SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549

                                 Form 10-QSB


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

                For the quarterly period ended March, 31, 1997

                                     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         0-14609                        

                                AMERECO, INC.                   
         (Exact name of Registrant as specified in its charter)

                  Utah                           84-0960456        
     (State of other jurisdiction of          (I.R.S. Employer
      incorporation or organization)          Identification No.)

       680 Atchison Way, Suite 800  Castle Rock, Colorado  80104   
       (Address of principal executive offices)        (Zip Code)

                               (303) 688-5160                       
            (Registrant's telephone number, including area code)




Check whether the Issuer (1) filed all reports required to be filed by Section
 13 or 15(d) of the Securities Exchange Act 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 March 31, 1997, Issuer had 5,174,316 shares of common stock
 outstanding.




                              AMERECO, INC.
                             March 31, 1997
  



                                 

                                                             Page No.

PART I Financial Information:

Item 1.Financial Statements:
       Consolidated Balance Sheets as of March 31, 1997
       and December 31, 1996                                    3

       Statements of Operations for the Three
       Months Ended March 31, 1997 and 1996                     4

       Consolidated Statements of Stockholders' Equity
       for the Three Months Ended March 31, 1997                5  

       Statements of Cash Flows for the
       Three Months Ended March 31, 1997 and 1996               6
  
       Notes to Financial Statements                            7-15

Item 2 Management's Discussion and Analysis of                 
       Financial Condition and Results of Operations           16-17           


PART II 

       Items 1-6 Other Information                              18

Signatures                                                      19























                              AMERECO, INC.
                      Consolidated Balance Sheets
                               

                                                  (Unaudited)
Assets:                                            March 31,    December 31,
                                                     1997           1996
Current assets:
 Cash                                             $    5,573     $    39,040
 Accounts receivable - trade, net                    537,615         301,038
 Accounts receivable - other                          17,164           7,220
 Inventories                                       1,318,680       1,648,387
 Prepaid expenses                                     94,133          47,049
 Collateral deposit                                1,000,000       1,000,000 

  Total Current Assets                             2,973,165       3,042,734
 
Property, Plant, and Equipment:
 Machinery and equipment                          14,729,004      14,330,946 
 Office equipment                                    103,746         102,396
 Less accumulated depreciation                      (885,237)       (849,546)
 Land and improvements                               504,837         472,757

  Net Property, Plant, and Equipment              14,452,350      14,056,553 

Other assets:
 Loan costs                                          206,657          39,957

  Total Assets                                   $17,632,172     $17,139,244
























See accompanying notes to financial statements


                                    Page 3



                                    AMERECO, INC.
                            Consolidated Balance Sheets


                                                 (Unaudited) 
                                                   March 31,    December 31,
                                                     1997           1996
Liabilities and Stockholders' Equity:             

Current Liabilities:
 Notes payable                                  $ 4,349,370      $ 3,874,656
 Notes payable - affiliate                        1,252,000        1,197,000
 Accounts payable - trade                           897,880          832,960
 Accounts payable - other                            30,843           29,168
 Accrued expenses                                   379,049          215,657   
 Amounts due to related entities                    719,144          687,525
 Current portion of long-term debt                   62,400           60,791

  Total Current Liabilities                       7,690,686        6,897,757 

Long-term debt                                      100,342          116,559  

  Total Liabilities                               7,791,028        7,014,316

Commitments and Contingencies                            --               --

Stockholders' Equity:
 Common stock                                         5,175            5,008
 Additional paid-in capital                      14,637,564       14,471,031
 Accumulated deficit                             (4,801,595)      (4,351,111)

  Total Stockholders' Equity                      9,841,144       10,124,928

  Total Liabilities and Stockholders' Equity    $17,632,172      $17,139,244




















See accompanying notes to financial statements.



