5

                                       1






                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                  FORM 10-KSB

[  X  ]    ANNUAL  REPORT  PURSUANT  TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE  ACT  OF  1934  FOR  THE                            FISCAL YEAR ENDED
DECEMBER  31,  1997  [FEE  REQUIRED}
[]   TRANSITION REPORT  UNDER SECTION 13 OR 15 (D)  OF THE SECURITIES EXCHANGE
ACT  OF  1934

                          Commission File No. 0-6119

                            TRI-VALLEY CORPORATION
            (Exact Name of Registrant as Specified in its Charter)

          Delaware                                                   84-061743
(State  or  Other  Jurisdiction  of Incorporation or          (I.R.S. Employer
Identification  Number)
  Organization)

     230 South Montclair Street, Suite 101,  Bakersfield, California 93309
                   (Address of Principal Executive Offices)

Registrant's  Telephone  Number  Including  Area  Code:    (805)  837-9300

Securities  Registered  Pursuant  to  Section  12(b)  of  the  Act:       None

Securities  Registered  Pursuant  to  Section  12(g)  of  the  Act:

     Title  of  Each  Class          Name of Each Exchange on Which Registered
           Common                                        None

                        Common Stock, $0.001 par value
                               (Title of Class)

Indicate  by  check  mark  whether  the  registrant  (1) has filed all reports
required  to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding  12  months  (or for such shorter period that the
registrant  was  required  to  file such reports), and (2) has been subject to
such  requirement  for  the  past 90 days.               Yes___X__     No_____

Check  if  there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B contained in this form, and no disclosure will be  contained
to  the best of the registrant's knowledge, in definitive proxy or information
statements  incorporated  by  reference  in  Part  III of this Form 10-KSB, if
applicable,  or  any  amendment  to  this  Form  10-KSB.
___X__

The  issuer's  revenues  for  the  most  recent  fiscal  year  were  $915,519.

As  of December 31, 1997 18,922,248 common shares were issued and outstanding.
As  of  midnight  April30,  1998  19,061,248  common  shares  were  issued and
outstanding, and the aggregate market value of the common shares of Tri-Valley
Corporation  held by non-affiliates on that date was approximately$14,198,233.

                      DOCUMENTS INCORPORATED BY REFERENCE
                                     None








                                    PART I

ITEM  1.  BUSINESS
------------------

Tri-Valley  Corporation,  a  Delaware  corporation,  herein  referred  to  as
"Company,"  "Registrant,"  "Parent"  or  "Tri-Valley",  is  in the business of
exploring,  acquiring  and  developing prospective and producing petroleum and
precious  metals  properties  and  interests  therein.    The  wholly  owned
subsidiary,  Tri-Valley  Oil  &  Gas  Company  ("TVOG") operates the oil & gas
activities.   The precious metals activity is operated directly by the Parent,
Tri-Valley  Corporation.

TVOG primarily generates its own exploration prospects from internal data, and
also  screens  submittals  from  other  geologists and companies.  TVOG enters
exploration  co-ventures  from time to time with major industry companies such
as  Phillips  Petroleum  Company (Houston Regional Office), Occidental USA and
Texaco  USA.    Typically,  TVOG  will  enter agreements to look for potential
projects to co-venture with another major oil company within a geographic area
of  mutual  interest  ("AMI").    When  TVOG  proposes a potential project, or
"play," within the AMI, it offers the play to its potential co-venturers.  The
co-venturers  must then accept or reject up to 50% of the play under the terms
of the agreement involved, within a limited time period.  TVOG is the operator
of  these  co-ventures.

In  1997,  we incorporated a new subsidiary for the Company - Tri-Valley Power
Corporation.  We intend to convert part of our gas production into electricity
by means of co-generation facilities.  This will allow the Company to become a
fully  integrated  gas/power  producer.    The  deregulation  of the utilities
industry  in California will enable Tri-Valley Power Corporation to market the
electricity  in  California,  the  seventh  largest  economy  in  the  world.

In  1987,  the  Company acquired precious metals claims on Alaska state lands.
The  Company  has conducted exploration operations on these properties and has
reduced  its  original  claims  to  a  block of approximately 28,160 acres (44
square  miles).    In  1989,  the  Company recovered approximately 3,000 rough
ounces  of gold and sold approximately 1,650 pure smelted ounces from a 30,000
ton  bulk  sample  on  a  five  acre  area,  denominated the Richardson Mining
property.   The Company has conducted trenching,  core drilling, bulk sampling
and  assaying activities to date and has reason to believe that mineralization
exists to justify additional exploration and development activities.  However,
to  date,  the  Company  has not identified probable mineral reserves on these
properties.  During 1997, the Company expensed exploration costs of $2,860,776
associated  with  its  work  on these claims, which the Company had treated as
capitalized  costs  prior  to  1997.    See  Properties-Precious  Metals.

The  Company  filed  for  Chapter  11  Reorganization in January of 1996.  The
reason  for  the  filing  was  the  Company's  inability  to arrange long term
financing  prior to the maturity of short-term loans.  During 1996 the Company
was  able  to  raise  several million dollars through private placement of its
stock  to  pay all outstanding obligations in full.  Consequently, the Company
was  dismissed  from  Chapter  11  November  1996.



ITEM  1.    BUSINESS  (CONTINUED)
--------------------

In  1996, the Company changed its fiscal year end from July 31 to December 31.
Tri-Valley  has  5  full  time  employees.

Current  Year

The  company drilled and completed three additional wells in 1997.  Two of the
wells  were  put on line and began producing in the summer of 1997.  The third
well  has  been  waiting  on  completion  of  a  pipeline  which  the  Company
anticipates  completing  by  early  summer  of  1998.

In  1997  the  Company  expensed  previously  capitalized  costs on its Alaska
properties.  See  Management's  Discussion and Analysis of Operations-Precious
Metals.

Executive  Officers  of  the  Registrant
----------------------------------------

F.  Lynn  Blystone  -  62                President and Chief Executive Officer
-------------------------
1974
                         Tri-Valley  Corporation,  and  its  wholly
                         Owned  subsidiary,  Tri-Valley  Oil  &  Gas
                         Company,  Bakersfield,  California

Mr.  Blystone became president of Tri--Valley Corporation in October 1981, and
was  nominally  vice  president  from  July  to  October 1981.  His background
includes  institution  management,  venture  capital  and  various  management
functions  for  a  mainline  pipeline  contractor  including  the Trans Alaska
Pipe-line  Project.   He has founded, run and sold companies in several fields
including Learjet charter, commercial construction, municipal finance and land
development.    He  is  also  president  of a family corporation, Bandera Land
Company,  Inc.,  with  real  estate  interests  in  Kern, Riverside and Orange
Counties,  California.    A  graduate  of Whittier College, California, he did
graduate  work  at  George  Williams  College,  Illinois,  in  organizational
management.    He  devotes  full  time  to  Tri-Valley  Corporation.


Thomas  J.  Cunningham  -  55            Treasurer and Chief Financial Officer
----------------------
1997
                         Tri-Valley  Corporation,  and  its  wholly
                         Owned  subsidiary,  Tri-Valley  Oil  &  Gas
                         Company,  Bakersfield,  California

Named  as  Tri-Valley  Corporation's  Treasurer and Chief Financial Officer on
February  1997,  Mr.  Cunningham  has  over  25  years experience in corporate
finance,  Securities  and  Exchange  Commission  public  company  reporting,
shareholder  relations,  and  employee  benefits.   In his career he served as
Staff  Accountant  for  Forest  Oil,  Accounting    

ITEM  1.    BUSINESS  (CONTINUED)
--------------------

Supervisor,  for  Tesoro  Petroleum,  Controller  and  Assistant Secretary for
Tucker  Drilling  Company,  and  as  Executive Vice President, Chief Financial
Officer  and  Director  for  Star  Resources,  Inc.    Most  recently he was a
Management  Consultant  in  finance,  marketing  and  human  resource  matters
including  employee benefit planning.  He received his education in accounting
and  business  administration  from  Angelo  State  University,  Texas.


ITEM  2.  PROPERTIES
--------------------

The Company's headquarters and administrative offices are located at 230 South
Montclair  Street,  Suite  101,  Bakersfield,  California  93309.  The Company
leases  approximately 2,500 square feet of office space at that location.  The
Company's  oil  and  gas  operations are conducted from office space leased by
TVOG  in  Carpinteria,  California.    The principal properties of the Company
consist of proven and unproven oil and gas and precious metal properties, maps
and  geologic  records  related  to prospective oil and gas and precious metal
properties,  office  and  other  equipment.

Oil  and  Gas  Operations
-------------------------

The  oil and gas properties in which the Company holds interests are primarily
located in the area of central California known as the Sacramento Valley.  The
Company  also  leases  exploration  acreage in the San Joaquin and Santa Maria
Valleys.  The Company contracts for the drilling of all its wells and does not
own  any drilling equipment, bulk storage facilities, transportation pipelines
or  refineries.

The  company  has  retained  the services of Cecil Engineering, an independent
engineer,  for  the  purposes  of estimating the Company's net share of proved
developed  oil and gas reserves on all the Company's oil and gas properties at
December  31,  1997.  The Company does not include any undeveloped reserves in
these  reserve  studies  and,  accordingly, only proved developed reserves are
reported  herein.    Price  is a material factor in the stated reserves of the
Company,  because  higher  prices permit relatively higher-cost reserves to be
produced  economically.  Higher prices generally permit longer recovery, hence
larger  reserves  at  higher values.  Conversely, lower prices generally limit
recovery  to  lower-cost  reserves,  hence  smaller  reserves.  The process of
estimating  oil and gas reserve quantities is inherently imprecise.  Ascribing
monetary  values to those reserves, therefore, yields imprecise estimated data
at  best.

The  estimated  future  net  recoverable  oil  and  gas  reserves  from proved
developed  properties  as of December 31, 1997, December 31, 1996 and July 31,
1996  were  as  follows:
                              BBL                                      MCF
                              ---                                  -------

December 31, 1997             Condensate     224     Natural Gas     1,903,154
December 31, 1996             Condensate     644     Natural Gas     2,003,135
July  31,  1996               Condensate     442     Natural Gas	   1,934,339



<PAGE>

ITEM  2.  PROPERTIES  (CONTINUED)
---------------------------------

Using  year-end  oil  and  gas  prices  and  current levels of lease operating
expenses,  the estimated present value of the future net revenue to be derived
from  the  Company's proved developed oil and gas reserves, discounted at 10%,
was  $1,757,195  at  December  31,  1997,  $1,394,701 at December 31, 1996,and
$1,126,910  at July 31, 1996.  Reference is made to the unaudited supplemental
information  of  the consolidated financial statements for further information
on  oil  and  gas  reserves  and  estimated  values.

The following table sets forth the net quantities of natural gas and crude oil
produced  by  Registrant  during:

                                       Transition
                     Year Ended     Period Ended     Year Ended
             December 31, 1997     December 31, 1996     July 31, 1996
             -----------------     -----------------     -------------

             Natural Gas (MCF)     323,879     111,261     272,931
    		 Crude Oil (BBL)           225          70         210



The  following table sets forth the average sales price and average production
(lifting)  cost  per  unit  of  oil  and  gas  produced  by registrant during:

                                       Transition
                     Year Ended     Period Ended     Year Ended
             December 31, 1997     December 31, 1996     July 31, 1996
             -----------------     -----------------     -------------

              Natural gas (per MCF)     $2.40     $2.00     $2.00
		  Production  Costs
              (per MCF)      			.30       .10       .10

              Net Profit per MCF   	    $2.10     $1.90     $1.90


As  of December 31, 1997, the Company had the following gross and net position
in  wells  and  developed  acreage:

          Wells  (1)                                Acres (2)
          ----------                                ---------

        Gross     Net                             Gross     Net
        -----     ---                             -----     ---
         10       4.7                              2192     645



(1)       "Gross" wells represent the total number of producing wells in which
the  Company  has  a  working  interest  or  overriding  royalty.  "Net" wells
represent the number of gross producing wells multiplied by the percentages of
the  working  interests  and/or  royalty  interests  therein  by  the Company.

(2)         "Gross" acres represent the total acres in which the Company has a
working interest; "net" acres represent the aggregate of the working interests
of  the  Company  in  the  gross  acres.



ITEM  2.  PROPERTIES  (CONTINUED)
--------------------
The  following  table  sets forth the number of productive and dry exploratory
and  development  wells  drilled  by  the  Company  during:

                                          Transition
                       Year Ended     Period Ended     Year Ended
                December 31, 1997     December 31, 1996     July 31, 1996
                -----------------     -----------------     -------------

Exploratory
 Producing             1.0                   1.0                  1.0
 Dry                   -0-                   -0-                  -0-

   Total               1.0                   1.0                  1.0



Development
 Producing             2.0                   -0-                  -0-
 Dry                   -0-                   -0-                  -0-

   Total               2.0                   -0-                  -0-

The above table, regarding net wells, recognizes only those wells in which the
Company  holds  an  overriding royalty interest or an earned working interest.
Working  interests  to  be  earned  at  payout  have  not  been  included.

The Company deals with both industry and sophisticated individual investors on
its  oil  and  gas  projects.

The  Company  continually  screens  geologically prospective acreage as to its
availability  for  leasing.   Oil and gas prospects developed by the Company's
own  staff  and  by  other  sources  are  regularly  evaluated.

The  following  table sets forth information regarding undeveloped oil and gas
acreage  in  which  the  Company  had  an  interest  on  December  31,  1997.

                 State          Gross Acres          Net Acres
                 -----          -----------          ---------

               California          8719                 3158


In  1997,  the Company acquired the worldwide database of San Carlos Oil & Gas
Corporation  which also contains numerous California well logs, maps and other
geological  data for cash and Tri-Valley stock.  In 1997, the Company acquired
rights  to  over  20,000 miles of California seismic data from GEOONE for cash
and  Tri-Valley  stock.  These databases enable Tri-Valley to rapidly evaluate
both  exploration prospects and producing properties in every onshore basin in
California.
ITEM  2.  PROPERTIES  (CONTINUED)
--------------------
Some  of  the  Company's  undeveloped  acreage is held pursuant to leases from
landowners.   Such leases have varying dates of execution and generally expire
one  to  five  years  after  the  date  of  the  lease.

Precious  Metals
----------------
The  precious  metals  properties  are  located  in interior Alaska.  They are
comprised  of  leased  claims  solely  on  State  open  lands requiring annual
assessment work, and an annual per claim fee.  All fees are current.  However,
the  Company  reduced  its  claim block, in Alaska, subsequent to November 30,
1995,  to  concentrate  on  the  most  advanced  targets.

