SIGNATURES					                                        8   
   
     
<PAGE>     
			   
   
   
              PART I.   FINANCIAL INFORMATION   
   
   
<PAGE>                              1   
   
   
   
   
ITEM 1.            LEXICO ENERGY EXPLORATION, INC.     
                   (A Development Stage Company)                         
                           BALANCE SHEET   
                          MARCH 31, 1998   
                            (UNAUDITED)              

                               ASSETS   
   
                       
Cash                                 $        824 
                                    _____________	 
  
    Total current assets                      824

Office equipment (net)                      2,800
Oil and gas properties                    295,000
Investment in USAPL                       100,000
Option                                     10,000
                                    -------------
   
Total Assets     	                			$    408,624   
                                    =============             
   
   
            LIABILITIES AND STOCKHOLDERS' EQUITY   
   
Current liabilities   
						   
     Accounts payable                	$    68,031   
     Interest payable          	           39,759
     Related party notes payable          180,000   
                                     ____________
	Total current liabilities	               287,790   
                                     ____________
   
Total Liabilities      	           		     287,790   
                                     ____________
   

Stockholders' equity    
         
     Common stock: $.001 par   
       value, 50,000,000 shares    
       authorized, 11,277,000   
       shares issued   
       & outstanding            	    	    11,277   
    
     Preferred stock:  $.01 par   
       value, 5,000,000 shares   
       authorized, 0 shares   
       issued & outstanding             	      -   
   
     Additional paid in capital          494,788    
   
     Deficit accumulated during				   
        the development stage        (   385,231)   
                                    ____________

  Stockholders' Equity      			          120,834
                                    ____________

Total Liabilities And   
 Stockholders' Equity	     	          $  408,624    
	 						                            ============

                  	 See Notes to Financial Statements		                
	   	   
   
<PAGE>	                               2	          
   
   
     
                     LEXICO ENERGY EXPLORATION, INC.     
                      (A Development Stage Company)   
                         STATEMENT OF OPERATIONS   
                              (UNAUDITED)   

<TABLE>
<S>                                     <C>                     <C>                         <C>          
   
                                                                                            Dec. 31, 1987
			                                    	   Three Months Ended       Six Months Ended        (inception)
		                                    		        March  31                March 31           to March 31,
	 			                                      1998          1997       1998         1997           1998    
							                                    ____          ____       ____         ____       _____________

   								   
Sales                                	  $      -      $      -    $      -     $      -     $        -  
   
Operating expenses                    		  52,389           450      92,126          650        356,459  
                                        ________      ________    ________     ________     __________ 
Income (loss) from   
 operations	              	              (52,389)      (   450)    (92,126)     (   650)     ( 356,459)  
                                        ________      ________    ________     ________     __________
Other income (expense):   
  
	Interest income	                      	       -    	        -           -            -         10,987  
 Interest expense                        ( 1,675)      ( 1,675)    ( 3,351)     ( 3,351)     (  39,759)
	                                       ________      ________    ________     ________     __________ 
	Total other income          	           ( 1,675)  		  ( 1,675)    ( 3,351)     ( 3,351)     (  28,772)
                                        ________      ________    ________     ________     __________
Income (loss) before   
 income taxes            		              (54,064)      ( 2,125)    (95,477)     ( 4,001)     ( 385,231)
                                        ________      ________    ________     ________     __________

Provision for income tax                       -           -            -              -             -
			                                     ________      ________    ________     ________     __________
Net income (loss)            	          $(54,064)   		$( 2,125)   $(95,477)    $( 4,001)    $( 385,231) 
                                        ========      ========    ========     ========     ==========
 
Net income (loss) per share             $(  *  )    	 $(  *  )    $(  *  )     $(  *  )     $(  .038 )  
                                        ========      ========    ========     ========     ========== 
   
Weighted average number of   
common shares outstanding              11,277,000    11,277,000  11,277,000   11,277,000    10,088,260
                                       ==========    ==========  ==========   ==========    ==========
*Less than $.01 per share   
   
