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<PAGE>

                     SECURITIES  AND  EXCHANGE  COMMISSION
                           WASHINGTON,  D.C.    20549
                                  FORM  10-KSB




[ ]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE
     ACT OF 1934 FOR THE FISCAL YEAR ENDED ___________________ [FEE REQUIRED]

[X]  TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934 FROM AUGUST 1, 1996 TO DECEMBER 31, 1996 [NO FEE REQUIRED]




                          Commission File No. 2-67096

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

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

         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                       Electronic Bulletim Board NASDAQ
                         $0.01 Par Value Common Stock
                         ----------------------------
                               (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  filing  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  $879,247.

As of December 31, 1996, 14,102,473 common shares were issued and outstanding.
As  of  midnight  March  26,  1997,  14,413,248  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 $1,406,250.

                      DOCUMENTS INCORPORATED BY REFERENCE
 The information called for by Part III is incorporated by reference to the
 definitive Proxy Statement for the Annual Meeting of Stockholders of the
 Company held March 22, 1997, which was filed with the Securities and Exchange
 Commission not later than 120 days after December 31, 1996.

             The total number of pages in this Form 10-KSB are 50.

   The Index of Exhibits included in this Form 10-KSB is located at page 50.



<PAGE>
                                    PART I
                                    ------
ITEM  1.    BUSINESS
--------------------

Tri-Valley Corporation (formerly Tri-Valley Oil & Gas Corporation), a Delaware
corporation,  hereinafter  referred to as "Company," "Registrant", "Parent" or
"Tri-Valley",  has  been  engaged  in  the  business  of exploring, acquiring,
developing  and  dealing  in  prospective  and producing petroleum and mineral
properties and interests therein.  Precious metal activity has been carried on
directly  by  the  Parent  and oil and gas activities through its wholly owned
subsidiary,  Tri-Valley  Oil  &  Gas  Company  ("TVOG").

TVOG  was organized as a California corporation in 1963. TVOG, the subsidiary,
effects  exploration  relationships  with  various major oil companies such as
Phillips  Petroleum  Company  (Houston  Regional  Office),  Occidental USA and
Texaco  USA  with  whom  it  has  co-ventured  on  a  50-50 basis to use their
proprietary  data to generate exploration plays in the Sacramento Valley. This
relationship involves a TVOG submittal procedure wherein the major company has
a  short  period  to  accept  or reject plays generated by TVOG in the area of
mutual  interest ("AMI"). If it accepts, it joins up to 50% under the terms of
the  agreement  involved.  TVOG  is  operator  for  these  co-ventures.

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  precious  metal properties are located in
interior  Alaska,  known  as  the  Richardson, Alaska property. Precious metal
activity  has  been an exploratory activity since inception. In February 1991,
Tri-Valley  signed  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 for precious metals on Tri-Valley's then 64 square
mile lode gold claim block at Richardson, Alaska. Based on the results of this
study,  Tri-Valley  management  believes  it  to be prudent for the Company to
continue  to  develop  the precious metals segment of the Company. At present,
this  is  only  a  prognostic  resource  and  not  a  proven  reserve.
                                         ----------------------------

CHANGE  IN  YEAR  END
---------------------

On  March  10,  1996, the board determined to change the Company's fiscal year
end  from  July 31 to December 31. This Form 10-KSB is being filed to show the
results  of  the  five month transition period from August 1, 1996 to December
31,  1996,  and  are not necessarily indicative of operations for a full year.


<PAGE>
ITEM  1.    BUSINESS  (Continued)
--------------------

CHAPTER  11  PROCEEDINGS
------------------------

CURRENT  YEAR  DEVELOPMENTS

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 (the "Code"). The Chapter 11 cases of TVC
and  TVOG were substantially consolidated under TVC, and TVC continues to file
consolidated  tax  and  SEC  reports.

On  November  1,  1996,  the  Company  and  its  wholly  owned subsidiary were
dismissed  from  Chapter 11, having paid their secured and unsecured creditors
100  cents  on  the  dollar.

CHAPTER  11  REORGANIZATION
---------------------------

In  March,  April  and  September  1995,  the  Company  arranged borrowings of
$100,000,  $400,000  and  $120,000, respectively, totaling $620,000 from Frank
Agar,  an individual of Midland Texas.  Terms of the loans were on a six month
note  with  a 30 day call paying 10% annual interest and collateralized by all
of  TVOG's  producing  gas  properties in the Sacramento Valley of California.
The  purpose  of  the  loans  was  to  consolidate  increasingly  short  term
obligations  and provide short term operating capital, enabling the Company to
accommodate  two  years  of  heavy  losses  due to production declines and gas
prices  plunging  to  unforeseen  20  year  lows.

At  the  time  of the loans, the Company's management anticipated hooking up a
major  discovery,  and  drilling  an  offset  well  to  accelerate  production
revenues.   With this enhancement and some third party collateral, it appeared
that  take  out  financing  from a conventional institution could be arranged.
Permit  delays  and  freezing  of  credit  lines due to a merger between banks
eliminated  that approach.  As the six month financing period ended, the board
of directors met with the secured lender and worked out a 90 day standstill in
order  to  sell  the  reserves  and  preserve the stockholder equity above the
lender's  interest.

Three  substantial  offers from capable parties were received.  The lead offer
exceeded  the  loan  principal  by  approximately  $1  million and the Company
proceeded  toward  acceptance.  One day before the close, the offerer abruptly
terminated  citing several unacceptable conditions.  The Company believed none
of  the conditions were items that affected the economic value of the deal and
none  that  could  not  be  handled  in  the  closing and post closing stages.


<PAGE>
ITEM  1.    BUSINESS  (Continued)
--------------------

CHAPTER  11  REORGANIZATION  (Continued)
---------------------------

The  Company immediately contacted its other two backup buyers.  One could not
arrange  financing  before the foreclosure date.  The other pulled out one day
before  the  foreclosure  citing a "wait and see" position.  On the day of the
foreclosure  deadline,  discussions  with the secured lender promised to "work
something  out",  but  were  not  attended by any forbearance in writing.  The
Company obviously could not negotiate without such written forbearance and was
advised  its  only  alternative was to file for protection under Chapter 11 of
the  Federal  Bankruptcy  Code.

The initial intent of management upon opting for Chapter 11 was to protect the
Company's  reserves and to submit a plan of reorganization which would, in the
best  case  scenario,  allow for the payment of all Company obligations at 100
cents on the dollar.  As a plan was being developed, management was introduced
to  an  investment  group who agreed to pay off several of the Company's major
obligations,  including  the  note to Frank Agar, and in return, the investors
would  receive  notes  which  could  be,  and,  subsequent  to  year end, were
converted into newly issued restricted shares of Tri-Valley Corporation common
stock.    This  infusion  of new capital and increased revenue from operations
enabled  the Company to seek and obtain dismissal of the bankruptcy.  Although
a  reorganization  plan  was never filed, the Company's management was able to
meet  its  initial goals of protecting its reserves and paying all obligations
at  100  cents  on  the  dollar.

EXECUTIVE  OFFICERS  OF  THE  REGISTRANT
----------------------------------------

F.  Lynn Blystone - 60          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  organization
management.    He  gives  full  time  to  Tri-Valley.


<PAGE>
ITEM  1.    BUSINESS  (Continued)
--------------------
EXECUTIVE  OFFICERS  OF  THE  REGISTRANT  (Continued)
----------------------------------------
Thomas  J.  Cunningham - 54     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 CFO on February 28, 1997, Mr.
Cunningham  has  over 25 years experience in corporate finance, public company
reporting,  shareholder  relations,  and employee benefits.  In his career, he
served  as Plant Property and Equipment Supervisor, corporate wide, for Tesoro
Petroleum,  as Controller and Assistant Secretary for Tucker Drilling Company,
and  as  Executive  Vice  President  and  Chief  Financial  Officer  for  Star
Resources.    Most  recently,  he  was  a  Management  Consultant  in finance,
marketing,  and  human  resource matters including employee benefit plans.  He
received  his  education in accounting and business administration from Angelo
State  University,  San  Angelo,  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 for a
monthly  rental  of  $1,350.

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.    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 contracts for the drilling of all its wells
and  does  not  own  any  drilling  equipment,  bulk  storage  facilities,
transportation  pipelines  or  refineries.   The precious metal properties are
located  in  interior  Alaska.    They are comprised of leased claims on State
lands,  leased  patented  claims,  direct  claims of the Company on State open
lands  requiring  annual  assessment  work and, in the case of State of Alaska
lands,  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.