                                    Page 3


                                  AMERECO, INC.
                           Statements of Operations
              For The Three Months Ended March 31, 1997 and 1996
                                   (Unaudited)
                          
                                                   March 31,       March 31,   
                                                     1997            1996

Net Sales                                          $ 846,579       $ 741,418
Cost of Sales                                        960,873         821,404

 Gross Profit (Loss)                                (114,294)        (79,986)

Operating Expenses:
 Selling expenses                                    118,158         120,851
 Management expenses                                  60,000          60,000
 General and administrative                           17,710          12,024

  Total Operating Expenses                           195,868         192,875

  Loss from Operations                              (310,162)       (272,861)

Other Income (Expenses):
 Interest expense                                   (153,040)       (150,032)
 Interest income                                      12,718          12,752
 Miscellaneous income                                      0           1,749   
 Amortization                                              0         (51,349) 

  Total Other Income (Expenses)                     (140,322)       (186,880)

  Net Loss                                         ($450,484)      ($459,741)



Net Loss Per Share                                    ($0.09)         ($0.42)

Weighted average common shares for
 computing per share data                          5,035,399       1,087,806









See accompanying notes to financial statements

                                   Page 4








                                 AMERECO, INC.
                Consolidated Statement of Stockholders' Equity
                   For the Three Months Ended March 31, 1997
                                  (Unaudited)




                                        Additional                    Total
                       Common Stock       Paid-In   Accumulated   Shareholders'
                    Shares     Amount     Capital      Deficit       Equity   

Balance at
December 31,1996  5,007,616    $5,008  $14,471,031  ($4,351,111)   $10,124,928

Common stock issued 166,700       167      166,533                     166,700

Net Loss for the
three months ended
March 31, 1997  ___________  ________   __________     (450,484)      (450,484)

Balance at March
31, 1997          5,174,316    $5,175  $14,637,564  ($4,801,595)    $9,841,144





























See accompanying notes to financial statements


                                    Page 5





                               AMERECO, INC.
                        Statements of Cash Flows
            For The Three Months Ended March 31, 1997 and 1996    
                                (Unaudited)



                                                      March 31,     March 31,
                                                        1997          1996

Cash Flow from Operating Activities:
 Net Loss                                            ($450,484)    ($459,741)
 Adjustments to reconcile net loss to net
  cash used in operating activities:
   Depreciation and amortization                        35,691       128,666
 Changes in operating assets and liabilities:
  (Increase)decrease in accounts receivable-trade     (236,577)       (8,546)
  (Increase)decrease in accounts receivable-other       (9,944)     (336,715)
  (Increase)decrease in inventories                    329,707      (153,373)
  (Increase)decrease in prepaid expenses               (47,084)        8,107
  Increase(decrease) in notes payable                  474,714       165,589
  Increase(decrease) in notes payable-affiliate         55,000             0 
  Increase(decrease) in accounts payable-trade          64,920       (85,820)
  Increase(decrease) in accounts payable-other           1,675         2,418
  Increase(decrease) in accrued expenses               163,392       (29,822)
  Increase(decrease) in amounts due related entities    31,619       140,618
  Increase(decrease) in cur. port. of long-term debt     1,609        60,630

Net cash provided (used) by operating activities       414,238      (567,989)

Cash Flows from Investing Activities:
 Increase in property and equipment                   (431,488)     (547,500)

Cash Flows from Financing Activities:
 Payment of long-term debt                             (16,217)     (135,630)
 Proceeds from issurance of long-term debt                   0       223,372
 Conversion of debt to equity                                0     1,000,000

Net cash provided (used) by financing activities       (16,217)    1,087,742

Net increase (decrease) in cash                        (33,467)      (27,747)
 Cash, beginning of period                              39,040        43,130    

Cash, ending of period                                  $5,573       $15,383



Supplemental disclosure of non-cash change in
 operating activities:
  Common stock issued for debt and services            166,700             0






See accompanying notes to financial statements.

                                     Page 6

                                AMERECO, Inc.
                       Notes to Financial Statements
                               March 31, 1997


Note 1: Summary of Significant Accounting Policies

Operations
AMERECO, Inc. (the "Company") was organized as a Utah corporation on October
16, 1974, under the name of Norcal Chemical Corporation.  The Company's name
was changed  to AMERECO, Inc. in June 1995.   In 1986 the  Company  acquired
through the United States Bankruptcy Court  a lightweight aggregate facility
located  in Clay County, Georgia and acquired  a sand and gravel property in
Columbus, Georgia. In 1988 the Company's current management was elected.  In
April 1992  the Company  sold the  non-operating  sand and  gravel  property
utilizing  the  proceeds  from  the  sale  to retire  indebtedness  owed  to
creditors  of the  Company and  creditors in the  Chapter 11 proceeding.  In
March 1993 the  Company formed  and became  the General Partner  of Omnivest
Resources, L.P. (the "Partnership") for  the purpose  of raising  capital or
financing necessary to refurbish  and place into production  the lightweight
aggregate facility in Clay County, Georgia.   The Company transferred to the
Partnership  all of  the Company's  title and  interest  in the  lightweight
aggregate facility, subject to $311,250 of Company indebtedness, in exchange
for a 99.9% general partnership interest.  The Company concurrently executed
a Credit Agreement  with C.I.S. Resources  Limited Liability Company ("CIS")
and Georgia Resources, Inc.("GRI").  The Company as managing general partner
of the Partnership, managed the refurbishment of the plant and the operation
of the lightweight aggregate facility under terms of a management agreement.