The  following table sets forth the information regarding the acreage position
the  Company  has  under  lease  in  Alaska  as  of  December  31,  1997:

                 State          Gross Acres          Net Acres
                 -----          -----------          ---------

                 Alaska          24,000.00          23,300.00

Mineral  properties  claimed  on  Open  State  land  require  minimum  annual
assessment  work  of $100 worth per State of Alaska claim.  The Company had no
Federal  claims,  1,678  State  of  Alaska  claims,  and 10 prospecting sites,
totaling  66,281  net  acres  as  of  July  31, 1995.  Subsequent to 1995, the
Company  reduced  its claim block to 606 claims and prospecting sites totaling
over 24,000 acres (over 37.5 square miles) to concentrate on the most advanced
targets.   Expenditures on the Richardson, Alaska acreage have already carried
forward annual assessment requirements more than four years on all its claims.

In  1991,  Tri-Valley  entered into an agreement with the Moscow based Central
Research  Institute  of  Geological  Prospecting  for Base and Precious Metals
("TsNIGRI")  to  demonstrate their proprietary technology for evaluating large
areas  of  covered  sub-arctic terrain.  TsNIGRI has performed over 1,000 line
miles  of  ground  traverses  for  geological,  geochemical,  biochemical,
hydrochemical  sampling and geophysical profiles throughout Tri-Valley's claim
block and surroundings.  Over 5,000 samples have been run through a variety of
laboratory  analysis  including over 1,000 samples assayed by Bondar-Clegg, an
industry  accepted  assay house.  Physical gold has been found at 60 locations
wide spread over a 20 mile swath on the claims and TsNIGRI has increased their
forecast to over 2 million ounces of recoverable gold. Based on the results of
this  study  of  the  Company's  then  64  square  mile lode gold claim block,
Tri-Valley  management  believes  it prudent for continued development of this
precious  metals  segment  of  the  Company.

In  1998, the Company retained the services of M. J. Bright and Associates, an
independent registered geologist based in Denver, Colorado to analyze the data
from  one core drill site and surrounding trench samples at the Democrat Dike,
to  estimate probable reserves.  M. J. Bright delineated 141,500 tons  grading
0.11  ounces  per ton (opt) or about 15,000 ounces, beginning at surface to 80
feet  subsurface.  An additional 12,000 ounces is indicated from an additional
20  feet  depth  of  108,500  tons  also grading 0.11 opt. for a total of over
27,000 probable ounces.  This occurs in an area approximately 1,200 feet long,
250  feet  deep  and  300  to 600 feet wide.  This represents approximately 12
million  tons  projected  to  grade about 0.06 opt. for a possible resource of
about  
<PAGE>
ITEM  2.  PROPERTIES  (CONTINUED)
--------------------

720,000  ounces.  The Company is undertaking further review and exploration of
the  potential  resources  in  this  area.

Management  believes it has demonstrated that the Company possesses a superior
mineral
property  which  could  reward  the  shareholders  dramatically from discovery
success  with  little  downside  exposure  at  present.


Environmental
-------------

The  Company's  energy  operations  are  subject  to  a  number of regulations
relating  to  environmental  protection, as are all exploration and production
companies.    However,  the Company believes it is in full compliance with all
environmental  related  rules  and  regulations.


ITEM  3.  LEGAL  PROCEEDINGS
----------------------------

Tri-Valley  Oil  and  Gas  Co.  v. ABA Energy Corporation et al, No. C97-02561
(Superior Court of Contra Costa County, California).  TVOG is the plaintiff in
a  lawsuit  against  a  former  officer,  his  company  and  TVOG's consulting
geologist  seeking  damages  and  imposition of a constructive trust regarding
certain disputed oil and gas properties.  The amount, if any, which TVOG might
recover  is  not  determinable as of the date of this report.  The case is set
for  trial  in  June  1998.


ITEM  4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS
---------------------------------------------------------------------

No  matters  were  submitted  to  a vote of security holders during the fourth
quarter  of  1997.

<PAGE>
------

                                    PART II
                                    -------

ITEM  5.  MARKET  PRICE OF THE REGISTRANT'S COMMON STOCK AND RELATED  SECURITY
------------------------------------------------------------------------------
HOLDER  MATTERS
---------------

Shares  of  Tri-Valley  Corporation  stock  are traded over-the-counter on the
Electronic  Bulletin Board under the symbol "TRIL".  The following table shows
the  high  and  low bid and asked prices of Tri-Valley stock for the quarterly
periods  indicated  as  reported  by  the  OTC  Stock  Journal:
<TABLE>
<CAPTION>


                Bid Prices   Asked Prices
                -----------  -------------           
                   High           Low       High    Low
                -----------  -------------  -----  -----
<S>             <C>          <C>            <C>    <C>
1997:
First Quarter.  $     2.938  $         .68  $3.00  $ .72
Second Quarter  $     1.688  $        1.13  $1.81  $1.31
Third Quarter.  $      1.50  $        1.13  $1.56  $1.22
Fourth Quarter  $     1.313  $         .88  $1.38  $ .97
</TABLE>


                 Bid  Prices                            Asked  Prices
                 -----------                            -------------
          High                    Low                    High              Low
          ----                    ---                    ----              ---


1996:
     First Quarter     $     .1563     $     .05     $   .1875     $     .15
Second  Quarter        $       .15     $     .03     $     .16     $     .14
Third  Quarter         $     .3125     $    .105     $     .50     $     .14
 Fourth  Quarter       $     .4375     $     .13     $     .50     $     .438


As  of December 31, 1997, the Company estimates that its common stock was held
by  2000 shareholders of record in 40 states and 4 foreign countries of record
of  Tri-Valley  Corporation  common  stock.

The Company historically has paid no dividends, and at this time does not plan
to  pay any dividends in the immediate future.  As of 3/20/98, the Company had
15 market makers for our stock.  In 1997, trading volume exceeded 14.2 million
shares.

Recent  Sales  of  unregistered  Securities
-------------------------------------------
During  the  last  quarter of 1997 428,500 "A" warrants were exercised at $.50
each,  and  12,500  "B" warrants were exercised at $1.00 each. The exercise of
these  warrants  resulted  in 441,000 new shares to be issued.  These warrants
were  exercised by 8 individuals. The warrants were originally issued prior to
1997  in  privately  negotiated  transactions  exempt  from registration under
Section  4(2) of the Securities Act of 1933 and/or Regulation D promulgated by
the  Securities  and  Exchange  Commission.


<PAGE>
------


ITEM  6.    MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION
-----------------------------------------------------------------------------

Notice  Regarding  Forward-Looking  Statements
----------------------------------------------

This  report  contains  forward-looking  statements.  The words, "anticipate,"
"believe,"  "expect," "plan," "intend," "estimate," "project," "could," "may,"
"foresee,"  and  similar  expressions are intended to identify forward-looking
statements.    These  statements  include  information  regarding  expected
development  of  the Company's business, lending activities, relationship with
customers, and development in the oil and gas industry.  Should one or more of
these  risks  or  uncertainties  occur, or should underlying assumptions prove
incorrect,  actual  results  may  vary  materially  and  adversely  from those
anticipated,  believed,  estimated  or  otherwise  indicated.


Computer  Uncertainties  for  the  Year  2000

The  Company  is  aware  of the issues associated with the programming code in
existing  computer  systems  as  the  millennium  (Year  2000)  approaches.
Accordingly,  as  of  December 31, 1997, the Company has examined the computer
software  and  hardware  and  is confident it will accommodate the "Year 2000"
issue.    The  funds  spent  on  this  investigation  were  minimal.


General

The  company  in  its  35  year  history has been primarily an exploration and
production  company.   However, in the last 11 years the Company has also been
involved  in  exploring  gold  mining  claims  in  Alaska.


Natural  Gas  Activities

In  1997  Tri-Valley  Oil  &  Gas  Company,  the  wholly  owned  subsidiary of
Tri-Valley  Corporation  discovered  two  new large gas pools in the Tracy gas
field.  Drilling the Pimentel No. 1-15 discovered the new gas pools.  The well
is  waiting  for  a  pipeline  hook-up.  The Company has been negotiating with
Pacific  Gas  &  Electric  to  acquire a portion of pipeline that is in place.
Hook-up  is  expected  in  the  late  spring  of  1998

Two  development wells were drilled and completed in 1997, the Martins-Severin
No.  6  and  the  Webb Tract No.2.  These new wells added significantly to the
Company's  cash  flow.

The Company sells a percentage of production on a fixed contract price and the
remainder  at  the  monthly spot price.  This allows the Company to spread the
risk  to both pricing scenarios.  Tri-Valley is continuing a capital formation
program  that  it  began last year.   This will give the Company the liquidity
and  flexibility  to  take advantage of opportunities for acquisitions as they
are  discovered.    The  Company  is aggressively looking for such acquisition
possibilities.

ITEM  6.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION
(CONTINUED)

Our hydrocarbon reserves were valued by independent engineers at a net present
value  of  $1,757,195  at  December  31,  1997,  an  increase of $362,494 from
December  31,  1996  after  taking into account the SEC mandatory 10% discount
rate  and also taking into consideration the effect of income tax.  This value
does  not  appear  on  the  balance  sheet  because  accounting  rules require
discovered  reserves  to  be  carried  on  the  balance  sheet  at the cost of
obtaining  them rather than the actual future net revenue from producing them.
Tri-Valley  arranges to be carried in the test wells on prospects.  Therefore,
it incurs very little cost and very little value of discovered reserves appear
on the balance sheet despite the fact that reserves are a very important value
to  the  Company,

Precious  Metals  Activity
The  Company  implemented  a core and reverse circulation drilling program for
the  three  most  advanced  targets  on  its  Richardson,  Alaska  lode  gold
exploration  project  during  the  summer  season of 1997.  The purpose was to
drill  for  potential resources at the John Mitchell Lode at the Democrat Dike
and  drill  infer  geologic  resources at the Banner/Buckeye and Buck/Shamrock
anomalies.    Due  to drill breakdowns, the footage was insufficient to attain
the  objectives.    The  Company  intends to begin processing a bulk sample of
100,000  tons  of  its  pre-crushed  ore  in  the  next  few  months.

The  price of gold has fluctuated in the last 12 months from a high of $349.00
per  oz.  to  a  low  of $278.30 per oz.  However, the Company believes it can
produce  the  gold  at  a  cost  that  will  still allow a significant profit.

During  1997,  the  Securities  and  Exchange  Commission  staff  reconsidered
existing accounting practices for mineral expenditures by United States junior
mining  companies. They now interpret generally accepted accounting policy for
junior  mining  companies to permit capitalization of acquisition, exploration
and  development  costs only after persuasive engineering evidence is obtained
to support recoverability of these costs (ideally upon determination of proven
and/or  probable  reserves  based  upon dense drilling samples and feasibility
studies  by  a  recognized  independent  engineer).  Although  the Company has
performed  drilling  samples  and  additional  tests, management has chosen to
follow  the more conservative method of accounting by expensing the previously
capitalized  gold  mineral  costs  as  a  cumulative  effect  of  a  change in
accounting  principle  in  the  consolidated  statement  of  operations.

Telecommunications
------------------
During  1997  Tri-Valley  Corporation  continued its' due diligence to try and
acquire the assets of five telecommunication partnerships.  In May of 1997 the
Company loaned the partnership $125,000 dollars, which is secured by property,
on  a 6 month note which was subsequently extended for an additional period of
time.    This note is now in default.  While the Company remains interested in
acquiring these assets, negotiations have been inactive for several months and
questions  about the value of the assets under consideration have arisen.  The
Company  cannot  presently estimate the value of these assets or the price, if
any, at which they could be acquired and has hired an independent appraiser to
furnish  an  estimate  before  proceeding.

ITEM  6.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION
(CONTINUED)

Financial  Condition
The  Company  continued  to  strengthen its financial condition during 1997 in
part  due  to  the  exercise  of warrants.  Further, the price of gas averaged
$2.15 per MCF for the year.  New production from the Webb Tract No. 2, and the
Martins-Severin  No.  6  aided  in  revenue  increase.

As  the Company is usually carried for its interest in test wells, the risk to
the  company  is  greatly  reduced.

Working  capital as of December 31, 1997 was $889,889 up from $169,219 for the
year  ending  December  31,  1996.    This  increase  was due in large part to
additional  paid  in  capital from the exercise of warrants and increased cash
flow  from  new  gas  production.

RESULTS  OF  OPERATIONS
Comparison  of  Years  Ended  December  31,  1997  and  1996
Balance  Sheet
--------------
The  Company  had  $2,778,592  cash  on hand at December 31, 1997, compared to
$834,365 as of December 31, 1996.  This was due to advances of $1,845,064 from
joint  venture  partners  for  their share of a well the Company, as Operator,
will  drill.    Receivables  at  December  31,  1997  are $696,758 compared to
$278,110 at December 31, 1996.  This $418,648 increase is due to gas sales the
Company  had  made  at the end of December 1997.  Of the $696,758 receivables,
$605,431  is  payable  to  joint interest partners.  On December 31, 1997, the
Company  held a note receivable of $125,000 for a loan the Company made to the
telecommunications  partnership  in  May  1997.   This loan is now in default.

Revenues
Sales  of  oil and gas increased to $753,466 for the period ended December 31,
1997  from  $533,072  for  the year ended December 31, 1996.  This increase of
$220,394  was due to the additional production of the Webb Tract No. 2 and the
Martins-Severin  No.  6.   Other income of $66,167 is from operating overhead.
This  had  previously been included in Oil and Gas Sales.  Gas prices remained
favorable  during  this  last  year and the Company anticipates prices holding
firm.    Interest income increased from $4,221 for the year ended December 31,
1996  to  $95,886  for  the year ended December 31, 1997.  This was due to the
Company  depositing  the  increased  cash on hand into higher interest bearing
accounts.

Costs  and  Expenses
Costs  and  expenses  were  greater in the year ended December 31, 1997 due to
increased  lease  operating  expenses  resulting  from the Company's increased
drilling  activity.    General  administrative  expenses  increased  due  to
additional staff and the President starting to again take full salary.  He had
taken  a  reduced  salary  for the comparable period in 1996.  Accounting fees
were  greater  due  to  the  Company's attempted stock underwriting, which was
withdrawn  due  to  market  conditions.   Depletion and Depreciation increased
significantly  due  to  reserve  evaluation  by  the reservoir engineer. Legal
expenses  were  up  due  to  the  lawsuit.See  Item  3.  Legal  Proceedings.

