FORM 10-QSB.-- QUARTERLY REPORT UNDER SECTION 13
                 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
                     (Last amended by 34-32231, eff. 6/3/93)

                                  UNITED STATES
                       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 September 30, 1998
                                       or
[ ]  Transition  Report  Under  Section 13 or 15(d) of the  Exchange Act For the
     transition period from                     to
                           ---------------------  --------------------

Commission file number        2-54020
                             ---------

                      American Geological Enterprises, Inc.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                Utah                                      87-0273300
   -------------------------------                      --------------
   (State or other jurisdiction of                      (I.R.S. Employer
   incorporation or organization)                       Identification No.)


            495 East 4500 South, Suite 102, Salt Lake City, UT 84107
--------------------------------------------------------------------------------
                    (Address of principal executive officers)


                                 (801) 293-8101
--------------------------------------------------------------------------------
                         (Registrant's telephone number)


--------------------------------------------------------------------------------
             (Former name, former address, and former fiscal year,
                         if changed since last report)


Check  whether  the  registrant  (1) filed all  reports  required to be filed by
Section 13 or 15(d) of the Securities 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.
                                                       [X]   Yes     [ ] No

As of September 30, 1998, 1,260,997 shares of common stock were outstanding.


<PAGE>

                      AMERICAN GEOLOGICAL ENTERPRISES, INC.

                                 Balance Sheets



<TABLE>
<CAPTION>
                                                                                  September 30,
                                                                                       1998            December 31,
                                 Assets                                            (unaudited)             1997
                                 ------                                          ----------------     --------------
<S>                                                                             <C>                         <C>    
Current assets:
    Cash and cash equivalents                                                   $       926,540             935,431
    Marketable securities held-for-sale                                                 199,518             192,365
    Accounts receivable                                                                  22,390              22,025
    Interest and dividends receivable                                                     2,515               1,276
    Prepaid lease costs                                                                   3,810               2,649
                                                                                 ----------------     --------------
           Total current assets                                                       1,154,773           1,153,746

Investment in geothermal power unit, at cost, less accumulated
   amortization of $157,443 in 1998 and $134,951 in 1997                                669,756             692,248

Marketable securities held-to-maturity                                                   71,003              71,106
                                                                                 ----------------     --------------
                                                                                $     1,895,532           1,917,100
                                                                                 ================     ==============

                    Liabilities and Stockholders' Equity
                    ------------------------------------

Current liabilities:
    Accounts payable                                                            $         9,967               7,751
    Income taxes payable                                                                    921              18,374
    Accrued liabilities                                                                   2,913              27,286
    Deferred income taxes                                                                13,335              11,009
                                                                                 ----------------     --------------

           Total current liabilities                                                     27,136              64,420

Deferred income taxes                                                                    89,194              95,803
Deferred revenue                                                                        948,047             979,885
Minority interest                                                                        11,152              11,152


Stockholders' equity:
    Common stock, $.01 par value; authorized 2,500,000 shares; issued and
      outstanding 1,260,997 shares                                                       12,610              12,610
    Additional paid-in capital                                                          557,211             557,211
    Unrealized gain on marketable securities, net of tax                                 22,416              18,506
    Retained earnings                                                                   227,766             117,513
                                                                                 ----------------     --------------
                                                                                        820,003             765,840
                                                                                 ----------------     --------------
                                                                                $     1,895,532           1,917,100
                                                                                 ================     ==============
</TABLE>

                See accompanying notes to financial statements.


<PAGE>

                      AMERICAN GEOLOGICAL ENTERPRISES, INC.

                            Statements of Operations
                                   (Unaudited)




<TABLE>
<CAPTION>
                                                              Three months ended             Nine months ended
                                                          ---------------------------    ---------------------------
                                                           Sept. 30,      Sept. 30,       Sept. 30,     Sept. 30,
                                                              1998           1997            1998          1997
                                                          ------------   ------------    ------------   ------------

<S>                                                           <C>            <C>            <C>            <C>    
Revenues - gross revenues from geothermal
   power unit                                                 42,757         42,008         128,124        125,132
                                                          ------------   ------------    ------------   ------------
Expenses:
    Operating expenses of geothermal
       power unit                                             11,746         13,544          38,020         44,952
    Amortization of geothermal power unit                      7,497          7,497          22,492         22,492
    Lease costs                                                1,181          1,161           3,484          3,483
    General and administrative                                 2,613         11,778          26,684         21,002
                                                          ------------   ------------    ------------   ------------
                                                              23,037         33,980          90,680         91,929
                                                          ------------   ------------    ------------   ------------
           Income from operations                             19,720          8,028          37,444         33,203

Other income and expenses:
    Interest  income                                           8,194         10,252          24,487         29,488
    Dividend income                                            1,889          1,747           4,482          5,404
    Royalty income                                               112            259             330          1,025
                                                          ------------   ------------    ------------   ------------
                                                              10,195         12,258          29,299         35,917
                                                          ------------   ------------    ------------   ------------

           Income before income taxes                         29,915         20,286          66,743         69,120
Income tax expense                                             8,742          7,100          16,490         19,171
                                                          ------------   ------------    ------------   ------------
           Net income                                    $    21,173         13,186          50,253         49,949
                                                          ============   ============    ============   ============

           Net income per share                          $       .02            .01             .04            .04
                                                          ============   ============    ============   ============
</TABLE>



                See accompanying notes to financial statements.


<PAGE>


                      AMERICAN GEOLOGICAL ENTERPRISES, INC.