In June 1995 after Company stockholder approval of the transfer of assets to
the Partnership, CIS and GRI  converted the total advanced  under the Credit
Agreement into a 78.13% Limited Partnership interest.   The Partnership then
consummated a $4.5 million loan facility with an outside lender. The Company
as General Partner  guaranteed  the loan.   As a requirement for the loan, a
$1.25 million  Letter of Credit  was obtained  by GRI for the benefit of the
Partnership.   As consideration  to GRI, the  Company  issued an  additional
1.75%  Limited  Partnership  interest  to GRI.   With the conversion  of the
lenders to Limited Partners and  the additional Limited Partnership interest
for the  Letter of  Credit as  collateral, the Company  reduced its  General
Partnership interest from 99.9% to 20.02%.   In addition the Partnership had
capital requirements of $1.0 million  which was funded by sale of additional
Limited Partnership interests.  The Company's ownership interest was reduced
by 1.70% to 18.32%.

On June 1, 1996, in accordance  with agreements  previously approved  by the
Company's  shareholders, the  Limited  Partners  converted their  respective
partnership interests  into shares  of the Company's common stock  through a
reverse purchase  step transaction  in which the  business owned assets were
placed in a  corporation (Omnivest  Resources, Inc.) which  is now a  wholly
owned subsidiary of the Company.

Principles of Consolidation
The consolidated financial statements include the accounts of its 100% owned
subsidiary, Omnivest Resources, Inc.   All significant  intercompany  trans-
actions and balances have been eliminated in consolidation.

Cash and Cash Equivalents
The Company considers all investments purchased with an original maturity of
three months or less to be cash equivalents.

Property and Equipment
The Company's property and  equipment are stated at cost.   Costs other than
machinery and equipment are depreciated  using the straight-line method over
the  estimated  useful  lives  of the  assets.   Machinery and  equipment of
Omnivest  Resources, Inc.  are  depreciated  using  the  units-of-production
method.   When assets  are retired  or disposed of, all applicable costs and
accumulated  depreciation are  retired from the  accounts and  any resulting
gain or loss is recognized. 

Allowance for Uncollectible Accounts
The Company  provides an  allowance for  uncollectible  accounts  based upon
prior  experience  and  management's  assessment  of the  collectibility  of
existing specific accounts.

Income Taxes
The Company has adopted the provisions of FASB Statement No. 109 "Accounting
for  Income  Taxes",  which  requires  the  asset  and liability  method  of
accounting for income taxes.

Use of Estimates
The  preparation  of  financial  statements  in  conformity  with  generally
accepted  accounting  principles requires  management to make  estimates and
assumptions that  affect the reported amounts  of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and  the reported  amounts of  revenues and  expenses during  the
reporting period.  Actual results could differ from these estimates.

Inventory
Inventory is valued at average cost under the last-in first-out(LIFO) method
not in excess of market.

Note 2: Business Combination
Effective June 1, 1996, AMERECO, Inc. completed  a step transaction in which
it issued  3,677,071 shares  of its  common stock  valued at $8,768,613  and
received 100%  of the  common stock  of Omnivest  Resources, Inc.  (formerly
Omnivest Resources, L.P.).   The business combination was accounted for as a
reverse purchase of AMERECO, Inc. by Omnivest Resources, Inc.  Operations of
Omnivest Resources, Inc. are reported for all periods presented.  Operations
for AMERECO, Inc. are  reported for  the quarter ended  March 31, 1997.  The
purchase  price  approximated  the fair  value of  the net  assets  acquired
resulting in no goodwill.

Prior to June 1, 1996, AMERECO, Inc. reported  its general  partner interest
in Omnivest Resources, L.P. as an equity method investment. At May 31, 1996,
AMERECO, Inc.'s general  partner investment  in Omnivest Resources, L.P. was
20.02% and was carried  at $3,793,335.  From January 1, 1996 to May 31, 1996
the AMERECO, Inc. equity method loss was $133,340.