<PAGE>


























                         ITEM 7:  FINANCIAL STATEMENTS

<PAGE>






     TRI-VALLEY  CORPORATION
     INDEX
<TABLE>
<CAPTION>



                                                                     Page(s)
                                                                     -------

<S>                                                                  <C>


Report of Brown Armstrong Randall & Reyes,
  Independent Auditor's Report. . . . . . . . . . . . . . . . . . .       15
                                                                     -------

Consolidated Balance Sheets at December 31, 1997,
  December 31, 1996 and July 31, 1996 . . . . . . . . . . . . . . .    16-17
                                                                     -------

Consolidated Statements of Operations for the Year Ended
  December 31, 1997, Transition Period Ended December 31, 1996
  and the Year Ended July 31, 1996. . . . . . . . . . . . . . . . .       18
                                                                     -------

Consolidated Statements of Shareholders' Equity for the
  Year Ended December 31, 1997, the Transition Period Ended
  December 31, 1996 and for the Year Ended July 31, 1996. . . . . .    19-20


Consolidated Statements of Cash Flows for the Year Ended
  December 31, 1997, the Transition Period Ended December 31, 1996
  and for the Year Ended July 31, 1996. . . . . . . . . . . . . . .    21-22
                                                                     -------

Notes to Consolidated Financial Statements. . . . . . . . . . . . .    23-43
                                                                     -------

Supplemental Information about Oil and Gas Producing Activities
  (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . .       44
-------------------------------------------------------------------  -------
</TABLE>




                                      16

REPORT  OF  INDEPENDENT  AUDITORS

The  Board  of  Directors
Tri-Valley  Corporation
Bakersfield,  California

We  have  audited  the  accompanying consolidated balance sheets of Tri-Valley
Corporation  as of December 31, 1997, December 31, 1996 and July 31, 1996, and
the  related  consolidated  statements of operations, changes in shareholders'
equity  and  cash  flows  for the year ended December 31, 1997, the five month
transition  period  ended  December  31,  1996 and for the year ended July 31,
1996.  These  financial  statements  are  the  responsibility of the Company's
management.    Our  responsibility is to express an opinion on these financial
statements  based  on  our  audits.

We  conducted  our  audits  in  accordance  with  generally  accepted auditing
standards.    Those  standards  require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting  the amounts and disclosures in the financial statements.  An audit
also  includes  assessing  the  accounting  principles  used  and  significant
estimates  made  by  management,  as  well as evaluating the overall financial
statement presentation.  We believe that our audits provide a reasonable basis
for  our  opinion.

In  our  opinion, the financial statements referred to above present fairly in
all  material  respects,  the  consolidated  financial  position of Tri-Valley
Corporation  at  December  31, 1997, December 31, 1996 and July 31, 1996,  and
the  results  of  its  consolidated operations and its cash flows for the year
ended  December  31, 1997, the five month transition period ended December 31,
1996,  and  for  the  year  ended  July 31, 1996, in conformity with generally
accepted  accounting  principles.

As  explained  in Note 1 to the consolidated financial statements, in 1997 the
Company  changed  its  method  of  accounting for gold mineral exploration and
development  costs.

     BROWN  ARMSTRONG  RANDALL  &  REYES
ACCOUNTANCY  CORPORATION

Bakersfield,  California
March  6,  1998
                            TRI-VALLEY CORPORATION
                          CONSOLIDATED BALANCE SHEETS

                                    ASSETS

<TABLE>
<CAPTION>



                                                   Transition
                                                   Year Ended     Period Ended
                                                  December 31,    December 31,     Year Ended
                                                      1997            1996        July 31, 1996
                                                  -------------  --------------  ---------------

<S>                                               <C>            <C>             <C>


CURRENT ASSETS
   Cash. . . . . . . . . . . . . . . . . . . . .  $   2,778,592  $      834,365  $      258,924 
   Accounts receivable, trade. . . . . . . . . .        696,758         278,110         277,586 
   Note receivable . . . . . . . . . . . . . . .        125,000   -_______2,029               - 
                                                  -------------  --------------                 
   Prepaid expenses. . . . . . . . . . . . . . .          2,029           2,029
                                                  -------------  --------------                 

      Total Current Assets . . . . . . . . . . .      3,602,379       1,114,504         538,539 
                                                  -------------  --------------  ---------------

PROPERTY AND EQUIPMENT, NET
  (Notes 1 and 2)
                                                        821,614       3,182,860       3,085,825 
                                                  -------------  --------------  ---------------

OTHER ASSETS
   Deposits. . . . . . . . . . . . . . . . . . .        100,000          62,000          61,000 
   Restricted cash - escrow account. . . . . . .              -          60,000               - 
   Acquisition costs (Note 1). . . . . . . . . .        119,007          29,753               - 
   Investments in partnerships (Note 1). . . . .          8,421          20,682          (7,152)
   Well Database (net of accumulated of $1,539
     At December 31, 1997) . . . . . . . . . . .         93,111               -               - 
   Goodwill (net of accumulated amortization
     Of $178,055 at December 31, 1997, $167,209
     At December 31, 1996, and $162,690 at
     July 31, 1996 (Note 1). . . . . . . . . . .        255,798         266,644         271,163 
   Other . . . . . . . . . . . . . . . . . . . .         13,908
                                                  -------------                                 
                                                              -               -
                                                  -------------  --------------                 

      Total Other Assets . . . . . . . . . . . .        590,245         439,079         325,011 
                                                  -------------  --------------  ---------------

      TOTAL ASSETS . . . . . . . . . . . . . . .  $   5,014,238  $    4,736,443  $    3,949,375 
------------------------------------------------  =============  ==============  ===============
</TABLE>



     The  accompanying  notes  are  an  integral  part  of  these  financial
statements.

                                      18

                     LIABILITIES AND SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>


                                                        Transition
                                                        Year Ended     Period Ended
                                                       December 31,    December 31,     Year Ended
                                                           1997            1996        July 31, 1996
                                                      --------------  --------------  ---------------

<S>                                                   <C>             <C>             <C>


CURRENT LIABILITIES
   Notes and contracts payable (Note 3). . . . . . .  $      90,667   $      11,042   $       77,992 
   Trade accounts payable. . . . . . . . . . . . . .         74,796          57,566          226,057 
   Amounts payable to joint venture participants . .        605,431         484,008          505,690 
   Advances from joint venture participants. . . . .      1,845,064         196,527          483,412 
   Due to related parties. . . . . . . . . . . . . .         96,532         196,142          204,392 
   Accrued expenses and other liabilities. . . . . .              -               -          134,908 
                                                      --------------  --------------  ---------------

      Total Current Liabilities. . . . . . . . . . .      2,712,490         945,285        1,632,451 
                                                      --------------  --------------  ---------------

LONG-TERM PORTION OF NOTES AND
  CONTRACTS PAYABLE
   Notes payable . . . . . . . . . . . . . . . . . .         13,950          37,608           16,757 
   Convertible notes payable . . . . . . . . . . . .              -               -          900,000 
                                                      --------------  --------------  ---------------

      Total Long-Term Portion of Notes and
        Contracts Payable. . . . . . . . . . . . . .         13,950          37,608          916,757 
                                                      --------------  --------------  ---------------

OTHER LIABILITIES
   Investor payable. . . . . . . . . . . . . . . . .        103,000         662,680                - 
                                                      --------------  --------------  ---------------

SHAREHOLDERS' EQUITY
   Common stock, $.001 par value; 50,000,000 shares
    authorized; 18,922,248, 14,102,473, and
    8,027,248 issued and outstanding at
    December 31, 1997, December 31, 1996 and
    July 31, 1996, respectively. . . . . . . . . . .         18,922         141,024           80,272 
   Less: common stock in treasury, at cost,
    156,925 shares . . . . . . . . . . . . . . . . .        (28,639)        (28,639)         (28,639)
   Capital in excess of par value. . . . . . . . . .      8,048,331       5,495,726        3,772,753 
   Accumulated deficit . . . . . . . . . . . . . . .     (5,853,816)     (2,517,241)      (2,424,219)
                                                      --------------  --------------  ---------------

      Total Shareholders' Equity . . . . . . . . . .      2,184,798       3,090,870        1,400,167 
                                                      --------------  --------------  ---------------

      TOTAL LIABILITIES AND
        SHAREHOLDERS' EQUITY . . . . . . . . . . . .  $   5,014,238   $   4,736,443   $    3,949,375 
----------------------------------------------------  ==============  ==============  ===============
</TABLE>


     TRI-VALLEY  CORPORATION
     CONSOLIDATED  STATEMENTS  OF  OPERATIONS

<TABLE>
<CAPTION>



                                                  Transition
                                                  Year Ended     Period Ended
                                                 December 31,    December 31,     Year Ended
                                                     1997            1996        July 31,1996
                                                --------------  --------------  --------------

<S>                                             <C>             <C>             <C>


REVENUES
   Sale of oil and gas . . . . . . . . . . . .  $     753,466   $     470,300   $     872,386 
   Interest income . . . . . . . . . . . . . .         95,886           4,221           6,861 
   Other income. . . . . . . . . . . . . . . .         66,167               -               - 
                                                --------------  --------------  --------------

                                                      915,519         474,521         879,247 
                                                --------------  --------------  --------------

COST AND EXPENSES
   Leases sold, relinquished and impaired. . .              -               -          27,593 
   Oil and gas leases. . . . . . . . . . . . .        145,443          82,481         259,673 
   General and administrative. . . . . . . . .      1,076,565         424,576         764,799 
   Depreciation, depletion and amortization. .        152,490          23,448          53,453 
   Interest. . . . . . . . . . . . . . . . . .         15,220          35,438          89,487 
                                                --------------  --------------  --------------

                                                    1,389,718         565,943       1,195,005 
                                                --------------  --------------  --------------

LOSS BEFORE INCOME TAXES AND
  CHANGE IN ACCOUNTING PRINCIPLE . . . . . . .       (474,199)        (91,422)       (315,758)

TAX PROVISION (Note 5) . . . . . . . . . . . .          1,600           1,600           1,600 
                                                --------------  --------------  --------------

NET LOSS BEFORE CHANGE IN
  ACCOUNTING PRINCIPLE . . . . . . . . . . . .       (475,799)        (93,022)       (317,358)

CHANGE IN ACCOUNTING PRINCIPLE
  Cumulative effect of change in gold mineral
    Exploration and development costs method
    of accounting (Note 1) . . . . . . . . . .     (2,860,776)              -               - 
                                                --------------  --------------  --------------

NET LOSS . . . . . . . . . . . . . . . . . . .  $  (3,336,575)  $     (93,022)  $    (317,358)
                                                ==============  ==============  ==============

NET LOSS PER COMMON SHARE. . . . . . . . . . .  $        (.19)  $        (.01)  $        (.04)
                                                ==============  ==============  ==============

WEIGHTED AVERAGE NUMBER OF SHARES
 OUTSTANDING . . . . . . . . . . . . . . . . .     17,261,723      10,191,230       7,452,248 
----------------------------------------------  ==============  ==============  ==============
</TABLE>



     (Continued  on  next  page)


                                      19

     TRI-VALLEY  CORPORATION
     CONSOLIDATED  STATEMENTS  OF  CHANGES  IN  SHAREHOLDERS'  EQUITY

<TABLE>
<CAPTION>



                  Capital in
                   Excess of   Accumulated    Treasury     Preferred     Options    Shareholders'
                    Shares      Par Value     Par Value     Deficit       Stock         Stock        Outstanding     Equity
                  -----------  ------------  -----------  ------------  ---------  ---------------  -------------  -----------

<S>               <C>          <C>           <C>          <C>           <C>        <C>              <C>            <C>


Balance at
 July 31, 1995 .   7,337,248   $     73,372  $3,284,653   $(2,106,861)  $(28,639)  $      300,000   $    191,000   $1,713,625 
                  -----------  ------------  -----------  ------------  ---------  ---------------  -------------  -----------

Issuance of
 common stock
 to investors. .     390,000          3,900     191,100             -          -                -       (191,000)       3,900 
Transfer of
 preferred stock
 to common . . .     300,000          3,000     297,000             -          -         (300,000)             -            - 
Net loss . . . .    (317,358)
                  -----------                                                                                                 
                           -              -           -      (317,358)         -                -              - 
                  -----------  ------------  -----------  ------------  ---------  ---------------  -------------             

Balance at
 July 31, 1996 .   8,027,248        80,2725   3,772,753    (2,424,219)   (28,639)       1,400,167              -    1,400,167 
                  -----------  ------------  -----------  ------------  ---------  ---------------  -------------  -----------

Issuance of
 common stock
 to investors. .   6,075,225         60,752   2,100,186             -          -                -              -    2,160,938 
Stock issuance
 costs . . . . .           -              -    (377,213)            -          -                -              -     (377,213)
Net loss . . . .           -              -           -       (93,022)         -                -              -      (93,022)
----------------  -----------  ------------  -----------  ------------  ---------  ---------------  -------------  -----------
</TABLE>




     The  accompanying  notes  are  an  integral  part  of  these  financial
statements.

                                      20

     TRI-VALLEY  CORPORATION
     CONSOLIDATED  STATEMENTS  OF  CHANGES  IN  SHAREHOLDERS'  EQUITY

<TABLE>
<CAPTION>



                Capital in
                Excess of    Accumulated    Treasury     Preferred     Options   Shareholders'
                  Shares      Par Value     Par Value     Deficit       Stock        Stock        Outstanding      Equity
                ----------  -------------  -----------  ------------  ---------  --------------  -------------  ------------

<S>             <C>         <C>            <C>          <C>           <C>        <C>             <C>            <C>


Balance at
 December 31,
 1996. . . . .  14,102,743       141,024    5,495,726    (2,517,241)   (28,639)               -             -     3,090,870 
                ----------  -------------  -----------  ------------  ---------  --------------  -------------  ------------

Issuance of
 common stock
 to investors.   4,819,505        48,198    2,890,867             -          -                -             -     2,939,065 
Stock issuance
 costs . . . .           -             -     (508,562)            -          -                -      (508,562)
Change due to
  decrease in
  par value. .           -      (170,300)     170,300             -          -                -             -             - 
Net loss . . .           -             -            -    (3,336,575)         -                -             -    (3,336,575)
                ----------  -------------  -----------  ------------  ---------  --------------  -------------  ------------


Balance at
 December 31,
 1997. . . . .  18,922,248  $     18,922   $8,048,331   $(5,853,816)  $(28,639)  $            -  $          -   $ 2,184,798 
--------------  ==========  =============  ===========  ============  =========  ==============  =============  ============
</TABLE>



     (Continued  on  next  page)


                                      21

     TRI-VALLEY  CORPORATION
     CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
<TABLE>
<CAPTION>



                                                            Transition
                                                            Year Ended     Period Ended
                                                           December 31,    December 31,     Year Ended
                                                               1997            1996        July 31, 1996
                                                          --------------  --------------  ---------------

