AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION ON



January 14, 2008



SECURITIES AND EXCHANGE
COMMISSIONWASHINGTON, D.C.  20549



### FORM 10-QSB

(Mark One)

[  X ]          QUARTERLY REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934For the quarterly period ended:November 30, 2007



[   ]           TRANSITION REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934For the transition period
from_________________ to _________________________



Commission file number:333-91191



### INTERMOUNTAIN REFINING CO., INC.

(Name of small business issuer in its
charter)



|NEW MEXICO                                                     | 74-2329327                             
|-------------------------------------------------------------- | ---------------------------------------
|(State or other jurisdiction of incorporation or
organization) | (I.R.S. Employer Identification
Number)



1921 Bloomfield
BoulevardFarmington, New Mexico 
87401Telephone: (505)
326-2668(Address, including zip code, and
telephone number, including area code, of issuer's principal executive
offices)

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
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 __

APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes_____ No
_____

(APPLICABLE ONLY TO CORPORATE
ISSUERS)



State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: 1,155,609 shares
of common stock, no par value, were outstanding on December 31,
2007.

Transitional Small Business Disclosure Format (Check one):
Yes[ ] No [X]

### 10-QSB 1<page>

### Table of Contents







|                                                                                      | Page
|------------------------------------------------------------------------------------- | ----
|Financial Statements of Intermountain                                                 | 2   
|Management's Discussion and Analysis of Financial Condition
and Results of Operations | 2   
|Intermountain's Business Activities                                                   | 2   
|Liquidity and Capital Resources                                                       | 3   
|Cash Requirements as of November 30, 2007                                             | 3   
|Results of Operations                                                                 | 4   
|Inflation, Deflation and Changing Prices                                              | 8   
|Critical Accounting Estimates                                                         | 9   
|Controls and Procedures                                                               | 9   
|Legal Proceedings                                                                     | 9   
|Submission of Matters to a Vote of Security
Holders                                   | 9   
|Index To Financial Statements                                                         | 9   
|Exhibits and Reports on Form 8-K                                                      | 14  
|Signatures                                                                            | 14  
|                                                                                      |     

### 10-QSB 2<page>

### Financial Statements of Intermountain

The financial statements of Intermountain as of November 30,
2007 and for the three and nine month periods ended November 30, 2006 and
November 30, 2007 are included beginning on page 9 of this report.

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

The following discussion of our financial condition as of
November 30, 2007 and results of operations for the three and nine month periods
ended November 30, 2006 and November 30, 2007, should be read in conjunction
with our financial statements and notes related thereto included elsewhere in
this report.

Some of the statements contained in this report relate to
future expectations, contain projections of results of operations or financial
condition or include other forward-looking information. When used in this
report, the words "estimate", "project", "anticipate", "intend", "believe",
"hope", "may" and similar expressions, as well as "will", "shall" and other
indications of future tense, are intended to identify forward-looking
statements. Those statements are subject to known and unknown risks,
uncertainties and other factors that could cause the actual results to differ
materially from those contemplated by the statements.  You are cautioned
not to place undue reliance on the forward-looking statements.

### Intermountain's Business Activities

Intermountain was incorporated under the laws of the state of
New Mexico in January 1984 and conducts its business in the following
areas:

- Production of natural gas in New Mexico (Intermountain sold
its interest in all of its Kansas natural gas producing properties on February
28, 2007)
- Leasing, on a fee basis, of asphalt paving products
manufacturing and storage facilities in Fredonia, Arizona. The land and
equipment associated with the entire facility were sold in October, 2007,
however, Intermountain retained the benefits and obligations associated with the
equipment leased to Paramount Petroleum until December 31, 2010 or such earlier
time as may be elected by Intermountain.
- Other business activities including leasing unused space in
Intermountain's office building.

### 10-QSB 3<page>

### Liquidity and Capital Resources:

While current cash balances are adequate to satisfy normal
operating costs, our present forecasts indicate that future cash flows from
current operations will not be sufficient to fully cover normal operating costs.
It is our intent to acquire, through purchase or merger, additional interests in
oil and/or natural gas producing activities to replace cash flows lost as the
result of the sale of our Kansas natural gas properties. There are presently no
formal plans or agreements in place and there is no assurance that we will enter
into any formal agreements in the near future that would have a significant
impact on Intermountain's financial condition.

The following table presents selected financial data regarding
cash and working capital:



|                          | February 28, 2007 | % Change | November 30, 2007
|------------------------- | ----------------- | -------- | -----------------
|Cash and cash equivalents | $  2,391,302      | (16)%    | $  2,013,419     
|                          |                   |          |                  
|Working capital           | $  2,266,766      | (7)%     | $  2,108,796     

During the nine months ended November 30, 2007, Intermountain
realized a $201,000 decrease in cash from operating activities and a $177,000
decrease in cash from non-operating sources. The most significant use of
operating cash included the payment of income taxes of $201,000 with respect to
taxable income for the year ended February 28, 2007. Significant non-operating
sources and uses of cash included the use of $219,000 for drilling and
completion of a replacement well in Kansas offset by the receipt of $40,000 cash
down payment from the sale of land and equipment at the Fredonia, Arizona,
asphalt facility.

During the nine months ended November 30, 2006, Intermountain
realized a $210,000 increase in cash from operating activities and a $224,000
increase in cash from non-operating sources. There were no significant or
unusual operating cash items during the period. The $224,000 increase in cash
from non-operating sources consisted mainly of $270,000 proceeds from the sale
of our electric generation facility offset by $52,000 of improvements made to
the electric generation equipment in order to complete the sale. Additional
non-operating sources and uses of cash consisted of $7,500 proceeds from the
sale of approximately 1 acre of land at our Fredonia Arizona facility and
$13,000 collection of notes receivable, offset by $10,000 used to plug and
abandon a gas well in Kansas and $5,000 increase in investments available for
sale.