During  1995,  the  Company  borrowed  a  total of $620,000 from Frank Agar to
consolidate  short-term  obligations and provide short-term operating capital.
The  loan  is  secured  by  all  of  TVOG's  producing  gas  properties in the
Sacramento  Valley of California. For full description see Item 1. "Business -
Chapter  11  Reorganization."

For  the  years  ended  July  31,  1992 through 1996, the Company retained the
services  of  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  properties.

<PAGE>
ITEM  2.    PROPERTIES  (Continued)
----------------------

For this year, the Company retained independent engineering of its reserves by
Cecil  Engineering,  a long established consulting engineering firm which does
SEC  reserve  calculations.    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.    Higher prices generally permit longer recovery,
hence  larger  reserves  at  higher values. Conversely, lower prices generally
limit recovery, hence smaller reserves in that event. In the latter part of FY
95,  gas prices plunged temporarily to 20 year lows that drastically downsized
Tri-Valley  reserve values at July 31, 1995. The Company believes its July 31,
1995  reserve  report,  which  was  required under SEC Regulations to use this
price  aberration  in  its  calculations, is not representative of the current
values of its reserves, especially since the gas price has risen substantially
since  July  1995  and a substantive new well has been put in production. This
was  corroborated  by  the  fact  that Tri-Valley received several offers from
ready,  willing  and able buyers as much as 2.5 times the $835,771 represented
in  the  independent  engineer's  report  for  July  31,  1995.

The  estimated  future  net  recoverable  oil  and  gas  reserves  from proved
developed  properties  as  of  December  31,  1996, and July 31, 1996, were as
follows:
<TABLE>
<CAPTION>


                               BBL                  MCF
                               ---               ---------
<S>                <C>         <C>  <C>          <C>

December 31, 1996  Condensate  644  Natural Gas  2,003,135
July 31, 1996      Condensate  442  Natural Gas  1,934,339
</TABLE>


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.

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  $1,394,701  and  $1,126,910  at  December  31,  1996,  and July 31, 1996,
respectively.   Reference is made to the unaudited supplemental information of
the  consolidated  financial statements for further information on oil and gas
reserves  and  estimated  values.


<PAGE>
ITEM  2.    PROPERTIES  (Continued)
----------------------

Registrant  did  not  file  estimates  of total proved net oil or gas reserves
with,  or  included in reports to, any other Federal authority or agency since
the  beginning  of  the  last fiscal year, except for estimates filed with the
U.S.  Bankruptcy  Court.  As  yet, few reserve estimates are available for the
Company's  precious  metal  properties  as  they were all acquired as geologic
plays  with  minimal  testing  and assay to date. TVC does not project any ore
reserve  tons  of its Richardson, Alaska property.  However, TVC has recovered
over  3,000  raw  ounces of gold from a 30,000 ton bulk sampling of one 5-acre
area.  From  trenching, core and TVC drilling, bulk sampling and assaying, the
Company  has  reason  to believe that larger commercially recoverable reserves
may  be  exposed by its subsequent programs. The future recovery of raw ounces
on  a  per  ton  basis  is  purely  speculative  at  this  time.

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


                      Transition
                     Period Ended      Year Ended
                   December 31, 1996  July 31, 1996
                   -----------------  -------------
<S>                <C>                <C>

Natural Gas (MCF)            111,261        272,532
Crude Oil (BBL)                   70            210
</TABLE>


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


                           Transition
                          Period Ended       Year Ended
                       December 31, 1996   July 31, 1996
                       ------------------  --------------
<S>                    <C>                 <C>

Natural gas (per MCF)  $             2.00  $         2.00
Production costs
  (per MCF)                           .10             .10
                       ------------------  --------------

Net Profit per MCF     $             1.90  $         1.90
                       ==================  ==============
</TABLE>




<PAGE>
ITEM  2.    PROPERTIES  (Continued)
----------------------

As  of December 31, 1996, the Company had the following gross and net position
in  wells  and  developed  acreage:

                                   Wells(2)                           Acres(1)
                            ---------------                  -----------------
                             Gross            Net               Gross      Net
                            ------      ---------             -------   ------

                               13           3.576            2785.00    740.40

(1)         "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.

(2)       "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  or  royalty  interests  therein  by  the  Company.

The  following  table  sets forth the number of productive and dry exploratory
and  development  wells  drilled  by  the  Company  during:
<TABLE>
<CAPTION>


                Transition
               Period Ended      Year Ended
             December 31, 1996  July 31, 1996
             -----------------  -------------
<S>          <C>                <C>

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

    Total                  1.0            1.0
             =================  =============

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

    Total                  -0-            -0-
             =================  =============
</TABLE>


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.  Tri-Valley
changed  its  farmout terms in 1987 to allow for the Company to participate in
the  completion  of  promoted  prospects  and  thereby retain a larger working
interest  in  wells.

The  Company deals with both industry and sophisticated individual partners on
its  oil,  gas  and  precious  metals  projects.


<PAGE>
ITEM  2.    PROPERTIES  (Continued)
----------------------

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

The  following  table  sets forth information regarding undeveloped acreage in
which  the  Company  had  an  interest  on  December  31,  1996.

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

    California  oil  and  gas                  2,785.00              740.40
    Alaska  minerals                          24,000.00           23,300.00

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.

The Company is obligated to pay varying annual delay rentals to the lessors on
such  properties  in  order  to  prevent  the  leases  from expiring.  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 November 30, 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 Alaska
claims.


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

On  January  30,  1996, Tri-Valley and its wholly owned subsidiary, Tri-Valley
Oil  & Gas Co. filed voluntary petitions in the United States Bankruptcy Court
for the Eastern District of California sitting in Fresno seeking to reorganize
under  Chapter  11  of the Federal Bankruptcy Code.  Citing improved cash flow
due  to  new  capital  and increased production, the Company moved for and, on
November  1,  1996,  was  granted  dismissal  from  any  further  Chapter  11
proceedings.

Since the petition date, the Company continued in possession of its properties
and,  as  debtors  in  possession, were authorized to operate and manage their
respective  businesses  and  enter  into all transactions (including obtaining
services,  supplies  and inventories) that each could have entered into in the
ordinary course of their business had their been no bankruptcy.  Although each
debtor  was  authorized  to operate its business as a debtor in possession, it
could  not  engage  in  transactions  outside  the ordinary course of business
without  first  complying  with  the  notice  and  hearing  provisions  of the
Bankruptcy  Code  and  obtaining  Bankruptcy  Court  approval where necessary.

<PAGE>
ITEM  3.    LEGAL  PROCEEDINGS  (Continued)
------------------------------

An  official  unsecured  creditor's committee (the "Creditors' Committee") was
appointed  by the Office of the United States Trustee pursuant to Section 1102
of  the Bankruptcy Code.  The Creditors' Committee had the right to review and
object to certain business transactions and was expected to participate in the
negotiation  of  any  plan of reorganization.  The Company was required to pay
certain  expenses  of the Creditors' Committee, including counsel fees, to the
extent  allowed  by  the  Bankruptcy  Court.  No expenses were incurred as the
committee  never  met  or  retained  counsel.

However, an Official Committee of Equity Security Holders ("OCESH") was formed
under  the auspices of the United States Trustee ("UST") who comprised it in a
manner  which  gave  a  minority  of  dissident shareholders both quorum and a
majority.    The    OCESH  retained  counsel  and  filed  numerous  motions of
opposition and delay in an effort to promote the agenda of the dissidents.  At
the  dismissal,  the  Company  was required to escrow $60,000 against possible
legal  fees. Subsequent to the transition period end, Tri-Valley agreed to pay
approximately  $29,000  in  allowable  legal  fees  to  settle  this  issue.

The following lawsuits were settled prior to the dismissal of the Company from
Chapter  11 proceedings, and, to the best of management's knowledge, there are
no  other  material  pending  legal  proceedings.

The  lawsuit  between  the  Company  and  Carl Mitchell for payment of advance
royalties  allegedly  due  the  Estate  of John R. Mitchell on the Richardson,
Alaska  property  as  well  as  a  reimbursement of certain expenses allegedly
incurred for the benefit of the Richardson property.  The Company settled this
claim  in  full  for  $80,000  during the fiscal year 1996 which is the amount
management  believed  it  owed.