<S>                                                       <C>             <C>             <C>


CASH FLOWS FROM OPERATING ACTIVITIES
    Net loss . . . . . . . . . . . . . . . . . . . . . .  $  (3,336,575)  $     (93,022)  $     (317,358)
    Adjustments to reconcile net loss to net cash
      used by operating activities:
        Depreciation, depletion and amortization
        Stock issued for services rendered . . . . . . .        152,490          23,448           53,453 
        Impairment, dry hole and other disposals of. . .        133,000         147,938                - 
          property and equipment
        Changes in operating capital:. . . . . . . . . .      2,860,776               -           27,593 
        (Increase) decrease in accounts receivable
        (Increase) decrease in prepaid expenses. . . . .       (418,648)           (524)          17,784 
        (Increase) decrease in deposits. . . . . . . . .              -               -            8,812 
        Increase (decrease) in trade accounts payable. .        (38,000)         (1,000)          39,241 
        Increase (decrease) in amounts payable to. . . .         17,231        (168,491)         100,687 
          joint venture participants and related parties
        Increase (decrease) in advances from joint . . .         21,813         (29,932)          86,521 
          venture participants
        Increase (decrease) in accrued expenses and. . .      1,648,537        (286,885)        (144,399)
          other liabilities
Net Cash (Used) Generated by Operating Activities. . . .              -        (120,845)          27,593 
                                                          --------------  --------------  ---------------
                                                              1,040,624        (529,313)        (135,408)
                                                          --------------  --------------  ---------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Note receivable. . . . . . . . . . . . . . . . . . .       (125,000)              -                - 
    Capital expenditures . . . . . . . . . . . . . . . .       (824,944)       (145,718)        (240,955)
    Investment in partnerships . . . . . . . . . . . . .         12,257         (27,834)               - 
                                                          --------------  --------------  ---------------
Net Cash Used by Investing Activities. . . . . . . . . .       (937,687)       (173,552)        (240,955)
                                                          --------------  --------------  ---------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Restricted cash - escrow account . . . . . . . . . .         60,000         (60,000)               - 
    Proceeds from issuance of debt . . . . . . . . . . .              -               -        1,038,000 
    Principal payments on long-term debt . . . . . . . .        (55,476)       (946,099)        (635,317)
    Proceeds from issuance of common stock . . . . . . .         48,185          58,122            3,900 
    Investor payable . . . . . . . . . . . . . . . . . .        103,000         662,680                - 
    Additional paid in capital . . . . . . . . . . . . .      2,060,700       1,806,941                - 
    Stock issuance costs . . . . . . . . . . . . . . . .       (375,119)       (243,338)               - 
                                                          --------------  --------------  ---------------
Net Cash Provided by Financing Activities. . . . . . . .      1,841,290       1,278,306          406,583 
                                                          --------------  --------------  ---------------

NET INCREASE IN CASH AND  CASH
  EQUIVALENTS. . . . . . . . . . . . . . . . . . . . . .      1,944,227         575,441           30,220 
CASH AT BEGINNING OF YEAR. . . . . . . . . . . . . . . .        834,365         258,924          228,704 
                                                          --------------  --------------  ---------------

CASH AT END OF YEAR. . . . . . . . . . . . . . . . . . .  $   2,778,592   $     834,365   $      258,924 
--------------------------------------------------------  ==============  ==============  ===============
</TABLE>




     The  accompanying  notes  are  an  integral  part  of  these  financial
statements.
                                      22



     TRI-VALLEY  CORPORATION
     CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS


<TABLE>
<CAPTION>



                                                       Transition
                                                       Year Ended    Period Ended
                                                      December 31,   December 31,     Year Ended
                                                          1997           1996       July 31, 1996
                                                      -------------  -------------  --------------

<S>                                                   <C>            <C>            <C>


SUPPLEMENTAL DISCLOSURES OF CASH
  FLOW INFORMATION:

    Interest paid. . . . . . . . . . . . . . . . . .  $      15,220  $      35,438  $       85,487
                                                      =============  =============  ==============

    Income taxes paid. . . . . . . . . . . . . . . .  $       1,600  $       1,600  $        1,600
                                                      =============  =============  ==============

NONCASH FINANCING AND INVESTING
  ACTIVITIES:

    Issuance of common stock for services rendered .  $     133,000  $     147,938  $            -
    Issuance of debt to satisfy stock issuance cost.        133,443              -               -
    Issuance of common stock for well database . . .         12,500              -               -
    Conversion of debt to common stock . . . . . . .         22,000              -               -
    Conversion of investor payable to common stock .        662,680              -               -
    Increase in paid in capital due to change in par
      value of common stock. . . . . . . . . . . . .        170,300              -               -
----------------------------------------------------  -------------  -------------  --------------
</TABLE>




                                      48

     TRI-VALLEY  CORPORATION
     NOTES  TO  FINANCIAL  STATEMENTS
     DECEMBER  31,  1997,  DECEMBER  31,  1996  AND  JULY  31,  1996


NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
            ----------------------------------------------

This  summary  of significant accounting policies of Tri-Valley Corporation is
presented  to  assist in understanding the Company's financial statements. The
financial  statements  and  notes  are  representations  of  the  Company's
management,  which  is responsible for their integrity and objectivity.  These
accounting  policies  conform  to generally accepted accounting principles and
have been consistently applied in the preparation of the financial statements.

Business  Combinations
----------------------

The  information  contained in the financial statements and accompanying notes
is  that  of  Tri-Valley  Corporation  with  which  the  subsidiary  company
(Tri-Valley  Oil  &  Gas  Co.)  has  been  consolidated.

Use  of  Estimates  in  the  Preparation  of  Financial  Statements
-------------------------------------------------------------------

The  preparation of financial statements in conformity with generally accepted
accounting  principles  requires  management to make estimates and assumptions
that affect the reported amounts of assets, liabilities and disclosures at the
date  of  the financial statements as well as the reported amounts of revenues
and  expenses  during  the  reporting period. Actual results could differ from
those  estimates.

Material  estimates  that  are  particularly susceptible to significant change
relate  to  the  determination of the depreciation, depletion and amortization
account  balance.  Depreciation,  depletion  and  amortization  is  based upon
probable  and  proven  reserves for mining and proven reserves for oil and gas
properties.  Depletion  will be provided on mining properties when they become
commercial.
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)
            ----------------------------------------------

Fiscal  Year  Change
--------------------

Effective March 10, 1997, the Company changed its fiscal year-end from July 31
to  December  31.   Accordingly, the consolidated financial statements include
the results of operations for the transition period, which are not necessarily
indicative  of  operations  for  a  full  year.

Results  for  the  comparable  prior  transition  period are summarized below.
<TABLE>
<CAPTION>



                               Twelve Months         Five Months
                                   Ended                Ended
                             December 31, 1996    December 31, 1995
                                 Unaudited            Unaudited
                            -------------------  -------------------

<S>                         <C>                  <C>

Revenues . . . . . . . . .  $          544,249   $          262,666 
Operating loss . . . . . .            (196,040)             (48,117)
Provision for income taxes              (1,600)              (1,600)
Net Loss . . . . . . . . .             197,640              (49,717)

Net Loss Per Common Share.                (.01)                (.01)
</TABLE>


Chapter  11  Reorganization
---------------------------

On  January  30,  1996,  Tri-Valley  Corporation  ("TVC") and its wholly owned
subsidiary,  Tri-Valley  Oil  & Gas Co. ("TVOG"), filed voluntary petitions in
the  United  States  Bankruptcy Court (the "Bankruptcy Court") for the Eastern
District  of  California sitting in Fresno seeking to reorganize under Chapter
11  of  the  Federal  Bankruptcy  Code.

During  the  process  of  developing a Plan, management was able to infuse the
Company  with  capital  from  new  investors  and  increased  production.  The
Company,  citing  the  influx  of capital, filed a motion to be dismissed from
bankruptcy.    On November 1, 1996, the court granted the motion and dismissed
the  case.  These financial statements, however, do not reflect any adjustment
or  disclosure  since  no  plan  of  reorganization  was actually filed and/or
confirmed  by  the  Bankruptcy  Court,  and  all  major obligations which were
subject  to  compromise  were  paid  100  cents  on  the  dollar.
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)
            ----------------------------------------------

History  and  Business  Activity
--------------------------------

Historically  an  oil  and gas exploration and production company, emphasizing
the  Sacramento Valley natural gas province, the Company added precious metals
exploration  in  fiscal  1987.   The Company conducts its oil and gas business
primarily  through  its  34  year  old  wholly  owned  oil and gas subsidiary,
Tri-Valley  Oil  &  Gas  Company ("TVOG"). TVOG is engaged in the exploration,
acquisition  and  production  of  oil  and  gas  properties.   At present, the
precious  metals  exploration activities are conducted directly by the parent,
Tri-Valley  Corporation  ("TVC").  TVC has traditionally sought acquisition or
merger  opportunities  within and outside of petroleum and mineral industries.

Basis  of  Accounting
---------------------

The  Company  prepares  its  financial  statements  using the accrual basis of
accounting  in  conformity  with  generally  accepted  accounting  principles
consistently  applied.    Oil and gas and mining activities are recorded using
the  successful  efforts  method  of  accounting.    See  discussion  below.

Substantially  all  of  the  Company's exploration, development and production
activities  are  conducted in the form of joint venture agreements with others
and,  accordingly,  the  financial  statements  reflect  only  the  Company's
proportionate  interest  in  these  joint  ventures.

Cash  Equivalent  and  Short-Term  Investments
----------------------------------------------

Cash  equivalents  consist  of  highly  liquid  debt  instruments  such  as
certificates of deposit, commercial paper, and money market accounts purchased
with  an  original  maturity  date  of  three  months  or  less.

NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)
            ----------------------------------------------

Goodwill
--------

The  consolidated  financial  statements  include  the net assets purchased of
Tri-Valley  Corporation's  wholly  owned subsidiary. Net assets are carried at
their  fair  market  value  at the acquisition date. The excess of acquisition
costs  over  the  fair  value  of  assets acquired is included in and has been
allocated  to  goodwill.  Goodwill  of  $433,853  is  being  amortized  on  a
straight-line  basis  over  40  years.  The  carrying  amount  of  goodwill is
evaluated  periodically.  Factors  used  in the evaluation include anticipated
cash  flows  from  operating  and  non-operating  mineral  properties,  as the
goodwill  originally  attached  to  extractive industry properties. Tri-Valley
Corporation  has  not  established an allowance for the impairment of goodwill
which  may  be  realized should the Company be acquired or merged with another
organization.

Acquisition  Costs
------------------

The  Company  is preparing to propose acquisition of 26 wireless communication
licenses  held  by  five partnerships by exchanging TVC unregistered stock for
the licenses. The costs associated with the potential license acquisitions are
currently  being capitalized. In the event the acquisition is not consummated,
these  costs  will  be  charged  to  operations.

Drilling  Agreements/Joint  Ventures
------------------------------------

Tri-Valley  frequently  participates in drilling agreements whereby it acts as
operator  of  drilling  and  producing  activities.    As  operator,  TVOG  is
contingently  liable for the activities of these ventures.  The Company owns a
carried  interest and/or overriding royalty interest in such ventures, earning
a  working  interest  at  payout.

Receivables  from  and  amounts  payable  to these related parties (as well as
other  related  parties)  have  been  segregated in the accompanying financial
statements.  Transactions with these parties are within the ordinary course of
business.

Oil  and  Gas  Property  and  Equipment  (Successful  Efforts)
--------------------------------------------------------------

The  Company accounts for its oil and gas exploration and development costs on
the  successful  efforts  method.  Under this method, costs to acquire mineral
interests  in  oil and gas properties, to drill and complete exploratory wells
that  find  proved  reserves  and  to drill and complete development wells are
capitalized.  Exploratory dry-hole costs, geological and geophysical costs and
costs  of  carrying  and  retaining  unproved  properties  are  expensed  when
incurred.  Depletion,  depreciation  and amortization of oil and gas producing
properties  are  computed  on an aggregate basis using the units-of-production
method.
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)
            ----------------------------------------------

Oil  and  Gas  Property  and  Equipment  (Successful  Efforts)  (Continued)
--------------------------------------------------------------

In  March  1995,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement  of  Financial  Accounting Standards (SFAS) No. 121, "Accounting for
the  Impairment  of  Long-Lived Assets and/or Long-Lived Assets to be Disposed
of." This statement requires that long-lived assets be reviewed for impairment
whenever  events or changes in circumstances indicate that the carrying amount
of  an asset may not be recoverable. It establishes guidelines for determining
recoverability  based  on  future net cash flows from the use of the asset and
for the measurement of the impairment loss. Impairment loss under SFAS No. 121
is  calculated  as the difference between the carrying amount of the asset and
its fair value. Any impairment loss is recorded in the current period in which
the  recognition  criteria  are  first  applied  and met. Under the successful
efforts  method  of  accounting  for  oil  and  gas  operations,  the  Company
periodically  assessed  its proved properties for impairments by comparing the
aggregate  net  book  carrying  amount  of  all  proved  properties with their
aggregate  future  net  cash  flows.  The  new  statement  requires  that  the
impairment  review  be  performed  on  the lowest level of asset groupings for
which  there  are  identifiable  cash  flows. In the case of the Company, this
results  in  a  property  by  property  impairment  review.

The Company adopted SFAS No. 121 in the first quarter of 1996. Impairment loss
on  the  oil  and  gas  properties is calculated as the difference between the
asset  book  carrying amounts and future discounted net cash flow projections,
giving  consideration  to  recent prices, pricing trends and estimated reserve
quantities.  These  projections  represent the Company's best estimate of fair
value  based  on  the  information  available.

Upon  the  sale  of  oil  and  gas  reserves  in place, costs less accumulated
amortization of such property are removed from the accounts and resulting gain
or  loss  on sale is reflected in operations.  Upon abandonment of properties,
the  reserves are deemed fully depleted and any unamortized costs are recorded
in  the  statement of operations under leases sold, relinquished and impaired.

Gold  Mineral  Property
-----------------------

In  prior  years,  all  costs  related  to  mineral  properties  with economic
development  potential,  including  mineral  claim  acquisition  costs  and
exploration  and  development  expenditures  were  deferred  until the related
mineral  claims achieved commercial production.  At such time, the costs would
be  amortized  against  income  from future mining operations.  All grassroots
exploration  costs,  which  are  costs  incurred while probing for prospective
developmental  sites,  are  charged  to  expense  as  incurred.
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)
            ----------------------------------------------

Gold  Mineral  Property  (Continued)
-----------------------

During  1997,  the  Securities  and  Exchange  Commission  staff  reconsidered
existing accounting practices for mineral expenditures by United States junior
mining  companies. They now interpret generally accepted accounting policy for
junior  mining  companies to permit capitalization of acquisition, exploration
and  development  costs only after persuasive engineering evidence is obtained
to support recoverability of these costs (ideally upon determination of proven
and/or  probable  reserves  based  upon dense drilling samples and feasibility
studies  by  a  recognized  independent  engineer).  Although  the Company has
performed  drilling  samples,  and an independent engineer has deemed the gold
properties  contain  profitable  reserves in excess of property costs incurred
through  December  31,  1997,  management  has  chosen  to  follow  the  more
conservative method of accounting by expensing the previously capitalized gold
mineral  costs  as  a cumulative effect of a change in accounting principle in
the  consolidated  statement  of  operations.

Capitalization  of  Interest
----------------------------

Interest  cost  is  capitalized on construction and development programs until
placed  into  operation.

