U. S. Securities and Exchange Commission
                          Washington D. C.  20549

                                FORM 10-KSB

(X)  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
     For the fiscal year ended June 30, 1996

( )  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE 
     SECURITIES EXCHANGE ACT OF 1934
     For the transition period from -------------- to -------------

                        Commission File No. 0-11732
                                            -------
                    Appalachian Oil & Gas Company, Inc.
                   -------------------------------------
               (Name of Small Business Issuer in its Charter)

     UTAH                                                   87-0382031     
     ----                                                   ----------
(State of Other Jurisdiction                        (IRS Employer I.D. No.)
 of incorporation or organization)

                701 Second Avenue North Nashville, TN 37201
                --------------------------------------------
             (Address of Small Business Issuer in its Charter)

                 Issuer's Telephone Number: (615) 254-4789
                                                 --------------
       (Former Name or Former Address, if changed since last Report)

Securities Registered under Section 12(b) of the Exchange Act.
Securities Registered under Section 12(g) of the Exchange Act:

Check whether the Issuer(l) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

     (l)  Yes    X    No           (2)  Yes   X    No       
               -----     -----               -----     -----
Check if there is no disclosure of delinquent files in response to Item 40S
of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10KSB. (  )

     State Issuer's revenues for its most recent fiscal year:


                                     1<PAGE>
     The Exhibit Index commences on page 11.

State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the
average bid and asked prices of such stock, as of a specified date within
the past 60 days.

September 8 1998, $ .03 There are approximately 8,135,795 shares of common
voting stock of the Registrant held by non-affiliates.

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS) 

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

                 (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the Issuer's classes of
common equity, as of the latest practicable date: 8,135,795 Shares as of
September 8, 1998.

                    DOCUMENTS INCORPORATED BY REFERENCE
                    ------------------------------------

A description of "Documents Incorporated by Reference" is contained in Item
14 of this Report.

          Transitional Small Business Issuer Format   Yes          No     X 
                                                            -----     -----
                                     2
<PAGE>
                    APPALACHIAN OIL & GAS COMPANY, INC.

                                   INDEX

Part I                                                            Page No. 
                                                                 --------- 
  Item 1.   Business . . . . . . . . . . . . . . . . . . . . . . . . . 1

  Item 2.   Properties . . . . . . . . . . . . . . . . . . . . . . . . 4

  Item 3.   Legal Proceedings. . . . . . . . . . . . . . . . . . . . . 5

  Item 4.   Submission of Matters to a 
            Vote of Securities Holders . . . . . . . . . . . . . . . . 6

Part II

  Item 5.   Market for Registrant's Common 
            Equity and Related Matters . . . . . . . . . . . . . . . . 6

  Item 6.   Selected Financial Data. . . . . . . . . . . . . . . . . . 7

  Item 7.   Management's Discussion and Analysis of Financial
            Conditions and Results of Operations . . . . . . . . . . . 7

  Item 8.   Financial Statements and Supplementary Data. . . . . . . . 7

  Item 9.   Changes in and Disagreements with Accountants on 
            Accounting and Financial Disclosure. . . . . . . . . . . . 7
Part III

  Item 10.  Directors and Executive Officers of the Registrant . . . . 8

  Item 11.  Compensation . . . . . . . . . . . . . . . . . . . . . . . 8
            
  Item 12.  Security Ownership of Certain Beneficial Owners 
            and Management . . . . . . . . . . . . . . . . . . . . . . 8

  Item 13.  Certain Relationships and Related Transactions . . . . . . 9

  Item 14.  Exhibits, Financial Statements, Schedules and 
            Reports on Form 10-K . . . . . . . . . . . . . . . . . . .10

            Signatures . . . . . . . . . . . . . . . . . . . . . . . .11


                                     3
<PAGE>
                                   PART I
Item 1. Business
----------------

General

In 1981, Dry Creek Exploration, Inc. ("Dry Creek"), the predecessor of
Appalachian Oil & Gas Company, Inc. (the "Company") was incorporated under
the laws of the State of Utah.  Its purpose was to engage in the
acquisition, exploration and development of mineral properties.  Dry Creek
sold 1,165,000 shares of its Common Stock to its promoters for $.00214 per
share, a total of $2,500, and 2,500,000 shares of its Common Stock to other
residents of the State of Utah at $.01 per share, an aggregate of $25,000. 
Dry Creek subsequently purchased from a non-affiliate ten (10) placer
claims, each consisting of one hundred sixty (160) acres located in Utah,
for $20,000.  Having substantially depleted the funds obtained by Dry Creek
from its public offering in the purchase of the mining claims, and unable
thereafter to raise the necessary additional capital for, or to interest
third parties in, the exploration of such claims, Dry Creek conducted no
substantive business activities until its acquisition of assets from
Ratliff Farms, Inc. ("Ratliff") and Universal Energy and Exploration, Inc.
("Universal").

