AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION ON



January 16, 2007



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, 2006



[   ]           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,
2006.

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                                                       | 2   
|Cash Requirements as of November 30, 2006                                             | 3   
|Results of Operations                                                                 | 3   
|Inflation, Deflation and Changing Prices                                              | 8   
|Critical Accounting Estimates                                                         | 8   
|Controls and Procedures                                                               | 8   
|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  
|                                                                                      |     

### 

### Financial Statements of Intermountain

The financial statements of Intermountain as of November 30,
2006 and for the three and nine month periods ended November 30, 2005 and
November 30, 2006 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, 2006 and results of operations for the three and nine month periods
ended November 30, 2005 and November 30, 2006, 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 (all crude oil producing properties
were sold in November 2005)
- Leasing, on a fees basis, of asphalt paving products
manufacturing and storage facilities in Fredonia, Arizona
- Other business activities including leasing unused space in
Intermountain's office building

### Liquidity and Capital Resources:

Management believes that cash flow from ongoing operations
will be adequate to meet cash demands for the coming year.

10-QSB 2<PAGE>

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



|                          | February 28, 2006 | % Change | November 30, 2006
|------------------------- | ----------------- | -------- | -----------------
|Cash and cash equivalents | $     851,102     | 51%      | $  1,284,603     
|                          |                   |          |                  
|Working capital           | $     996,963     | 34%      | $  1,339,210     



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.

During the nine months ended November 30, 2005, Intermountain
realized a $141,000 decrease in cash from operating activities and a $42.000
increase in cash from non-operating sources. Significant or unusual operating
cash items during the period consisted of $277,000 cash used for the abatement
of asbestos containing materials at Intermountain's asphalt products
manufacturing and storage facility. The $42,000 increase in cash from
non-operating sources consisted of $38,500 from the sale of the Nebraska oil
producing properties, $37.000 from the surrender of an officer life insurance
policy, less $28,000 used to purchase new fuel tanks and cooling system
improvements on the electric generation equipment in preparation for its
anticipated sale.



### Cash requirements as of November 30,
2006:

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
- $1,000 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,
consisting of cash flows from operating and non-operating activities, are
estimated as follows:

- $20,000 per month net cash flow from estimated natural gas
operations based on results of operations during the nine months ended November
30, 2006 (as adjusted for projections of changes in production, prices, and
operating costs over the next twelve months)
- $1,900 per month from Farmington, NM office space
rental
- $2,500 per month interest and dividends earned on cash
balances and investments
- $3,200 per month from the rental of our asphalt storage and
manufacturing equipment plus an average of $8,300 per month in throughput fees
based on estimated annual asphalt product shipments of 10,000 tons during the
2007 paving season.

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.

10-QSB 3<PAGE>



|                                                        | Three months ended | Nine months ended
|------------------------------------------------------- | ------------------ | -----------------
|                                                        | November 30, 2005  | % Change         
|Revenues                                                | $     393,693      | (43)%            
|Costs and expenses (excluding asbestos abatement
costs) | 228,779            | (0)%             
|Asbestos abatement costs                                | 102,207            | (100+)%          
|Net income before taxes                                 | 62,707             | (105)%           
|Income taxes                                            | -                  | (100+)%          
|Net Income (Loss)                                       | $      62,707      | (103)%           

#### 

#### 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, 2005  | % Change         
|Oil and gas production            | $     304,520      | (59)%            
|Asphalt equipment rental and fees | 82,828             | 12%              
|Real estate rental                | 5,595              | (1)%             
|Other revenues                    | 750                | 0%               
|Total Revenues                    | $     393,693      | 43%              



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 30,2005           | November 30,2006         
|Natural gas produced, net (Mcf) | 45,901                     | 34,073                   
|Average selling price ($/Mcf)   | $6.46                      | $3.70                    
|Crude oil produced, net (Bbls)  | 141                        | N/A                      
|Average selling price ($/Bbl)   | $55.22                     | N/A                      

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. 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.