### Cash requirements as of November 30,
2007:

Estimated cash requirements for the next twelve months
include:

- $24,000 per month in normal general and administrative costs
including costs to operate our Farmington office building
- $800 in estimated monthly costs associated with the ownership
and maintenance of Intermountain's asphalt manufacturing and storage
facility

In its efforts to develop additional
sources of revenues, Intermountain may incur some project development costs. We
are unable to predict the level of costs that may be incurred for such
additional projects during the next year.

Expected sources of cash during the next twelve months consist
of cash flows from operating activities estimated as follows:

- $5,000 per month (net of production costs) from estimated
natural gas operations based on results of operations during the nine months
ended September 30, 2007 along with projections of production and prices during
the next 12 months
- $1,000 per month from Farmington office space rental and
consulting services
- $5,000 per month interest and dividends earned on cash
balances and other investments
- $3,200 per month from the continued rental of the asphalt
storage and manufacturing facility plus an average of $8,300 per month in
throughput fees based on estimated annual asphalt product shipments of 10,000
tons during the 2008 paving season. While the asphalt facility was sold in
October 2007, Intermountain will continue to receive rental and throughput fees
associated with the facility until December 31, 2010 or such earlier time as may
be decided by Intermountain
- $370,000 of additional compensation from the sale of our
Kansas natural gas producing properties contingent on the successful return of
production from one of the Kansas gas units. During the nine months ended
November 30, 2007, Intermountain capitalized approximately $219,000 associated
with drilling and completing a replacement well on the unit. The well has not
yet developed sufficient operating pressure to produce saleable quantities of
natural gas. Intermountain's consultant believes that a large amount of water
had previously invaded the gas producing formation from a casing leak in the
original well, which has since been plugged. Intermountain is presently
attempting to dewater the gas producing formation with the hope that the gas
pressure will improve to the point that saleable quantities of gas can be
achieved.  There is no assurance that resumption of production from the gas unit
will be successful.

### 10-QSB 3<page>

Estimates of future
sources and uses of cash presented herein are based on our assumptions and
expectations that our operations will continue at current levels without
material interruption and that collection of accounts will occur under agreed
terms. Actual results may be materially different.



### Results of Operations:

The following table summarizes the results of Intermountain's
operations for each of the periods indicated. All percentage amounts were
calculated using the underlying data.





|                               | Three months ended | Nine months ended
|------------------------------ | ------------------ | -----------------
|                               | November 30, 2006  | % Change         
|Revenues                       | $     224,751      | (35)%            
|Costs and expenses             | 228,121            | (89)%            
|Net income (loss) before taxes | (3,370)            | 3,677%           
|Income taxes                   | (1,459)            | 2,568%           
|Net Income (Loss)              | $     (1,911)      | 4,523%           

#### 

#### Revenues:

The following table presents a summary of Intermountain's
revenues for the periods indicated. All percentage amounts were calculated using
the underlying data.





|                                  | Three months ended | Nine months ended
|--------------------------------- | ------------------ | -----------------
|                                  | November 30, 2006  | % Change         
|Oil and gas production            | $     125,957      | (74)%            
|Asphalt equipment rental and fees | 92,509             | 19%              
|Real estate rental                | 5,535              | (55)%            
|Other revenues                    | 750                | 0%               
|Total Revenues                    | $     224,751      | (35)%            



Changes in individual components of revenues are discussed
below:

##### Oil and gas revenues:

The following table contains oil and gas production volume,
net to Intermountain's interest, and average selling prices received for the
periods indicated:



|                                | For the three months
ended | For the nine months ended
|------------------------------- | -------------------------- | -------------------------
|                                | November 30,2006           | November 30,2007         
|Natural gas produced, net (Mcf) | 34,073                     | 4,088                    
|Average selling price ($/Mcf)   | $3.70                      | $7.97                    

The decrease in natural gas revenues for the nine months ended
November 30, 2007 compared to the nine months ended November 30, 2006 consisted
of a $391,000 decrease due to the February 2007 sale of the Kansas gas producing
properties and a $15,000 decrease in New Mexico natural gas sales. The decrease
in New Mexico natural gas sales consisted of a 5,180 Mcf (28%) decrease in
natural gas produced offset by a $1.51 per Mcf (23%) increase in average selling
prices. Due to the complexity of economic factors affecting energy prices, we
are unable to predict the direction or magnitude of future prices changes. It is
expected that Intermountain's production of natural gas will decline over the
next twelve months consistent with observed decline rates.

### 10-QSB 4<page>

The decrease in oil and natural gas revenues for the nine
months ended November 30, 2006 compared to the nine months ended November 30,
2005 consisted of a $193,000 decrease in natural gas revenues and a $27,000
decrease in crude oil revenues. The decrease in natural gas revenues consisted
of an 11,351Mcf (8%) decrease in natural gas produced and a $1.05 per Mcf (21%)
decrease in selling prices. Kansas natural gas revenues declined by $157,000
which consisted of a 7,493 Mcf (6%) decrease in production along with a $1.11
per MCF (32%) decrease in selling prices. New Mexico natural gas revenues
declined by $35,000 which consisted of a 3,858 Mcf (17%) decrease in production
along with a $0.43 per Mcf (6%) decrease in selling prices. Intermountain sold
its Nebraska crude oil producing properties in November 2005.