Properties  and  Equipment
--------------------------
Properties  and  equipment are depreciated using the straight-line method over
the  following  estimated  useful  lives:


                                 Office furniture and fixtures     3 - 7 years
                                                         Building     40 years
                                                         --------     --------


Leasehold  improvements  are  amortized  over the life of the lease (3 years).

Maintenance  and  repairs,  which  neither  materially add to the value of the
property nor appreciably prolong its life, are charged to expense as incurred.
Gains  or  losses on dispositions of property and equipment other than oil and
gas  are  reflected  in  operations.

Concentration  of  Credit  Risk
-------------------------------
The  Company  sells  oil,  gas  and natural gas liquids to various oil and gas
purchasers  primarily  in  the northern California region.  Credit is extended
based  on  an  evaluation of the customer's financial condition, and generally
collateral  is  not required.  Transactions with major customers are discussed
in  detail  in  Note  6.

The  Company  places  its  temporary cash investments with high credit quality
financial  institutions  and  limits  the amount of credit exposure to any one
financial  institution.
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)
            ----------------------------------------------
Net  Income  (Loss)  Per  Common  Share
---------------------------------------
The  calculation  of net income/loss per common share is based on the weighted
average  number  of  common  stock  shares outstanding during each period. The
effect  of convertible preferred stock and warrants on the net income/loss per
share  ratio  is  considered  anti-dilutive  and  was  not  included  in  the
computation  of  earnings  per  common  share  for any of the years or periods
presented.

Reclassification
----------------
Certain  amounts  in  the  financial  statements  have been reclassified to be
consistent  and  comparable  from  year-to-year.

Accounting  Pronouncements
--------------------------
In  June 1997, the Financial Accounting Standards Board (FASB) issued SFAS No.
130,  "Reporting  Comprehensive  Income." This statement establishes standards
for  reporting  and  display of comprehensive income and its components in the
Company's  financial  statements. Comprehensive income includes all changes in
the  Company's  equity  except  investments by and distributions to owners and
includes,  among  other  things,  foreign currency translation adjustments. In
June  1997,  the FASB also issued SFAS No. 131, "Disclosures about Segments of
an  Enterprise  and Related Information." This statement establishes standards
for  reporting  information  about  operating  segments  in  annual  financial
statements  and  requires  selected  information  about  operating segments be
included  in interim reports issued to shareholders. Both these statements are
effective  for  financial  statements for periods beginning after December 15,
1997.  As  both  SFAS  Nos.  130 and 131 establish standards for reporting and
display,  the Company does not expect the adoption of these statements to have
a  material  impact  on  its  financial  condition  or  results of operations.


NOTE  2  -  PROPERTY  AND  EQUIPMENT
            ------------------------
Oil  and  gas properties, and equipment and fixtures consist of the following:
<TABLE>
<CAPTION>



                                           December 31,   December 31,
                                               1997           1996       July 31, 1996
                                           -------------  -------------  --------------

<S>                                        <C>            <C>            <C>


Oil and Gas - California
-----------------------------------------                                              

Proved properties, net of accumulated
  depletion of $378,899 at December 31,
  1997, $250,396 at December 31, 1996 and
  $233,259 at July 31, 1996 . . . . . . .  $     332,914  $     259,709  $      276,846
Unproved properties . . . . . . . . . . .        399,818        483,287         695,861
                                           -------------  -------------  --------------

      Total Oil and Gas Properties. . . .  $     732,732  $     742,996  $      972,707
-----------------------------------------  =============  =============  ==============
</TABLE>


NOTE  2  -  PROPERTY  AND  EQUIPMENT  (Continued)
            ------------------------
<TABLE>
<CAPTION>



                                                December 31,   December 31,
                                                    1997           1996       July 31, 1996
                                                -------------  -------------  --------------

<S>                                             <C>            <C>            <C>


Other Property and Equipment
----------------------------------------------                                              
    Mining prospects . . . . . . . . . . . . .              -      2,376,005       2,057,732
    Land . . . . . . . . . . . . . . . . . . .         11,281         11,281          11,281
    Building net of accumulated depreciation
      $611,045 at December 31, 1997, $4,982
      at December 31, 1996 and $4,512 at
      July 31, 1996. . . . . . . . . . . . . .         39,014         40,142          40,612
    Office equipment, vehicle, and leasehold
      improvements net of accumulated
      depreciation of $97,998 at December 31,
      1997, $87,524 at December 31, 1996 and
      $86,203 at July 31, 1996 . . . . . . . .         38,587         12,436           3,493
                                                -------------  -------------  --------------

        Total Other Property and Equipment . .         88,882      2,530,057       2,113,118
                                                -------------  -------------  --------------

Property and Equipment (Net) . . . . . . . . .  $     821,614  $   3,182,860  $    3,085,825
----------------------------------------------  =============  =============  ==============
</TABLE>



NOTE  3  -  NOTES  AND  CONTRACTS  PAYABLE
            ------------------------------

Long-term  debt  is  summarized  below:
<TABLE>
<CAPTION>



                                               December 31,   December 31,
                                                   1997           1996       July 31, 1996
                                               -------------  -------------  --------------

<S>                                            <C>            <C>            <C>


Note payable to National Bank of Alaska
  dated August 27, 1992; secured by
  property; payable in monthly
  installments of $539 including interest.
  Interest rate at 12.00%, December 31, 1997,
  December 31, 1996, and July 31, 1996. . . .  $      18,092  $      22,076  $       23,225
                                               -------------  -------------  --------------

Note payable to Bandera Land Company
  dated December 4, 1992; unsecured;
  interest at 10.00%, December 31, 1997,
  December 31, 1996, and July 31, 1996;
  interest only payable on outstanding
  balance.. . . . . . . . . . . . . . . . . .              -              -          17,950
---------------------------------------------  -------------  -------------  --------------
</TABLE>


NOTE  3  -  NOTES  AND  CONTRACTS  PAYABLE  (Continued)
            ------------------------------
<TABLE>
<CAPTION>



                                                  December 31,  December 31,
                                                      1997          1996      July 31, 1996
                                                  ------------  ------------  -------------    

<S>                                               <C>           <C>           <C>            <C>


Note payable to Edgar Moss dated -
  February 1, 1994; unsecured; no
  stated interest. . . . . . . . . . . . . . . .             -             -         11,000
                                                  ------------  ------------  -------------       

Note payable to Edgar Moss dated
  February 22, 1995; unsecured; interest
  at 7.20%, monthly interest payable with
  principal balance due August 22, 1995. . . . .             -             -         16,000
                                                  ------------  ------------  -------------       

Note payable to Laurence B. Flood dated
  September 16, 1995; unsecured; interest
  at 10.00%, monthly interest payable
  in cash or Tri-Valley Corporation
  unregistered common stock at $.30 per
  share, principal balance due September 16,
                                                         1999.             -          7,000  7,000
                                                                ------------  -------------  -----

Note payable to Laurence B. Flood dated
  July 19, 1995; unsecured; interest at 10.00%,
  monthly interest payable in cash or Tri-
  Valley Corporation unregistered common
  stock at $.30 per share, principal balance
  due July 19, 1999.
                                                             -        15,000         15,000
                                                  ------------  ------------  -------------       

Note payable to Imperial Premium Finance,
  Inc., dated June 9, 1997; secured by
  contractual policy; interest at 12.00%;
  payable in monthly installments of
  $680 including interest. . . . . . . . . . . .         4,574         4,574          4,574
                                                  ------------  ------------  -------------       

Note payable to Mayal Inwald, dated
  May 4, 1996; unsecured; interest at
  10.00%; interest only on outstanding
  balance with principal due May 4,
  1998. Convertible to common stock.(*). . . . .             -             -        150,000
                                                  ------------  ------------  -------------       

Note payable to Behrooz Sarafraz, dated
  July 19, 1996; secured by property;
  convertible to common stock, interest
  at 10.00%; monthly interest payable
  with principal due July 19, 1998.(*) . . . . .             -             -        750,000
------------------------------------------------  ------------  ------------  -------------       
</TABLE>


NOTE  3  -  NOTES  AND  CONTRACTS  PAYABLE  (Continued)
            ------------------------------
<TABLE>
<CAPTION>



                                                December 31,   December 31,
                                                    1997           1996       July 31, 1996
                                                -------------  -------------  --------------

<S>                                             <C>            <C>            <C>


Note payable to principle shareholder, dated
  June 28, 1997; unsecured; interest at 8.00%;
  payable in monthly installments of $4,354,
  including interest.. . . . . . . . . . . . .         33,811              -               -
                                                -------------  -------------  --------------

Note payable to principle shareholder, dated
  June 28, 1997; unsecured; interest at 8.00%;
  payable in monthly installments of $771,
  including interest.. . . . . . . . . . . . .          6,712              -               -
                                                -------------  -------------  --------------

Note payable to principle shareholder, dated
  June 28, 1997; unsecured; interest at 8.00%;
  payable in monthly installments of $542,
  including interest.. . . . . . . . . . . . .          4,716              -               -
                                                -------------  -------------  --------------

Note payable to principle shareholder, dated
  June 28, 1997; unsecured; interest at 8.00%;
  payable in monthly installments of $2,167,
  including interest.. . . . . . . . . . . . .         20,893              -               -
                                                -------------  -------------  --------------

Note payable to principle shareholder, dated
  June 28, 1997; unsecured; interest at 8.00%;
  payable in monthly installments of $1,496,
  including interest.. . . . . . . . . . . . .         15,819              -               -
                                                -------------  -------------  --------------

                                                      104,617         48,650         994,749
Less current portion . . . . . . . . . . . . .         90,667         11,042          77,992
                                                -------------  -------------  --------------

Long-Term Portion of Notes and Contracts
  Payable. . . . . . . . . . . . . . . . . . .  $      13,950  $      37,608  $      916,757
----------------------------------------------  =============  =============  ==============
</TABLE>


(*)         During the transition period, these notes were converted to common
stock  in  accordance  with  the  terms  of the original agreements (Note 10).
NOTE  3  -  NOTES  AND  CONTRACTS  PAYABLE  (Continued)
            ------------------------------

Maturities  of  long-term debt for the five years succeeding December 31, 1997
are  as  follows:
<TABLE>
<CAPTION>



<S>            <C>


December 31,
-------------         

1998. . . . .  $90,667
1999. . . . .    5,067
2000. . . . .    5,709
2001. . . . .    3,174
Thereafter. .        -
               -------

104,617
=============         
</TABLE>



NOTE  4  -  RELATED  PARTY  TRANSACTIONS
            ----------------------------

The following is known to the Company to be the only beneficial owner of 5% or
more  of  the  Company's  outstanding  common  stock  at  December  31,  1997:



                          Ownership Shares     Percentage
                          ----------------     ----------

                     Dennis Vaughan     967,200     5.11%
                     --------------     -------     -----



Tri-Valley  is  a  general  partner  and  operator of the Tri-Valley Oil & Gas
exploration  Programs  1971-1 and Martins-Severin Partnerships. Income derived
from  these  activities  follows:
<TABLE>
<CAPTION>



                                      Transition
                                      Year Ended    Period Ended
                                     December 31,   December 31,     Year Ended
                                         1997           1996       July 31, 1996
                                     -------------  -------------  --------------

<S>                                  <C>            <C>            <C>


Partnership income, net of expenses  $     255,192  $      89,742  $      286,500
-----------------------------------  =============  =============  ==============
</TABLE>


On  December  4, 1992, the Company entered into an agreement to borrow $15,000
from Bandera Land Company which is owned by F. Lynn Blystone and other members
of  the  Blystone  Family.  Interest  at  10.0%  is payable on the outstanding
balance with no stated due date. The balance outstanding at December 31, 1997,
December  31,  1996,  and  July 31, 1996 was $0, $0 and $17,950, respectively.
NOTE  4  -  RELATED  PARTY  TRANSACTIONS  (Continued)
            ----------------------------

On  September  16, 1995 and July 19, 1995, the Company entered into agreements
to  borrow  $9,000  and  $15,000,  respectively,  from  Laurence  B.  Flood, a
shareholder  of  the  Company.  Interest at 10% is payable every two months in
cash  or Tri-Valley Corporation unregistered common stock at $.30 per share at
the  sole discretion of the Company. The notes were due to mature on September
16  and July 19, 1999, respectively. Other terms of the agreements involve the
following:

  -         Principal amount convertible into TVC unregistered common stock at
$.25  per  share  at  any  time.

  -      Options on 7,000 and 15,000 shares of TVC unregistered shares at $.50
per  share  exercisable  through September 16 and July 19, 1999, respectively.

  -          TVC may force exercise of said options if the market quotes a bid
price  of  $1.00  per  share or higher for at least twenty consecutive trading
days.

On  August 21, 1997, these notes were paid in full with the issuance of 88,000
shares  of  unregistered,  restricted  common  stock  at  $.25  per  share.

Due to related parties of $96,532, $196,142 and $204,392 at December 31, 1997,
December  31, 1996 and July 31, 1996, respectively, consist of payroll payable
to  F.  Lynn  Blystone.

On  March  22,  1997, the directors voted to award themselves 10,000 shares of
stock  each  in  lieu  of  services  rendered to the Company.  The shares were
awarded  at  a  price  of $1.86 per share. Due to the restricted nature of the
shares,  the Company has recognized the commitment in the financial statements
at  a  discount  ($1.12  per  share).

On  August  8,  1997, as provided for in his employment contract, the board of
directors  awarded  F. Lynn Blystone, CEO and President of the Company, 40,000
shares  of unregistered, restricted common stock for compensation for services
rendered  to  the  Company.  The  shares were awarded at a price of $1.375 per
share  (trading  value  at the date of the transaction) and were appropriately
discounted  to  $.55  per  share  due  to  their  restricted  nature.

On  June  28,  1997,  the  Company  recorded five notes payable to a principle
shareholder  of  Tri-Valley  Corporation  common  stock  for services rendered
related  to  the issuance of stock. At December 31, 1997, the aggregate amount
of the notes payable was $81,951 (see Note 3). The principle balances totaling
$133,400,  were  recorded  as  stock  issuance  costs which are a component of
shareholder's  equity.

During  fiscal  year  1997,  the  Company  paid  a  principle  shareholder  of
Tri-Valley  Corporation  $322,000  for  finder fees related to the issuance of
stock.  These  transactions  are  recorded as stock issuance costs which are a
component  of  shareholder's  equity.
NOTE  5  -  INCOME  TAXES
            -------------

At  December  31,  1997,  the  Company  had  available  net  operating  loss
carryforwards  for  financial  statements  and  federal income tax purposes of
approximately  $6,200,000. These loss carryforwards are between 1998 and 2012.