During  fiscal 1996, a lawsuit between the Company and Helen L O'Brien, former
TVC\TVOG  vice  president  and  secretary-treasurer,  concerning her claim for
additional  compensation  from  the  Employee  Overriding  Royalty Program was
settled.    The  settlement  amount  is  not  material  to  the  Company.


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

During  the  first  quarter  of  fiscal  1997, the Company submitted its Proxy
Statement  and  the  Notice  of Annual Meeting of Shareholders dated March 22,
1997  to  all shareholders of record. The Proxy Statement contained four items
for  the shareholders' vote at the fiscal 1997 meeting held on March 22, 1997.


<PAGE>
ITEM  4.    SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS
-----------------------------------------------------------------------
(Continued)

Management  cast  a minimum of 9,832,417 votes on all items and was pleased to
declare  that all four items on the agenda were approved.  The final number of
votes  cast  for  each  item  on  the  agenda  are  as  follows:

1.          Re-elect  management  slate  of  directors:
<TABLE>
<CAPTION>


                      For             Withheld
                      ---             --------
<S>                   <C>  <C>        <C>       <C>

Earl H. Beistline          9,832,417            48,941
F. Lynn Blystone           9,985,617            54,741
Milton J. Carlson          9,832,417            48,941
Dennis P. Lockhart         9,855,352            26,006
Loren J. Miller            9,870,458            10,900
Terrance L. Stringer       9,832,417            48,941
</TABLE>


2.   Re-appoint Brown Armstrong Randall & Reyes, Accountancy Corporation
     as  independent  accountants:
     9,787,554  shares  for,  out  of  9,881,358  shares  voting
     (99.05%  of  votes  cast)

3.   Amend charter to increase common stock authority to 50,000,000 shares.
     9,678,548  for,  out  of  9,881,358  shares  voting
     (97.9%  of  votes  cast  and 67.15% of the issued and outstanding shares)

4.   Authorize  management  to  transact other business at the meeting:
     9,799,457  shares  for,  out  of  9,881,318  shares  voting
     (99.17%  of  votes  cast)

It  was  moved, seconded and carried that the actions and acts of the board of
directors  and  executive  actions  of the president since the last meeting be
ratified.

No  matters  were  submitted to a vote during fiscal year ended July 31, 1996.


<PAGE>
                                    PART II

ITEM  5.    MARKET  PRICE  OF  THE  REGISTRANT'S  COMMON  STOCK  AND
--------------------------------------------------------------------
RELATED  SECURITY  HOLDER  MATTERS
----------------------------------
Shares  of  Tri-Valley  Corporation  stock  have  been  traded  in  the
over-the-counter  market.   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>          <C>   <C>    <C>    <C>            <C>

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
</TABLE>


As  of  December 31, 1996, the Company estimates 850 shareholders 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. While in bankruptcy, the Company
was  prohibited  from  making  cash  dividend  payments  under  its  debtor in
possession financing. This no longer applies as the Company was dismissed from
Chapter  11  proceedings.


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

In its 34th year of business, the Company is primarily involved in exploration
and  production  of  natural  gas and gold.  Fiscal 1996 saw Tri-Valley suffer
from severe cash flow constraints attributable to significant operating losses
stemming  from  a short-term plunge in gas prices to 20 year lows and declined
production  from  depleting  zones.


<PAGE>
ITEM  6.    MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL
------------------------------------------------------------------
CONDITION  (Continued)
---------

On  January  30, 1996, Tri-Valley Corporation and its wholly owned subsidiary,
Tri-Valley Oil & Gas Company filed voluntary petitions under Chapter 11 of the
Federal  Bankruptcy  Code  seeking to reorganize under the Code.  (The Company
successfully  used  the bankruptcy to buy time to raise new capital and, after
paying  all  creditors  in  full, was dismissed 10 months later on November 1,
1996).    The Company has experienced significant operating losses in the last
three  years  stemming  from  production decline and a temporary plunge in gas
prices to 20 year lows and the costs of the Chapter 11.  However, cash flow is
increasing  primarily  due to new wells beginning production and the reduction
in  costs associated with the Chapter 11 proceedings.  These reductions should
help  the  Company to be profitable in the next full year of operations.  Both
production and price have since increased and management expects liquidity not
to  be  of any concern in the future.  A substantial capital formation program
is  under  way  which  improves  the  financial  strength  of  the  Company.

Tri-Valley  Oil  &  Gas, the wholly owned subsidiary of Tri-Valley Corporation
discovered  two new large gas pools in the Tracy gas field.  The new gas pools
were  discovered  by drilling the Pimentel No. 1-15.  Based on the information
from  this  well, the Company is enthused about the opportunity for additional
locations  on this property and is considering a 3-D seismic shooting campaign
to  define optimum exploration and development programs for the horizons.  The
revenue  from this discovery will result in significant increased revenue when
it  is  placed into production in the next few months.  The Company is further
encouraged about the deeper sub-thrust F zone prospect with a target in excess
of  300  billion  cubic  feet  of gas and is looking forward to accelerating a
funding  program  for  that  exploration  segment.

Subsequent  to the fiscal year ending July 31, 1996, and prior to December 31,
1996,  Tri-Valley's  capital formation program has generated $3,000,000 in new
money from the sale of unregistered stock and participation in projects.  As a
result,  Tri-Valley  was  dismissed  from  Chapter 11 in the strongest capital
position in its corporate history.  The Company has changed its fiscal year to
December  31  in  order  to  reflect  this  strength  on its audited financial
statements.


<PAGE>
ITEM  6.    MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL
------------------------------------------------------------------
CONDITION  (Continued)
---------

The  Company's  hydrocarbon  reserves  at  December  31,  1996  were valued by
independent  engineers  at a net present value of $1,394,701, up from the July
31,  1996  value of $1,126,910, after 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 cost of obtaining them rather
then  the  actual  future  net  revenue from producing them.  Since Tri-Valley
arranges  to  be carried in the test wells on prospects, it incurs very little
costs  and, therefore, very little value of discovered reserves appears on the
balance sheet despite the fact that reserves are a most important value of the
Company,  especially  from an industry point of view.  Also not on the balance
sheet  is  significant  value  resulting  from more than $1,500,000 in outside
investment by third parties into exploration on the properties adjacent to the
Company's  Richardson, Alaska property.  Such exploration is, in the Company's
opinion,  a  great  value  to the Company because it helps the Company further
define  its exploration activities, and, as such, the Company benefits greatly
from  the  third  party's expertise and effort.  These values, in management's
opinion, constitute a significant part of the value of the Company even though
it  is  presently  unrecognized,  on the balance sheet.  In the long term, the
Company's  viability  will  be  dependent on its ability to achieve successful
future  operations.

Similarly,  Tri-Valley  has  invested  $1,680,000 (the equivalent of less than
4,500  ounces  of  gold  at today's price) in its Richardson, Alaska lode gold
exploration  project.    A substantial part of this is represented by contract
payments  of  300,000  shares  of  Tri-Valley  preferred  stock,  convertible
one-for-one  into  common,  to  TsNIGRI,  the  Moscow  based  Central Research
Institute of Geological Prospecting for Base and Precious Metals.  TsNIGRI has
performed  over  1,000  line  miles  of  ground  traverses  for  geological,
geochemical,  biochemical,  hydrochemical  sampling  and  geophysical profiles
throughout  225  square  miles  of  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.  At present, this is only a prognostic
resource  and  not  a  proven  reserve.  Since 1993, Tri-Valley has spent time
assimilating  this vast amount of new data to define more specific targets for
field  confirmation  in  the  future.

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.


<PAGE>
ITEM  6.    MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL
------------------------------------------------------------------
CONDITION  (Continued)
---------

BUSINESS  REVIEW

Change  in  Year  End
---------------------

The Company has changed the year end from July 31 to a December 31 fiscal year
end.

Natural  Gas  Activities
------------------------

Natural  gas prices continued to firm which provided additional revenue to the
Company  and  stimulated  investor  support for the Company's projects and the
market  price  of  its  stock.

After two years of diligent effort, numerous industry, regulatory, geographic,
and  mechanical  obstacles  were  overcome to hook up the Webb Tract No. 1.  A
major  dry  gas  discovery, it began producing nearly 5 million cubic feet per
day  from  a  dual  completion.   The gas is contracted to Tosco with 60% on a
fixed  price  and  40% on the spot market as agreed among the working interest
partners.  The working interest partners have been cash called to drill the WT
No.  2  development  well  this  spring  followed by a WT No. 3 step out well.