The decrease in natural gas revenues for the three months
ended November 30, 2007 compared to the three months ended November 30, 2006
consisted of a $102,000 decrease due to the February 2007 sale of the Kansas gas
producing properties offset by a $9,000 increase in New Mexico natural gas
sales. The increase in New Mexico natural gas sales consisted of a 205 Mcf (5%)
increase in natural gas produced along with a $1.79 per Mcf (29%) increase in
average selling prices.

The decrease in crude oil and natural gas revenues for the
three months ended November 30, 2006 compared to the three months ended November
30, 2005 consisted of a $171,000 decrease in natural gas revenues and an $8,000
decrease in crude oil revenues. The decrease in natural gas revenues consisted
of an 11,828 Mcf (26%) decrease in production along with a $2.76 per Mcf (43%)
decrease in selling prices. Kansas natural gas revenues declined by $124,000
that consisted of a 7,915 Mcf (21%) decrease in production along with a $2.81
per Mcf (45%) decrease in selling prices. New Mexico natural gas revenues
declined by $37,000 which consisted of a 3,913 Mcf (50%) decrease in production
along with a $1.62 per Mcf (21%) decrease in selling prices. Intermountain sold
its Nebraska crude oil producing properties in November 2005.

##### Leasing of asphalt products manufacturing and storage
facilities:

Asphalt equipment rental and throughput fees increased by
$44,000 for the nine months ended November 30, 2007 compared to the nine months
ended November 30, 2006 and increased by $18,000 for the three months ended
November 30, 2007 compared to the three months ended November 30, 2006. Product
shipments from the facility increased by 4,432 tons (39%) during the nine months
ended November 30, 2007 compared to the nine months ended November 30, 2006 and
decreased by 435 tons (8%) during the three months ended November 30, 2007
compared to the three months ended November 30, 2006. During the quarter ended
November 30, 2007, total shipments for the 2007 calendar year exceeded 10,000
tons, which triggered the retroactive $4.50 per ton supplemental throughput fee.
The calendar 2007 paving season ended in November 2007. Shipments of products
for the 2008 paving season are expected to begin in April or May of 2008. The
fourth extended term of the lease contract on the asphalt facility was set to
expire on December 31, 2006. However, the contract has been extended for an
additional year. In October 2007, Intermountain sold all of its land and
equipment located at the Fredonia facility, including the equipment leased under
the agreement with Paramount. As part of the sale agreement, Intermountain
retained the benefits and obligations associated with the equipment leased to
Paramount until December 31, 2010 or an earlier date at the sole option of
Intermountain. Intermountain intends to maintain the agreement with Paramount
until December 31, 2010 unless Paramount, at its option, cancels the agreement
prior to that time. Due to changing asphalt market conditions, Intermountain is
unable to predict the volume of asphalt product shipments from the facility over
the next twelve months but we anticipate that asphalt shipments during the 2008
paving season will be comparable to those of the 2007 paving season.

Asphalt equipment rental and throughput fees decreased overall
by $64,000 for the nine months ended November 30, 2006 compared to the nine
months ended November 30, 2005 but increased by $10,000 for the three months
ended November 30, 2006 compared to the three months ended November 30, 2005.
Overall, asphalt product shipments declined by 6,500 tons (36%) during the nine
months ended November 30, 2006 compared to the nine months ended November 30,
2005. We had anticipated that product shipments would decline due to a reduction
in the amount of paving grade asphalt made available for sale from the facility
by Paramount and we previously downgraded our 2006 asphalt product shipment
projections from 15,000 tons to 10,000 tons. During the quarter ended November
30, 2006, total shipments for the 2006 calendar year exceeded 10,000 tons, which
triggered the retroactive $4.50 per ton supplemental throughput fee.

### 10-QSB 5<page>

##### Real estate rental:

The decrease in real estate rental revenues for the three and
six months ended November 30, 2007 compared to the three and nine months ended
November 30, 2006 was attributed to a decrease in occupancy in the Farmington,
New Mexico office building. One tenant moved out during the quarter ended March
31, 2007, which resulted in a reduction in rental revenues of approximately
$885/month. The vacated offices were renovated during the quarter ended November
30, 2007 and portions of the space were rented to another tenant in December
2007. There are presently six small to medium sized offices available for rent
in the building.

The decrease in real estate rental income for the three and
nine months ended November 30, 2006 compared to the three and nine months ended
November 30, 2005 was due to a slight decrease in occupancy in the Farmington
office building.



#### Costs and Expenses:

The following table presents a summary of Intermountain's
costs and expenses for the periods indicated:



|                                                                                    | Three Months Ended | Nine Months Ended
|----------------------------------------------------------------------------------- | ------------------ | -----------------
|                                                                                    | November 30, 2006  | % Change         
|Cost of sales                                                                       | $    173,156       | (84)%            
|General and administrative costs                                                    | 65,266             | 16%              
|Depletion, depreciation and amortization                                            | 7,982              | (37)%            
|Accretion of discount on asset retirement
obligations                               | 532                | (80)%            
|Salvage of refinery equipment                                                       | -                  | (100+)%          
|Loss on settlement of asset retirement
obligations                                  | -                  | -                
|Gain on sale of land and equipment                                                  | (6,768)            | (910)%           
|Gain on sale of electric generation facility                                        | (4,936)            | 100%             
|Bad debt expense                                                                    | -                  | -                
|Interest and investment income, (net of depletion on
investments in royalty trusts) | (7,111)            | (95)%            
|Total costs and expenses                                                            | $  228,121         | (89)%            
|                                                                                    |                    |                  



Changes in individual components of costs and expenses are
discussed below.

##### Cost of sales:

Cost of sales includes costs incurred in the production of oil
and natural gas and certain costs of maintaining the asphalt and refinery
facility.

