SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

[ X ]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE
ACT  OF 1934 FOR THE                         FISCAL YEAR ENDED DECEMBER 31, 1998
[FEE  REQUIRED}
[]   TRANSITION  REPORT  UNDER  SECTION 13 OR 15 (D)  OF THE SECURITIES EXCHANGE
ACT  OF  1934

                           Commission File No. 0-6119

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

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

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

Registrant's  Telephone  Number  Including  Area  Code:  (661)  837-9300

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

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

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

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

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

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

The  issuer's  revenues  for  the  most  recent  fiscal  year  were  $977,892.

As of December 31, 1998 19,088,248 common shares were issued and outstanding. As
of  February26,  1998, 19,088,248 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$6,910,870.

                       DOCUMENTS INCORPORATED BY REFERENCE
                            Articles of Incorporation








                                     PART I

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

Tri-Valley Corporation, a Delaware corporation, is in the business of exploring,
acquiring and developing prospective and producing petroleum and precious metals
properties and interests therein.  Our wholly owned subsidiary, Tri-Valley Oil &
Gas  Company  ("TVOG")  operates  the  oil  &  gas activities.  TVOG derives the
majority  of  its  revenue from gas production.  The precious metals activity is
operated  directly  by  Tri-Valley  Corporation.

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

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

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

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



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

In  1996,  the  Company changed its fiscal year end from July 31 to December 31.
Tri-Valley  has  7  full  time  employees.

The  Company  is continuing a capital formation program that it began last year.
This  will  give  the Company the liquidity and flexibility to take advantage of
opportunities  for  acquisitions  as  they  are  discovered.

Current  Year

Over  60  people  attended  the  August  22,  1998  shareholder  meeting  in San
Francisco.  An  extensive  question and answer period covered all aspects of the
Company's  activities  (However,  no  information was given that was not already
fully  disclosed).  Management continues to enjoy very strong support.  Over 89%
(17,032,377  out  of  19,063,248)  of  the  issued and outstanding shares voted.
Management's slate of directors was reelected by a range of approximately 94% to
99%  of  the  shares  voting.  The  accounting  corporation of Brown, Armstrong,
Randall & Reyes was approved as auditors by over 99%.  The stock option plan for
employees and directors was approved by over 85% and the actions of the board of
directors  since  the  previous  shareholder  meeting were ratified by over 96%.

The  company  drilled  two  additional wells in 1998.  These wells are currently
being  evaluated  as  to  production  capability.  A  third well, which had been
waiting  on  a pipeline hookup was put on line and began producing in October of
1998.


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

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

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

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

The  company  has  retained  the  services  of Cecil Engineering, an independent
engineer,  for  the  purposes  of  estimating  the Company's net share of proved
developed  oil  and  gas reserves on all the Company's oil and gas properties at
December  31,  1998.  The  Company  does not include any undeveloped reserves in
these  reserve  studies  and,  accordingly,  only  proved developed reserves are
reported  herein.  Price  is  a  material  factor  in the stated reserves of the
Company,  because  higher  prices  permit  relatively higher-cost reserves to be
produced  economically.  Higher  prices  generally  permit  longer

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

recovery,  hence  larger  reserves  at  higher values.  Conversely, lower prices
generally  limit  recovery  to  lower-cost reserves, hence smaller reserves. The
process  of  estimating  oil and gas reserve quantities is inherently imprecise.
Ascribing  monetary  values  to  those  reserves,  therefore,  yields  imprecise
estimated  data  at  best.

The  estimated future net recoverable oil and gas reserves from proved developed
properties as of December 31, 1998, December 31, 1997 and December 31, 1996 were
as  follows:
                              BBL                   MCF
                              ---                 -----

December  31,  1998             Condensate     234     Natural Gas     1,434,499
December  31,  1997             Condensate     224     Natural Gas     1,903,154
December  31,  1996             Condensate     644     Natural Gas     2,003,135

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
$1,178,295  at December 31, 1998, $1,757,195 at December 31, 1997,and $1,394,701
at  December  31,  1996.  Reference  is  made  to  the  unaudited  supplemental
information  of the consolidated financial statements for further information on
oil  and  gas  reserves  and  estimated  values.

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

                                                   Transition
                    Year Ended      Year Ended     Period Ended     Year Ended
                   December 31,     December 31,     December 31,     July 31,
                      1998            1997             1996            1996
                                    ----     ----     ----

Natural Gas (MCF)    277,946         323,879          111,261        272,931
Crude Oil (BBL)          137             225               70            210



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

                                                       Transition
                      Year Ended      Year Ended       Period Ended   Year Ended
                     December 31,     December 31,     December 31,     July 31,
                         1998            1997             1996           1996
                                    ----     ----     ----

Natural gas (per MCF)     $2.20          $2.40            $2.00          $2.00
Production  Costs
            (per MCF)       .20            .30              .10            .10

Net Profit per MCF        $2.00          $2.10            $1.90          $1.90




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

As of December 31, 1998, the Company had the following gross and net position in
wells  and  developed  acreage:

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

        Gross     Net                           Gross     Net
        -----     ---                           -----     ---
          12     5.125                           2192     645

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

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

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

The  following table sets forth the number of productive and dry exploratory and
development  wells  drilled  by  the  Company  during:
                                             Transition
              Year Ended     Year Ended     Period Ended     Year Ended
             December 31,     December 31,     December 31,     July 31,
                1998*            1997             1996           1996
                                     ----     ----     ----

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

   Total        -0-              1.0              1.0            1.0

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

   Total        -0-              2.0              -0-            -0-

*Two  exploratory wells were drilled in 1998.  No determination has been made as
to  the  ability  to  commercially  produce  these  wells.

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

The Company continually screens oil and gas prospects developed by the Company's
own  staff  and  by  other  sources  for  potential  leasing.




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

The  following  table  sets  forth information regarding undeveloped oil and gas
acreage  in  which  the  Company  had  an  interest  on  December  31,  1998.

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

                California        10,960                6,783

In  1997,  the  Company  acquired the worldwide database of San Carlos Oil & Gas
Corporation  which  also  contains numerous California well logs, maps and other
geological  data  for  cash and Tri-Valley stock.  In 1997, the Company acquired
rights  to over 20,000 miles of California seismic data from GEOONE for cash and
Tri-Valley  stock.  These  databases  enable Tri-Valley to rapidly evaluate both
exploration  prospects  and  producing  properties  in  every  onshore  basin in
California.

Some  of  the  Company's  undeveloped  acreage  is  held pursuant to leases from
landowners.  Such  leases  have  varying dates of execution and generally expire
one  to  five  years  after  the  date  of  the  lease.

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

The  following  table  sets forth the information regarding the acreage position
the  Company  has  under  lease  in  Alaska  as  of  December  31,  1998:

    State          Gross Acres             Net Acres
    -----          -----------             ---------
                                    
   Alaska          33,000.00               32,660.00

Mineral  properties claimed on Open State land require minimum annual assessment
work  of  $100  worth  per  State  of  Alaska claim.  The Company had no Federal
claims,  1,678 State of Alaska claims, and 10 prospecting sites, totaling 66,281
net  acres  as  of  July  31, 1995.  Subsequent to 1995, the Company reduced its
claim block to 606 claims and prospecting sites totaling over 24,000 acres (over
37.5  square  miles)  to  concentrate on the most advanced targets.  In 1997 and
1998,  the  Company  conducted  additional  staking  to  bring  its present land
position to approximately 33,000 acres (51.5 square miles).  Expenditures on the
Richardson,  Alaska  acreage  have  already  carried  forward  annual assessment
requirements  more  than  four  years  on  all  its  claims.