The increase in oil and natural gas revenues for the nine
months ended November 30, 2005 compared to the nine months ended November 30,
2004 consisted of a $102,000 increase in Kansas natural gas revenues, a $138,000
increase in New Mexico natural gas revenues, and a $4,000 increase in Nebraska
crude oil revenues. The increase in Kansas natural gas revenues consisted of a
$1.24 per Mcf (37%) increase in the average natural gas price received offset by
a 13,100 Mcf (10%) decrease in natural gas produced. The increase in New Mexico
natural gas revenues consisted of a 25,900 Mcf (728%) increase in natural gas
produced along with a $1.14 per Mcf (19%) increase in the average natural gas
price received. The significant increase in New Mexico natural gas production
was attributed to the inclusion of 10 months of production during the nine
months ended November 30, 2005 compared to the inclusion of only 2 months of
production during the nine months ended November 30, 2004. The New Mexico
properties were acquired in August 2004.  The increase in Nebraska crude oil
revenues consisted of a $13.13 per Bbl (36%) increase in the average crude oil
price received offset by a 94 Bbl (15%) decrease in crude oil sold.
Intermountain sold its interest in the Nebraska oil producing properties
effective as of November 1, 2005.

The decrease in crude oil and natural gas revenues during 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
which 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.

10-QSB 4<PAGE>

The increase in oil and natural gas revenues for the three
months ended November 30, 2005 compared to the three months ended November 30,
2004 consisted of a $102,000 (76%) increase in Kansas natural gas revenues, a
$40,000 (186%) increase in New Mexico natural gas revenues, and a $2,000
increase in Nebraska crude oil revenues. The increase in Kansas natural gas
revenues consisted of a $2.72 per Mcf (78%) increase in the average natural gas
price received offset by a 500 Mcf (1%) decrease in natural gas produced. The
increase in New Mexico natural gas revenues consisted of a $1.81 per Mcf (30%)
increase in average natural gas price received along with a 4,200 (119%)
increase in natural gas produced.  The increase in Nebraska crude oil revenues
consisted of a $12.58 per Bbl (30%) increase in the average crude oil price
along with a 13 Bbl (10%) increase in crude oil sold.

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

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. The
calendar 2006 paving season essentially ended in early December 2006. Shipments
of products for the 2007 paving season are expected to begin in April or May of
2007. The third 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. 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 2007
paving season will be comparable to those of the 2006 paving season.

Asphalt equipment rental and throughput fees increased overall
by $30,000 during the nine months ended November 30, 2005 compared to the nine
months ended November 30, 2004 but declined by $28,000 during the three months
ended November 30, 2005 compared to the three months ended November 30, 2004.
Overall, shipments of asphalt products increased for the three and nine months
ended November 30, 2005 compared to the three and nine months ended November 30,
2004. The decrease in throughput fee revenues during the three months ended
November 30, 2005 as compared to the three months ended November 30, 2004 was
due to the timing of the recognition of retroactive supplemental throughput fees
between the two periods.

##### Real estate rental:

Real estate rental income declined by an average $20 per month
and $32 per month for the three and nine months ended November 30, 2006 compared
to the three and nine months ended November 30, 2005 respectively. The reduction
in real estate rental income during the respective periods was due to a slight
decrease in occupancy in the Farmington, NM office building. There are presently
four small offices available for rent in the building.

10-QSB 5<PAGE>

Real estate rental income declined by an average $130 per
month and $87 per month for the three and nine months ended November 30, 2005
compared to the three and nine months ended November 30, 2004 respectively.

#### 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, 2005  | % Change         
|Cost of sales                                                                       | $    163,677       | 6%               
|General and administrative costs                                                    | 67,069             | (3)%             
|Depletion, depreciation and amortization                                            | 13,172             | (39)%            
|Accretion of discount on asset retirement
obligations                               | 671                | (21)%            
|Loss on settlement of asset retirement
obligations                                  | -                  | -                
|Asbestos abatement costs                                                            | 102,207            | (100)%           
|Salvage of refinery equipment                                                       | (25,005)           | 100%             
|Loss on sale of oil producing properties                                            | 7,888              | (100)%           
|Gain on sale of land                                                                | -                  | (100+)%          
|Gain on sale of electric generation facility                                        | -                  | (100+)%          
|Impairment of electric generation equipment                                         | -                  | -                
|Interest and investment income, (net of depletion on
investments in royalty trusts) | 1,307              | (644)%           
|Total costs and expenses                                                            | $  330,986         | (31)%            
|                                                                                    |                    |                  