Tri-Valley's natural gas discoveries and production raised it into the top 10%
of  193  California  dry gas operators.  Among U.S. petroleum companies ranked
annually  by the Oil & Gas Journal, Tri-Valley rose to 195th place giving it a
total  gain  over  the  past  eight  years  of  199  places.

The  Company  announced  two new pool discoveries in its Pimentel 1-15 well in
the  City  of  Tracy.    The  Company  is  methodically  testing the extensive
indications  of  hydrocarbon  bearing  zones  to complete the well for optimum
deliverability.    The  Company expects to drill multiple locations to develop
the discovery and is considering additional seismic shooting to further define
the  field  as well as enhance a deeper, larger target for drilling this year.
This  new  discovery  will  add  significantly  to  the  Company's  reserves.

Working  interest  partners  in  the Martins-Severin production unit have been
cash  called to drill the M-S 6 development well.  In all, the Company expects
to substantially increase its reserves, production, and revenue from new wells
this  fiscal  year.


<PAGE>
ITEM  6.    MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL
------------------------------------------------------------------
CONDITION  (Continued)
---------

BUSINESS  REVIEW  (Continued)

Natural  Gas  Activities  (Continued)
------------------------

Looking to the future, Tri-Valley Oil and Gas acquired for cash and Tri-Valley
Corporation  stock, the extensive geologic and seismic data base of San Carlos
Oil and Gas Corporation which was assembled over nearly 50 years by San Carlos
president, Charles W. Hatten.  While much of it is concentrated in California,
it  also  includes  several  other venues in North America, South America, the
Middle  East  and  the Far East.  Mr. Hatten, who built Great Basins Petroleum
into  an  international  petroleum  and  minerals company has joined TVOG as a
consultant.

Telecommunications
------------------

After  nearly  a year of due diligence, Tri-Valley Corporation is preparing to
propose  acquisition  of  26  wireless  communication  licenses  held  by five
partnerships  by  exchanging TVC unregistered stock for partnership interests.
At  this time, it appears to represent an attractive business opportunity that
would  strengthen  the Company's balance sheet, revenue sources, and access to
capital.    A  majority  of  the partners in the partnerships have voted to be
acquired  by  Tri-Valley  in  the  event  that  Company  proceeds  with  the
transaction.

 Precious  Metal  Activities
----------------------------

The  gold price has remained relatively stable as a physical use commodity and
does  not  seem  to  function  significantly  as a financial instrument to the
extent  it did formerly.  For instance, international crises do not affect the
price substantially.  For some years, physical consumption demand has exceeded
the  newly mined supplies, but selling forward by producers and sales into the
physical  market from central bank hoards has capped any great price increase.

The  Company  has proposed a core and reverse circulation drilling program for
the  three  most  advanced  targets  on  its  Richardson,  Alaska  lode  gold
exploration  project.  The Company was actively seeking investment to fund the
program prior to the filing of Chapter 11 petitions.  The purpose was to drill
prove  reserves at the John Mitchell Lode at the Democrat Dike and drill infer
geologic  resources  at the Banner/Buckeye and Buck/Shamrock anomalies.  Since
dismissal  from  Chapter  11  on  November  1,  1996, the Company has received
expressions  of  interest and preliminary offers from several mining companies
to  joint  venture  the  further  exploration and development of the property.


<PAGE>
ITEM  6.    MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL
------------------------------------------------------------------
CONDITION  (Continued)
---------

BUSINESS  REVIEW  (Continued)

 Precious  Metal  Activities  (Continued)
----------------------------

Additionally,  the  Company  has  been  approached  by  several smaller mining
concerns  and  is  considering  continuing  its own exploration using internal
funds.  The  Company  is  interviewing mining and mineral processing engineers
with a view toward completing the processing of approximately 100,000 tones of
partially  crushed,  partially  processed  ore  from  the  John Mitchell lode.
Management  believes  that  an  agreement  will be reached shortly as to these
discussions.    Weather  permitting,  the  Company  will  begin processing its
pre-crushed  ore  in  the  next few months.  The anticipated revenue should be
significant  enough  to  allow  additional  test  drilling.

Financial  Condition
--------------------

The  financial  condition  of  the  Company  strengthened substantially in the
period  as  the  Company completed the private placement of unregistered stock
and  paid  off  its  creditors  100  cents  on  the dollar.  Only certain term
contracts  are  left  to  be  serviced  in  accordance  with  their  terms.
Accordingly,  Tri-Valley  Corporation and its subsidiary, Tri-Valley Oil & Gas
Company  were  dismissed  from  Chapter  11  on  November  1,  1996.

Further,  gas  prices  continued to firm which increased revenue.  The Company
expects  its  sales  contracts  coupled  with new production coming on line to
restore  its  operating  revenues  to  secure  levels.

The  Company  paid off  the administrative, legal, and accounting costs of its
Chapter  11  and  this  offsets  any  net  income  despite increased revenues.
However,  the  balance  sheet  is  greatly  enhanced  with  healthy  cash  and
receivables  balances.    Further, the Company's stock is enjoying substantial
gains as recognition of its accomplishments, natural gas prices, and potential
growth.

Tri-Valley  expects  substantially increased capital infusion to continue from
the  exercise  of  warrants  issued  to  the  private  placement  investors.


<PAGE>
ITEM  6.    MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL
------------------------------------------------------------------
CONDITION  (Continued)
---------

RESULTS  OF  OPERATIONS

Five  Months  Ended  December  31,  1996,  as  Compared with Five Months Ended
------------------------------------------------------------------------------
December  31,  1995
-------------------

REVENUES

Revenues  continued to increase as natural gas prices firmed so that gas sales
in  the period ending December 31, 1996 generated $470,300 versus $275,453 for
the  same  period in 1995.  Overall revenue was $474,521 for the period ending
December  31,  1996  versus  $292,666  for  the  same  period  in  1995.


COSTS  AND  EXPENSES

Costs  and  expenses were greater in the five months ending December 31, 1996,
due  to  substantial  legal  and  accounting  expenses  in  the  general  and
administrative  section  versus  the same period in that category the previous
year.  This resulted in a net loss before income taxes of $91,422 for the five
months  ending December 31, 1996, versus a loss of $49,717 for the same period
the  previous  year.

The  Company  expects  the  legal and accounting costs to reduce in subsequent
quarters  while  prices  appear  to  remain  firm  as  it  aims for profitable
operations.    New  production,  from wells completed after December 31, 1995,
should  result  in  substantial  increased  revenue.

The  balance  sheet  showed  dramatic  improvement as the Company paid off its
obligations  with  proceeds from private placements of its unregistered stock.
Gross  assets  increased  significantly  in  this period versus the comparable
period last year due to increase in cash and accounts receivable, this was due
to  increased gas prices and private placement of stock.  Further, stockholder
equity  increased  in  the  five  months ending December 31, 1996.  Additional
capital to increase the net worth is forthcoming from the exercise of warrants
attached  to  the  private  placement  stock.

COMPARISON  OF  FISCAL  YEARS  ENDED  JULY  31,  1996  AND  1995
----------------------------------------------------------------

REVENUES

Revenues  from  the  sale of oil and gas more than doubled in fiscal year 1996
from  $376,154  to  $872,386.  The  increase  was from substantial natural gas
production  and  natural  gas  price  increases as well as $73,884 in one time
accruals  from  prior  production.  Production  increased from a new well, the
Martins-Severin  No.  5,  and  gas  prices  strengthened  to  propel  revenues
considerably higher. The Company expects prices to remain firm well into 1997.

<PAGE>
ITEM  6.    MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL
------------------------------------------------------------------
CONDITION  (Continued)
---------

COMPARISON  OF  FISCAL  YEARS  ENDED  JULY  31,  1996  AND  1995  (CONTINUED)
----------------------------------------------------------------

COSTS  AND  EXPENSES
Costs  of  the  Chapter 11 and new financing drove G&A expenses to $764,799 in
fiscal  year  1996  versus  $498,421 in fiscal year 1995. All other categories
also increased as the Company wrote off non-productive leases and charged more
to  operating  expense  and  depreciation,  depletion  and amortization due to
increased  production.  The  total  expenses  in  fiscal  year  1996  reached
$1,195,005  for a loss of $317,358 versus $737,621 and $306,844, respectively,
for  the  same  period  in  fiscal  year  1995.