The  components  of  the  net  deferred  tax  assets  were  as  follows:
<TABLE>
<CAPTION>



                                     December 31,    December 31,
                                         1997            1996        July 31, 1996
                                    --------------  --------------  ---------------

<S>                                 <C>             <C>             <C>


Deferred Tax Assets:
  Net operating loss carryforwards  $     765,000   $     782,000   $      629,000 
  Satutory depletion carryforwards        775,000         660,000          620,000 
                                    --------------  --------------  ---------------

Total Deferred Tax Assets. . . . .      1,540,000       1,442,000        1,249,000 
                                    --------------  --------------  ---------------

Valuation Allowance. . . . . . . .     (1,540,000)     (1,442,000)      (1,249,000)
                                    --------------  --------------  ---------------

Net Deferred Tax Assets. . . . . .  $           -   $           -   $            - 
----------------------------------  ==============  ==============  ===============
</TABLE>


A  full  valuation  allowance has been established for the deferred tax assets
generated  by  net  operating  loss  carry  forwards due to the uncertainty of
future  utilization.

NOTE  6  -  MAJOR  CUSTOMERS
            ----------------

Oil  and  Gas
-------------

The Company received in excess of 10% of its revenue from various sources (oil
and  gas  sales  and  mineral  royalties)  as  follows:
<TABLE>
<CAPTION>



                         A        B        C      Other
                      -------  -------  -------  -------

<S>                   <C>      <C>      <C>      <C>


Period Ended:
   July 31, 1996 . .  153,862  403,366        *  109,810
   December 31, 1996   95,408        *  187,492    9,701
   December 31, 1997   96,091  350,689  283,749   37,097
--------------------  -------  -------  -------  -------
</TABLE>


  *    Not  a  major  source  during  the  period.

All  oil  and  gas  sales have occurred in the northern California gas market.
NOTE  7  -  FINANCIAL  INFORMATION  RELATING  TO  INDUSTRY  SEGMENTS
            --------------------------------------------------------
The  Company's operations are classified into two principal industry segments.
Following  is  a  summary  of  segmented  information  for  1997  and  1996:
<TABLE>
<CAPTION>



                                                Oil and Gas    Precious Metals      Total
                                               -------------  -----------------  ------------

<S>                                            <C>            <C>                <C>


Year Ended December 31, 1997
    Total Revenues. . . . . . . . . . . . . .  $    867,622   $              -   $   867,622 
                                               =============  =================  ============

Loss Before Taxes and Change in Accounting
  Principle . . . . . . . . . . . . . . . . .  $   (474,199)  $              -   $  (474,199)
Income Taxes. . . . . . . . . . . . . . . . .         1,600                  -         1,600 
Change in Accounting Principle. . . . . . . .             -         (2,860,776)   (2,860,776)
                                               -------------  -----------------  ------------

Net Loss. . . . . . . . . . . . . . . . . . .  $   (475,799)  $     (2,860,776)  $(3,336,575)
                                               =============  =================  ============

Property, Plant and Equipment Additions,
  Net of Deletions. . . . . . . . . . . . . .  $     14,759   $     (2,376,005)  $(2,361,246)
                                               =============  =================  ============

Depreciation, Depletion and Amortization. . .  $    151,362   $          1,128   $   152,490 
                                               =============  =================  ============

    Total Assets. . . . . . . . . . . . . . .  $  4,975,224   $         39,014   $ 5,014,238 
                                               =============  =================  ============

Transition Period Ended December 31, 1996
  Total Revenues. . . . . . . . . . . . . . .  $    474,521   $              -   $   474,521 
                                               =============  =================  ============

Income (Loss) Before Taxes. . . . . . . . . .  $    (91,422)  $              -   $   (91,422)
Income Taxes. . . . . . . . . . . . . . . . .         1,600                  -         1,600 
                                               -------------  -----------------  ------------

Net Income (Loss) . . . . . . . . . . . . . .  $    (93,022)  $              -   $   (93,022)
                                               =============  =================  ============

Property, Plant and Equipment Additions,
  Net of Deletions. . . . . . . . . . . . . .  $   (212,575)  $        318,273   $   105,698 
                                               =============  =================  ============

Depreciation, Depletion and Amortization. . .  $     23,448   $              -   $    23,448 
                                               =============  =================  ============

    Total Assets. . . . . . . . . . . . . . .  $  2,315,313   $      2,421,130   $ 4,736,443 
                                               =============  =================  ============

Year Ended July 31, 1996
  Total Revenues. . . . . . . . . . . . . . .  $    879,247   $              -   $   879,247 
                                               =============  =================  ============

Income (Loss) Before Taxes. . . . . . . . . .  $   (315,758)                 -   $  (315,757)
Income Taxes. . . . . . . . . . . . . . . . .         1,600                  -         1,600 
                                               -------------  -----------------  ------------

Net Income (Loss) . . . . . . . . . . . . . .  $   (317,358)  $              -   $  (317,358)
                                               =============  =================  ============

Property, Plant and Equipment Additions, Net.  $   (305,288)  $        429,615   $   124,322 
                                               =============  =================  ============

Depreciation, Depletion and Amortization. . .  $     53,453   $              -   $    53,453 
                                               =============  =================  ============
    Total Assets
                                               $  1,839,750   $      2,109,625   $ 3,949,375 
                                               =============  =================  ============
</TABLE>


NOTE  8  -  COMMITMENTS
            -----------

Employee  Stock  Options
------------------------

The  Company  has  a  nonqualified  stock  option plan, which provides for the
granting  of  options to key employees, consultants, and nonemployee directors
of  the  Company.  The  option  price,  number  of  shares  and grant date are
determined  at  the  discretion  of  the Company's board of directors. Options
granted  under  the plan are exercisable for a period also to be determined by
the  board  of  directors.

The  Company has elected to account for the stock option plan under Accounting
Principles Board Opinion NO. 25, "Accounting for Stock Issued for Employees,:"
and  related  interpretations.  Accordingly,  no compensation expense has been
recognized  for  the  stock  option.

Had  compensation expense for the stock plan been determined based on the fair
value  of  the  options  at  the  grant  date  consistent with the methodology
prescribed  under  Statement  of  Financial Standards No. 123, "Accounting for
Stock-Based Compensation," the Company's net loss would have been increased by
$258,030  in  1997.  The  weighted  average  fair value of the options granted
during  1997  was  estimated using the Black-Scholes option pricing model with
the  following  assumptions:
<TABLE>
<CAPTION>



Grant Date                August 19, 1997   December 6, 1997
                          ----------------  -----------------

<S>                       <C>               <C>


Shares granted . . . . .          200,000            100,000 
Risk-free interest rate.              7.5%               7.5%
Expected life (years). .                5                  2 
Expected volatility. . .             83.1%              83.1%
Expected dividends . . .                -                  - 
------------------------  ----------------  -----------------
</TABLE>


NOTE  8  -  COMMITMENTS  (Continued)
            -----------

Employee  Stock  Options  (Continued)
------------------------

A  summary of option transactions during the year ended December 31, 1997, the
transition period ended December 31, 1996, and the year ended July 31, 1996 is
shown  below:
<TABLE>
<CAPTION>



                                             Weighted-
                                              Average
                                               Number    Exercise
                                             of Shares     Price
                                             ----------  ---------

<S>                                          <C>         <C>


Outstanding at August 1, 1995 . . . . . . .    425,000   $    0.53

  Granted . . . . . . . . . . . . . . . . .          - 
  Exercised . . . . . . . . . . . . . . . .          - 
  Canceled. . . . . . . . . . . . . . . . .    (70,000)  $    0.52
                                             ----------  ---------

Outstanding at July 31, 1996. . . . . . . .    355,000   $    0.52

  Granted . . . . . . . . . . . . . . . . .          - 
  Exercised . . . . . . . . . . . . . . . .          - 
  Canceled. . . . . . . . . . . . . . . . .          - 
                                             ----------           

Outstanding at December 31, 1996. . . . . .    355,000   $    0.52

  Granted . . . . . . . . . . . . . . . . .    300,000   $    0.83
  Exercised . . . . . . . . . . . . . . . .    (16,000)  $    0.58
  Canceled. . . . . . . . . . . . . . . . .    (70,000)  $    0.52
                                             ----------  ---------

Outstanding at December 31, 1997. . . . . .    569,000   $    0.69
                                             ==========           

Exercisable at December 31, 1997. . . . . .    569,000   $    0.69
                                             ==========           

Available for Issuance at December 31, 1997          - 
-------------------------------------------  ==========           
</TABLE>


NOTE  8  -  COMMITMENTS  (Continued)
            -----------

Employee  Stock  Options  (Continued)
------------------------
<TABLE>
<CAPTION>



                   Weighted-Average
                 Remaining Contractual
                   Number of Shares     Life of Shares  Number of Shares
Exercise Price        Outstanding        Outstanding      Exercisable
---------------  ---------------------  --------------  ----------------

<S>              <C>                    <C>             <C>

0.50 . . . . .                309,000            3.49           309,000
0.55 . . . . .                160,000             .75           160,000
1.50 . . . . .                100.000            2.00           100,000
                 ---------------------                  ----------------

569,000 . . . .                569,000
===============  =====================                                  
</TABLE>


Leases
------

The  Company conducts its operations from leased facilities.  The lease, which
is  for  one  year, is classified as an operating lease and expires on July 1,
1998,  with  two  one  year  options  to  renew.

The  following  is  a  schedule,  by  years, of future minimum rental payments
required  under  this  lease  as  of  December  31,  1997:
<TABLE>
<CAPTION>



<S>                <C>


December 31, 1998  $14,850
-----------------  =======
</TABLE>


Litigation
----------

The  Company  is  engaged  in  an  on-going lawsuit in the Contra Costa County
Superior  Court.    Company  management,  as  plaintiff, is seeking to recover
damages incurred from a breech of contract and fiduciary responsibilities by a
former  officer  and  a  consulting geologist.  Its outcome is unknown at this
time.
NOTE  8  -  COMMITMENTS  (Continued)
            -----------

Contingencies
-------------
The  Company  is  subject  to possible loss contingencies pursuant to federal,
state and local environmental laws and regulations. These include existing and
potential  obligations  to  investigate  the effects of the release of certain
hydro-carbons  or  other  substances at various sites; to remediate or restore
these  sites;  and to compensate others for damages and to make other payments
as  required  by law or regulation. These obligations relate to sites owned by
the  Company  or  others, and are associated with past and present oil and gas
operations. The amount of such obligations is indeterminate and will depend on
such  factors  as  the unknown nature and extent of contamination, the unknown
timing,  extent  and  method  of  remedial  actions which may be required, the
determination  of  the  Company's liability in proportion to other responsible
parties,  and  the  state  of  the  law.


NOTE  9  -  COMMON  STOCK
            -------------
On  April  21,  1995,  the  Company's  Board  resolved  that  common  stock of
Tri-Valley  Corporation  be  increased  from  15,000,000  shares authorized to
25,000,000  shares.   On March 22, 1997, the shareholders unanimously ratified
this  increase  plus  additional  25,000,000  shares bringing the total shares
authorized  to  50,000,000.  In  addition,  the  shareholders  also approved a
decrease  in  the  par  value  of  each  share  from  $0.01  to  $0.001.

Prior  to  July  31,  1996,  new investors contributed $900,000 in the form of
convertible  notes  payable. The first $150,000 was approved by the Bankruptcy
Court on April 25, 1996, secured by a note with a stated interest rate of 10%,
interest  only  for two years, with the outstanding balance due and payable at
the end of two years. The remaining $750,000 was also secured by a note with a
stated interest rate of 10%, interest only for two years, with the outstanding
balance  due  and payable in two years. During the transition period, both the
above loans were converted to Tri-Valley Corporation common stock. The lenders
converted the debt by using an exchange rate of one "unit" for each dollar due
and payable with each unit consisting of 2.5 shares of Tri-Valley common stock
plus  four  warrants.  The  warrants  are  transferable and consist of two "A"
warrants  exercisable  at  $0.50 each, one "B" warrant exercisable at $1 each,
and  one "C" warrant exercisable at $1.50 each (see Note 11.) The warrants are
required  to  be exercised within one year from the issue or they become void.

Also,  during  the transition period, an additional 460,000 "units" were sold,
also  at  $1  per "unit". Other stock transactions occurring during the period
included  110,000  "A"  warrants  issued  at $0.30 per share, 2,080,000 shares
purchased  at  $0.25  per share, and 222,225 shares issued at $0.45 per share.
The  Company  also  issued  shares  for  services  rendered. These shares were
recorded  at  the trading value of the stock on November 13, 1996, the day the
services  were  deemed  to be rendered. The value of the issuance on that date
was  $147,938.  The  Company  received  $2,013,001  of  new capital during the
transition  period  as  a  result  of  these  transactions.
NOTE  9  -  COMMON  STOCK  (Continued)
            -------------

During  fiscal  year 1997, the investors exercised the remaining 1,372,000 "A"
warrants  outstanding  at  various  prices,  814,000 "B" warrants at $1.00 per
share,  and  501,000  "C" warrants at $1.50 per share. The Company received an
additional  $2,590,790  in  additional  capital  from  the  exercise  of these
warrants.

During  fiscal  year  1997,  the  Company issued an aggregate 90,000 shares of
unregistered,  restricted  common  stock  to  officers  and  directors  for
compensation.  These  issuances were valued at fair market based upon the open
market  closing  price  as of the date of each transaction and were discounted
appropriately  due  to  their  restricted  nature.  These  transactions  were
cumulatively  valued at approximately $78,000 and are reflected as a component
of  general  and  administrative  expenses  in  the  accompanying consolidated
statement  of  operations.

During  fiscal  year  1997,  the Company issued an aggregate 100,000 shares of
unregistered,  restricted  common stock to various shareholders for consulting
services.  These issuances were valued at the fair market value as of the date
of  each respective transaction and were discounted appropriately due to their
restricted  nature.  These  transactions  were  cumulatively  valued  at
approximately  $55,000  and  are  reflected  as  a  component  of  general and
administrative  expenses  in  the  accompanying  consolidated  statement  of
operations.

On July 21, 1997, the Company issued 25,000 shares of unregistered, restricted
common  stock to Geoone for rights to their geological database. This issuance
was  valued at the fair market value as of the date of the transaction and was
discounted  appropriately  due  to its restricted nature. This transaction was
cumulatively  valued  at  approximately  $12,500  and  was  capitalized  as  a
component  of the well database asset in the accompanying consolidated balance
sheet.