During May 1982, those in control of Dry Creek accepted a proposal from the
management of Ratliff and Universal, two (2) Tennessee corporations under
the common control of James W. Ratliff, whereby their individually owned
shares were acquired by James W. Ratliff and his affiliates and James W.
Ratliff and persons affiliated with him were appointed to the Board of
Directors of Dry Creek.

On June 18, 1982, at a special meeting of Dry Creek's shareholders, and at
which, of the three million six hundred sixty-five thousand (3,665,000)
shares outstanding, two million forty-seven thousand (2,047,000) shares
were represented in person or by proxy, the following actions were
approved:  (I) the name of the Company was changed to Appalachian Oil & Gas
Company, Inc.; (ii) the authorized Common Stock was increased from Fifty
million (50,000,000) to one hundred million (100,000,000) shares; (iii) the
outstanding three million six hundred sixty-five thousand (3,665,000)
shares of Common Stock split on a two for one basis; (iv) individuals who
were officers, directors or affiliates of Ratliff and/or Universal were
elected to comprise the Company's Board of Directors; and, (v) the Company
was thereafter to purchase certain assets of Ratliff and Universal as
described in a brochure presented on behalf of the sellers, in exchange for
five million (5,000,000) shares of its Common Stock, on a post split basis,
subject to satisfying certain conditions relating to the audit of such
assets.

At the time of purchase, Ratliff was a dormant corporation and Universal
was engaged in the acquisition and development of oil and gas properties. 
The Company has continued some of the oil and gas operations so acquired.

From 1982 into late 1985 the Company's activities involved lease
acquisitions and the sale of interests in wells to be drilled on such
leases.  Income was principally derived from the difference between the
aggregate purchase price obtained for the interests in a well sold to
others and the actual cost to drill and complete the particular well.

                                     3<PAGE>

In December 1985, new directors were elected and they continued to drill
wells on developed leases.  The Company also sought to increase its sales
of natural gas from wells in which it held interests.

On August 15, 1989, a group of shareholders filed a complaint for mandamus
and other relief pursuant to section 13D of the Securities and Exchange
Commission regulations to review the books and records of the company and
conduct a shareholders' meeting.  This suit was filed in the Chancery Court
of Hamilton County, Tennessee.  The Court upheld the complaint and allowed
the plaintiffs to review the books and conduct a shareholders' meeting.  At
that time new Directors and Officers were elected by a meeting of the
Shareholders.  

The new management and directors exercised the best efforts to attempt to
rectify a situation of field wells that had gone into disrepair, wells that
were non-productive and field equipment that needed to be replaced or
repaired.  For the year 1991 the shareholders elected Raymond Connelly as
Chairman of the Board and Director, Russell Ratliff as officer and
Director, and Tyler Tait as Secretary and Director.

In 1992, the shareholders elected Raymond Connelly as Chairman of the Board
of the Corporation, John R. (Jack) Tait as President/CEO and Director and
his son, Tyler Tait Secretary and Director.

In September 1992, at the annual meeting of the shareholders of the
Company, Barry L. Fly was elected as a Director of the corporation.  In
January 1993, John R. Tait submitted his resignation as President and
Director of the Company, Tyler Tait submitted his resignation as
Director/Secretary-Treasurer of the Company, and Brent Anderson submitted
his resignation as vice-president of the Company.

In January 1993, upon the acceptance of the resignations of Messrs. Tait,
Tait and Anderson, the Board of Directors of the Company elected Mark S.
Moore and Brad L. Fly as Directors of the Corporation.

Barry L. Fly was elected Secretary of the corporation and Brad L. Fly was
elected as Treasurer of the corporation in January 1993.

In April 1993, William Goodwin accepted the position of President with the
Company.  Mr. Goodwin resigned as President on February 22, 1994.  On March
9, 1994,  Mark S. Moore was elected President and CEO of the corporation by
the Board of Directors.