In  1991,  Tri-Valley  entered  into  an agreement with the Moscow based Central
Research  Institute  of  Geological  Prospecting  for  Base  and Precious Metals
("TsNIGRI")  to  demonstrate  their  proprietary technology for evaluating large
areas  of  covered  sub-arctic  terrain.  TsNIGRI  has performed over 1,000 line
miles  of  ground  traverses  for  geological,  geochemical,  biochemical,
hydrochemical  sampling  and  geophysical profiles throughout Tri-Valley's claim
block  and  surroundings.  Over  5,000  samples  have  been  run  through  a


ITEM  2.  PROPERTIES  (CONTINUED)
--------------------
variety  of  laboratory  analysis  including  over  1,000  samples  assayed  by
Bondar-Clegg, an industry accepted assay house.  Physical gold has been found at
60  locations  wide  spread  over  a 20 mile swath on the claims and TsNIGRI has
increased  their forecast to over 2 million ounces of recoverable gold. Based on
the  results  of this study of the Company's then 64 square mile lode gold claim
block,  Tri-Valley  management  believes it prudent for continued development of
this  precious  metals  segment  of  the  Company.

In  1998,  the  Company retained the services of M. J. Bright and Associates, an
independent  registered  geologist based in Denver, Colorado to analyze the data
from one core drill site and surrounding trench samples at the Democrat Dike, to
estimate  probable reserves.  M. J. Bright delineated 141,500 tons  grading 0.11
ounces  per  ton  (opt)  or about 15,000 ounces, beginning at surface to 80 feet
subsurface.  An additional 12,000 ounces is indicated from an additional 20 feet
depth of 108,500 tons also grading 0.11 opt. for a total of over 27,000 probable
ounces.  This occurs in an area approximately 1,200 feet long, 250 feet deep and
300  to  600 feet wide.  This represents approximately 12 million tons projected
to  grade  about 0.06 opt. for a possible resource of about 720,000 ounces.  The
Company is undertaking further review and exploration of the potential resources
in  this  area.

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

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

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


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

Tri-Valley  Oil  and  Gas  Co.  v.  ABA  Energy Corporation et al, No. C97-02561
(Superior Court of Contra Costa County, California).  TVOG is the plaintiff in a
lawsuit  for  the  theft  of  trade  secrets  and  illegal  use  of  proprietary
information  against  a  former  officer,  his  company  and  TVOG's  consulting
geologist  seeking  damages  and  imposition  of  a constructive trust regarding
certain  disputed  oil and gas properties.  The amount, if any, which TVOG might
recover  is  not  determinable  as  of the date of this report.  The evidentiary
stage  of the trial has been concluded and the Company is waiting on the Judge's
ruling.


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

No  matters  were  submitted  to  a  vote  of security holders during the fourth
quarter  of  1998.

<PAGE>
------

                                     PART II
                                     -------

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

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


                        Bid Prices          Asked Prices
                -----------  -------------           
                   High         Low          High    Low
                -----------  -------------  -----  -----
<S>             <C>          <C>            <C>    <C>

1998:
First Quarter   $     1.688  $    .91      $1.63  $1.02
Second Quarter  $      .969  $    .53      $ .97  $ .69
Third Quarter   $      .719  $    .31      $ .78  $ .59
Fourth Quarter  $      .625  $    .19      $ .56  $ .38
</TABLE>



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


1997:
First  Quarter   $     2.938  $     .68     $3.00  $    .72
Second  Quarter  $     1.688  $    1.13     $1.81  $   1.31
Third  Quarter   $      1.50  $    1.13     $1.56  $   1.22
Fourth  Quarter  $     1.313  $     .88     $1.38  $    .97


As of December 31, 1998, the Company estimates that its common stock was held by
2,000  shareholders  of  record  in  40 states and at least 4 foreign countries.

The  Company  historically has paid no dividends, and at this time does not plan
to  pay  any  dividends in the immediate future.  Rather, the Company strives to
add  share  value  through discovery success.  As of 3/05/99, the Company had 14
market  makers  for  our  stock.  In  1998,  trading volume exceeded 9.5 million
shares.


Recent  Sales  of  unregistered  Securities
-------------------------------------------

During  1998, 123,000 "B" warrants were exercised at $1.00 each. The exercise of
these  warrants  resulted  in  123,000  new  shares issued.  These warrants were
exercised by 6 individuals. The warrants were originally issued prior to 1997 in
privately negotiated transactions exempt from registration under Section 4(2) of
the Securities Act of 1933 and/or Regulation D promulgated by the Securities and
Exchange  Commission.  There  were  13,000 shares issued at $0.50 each and 5,000
issued  at  $0.75  each from the exercise of stock options held by two directors
and  one  employee.  Additionally,  25,000  shares were sold to an individual in
private placement at a price of $0.50 per share exempt under Section 4(2) of the
Securities  Act  of  1933.

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


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


Computer  Uncertainties  for  the  Year  2000
The  Company  is  aware  of  the  issues associated with the programming code in
existing computer systems as the millennium (Year 2000) approaches.  The Company
has  examined  the  computer  software  and is confident it will accommodate the
"Year  2000"  issue.  Additionally,  the  Company  is contacting its appropriate
vendors  to  determine  if they are equipped to handle the Year 2000 issue.  The
Company  expects to have all the responses from these vendors by the end of  the
second  quarter  of its fiscal year 1999.  The funds spent on this determination
are  less  than  fifty  dollars.


Natural  Gas  Activities
In  1997 Tri-Valley Oil & Gas Company, the wholly owned subsidiary of Tri-Valley
Corporation drilled the Pimentel 1-15.  The well had been waiting for a pipeline
hook-up  until  it  was  hooked  up  and  began  producing  in  October  1998.

The Company generally sells a percentage of production on a fixed contract price
and  the  remainder  at  the  monthly spot price.  However, for 1999 the Company
believes  that  continued  weakness  in  the  oil  and  gas sector will persist.
Therefore  the  Company  is  selling  100%  on  a  fixed  price  contract.

Our  hydrocarbon  reserves were valued by independent engineers at a net present
value  of  $1,178,295 at December 31, 1998, a decrease of $578,900 from December
31,  1997 after taking into account the SEC mandatory 10% discount rate and also
taking  into consideration the effect of income tax.  This value does not appear
on  the balance sheet because accounting rules require discovered reserves to be
carried  on  the  balance  sheet  at  the cost of obtaining them rather than the
actual  future  net  revenue  from  producing  them.

Tri-Valley arranges to be carried in the test wells on prospects.  Therefore, it
incurs  very  little cost and very little value of discovered reserves appear on
the  balance  sheet despite the fact that reserves are a very important value to
the  Company,


Precious  Metals  Activity
The  price  of  gold has fluctuated in the last 12 months from a high of $314.50
per  oz.  to  a  low  of  $274.60  per oz.  However, the Company believes it can
produce  the  gold  at  a  cost  that  will  still  allow  a significant profit.

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

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


Subsequent  Activities
----------------------

On  March 22, 1999, Tri-Valley and Placer Dome U.S., Inc., executed a definitive
agreement for PDUS to explore, develop and mine approximately 36 square miles of
Tri-Valley's  50.5-square  mile  claim  block  at  Richardson,  Alaska.