Note 3: Inventories and Accounting Change
During 1996, the  Company  changed  its method  of determining  the  cost of
inventory from  first-in, first-out (FIFO) to  the last-in, first-out (LIFO)
method.  The Company  believes the LIFO method  more closely relates current
costs with  current  revenue.  The effect on 1995 operations would have been
to  decrease the  operating loss by $164,690.   Inventories consisted of the
following:

                                         March 31,       December 31,
                                           1997             1996

          Raw Materials                  $  39,029       $   47,336
          Aggregate                        834,188        1,200,233
          Processed Clay                   342,028          297,380
          Spare parts & supplies           103,435          103,435
                                        $1,318,680       $1,648,387

Note 4: Property and Equipment
Depreciation  expense  for the  periods ended  March 31, 1997 and  1996 were
$35,691 and $77,316, respectively.

Note 5: Notes Payable
Unaffiliated Notes Payable
Note payable - Congress Financial Corporation:
The Company has a loan dated June 15, 1995 due
June 15, 1997.  The interest rate is prime plus
2.25% which was 10.5% at March 31, 1997.
Principal payments of $25,000 plus interest
are made monthly.  The loan is secured by all
assets owned and hereafter acquired by
Omnivest Resources, Inc. and guaranteed by
AMERECO, Inc.                                            *  $2,225,000

Note payable - Congress Financial Corporation:
The Company has a revolving line of credit due
June 15, 1997.  The interest rate is prime plus
2.25% which was 10.5% at March 31, 1997.
Advances shall not exceed 70% of eligible accounts
receivable and 45% of eligible inventory with a
maximum availability reserve of $1.75 million.
Collateral for the loan is all assets owned and
hereafter acquired by Omnivest Resources, Inc.
and guaranteed by AMERECO, Inc.                             1,527,137

Unsecured note due February 26, 1997, interest
rate of 13% per annum                                    *    350,000

Note payable - unsecured bearing interest rate
of 12% per annum, due August 30, 1996                         100,000

Note payable - unsecured bearing interest rate
of 13%, due March 31, 1997                                     75,000

Note payable, unsecured bearing interest at 11%,
interest paid semiannually, due April 15, 1997                 40,000

Note payable, unsecured bearing interest
at 8%, due December 31, 1996                                   28,337

Unsecured note due September 8, 1987 interest
rate of 8% per annum                                            3,896

Total Unaffiliated Notes Payable                            4,349,370

Notes Payable to Affiliates
Unsecured note with affiliate due March 23,
1997, interest rate of 13% per annum                          350,000

Unsecured note with affiliate, interest rate
of 10.25% per annum with $200,000 due February
28, 1997 and the balance due March 13, 1997                   804,000

Unsecured note with affiliate Corporation,
interest rate of 10%, due January 10, 1997                     98,000

Total Notes Payable to Affiliates                           1,252,000

Total Current Notes Payable                                $5,601,370

Long Term Debt
Note payable - financial institution. Loan
secured by specific equipment, interest rate
of 10.5% per annum, monthly principal and
interest payments of $6,378.50, due August 1,
1999                                                       $  162,742
  Less Current Portion                                        (62,400)
  Long Term Debt                                           $  100,342
   
    *  See Subsequent Event Note 13.

Note 6: Income Taxes
The Company has loss carry-forward of $9,177,269 that  may be offset against
future taxable income.  The carry-forward expires in 2011.

A deferred  tax asset  has not  been reflected  in the  financial statements
since the  realization of the  benefit is not  assured due to  the Company's
past operating history.