The Company moved its corporate offices on June 1, 1994, to 240 Mayfield
Drive, Suite #106, Smyrna, Tennessee 37167.

The Company had successfully gained approval of a plan of reorganization
under Chapter 11 of the United States Bankruptcy Code in the United States
Bankruptcy Court for the Southern District of Kentucky.  The plan was
approved by the Court in March 1992.  In January 1993, the Company was able
to successfully satisfy all provisions of the confirmed plan by
successfully satisfying all unsecured debt according to the plan confirmed
by the Untied States Bankruptcy Court for the Southern District of
Kentucky.  The Corporation also successfully made payments of $25,000 per
month to the secured creditor, Valley Bank of Sweetwater, Tennessee on a
monthly basis according to the confirmed plan of reorganization by the
United States Bankruptcy Court.

                                     5<PAGE>
On February 1, 1996, the Company sold 60.0% of all of its rights, title and
interest in machinery and equipment, land, oil and gas well leaseholds to
K. Petroleum, Inc., an Ohio Corporation.  Further, on February 1, 1996, the
Company signed an operating agreement with K. Petroleum, Inc., (KPI), an
Ohio Corporation, whereby KPI, would be sole operator of the properties. 
KPI shall conduct and direct and have full control of all operations and
the properties.  Under terms of the operating agreement KPI shall operate
the properties as an independent contractor on behalf of the parties to the
Agreement.

Since the sale of 60% of the assets to KPI, the Company has conducted no
business other than to pay its creditors with the proceeds of the sale, and
collect the royalties from KPI. 

In December 1995, Mark S. Moore resigned as President and CEO of the
Company.  In January 1996, the Board of Directors appointed Mr. Raymond
Connelly as President and CEO of the Company.  

In January 1996, Mr. Brad L. Fly resigned as Treasurer and Member of the
Board of Directors of Appalachian Oil and Gas Company.

In March 1996, Mr. Brad Fly, was re-appointed to its Board of Directors of
the Company. 

In March 1996, the Board of Directors authorized the sale of an undivided
60% of its assets in Clay County, Kentucky for $450,000 to K Petroleum,
Inc.

In May 1996, Mr. Barry L. Fly, resigned as Secretary and Director and Mr.
Brad L. Fly resigned as a director.  The Board appointed Mr. Bill Jones,
Mr. Turner Snodgrass and Mr. Larry Cortin as Board Members. 

In 1996, the Company moved its offices from Smyrna, Tennessee to Nashville,
Tennessee.

In 1997, Mr. David Cooley was appointed to the Board of Directors.

For the past two years, the Company sales have been solely from royalties
from the production of Natural Gas.  Oil production has been negligible.

Business

Drilling Program    
----------------

During the period after the sale of the 60% interest in its oil and gas
wells, royalties from gas sales have declined and ceased in the fourth
fiscal quarter of the year ended June 30, 1998.  The Company has requested
production records from K Petroleum, but has not been able to obtain them
as of the date of this report.

                                     6
<PAGE>
Competition and Markets
-----------------------

The competitive business conditions which affect the Company's Operating
Contractors competitive position in the industry include the price of gas
as determined by supply and demand, the availability of gas from the
Company and other competitors, weather conditions, and the extremely high
cost of the compression and transportation of the gas that is required of
the Operating Contractors because of the existing pressure conditions of
the Company's sole purchaser, Somerset Gas Services.

There are a large number of companies, partnerships and individuals engaged
in exploration, development and production of oil and gas properties in the
area including, but not limited to, Delta Gas, Wiser Oil Company, Petro
Flow, Incorporated, PXT, Incorporated, Southern Gas Company, Incorporated
and Midamco, Incorporated.  

Government Regulation
---------------------

Activities of the Company are regulated by several state and federal
agencies and by several state and federal acts.  The Company is regulated
by the Environmental Protection Agency, the United States Forestry Service,
the United States Department of Agriculture, United States Bureau of Land
Management, Kentucky Public Service Commission, Kentucky Environmental
Protection Agency- Division of Water, and the Kentucky Bureau of Mines and
Minerals.  Specific acts and statutes which govern the Company include the
Federal Environmental Protection Act, the Kentucky Environmental Protection
Act and Clean Water and Air Act, the Kentucky Public Service Commission Law
Annotated, Kentucky revised statutes Chapter 74, and the Commonwealth of
Kentucky, Department of Mines and Minerals permitting drilling operations
and the approval of drilled wells for production.