Total assets increased slightly to $3,949,375 in fiscal year 1996, up $124,322
from $3,825,053 in fiscal year 1995. However, stockholder equity suffered from
the  loss  and  declined to $1,400,167 in fiscal year 1996, down $313,458 from
$1,713,625  in  fiscal  year  1995.

The  Company  anticipates  increased  revenues for fiscal year 1997 along with
increased  expenses  as  it  makes an extraordinary effort to complete several
projects which it expects to fund from operations and new project capital from
the  sale  of  equity.


<PAGE>

                         ITEM 7. FINANCIAL STATEMENTS
                         ----------------------------

<PAGE>

                        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,  1996  and  July  31, 1996, and the related
consolidated  statements  of  operations,  changes in shareholders' equity and
cash  flows  for  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, 1996 and July 31, 1996,  and the results of its
consolidated  operations  and  its  cash  flows  for the five month transition
period  ended  December  31,  1996,  and  for the year ended July 31, 1996, in
conformity  with  generally  accepted  accounting  principles.

     BROWN  ARMSTRONG  RANDALL  &  REYES
     ACCOUNTANCY  CORPORATION



Bakersfield,  California
February  28,  1997,  except  for  Note  10
whose  date  is  March  22,  1997

<PAGE>



<PAGE>

<PAGE>

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

                            TRI-VALLEY CORPORATION
                          CONSOLIDATED BALANCE SHEETS

                                    ASSETS
<TABLE>
<CAPTION>


                                               Transition     Fiscal Year
                                              Period Ended       Ended
                                              December 31,     July 31,
                                                  1996           1996
                                              -------------  -------------
<S>                                           <C>            <C>

CURRENT ASSETS
  Cash                                        $     894,365  $    258,924
  Accounts receivable, trade                        278,110       277,586
  Prepaid expenses                                    2,029         2,029
                                              -------------  -------------

    Total Current Assets                          1,174,504       538,539
                                              -------------  -------------

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

OTHER ASSETS
  Deposits                                           62,000        61,000
  Investments in partnerships (Note 1)               20,682        (7,152)
  Acquisition Costs (Note 1)                         29,753             -
  Goodwill (net of accumulated amortization
    of $167,209 at December 31, 1996 and
    $162,690 at July 31, 1996 (Note 1)              266,644       271,163
                                              -------------  -------------

    Total Other Assets                              379,079       325,011
                                              -------------  -------------

    TOTAL ASSETS                              $   4,736,443  $  3,949,375
                                              =============  =============
</TABLE>



<PAGE>


                     LIABILITIES AND SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>


                                                    Transition
                                                   Period Ended
                                                   December 31,     Year Ended
                                                       1996        July 31, 1996
                                                  --------------  ---------------
<S>                                               <C>             <C>

CURRENT LIABILITIES
  Notes and contracts payable (Note 3)            $      11,042   $       77,992
  Trade accounts payable                                 57,566          226,057
  Amounts payable to joint venture participants         484,008          505,690
  Advances from joint venture participants              196,527          483,412
  Due to related parties                                196,142          204,392
  Accrued expenses and other liabilities                      -          134,908
                                                  --------------  ---------------
    Total Current Liabilities                           945,285        1,632,451
                                                  --------------  ---------------
LONG-TERM PORTION OF NOTES AND
 CONTRACTS PAYABLE
  Notes payable                                          37,608           16,757
  Convertible notes payable                                   -          900,000
                                                  --------------  ---------------

    Total Long-Term Portion of Notes and
     Contracts Payable                                   37,608          916,757
                                                  --------------  ---------------
OTHER LIABILITIES
  Investor Payable                                      662,680                -
                                                  --------------  ---------------
SHAREHOLDERS' EQUITY
  Common stock, $.01 par value:
    25,000,000 shares authorized;
    14,102,473 and 8,027,248 issued and
    outstanding at December 31, 1996
     and July 31, 1996, respectively                    141,024           80,272
  Less:  Common stock in treasury, at cost,
    156,925 shares                                      (28,639)         (28,639)
  Capital in excess of par value                      5,495,726        3,772,753
  Accumulated deficit                                (2,517,241)      (2,424,219)
                                                  --------------  ---------------
    Total Shareholders' Equity                        3,090,870        1,400,167
                                                  --------------  ---------------
    TOTAL LIABILITIES AND
      SHAREHOLDERS' EQUITY                        $   4,736,443   $    3,949,375
                                                  ==============  ===============
</TABLE>



<PAGE>
                            TRI-VALLEY CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>


                                               Transition                     Period Ended
                                              December 31,     Year Ended
                                                  1996        July 31, 1996
                                             --------------  ---------------
<S>                                          <C>             <C>              <C>

REVENUES
  Sale of oil and gas                        $     470,300   $      872,386
  Precious metals revenue                                -                -
  Interest income                                    4,221            6,861
                                             --------------  ---------------

                                                   474,521          879,247
                                             --------------  ---------------

COST AND EXPENSES
  Leases sold, relinquished and impaired                 -           27,593
  Oil and gas leases                                82,481          259,673
  General and administrative                       424,576          764,799
  Depreciation, depletion and amortization          23,448           53,453
  Interest                                          35,438           89,487
                                             --------------  ---------------

                                                   565,943        1,195,005
                                             --------------  ---------------

LOSS BEFORE INCOME TAXES                           (91,422)        (315,758)

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

NET LOSS                                     $     (93,022)  $     (317,358)
                                             ==============  ===============

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

WEIGHTED AVERAGE NUMBER OF
  SHARES OUTSTANDING                            10,191,230        7,452,248
                                             ==============  ===============
</TABLE>



<PAGE>

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

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

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


<TABLE>
<CAPTION>


                                                      Capital
                                                        in
                                            Par      Excess of    Accumulated    Treasury    Preferred      Options
                                Shares     Value     Par Value      Deficit       Stock        Stock      Outstanding
                              ----------  --------  -----------  -------------  ----------  -----------  -------------
<S>                           <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

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

Balance at July 31, 1996       8,027,248    80,272   3,772,753     (2,424,219)    (28,639)           -              -

Issuance of common stock
  to investors                 6,075,225    60,752   2,100,186              -           -            -              -
Stock issuance costs                   -         -    (377,213)             -           -            -              -
Net loss                               -         -           -        (93,022)          -            -              -
                              ----------  --------  -----------  -------------  ----------  -----------  -------------

Balance at December 31, 1996  14,102,473  $141,024  $5,495,726   $ (2,517,241)  $ (28,639)  $        -   $          -
                              ==========  ========  ===========  =============  ==========  ===========  =============


                                   Stock
                               Shareholders'
                                  Equity
                              ---------------
<S>                           <C>


Balance at July 31, 1995      $    1,713,625

Issuance of common stock
  to investors                         3,900
Transfer of preferred
  stock to common                          -
Net loss                            (317,358)
                              ---------------

Balance at July 31, 1996           1,400,167

Issuance of common stock
  to investors                     2,160,938
Stock issuance costs                (377,213)
Net loss                             (93,022)
                              ---------------

Balance at December 31, 1996  $    3,090,870
                              ===============
</TABLE>




<PAGE>

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

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


                                                        Transition
                                                       Period Ended        Year Ended
                                                     December 31, 1996    July 31, 1996
                                                    -------------------  ---------------
<S>                                                 <C>                  <C>

CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                          $          (93,022)  $     (317,358)
  Adjustments to reconcile net loss to net cash
    used by operating activities:
  Depreciation, depletion and amortization                      23,448           53,453
  (Increase) decrease in accounts receivable                      (524)          17,784
  Decrease (increase) in prepaid expenses                            -            8,812
  Decrease (increase) in deposits                               (1,000)          39,241
  Increase (decrease) in trade accounts payable               (168,491)         100,687
  Increase (decrease) in amounts payable to joint
    venture participants and related parties                   (29,932)          86,521
  (Decrease) increase in advances from joint
    venture participants                                      (286,885)        (144,399)
  (Decrease) increase in accrued expenses and
    other liabilities                                         (134,908)          (7,742)
  Impairment, dry hole and other disposals of
    property and equipment                                           -           27,593
                                                    -------------------  ---------------
     Net Cash Used by Operating Activities                    (691,314)        (135,408)
                                                    -------------------  ---------------
CASH FLOWS FROM INVESTING ACTIVITIES
  Capital expenditures                                        (145,718)        (240,955)
  Investment in partnerships                                   (27,834)               -
                                                    -------------------  ---------------
     Net Cash Used by Investing Activities                    (173,552)        (240,955)
                                                    -------------------  ---------------
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from issuance of debt                                     -        1,038,000
  Principal payments on long-term debt                        (946,099)        (635,317)
  Proceeds from issuance of common stock                        60,752            3,900
  Investor payable                                             662,680                -
  Additional paid in capital                                 1,722,974                -
                                                    -------------------  ---------------
     Net Cash Provided by Financing Activities               1,500,307          406,583
                                                    -------------------  ---------------
NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS                                             635,441           30,220
CASH AT BEGINNING OF YEAR                                      258,924          228,704
                                                    -------------------  ---------------
CASH AT END OF YEAR                                 $          894,365   $      258,924
                                                    ===================  ===============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
    Interest paid                                   $           35,438   $       85,487
                                                    ===================  ===============
    Income taxes paid                               $            1,600   $        1,600
                                                    ===================  ===============
</TABLE>



<PAGE>

<PAGE>

                            TRI-VALLEY CORPORATION
                         NOTES TO FINANCIAL STATEMENTS
                         DECEMBER 31 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.