                            Statements of Cash Flows
                                   (Unaudited)




<TABLE>
<CAPTION>
                                                                                        Nine months ended
                                                                               ------------------------------------
                                                                                   Sept. 30,          Sept. 30,
                                                                                     1998                1997
                                                                               -----------------   ----------------
<S>                                                                           <C>                           <C>   
Cash flows from operating activities:
    Net income                                                                $         50,253              49,949
    Adjustments to reconcile net income to net cash provided by
      operating activities:
        Amortization of geothermal power unit                                           22,492              22,492
        Accretion on marketable securities held to maturity                                103                 100
        Change in operating assets and liabilities:
           Accounts receivable                                                            (365)              2,492
           Interest and dividends receivable                                            (1,239)               (447)
           Prepaid lease costs                                                          (1,161)             (1,161)
           Accounts payable                                                              2,216               2,609
           Accrued liabilities                                                         (24,373)              4,665
           Income taxes payable                                                        (17,453)             10,487
           Deferred income taxes                                                        (6,953)             (5,110)
           Deferred revenue                                                            (31,838)            (31,837)
                                                                               -----------------   ----------------
           Net cash provided by/(used in) operating activities                          (8,318)             54,239
                                                                               -----------------   ----------------
Cash flows from investing activities:
    Purchase of marketable securities                                                     (573)               (724)
    Redemption of marketable securities                                                      -              25,000
                                                                               -----------------   ----------------
           Net cash provided by/(used in) investing activities                            (573)             24,276
                                                                               -----------------   ----------------
Increase (decrease) in cash and cash equivalents                                        (8,891)             78,515

Cash and cash equivalents at beginning of period                                       935,431             833,654
                                                                               -----------------   ----------------
Cash and cash equivalents at end of period                                    $        926,540             912,169
                                                                               =================   ================
</TABLE>



                See accompanying notes to financial statements.


<PAGE>

                      AMERICAN GEOLOGICAL ENTERPRISES, INC.

                      Notes and Disclosures to Form 10-QSB



1.     Presentation
       ------------

       The  financial  statements  as of September  30,  1998,  and for the nine
       months then ended were prepared by American Geological Enterprises,  Inc.
       (AGE)  without  audit  pursuant  to  the  rules  and  regulations  of the
       Securities  and  Exchange  Commission  (SEC).   Certain  information  and
       footnote  disclosures  normally  included  in  the  financial  statements
       prepared in accordance with generally accepted accounting principles have
       been condensed or omitted pursuant to such rules and regulations.  In the
       opinion  of  management,  all  necessary  adjustments  to  the  financial
       statements  have been made to present  fairly the financial  position and
       results of operations  and cash flows.  The results of operations for the
       periods  presented are not necessarily  indicative of the results for the
       respective  complete years.  AGE has previously filed with the SEC a Form
       10-KSB,  which included  audited  financial  statements for the two years
       ending  December 31, 1997 and 1996.  It is suggested  that the  financial
       statements  contained  in this  filing  be read in  conjunction  with the
       statements and notes thereto contained in AGE's Form 10-KSB filing.


2.     Net Income Per Share
       --------------------

       Net income per share is computed by dividing  net income by the  weighted
       average number of shares outstanding during each period.


<PAGE>

                      AMERICAN GEOLOGICAL ENTERPRISES, INC.

           Management's Discussion and Analysis of Financial Condition
                            and Results of Operations



AGE is engaged in the acquisition of geothermal and oil and gas leases.  Revenue
consists of royalties and  interest.  AGE's  financial  condition and results of
operations  fluctuate  from year to year,  depending  upon the  production  from
current leases,  the availability of leases to be acquired,  and the opportunity
to sell lease  rights.  AGE's  ability to obtain  future  leases or to  generate
revenues from the sale of lease rights is not determinable; hence, its financial
condition and operations may fluctuate widely in the future.

Financial Condition & Results of Operations
-------------------------------------------

At September 30, 1998, AGE's financial condition is consistent with December 31,
1997. Income and expenses are consistent for both the three months ended and the
nine  months  ended   September  30,  1998  and  1997  except  for  general  and
administrative  expenses.  Although general and administrative  expenses for the
three months ended September 30, 1998 and 1997 are significantly different, this
is due to the fact that these expenses,  particularly professional fees, are not
incurred ratably during the year. However,  general and administrative  expenses
for the nine months ended September 30, 1998 and 1997 are comparable.

Liquidity
---------

AGE's liquidity at September 30, 1998, is considered adequate with $1,127,637 in
working  capital.  AGE's future  commitments  consist of lease  payments on land
which  lies  within  the  participating  area  of  the  geothermal  power  unit.
Additionally, AGE is committed to furnish its share of steam from its investment
in the  geothermal  power  unit to Utah  Power & Light  (UP&L)  under a  30-year
agreement that commenced in 1991. There are no other  commitments or anticipated
expenditures of a capital nature.

AGE's economic  future will be dependent,  in major part,  upon the value of its
undeveloped   interests  in  the  geothermal  power  unit.  The  value  of  such
undeveloped  interests will, in turn, be dependent upon, among other matters (a)
the then  current  price of  energy;  (b)  governmental  incentives  to  develop
renewable resources; (c) regulatory incentives; and (d) the load needs of UP&L.

Other
-----

A tax rate of 34.6  percent  was used for  income  tax  calculations  for  1998.
Current  estimates  support 34.6 percent as the  effective tax rate for the 1998
year.


<PAGE>

                                     Part II

                                Other Information



There is no  information  to be  submitted  under Part II,  and no reports  were
required to be filed under Form 8-K during the period.








                               S I G N A T U R E S


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


                                           AMERICAN GEOLOGICAL ENTERPRISES, INC.
                                           (Registrant)




November 12, 1998                          /s/ Dominic Welch
-----------------                          -------------------------------------
Date                                       DOMINIC WELCH, President/Treasurer




November 12, 1998                          /s/ Peter W. G. Cayias
-----------------                          -------------------------------------
Date                                       PETER W.G. CAYIAS, Secretary