The decrease in costs of sales during the nine months ended
November 30, 2007 compared to the nine months ended November 30, 2006 consisted
of a $247,000 decrease in natural gas production costs and a $16,000 decrease in
asphalt facility maintenance costs. The decrease in natural gas production costs
consisted of a $1,000 increase in New Mexico natural gas production costs and a
$248,000 decrease associated with the Kansas natural gas producing properties,
which were sold on February 28, 2007. Well pump, production casing and tubing,
and surface equipment failures occur randomly and the timing and cost of repairs
cannot be accurately predicted. During the nine months ended November 30, 2007,
Intermountain incurred approximately $27,000 in costs associated with repair
claims made by the purchaser of the Kansas properties in accordance with
provisions of the sale agreement, approximately $3,000 for its share of 2007
Kansas property taxes, and $3,000 associated with dewatering operations on a
replacement well completed in July 2007. It is believed that all repair claims
made by the purchaser have now been satisfied. The dewatering operation
associated with the replacement well in Kansas will continue until the well
develops sufficient pressure to produce saleable quantities of gas, or it is
determined that such cannot be accomplished. It is anticipated that dewatering
costs will be approximately $1,000 per month. There is no assurance that
dewatering efforts will be successful. The decrease in asphalt facility
maintenance costs were attributed substantially to debris removal costs incurred
during the nine months ended November 30, 2006 in association with completion of
equipment dismantling activities.

### 10-QSB 6<page>

The decrease in cost of sales during the nine months ended
November 30, 2006 compared to the nine months ended November 30, 2005 consisted
of a $103,000 decrease in oil and natural gas production costs offset by a
$14,000 increase in asphalt facility maintenance costs. The decrease in oil and
natural gas production costs consisted of a $51,000 decrease in Kansas natural
gas production costs, a $37,000 decrease in New Mexico natural gas production
costs, and the elimination of $14,000 in Nebraska crude oil production costs.
The Nebraska crude oil producing properties were sold during November 2005.  The
increase in asphalt facility maintenance costs was attributed to costs incurred
to clear debris left behind upon completion of equipment dismantling and metal
salvage activities.

The decrease in costs of sales during the three months ended
November 30, 2007 compared to the three months ended November 30, 2006 consisted
of a $130,000 decrease in natural gas production costs and a $16,000 decrease in
asphalt facility maintenance costs. The decrease in natural gas production costs
consisted of a $5,000 increase in New Mexico natural gas production costs and a
$134,000 decrease associated with the Kansas natural gas producing properties,
which were sold in February 2007. During the three months ended November 30,
2007, Intermountain incurred $3,000 for its share of 2007 Kansas property taxes
and approximately $2,000 associated with dewatering operations on the Kansas
replacement well that was completed in July 2007. The decrease in asphalt
facility maintenance costs was attributed to debris removal costs incurred
during the three month period ended November 30, 2006.

The increase in costs of sales during the three months ended
November 30, 2006 compared to the three months ended November 30, 2005 consisted
of a $15,000 increase in asphalt facility maintenance costs offset by a $6,000
decrease in oil and natural gas production costs. The decrease in oil and
natural gas production costs consisted of a $39,000 increase in Kansas natural
gas production costs offset by a $40,000 decrease in New Mexico natural gas
production costs and the elimination of  $5,000 crude oil production
costs.

##### General and administrative expenses:

General and administrative expenses include the cost of
Intermountain's officers and administrative employees, costs incurred to operate
and maintain the Farmington office building, and all items of general overhead
required to manage and administer the corporate affairs of
Intermountain.

The increase in general and administrative expenses during the
three and nine months ended November 30, 2007 compared to the three and nine
months ended November 30, 2006 were generally attributed to approximately
$10,000 incurred for minor roof repairs and office space renovations performed
on several offices that had been vacated earlier in 2007. Overall, all other
general and administrative expense categories declined by $3,000 during the nine
months ended November 30, 2007 compared to the nine months ended November 30,
2006. Aside from the office building maintenance costs discussed above, there
were no significant changes in general and administrative costs for the three
months ended November 30, 2007 compared to the three months ended November 30,
2006.

There were no significant changes in general and
administrative expenses during the three and six months ended November 30, 2006
compared to the three and six months ended November 30, 2005.

##### Depreciation and Depletion:

The decrease in depreciation and depletion costs for the nine
months ended November 30,2007 compared to the nine months ended November 30,
2006 primarily consisted of a $5,700 decrease in New Mexico natural gas
depletion and an $11,600 decrease in depletion associated with the Kansas gas
producing properties which were sold in February 2007. The decrease in
depreciation and depletion costs for the three months ended November 30, 2007
compared to the three months ended November 30, 2006 primarily consisted of a
$300 increase in New Mexico natural gas depletion and a $3,200 decrease in
depletion associated with the Kansas gas producing properties.

The decrease in depreciation and depletion costs during the
nine months ended November 30, 2006 compared to the nine months ended November
30, 2005 consisted of a $700 decrease in Kansas natural gas depletion, a $3,000
decrease in New Mexico natural gas depletion and the elimination of $2,000 of
depletion associated with the Nebraska crude oil properties. The decrease in
depreciation and depletion costs during the three months ended November 30, 2006
compared to the three months ended November 30, 2005, consisted of a $700
decrease in Kansas natural gas depletion, a $4,000 decrease in New Mexico
natural gas depletion, and the elimination of $600 in depletion associated with
the Nebraska crude oil properties.