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

Effective March 10, 1997, the Company changed its fiscal year-end from July 31
to December 31.  Accordingly, the consolidated financial statement 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  year  are  summarized  below.
<TABLE>
<CAPTION>


                             Five Months Ended
                             December 31, 1995
                            -------------------
<S>                         <C>

Revenues                    $          292,666
Operating income                       (48,117)
Provision for income taxes              (1,600)
Net loss                               (49,717)

Net loss per common share                 (.01)
</TABLE>




<PAGE>
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)
            ----------------------------------------------

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 (the "Code").  The chapter 11 cases of TVC
and  TVOG were substantially consolidated under TVC, and TVC continues to file
consolidated  tax  and  SEC  reports.

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.    Prior  to  this  dismissal,  the  Company  operated  as  a
debtor-in-possession  under Chapter 11 of the Federal Bankruptcy Code.  During
this  period,  all  Company  obligations  were  subject  to compromise.  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,  subsequent  to  year  end,  paid  100  cents  on  the  dollar.

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  33  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 jointly with others and, accordingly, the financial
statements  reflect  only  the  Company's  proportionate  interest  in  such
activities.


<PAGE>
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)
            ----------------------------------------------
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.

Restricted  Cash
----------------

The  Company  maintains  four  cash  accounts  which  have  been classified as
restricted cash. The operating account, with balances of $283,843 and $189,609
at  December  31,  1996  and  July  31,  1996,  respectively,  consist  of the
production  revenues received by the operating company for payment to the well
project  investors  minus any lifting costs. The Webb Pipeline account, having
balances  of  $298,626  and  $0  at  December  31,  1996  and  July  31, 1996,
respectively,  is  required by the Webb-Tract project agreement to be used for
construction  of  the  Webb-Tract pipeline. The Company also maintains a money
market  account  which  is  used  to  accumulate  investors  money for various
drilling  projects.  The  account  balances  at December 31, 1996 and July 31,
1996,  were  $143,529  and  $33,240,  respectively.  Finally,  the Company was
required, while in bankruptcy, to maintain an escrow account totalling $60,000
for  potential allowable legal fees payable to the counsel of the Committee of
Equity  Security  Holders.  This dispute was settled subsequent to the balance
sheet  date  for  approximately $29,000 consisting of legal fees and expenses.
Total  restricted cash was $785,998 and $222,849 at December 31, 1996 and July
31, 1996, respectively. Unrestricted cash was $108,367 and $36,075 at December
31,  1996  and  July  31,  1996,  respectively.

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
partnership  interests. The cost associated with this potential acquisition is
currently  being capitalized. In the event the acquisition is not consummated,
these  costs  will  be  charged  to  operations.

<PAGE>
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)
            ----------------------------------------------

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.

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.


<PAGE>
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)
            ----------------------------------------------

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

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 undiscounted 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.

Mineral  Property
-----------------

All  costs related to mineral properties with development potential, including
mineral  claim  acquisition costs and exploration and development expenditures
are  deferred  until the related mineral claims are abandoned, sold or achieve
commercial  production.    At  that  time,  the costs will be either amortized
against  income  from  future  mining  operations  or written off.  Grassroots
exploration  costs  are  charged  to  expense  as  incurred.

The  amount  shown  for mineral properties and development represents costs to
date  and  does  not  necessarily  reflect present or future values.  The full
recovery  of  the  above  mentioned  deferred cost depends on a combination of
different  factors,  including  (i)  future  metal  prices (ii) the results of
future exploration, and discovery and development of ore reserves and (iii) to
the  extent  necessary, the procurement of additional capital and financing to
carry  out  future  activities.    The  carrying amount of mineral properties,
proved  and  unproved,  is  evaluated  at  least annually and reduced if these
properties  are  impaired.

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

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


<PAGE>
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)
            ----------------------------------------------

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.

Derivative  Financial  Instruments  and  Fair  Value  Disclosure  (SFAS  119)
-----------------------------------------------------------------------------

In October 1994, the Financial Accounting Standards Board issued SFAS No. 119,
"Disclosure about Derivative Financial Instruments and Fair Value of Financial
Instruments."  The  provisions  of  SFAS  119  are  effective  for  financial
statements issued for years ending after December 15, 1994, for entities whose
total  assets  exceed  $150 million. For those entities whose total assets are
less  than  $150  million at December 15, 1994, the provisions of SFAS 119 are
effective  for  years  ended  after  December  15,  1995.  SFAS  119  requires
disclosures  about  derivative  financial  instruments  and  other  financial
instruments  with  similar  characteristics.  The provisions of this statement
should not have a significant effect on the Company's financial position since
the  Company  does  not  have any derivative financial instrument investments.


<PAGE>
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)
            ----------------------------------------------

Fair  Values  of  Financial  Instruments
----------------------------------------

Statement  of  Financial Accounting Standards No. 107, "Disclosures about Fair
Value of Financial Instruments," requires disclosure of fair value information
about  financial  instruments,  whether  or not recognized in the statement of
financial  condition.  In  cases where quoted market prices are not available,
fair  values  are  based  on  estimates using present value or other valuation
techniques.  Those  techniques  are  significantly affected by the assumptions
used,  including the discount rate and estimates of future cash flows. In that
regard, the derived fair value estimates cannot be substantiated by comparison
to  independent markets and, in many cases, could not be realized in immediate
settlement  of  the  instruments. Statement No. 107 excludes certain financial
instruments and all nonfinancial instruments from its disclosure requirements.
For  the  purpose  of  this  statement,  the carrying amounts of the Company's
instruments  approximate  their  fair  market  values.

Income  Taxes
-------------

On  January  1,  1994,  the  Company  began  accounting  for  income  taxes in
accordance  with  SFAS  No. 109 which became effective for the year ended July
31,  1994.  There  was  no  material  affect  on the financial statements upon
adoption.  Pursuant  to  SFAS  No. 109, income taxes are provided based on the
liability  method  of  accounting.  The provision for income taxes is based on
pretax  financial  accounting  income. Deferred tax assets and liabilities are
recognized  for  future  expected  tax  consequences  of temporary differences
between  income  tax  and  financial  reporting,  and  principally,  relate to
differences  in  the  tax  bases  of assets and liabilities and their reported
amounts,  using  enacted tax rates in effect for the year in which differences
are  expected  to  reverse. If it is more likely than not that some portion or
all  of  a  deferred  tax asset will not be realized, a valuation allowance is
recognized.

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 presented.

Reclassification
----------------

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


<PAGE>
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)
            ----------------------------------------------

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 on units of
production.