Terms  of the agreement called for PDUS to expend a minimum of US$6.5 million in
work on the property and partially reimburse Tri-Valley for some of its previous
exploration,  all  within  five years, in order for PDUS to earn 51% interest in
the  property  PDUS may earn an additional 29% interest by completing a bankable
feasibility study on no less than 750,000 ounces of gold and enacting a positive
production  decision  on  same.  Tri-Valley estimates such a study could cost in
excess  of  US$10  million

Tri-Valley  believes  the  PDUS exploration acreage hosts a massive gold-bearing
zone system related to the pluton underlying Buck Mountain and the Buckeye Creek
on  the  flank  where  samples grading high values of gold (1.5 opt), tellurium,
bismuth  and  tungsten  with  weaker  arsenic  values  were  found.

Tri-Valley  retained  approximately  14.5  square  miles  for  its  own account,
including  a  potentially high grade dike system and high grade creek as well as
placer rights over the entire 51.5 square miles of claims and prospecting sites.


Telecommunications

Tri-Valley Corporation continued its due diligence in 1998 to try to acquire the
assets  of  five  telecommunication  partnerships.  In  May of 1997, the Company
loaned  the  partnership  $125,000 dollars, which is secured by property, on a 6
month  note  which  was  subsequently extended for an additional period of time.
This  note  is  now  in  default.







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


RESULTS  OF  OPERATIONS
Comparison  of  Years  Ended  December  31,  1998  and  1997
Balance  Sheet
--------------

The  Company  had  $191,226  cash  on  hand  at  December  31,  1998 compared to
$2,778,592 as of December 31, 1997.  This decrease was the result of the Company
spending  $1,710,032  that  had  been  advanced  to  the  Company from the joint
interest partners for their participation in wells to be drilled during the year
1998.  Accounts  receivable  are  down  for  the year ended December 31, 1998 by
$389,185  due to less drilling activity by the Company in 1998.  The Company has
a  note  receivable  for  a  loan  the  Company  made  to the telecommunications
partnership.  This  loan  is  now  in  default  and  has  been reclassified as a
non-current  asset.  However, the Company believes the collatteral for this loan
is  more  than  sufficient  to  satisfy  this  debt.  Trade accounts payable are
$507,730  greater for the year ended December 31, 1998 from the same period last
year  due  in  large  part  to  the  costs  associated  with  the  lawsuit.


Revenues

Oil  and  Gas sales increased to $833,380 for the period ended December 31, 1998
from  $753,466  for  the year ended December 31, 1997.  This increase of $79,914
was  due to two wells drilled in 1997 that produced for only part of the year in
1997.  However,  they  produced  for  an  entire  year in 1998.  Gas prices were
favorable  for  1998,  the  result of the Company selling its gas partially on a
fixed  price  contract and a portion on the spot market.  However, for 1999, the
Company  is  selling  on  a  fixed  contract  basis  only  as the Company is not
convinced that gas prices for 1999 will remain strong.  Interest income was down
$29,259.  This  was  due  to  fewer  funds available to the company to invest in
interest  bearing  accounts,  as  has  been  the case in preceding years.  Other
income  was  up $11,718 from increased overhead charges, which was the result of
more  well  being  operated.


Costs  and  Expenses
--------------------

Cost and expenses were up $597,630 from last year due in part to mining costs of
$228,707  which  are  now  being  expensed.  These costs had been capitalized in
prior  years.  These  costs  were made up of lessor payments, option payments to
one lessor, a reservoir engineer report and costs of negotiating a joint venture
agreement  with  Placer  Dome  USA.  General  and administrative costs increased
$432,616  over  last year primarily due to legal expenses related to the lawsuit
between  TVOG and ABA Energy Corporation, et al.  See item 3. Legal Proceedings.



























                          ITEM 7:  FINANCIAL STATEMENTS

<PAGE>






     TRI-VALLEY  CORPORATION
     INDEX
<TABLE>
<CAPTION>



                                                                  Page(s)
                                                                  -------

<S>                                                               <C>



Report of Brown Armstrong Randall & Reyes,
  Independent Auditor's Report                                         14
                                                                  -------

Consolidated Balance Sheets at December 31, 1998 and 1997           15-16
                                                                  -------

Consolidated Statements of Operations for the Years Ended
  December 31, 1998 and 1997                                           17
                                                                  -------


Consolidated Statements of Shareholders' Equity for the                18
  Years Ended December 31, 1998 and 1997

Consolidated Statements of Cash Flows for the Years Ended
  December 31, 1998 and 1997                                        19-20
                                                                  -------

Notes to Consolidated Financial Statements                          21-38
                                                                  -------

Supplemental Information about Oil and Gas Producing Activities
  (Unaudited)                                                          39
----------------------------------------------------------------  -------
</TABLE>





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,  1998  and 1997, and the related consolidated
statements of operations, changes in shareholders' equity and cash flows for the
years  then  ended.  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 consolidated financial statements referred to above present
fairly  in  all  material  respects,  the  financial  position  of  Tri-Valley
Corporation  at December 31, 1998 and 1997,  and the results of their operations
and  their  cash  flows  for  the years then ended, in conformity with generally
accepted  accounting  principles.

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

     BROWN  ARMSTRONG  RANDALL  &  REYES
ACCOUNTANCY  CORPORATION

Bakersfield,  California
February  26,  1999
The  accompanying  notes  are  an  integral  part  of these financial documents.

                                       15

                             TRI-VALLEY CORPORATION
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

<TABLE>
<CAPTION>



                                                                             Year  Ended       Year  Ended
                                                                            December  31,     December  31,

                                                                                1998___           1997___
                                                                            -----------  --------------------

<S>                                                                         <C>          <C>




CURRENT ASSETS
   Cash                                                                     $   191,226  $          2,778,592
   Accounts receivable, trade                                                   307,573               696,758
   Note receivable                                                                    -               125,000
   Prepaid expenses                                                               2,029                 2,029
                                                                            -----------  --------------------
      Total Current Assets                                                      500,828             3,602,379
                                                                            -----------  --------------------


PROPERTY AND EQUIPMENT, NET
  (Notes 1 and 2)                                                             1,038,237               821,614
                                                                            -----------  --------------------



OTHER ASSETS
   Deposits                                                                     100,000               100,000
   Note Receivable                                                              125,000                     -
   Acquisition costs (Note 1)                                                   183,342               119,007
   Investments in partnerships (Note 1)                                          10,686                 8,421
   Well Database (net of accumulated of $31,550
     And $1,539 at December 31, 1998 and
     1997, respectively)                                                         61,561                93,111
   Goodwill (net of accumulated amortization
     Of $188,901 at December 31, 1998, $178,055
     At December 31, 1997 (Note 1)                                              244,952               255,798
   Other                                                                         13,913                13,908
                                                                            -----------  --------------------
      Total Other Assets                                                        739,454               590,245
                                                                            -----------  --------------------

      TOTAL ASSETS                                                          $ 2,278,519  $          5,014,238
--------------------------------------------------------------------------  ===========  ====================
The accompanying notes are an integral part of these financial documents.