Government approval of the Company's Operating Agents operation is mandated
pursuant to the Kentucky Public Service Commission Law Annotated, Kentucky
revised statutes Chapter 74.

While existing and probable governmental regulations on the business are
time consuming, the Company believes its Operating Agents to be in
compliance with all regulations and that said compliance has not resulted
in any significant expense or competitive disadvantage to the Company.

Employees
---------

As of June 30, 1996, the Company employed one person,  Patsy Fly as Office
Manager.


Item 2. Properties
------------------

The following table sets forth the approximate gross and net acres of
undeveloped and developed oil and gas properties of the Company at June 30,
1996.  The Company has an undivided 40% interest in these wells.
<TABLE>
<CAPTION>
                                        UNDEVELOPED
State          Gross Acres              Net Acres
--------       -----------              ---------
<S>           <C>                      <C>
Kentucky        1,100.00                   908.00
      TOTAL     1,100.00                   908.00

                                     7

                                        DEVELOPED
State          Gross Acres              Net Acres
--------       -----------              ---------
Kentucky         2,910                    2,206
    TOTAL        2,910                    2,206
</TABLE>

The Company's oil and gas interests are located  in Clay County in
Kentucky.

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

The table below shows the number of the Company's gross and net oil and gas
wells as of June 30, 1995.  Gross wells are the total number of wells in
which the Company owns a working interest, and net wells refer to the
average of the fractional net revenue interests owned by the Company in
gross wells.  Dry holes are not included.

<TABLE>
<CAPTION>
          Total     Total              Oil              Gas
State     Gross     Net         Gross   Net       Gross   Net
--------  -----     ------      -----   ----      ------  ------
<S>       <C>       <C>         <C>     <C>       <C>     <C>
Kentucky  30        57.245      0       .0000     30      57.245
</TABLE>

The Company has made no attempt to establish a drilling program.    

Present Activities
------------------

There are no wells in the process of drilling at the present time.

Delivery Commitments
--------------------

The Company has no obligations to provide a fixed or returnable quantity of
oil or gas under existing contracts or agreements.

Item 3. Legal Proceedings
-------------------------
Federal Bankruptcy Court Filing
-------------------------------

On February 1, 1991, the Company filed for relief under Chapter 11 of the
Federal bankruptcy laws in the United States Bankruptcy Court for the
Eastern District of Kentucky.  The Court mandated that the Company
management continue operations as debtor-in-possession.  On March 25, 1992,
a plan of reorganization was approved by the Court and implemented by
Company management.  The plan required final payment to creditors on or
before September 25, 1992.  Payment in full was made to all unsecured
creditors in January 1993.  Monthly payments were made on a timely basis
according to the provisions of the confirmed plan to Valley Bank in
Sweetwater, Tennessee, the only secured creditor, in the amount of $25,000
per month until March 11, 1993, when the indebtedness to Sweetwater Bank
was satisfied in full by the payment of $172,348.49, as a result of the re-
financing of the Promissory Note to the bank with private individuals.  In
1994 the Company received a court order from the United States Federal
Bankruptcy Court in Kentucky fully dismissing the bankruptcy case, in which
the company was recognized as having fully completed its obligations under
the Chapter 11 Plan of Reorganization and successfully received a full
discharge of all obligations pursuant to the bankruptcy.

                                     8<PAGE>

Goldeneye, Inc. and Clyde Fuller vs. Appalachian Oil & Gas Company, Inc.
------------------------------------------------------------------------

The case was filed on August 17, 1993 seeking payment of royalties due to
the Leaseholder.  The Operator paid under the terms of the contract and
case was dismissed on March 14, 1994 in Clay County Circuit Court,
Kentucky.

State of Tennessee On the Relation of James E. Ables, et. al. vs.
-----------------------------------------------------------------
Appalachian Oil & Gas Company, Inc. and Clyde M. Fuller.
--------------------------------------------------------
           
On August 15, 1989 the plaintiffs (Section 13-D Group) filed a complaint
for mandamus and other relief to be allowed to review the books and records
of the Company and conduct a shareholder meeting, and the defendants (then
Company management) moved for an Order to Restrain plaintiffs from
conducting an adjourned shareholders meeting on December 20, 1989 in
Nashville, Tennessee.  The Defendants appealed the interlocutory denial of
the request for restraining order.  On December 14, 1989 the court ordered
then president Clyde M. Fuller, to post a personal bond for $10,000.00 and
should Court of Appeals deny defendant's application, the bond shall be
liable to pay plaintiffs (13-D Group) their reasonable expenses with
solicitation of proxies caused by staying shareholders meeting of December
10, 1989 together with the costs of the appeal.  The Chancery Court,
Hamilton County, Tennessee denied the appeal and taxed the costs to
defendant/Fuller.