##### Salvage of refinery equipment:

In April 2005, we initiated the process of dismantling the
portions of our Fredonia refining equipment that were no longer used for ongoing
operations and were not expected to be used in the future. During the nine
months ended November 30, 2007, Intermountain sold pipe and equipment for
$9,900. The carrying value of the items sold had previously been fully impaired.
During the nine month period ended November 30, 2006, Intermountain recognized
$11,000 from the salvage of metals removed from the facility. All of the land
and remaining equipment located at the facility were sold to an unrelated third
party in October 2007.

### 10-QSB 7<page>

##### Gain on sale of land and equipment:

In October 2007, Intermountain sold its remaining 20 acres of
land and all remaining equipment located at its Fredonia facility to an
unrelated third party for $80,000. On the date of closing, the carrying value of
the land and equipment was $11,353, net of accumulated depreciation of $577,919,
which resulted in a $68,383 gain on the sale after $264 in closing costs. As an
inducement to enter into the transaction, the purchaser granted Intermountain
the right to retain all benefits and obligations related to the asphalt
manufacturing and storage equipment under lease to Paramount Petroleum. The
rights and obligations associated with the leased equipment will expire on
December 31, 2010 unless terminated earlier at Intermountain's
option.

During November 2006, Intermountain sold approximately 1 acre
of land located at the Fredonia, Arizona facility to Red Hills Manufacturing,
Inc., a related party, for $7,500. On the date of closing, the carrying value of
the land was $732, which resulted in a gain on the sale of $6,768 after $50 in
closing costs.

##### Sale of electric generation equipment:

In November 2006, Intermountain sold its electric generation
equipment, including associated land and building, for approximately $274,000.
As of the date of closing, the carrying cost of the facility was $264,884, net
of previously recognized impairments in value totaling $440,935. The net
proceeds from the sale were $269,820 resulting in a gain on the sale of
$4,936.

##### Bad debt expense:

During the nine months ended November 30, 2007, Intermountain
wrote off, as uncollectible, $11,000 associated with a past due account which
arose from the prior salvage of portions of the equipment and metals salvaged
from the Fredonia refinery facility. The subject account was not related to
on-going operations.

##### Loss on settlement of asset retirement
obligations:

During the nine months ended November 30, 2006, Intermountain
recognized a $7,100 loss on the settlement of asset retirement obligations
associated with the plugging and abandonment of one of our Kansas natural gas
wells. At the time of plugging, the present value of the well's estimated
retirement obligation was $2,700. The actual plugging cost for the well was
$9,800.

##### Interest and investment income (net):

Interest and investment income includes earnings on cash
balances and certificates of deposit, and net earnings on
investments.

The increase in interest and investment income for the nine
months ended November 30, 2007 compared to the nine months ended November 30,
2006 consisted of a $27,800 increase in interest earned on cash balances and
notes receivable, and a $600 decrease in investment earnings (net of depletion
on investments in oil and gas royalty trusts). The increase in interest and
investment income for the three months ended November 30, 2007 compared to the
three months ended November 30, 2006 consisted of a $7,100 increase in interest
earned on cash balances and notes receivable and a $200 increase in investment
income (net of depletion on investments in oil and gas royalty trusts). During
the three and nine months ended November 30, 2007 we incurred approximately $500
of interest expense associated with interest on fiscal year ended February 28,
2007 income tax payments due. Intermountain did not incur any interest expense
during the three and nine months ended November 30, 2006.

The increase in interest and investment income for the nine
months ended November 30, 2006 compared to the nine months ended November 30,
2005 consisted of a $10,000 increase in interest earned on cash balances, and a
$4,000 increase in investment earnings (net of depletion on investments in oil
and gas royalty trusts). The increase in interest and investment income for the
three months ended November 30, 2006 compared to the three months ended November
30, 2005 consisted of a $4,000 increase in interest earned on cash balances and
a $5,000 increase in investment earnings (net of depletion on investments on oil
and gas royalty trusts). We incurred no interest expense during the three and
nine months ended November 30, 2006 and November 30, 2005.

### Inflation, Deflation and Changing Prices:

The results of operations and capital expenditures will
continue to be affected by inflation, deflation and changing prices. 
Prices of natural gas could have a materially adverse effect on Intermountain's
operations.  Management is unable to determine the full impact of
inflation, deflation and changing prices on the results of operations or working
capital.

### 10-QSB 8<page>

### Critical Accounting Estimates

Certain accounting estimates are important to the presentation
of our financial condition and results of operations and require management's
subjective or complex judgments. Such estimates are subject to change based on
future conditions and events that may have a material effect on our financial
condition and results of operations. There have been no significant changes in
our assumptions or underlying factors that may adversely affect our previous
accounting estimates.

### Controls and Procedures

### Evaluation of Disclosure Controls and
Procedures:

Disclosure controls and procedures are designed and
implemented to insure that all material information relating to a company is
made known to its chief operating officer, chief financial officer, and such
other persons who are responsible for preparing and filing periodic reports with
the Securities and Exchange Commission.  William N. Hager and Rick L. Hurt,
representing all of the officers and directors of Intermountain, have evaluated
our disclosure controls and procedures and concluded that such controls were
effective as of November 30, 2007.

### Changes in Internal Controls:

There have been no significant changes in Intermountain's
internal controls or in other factors that could significantly affect these
controls subsequent to the date of Management's last evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.

### Legal Proceedings

We are not aware of any pending or threatened legal
proceedings to which Intermountain is a party. We are not aware of any pending
or threatened legal proceedings to which any director, officer, affiliate of
Intermountain, or any owner of more than 5% of Intermountain's common stock, is
an adverse party to, or has a material interest adverse to,
Intermountain.

### Submission of Matters to a Vote of Security Holders

There have been no matters submitted to a vote of security
holders during the three months ended November 30, 2007 through the solicitation
of proxies or otherwise.