</TABLE>

         	         See Notes to Financial Statements   
     
   
<PAGE>	  	                            3		   
   
   
                    LEXICO ENERGY EXPLORATION, INC.     
	                    (A Development Stage Company)   
	                       STATEMENT OF CASH FLOWS   
 		                          (UNAUDITED)   
								   
	                                                                 Dec.31,1987
				                                         	 Six Months Ended   (inception)
	  				                                            March 31	      to March 31,
				                                         	1998          1997      1998
							                                       ____          ____  ___________

Cash Flows From Operating Activities:   
   
   Net income (loss)	          	           $(95,477)     $( 4,001)  $(385,231)
   
   Adjustments to reconcile net   
   income (loss) to net cash    
   provided by (used for)    
   operating activities:   
   
       Depreciation                             200             -         200
       Increase in accounts payable               -           650      68,031
       Increase in interest payable           3,351         3,351      39,759 
		                                         --------      --------   ---------
	        Net cash provided   
     	   by (used for)   
	        operating activities 	             (91,926             -    (277,241)
                                           --------      --------   ---------
   

Cash Flows From Investing Activities:

      (Purchase) of equipment               ( 3,000)            -    (  3,000)
      (Capitalized) expenditures            (75,000)            -    ( 75,000)
      (Purchase) of option                  (10,000)            -    ( 10,000)
      (Purchase) of oil and gas interests         -             -    (220,000)
                                           --------      --------   ---------
         Net cash provided
         by (used for)
         investing activities               (88,000)            -    (308,000)
                                           --------      --------   --------- 


Cash Flows From Financing Activities:   
   
       Sale of common stock                       -             -      11,277
       Increase in related party
         notes payable                      180,000             -     180,000
       Increase in paid in capital         		   750  	          -     394,788
			                                        --------      --------   ---------  
     	   Net cash provided   
      	  by (used for)   
	        financing activities	              180,750  	          -     586,065
                                           ________	     ________   _________

Net Increase (Decrease) In Cash                 824             -         824 
                                           ________      ________   _________

Cash At The Beginning Of The Period               -             -           -   
                                           ________      ________   _________
   
Cash At The End Of The Period              $    824      $      -   $     824
                                           ========      ========   =========
	  
                     See Notes to Financial Statements   
   
   
<PAGE>		                              4   
   
   
                    LEXICO ENERGY EXPLORATION, INC.     
                    (A Development Stage Company)   
                    Notes to Financial Statements   
                              (Unaudited)   
   
   
Note 1. 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.   
   
<PAGE>                              		5   
   
   
                  LEXICO ENERGY EXPLORATION, INC.     
   
ITEM 2.  Managements's Discussion and Analysis or Plan of     
         Operation   
   
General

Lexico Energy Exploration, Inc. was incorporated in Delaware in 1987. The
Company is now engaged principally in the business of exploration and 
development of natural gas wells. To date, several properties have been
acquired and additional properties are being considered for acquisition.

Strategic Developments

     New Gas Well

The Uintah Basin, a major hydrocarbon producing area in Northeast Utah,
is recognized as the second largest onshore hydrocarbon basin in the 
contiguous United States and one of the world's largest non-marine
petroleum accumulations.

The Company is in the process of acquiring 75% of 211.5 BCF of proven 
reserves associated with the Conoco 22-1 well from NBGC. The reserves are
valued at $0.73/mcf, and are intended to be brought forward in
April of 1998. The acquisition would include the deep rights from the top
of the Mancos formation at 9,700 feet to the Weber formation at 
20,000 feet. Significant finds of gas exist in the well from 9,700 feet
to 20,000 feet according to the drill stem tests.

The 22-1 well was originally drilled by Conoco and Prudential Life in 1972 
to a depth of 20,000 feet, and recompleted in 1980 by Gillman Hill. The
well was cased to a depth of 14,800 feet to the Frontier zone and completed
there. Engineering reports on the 22-1 project indicate reserves of 32 BCF
in the Frontier, Castlegate and Upper Mancos formations based on 160 acre
spacing. In addition, the well has 436,000 barrels of recoverable condensate.

The Company has received a commitment from Coastal/Engage to purchase up to
4,000 MMBtu/day from this well for a one year term at Inside FERC CIG Rocky
Mountains Index minus $0.20.