                                                                                     16

LIABILITIES AND SHAREHOLDERS' EQUITY



                                                                            Year Ended          Year Ended
                                                                            December  31,     December  31,
                                                                               1998               1997
                                                                            ------------      -------------

<S>                                                                         <C>           <C>



CURRENT LIABILITIES
   Notes and contracts payable (Note 3)
   Trade accounts payable                                                   $     9,641   $     90,667 
   Amounts payable to joint venture participants                                582,533         74,796 
   Advances from joint venture participants                                     244,664        605,431 
   Due to related parties                                                       135,032      1,845,064 
                                                                                  5,712         96,532 
                                                                            ------------  -------------

      Total Current Liabilities                                                 977,582      2,712,490 
                                                                            ------------  -------------


LONG-TERM PORTION OF NOTES AND
  CONTRACTS PAYABLE
   Notes payable (Note 3)                                                         8,527         13,950 
--------------------------------------------------------------------------  ------------  -------------




OTHER LIABILITIES
   Investor payable                                                                  --        103,000 
--------------------------------------------------------------------------  ------------  -------------

SHAREHOLDERS' EQUITY
   Common stock, $.001 par value; 50,000,000 shares
    authorized; 19,088,248, 18,922,248,
    issued and outstanding at December 31, 1998,
    and 1997, respectively                                                       19,088         18,922 
   Less: common stock in treasury, at cost,
    172,925 and 156,925 shares at
    December 31, 1998 and 1997 respectively                                     (41,061)       (28,639)
   Capital in excess of par value                                             8,177,655      8,048,331 
   Accumulated deficit                                                       (6,863,272)    (5,853,816)
                                                                            ------------  -------------

      Total Shareholders' Equity                                              1,292,410      2,184,798 
                                                                            ------------  -------------

      TOTAL LIABILITIES AND
        SHAREHOLDERS' EQUITY                                                $ 2,278,519   $  5,014,238 
--------------------------------------------------------------------------  ============  =============
The accompanying notes are an integral part of these financial documents.

                                                                                     17 

TRI-VALLEY CORPORATION
  CONSOLIDATED STATEMENTS OF OPERATIONS




                                                                           Year  Ended     Year  Ended
                                                                           December  31,   December  31,

                                                                              1998             1997
                                                                           ------------   ------------



REVENUES
   Sale of oil and gas                                                      $   833,380   $   753,466 
   Interest income                                                               66,627        95,886 
   Other income                                                                  77,885        66,167 
                                                                            ------------  ------------

                                                                                977,892       915,519 
                                                                            ------------  ------------

COST AND EXPENSES
   Mining exploration costs                                                     228,707             - 
   Oil and gas leases                                                           108,810       145,443 
   General and administrative                                                 1,509,181     1,076,565 
   Depreciation, depletion and amortization                                     135,955       152,490 
   Interest                                                                       4,695        15,220 
                                                                            ------------  ------------

                                                                              1,987,348     1,389,718 
                                                                            ------------  ------------

LOSS BEFORE INCOME TAXES AND
  CHANGE IN ACCOUNTING PRINCIPLE                                             (1,009,456)     (474,199)

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

NET LOSS BEFORE CHANGE IN
  ACCOUNTING PRINCIPLE
                                                                             (1,009,456)     (475,799)
CHANGE IN ACCOUNTING PRINCIPLE
  Cumulative effect of change in gold mineral
    Exploration and development costs method
    of accounting (Note 1)
                                                                                ____  -    (2,860,776)
                                                                            ------------  ------------
NET LOSS
                                                                            $(1,009,456)  $(3,336,572)
                                                                            ============  ============
NET LOSS BEFORE CHANGES IN
ACCOUNTING PRINCIPLES PER COMMON
  SHARE                                                                     $      (.05)  $      (.03)
                                                                            ============  ============

CHANGE IN ACCOUNTING PRINCIPLE PER
  COMMON SHARE                                                              $         -   $      (.17)
                                                                            ============  ============

NET LOSS PER COMMON SHARE                                                   $      (.05)  $      (.19)
                                                                            ============  ============


WEIGHTED AVERAGE NUMBER OF SHARES  OUTSTANDING                               18,887,870    17,261,723 
--------------------------------------------------------------------------  ============  ============
The accompanying notes are an integral part of these financial documents.

                                                                                     18 

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



                                                                   Capital in
                                                                   Excess  of     Accumulated     Treasury   Shareholders'

                                            Shares     Par Value    Par Value      Deficit        Stock        Equity
                                          ----------  -----------  ------------  ------------  ------------  -----------


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


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

Balance at
 December 31,
 1997                                     18,922,248  $   18,922   $ 8,048,331   $(5,853,816)  $   (28,639)   $2,184,798 


Issuance of
 common stock
 to investors                                166,000         166       145,584             -       (12,422)      133,328 
Stock issuance                                     -
 Costs                                             -           -      ( 16,260)            -             -     ( 16,260)
Net loss                                           -           -                 (1,009,456)            -    (1,009,456)
                                          ----------  -----------  ------------  ------------  ------------  ------------

Balance at
 December 31,
 1998                                     19,088,248  $   19,088   $ 8,177,655   $(6,863,272)  $   (41,061)  $1,292,410 
                                          ==========  ===========  ============  ============  ============  ===========
(Continued on next page)

19

  TRI-VALLEY CORPORATION
  CONSOLIDATED STATEMENTS OF CASH FLOWS





                                                                           Year  Ended    Year  Ended
                                                                           December  31,  December  31,

                                                                               1998           1997
                                                                           ------------   ------------




CASH FLOWS FROM OPERATING ACTIVITIES
    Net loss                                                               $(1,009,456)  $(3,336,575)
    Adjustments to reconcile net loss to net cash
      used by operating activities:
        Depreciation, depletion and amortization                               135,955       152,490 
        Stock issued for services rendered                                           -       133,000 
        Impairment, dry hole and other disposals of
          property and equipment                                                     -     2,860,776 
        Changes in operating capital:
        (Increase) decrease in accounts receivable                             389,185      (418,648)
        (Increase) in deposits and other assets                                     (5)      (38,000)
        Increase in trade accounts payable                                     507,737        17,231 
        Increase (decrease) in amounts payable to
          joint venture participants and related parties                      (451,587)       21,813 
                                                                           ------------  ------------

Net Cash (Used) Generated by Operating Activities                             (428,171)     (607,913)
                                                                           ------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Note receivable                                                                  -      (125,000)
    Capital expenditures                                                      (374,517)     (824,944)
    Investment in partnerships                                                  (2,265)       12,257 
                                                                           ------------  ------------

Net Cash Used by Investing Activities                                         (376,782)     (937,687)
                                                                           ------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Increase (decrease) in advances from joint
      Ventures participants                                                 (1,710,032)    1,648,537 
    Restricted cash - escrow account                                                 -        60,000 
    Principal payments on long-term debt                                       (86,449)      (55,476)
    Proceeds from issuance of common stock                                          63        48,185 
    Investor payable                                                           103,000 
    Additional paid in capital                                                  42,687     2,060,700 
    Purchase of treasury stock                                                 (12,422)            - 
    Stock issuance costs                                                       (16,260)     (375,119)
                                                                           ------------  ------------

Net Cash Provided by Financing Activities                                   (1,782,413)    3,489,827 
                                                                           ------------  ------------

NET INCREASE IN CASH AND  CASH
  EQUIVALENTS                                                               (2,587,366)    1,944,227 
CASH AT BEGINNING OF YEAR                                                    2,778,592       834,365 
                                                                           ------------  ------------

CASH AT END OF YEAR                                                        $   191,226   $ 2,778,592 
-------------------------------------------------------------------------  ============  ============
The accompanying notes are an integral part of these financial documents.