On  August  21,  1997,  the  Company  issued  88,000  shares  of unregistered,
restricted  common stock to Lawrence Flood for payment of a note payable. This
issuance  was  valued at the balance of the note payable, $22,000, on the date
of  the transaction. This issuance paid the note payable due to Flood in full.
NOTE  10  -  WARRANTS
             --------

Changes  in  common  stock  warrants  were  as  follows:
<TABLE>
<CAPTION>



                                                 For the Five
                                                    Months
                                                  Year Ended              Ended
                                                 December 31,         December 31,    Year Ended
                                                     1997                 1996       July 31, 1996
                                           -------------------------  -------------  -------------

<S>                                        <C>                        <C>            <C>


Outstanding "A" warrants beginning. . . .                 1,372,000      1,800,000               -

Additional granted. . . . . . . . . . . .                         -        930,000       1,800,000
Exercised during period . . . . . . . . .                (1,372,000)    (1,358,000)              -
                                           -------------------------  -------------  -------------

Outstanding "A" warrants at end of period                         -      1,372,000       1,372,000
                                           =========================  =============  =============

Outstanding "B" warrants beginning. . . .                 1,365,000        900,000               -

Additional granted. . . . . . . . . . . .  -               (814,000)       465,000         900,000
Exercised during period . . . . . . . . .                  (551,000)             -               -
                                           -------------------------                              
Expired during period . . . . . . . . . .                         -              - 
                                           -------------------------  -------------               
                                                                  - 
                                           =========================                              
Outstanding "B" warrants at end of period                 1,365,000        900,000 
                                           =========================  =============               

Outstanding "C" warrants beginning. . . .                 1,365,000        900,000               -

Additional granted. . . . . . . . . . . .                         -        465,000         900,000
Exercised during period . . . . . . . . .                  (501,000)             -               -
Expired during period . . . . . . . . . .                  (864,000)             -               -
                                           -------------------------  -------------  -------------

Outstanding "C" warrants at end of period                         -      1,365,000         900,000
-----------------------------------------  =========================  =============  =============
</TABLE>



NOTE  11  -  INVESTOR  PAYABLE
             -----------------

The  Company  had investor payables totaling $103,000 and $662,680 at December
31,  1997  and  1996,  respectively.  These  payable were incurred because the
Company  received  cash  from  investors to exercise and purchase stock before
year  end,  however,  the  shares  were  not  issued  until after year end. At
December  31,  1997,  the  unissued  common  stock  consisted of 1,248,000 "A"
warrants  exercised at various prices and 575,775 shares purchased at $.45 per
share.  At  December  31, 1997, unissued common stock consisted of 103,000 "B"
warrants  exercised  at $1.00 per share. All unissued shares were subsequently
issued  after  year  end  reducing  these  payables  to  zero.
NOTE  12  -SHAREHOLDER  MEETING
           --------------------

On  March  22,  1997, Tri-Valley held its annual shareholders meeting in Santa
Barbara,  California.   The shareholders were presented with four items on the
proxy  to  vote  on.    Management's  slate  of  directors,  increase of stock
authorization  from  15  million  to  50  million  shares,  the  independent
accountants,  and  ratification of the boards past actions were the four items
on  the  ballot,  and  they  were  all  approved  by  the  shareholders.


NOTE  13  -  POTENTIAL  ACQUISITIONS
             -----------------------

The  Company is presently investigating the viability of acquiring 26 wireless
communication  licenses  held by five partnerships and is currently performing
due  diligence  relating  to this potential transaction.  All costs associated
with  the  possible  acquisition  have  been  capitalized  in  accordance with
generally  accepted  accounting  principles.


NOTE  14  -  SUBSEQUENT  EVENTS
             ------------------

Subsequent  to  year  end,  the  Company  purchased a telecommunications tower
belonging  to Northeast Telecom, Inc. for $50,000 from the U.S. Trustee of the
Chapter  7  bankruptcy of Northeast Telecom, Inc.  The Company intends to rent
antennae  space  on  the  tower to various telecommunications customers in the
area.  The  tower can hold up to twenty antennae, and management has estimated
that  potential  rental  revenue  should  be  roughly  equivalent  to $800 per
antennae  per  month.
     TRI-VALLEY  CORPORATION
     SUPPLEMENTAL  INFORMATION  ABOUT  OIL  AND  GAS  PRODUCING
     ACTIVITIES  (UNAUDITED)


The  following  estimates  of  proved oil and gas reserves, both developed and
undeveloped,  represent  interests  owned by the Company located solely in the
United  States.    Proved reserves represent estimated quantities of crude oil
and  natural  gas  which  geological  and  engineering  data demonstrate to be
reasonably certain to be recoverable in the future from known reservoirs under
existing  economic  and  operating  conditions.   Proved developed oil and gas
reserves  are  reserves  that can be expected to be recovered through existing
wells,  with existing equipment and operating methods.  Proved undeveloped oil
and gas reserves are reserves that are expected to be recovered from new wells
on  undrilled  acreage,  or  from  existing  wells  for which relatively major
expenditures  are  required  for  completion.

Disclosures  of  oil  and  gas  reserves  which  follow are based on estimates
prepared  by  independent  engineering consultants for the year ended December
31, 1997, the transition period ended December 31, 1996 and for the year ended
July  31,  1996.  Such analyses are subject to numerous uncertainties inherent
in  the  estimation  of quantities of proved reserves and in the projection of
future  rates  of production and the timing of development expenditures. These
estimates  do  not  include  probable  or  possible  reserves.

These  estimates  are furnished and calculated in accordance with requirements
of  the  Financial  Accounting Standards Board and the Securities and Exchange
Commission ("SEC"). Because of unpredictable variances in expenses and capital
forecasts,  crude  oil  and  natural gas price changes, largely influenced and
controlled by U.S. and foreign government actions, and the fact that the basis
for  such  estimates vary significantly, management believes the usefulness of
these  projections is limited. Estimates of future net cash flows presented do
not  represent  management's assessment of future profitability or future cash
flows  to  the  Company.  Management's  investment and operating decisions are
based  upon  reserve  estimates that include proved reserves prescribed by the
SEC  as  well  as  probable  reserves,  and  upon  different  price  and  cost
assumptions  from  those  used  here.

It  should  be  recognized  that  applying  current  costs and prices and a 10
percent  standard discount rate does not convey absolute value. The discounted
amounts  arrived  at  are  only  one  measure of the value of proved reserves.
Capitalized  costs  relating  to  oil and gas producing activities and related
accumulated  depletion, depreciation and amortization at December 31, 1997 are
as  follow:
<TABLE>
<CAPTION>



                                             Transition
                                             Year Ended     Period Ended
                                            December 31,    December 31,     Year Ended
                                                1997            1996        July 31, 1996
                                           --------------  --------------  ---------------

<S>                                        <C>             <C>             <C>


Aggregate capitalized costs:
  Proved properties . . . . . . . . . . .  $     711,813   $     510,106   $      510,106 
  Unproved properties . . . . . . . . . .        399,818         483,287          695,861 
  Accumulated depletion, depreciation and
    amortization. . . . . . . . . . . . .       (378,899)       (250,396)        (233,259)
                                           --------------  --------------  ---------------

Net capitalized costs . . . . . . . . . .  $     732,732   $     742,997   $      972,708 
-----------------------------------------  ==============  ==============  ===============
</TABLE>


The  following sets forth costs incurred for oil and gas property acquisition,
exploration  and  development  activities,  whether  capitalized  or expensed,
during:
<TABLE>
<CAPTION>



                               Transition
                               Year Ended    Period Ended
                              December 31,   December 31,     Year Ended
                                  1997           1996       July 31, 1996
                              -------------  -------------  --------------

<S>                           <C>            <C>            <C>


Acquisition of producing
  properties and productive
  and non-productive acreage  $      33,566  $     212,574  $      112,703
----------------------------  =============  =============  ==============
</TABLE>


Results  of  operations  from  oil  and  gas  producing  activities
-------------------------------------------------------------------

The  results  of  operations  from  oil  and  gas  producing activities are as
follows:
<TABLE>
<CAPTION>



                                                 Transition
                                                 Year Ended     Period Ended
                                                December 31,    December 31,     Year Ended
                                                    1997            1996        July 31, 1996
                                               --------------  --------------  ---------------

<S>                                            <C>             <C>             <C>


Sales to unaffiliated parties . . . . . . . .  $     767,626   $     470,300   $      872,386 
Production costs. . . . . . . . . . . . . . .        (97,546)        (82,481)        (259,673)
Depletion, depreciation and
 amortization . . . . . . . . . . . . . . . .       (128,503)        (18,929)         (42,607)
                                               --------------  --------------  ---------------

                                                     541,577         368,890          570,106 
Income tax expenses . . . . . . . . . . . . .       (184,136)       (125,412)        (193,837)
                                               --------------  --------------  ---------------

Results of operations from activities before
  extraordinary items (excluding blending
  operations, corporate overhead and
   interest costs). . . . . . . . . . . . . .  $     357,441   $     243,478   $      376,269 
---------------------------------------------  ==============  ==============  ===============
</TABLE>


Changes  in  estimated  reserve  quantities
-------------------------------------------
The  net  interest in estimated quantities of proved developed and undeveloped
reserves  of  crude oil and natural gas at December 31, 1997, December 31, and
July  31,  1996,  and changes in such quantities during each of the years then
ended,  were  as  follows:
<TABLE>
<CAPTION>


                                                               Transition
                                                               Year Ended    Period Ended
                                                              December 31,   December 31,     Year Ended
                                                                  1997           1996       July 31, 1996
                                                              -------------  -------------  --------------           

Oil                                                                Gas            Oil            Gas                Oil
  (BBL)                                                           (MCF)          (BBL)          (MCF)              (BBL)
------------------------------------------------------------  -------------  -------------  --------------  -------------------

<S>                                                           <C>            <C>            <C>             <C>

Proved developed and
  undeveloped reserves:

Beginning of year. . . . . . . . . . . . . . . . . . . . . .           644      2,003,135             442   1,934,339  180,057 
Revisions of previous estimates Extensions, discoveries and.          (274)      (273,214)            272                  (97)
  other additions. . . . . . . . . . . . . . . . . . . . . .             - 
Production . . . . . . . . . . . . . . . . . . . . . . . . .            79        497,112               -             (111,261)
                                                                                                            -------------------
                                                                      (225)      (323,879)            (70)                (210)
                                                              -------------  -------------  --------------  -------------------
End of year. . . . . . . . . . . . . . . . . . . . . . . . .     2,003,135 
                                                              =============                                                    
                                                                       224      1,903,154             644                  442 
                                                              =============  =============  ==============  ===================

Proved developed reserves:

Beginning of year. . . . . . . . . . . . . . . . . . . . . .           644      2,003,135             442            1,934,339 
                                                              =============  =============  ==============  ===================

End of year. . . . . . . . . . . . . . . . . . . . . . . . .           224      1,903,154             644            2,003,135 
                                                              =============  =============  ==============  ===================







Oil                                                              Gas
  (BBL)                                                         (MCF)
------------------------------------------------------------  ----------      

<S>                                                           <C>         <C>

Proved developed and
  undeveloped reserves:

Beginning of year. . . . . . . . . . . . . . . . . . . . . .        367   1,888,231
Revisions of previous estimates Extensions, discoveries and.   (206,836)
  other additions
Production . . . . . . . . . . . . . . . . . . . . . . . . .        382     525,475

                                                               (272,531)
                                                              ----------           
End of year

                                                              1,934,339 
                                                              ==========           

Proved developed reserves:

Beginning of year. . . . . . . . . . . . . . . . . . . . . .        367   1,888,231
                                                              ==========  =========

End of year. . . . . . . . . . . . . . . . . . . . . . . . .        442   1,934,339
                                                              ==========  =========
</TABLE>


Standardized  measure  of  discounted future net cash flows relating to proved
------------------------------------------------------------------------------
oil  and
--------
gas  reserves
-------------
A  standardized measure of discounted future net cash flows is presented below
for the year ended December 31, 1997, the transition period ended December 31,
1996  and  the  year  ended  July  31,  1996.

The  future  net  cash  inflows  are  developed  as  follows:
(1)         Estimates are made of quantities of proved reserves and the future
periods  during  which  they  are  expected  to  be produced based on year-end
economic  conditions.
(2)        The estimated future production of proved reserves is priced on the
basis  of  year-end  prices.
(3)        The resulting future gross revenue streams are reduced by estimated
future costs to develop and to produce proved reserves, based on year end cost
estimates.
(4)      The resulting future net revenue streams are reduced to present value
amounts  by  applying  a  ten  percent  discount.
Standardized  measure  of  discounted future net cash flows relating to proved
------------------------------------------------------------------------------
oil  and
--------
gas  reserves  (Continued)
-------------

Disclosure  of  principal components of the standardized measure of discounted
future  net cash flows provides information concerning the factors involved in
making  the calculation.  In addition, the disclosure of both undiscounted and
discounted  net  cash flows provides a measure of comparing proved oil and gas
reserves  both  with  and  without  an  estimate  of  production  timing.  The
standardized  measure  of  discounted future net cash flows relating to proved
reserves  reflects  income  taxes.
<TABLE>
<CAPTION>



                                             Transition
                                             Year Ended     Period Ended
                                            December 31,    December 31,     Year Ended
                                                1997            1996        July 31, 1996
                                           --------------  --------------  ---------------

<S>                                        <C>             <C>             <C>


Future cash in flows. . . . . . . . . . .  $   4,166,677   $   3,098,724   $    2,989,560 
Future production and development costs .       (990,987)       (660,118)        (608,480)
Future income tax expenses. . . . . . . .       (380,077)       (259,282)        (674,158)
                                           --------------  --------------  ---------------

Future net cash flows . . . . . . . . . .      2,795,613       2,179,324        1,706,922 
                                           --------------  --------------  ---------------

10% annual discount for estimated timing
  of cash flows . . . . . . . . . . . . .      1,038,418         784,623          580,012 
                                           --------------  --------------  ---------------

Standardized measure of discounted future
  net cash flow . . . . . . . . . . . . .  $   1,757,195   $   1,394,701   $    1,126,910 
-----------------------------------------  ==============  ==============  ===============
</TABLE>


Changes in standardized measure of discounted future net cash flow from proved
------------------------------------------------------------------------------
reserve  quantities
-------------------

This  statement  discloses  the sources of changes in the standardized measure
from  year  to  year.    The  amount  reported  as  "Net changes in prices and
production  costs"  represents  the  present  value  of  changes in prices and
production  costs  multiplied  by  estimates  of  proved  reserves  as  of the
beginning  of  the  year.    The  "accretion  of  discount"  was  computed  by
multiplying  the ten percent discount factor by the standardized measure as of
the  beginning  of  the  year.    The  "Sales  of oil and gas produced, net of
production  costs"  is  expressed  in  actual  dollar  amounts.  "Revisions of
previous quantity estimates" is expressed at year-end prices.  The "Net change
in  income  taxes" is computed as the change in present value of future income
taxes.
57

Changes in standardized measure of discounted future net cash flow from proved
------------------------------------------------------------------------------
reserve  quantities  (Continued)
-------------------
<TABLE>
<CAPTION>



                                                          Transition
                                                          Year Ended     Period Ended
                                                         December 31,    December 31,     Year Ended
                                                             1997            1996        July 31, 1996
                                                        --------------  --------------  ---------------

<S>                                                     <C>             <C>             <C>


Standardized measure - beginning of period . . . . . .  $   1,394,701   $   1,126,910   $      835,771 
                                                        --------------  --------------  ---------------

Sales of oil and gas produced, net of production costs       (670,080)       (387,819)        (612,715)
                                                        --------------  --------------  ---------------

Revisions of estimates of reserves provided in
  in prior years:
    Net changes in prices and production costs . . . .        149,033        (195,368)         985,846 
Revisions of previous quantity estimates . . . . . . .       (614,464)        342,108         (390,920)

Extensions, discoveries and improved recovery. . . . .      1,123,473               -          933,148 
                                                        --------------  --------------  ---------------

Accretion of discount. . . . . . . . . . . . . . . . .        139,470         112,691           83,577 
Changes in production rates (timing) and other . . . .        114,268          18,697         (118,400)
                                                        --------------  --------------  ---------------

Net change in income taxes . . . . . . . . . . . . . .        120,794         414,876         (589,397)
                                                        --------------  --------------  ---------------

Net increase . . . . . . . . . . . . . . . . . . . . .        362,494         267,791          291,139 
                                                        --------------  --------------  ---------------

Standardized measure - end of period . . . . . . . . .  $   1,757,195   $   1,394,701   $    1,126,910 
------------------------------------------------------  ==============  ==============  ===============
</TABLE>

















<PAGE>
                                    ------
                                   PART III
                                   --------


ITEM  8.  DISAGREEMENTS  ON  ACCOUNTING  AND  FINANCIAL  DISCLOSURE
-------------------------------------------------------------------

None.