NOTE  2  -  PROPERTY  AND  EQUIPMENT
            ------------------------

Oil  and  gas properties, and equipment and fixtures consist of the following:
<TABLE>
<CAPTION>


                                                                 Transition
                                                                Period Ended
                                                                December 31,    Year Ended
                                                                    1996       July 31, 1996
                                                                -------------  -------------
<S>                                                             <C>            <C>

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

  Proved properties, net of accumulated
    depletion of $250,396 at December 31,
    1996 and $233,259 at July 31, 1996                               $259,709  $     276,846
  Unproved properties                                                 483,287        695,861
                                                                -------------  -------------

     Total Oil and Gas Properties                                     742,996        972,707
                                                                -------------  -------------
</TABLE>



<PAGE>
NOTE  2  -  PROPERTY  AND  EQUIPMENT
            ------------------------
<TABLE>
<CAPTION>


                                           Transition
                                          Period Ended
                                          December 31,     Year Ended
                                              1996       July 31, 1996
                                          -------------  --------------
<S>                                       <C>            <C>

A summary of other property and
----------------------------------------
  equipment follows:
----------------------------------------

  Mining prospects                            2,376,005       2,057,732
  Land                                           11,281          11,281
  Building net of accumulated
    depreciation of $4,982 at
    December 31, 1996 and $4,512
    at July 31, 1996                             40,142          40,612
  Office equipment and leasehold
    improvements net of accumulated
    depreciation of $87,524 at
    December 31, 1996 and $86,203 at
    July 31, 1996                                12,436           3,493
                                          -------------  --------------
     Total Other Property and Equipment       2,439,864       2,113,118
                                          -------------  --------------
Property and Equipment (Net)              $   3,182,860  $    3,085,825
                                          =============  ==============
</TABLE>


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

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


                                             Transition
                                            Period Ended
                                            December 31,     Year Ended
                                                1996       July 31, 1996
                                            -------------  --------------
<S>                                         <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,
  1996 and July 31, 1996.                   $      22,076  $       23,225

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



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


                                                   Transition
                                                  Period Ended
                                                  December 31,   Year Ended
                                                      1996      July 31, 1996
                                                  ------------  -------------
<S>                                               <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, 1996; secured by
  contractual policy; interest at 12.00%;
  payable in monthly installments of
  $680 including interest.                               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
</TABLE>



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


                                               Transition
                                              Period Ended
                                              December 31,    Year Ended
                                                  1996      July 31, 1996
                                              ------------  --------------
<S>                                        <C>  <C>           <C>

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
                                              ------------  --------------

                                                    48,650         994,749

Less current portion                                11,042          77,992
                                              ------------  --------------

Long-Term Portion of Notes and Contracts
  Payable                                  $        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).

Maturities  of  long-term debt for the five years succeeding December 31, 1996
are  as  follows:
<TABLE>
<CAPTION>


December 31,
------------
<C>           <S>                   <C>

                           1997     $11,042
                           1998       6,468
                           1999      28,468
                           2000       2,672
                       Thereafter         -
                                    -------

                                    48,650
                                    =======
</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,  1996:
<TABLE>
<CAPTION>


                                  Ownership
                          Shares              Percentage
                          ------              ----------
<S>              <C>      <C>     <C>         <C>

  Dennis Vaughn  967,200               6.61%
</TABLE>



<PAGE>
NOTE  4  -  RELATED  PARTY  TRANSACTIONS  (Continued)
            ----------------------------

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
                                 Period Ended
                                 December 31,    Year Ended
                                     1996      July 31, 1996
                                 ------------  --------------
<S>                           <C>  <C>           <C>

  Partnership income, net of
    expenses                  $        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, 1996,
and  July  31,  1996  was  $0  and  $17,950,  respectively.

On July 19, 1995, the Company entered into an agreement to borrow $15,000 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 note matures on
July  19,  1999.  Other  terms  of  the  agreement  involve  the  following:

     Principal  amount  convertible into TVC unregistered common stock at $.30
per  share  at  any  time.

     Options  on  15,000  shares  of TVC unregistered shares at $.50 per share
exercisable  through  July  19,  1999.

     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.

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


<PAGE>
NOTE  5  -  INCOME  TAXES
            -------------

At  December  31,  1996,  the  Company  had  available  net  operating  loss
carryforwards  for  financial  statements  and  federal income tax purposes of
approximately  $2,300,000.  These  loss  carryforwards expire between 1998 and
2012.

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


                                       Transition
                                      Period Ended
                                      December 31,     Year Ended
                                          1996        July 31, 1996
                                     --------------  ---------------
<S>                                  <C>             <C>

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

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

Valuation Allowance                     (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 carryforwards due to the uncertainty of future
utilization.


NOTE  6  -  MAJOR  CUSTOMER
            ---------------

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>


                                               Company
                                               -------
                    A        B        C     D   Other
                 -------  -------  -------  -  -------
<S>              <C>      <C>      <C>      <C>  <C>

Period Ended:
  July 31, 1996  153,862  403,366        *  *  109,810
  December 31,
    1996          95,408        *  187,492  *    9,701
</TABLE>


  *    Not  a  major  source  during  the  year.

All  oil  and  gas  sales have occurred in the northern California gas market.


<PAGE>
NOTE  7  -  EMPLOYEE  OVERRIDING  ROYALTY  PAYABLE
            --------------------------------------

From time to time the Company negotiates an overriding royalty for the benefit
of  its  employees  on  plays  it  sells  to  third  parties.  The override is
effective only on producing properties. Distribution was originally determined
by the Tri-Valley CEO, but in 1992 and 1993, the compensation committee of the
Board  of  Directors of the Company determined shares of specific officers and
the  CEO determined the rest. Subsequent to July 31, 1990, the Company and the
Company's  employees  participated  in one of the major gas discoveries in the
Sacramento Valley in some years.  From an old farmout, TVOG retained a 2% ORRI
and  the  employees  retained  a  1.5%  ORRI.

Further gas discoveries in 1990, 1991, 1993 and 1995 temporarily increased the
employee  override  revenue.  As  industry  conditions  limited  the amount of
interest  the  Company could keep in its deals, the employee override became a
less  effective  bonus  program and management terminated it on new leases. An
employee/officer  of  the  Company  instituted  legal  proceedings to claim an
additional  share of undistributed employer overriding royalty from the period
September  1991 to August 1992.  This case was settled prior to the bankruptcy
filing  for  an  amount  immaterial  to  the  Company  (see  Note  9).

The  financial  statements  at  July 31, 1995, included a liability for unpaid
employee  overriding  royalty of $77,884. This liability was eliminated in the
second  quarter of fiscal year 1996, when the case was settled for a diminimus
amount.  The program was terminated on January 1, 1996, with an effective date
of  December  1,  1995  which resulted in addition to income of $73,884 in the
second  quarter  ending  January  31,  1996.


NOTE  8  -  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  1996:
<TABLE>
<CAPTION>


                                Oil and      Precious
                                  Gas         Metals     Total
                               ---------     --------  ---------
<S>                            <C>        <C>  <C>       <C>

Transition Period Ended
 December 31, 1996
  Total Revenues               $470,300   $         -  $470,300
                               =========  =  ========  =========

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

  Net Income (Loss)            $(93,022)  $         -  $(93,022)
                               =========  =  ========  =========
</TABLE>




<PAGE>
NOTE  8  -  FINANCIAL  INFORMATION  RELATING  TO  INDUSTRY  SEGMENTS
            --------------------------------------------------------
              (Continued)
<TABLE>
<CAPTION>


                                  Oil and     Precious
                                    Gas        Metals       Total
                                -----------  ----------  -----------
<S>                             <C>          <C>         <C>

  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  9  -  COMMITMENTS
            -----------

On  May  2,  1992,  the Board of Directors approved the following compensatory
stock  option  plans  for  directors,  officers  and  employees:

      Outside  directors  -  awarded  purchase options for up to 30,000 shares
each at $.50 per share and an additional 40,000 shares each at $.55 per share,
with  an  expiration  date  of  September  14,  1995.  The expiration date was
extended  to  September  14,  1997,  by  the  Board  of  Directors.

      Officer  - awarded purchase options for up to 100,000 shares at $.50 per
share.

On  August  29, 1992, the Board of Directors of Tri-Valley Corporation awarded
to  Blystone, an employee, the option to purchase 100,000 shares of Tri-Valley
Corporation  stock at $.50 per share with such option price increasing to $.60
per share on any outstanding options effective September 14, 1992, and to $.75
per  share  on  any  outstanding  options  on  September  14, 1994.  Any stock
purchases through this option will be unregistered common stock and subject to
Rule  144.    The  option will be effective only while Blystone is employed by
Tri-Valley  and  shall  terminate  in  any  event,  September  14,  1997.

<PAGE>
NOTE  9  -  COMMITMENTS  (Continued)
            -----------

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,
1997,  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,  1996:

  December  31,  1997                                               $   14,850
                                                                    ==========

Litigation
----------

Unless  otherwise  noted,  since  the  Company  filed  Chapter  11  petitions,
prosecutions of all pre-petition claims against the Company were stayed by the
automatic  stay  imposed  by  the  Code.    Management,  during the bankruptcy
proceedings,  was  able  to  come  to terms with all parties who, prior to the
filing  of  the  petition,  had  a  claim against the Company. In general, the
following  lawsuits  sought  damages  that, at the current standing, have been
resolved through settlement.  Management does not know of any other pending or
threatening  litigation  which  exists  at  this  time.