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 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 (excluding asbestos
abatement 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 increase in cost of sales during the nine months ended
November 30, 2005 compared to the nine months ended November 30, 2004 consisted
of a $234,000 increase in oil and natural gas production costs offset by a
$15,000 decrease in asphalt facility maintenance costs (excluding asbestos
abatement costs). The increase in oil and natural gas production costs consisted
of a $154,000 increase in Kansas natural gas production costs along with the
addition of $85,000 in New Mexico natural gas production costs, offset by a
$5,000 decrease in Nebraska crude oil production costs. The significant increase
in Kansas natural gas production costs was the result of three production casing
failures experienced during the summer of 2005. The Nebraska crude oil
production properties were sold effective as of November 1, 2005. The decrease
in asphalt facility maintenance costs (excluding asbestos abatement costs) was
attributed to a decrease in environmental permitting and compliance
costs.

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 (excluding asbestos
abatement 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.

10-QSB 6<PAGE>

The increase in cost of sales during the three months ended
November 30, 2005 compared to the three months ended November 30, 2004 consisted
of a $50,000 increase in oil and natural gas production costs offset by a $4,000
decrease in asphalt facility maintenance costs (excluding asbestos abatement
costs). The increase in oil and natural gas production costs consisted of a
$15,000 increase in Kansas natural gas production costs, and a $40,000 increase
in New Mexico natural gas production costs, offset by a $5,000 decrease in
Nebraska 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.

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.

There were no significant changes in general and
administrative expenses during the three and six months ended November 20, 2005
compared to the three and six months ended November 30, 2004.

##### Asbestos abatement obligation and salvage of
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. As part of the
process, the presence of asbestos containing materials was identified in
portions of the equipment. The abatement of asbestos containing materials at the
facility was substantially completed during the year ended February 28, 2006 and
we do not believe that we will incur any significant future costs associated
with asbestos abatement at the facility. During the nine month period ended
November 30, 2006, we recognized $11,000 from the salvage of metals removed from
the facility. Except for a small additional amount of debris removal, we believe
that the dismantling process is substantially complete.

During the nine months ended November 30, 2005, we incurred
approximately $277,000 of consulting and asbestos abatement costs associated
with removing asbestos from the equipment being dismantled and recognized
$27,500 from the salvage of metals.

##### Impairment and sale of electric generation
equipment:

In 2005, Intermountain entered into a memorandum of
understanding to sell its electric generation equipment, including the land and
building on which the equipment is situated, to a regional electric power
distributor for approximately $274,000. The memorandum of understanding required
that the equipment be operational with closing contingent on completion of a
24-48 hour test run under full load conditions. In August 2006, the full load
test run was successfully completed. Closing on the sale was completed during
November 2006.

During the nine months ended November 30, 2006, we capitalized
$52,241 in costs associated with improvements deemed necessary to make the
electric generation equipment fully operational and to insure that the equipment
would successfully complete the test run. During the nine months ended November
30, 2005 we capitalized $28,378 in such improvement costs and recognized an
additional $30,303 for the estimated impairment in value of the
facility.

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.

##### Gain on sale of land:

During November 2006, we sold approximately 1 acre of land
located at our 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.

##### Depreciation and Depletion:

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.

There was relatively no change in depreciation and depletion
expense for the nine months ended November 30, 2005 compared to the nine months
ended November 30, 2004. Significant changes within this cost category included
a $20,000 increase in depletion on the New Mexico natural gas properties and a
$19,000 decrease in depreciation on the asphalt facility.

10-QSB 7<PAGE>

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.

The decrease in depreciation and depletion expense for the
three months ended November 30, 2005 compared to the three months ended November
30, 2004 primarily consisted of a $5,000 increase in depletion on the New Mexico
natural gas properties and a $6,000 decrease in depreciation on the asphalt
facility.

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

During the nine months ended November 30, 2006, we 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, 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.