### Financial Statements of Intermountain Refining Co., Inc.

### Index to Financial Statements



|                                                                                            | Page
|------------------------------------------------------------------------------------------- | ----
|                                                                                            |     
|Balance Sheet as of November 30,
2007                                                       | 10  
|                                                                                            |     
|Statements of Operations and
Comprehensive Income/Loss for the three and nine month periods |     
|ended November
30, 2006 and November 30, 2007                                               | 11  
|                                                                                            |     
|Statements of Cash Flows for the
nine month periods ended                                   |     
|November 30, 2006
and November 30, 2007                                                     | 12  
|                                                                                            |     
|Notes to financial
statements                                                               | 13  

### 10-QSB 9<page>



|Intermountain Refining Co., Inc.                                           |  |              
|-------------------------------------------------------------------------- |  | -------------
|Balance Sheet - Unaudited                                                  |  |              
|November 30, 2007                                                          |  |              
|                                                                           |  |              
|Assets                                                                     |  |              
|Current Assets                                                             |  |              
|Cash and cash equivalents                                                  |  | $   2,013,419
|Accounts receivable                                                        |  | 94,724       
|Current portion of notes receivable - Note
C                               |  | 12,570       
|Accrued interest receivable                                                |  | 109          
|Prepaid expenses                                                           |  | 2,817        
|Total Current Assets                                                       |  | 2,123,639    
|Property, Plant and
Equipment, net of valuation allowances                 |  |              
|Land, buildings and improvements - Note
C                                  |  | 343,057      
|Equipment                                                                  |  | 45,990       
|Asphalt manufacturing and storage
equipment                                |  | 4,000        
|Oil and gas properties, (successful
efforts method)- Note B                |  | 658,489      
|                                                                           |  | 1,051,536    
|Less accumulated depletion and
depreciation                                |  | (464,388)    
|                                                                           |  | 587,148      
|Other Assets                                                               |  |              
|Notes receivable, net of current portion - Note
C                          |  | 26,384       
|Available-for-sale
investments                                             |  | 130,527      
|Other assets                                                               |  | 275          
|                                                                           |  | 157,186      
|Total Assets                                                               |  | $ 2,867,973  
|                                                                           |  |              
|Liabilities and Stockholders' Equity                                       |  |              
|Current Liabilities                                                        |  |              
|Accounts payable                                                           |  | $     3,701  
|Taxes other than income
taxes                                              |  | 2,659        
|Income taxes payable                                                       |  | 8,483        
|Total Current
Liabilities                                                  |  | 14,843       
|Deferred
Taxes                                                             |  | 19,865       
|                                                                           |  |              
|Asset Retirement Obligations                                               |  | 7,082        
|Commitments and
Contingencies                                              |  | -            
|Stockholders'
Equity                                                       |  |              
|Common stock, no par value, authorized
10,000,000 shares,                  |  |              
|issued and outstanding 1,155,609 shares                                    |  | 1,455,314    
|Preferred stock, $0.01 par value, authorized 5,000,000
shares,             |  |              
|0 shares issued and outstanding.                                           |  | -            
|                                                                           |  |              
|Retained earnings                                                          |  | 1,333,976    
|Accumulated other comprehensive gain                                       |  | 36,893       
|                                                                           |  | 2,826,183    
|Total Liabilities and Stockholders'
Equity                                 |  | $ 2,867,973  
|                                                                           |  |              
|The accompanying notes are an integral part of these
financial statements. |  |              