The  lawsuit  pending  between  the  Company  and Carl Mitchell for payment of
advance  royalties  allegedly  due  the  Estate  of  John  R.  Mitchell on the
Richardson,  Alaska  property  as  well as a reimbursement of certain expenses
allegedly  incurred for the benefit of the Richardson property was settled for
$80,000. No other claim exists at the report date in relation to this subject.

Subsequent  to  December  31, 1995, a lawsuit between the Company and Helen L.
O'Brien, former TVC\TVOG vice president and secretary-treasurer concerning her
claim for additional compensation from the Employee Overriding Royalty Program
was  settled  (see  Note  7).  The  settlement  amount  is not material to the
Company.

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.


<PAGE>
NOTE  10  -  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 an 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. The warrants are required to be
exercised  within  one  year  from  the  issue  or  they  become  void.

During  the  transition  period, the Company received an additional $1,080,001
through  the  issuance of stock. This investment consisted of 2,080,000 shares
sold  at $0.25 per share, 100,001 sold at $0.45 per share, and 460,000 "units"
bought  at  $1  per  unit.  Each "unit" is identical to the "units" previously
mentioned.  At  the balance sheet date $2,620,000  "A" warrants, 1,435,000 "B"
warrants,  and  1,368,000  "C"  warrants  remain  to  be  issued.

In  addition to the 110,000 "A" warrants which were exercised and issued prior
to  December 31, 1996, 1,360,000 "A" warrants were exercised prior to December
31, 1996, at various prices for a total investment of $453,075, however, these
warrants  will not be issued until after the shareholders meeting on March 22,
1997  (see  Note  11).

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

As  of  the  balance  sheet date, the Company had an investor payable totaling
$662,680.  This  is  money  which  the Company had received from investors for
common  stock,  which, as of the transition period's end, had not been issued.
The  unissued  common  stock  consists  of 1,360,500 "A" warrants exercised at
various  prices and 575,775 shares purchased at $0.45 per share. Subsequent to
the  year  end,  310,775  of  the $0.45 stock was issued. The balance of these
warrants  and  shares will be issued subsequent to the shareholders meeting on
March  22,  1997.


<PAGE>
NOTE  12  -  SUBSEQUENT  EVENTS  -  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, and 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 unanimously approved by the shareholders.

<PAGE>
                            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 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.

<PAGE>

<PAGE>

Capitalized  costs  relating  to  oil and gas producing activities and related
accumulated depletion, depreciation and amortization at July 31 are as follow:
<TABLE>
<CAPTION>

                    Transition
                    Period  Ended

                                  December 31,     Year Ended
                                      1996        July 31, 1996
                                 --------------  ---------------
<S>                              <C>             <C>

Aggregate capitalized costs:
 Proved properties               $     510,106   $      510,106
 Unproved properties                   483,287          695,861
 Accumulated depletion,
  depreciation and amortization       (250,396)        (233,259)
                                 --------------  ---------------
Net capitalized costs            $     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  1996:
<TABLE>
<CAPTION>


                                Transition
                               Period Ended
                               December 31,     Year Ended
                                   1996       July 31, 1996
                              --------------  --------------
<S>                           <C>             <C>

Acquisition of producing
  properties and productive
  and non-productive acreage  $    (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
                                                Period Ended
                                                December 31,     Year Ended
                                                    1996        July 31, 1996
                                               --------------  ---------------
<S>                                            <C>             <C>

Sales to unaffiliated parties                  $     470,300   $      872,386
Production costs                                     (82,481)        (259,673)
Depletion, depreciation and
 amortization                                        (18,929)         (42,607)
                                               --------------  ---------------
                                                     368,890          570,106
Income tax expenses                                 (125,412)        (193,837)
                                               --------------  ---------------
Results of operations from activities before
  extraordinary items (excluding blending
  operations, corporate overhead and
   interest costs)                             $     243,478   $      376,269
                                               ==============  ===============
</TABLE>



<PAGE>

<PAGE>

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, and July 31, 1996, and
changes  in  such  quantities  during  each  of  the years then ended, were as
follows:
<TABLE>
<CAPTION>


                                        Transition
                                       Period Ended              Year Ended
                                    December 31, 1996          July 31, 1996
                                    ------------------         --------------
                              Oil          Gas           Oil        Gas
                             (BBL)        (MCF)         (BBL)      (MCF)
                             -----  ------------------  -----  --------------
<S>                          <C>    <C>                 <C>    <C>

Proved developed and
 undeveloped reserves:

 Beginning of year            442           1,934,339    367       1,888,231
 Revisions of previous
  estimates                   272             180,057    (97)       (206,836)
 Extensions, discoveries
  and other additions           -                   -    382         525,475
 Production                   (70)           (111,261)  (210)       (272,531)
                             -----  ------------------  -----  --------------

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

 Proved developed reserves:

  Beginning of year           442           1,934,339    367       1,888,231
                             =====  ==================  =====  ==============

  End of year                 644           2,003,135    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 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.


<PAGE>
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
                             Period Ended
                             December 31,     Year Ended
                                 1996        July 31, 1996
                            --------------  ---------------
<S>                         <C>             <C>

Future cash in flows        $   3,098,724   $    2,989,560
Future production and
  development costs              (660,118)        (608,480)
Future income tax expenses       (259,282)        (674,158)
                            --------------  ---------------

Future net cash flows           2,179,324        1,706,922

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

Standardized measure of
  discounted future net
  cash flow                 $   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.


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


                                                    Transition
                                                   Period Ended
                                                   December 31,     Year Ended
                                                       1996        July 31, 1996
                                                  --------------  ---------------
<S>                                   <C>         <C>             <C>

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

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

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

Extensions, discoveries and improved
  recovery                                                    -          993,148

Accretion of discount                                    93,994          (94,823)

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

Net increase                                            267,791          291,139
                                                  --------------  ---------------

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



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

None.


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


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

The  section  entitled  "Approve Management's Slate of Directors" appearing in
the  Registrant's  proxy statement for the annual meeting of stockholders held
on  March  22,  1997,  sets  forth  certain  information  with  respect to the
directors  of  the Registrant and is incorporated herein by reference. Certain
information  with  respect to persons who are or may be deemed to be executive
officers  of the Registrant is set forth under the caption "Executive Officers
of  the  Registrant"  in  Part  I  of  this  report.


ITEM  10.  EXECUTIVE  COMPENSATION
----------------------------------

The section entitled "Compensation of Officers and Directors" appearing in the
registrant's  proxy  statement  for  the annual meeting of stockholders held on
March  22,  1997,  sets  forth  certain  information  with  respect  to  the
compensation  of  management  of  the Registrant and is incorporated herein by
reference.


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

The sections entitled "Voting Securities and Rights" and "Approve Management's
Slate  of  Directors"  appearing  in  the Registrant's proxy statement for the
annual  meeting  of  stockholders  held  on  March 22, 1997, set forth certain
information  with  respect  to the ownership for the Registrant's Common Stock
and  are  incorporated  herein  by  reference.


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

(a)      None.


<PAGE>
                                    PART IV
                                    -------


ITEM  13.  EXHIBITS,  FINANCIAL  STATEMENTS  SCHEDULES,  AND
------------------------------------------------------------
REPORTS  ON  FORM  8-K
----------------------

(a)          EXHIBITS
             --------

             (27) Financial Data Schedule


(b)          REPORTS  ON  FORM  8-K
             ----------------------

          J.  Bruce  Carruthers  II,  director,  resigned  January  26,  1996.


<PAGE>

<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.

March 31,  1997          By:
                                                   F.  Lynn  Blystone
                                                   President,  Chief Executive
                                                   Officer  and Director

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:



March 31,  1997          By:
                                                   Dennis  P.  Lockhart,
                                                   Director


March 31,  1997          By:
                                                   Terrance  L.  Stringer,
                                                   Director


March 31,  1997          By:
                                                   Milton J. Carlson,
                                                   Director


March 31,  1997          By:
                                                   Earl H. Beistline,
                                                   Director


March 31,  1997          By:
                                                   Loren  Miller,
                                                   Director