Overall, interest and investment income was relatively
unchanged for the nine months ended November 30, 2005 compared to the nine
months ended November 30, 2004, but consisted of a $7,000 increase in interest
earned on cash balances offset by a $1,000 decrease in investment income and
$6,000 in depletion recognized on royalties received from investments in oil and
gas royalty trusts.  The decrease in interest and investment income for the
three months ended November 30, 2005 compared to the three months ended November
30, 2004 consisted of a $1,000 increase in interest income offset by $6,000 in
depletion recognized on investments in oil and gas royalty trusts.

### 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.

### 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, 2006.

10-QSB 8<PAGE>

### 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, 2006 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,
2006                                                       | 10  
|                                                                                            |     
|Statements of Operations and
Comprehensive Income/Loss for the three and nine month periods |     
|ended November
30, 2005 and November 30, 2006                                               | 11  
|                                                                                            |     
|Statements of Cash Flows for the
nine month periods ended                                   |     
|November 30, 2005
and November 30, 2006                                                     | 12  
|                                                                                            |     
|Notes to financial
statements                                                               | 13  

10-QSB 9<PAGE>



|Intermountain Refining Co., Inc.                                           |  |              
|-------------------------------------------------------------------------- |  | -------------
|Balance Sheet - Unaudited                                                  |  |              
|November 30, 2006                                                          |  |              
|                                                                           |  |              
|Assets                                                                     |  |              
|Current Assets                                                             |  |              
|Cash and cash equivalents                                                  |  | $   1,284,603
|Accounts receivable                                                        |  | 126,876      
|Notes receivable                                                           |  | 10,850       
|Accrued interest receivable                                                |  | 142          
|Prepaid expenses                                                           |  | 3,337        
|Total Current Assets                                                       |  | 1,425,808    
|Property, Plant and
Equipment, net of valuation allowances                 |  |              
|Land, buildings and improvements - Note
D                                  |  | 354,410      
|Equipment                                                                  |  | 45,990       
|Asphalt manufacturing and storage
equipment                                |  | 581,919      
|Oil and gas properties, (successful
efforts method)                        |  | 1,432,308    
|                                                                           |  | 2,414,627    
|Less accumulated depletion and
depreciation                                |  | (1,801,723)  
|                                                                           |  | 612,904      
|Other Assets                                                               |  |              
|Electric generation equipment available for sale - Note
C                  |  | -            
|Available-for-sale
investments                                             |  | 135,283      
|Other assets                                                               |  | 275          
|                                                                           |  | 135,558      
|Total Assets                                                               |  | $ 2,174,270  
|                                                                           |  |              
|Liabilities and Stockholders' Equity                                       |  |              
|Current Liabilities                                                        |  |              
|Accounts payable                                                           |  | $    82,775  
|Taxes other than income
taxes                                              |  | 2,681        
|Income taxes payable                                                       |  | 1,142        
|Total Current
Liabilities                                                  |  | 86,598       
|Deferred
Taxes                                                             |  | 22,388       
|                                                                           |  |              
|Asset Retirement Obligations                                               |  | 31,268       
|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                                                          |  | 537,125      
|Accumulated other comprehensive gain                                       |  | 41,577       
|                                                                           |  | 2,034,016    
|Total Liabilities and Stockholders'
Equity                                 |  | $ 2,174,270  
|                                                                           |  |              
|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, 
|                                                                                                                                                                                                                                                                                  | 2005               | 2006              | 2005          | 2006         
|                                                                                                                                                                                                                                                                                  | (Unaudited)        | (Unaudited)       | (Unaudited)   | (Unaudited)  
|Revenues                                                                                                                                                                                                                                                                          |                    |                   |               |              
|Oil and gas production revenues - Note
B                                                                                                                                                                                                                                          | $   304,520        | $   125,957       | $   734,949   | $   515,137  
|Asphalt equipment rental and fees                                                                                                                                                                                                                                                 | 82,828             | 92,509            | 208,157       | 143,727      
|Real estate rental income                                                                                                                                                                                                                                                         | 5,595              | 5,535             | 17,700        | 17,413       
|Other revenues                                                                                                                                                                                                                                                                    | 750                | 750               | 5,000         | 2,250        
|                                                                                                                                                                                                                                                                                  | 393,693            | 224,751           | 965,806       | 678,527      
|Costs and Expenses                                                                                                                                                                                                                                                                |                    |                   |               |              
|                                                                                                                                                                                                                                                                                  |                    |                   |               |              
|Cost of sales, exclusive of depletion,
depreciation and amortizationshown separately
below  - Note B                                                                                                                                                                              | 163,677            | 173,156           | 453,190       | 364,162      
|General and administrative                                                                                                                                                                                                                                                        | 67,069             | 65,266            | 218,657       | 215,426      
|Depletion, depreciation and
amortization                                                                                                                                                                                                                                          | 13,172             | 7,982             | 39,911        | 34,011       
|Accretion of discount on asset retirement
obligations                                                                                                                                                                                                                             | 671                | 532               | 2,014         | 1,598        
|Asbestos abatement costs                                                                                                                                                                                                                                                          | 102,207            | -                 | 277,207       | -            
|Salvage of refinery equipment                                                                                                                                                                                                                                                     | (25,005)           | -                 | (27,505)      | (11,141)     
|Impairment in value of electric generation
equipment                                                                                                                                                                                                                              | -                  | -                 | 30,303        | -            
|Loss on sale of oil and gas producing properties                                                                                                                                                                                                                                  | 7,888              | -                 | 7,888         | -            
|Loss on settlement of asset retirement
obligations                                                                                                                                                                                                                                | -                  | -                 | -             | 7,112        
|Gain on sale of land - Note D                                                                                                                                                                                                                                                     | -                  | (6,768)           | -             | (6.768)      
|Gain on sale of electric generation facility - Note