At December  31, 1996,  the  Company  has  net  operating  loss  carry-overs
available  to offset  future federal taxable income, if any.   These amounts
will expire as follows:

                 1999     $  70,991         2006    $  434,768
                 2000       555,816         2007     1,954,098
                 2001       288,190         2008       479,243
                 2002       394,878         2009       472,027
                 2003       346,704         2010       768,480
                 2004       568,868         2011     2,176,396
                 2005       666,810

         Total operating loss carry-forward         $9,177,269

The components  of the  deferred  tax  asset  related to  the operating loss
carry-forward are as follows:

                   Deferred Tax Assets           $3,120,000
                   Less Valuation Allowance      (3,120,000)
                   Deferred Tax Asset            $        0

Note 7: Stock Options Stockholders Equity
In June 1995 the  stockholders of the Company  approved a stock option plan. 
Under the plan, the Board of Directors may grant options for the purchase of
up to 100,000 common shares.  The options  may be  exercisable for  not more
than ten  years and  the option price  must be  not less than  market value.
Non-qualified (non-employees)  may be  granted  options  at an  option price
determined by a committee.   During 1995, 22,500 non-qualified  options have
been granted with an exercise price of $4.00 and an expiration year of 2001.
During  1996, no  options  were  granted or  exercised  and  40,000  options
expired.   At March 31, 1997, no options have been exercised.

Additionally, the Company granted options  to officers, directors and others
for their past contributions.  No options have been exercised or are in-the-
money.   Since the option exercise prices were higher than fair market value
at the date of grant no compensation cost is included in operating income.

The following table represents these options outstanding:

                                        Exercise     Expiration
                            Granted       Price         Date

Officers and directors      400,000       $ 4.25       12/31/99
                            300,000       $ 1.50       12/31/99
                              2,500       $ 4.00       1/1/2001
                              2,500       $ 4.00       7/1/2001

Others                      400,000       $ 4.25       12/31/99 
                             20,000       $ 4.75       12/31/99
                             17,500       $ 4.00       7/1/2001
                            500,000       $ 2.00       3/17/2002

     Total                1,642,500   


Note 8: Extraordinary Items and Infrequent or Unusual Items
Georgia Resources, Inc. did not exercise their right for payment of interest
on a loan to ORLP prior to conversion. The principal was converted to common
stock and the accrued interest forgiven.   The accrued interest  through the
date of conversion was $91,253.

As a result  of the reverse purchase  in 1996 and the  loan restructure (See
Note 13.), organization cost related to the partnership and partnership loan
fees previously capitalized were written-off to operations.

Note 9: Transactions with Related Parties
The Officers  of the  Company have  accrued salaries  and expenses from 1988
through 1996.  The accrued salaries and expenses at March 31, 1997 and 1996,
were $645,644 and $569,644, respectively.

On September 21, 1995, the Company's Board of Directors  approved a two year
employment  contract  with two  officers.   The duties,  compensation, bonus
calculations and  benefits are materially  the same, except for the two year
time commitment  by all parties, as the  employment agreement they have been
operating under since March 1993.







On  September  26, 1996,  Cathay  Global  Investments, Inc.,  f/k/a Omnivest
International, Inc., an affiliate of the Company, provided an unsecured loan
to the Company for $350,000 with the same terms and conditions negotiated by
the Company with a third party on August 30, 1996.  The term of the loan was
90 days with  a 90 day renewal option  at an interest rate of 13% per annum.
The Company paid a non-refundable  processing fee of 45,918 shares of common
stock  with 45,918 shares issued  on the extension date.  The Company repaid
this  loan with  proceeds from  its borrowings  from FmHA/Rural  Development
guarantee loan in April 1997.  (See Note 13.)

In addition, Cathay  Global  Investments, Inc., an affiliate  of the Company
provided additional working capital unsecured loans  to bridge the Company's
operation  until the pending $5,000,000 loan  with an FmHA/Rural Development
guarantee  could be completed.   Cathay Global Investments, Inc. advanced an
additional $549,000  unsecured  between  November 29, 1996  and December 30,
1996 at  an interest rate  of 10.25% and a  maturity date of March 13, 1997, 
and $200,000 at such interest with a maturity date of February 28, 1997, and
$55,000 on January 13, 1997 at such interest with a maturity date of January
20, 1997.