In addition, Lexico is acquiring 18 more drilling sites in the immediate 
area from NBGC. The probable reserves associated with this transaction
are approximately 394 BCF.

   
<PAGE>	                              	6   
   
     Completion of Current Development Inventory

The Company owns the rights to 50% of Conoco Federal 13-1 gas wells ("13-1")
which is also located in the Uintah Basin. The Company anticipates raising
capital in the third quarter of fiscal 1998 to complete the 13-1. After the
required capital is made available to the Company, it is anticipated that
the 13-1 can be completed in approximately two weeks working time, with cash
flow accruing to the Company approximately 60 days thereafter.

In order to fund completion of 13-1, it is currently anticipated that the
Company will attempt to raise between $500,000 and $1,000,000 by offering
"Units" consisting of Class "A" Preferred Stock and Common Stock. The 
Preferred Stock will be 6% cumulative and will be subject to mandatory
redemption from 75% of the net revenues received by the Company from sale
of gas from 13-1. It is anticipated that the Preferred Stock will be retired
by the end of 1999. The number of additional Common Shares to be issued 
under the proposed structure will range from 500,000 to 1 million. In order
to complete 13-1, the minimum $500,000 will be required. If more capital
than the minimum is raised, the funds will be used to drill additional
"horizontal legs" off of the primary well hole, which is anticipated
to increase the production of the well proportionately. 

The above described contemplated funding plan for 13-1 is provided for the
information of current investors and interested parties. The Company may
choose to alter the plan prior to an actual offering or to indefinitely delay
its plans to make any offering.

     Australian Subsidiary

The Company owns 50% of United Stratum AUS PTY (United) which owns drilling
prospects in the South Pacific. The Company also has options to purchase
the remaining shares of United Stratum.

Interwest Vanuatu PTY LTD holds the Petroleum Prospecting License in the
Port Sandwich Basin of the Republic of Vanuatu, S.W. Pacific. United owns
a 37 1/2% interest in the "Net Area Proceeds" of the Interwest concession.

<PAGE>                                 7

The concession includes almost all of Malakula Island and Espiritu Santo
Island, Republic of Vanuatu, S.W. Pacific, as well as offshore areas. The
area is approximately 3,728,000 (131 graticular blocks). The concession is
being marketed to major principals in the industry who have expressed
interest in a position to proceed with a four year program to develop this
project.

     Expansion Opportunities

The Company is actively seeking additional opportunities to expand its
asset base and cash flow prospects. It is conducting an ongoing process of
evaluating exploration and development properties and associated funding
sources. Several prospects are under careful scrutiny, however, no contracts
have yet been negotiated.

Results of Operations

The Company is considered a "development stage" company, with no actual
drilling or exploration operations having been conducted until midway
through the just finished quarter. The Company had losses of $54,064 for
the quarter and $95,477 year to date, resulting primarily from general
and administrative expenses.

Liquidity and Capital Resources

Operating activities of the Company used net cash of $149,000 in the quarter
primarily due to development work on the Conoco Federal 22-1 gas well,
exploration, and administrative overhead.

The Company requires capital to continue with its acquisition and 
development of oil and gas properties as well as to complete drilling on
existing properties and to earn an interest in prospects developed by
others under standard industry farmout arrangements. It is anticipated that
funding for expansion activities will be provided by an offering of the
Company's securities (as described above) and through institutional 
funding via standard industry arrangements.

<PAGE>                              8
   
PART II.  OTHER INFORMATION   
   
   
Item 1.	Legal Proceedings - None   
   
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	   
   
<PAGE>                             		9   
   
   
                         SIGNATURES   
   
	 In accordance with the requirements of the Exchange    
Act, the Registrant has duly caused this Report to be    
signed on its behalf by the undersigned, thereunto duly    
authorized.                                                        
   
			           	LEXICO ENERGY EXPLORATION, INC.   
   
   
			           	By: /s/Lex Dolton   
			           	Lex Dolton, President   
			           	and Director   
   
   
Date:  April 9, 1998	   
   

<PAGE>