C                                                                                                                                                                                                                             | -                  | (4,936)           | -             | (4,936)      
|Interest and investment (income)/loss,
net                                                                                                                                                                                                                                        | 1,307              | (7,111)           | (7,457)       | (20,865)     
|                                                                                                                                                                                                                                                                                  | 330,986            | 228,121           | 994,208       | 578,599      
|Income From Operations Before Income
Taxes                                                                                                                                                                                                                                        | 62,707             | (3,370)           | (28,402)      | 99,928       
|                                                                                                                                                                                                                                                                                  |                    |                   |               |              
|Provision (benefit) for income
taxes                                                                                                                                                                                                                                              |                    |                   |               |              
|Current                                                                                                                                                                                                                                                                           | -                  | (1,459)           | -             | 1,407        
|Deferred                                                                                                                                                                                                                                                                          | -                  | -                 | -             | -            
|                                                                                                                                                                                                                                                                                  | -                  | (1,459)           | -             | 1,407        
|                                                                                                                                                                                                                                                                                  |                    |                   |               |              
|Net Income (Loss)                                                                                                                                                                                                                                                                 | 62,707             | $(1,911)          | (28,402)      | 98,521       
|                                                                                                                                                                                                                                                                                  |                    |                   |               |              
|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  $2,835 and $8,890 for the three and nine month periods
ended November 30, 2005, respectively and $2,488 and $2,650 for the three and
nine month periods ended November 30, 2006, respectively) | 5,263              | 4,619             | 16,510        | 4,920        
|                                                                                                                                                                                                                                                                                  |                    |                   |               |              
|Comprehensive Income  (Loss)                                                                                                                                                                                                                                                      | $    67,970        | $        2,708    | $    (11,892) | $    103,441 
|                                                                                                                                                                                                                                                                                  | =========          | =========         | =========     | =========    
|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)                                                                                                                                                                                                                                                                 | $      
0.05       | $      
0.00      | $      (0.02) | $       
0.09
|                                                                                                                                                                                                                                                                                  | ========           | ========          | ========      | ========     
|                                                                                                                                                                                                                                                                                  |                    |                   |               |              
|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                                                                                                                                                                                                    
|Loss on impairment of electric generation
equipment                                                                                                                                                                                                   
|Loss on sale of oil producing properties                                                                                                                                                                                                              
|Gain on sale of land                                                                                                                                                                                                                                  
|Gain on sale of electric generation
facility                                                                                                                                                                                                          
|Changes in operating assets and
liabilities:                                                                                                                                                                                                          
|(Increase) decrease in
accounts receivable                                                                                                                                                                                                            
|Decrease in accrued interest receivable                                                                                                                                                                                                               
|(Increase) decrease 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                                                                                                                                                                                                            
|Collection of notes receivable                                                                                                                                                                                                                        
|Proceeds from sale of oil and gas producing
properties                                                                                                                                                                                                
|Purchases of available for sale
investments                                                                                                                                                                                                           
|Proceeds from the sale of land - Note D                                                                                                                                                                                                               
|Increase in cash value of life insurance
policy                                                                                                                                                                                                       
|Purchase of improvements to electric generation
equipment                                                                                                                                                                                             
|Proceeds from sale of electric generation facility -
Note C                                                                                                                                                                                           
|Proceeds from surrender of life insurance policy                                                                                                                                                                                                      
|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 $0 during the nine month
period ended November 30, 2005.                                                                                                                                                               
|Intermountain paid interest of $0 during the nine month
period ended November 30, 2006.                                                                                                                                                               
|Intermountain paid income taxes of  $430 during the
nine month period ended November 30, 2005.                                                                                                                                                        
|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, 2005, Intermountain's available for sale investments increased in
value by $16,510, net of deferred taxes of $8,890.                            
|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.                                                                                   
|During the nine month period ended November 30, 2005,
Intermountain reclassified inventory valued at $2,390, and land and building
valued at $3,178 (net of accumulated depreciation of $26,149), to electric
generation equipment available for sale.
|                                                                                                                                                                                                                                                      
|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, 2006 and the
statements of operations for the three and nine month periods ended November 30,
2005 and November 30, 2006, and the statements of cash flows for the nine month
periods ended November 30, 2005 and November 30, 2006 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, 2006, 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, 2006. The results of operations for the nine months ended November
30, 2006 are not necessarily indicative of the operating results for the full
year.