                                                                                    20 

  TRI-VALLEY CORPORATION
  CONSOLIDATED STATEMENTS OF CASH FLOWS







                                                                            Year  Ended        Year  Ended
                                                                            December  31,     December  31,
                                                                                1998             1997
                                                                            ------------        --------




SUPPLEMENTAL DISCLOSURES OF CASH
  FLOW INFORMATION:

    Interest paid                                                          $    4,695          $   15,220
                                                                           ============        ==========

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

NONCASH FINANCING AND INVESTING
  ACTIVITIES:

    Issuance of common stock for services rendered                         $        -          $  133,000

    Issuance of debt to satisfy stock issuance cost                        $        -          $  133,443

    Issuance of common stock for well database                             $        -          $   12,500

    Conversion of debt to common stock                                     $        -          $   22,000

    Conversion of investor payable to common stock                         $  103,000          $  662,680

    Increase in paid in capital due to change in par
      value of common stock                                                $        -          $  170,300
42


TRI-VALLEY CORPORATION
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  DECEMBER 31, 1998, AND 1997


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


                                       24

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

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

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

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

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

Material  estimates  that  are  particularly  susceptible  to significant change
relate  to  the  determination  of  the depreciation, depletion and amortization
account balance. Depreciation, depletion and amortization is based upon probable
and  proven  reserves for mining and proven reserves for oil and gas properties.
Depletion  will  be  provided  on mining properties when they become commercial.


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 year 1987.  The Company conducts its oil and gas business
primarily through its 5-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.NOTE 1 -
SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)
  --------------------------------------------

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

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

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

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

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

Goodwill
--------

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

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

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

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

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

Drilling  Agreements/Joint  Ventures(Continued)
------------------------------------

Receivables  from and amounts payable to these related parties (as well as other
related  parties) have been segregated in the accompanying financial statements.
In  the  event the Company has expended funds for a project in an amount greater
than  the original contribution from investors, these costs offset advances from
other  projects  on  the  consolidated  balance  sheet  until  such  time as the
investors  contribute more monies to fund these projects.  The Company had three
projects  at  December  31, 1998 and 1997, that had "over" expended funds in the
amounts of $552,179 and $112,374, respectively.  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.

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

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

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

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

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

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

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

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.

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

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.

Net  Income  (Loss)  Per  Common  Share
---------------------------------------
The  calculation  of  net  income/loss per common share is based on the weighted
average number of common stock shares outstanding during each period. The effect
of  convertible  preferred  stock  and warrants on the net income/loss per share
ratio  is  considered  anti-dilutive  and was not included in the computation of
earnings  per  common  share  for  any  of  the  years  or  periods  presented.

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

New  Accounting  Pronouncements
-------------------------------
Effective January 1, 1998, the Company adopted Statement of Financial Accounting
Standards  No.  130  (SFAS 130), Reporting Comprehensive Income.  This statement
requires  that  all  items  that  are required to be recognized under accounting
standards  as  components  of  comprehensive  income  be reported in a financial
statement  that  is  displayed  with  the  same  prominence  as  other financial
statements.  Comprehensive  income.  Comprehensive  income  is  the  same as net
income  for  all  years  presented.

Effective January 1, 1998, the Company adopted Statement of Financial Accounting
Standards  No.  131  (SFAS 131), Disclosures about Segments of an Enterprise and
Related Information.  This statement requires the Company to report income/loss,
revenue,  expense and assets by business segment including information regarding
the revenues derived from specific products and services and about the countries
in which the Company is operating.  The statement also requires that the Company
report  descriptive  information  about  the  way  that  operating segments were
determined,  the  products  and  services  provided  by  the operating segments,
differences  between  the measurements used in reporting segment information and
those  used in the Company's general-purpose financial statements and changes in
the measurement of segments amounts from period to period.  As noted above, this
statement  establishes  standards  for reporting and display and has no material
effect  on  the  Company's  financial  condition  or  results  of  operations.

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

New  Accounting  Pronouncements  (Continued)
-------------------------------
In  February  1998,  the  Financial  Accounting  Standards  Board  (FASB) issued
Statement  of  Financial  Accounting  Standards  No.  132 (SFAS 132), Employers'
Disclosures  about  Pensions and other Post-retirement Benefits.  This statement
standardizes  the  disclosure requirements for pension and other post-retirement
benefits.  The  Company  typically  does not offer the types of benefit programs
that  fall  under  the  guidelines  of  this  statement.

In  June  1998,  the FASB issued Statement of Financial Accounting Standards No.
133  (SFAS  133),  Accounting for Derivative Instruments and Hedging Activities.
This  statement  establishes  accounting  and reporting standards for derivative
instruments and requires recognition of all derivatives as assets or liabilities
in  the  statement of financial position and measurement of those instruments at
fair  value.  The  statement  is effective for fiscal years beginning after June
15,  1999.  Management  has  not  determined  what  impact  this  standard, when
adopted,  will  have  on  the  Company's  financial  statements.

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




                                     December 31,     December 31,
                                            1998             1997
                                        --------         --------



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

Proved properties, net of accumulated
  depletion of $444,686 and  $378,899 at
 December 31, 1998 and 1997,respectively  $254,267     $332,914
Unproved properties                        698,319      399,818
                                          --------     --------

      Total Oil and Gas Properties        $952,586     $732,732
----------------------------------------  ========     ========
</TABLE>


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


                                            December 31,  December 31,

                                                 1998            1997
                                           ----------        --------

<S>                                             <C>         <C>



Other Property and Equipment
----------------------------------------------                      
    Land                                            11,281    11,281
    Building net of accumulated depreciation
      $7,238 and $6,110 at December 31,
      1998 and 1997, respectively                   37,886    39,014
    Office equipment, vehicle, and leasehold
      Improvements net of accumulated
      Depreciation of $110,099 and $97,998 at
 December 31, 1998 and 1997, respectively           36,484    38,587
                                                ----------  --------

        Total Other Property and Equipment          85,651    88,882
                                                ----------  --------

Property and Equipment (Net)                    $1,038,237  $821,614
----------------------------------------------  ==========  ========
</TABLE>



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

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


                                      December 31,     December 31,

                                             1998            1997
                                          -------         -------

<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, 1998,
  and 1997.                                     $13,594  $18,092
                                                -------  -------

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

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

</TABLE>


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


                                     December 31,     December 31,
                                           1998             1997
                                        -------         --------

<S>                                             <C>      <C>



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

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

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

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

                                                 18,168   104,617
Less current portion                              9,641    90,667
                                                -------  --------

Long-Term Portion of Notes and Contracts
  Payable                                       $ 8,527  $ 13,950
----------------------------------------------  =======  ========
</TABLE>



Maturities of long-term debt for the five years succeeding December 31, 1998 are
as  follows:
<TABLE>
<CAPTION>



<S>            <C>



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

1999             9,641
2000 5,709
2001 2,818
Thereafter           -
               $18,168
-------------  =======
</TABLE>



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

The following are known to the Company to be the only beneficial owners of 5% or
more  of  the  Company's  outstanding  common  stock  at  December  31,  1998:
<TABLE>
<CAPTION>

<S>            <C>

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

   Dennis Vaughan               1,033,200          5.4%

   Albert C. Kutcher            1,303,900          6.8%

</TABLE>

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>



                                   Year  Ended     Year  Ended
                                   December  31,   December  31,
                                       1998             1997
                                     --------         --------

<S>                                  <C>       <C>



Partnership income, net of expenses  $258,520        $255,192
-----------------------------------  ========        ========
</TABLE>



Due  to  related  parties  of  $5,712 and $96,532 payable to F. Lynn Blystone at
December  31,  1998  and  1997,  respectively.