On March 17, 1997 VM Mortgage Lending Corporation, an  affiliate of  Georgia
Resources, Inc. entered into an agreement with its secured lender  to pledge
additional Certificates of Deposit up to $1 million, which the Company could
borrow against.  As arrangement fees in connection  with such borrowing from
such related party, the Company paid an arrangement fee of 166,700 shares to
Georgia Resources, Inc. and granted an option  to purchase 500,000 shares of
the Company's common stock  at $2.00 per share  through March 17, 2002.  The
shares issued and options granted pursuant to the arrangement fee in respect
of this borrowing are  subject to a one  time demand and multiple concurrent
registration rights through March 17,2002, pursuant to a Registration Rights
Agreement between GRI and the Company.  Further, the loans to the Company by
VM Mortgage Corporation  were secured by the pledge  of the Company's shares
in its ORI subsidiary. The Company, under such agreement, is required to pay
the costs  of registration, but not selling costs.   Both Mr. Miller and Mr.
Tribbey pledged their AMERECO, Inc. common stock  as additional requirements
of the transaction.  In addition, such officers were required to subordinate
and defer  payment of  unpaid  salaries  with respect  to periods  prior  to
December 31, 1994 of approximately $425,000. In addition, Messrs. Miller and
Tribbey agreed to defer one-third of their monthly salary until ORI produces
profits under  a specified formula and  subsequent to 1995, 1996 and through
the current date salaries have been paid. Such deferral of payment of earned
but unpaid  compensation  and deferral  of current  compensation  by Messrs.
Miller  and  Tribbey  has been  required  as a  condition  of the  Company's
borrowing from  Cathay,  affiliated with  Mr. Wei Ming Lu,  who beneficially
owns approximately 65% of the Common Stock of the Company. 

The Board of Directors of the Company, after consideration  of the terms and
relative difficulty  in obtaining alternate  financing determined  that such
borrowing  by the company was on terms  no less advantageous  to the Company
than could have been  obtained from unrelated  third parties.  Nevertheless,
it is  possible that  the Company  could have  been obtained  more favorable
terms from unrelated parties, dealing at arms' length, had such  credit been
then available to it.

Note 10: Earnings Per Share
Net loss  per common share is computed  using the weighted average number of
common shares  outstanding.   Outstanding  options are not  included  in the
calculation of net loss per common share since their impact is anti-dilutive. 

Note 11: Lease Commitments
The Company leases office space  on a month-to-month basis located in Castle
Rock, Colorado.  Rent expense  for the three months ended March 31, 1997 was
$7,179.




Note 12: Commitments and Contingencies
The Company's  operations are  subject to various  federal, state  and local
laws governing  protection of  the environment.   These laws are continually
changing  and, in  general, are  becoming  more  restrictive.   The  Company
believes that it is in compliance with all applicable laws and regulations.

On September 21, 1995, the Company's  Board of Directors approved a two-year
employment  contract with  two officers.   The duties,  compensation,  bonus
calculations and  benefits are  materially the same except  for the two-year
time commitment  by all parties  as the employment agreement  they have been
operating under  since March 1993.   Under the agreement, if terminated, the
two officers would receive approximately $120,000.

The  Company  is periodically  a defendant  in legal  proceedings arising in
connection with its business. In management's opinion, neither the financial
position nor  the results  of operations  of the Company  will be materially
affected by the final outcome of these legal proceedings.

Note 13: Subsequent Event
On April 18, 1997 the  Company completed  debt refinancing  with a southwest
Georgia bank.   The term  loan is  for 15 years for  $5,000,000 with monthly
amortization  of $54,713  principal  and  interest  with the  interest  rate
adjusted quarterly  based on  average Bond Equivalent Rate  during the prior
quarter.  The effective  interest rate  on April 18, 1997  was 10.32%.   The
collateral  for the loan is equipment, fixtures, all real property  owned by
the Company and a $500,000 Certificate of Deposit.

Proceeds from the above loan  was used to retire the term loan with Congress
Financial  Corporation  and reduce  the revolver  to $1,100,000  which  will
continue to be  secured by all  other assets including  accounts receivable,
inventory, and $1,250,000 Letter of Credit.   Upon the  payment to  Congress
Financial  Corporation  the $1  million  collateral  C.D.'s  pledged  by the
affiliate were released back to VM Mortgage Lending.

On April 18, 1997 Cathay Global Investments, Inc. ("Cathay") an affiliate of
the Company, agreed to renew and extend  the currently outstanding unsecured
notes with accrued interest  through that date.  In addition  they agreed to
pay the  currently  outstanding  unsecured note  of $98,000  principal  plus
accrued interest  to V.M. Mortgage  Corporation,  also an  affiliate  of the
Company.  The Company  is required  to make  quarterly  payments based  on a
formula of profitability through March 31, 1998.
 