### Note B – Reclassifications:

Oil and natural gas revenues and Costs of sales presented in
the Statement of Operations and Comprehensive Income (Loss) for the three and
six month periods ended November 30, 2005 have been restated from the prior year
presentation to reflect the reclassification of production taxes and gathering
costs that were previously included as reductions of gross revenues. The amounts
were reclassified to allow for comparability with the current year
presentation.

### Note C – Sale of Electric Generation
Facility:

In 2005, Intermountain entered into a memorandum of
understanding to sell its electric generation equipment, including the land and
building on which the equipment is situated, to a regional electric power
distributor for approximately $274,000. The memorandum of understanding required
that the equipment be operational with closing contingent on completion of a
24-48 hour test run under full load conditions. In August 2006, the full load
test run was successfully completed. Closing on the sale was completed during
November 2006.

During the nine months ended November 30, 2006, Intermountain
capitalized $52,241 in costs associated with improvements deemed necessary to
make the electric generation equipment fully operational and to insure that the
equipment would successfully complete the test run.

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.

### Note D - Sale of Land:

During November 2006, Intermountain sold approximately 1 acre
of land located at its Fredonia facility to Red Hills Manufacturing Inc. for
$7,500. The odd shaped parcel is encumbered with perpetual right of way
easements and borders land owned by Red Hills and one of the parcels of land
included in the sale of the electric generation facility. On the date of
closing, the carrying value of the parcel of land was $732,which resulted in a
$6,768 gain on the sale after $50 in closing costs. Red Hills is considered a
related party to Intermountain in that officers, directors and employees of
Intermountain are also officers, directors, and employees of Red Hills. In the
opinion of management, the terms of the transaction are believed to be at least
as favorable to Intermountain as those that could have been secured in an arm's
length transaction.

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, 2006.

### Exhibits:





|Exhibit | Description                                                                                 
|------- | --------------------------------------------------------------------------------------------
|3.1     | Amended and Restated Articles of Incorporation
(1)                                          
|3.2     | Bylaws (1)                                                                                  
|10.4    | Oneok / Kinder Morgan / KN Energy Gas Sales Agreement
(1)                                   
|10.5    | Paramount Petroleum Agreement (1)                                                           
|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.

### 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 16, 2007.

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 16, 2007William N. Hagler, Chairman of the Board
ofDirectors, and
President/s/ Rick
L. Hurt ____________________   Date: January 16, 2007Rick L. Hurt, Secretary, Treasurer, Director



10-QSB 14<PAGE>