On  March  22,  1997,  the directors were granted 10,000 shares of stock each in
lieu of services rendered to the Company.  The shares were awarded at a price of
$1.86  per  share.  Due  to the restricted nature of the shares, the shares were
appropriately  discounted  to  $0.74  per  share.

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

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

NOTE  4  -  RELATED  PARTY  TRANSACTIONS  (Continued)
            ----------------------------

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

On  December  22,  1997, the Company received a promissory note in the amount of
$3,750  from  F.  Lynn  Blystone.  Interest is payable at 10% per annum, in full
with  principal  on  June 22, 1999.  This note was received in consideration for
5,000  shares  of  stock  purchased  via  stock  options.


NOTE  5  -  INCOME  TAXES
            -------------

At  December  31,  1998,  the  Company  had  available  net operating loss carry
forwards  for  financial  statements  and  federal  income  tax  purposes  of
approximately $3,790,000. These loss carryforwards expire between 1999 and 2013.

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


                                   December 31,     December 31,
                                        1998          1997
                                    ------------  ------------

<S>                                 <C>           <C>



Deferred Tax Assets:
  Net operating loss carryforwards  $ 1,280,000   $   765,000 
  Satutory depletion carryforwards      200,000       775,000 
                                    ------------  ------------

Total Deferred Tax Assets             1,480,000     1,540,000 
                                    ------------  ------------

Valuation Allowance                  (1,480,000)   (1,540,000)
                                    ------------  ------------

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


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


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

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

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



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

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



Period Ended:
   December 31, 1997  96,091  350,689  283,749  37,097
   December 31, 1998       *  777,688        *  55,692
--------------------  ------  -------  -------  ------
</TABLE>


  *  Not  a  major  source  during  the  period.

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


NOTE  7  -  FINANCIAL  INFORMATION  RELATING  TO  INDUSTRY  SEGMENTS
            --------------------------------------------------------

The Company adopted SFAS No. 131, Disclosure About Segments of an Enterprise and
Related  Information  ("SFAS  131")  in  1998  which changes the way the Company
reports  information  about  its  operating  segments.

The  Company identifies reportable segments by product and country, although the
Company  currently does not have foreign country segments.  The Company includes
revenues  from both external customers and revenues from transactions with other
operating  segments  in its measure of segment profit or loss.  The Company also
includes interest revenue and expense, DD&A, and other operating expenses in its
measure  of  segment  profit  or  loss.

The  accounting  policies  of  the  reportable  segments  are  the same as those
described  in  the  Summary  of  Significant Accounting Principles (See Note 1).
NOTE  7  -  FINANCIAL  INFORMATION  RELATING  TO  INDUSTRY  SEGMENTS (Continued)
            --------------------------------------------------------
The  Company's  operations  are classified into two principal industry segments.
There  was  no activity in the power generation segment.  Following is a summary
of  segmented  information  for  1998  and  1997:
<TABLE>
<CAPTION>



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

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


Year Ended December 31, 1998
  Revenues from External Customers          $    833,380   $              -   $   833,380 
                                            =============  =================  ============

  Interest Revenue                          $     66,627   $              -   $    66,627 
                                            =============  =================  ============

  Interest Expense                          $      4,695   $              -   $     4,695 
                                            =============  =================  ============


Expenditures for Segment Assets             $    310,182   $              -   $   310,182 
                                            =============  =================  ============

Depreciation, Depletion and Amortization    $    135,955   $              -   $   135,955 
                                            =============  =================  ============

    Total Assets                            $  2,307,703   $              -   $ 2,307,703 
                                            =============  =================  ============


Income (Loss) Before Taxes                  $   (780,749)  $       (228,707)  $(1,009,456)
Income Taxes                                           -                  -             - 
                                            -------------  -----------------  ------------

Net Loss                                    $   (780,749)  $       (228,707)  $(1,009,456)
                                            =============  =================  ============


Year Ended December 31, 1997
  Revenues from External Customers          $    753,466   $              -   $   753,466 
                                            =============  =================  ============

  Interest Revenue                          $     95,886   $              -   $    95,886 
                                            =============  =================  ============

  Interest Expense                          $     15,220   $              -   $    15,220 
                                            =============  =================  ============


Expenditures for Segment Assets             $    154,027   $              -   $   154,027 
                                            =============  =================  ============

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

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

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

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

</TABLE>


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

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

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

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

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



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

<S>                       <C>               <C>



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


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

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

A  summary  of  option  transactions during the year ended December 31, 1998 and
1997,  and  the  transition  period  ended  December  31,  1996  is shown below:
<TABLE>
<CAPTION>


                                                        Weighted-
                                                         Average
                                              Number     Exercise

                                             of Shares   Price
                                             ----------  ------

<S>                                          <C>         <C>



Outstanding at July 31, 1996                   355,000   $ 0.52

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

Outstanding at December 31, 1996               355,000   $ 0.52

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

Outstanding at December 31, 1997               569,000   $ 0.69

  Granted                                            - 
  Exercised                                     13,000   $ 0.50
  Canceled                                           - 
                                             ----------        

Outstanding at December 31, 1998               556,000   $ 0.69
                                             ==========        

Exercisable at December 31, 1998               556,000   $ 0.69
                                             ==========        

Available for Issuance at December 31, 1998  1,000,000
-------------------------------------------  ==========
</TABLE>


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

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



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

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


0.50                          296,000            3.61           296,000
0.55                          160,000             .75           160,000
1.50                          100.000            1.00           100,000
                 ---------------------                  ----------------

                              556,000                           556,000
===============  =====================                                  
</TABLE>


Leases
------

The  Company  conducts  its  operations from leased facilities.  The leases, are
classified  as  operating  leases and expired on January 1, 1998 and February 1,
1999.  They  now  continue  on  a  month  to  month  basis.