As arrangement fees in connection with such renewal from such related party,
the Company is obligated to pay 307,998 shares to Cathay and grant an option
to purchase  923,994 shares  of the Company's  common stock  at $2 per share
through April 18, 2002.  The shares issued  and options  granted pursuant to
the arrangement fee  in respect  of this borrowing  are subject  to one time
demand and multiple  concurrent registration rights  through April 18, 2002,
pursuant to a Registration Rights Agreement  between Cathay and the Company.
Further, the loans  to the Company  by Cathay were secured  by the pledge of
the Company's  shares in  its Omnivest  Resources, Inc. ("ORI")  subsidiary.
The  Company,  under  such  agreement, is  required  to  pay  the  costs  of
registration, but not selling costs.    


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

The following is management's discussion and analysis of certain significant
factors that have  affected the Company's financial condition and results of
operation  during  the  periods  included  in  the  accompanying   financial
statements.

Results of Operations

AMERECO, Inc. (the "Company") was originally incorporated as Norcal Chemical
Corporation  on October 16, 1974.  The business  of the Company  has been to
manage  the Subsidiary's  refurbishment  and  start-up  of  the  lightweight
aggregate  facility  operation  including  manufacturing  and  marketing  of
ightweight  aggregate  used  in concrete  block, pre-stressed  and  pre-cast
concrete, structural  concrete, bridge  floors, highway  surfaces and  other
uses.


Three Months Ended March 31, 1997 as Compared to the Three Months Ended March
31, 1996

AMERECO consolidated with its  ORI subsidiary, recognized losses of $450,484
for the  quarter ended March 31, 1997  compared to  $459,741 for the quarter
ended March 31, 1996.  The Company's sales  increased approximately $105,000
during the  first quarter  of 1997  from the prior year, or  a 14% increase.
The Company anticipates  the loss from  operations to decline  substantially
both from continued increase  in sales volume and from reduction  of produc-
tion costs  on a per unit basis  due from  better efficiency and  longer run
times of production.

General and  administrative  costs increased  47% from  $12,024  in 1996  to
$17,710 in 1997.  The increase was due to additional  financing charges from
our primary lender.

Prior to  the conversion, Georgia Resources, Inc., an affiliate owned by Mr.
Wei Ming Lu, did  not  exercise their right for payment  of interest for the
continued  benefit  of the  Partnership.   The accrued  interest  of $91,253
through the date of conversion was forgiven.

During the prior year's first quarter, amortization of organization and loan
costs was $51,349 compared to $0 for the quarter ended March 31, 1997.

Seasonal Effect on Operations

Due to the  Company's relatively  brief operating  history, the Company  has
minimal  historical  data to  calculate  the  seasonal  effect on  sales and
production.  With regard to the ORI operation, it can be expected that sales
will experience some  decline in growth  of aggregate demand  due to weather
conditions and holiday periods.  The primary months which are expected to be
affected by possible  seasonality in  the Company's  business  are  November
through February, traditionally  slow months for the  construction materials
industry in general.

Liquidity and Capital Resources

The Company had total assets of $17,632,172 at March 31,1997 and $17,139,244
at  December 31, 1996.   The Company's cash  balance  at March 31, 1997  was
$5,573.   With no  material change  in cash  between years, the  decrease in
working capital  was primarily a result of current loans increasing approxi-
mately $600,000.

The Company  had only  long-term debt  obligations  of $100,342 at March 31,
1997.   The long-term debt  obligation  at December  31, 1996, for  ORI  was
$116,559.  The decrease in  long-term debt was due to a loan being amortized
with monthly principal and interest payments.  On April 18, 1997 the Company
completed debt  refinancing  with  First Federal  Savings Bank  of Southwest
Georgia.  The term loan is for 15 years for $5,000,000  with monthly amorti-
zation of $54,713 principal  and interest  with the  interest rate  adjusted
quarterly based on a weighted average Bond Equivalent Rate  during the prior
quarter.

The Company  has a loss  carry-forward  of $9,177,269, which may  be used to
offset  future taxable  income until 2011.   The deferred  tax asset  is not
reflected  in the  Company's financial statements, since realization  of any
benefit is not assured in view of the Company's operating history.








                               AMERECO, INC.


 
                       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 Security Holders

           None

Item 5     Other Information

           None

Item 6     Exhibits and Reports on Form 8-K
             Report dated February 26, 1997




                       Signatures

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

                           AMERECO, Inc.



Date: August 4, 1997   By:________________________________________
                          Kenneth W. Tribbey
                          Executive Vice President and
                          Chief Financial Officer