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:  December 31, 1997   
   
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 December 31, 1997, 11,277,000 shares of common stock   
were outstanding.   
   
Transitional Small Business Disclosure Format:   

Yes    X   No        
     ____    ____
   
<PAGE>   
   
   
   
TABLE OF CONTENTS   
Form 10-QSB    
1st Quarter Ended December 31, 1997    
   

Lexico Energy Exploration, Inc.    
										   
                                      						         Page   
   
PART I:  FINANCIAL INFORMATION   
   
            Item 1.    
                      
                   Balance Sheet 	                  			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	             	             8   
   
   
SIGNATURES					                                        9   
   
     
<PAGE>     
			   
   
   
              PART I.   FINANCIAL INFORMATION   
   
   
<PAGE>                              1   
   
   
   
   
ITEM 1.            LEXICO ENERGY EXPLORATION, INC.     
                   (A Development Stage Company)                         
                           BALANCE SHEET   
                         December 31, 1997   
                            (UNAUDITED)              

                               ASSETS   
   

Cash                                 $         30
                                    _____________

 Total current assets                          30

Office equipment (net)                        983
Oil and gas properties               $    320,000 
                                    _____________	 
  
Total Assets     	                			$    321,013   
                                    =============             
   
   
            LIABILITIES AND STOCKHOLDERS' EQUITY   
   
Current liabilities   
						   
     Accounts payable                	$    68,031   
     Interest payable          	           38,084
     Related party notes payable           40,000   
                                     ____________

	Total current liabilities	               146,115   
                                     ____________
   
Total Liabilities      	           		     146,115
                                     ____________
   

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        (   331,167)   
                                    ____________

  Stockholders' Equity      			          174,898
                                    ____________

Total Liabilities And   
 Stockholders' Equity	     	          $  321,013    
	 						                            ============

  The accompanying notes are an integral part of the financial statements.
	   	   
   
<PAGE>	                               2	          
   
   
     
                     LEXICO ENERGY EXPLORATION, INC.     
                      (A Development Stage Company)   
                         STATEMENT OF OPERATIONS   
                              (UNAUDITED)   
   
                                                                Dec. 31, 1987
			                                    	   Three Months Ended    (inception)
		                                    		       December 31       to Dec. 31,
	 			                                      1997          1996       1997	    
							                                    ____          ____   _____________

   								   
Sales                                	  $      -      $      -    $        -
   
Operating expenses                        39,737           200       304,070
                                        ________      ________     _________
Income (loss) from   
 operations	              	              (39,737)      (   200)     (304,070)

Other income (expense)   
	Interest income	                      	       -    	        -        10,987  
 Interest expense                       (  1,676)      ( 1,676)     ( 38,084)
	                                      _________      ________     _________
	Total other income          	          (  1,676)  		  ( 1,676)     ( 27,097)
                                       _________      ________     _________
Income (loss) before   
provision for income taxes
and extraordinary        		             ( 41,413)      ( 1,876)     (331,167)
                                       _________      ________     _________

Provision for income tax                       -             -             -   
			                                    _________      ________     _________

Net income (loss)            	         $( 41,413)   		$( 1,876)    $(331,167)
                                       =========      ========     =========
   
Net income (loss) per share             $(  *  )    	 $(  *  )     $( .033 )
                                        ========      ========     =========
   
Weighted average number of   
common shares outstanding              11,277,000    11,277,000    10,059,967
                                       ==========    ==========    ========== 
*Less than $.01 per share   
   
   The accompanying notes are an integral part of the financial statements.
     
   
<PAGE>	  	                            3		   
   
   
                    LEXICO ENERGY EXPLORATION, INC.     
	                    (A Development Stage Company)   
	                       STATEMENT OF CASH FLOWS   
 		                          (UNAUDITED)   
								   
	                                                                 Dec.31,1987
				                                         	Three Months Ended  (inception)
	  				                                           December 31	    to Dec. 31,
				                                         	1997          1996      1997
							                                       ____          ____  ___________

Cash Flows From Operating Activities:   
   
   Net income (loss)	          	           $(41,413)     $( 1,876)  $(331,167)
   
   Adjustments to reconcile net   
   income (loss) to net cash    
   provided by (used for)    
   operating activities:   
   
       Depreciation                              17             -          17
       Increase in accounts payable               -           200      68,031
       Increase in interest payable           1,676         1,676      38,084 
		                                         --------      --------   ---------
	        Net cash provided   
     	   by (used for)   
	        operating activities 	             (39,720)            -    (225,035)
                                           --------      --------   ---------
   