On March 11, 1994, Clyde M. Fuller renewed his petition for release of his
personal bond of $10,000.00.  Plaintiffs (then 13-D Group, now present
Company Management has simultaneously moved the Court to fix damages caused
by defendant in attempting to reverse Order of the Court for the sum of
$24,176.47, or alternatively to the extent of Mr. Fuller's bond. 

On March 22, 1995, the Chancellor of the Chancery Court, Hamilton County
Court Tennessee ruled in favor of the petitioner, Clyde M. Fuller, and
released the personal bond of $10,000.00 to Mr. Fuller by court opinion.

Item 4. Submission of Matters to a Vote of Security Holders
-----------------------------------------------------------

The annual meeting of Shareholders of the Company was held on September 12,
1992.  In addition to the election of directors and the approval of
auditors, the Shareholders approved an amendment to the Articles of
Incorporation to increase the par value of the Common Stock of the Company
from one-tenth of a cent to one cent per share, with a resultant stock
split of one share of the new one cent par value common voting stock for
each ten shares of the old one-tenth of a cent par value common voting
stock issued and outstanding.  Of the shares present at the annual meeting,
36,108,596 voted for the amendment and 3,670 voted against it;  no shares
abstained.  The Board of Directors set the date for the reverse split as
November 20, 1993.

On March 29, 1995 the annual meeting of the stockholders of Appalachian Oil
& Gas Company, Inc. was held at the company's corporate headquarters, 240
Mayfield Drive, Suite #106, Smyrna, Tennessee 37167.

                                     9<PAGE>

In addition to the election of directors and the approval of auditors, the
Shareholders approved changing of the state of incorporation from Utah to
the State of Tennessee.  1,401,330 shares presented at the meeting voted in
favor of these items and 20 shares voted against.

                                  PART II

Item 5. Market for Registrant's Common Equity and Related Matters Market
--------------------------------------------------------------------------
Price of Common Stock
---------------------

The following over-the-counter market quotations reflect inter-dealer
prices, without retain markup, markdown or commission, and may not
necessarily represent actual transactions.  The range of reported high and
low bid quotations was derived from a variety of sources, including
quotations published by the National Quotation Bureau, Inc. and other 
over-the-counter broker/dealers.

<TABLE>
<CAPTION>
For the Quarter Ended              High      Low
----------------------             ----      ---
<S>                                <C>       <C>
September 30, 1995                 .18       .03
December 31, 1995                  .18       .03
March 31, 1996                     .12       .03
June 30, 1996                      .12       .03
</TABLE>

At June 30, 1996, the Company had approximately 750 shareholders of record.

Dividends
---------
There have been no dividends declared since the date of the Company's
organization and no dividends are contemplated to be paid in the
foreseeable future.  It will continue to be the Company's policy to expend
any earnings in developing its gas and oil business.

Item 6. Selected Financial Data
-------------------------------
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
<S>                   <C>          <C>         <C>          <C>          <C>       
                        06/30/96     06/30/95    06/30/94     06/30/93     06/30/92
-------------------------------------------------------------------------------------
Revenues                $357,273     $539,395    $721,179   $1,069,097     $531,966
-------------------------------------------------------------------------------------
Income (Loss) from 
Continuing Operation 
Per Common Share       ($73,494)   ($197,130)    $121,727    ($30,771)   ($280,287)
-------------------------------------------------------------------------------------
Income (Loss) from 
Continuing Operations     (0.02)      (0.05)         0.04       (.001)       (0.17)
-------------------------------------------------------------------------------------
Total Assets            $287,591     $633,533    $851,628     $790,615   $1,107,718
-------------------------------------------------------------------------------------
Long-Term Obligations       $-0-     $129,490    $166.242     $434,596     $593,491
-------------------------------------------------------------------------------------
Cash Dividends Declare       N/A          N/A         N/A          N/A          N/A
-------------------------------------------------------------------------------------
</TABLE>
                                       10<PAGE>

The gain on sale of assets resulted from the sale of 60.0% of the assets to K.
Petroleum, Inc., (KPI).  The significant decrease in total assets also resulted
form that sale.