### 10-QSB 10<page>



|Intermountain Refining Co., Inc.                                                                                                                                                                                                                                                  |                    |                   |               |              
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------ | ----------------- | ------------- | -------------
|Statements of Operations and Comprehensive Income
(Loss)                                                                                                                                                                                                                          |                    |                   |              
|                                                                                                                                                                                                                                                                                  | Three months ended | Nine months ended
|                                                                                                                                                                                                                                                                                  | November 30,       | November 30,      | November 30,  | November 30, 
|                                                                                                                                                                                                                                                                                  | 2006               | 2007              | 2006          | 2007         
|                                                                                                                                                                                                                                                                                  | (Unaudited)        | (Unaudited)       | (Unaudited)   | (Unaudited)  
|Revenues                                                                                                                                                                                                                                                                          |                    |                   |               |              
|Oil and gas production revenues - Note
B                                                                                                                                                                                                                                          | $   125,957        | $    32,581       | $   515,137   | $   109,018  
|Asphalt equipment rental and fees                                                                                                                                                                                                                                                 | 92,509             | 110,062           | 143,727       | 188,045      
|Real estate rental income                                                                                                                                                                                                                                                         | 5,535              | 2,490             | 17,413        | 9,240        
|Other revenues                                                                                                                                                                                                                                                                    | 750                | 750               | 2,250         | 2,250        
|                                                                                                                                                                                                                                                                                  | 224,751            | 145,883           | 678,527       | 308,553      
|Costs and Expenses                                                                                                                                                                                                                                                                |                    |                   |               |              
|                                                                                                                                                                                                                                                                                  |                    |                   |               |              
|Cost of sales, exclusive of depletion,
depreciation and amortization    shown separately
below  - Note B                                                                                                                                                                          | 173,156            | 27,266            | 364,162       | 101,119      
|General and administrative                                                                                                                                                                                                                                                        | 65,266             | 75,656            | 215,426       | 222,477      
|Depletion, depreciation and
amortization                                                                                                                                                                                                                                          | 7,982              | 5,000             | 34,011        | 16,317       
|Accretion of discount on asset retirement
obligations                                                                                                                                                                                                                             | 532                | 104               | 1,598         | 312          
|Salvage of refinery equipment                                                                                                                                                                                                                                                     | -                  | (430)             | (11,141)      | (9,930)      
|Loss on settlement of asset retirement
obligations                                                                                                                                                                                                                                | -                  | -                 | 7,112         | -            
|Gain on sale of land and equipment - Note C                                                                                                                                                                                                                                       | (6,768)            | (68,383)          | (6.768)       | (68.383)     
|Gain on sale of electric generation facility                                                                                                                                                                                                                                      | (4,936)            | -                 | (4,936)       | -            
|Bad debt expense                                                                                                                                                                                                                                                                  | -                  | -                 | -             | 11,311       
|Interest and investment (income)/loss,
net                                                                                                                                                                                                                                        | (7,111)            | (13,873)          | (20,865)      | (47,580)     
|                                                                                                                                                                                                                                                                                  | 228,121            | 25,340            | 578,599       | 225,643      
|Income (Loss) From Operations Before Income
Taxes                                                                                                                                                                                                                                 | (3,370)            | 120,543           | 99,928        | 82,910       
|                                                                                                                                                                                                                                                                                  |                    |                   |               |              
|Provision (benefit) for income
taxes                                                                                                                                                                                                                                              |                    |                   |               |              
|Current                                                                                                                                                                                                                                                                           | (1,459)            | 36,014            | 1,407         | 21,976       
|Deferred                                                                                                                                                                                                                                                                          | -                  | -                 | -             | -            
|                                                                                                                                                                                                                                                                                  | (1,459)            | 36,014            | 1,407         | 21,976       
|                                                                                                                                                                                                                                                                                  |                    |                   |               |              
|Net Income (Loss)                                                                                                                                                                                                                                                                 | $(1,911)           | $84,529           | 98,521        | 60,934       
|                                                                                                                                                                                                                                                                                  |                    |                   |               |              
|Other Comprehensive Income, net of tax:                                                                                                                                                                                                                                           |                    |                   |               |              
|Unrealized gains (losses) on available for sale
securities:                                                                                                                                                                                                                       |                    |                   |               |              
|Unrealized holding gain arising during the period (net of
deferred tax expense of  $2,808 and $1,338 for the three and nine month periods
ended November 30, 2007, respectively and $2,488 and $2,650 for the three and
nine month periods ended November 30, 2006, respectively) | 4,619              | 5,215             | 4,920         | 2,487        
|                                                                                                                                                                                                                                                                                  |                    |                   |               |              
|Comprehensive Income  (Loss)                                                                                                                                                                                                                                                      | $        2,708     | $        89,744   | $    103,441  | $     63,421 
|                                                                                                                                                                                                                                                                                  | =========          | =========         | =========     | =========    
|Weighted Average Number of Shares
Outstanding                                                                                                                                                                                                                                     | 1,155,609          | 1,155,609         | 1,155,609     | 1,155,609    
|                                                                                                                                                                                                                                                                                  |                    |                   |               |              
|Basic and Fully Diluted Earnings Per
Share                                                                                                                                                                                                                                        |                    |                   |               |              
|Net income (loss)                                                                                                                                                                                                                                                                 | $      
(0.00)     | $      
0.07      | $       
0.09 | $       
0.05
|                                                                                                                                                                                                                                                                                  | ========           | ========          | ========      | ========     
|                                                                                                                                                                                                                                                                                  |                    |                   |               |              
|The accompanying notes are an integral part of these
financial statements.                                                                                                                                                                                                       

### 10-QSB 11<page>



|Intermountain Refining Co.,
Inc.Statements of Cash Flows                                                                                                                                                                 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                         
|                                                                                                                                                                                                                         
|                                                                                                                                                                                                                         
|                                                                                                                                                                                                                         
|Cash Flows From Operating Activities                                                                                                                                                                                     
|Net income (loss)                                                                                                                                                                                                        
|Adjustments to reconcile net loss to net
cash provided (used) by operating activities:                                                                                                                                   
|Depreciation, depletion and
amortization                                                                                                                                                                                 
|Accretion of discount on asset retirement
obligations                                                                                                                                                                    
|Depletion on investments in oil and gas royalty
trusts                                                                                                                                                                   
|Loss on settlement of asset retirement
obligations                                                                                                                                                                       
|Bad debt expense                                                                                                                                                                                                         
|Gain on sale of land and equipment                                                                                                                                                                                       
|Gain on sale of electric generation
facility                                                                                                                                                                             
|Changes in operating assets and
liabilities:                                                                                                                                                                             
|(Increase) decrease in
accounts receivable                                                                                                                                                                               
|(Increase) decrease in accrued interest
receivable                                                                                                                                                                       
|Increase in prepaid expenses                                                                                                                                                                                             
|Increase (Decrease) in
accounts payable and accrued expenses                                                                                                                                                             
|Decrease in income taxes
payable                                                                                                                                                                                         
|Net Cash Flow Provided (Used) by Operating
Activities                                                                                                                                                                    
|                                                                                                                                                                                                                         
|Cash Flows From Investing Activities                                                                                                                                                                                     
|Settlement of asset retirement obligations                                                                                                                                                                               
|Issuance of notes receivable                                                                                                                                                                                             
|Collection of notes receivable                                                                                                                                                                                           
|Purchases of available for sale
investments                                                                                                                                                                              
|Proceeds from the sale of land and
equipment                                                                                                                                                                             
|Capitalized oil and gas development
costs                                                                                                                                                                                
|Purchase of improvements to electric generation
equipment                                                                                                                                                                
|Proceeds from sale of electric generation
facility                                                                                                                                                                       
|Net Cash Flow Used by Investing Activities                                                                                                                                                                               
|                                                                                                                                                                                                                         
|Increase (Decrease) in Cash and Cash
Equivalents                                                                                                                                                                         
|                                                                                                                                                                                                                         
|Cash and Cash Equivalents at Beginning of
Year                                                                                                                                                                           
|                                                                                                                                                                                                                         
|Cash and Cash Equivalents at End of
Period                                                                                                                                                                               
|Intermountain paid interest of $499 during the nine
month period ended November 30, 2007.                                                                                                                                
|Intermountain paid interest of $0 during the nine month
period ended November 30, 2006.                                                                                                                                  
|Intermountain paid income taxes of  $200,558 during the
nine month period ended November 30, 2007.                                                                                                                       
|Intermountain paid income taxes of  $266 during the
nine month period ended November 30, 2006.                                                                                                                           
|                                                                                                                                                                                                                         
|Supplemental Schedule of Noncash Investing
Activities:During the nine month period ended
November 30, 2007, Intermountain's available for sale investments increased in
value by $2,487, net of deferred taxes of $1,338.
|During the nine month period ended November 30, 2006,
Intermountain's available for sale investments increased in value by $4,920, net
of deferred taxes of $2,650.                                                      
|                                                                                                                                                                                                                         
|The accompanying notes are an integral part of these
financial statements.                                                                                                                                               