Cash Flows From Investing Activities:

      (Purchase) of equipment               ( 1,000)            -    (  1,000)
      (Purchase) of oil and gas interests         -             -    (220,000)
                                           --------      --------   ---------
         Net cash provided
         by (used for)
         investing activities               ( 1,000)            -    (221,000)
                                           --------      --------   --------- 


Cash Flows From Financing Activities:   
   
       Sale of common stock                       -             -      11,277
       Increase in rel. party notes payable  40,000             -      40,000
       Increase in paid in capital         		   750  	          -     394,788
			                                        --------      --------   ---------  
     	   Net cash provided   
      	  by (used for)   
	        financing activities	              	40,750  	          -     446,065
                                           ________	     ________   _________

Net Increase (Decrease) In Cash                  30             -          30 

Cash At The Beginning Of The Period               -             -           -   
                                           ________      ________   _________
   
Cash At The End Of The Period              $     30      $      -   $      30
                                           ========      ========   =========
	  
   The accompanying notes are an integral part of the 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.  Management's Discussion and Analysis or Plan of     
         Operation   
   
     The Company effected the acquisition of 50% of United Stratum
AUS PTY Ltd ("USAPL") on December 18, 1997 through a common stock 
trade of 1 million shares of Lexico Energy Exploration, Inc. common
shares for 50% of USAPL stock. USAPL holds a 3/8 interest in VAP1
Petroleum Prospecting License, a Vanuatu 3,728,000 acre oil and gas
concession. The concession includes almost all of Malakula Island
and Espiritu Santo Island, Republic of Vanuatu, S.W. Pacific, as 
well as offshore areas.

Formal commitments are in process from Coastal and/or its subsidiary
to buy all the oil and gas in the Uintah Basin from Lexico's wells.

Drilling bids have been solicited from several drilling companies
to complete and bring on-line Conoco Well 13-1, in Uintah County,
Utah.

Mr. Edison F. Baldwin was added to the Board of Directors on 
October 24, 1997. Mr. Baldwin holds a B.S. in Construction Management
from Colorado State University, and a Masters of Business Administration
from the University of Colorado. He has extensive experience in 
construction estimating, cost control, scheduling owner-architect-
contractor liason, labor relations, construction management, and
overall company management on individual projects of $75 million
and an aggregate of $200 million. Mr. Baldwin has a diverse affiliation
with business and professional organizations including development
authorities, executive committees, and serving as a Director for
Norwest Bank of Fort Collins.

Mr. John P. Gold serves as the Company's Chief Consultant. Mr. Gold
has very extensive qualifications and experience in the oil and gas 
industry. He holds a M.A. in Geology from Cambridge University
and a D.I.C. in Petroleum Geology from Royal School of Mines, 
Imperial College, London. He has more than 30 years experience in oil
and gas exploration, development and production.
Mr. Gold has provided technical work and/or decision making that
resulted in employers' participation in the discovery of 27 oil and
gas fields in five countries with reserves exceeding 500 million
barrels of oil and 10 trillion cubic feet of gas, worth over
$30 billion at current prices.
Mr. Gold has also managed exploration programs for independent, 
public exploration and production companies in Indonesia, Australia,
Canada and the Rocky Mountain region of the U.S.A. 

   
<PAGE>	                              	6   
   
   
                  LEXICO ENERGY EXPLORATION, INC.

Security Ownership of Certain Beneficial Owners and Management

     The following table sets forth, as of the date of this Report,
the stock ownership of each person known by the Registrant to be the 
beneficial owner of five percent or more of the Registrant's 
common stock, each Officer and Director individually and all Directors
and Officers of the Registrant as a group:

                                    Number of            Percentage of
Name and Address                  Common shares        Total outstanding

L. Lex Dolton                      7,020,000                 62.25%
6614 N. Pinewood Dr.
Parker, CO  80134

Vanco Investments                    930,000                  8.25%
6535 S. Dayton
Englewood, CO  80111

Edison Baldwin                       750,000                  6.65%
4255 Woody Creek Lane       
Ft. Collins, CO  80524

Clarey D. Zingler                    169,000                  1.50%
7193 Christopher Ct.
Niwot, CO  80503

All Officers and Directors
as a Group (three persons)         7,939,000                 70.40%


<PAGE>                               7

   
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>                             	8   
   
   
                         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: February 19,  1998	   
   

<PAGE>