Item 7. Management's Discussion and Analysis of Financial Conditions and
------------------------------------------------------------------------
Results of Operations
---------------------

The following discussion should be read in conjunction with the Financial
Statements and their related notes, which are included elsewhere in this
report.

Plan of Operation
-----------------

The Company plans to sell the remaining 40.0% of its assets relating to its oil
and gas properties when that is accomplished the Company will have no
significant assets.

Results of Operations
---------------------

Expenses were relatively the same during the current year up to the sale of the
60% interest to K Petroleum, Inc., (KPI).  Since the sale expenses have become
smaller.  The Company currently has one employee and continues to rent office
space from its President. 

Item 8. Financial Statements
----------------------------

The financial statements begin on Page 15.

Item 9. Changes in and Disagreements with Accountants on Accounting and 
-----------------------------------------------------------------------
Financial Disclosure
--------------------
The Company did not re-appoint York, Neel & Company as its Certified Public
Accountant.  There were no disagreements with York, Neel & Company.

The Company appointed Schvaneveldt & Company to perform its certified audit and
assist in the other accounting requirements for the Company. 

                                    PART III

Item 10. Directors and Executive Officers of the Registrant
-----------------------------------------------------------

The following list sets forth the names and ages of all Directors and Executive
Officers of the Company, indicates the position held by each and their length
of service.
<TABLE>
<CAPTION>
Name                          Position            Assumed Office
--------------------          ---------           --------------
<S>                           <C>                 <C>
Raymond A. Connelly           Director/           April 1990 
Age 63                        Chairman            

Turner Snodgrass              Director            May 1996
Age 43


                                       11


Bill Jones                    Director/           May 1996
Age 66                        Secretary/Treasurer
</TABLE>

The following is a brief resume of the business experience of the Company
Directors and Officers.

Raymond A. Connelly
-------------------
Mr. Connelly is a self-employed businessman.  He has been involved in limited
partnerships promoting oil and gas development since 1985.  He is President and
CEO of First Place Corporation and President of Central Paint and Body Shop in
Nashville, Tennessee.  He has been a Director and Officer of the Company since
1989.  Mr. Connelly, for the last five years, has had business experience in
the areas of oil and gas serving as an officer and director of Appalachian Oil
& Gas, Inc., in the repair of automobiles and sale of automobile parts.

Turner Snodgrass
----------------

Mr. Snodgrass has been a practicing attorney in Nashville, Tenneessee since the
year 1980.  His practice is concertrated in general business law.  Mr.
Snodgrass has been an investor in gas and oil for several years.  For the past
four years he has been involved in the development of a 152-unit apartment
complex in Nashville.

Bill Jones
----------
Mr. Jones is a self-employed businessman.  He has been involved in the gas and
oil business since 1964.  He has been involved in numerous other businesses,
but basically gas and oil.  He started Easter Petroleum Corporation in 1969 and
sold his interest in 1991.

Item 11. Compensation
---------------------

Annual Compensation Paid to Officers and Directors for Fiscal Year
------------------------------------------------------------------

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
Name &         Fiscal Salary  Bonus  Other         Restricted Securities LTIP
Principal      Year   ($)     ($)    Annual        Stock      Underlying Payouts
Position                             Compensation  Awards     Options/   ($)
                                     ($)           ($)        SAR(S) #
<S>            <C>    <C>     <C     <C>           <C>        <C>        <C>
----------------------------------------------------------------------------------
Ray S. 
Connelly       1996   $-0-    $-0-   $-0-          $-0-       $-0-       $-0- 
----------------------------------------------------------------------------------
Turner 
Snodgrass      1996   $-0-    $-0-   $-0-          $-0-       $-0-       $-0-
----------------------------------------------------------------------------------
Bill Jones     1996   $-0-    $-0-   $-0-          $-0-       $-0-       $-0-
----------------------------------------------------------------------------------
</TABLE>
                                                  12<PAGE>

Item 12. Security Ownership of Certain Beneficial Owners and Management
------------------------------------------------------------------------

The following sets forth, as of June 30, 1995, certain information regarding
ownership of the common stock of the Company by (i) all persons known by the
Company to be the beneficial owners of as much as five percent (5%) of the
outstanding common stock of the company, (ii) each Officer and Director and
(iii) all Officers and Directors as a group. 