ITEM  9.  DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT
------------------------------------------------------------------

The  following  information  is  furnished  with  respect  to  each  director:

                    Year  First
                    Elected  as                    Position  With
Name  of  Director                    Age          Director *          Company
------------------                    ---          ----------

F.  Lynn  Blystone                    62              1974          President,
                              Chief  Executive
                              Officer

Dennis  P.  Lockhart                    51                  1982          None

Milton  J.  Carlson                    68                   1985          None

Earl  H.  Biestline                    82                   1992          None

Loren  J.  Miller(1)                    53                  1992          None


*    -  Term  as  director  continues until his successor is duly elected upon
annual  shareholders  meeting  or  duly  appointed  during  the  interim.

(1)-  Audit  Representative

The following is a list of Tri-Valley executive officers, their ages and their
positions  and  offices:

Name                    Age              Position and Date Elected to Position
----                    ---              -------------------------------------

F.  Lynn  Blystone          62          President and Chief Executive Officer,
                    TVC/TVOG/TVPC  (October  9,  1981)


Thomas  J.  Cunningham               55          Treasurer and Chief Financial
Officer
                    TVC/TVOG/TVPC  (February  28,  1997)





<PAGE>
------



F.  LYNN BLYSTONE - 62          President and Chief Executive Officer     1974
----------------------
                         Tri-Valley  Corporation,  and  its  wholly
                         Owned  subsidiary,  Tri-Valley  Oil  &  Gas
                         Co.,  Bakersfield,  California

     Mr. Blystone became president of Tri-Valley Corporation in October, 1981,
and  was  nominally vice president from July to October, 1981.  His background
includes  institution  management,  venture  capital  and  various  management
functions  for  a  mainline  pipeline  contractor  including  the Trans Alaska
Pipe-line  Project.   He has founded, run and sold companies in several fields
including Learjet charter, commercial construction, municipal finance and land
development.    He  is  also  president  of a family corporation, Bandera Land
Company,  Inc.,  with  real  estate  interests  in  Kern, Riverside and Orange
Counties  California.    A  graduate  of  Whittler College, California, he did
graduate work at George Williams College, Illinois in organization management.
He  gives  full  time  to  Tri-Valley.


DENNIS  P.  LOCKHART  -  51             President                         1982
---------------------------
                         Heller  International  Group,  Inc.
                         Chicago,  Illinois

     After service as a corporate banking officer of Citibank since 1971, most
recently  as  vice          President  in  the Central and South America Group
responsible  for debt-to-equity conversions, Mr. Lockhart has become president
of  Heller  International,  an  old  line  firm
now  owned  by  Fuji  Bank  Group.  Heller provides financing in 20 countries.
While  with  Citibank, Mr. Lockhart served the bank's international operations
in  Jedda  and  Riyahd,  Saudi Arabia; Athens, Greece; Beirut, Lebanon; and as
executive vice president of Iranian's Bank of Tehran, Iran.  He then served as
vice  president  and  regional  executive  for  corporate banking in the seven
southeastern  states  and  Puerto  Rico for Citicorp (USA) Inc.  A graduate of
Stanford  University,  he  has  an  M.A.  from  John  Hopkins  University.


MILTON  J.  CARLSON  -  68                    Investor,  Kalispell,  Montana
--------------------------
1985
---

     Mr.  Carlson  is  a  principal  in  Earthsong Corporation which, in part,
consults  on  environmental  matters  and  performs  environmental  audits for
government  agencies  and  public and private concerns.  Until its merger with
another  firm, Mr. Carlson formerly was vice president and corporate secretary
of  Union  Sugar Company, a $100 million unit of Sara Lee Corporation.  He was
involved  in  representing  industrial  end  users  of  energy  tthrough  the
California  Manufacturers  Association  as  the  former  chairman  of  the CMA
steering  committee  of the standing energy and environmental committees.  Mr.
Carlson  was  also  the  energy and environmental representative with Sara Lee
energy  advisory  group  and  monitored  related matters before the California
Public  Utilities  Commission  and Energy Commission as well as serving as the
legislative  representative  in  Sacramento  and Washington, D.C.  Mr. Carlson
attended  the  University of Colorado at Boulder and the University of Denver.





LOREN  J.  MILLER,  CPA  - 53          Controller                         1992
-----------------------------
                         Petro  America,  Inc.
                         Long  Beach,  California

     Mr.  Miller has served in a treasury and chief financial officer capacity
as  Vice president successively of Hershey Oil Corporation and Mock Resources,
Inc.    Prior  to  that  he  was  vice  president and general manager of Tosco
Production  Finance Corporation and formerly a senior auditor with Touche Ross
& Co.  He is experienced in exploration, production, product trading, refining
and  distribution as well as corporate finance.  He holds a B.S. in accounting
and  a  M.B.A.  in  finance  from  the  University  of  Southern  California.


EARL  H.  BEISTLINE,  LLD.  -  82                    Mining  Consultant
---------------------------------
1992
---
                         Fairbanks,  Alaska

     Dr.  Beistline is a past chairman of the Alaska State Minerals Commission
and  Dean  Emeritus  of  the  School  of Mineral Industry of the University of
Alaska.    Born in Juneau, he has achieved a special position in Alaska during
its transition from territorial status into statehood.  He has numerous honors
from  local,  state  and federal governments, academia, professional and civic
organizations and the mineral industry.  An active miner in the Central-Circle
Mining District, Dr. Beistline also serves as a director of one of the state's
primary  companies,  Usibelli  Coal Mines, Inc.  He holds a Bachelor of Mining
Engineering,  Engineer  of  Mines  and  Honorary Doctor of Law degree from the
University  of  Alaska.


THOMAS  J.  CUNNINGHAM - 55     Treasurer and Chief Financial Officer     1997
---------------------------
                         Tri-Valley  Corporation,  and  its  wholly
                         Owned  subsidiary,  Tri-Valley  Oil  &  Gas
                         Company,  Bakersfield,  California

     Named  as  Tri-Valley Corporation's Treasurer and Chief Financial Officer
on  February  1997,  Mr.  Cunningham has over 25 years experience in corporate
finance,  Securities  and         Exchange Commission public company reporting
shareholder  relations,  and  employee  benefits.   In his career he served as
Staff  Accountant  for  Forest  Oil, Accounting Company, and as Executive Vice
President, Chief Financial Officer and Director for Star Resources, Inc.  Most
recently  he  was  a  Management  Consultant  in  finance, marketing and human
resource  matters  including  employee  benefit  planning.    He  received his
education  in  accounting  and  business  administration  from  Angelo  State
University,  Texas.



<PAGE>
ITEM  10.  EXECUTIVE  COMPENSATION
----------------------------------


The  following  table summarizes the compensation of the chairman of the board
and  the  president of the Company and its subsidiaries, F. Lynn Blystone, for
the  fiscal  year ended December 31, 1997, and for the fiscal years ended July
31,  1996,  and  1995.

                                                       Long Term
                                                     Compensation
                                Annual Compensation          Awards
                                -------------------          ------
           (a)          (b)          ( c )          (d)          (e)
                                          Other          Securities
       Name          Period Covered          Salary          Compensation
       ----          --------------          ------          ------------
                              Underlying Options
                              ------------------

               F. Lynn          FYE 12/31/97          $197,660(1)
                                  195,000(2)
                   Blystone, CEO          5 Mo. Ended 12/31/96
                                            $42,250(1)
                                             FYE   7/31/96          $49,610(1)
                                             FYE   7/31/95          $43,750(1)

(1)         Includes salary that was deferred when Mr. Blystone took a reduced
salary  in  1996.
(2)          95,000  options  expired  unexercised  in  December,  1997.

Aggregated  1997  Option  Exercises  and  Year-End  Values
----------------------------------------------------------

The  following  table summarizes the number and value of all unexercised stock
options  held  by  the  Named  Officers  and  Directors  at  the  end of 1997.

                        ( A )          ( B )     ( C )
                    Number of Securities     Value of Unexercised In-
                  Underlying Unexercised     The-Money Options/SARs at
                       Options/SARs at FY-End (#)     FY-End ($)*

     NAME          EXERCISABLE/UNEXERCISABLE     EXERCISABLE/UNEXERCISABLE
     ----          -------------------------     -------------------------

                  F. Lynn Blystone          100,000/0     0/0

              Dennis P. Lockhart          30,000/0     $18,750/0
                                 40,000/0     $23,000/0

               Milton J. Carlson          30,000/0     $18,750/0
                                 40,000/0     $23,000/0

                Loren J. Miller          30,000/0     $18,750/0
                                 40,000/0     $23,000/0

               Earl H. Beistline          20,000/0     $12,500/0
                                 40,000/0     $23,000/0



ITEM  10.  EXECUTIVE  COMPENSATION(CONTINUED)
----------------------------------

     *Based  on a fair market value of $1.125 per share, which was the closing
bid  price  of the Company's Common Stock in the Nasdaq National Market System
on  December  31,  1997.

Compensation  of  Directors
---------------------------

The  Company compensates non-employee directors for their service on the board
of directors.  No directors received any stock options in 1997.  The following
tables  sets forth information regarding the cash compensation paid to outside
directors  in  1997.

                                  (A)     (B)

                                 NAME     FEES
                                 ----     ----

                           Earl Beistline     $3,800

                           Milton Carlson     $3,800

                         Dennis P. Lockhart     $3,450

                          Loren J. Miller     $3,800


ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS AND MANAGEMENT
------------------------------------------------------------------------------

As  of December 31, 1997, there were 18,922,248 shares of the Company's common
stock  outstanding.  The following persons were known by the Company to be the
beneficial  owners  of  more  than  5%  of  such  outstanding  common  stock:

                              Number of          Percent of
                Name and Address          Shares          Total
                ----------------          ------          -----

Dennis  Vaughan
2298  Featherhill  Road
           Santa Barbara, CA 93108          1,033,200          5.6%


The  following  table  sets  forth  the  beneficial ownership of the Company's
common  stock  as  of  December  31,  1997  by  each  director, by each of the
executive  officers  named  in  Item  11,  and  by  all executive officers and
directors  as  a  group:


                              Number of          Percent of
                Directors          Shares(1)          Total(2)
                ---------          ---------          --------

              F. Lynn Blystone          498,909     (3)     2.6%

                Dennis P. Lockhart          122,091          *


ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND
--------------------------------------------------------------------
MANAGEMENT(CONTINUED)
-----------------

                              Number of          Percent of
                Directors          Shares(1)          Total(2)
                ---------          ---------          --------

                 Milton J. Carlson          129,000          *

                  Loren J. Miller          95,300          *

                 Earl H. Beistline          78,000          *

Total  group  (all  directors  and
------------
         Executive officers - 5 persons)          923,300          4.8%

*Less  than  1%

(1)     Includes shares which the listed shareholder has the right to acquire,
from  options,  before  September  30,  1998  as  follows:  Dennis P. Lockhart
70,000; Milton J. Carlson 70,000; Loren J. Miller 70,000 and Earl H. Beistline
60,000.    F.  Lynn  Blystone  has  100,000.

(2)         Based on total outstanding shares of 18,922,248 as of December 31,
1997.    The  persons  named herein have sole voting and investment power with
respect  to  all  shares of  common stock shown as beneficially owned by them,
subject  to  community  property  laws  where  applicable.

(3)     Includes 23,400 shares held in the name of Bandera Land Company, Inc.,
a  family  corporation  of  which  Mr.  Blystone  is  the  president.


ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS
-------------------------------------------------------------

None.


ITEM  13.  EXHIBITS,  LISTS,  AND  REPORTS  ON  FORM  8-K
---------------------------------------------------------

(a)          Exhibits.

                                    Exhibit
             Number          Description of Exhibit          Page
             ------          ----------------------          ----

                3          Articles of Incorporation          *


*Included  as exhibit in the Registrant's Registration Statement and is hereby
incorporated  by  reference  herein.


ITEM  13.  EXHIBITS,  LISTS,  AND  REPORTS  ON  FORM  8-K(CONTINUED)
---------------------------------------------------------

(b)          Reports  on  Form  8-K

-          October  2,  1997  the Company filed an 8-K to report it had put on
production  two  wells  which  increased  monthly  gas  production  by  68%.

-     December 5, 1997 the Company filed and 8-K to report its withdrawal of a
registration  for  a  public  stock  offering.




<PAGE>


                                  SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act  of  1934,  the Registrant has duly caused this report to be signed on its
behalf  by  the  undersigned,  thereunto  duly  authorized.

___May  14__________,  1998       By:_/s/ F. Lynn Blystone____________________
                                F.  Lynn  Blystone
                                President,  Chief  Executive  Officer  and
                                Director


___May  21__________,  1998      By:__/s/ Thomas J. Cunningham________________
                                Thomas  J.  Cunningham
                                Treasurer,  Chief  Financial  Officer

Pursuant  to  the  requirements  of  the Securities Exchange Act of 1934, this
Report  has  been  signed  below  by  the  following  persons on behalf of the
Registrant  and  in  the  capacities  and  on  the  dates  included:



__May  22___________,  1998      By:__/s/ Dennis P. Lockhart__________________
                                Dennis  P.  Lockhart,  Director



__May  15___________,  1998      By:__/s/ Milton J. Carlson___________________
                                Milton  J.  Carlson,  Director



_May  19____________,  1998      By:__/s/ Earl H. Beistline___________________
                                Earl  H.  Beistline,  Director



_May  21____________,  1998       By:__/s/ Loren J. Miller____________________
                                Loren  J.  Miller,  Director