### 10-QSB 12<page>

### Intermountain Refining Co., Inc.

### Notes to Financial Statements

### Note A - Interim Financial Statements (Unaudited)

The accompanying balance sheet as of November 30, 2007 and the
statements of operations for the three and nine month periods ended November 30,
2006 and November 30, 2007, and the statements of cash flows for the nine month
periods ended November 30, 2006 and November 30, 2007 have been prepared by
Intermountain, without audit. In the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to present fairly
the financial position, results of operations and changes in cash at November
30, 2007, and for all periods presented, have been made.

It is suggested that these unaudited financial statements be
read in conjunction with the audited financial statements for the year ended
February 28, 2007. The results of operations for the nine months ended November
30, 2007 are not necessarily indicative of the operating results for the full
year.

### Note B - Kansas Natural Gas Producing
Properties

Intermountain sold all of its interests in the Kansas natural
gas producing properties on February 28, 2007. As part of the sale agreement,
Intermountain is entitled to receive an additional $370,000 contingent upon
restoration of production from one gas unit that, due to a significant casing
failure, was not producing natural gas as of the date of sale. Intermountain
attempted additional repair efforts subsequent to February 28, 2007 and
ultimately decided to drill a replacement well on the unit. The replacement well
was completed in July 2007. Initial gas pressure at the wellhead was not
sufficient to produce saleable quantities of gas and Intermountain, at the
advise of its consultant, is presently attempting to dewater the producing
formation in an effort to raise gas pressure to saleable levels. During the nine
month period ended November 30, 2007, Intermountain capitalized approximately
$219,000 in development costs associated with its efforts to restore production
from the gas unit. Management believes there is a reasonable probability that
production from the unit can be restored, however, there is no assurance that
the replacement well will be successful.

### Note C - Sale of Land and Equipment:

In October 2007, Intermountain sold its remaining 18 acres of
land and all remaining equipment located at its Fredonia facility to an
unrelated third party for $80,000. The proceeds from the sale included $40,000
cash down payment and a $40,000 6% note receivable, payable in 36 equal monthly
installments. On the date of closing, the carrying value of the land and
equipment was $11,353, net of accumulated depreciation of $577,919, which
resulted in a $68,383 gain on the sale after $264 in closing costs. As an
inducement to enter into the transaction, the purchaser granted Intermountain
the right to retain all benefits and obligations related to the asphalt
manufacturing and storage equipment under lease to Paramount Petroleum. The
rights and obligations associated with the leased equipment will expire on
December 31, 2010 unless terminated earlier at Intermountain's option.

### 10-QSB 13<page>

### Exhibits and Reports on Form 8-K

### Reports on Form 8-K:

There were no reports on Form 8-K filed by Intermountain
during the quarter ended November 30, 2007.

### Exhibits:





|Exhibit | Description                                                                                 
|------- | --------------------------------------------------------------------------------------------
|3.1     | Amended and Restated Articles of Incorporation
(1)                                          
|3.2     | Bylaws (1)                                                                                  
|10.5    | Paramount Petroleum Agreement (1)                                                           
|14.1    | Code of Ethics (2)                                                                          
|31.1    | Certification under Rule 13a-14(a)/15d-14(a) of Rick L.
Hurt, Secretary, Treasurer, Director
|31.2    | Certification under Rule 13a-14(a)/15d-14(a) of William N.
Hagler, President, Director      
|99.1    | Certification of  Chief Executive Officer under Sec.906 of
Sarbanes-Oxley Act of 2002       
|99.2    | Certification of  Chief Financial Officer under Sec.906 of
Sarbanes-Oxley Act of 2002       

(1) Incorporated herein by reference to Intermountain's
registration statement filed on Form S-1 dated April 9, 2001.

(2) Incorporated herein by reference to Intermountain's Form
10-KSB for the year ended February 28, 2006, as filed with the Commission on May
17, 2006.

### Signatures

Pursuant to 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, in the City of Farmington, State of New
Mexico, on January 14, 2008.

Intermountain Refining Co., Inc.

By:/s/ William N.
HaglerWilliam N. Hagler, President

Pursuant to the requirements of the Exchange Act, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ William N.
Hagler_________________   Date: January 14,
2008William N. Hagler, Chairman of the Board
ofDirectors, and
President/s/ Rick
L. Hurt ____________________   Date: January 14,
2008Rick L. Hurt, Secretary, Treasurer, Director

### 10-QSB 14<page>