Litigation
----------

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

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

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

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

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

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

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

NOTE  9  -  COMMON  STOCK  (Continued)
            -------------

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

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

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

NOTE  10  -  WARRANTS
             --------

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




                                               Year  Ended     Year  Ended
                                              December  31,   December  31,
                                                   1998            1997
                                               -----------      ----------

<S>                                        <C>   <C>



Outstanding "A" warrants beginning            -                 1,372,000 
Additional granted                            -                         - 
Exercised during period                       -                (1,372,000)
                                           ----  -------------------------
Outstanding "A" warrants at end of period     -                         - 
                                           ====  =========================

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

Outstanding "C" warrants beginning            -                 1,365,000 
Additional granted                            -                         - 
Exercised during period                       -                  (501,000)
Expired during period                         -                  (864,000)
                                           ----  -------------------------
Outstanding "C" warrants at end of period     -                         - 
-----------------------------------------  ====  =========================
</TABLE>




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

The  Company had investor payables totaling $103,000 at December 31, 1997.  This
payable  was  incurred  because  the  Company  received  cash  from investors to
exercise and purchase stock before year end, however, the shares were not issued
until  after year end. At December 31, 1997, the unissued common stock consisted
of  1,248,000  "A"  warrants  exercised  at  various  prices  and 575,775 shares
purchased  at  $.45  per  share.  At  December  31,  1997, unissued common stock
consisted  of  103,000  "B"  warrants exercised at $1.00 per share. All unissued
shares  were  subsequently  issued  during 1998 reducing these payables to zero.
     TRI-VALLEY  CORPORATION
     SUPPLEMENTAL  INFORMATION  ABOUT  OIL  AND  GAS  PRODUCING
     ACTIVITIES  (UNAUDITED)


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

Disclosures of oil and gas reserves which follow are based on estimates prepared
by  independent engineering consultants for the year ended December 31, 1998 and
1997.  Such  analyses  are  subject  to  numerous  uncertainties inherent in the
estimation  of  quantities  of  proved  reserves and in the projection of future
rates  of production and the timing of development expenditures. These estimates
do  not  include  probable  or  possible  reserves.

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

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



                                         Year  Ended     Year  Ended
                                        December  31,     December  31,
                                              1998        1997
                                           ----------  ----------
<S>                                        <C>         <C>



Aggregate capitalized costs:
  Proved properties                        $ 698,953   $ 711,813 
  Unproved properties                        698,319     399,818 
  Accumulated depletion, depreciation and
    amortization                            (444,686)   (378,899)
                                           ----------  ----------

Net capitalized costs                      $ 952,586   $ 732,732 
-----------------------------------------  ==========  ==========
</TABLE>


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



                                          Year  Ended     Year  Ended
                                         December  31,     December  31,
                                              1998             1997
                                           --------           -------

<S>                           <C>       <C>



Acquisition of producing
  properties and productive
  and non-productive acreage               $298,501          $33,566
----------------------------               ========          =======
</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>



                                            Year  Ended     Year  Ended
                                           December  31,    December  31,
                                                1998           1997
                                            ----------      ----------

<S>                                            <C>         <C>



Sales to unaffiliated parties                  $ 833,380   $ 767,626 
Production costs                                (108,810)    (97,546)
Depletion, depreciation and
 amortization                                    (80,330)   (128,503)
                                               ----------  ----------

                                                 644,240     541,577 
Income tax expenses                             (219,042)   (184,136)
                                               ----------  ----------

Results of operations from activities before
  extraordinary items (excluding blending
  operations, corporate overhead and
   interest costs)                             $ 425,198   $ 357,441 
---------------------------------------------  ==========  ==========
</TABLE>


Changes  in  estimated  reserve  quantities
-------------------------------------------
The  net  interest  in  estimated quantities of proved developed and undeveloped
reserves of crude oil and natural gas at December 31, 1998 and 1997, and changes
in  such  quantities  during  each  of  the  years  then ended, were as follows:


<TABLE>
<CAPTION>
                                                                Year  Ended        Year  Ended
                                                               December  31,       December  31,
                                                                      1998                1997
                                                                 ---------          ----------

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

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



Proved developed and
  undeveloped reserves:

Beginning of year                                              224   1,903,154    644   2,003,135 
Revisions of previous estimates Extensions, discoveries and    147    (190,709)  (274)   (273,214)
  other additions                                                -           -     79     497,112 
Production                                                    (137)   (277,946)  (225)   (323,879)
                                                              -----  ----------  -----  ----------

End of year                                                    234   1,434,499    224   1,903,154 
                                                              =====  ==========  =====  ==========

Proved developed reserves:

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

End of year                                                    234   1,434,499    224   1,903,154 
                                                              =====  ==========  =====  ==========
</TABLE>


Standardized  measure of discounted future net cash flows relating to proved oil
--------------------------------------------------------------------------------
and as  reserves
-------------
A  standardized  measure  of discounted future net cash flows is presented below
for  the  year  ended  December  31,  1998  and  1997.

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

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



                                          Year  Ended     Year  Ended
                                         December  31,    December  31,
                                              1998         1997
                                           -----------  -----------

<S>                                        <C>          <C>



Future cash in flows                       $2,999,514   $4,166,677 
Future production and development costs      (956,472)    (990,987)
Future income tax expenses                    (59,166)    (380,077)
                                           -----------  -----------

Future net cash flows                       1,983,876    2,795,613 
                                           -----------  -----------

10% annual discount for estimated timing
  of cash flows                               805,581    1,038,418 
                                           -----------  -----------

Standardized measure of discounted future
  net cash flow                            $1,178,295   $1,757,195 
-----------------------------------------  ===========  ===========
</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.
51

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



                                                     Year  Ended     Year  Ended
                                                    December  31,    December  31,
                                                           1998         1997
                                                     -----------     -----------

<S>                                                     <C>          <C>



Standardized measure - beginning of period              $1,757,195   $1,394,701 
                                                        -----------  -----------

Sales of oil and gas produced, net of production costs    (724,570)    (670,080)
                                                        -----------  -----------

Revisions of estimates of reserves provided in
  in prior years:
    Net changes in prices and production costs              34,516      149,033 
Revisions of previous quantity estimates                  (285,184)    (614,464)

Extensions, discoveries and improved recovery                    -    1,123,473 
                                                        -----------  -----------

Accretion of discount                                      175,720      139,470 
Changes in production rates (timing) and other            (100,292)     114,268 
                                                        -----------  -----------

Net change in income taxes                                 320,910      120,794 
                                                        -----------  -----------

Net increase                                              (578,900)     362,494 
                                                        -----------  -----------

Standardized measure - end of period                    $1,178,295   $1,757,195 
------------------------------------------------------  ===========  ===========
</TABLE>

















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


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

None.


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

The  following  information  is  furnished  with  respect  to  each  director:

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

F.  Lynn  Blystone          63              1974               President,
                                                               Chief  Executive
                                                               Officer

Dennis  P.  Lockhart        52              1982               None

Milton  J.  Carlson         69              1985               None

Earl  H.  Biestline         83              1992               None

Loren  J.  Miller(1)        54              1992               None


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

(1)-  Audit  Representative

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

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

F.  Lynn  Blystone          63      President  and  Chief Executive Officer,
                                    TVC  (October  9,  1981)
                                    CEO  TVOG  (October  9,  1981)
                                    Pres.  and  CEO  TVPC  (December  11,  1997)

Thomas  J. Cunningham       56      Treasurer and Chief Financial Officer
                                    TVC/TVOG  (February  28,  1997)
                                    TVPC  (December  11,  1997)
                                    Secretary  TVC/TVOG/TVPC
                                    (December  21,  1998)

Joseph  R.  Kandle          56      President  TVOG  (December  21,  1998)

<PAGE>
------

ITEM  9.  DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT  (Continued)
------------------------------------------------------------------

F. LYNN BLYSTONE - 63    President and Chief Executive Officer of          1974
---------------------
                         Tri-Valley  Corporation  and  Tri-Valley  Power
                         Corporation,  and  CEO  of  Tri-Valley  Oil  &  Gas
                         Company,  which  are  two  wholly  owned
                         subsidiaries  of  Tri-Valley  Corporation,
                         Bakersfield,  California

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


DENNIS  P.  LOCKHART  -  52    President                                    1982
---------------------------
                         Heller  International  Group,  Inc.
                         Chicago,  Illinois

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


MILTON  J. CARLSON - 69          Investor, Kalispell, Montana               1985
-----------------------

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


ITEM  9.  DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT  (Continued)
------------------------------------------------------------------

LOREN J. MILLER, CPA - 54          Controller, Petro America, Inc.          1992
-------------------------
                         Treasurer,  Jankovich  Company
                         San  Pedro,  California

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

EARL  H. BEISTLINE, LLD. - 83          Mining Consultant                    1992
-----------------------------
                         Fairbanks,  Alaska

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

THOMAS  J. CUNNINGHAM - 56     Secretary, Treasurer and Chief Financial     1997
--------------------------
                         Officer  of  Tri-Valley  Corporation,  and  its
                         wholly  owned  subsidiaries,  Tri-Valley  Oil  &
                         Gas  Company  and  Tri-Valley  Power
                         Corporation,  Bakersfield,  California

     Named  as Tri-Valley Corporation's Treasurer and Chief Financial Officer on
February  1997,  and as Corporate Secretary on December 21, 1998, Mr. Cunningham
has  over  25  years  experience  in  corporate finance, Securities and Exchange
Commission  public  company  reporting  shareholder  relations,  and  employee
benefits.  In  his  career  he  served  as  Staff  Accountant  for  Forest  Oil,
Accounting Company, and as Executive Vice President, Chief Financial Officer and
Director  for Star Resources, Inc.  Most recently he was a Management Consultant
in  finance,  marketing  and  human  resource matters including employee benefit
planning.  He  received  his education in accounting and business administration
from  Angelo  State  University,  Texas.

JOSEPH  R.  KANDLE  - 56          President and Chief Operating Officer     1998
------------------------
                         Tri-Valley  Oil  &  Gas  Company,  wholly
                         owned  subsidiary  of  Tri-Valley  Corporation
                         Bakersfield,  California

     Mr.  Kandle  was named as President of Tri-Valley Oil & Gas Co. February 1,
1999 after having joined Tri-Valley Oil & Gas on June 1, 1998, as Vice President
-  Engineering.  Mr.  Kandle  is  a 1965 graduate of the Montana school of mines
with  a  B.S.  degree  in  Petroleum  Engineering.  Mr.  Kandle  has 34 years of
experience  in  drilling, production, and operations starting with Mobil in 1965
where  he  specialized  in deep drilling.  After Mobil, he has held positions of
V.P.  &  Chief  Engineer of Great Basins Petroleum, V.P. - Engineering with Star
Resources  and  V.P.-  Engineering  with  Atlantic  Oil  Company.

COMPLIANCE  WITH  SECTION  16(A)  OF  THE  EXCHANGE  ACT

Section 16(a) of the Securities Exchange Act of 1934 and Securities and Exchange
Commission  regulations  require that the Company's directors, certain officers,
and  greater  than  10  percent  shareholders must file reports of ownership and
changes  in  ownership  with the SEC and must furnish the Company with copies of
all  such  reports  they file.  Based solely on the information furnished to the
Company, we believe that no person failed to file required Section 16(a) reports
on  a  timely  basis  during  or  in  respect  of  1997.


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


The following table summarizes the compensation of the chairman of the board and
the  president  of  the  Company and its subsidiaries, F. Lynn Blystone, for the
fiscal  year  ended  December  31,  1998,  1997,  and  1996.

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

     F. Lynn          FYE 12/31/98  $156,000(1)
       Blystone, CEO  FYE 12/31/97  $197,660(1)                  195,000(2)
                      FYE 12/31/96  $ 72,626(1)


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

Aggregated  1998  Option  Exercises  and  Year-End  Values
----------------------------------------------------------

The  following  table  summarizes  the number and value of all unexercised stock
options  held  by  the  Named  Officers  and  Directors  at  the  end  of  1998.

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

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

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




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

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

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

 Dennis P. Lockhart          30,000/0                       0/0
                             40,000/0                       0/0

 Milton J. Carlson           30,000/0                       0/0
                             40,000/0                       0/0

 Loren J. Miller             30,000/0                       0/0
                             40,000/0                       0/0

 Earl H. Beistlin e          20,000/0                       0/0
                             40,000/0                       0/0


     *Based on a fair market value of $0.50 per share, which was the closing bid
price  of  the  Company's  Common  Stock in the Nasdaq National Market System on
December  31,  1998.

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

The Company compensates non-employee directors for their service on the board of
directors.  No  directors  received  any  stock  options in 1998.  The following
tables  sets  forth  information regarding the cash compensation paid to outside
directors  in  1998.

                                   (A)              (B)

                                  NAME             FEES
                                  ----             ----

                          Earl Beistline          $1,350

                          Milton Carlson          $2,322

                          Dennis P. Lockhart      $2,510

                          Loren J. Miller         $1,834




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

As  of  December  31, 1998, there were 19,088,248 shares of the Company's common
stock  outstanding.  The  following  persons were known by the Company to be the
beneficial  owners  of  more  than  5%  of  such  outstanding  common  stock:

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

Albert  C.  Kutcher
12052  Linda  Flora  Drive
Ojai,  CA  93023               1,303,900            6.8%

Dennis  Vaughan
2298  Featherhill  Road
Santa  Barbara,  CA  93108     1,033,200            5.4%

The  following table sets forth the beneficial ownership of the Company's common
stock  as  of  December  31,  1998  by  each  director, by each of the executive
officers  named  in  Item  11,  and by all executive officers and directors as a
group:

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

      F. Lynn Blystone          512,409(3)          2.7%

      Dennis P. Lockhart        122,091(3)          *

      Milton J. Carlson         129,000(3)          *

      Loren J. Miller            95,300(3)          *

      Earl H. Beistline          78,000(3)          *

Total  group  (all  directors  and
------------
Executive officers - 5 persons) 936,800(3)          4.9%

*Less  than  1%

(1)     Includes  shares  which the listed shareholder has the right to acquire,
from  options, before September 30, 1998 as follows:  Dennis P. Lockhart 70,000;
Milton  J.  Carlson 69,000; Loren J. Miller 70,000 and Earl H. Beistline 58,000.
F.  Lynn  Blystone  has  100,000.

(2)     Based on total outstanding shares of 19,088,248 as of December 31, 1998.
The  persons  named herein have sole voting and investment power with respect to
all  shares  of  common  stock  shown  as beneficially owned by them, subject to
community  property  laws  where  applicable.

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


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

None.


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

(a)     Exhibits.

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

                 3          Articles of Incorporation          *


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


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

(b)     Reports  on  Form  8-K

-     None




<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  23,  1999                     By:_/s/  F.  Lynn  Blystone
                                     F.  Lynn  Blystone
                                     President,  Chief  Executive  Officer  and
                                     Director


March  19,  1999                     By:__/s/  Thomas  J.  Cunningham
                                     Thomas  J.  Cunningham
                                     Sec.,  Treas.,  Chief  Financial Officer

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



March  19,  1999                     By:__/s/  Dennis  P.  Lockhart
                                     Dennis  P.  Lockhart,  Director



March  17,  1999                     By:__/s/  Milton  J.  Carlson
                                     Milton  J.  Carlson,  Director



March  19,  1999                     By:__/s/  Earl  H.  Beistline
                                     Earl  H.  Beistline,  Director



March  23,  1999                     By:__/s/  Loren  J.  Miller
                                     Loren  J.  Miller,  Director