<TABLE>
<CAPTION>
------------------------------------------------------------------------
Title of         Name & Address of           Amount         Percent
Class            Beneficial Owner                           of Class
------------------------------------------------------------------------
<S>              <C>                         <C>            <C>
Common Stock     Raymond A. Connelly
                 701 2nd Avenue No.
                 Nashville, Tennessee (1)    744,066        17.7
------------------------------------------------------------------------
Common Stock     Aymkone PTY, LTD
                 Sydney, Australia           750,000        17.8
------------------------------------------------------------------------
Common Stock     Industrial Resources, Inc.
                 Knoxville, Tennessee        240,000         5.7
------------------------------------------------------------------------
The Company's directors and executive officer owned a total of 1,734,066 shares
of the Company's common stock.

(1) Includes 722,667 (17.1%) owned by First Place Corporation of Nashville,
Tennessee.  Mr. Connelly is President of First Place Corporation.

Changes In Control
------------------

There are no arrangements contemplated at the present time which may result in
the change in control of the small business issuer.

Item 13. Certain Relationships and Related Transactions
-------------------------------------------------------

Raymond Connelly, Director and Chairman of the Board of the Company, is an
Officer and Shareholder of First Place Corporation.  First Place Corporation
owns 7,226,667 shares of Common Stock. 

There were no material transactions, or series of similar transactions, during
the Company's last three calendar years, or any currently proposed
transactions, or series of similar transactions, to which the Company or any of
its subsidiaries was or is to be a party, in which the amount involved exceeded
$60,000, and in which any promoter or founder or any member of the immediate
family of any of the foregoing persons, had an interest.

There were no reports required by Section 16 (a) that were not filed on a
timely basis.



                                       13<PAGE>

                      Appalachian Oil & Gas Company, Inc.

                              Financial Statements

                              June 30, 1996 & 1995



                                       14<PAGE>
/Letterhead/
                             Schvaneveldt & Company
                          Certified Public Accountant
                       275 East South Temple, Suite #300
                           Salt Lake City, Utah 84111
                                 (801) 521-2392

Darrell T. Schvaneveldt, C.P.A.


                          Independent Auditors Report
                          ----------------------------

Board of Directors
Appalachian Oil & Gas Company, Inc.

I have audited the accompanying balance sheets of Appalachian Oil & Gas
Company, Inc., as of June 30, 1996, and the related statements of operations,
stockholders' equity, and cash flows for the years ended June 30, 1996 & 1995. 
These financial statements are the responsibility of the Company's management. 
My responsibility is to express an opinion on these financial statements based
on my audit. 

I conducted my audit in accordance with generally accepted auditing standards. 
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the  financial statements are free of material
misstatements.  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 the significant
estimates made by management, as well as evaluating the overall financial
statements presentation.  I believe that my audit provides a reasonable basis
for my opinion. 

The accompanying financial statements of Appalachian Oil & Gas Company, Inc.,
as of June 30, 1995, were audited by other auditors whose report thereon dated
April 24, 1996, expressed on unqualified opinion on those statements. 

In my opinion, the aforementioned financial statements present fairly, in all
material respects, the financial position of Appalachian Oil & Gas Company,
Inc., as of June 30, 1996, and the results of its operations and its cash flows
for the years ended June 30, 1996 & 1995, in conformity with generally accepted
accounting principles.



/S/ Darrell T. Schvaneveldt
Salt Lake City, Utah 
April 6, 1998



                                       15

<PAGE>
                      Appalachian Oil & Gas Company, Inc.
                                 Balance Sheets
                         June 30, 1996 & June 30, 1995


</TABLE>
<TABLE>
<CAPTION>
                                                            June         June 
                                                        30, 1996     30, 1995 
                                                     ------------ ------------
<S>                                                 <C>           <C>

Current Assets
--------------
  Cash & Cash Equivalents                           $    104,123  $    12,602 
  Accounts Receivable - Trade                             30,437       72,648 
                                                     ------------ ------------

      Total Current Assets                               134,560       85,250 

Property & Equipment
--------------------
  Oil & Gas Properties                                   140,184      626,095 
  Other Property & Equipment                             326,574      747,053 
                                                     ------------ ------------
      Total Property & Equipment                         466,758    1,373,148 

  Less Accumulated Depreciation, Depletion
   & Amortization                                        313,727      824,865 
                                                     ------------ ------------
      Net Property & Equipment                           153,031      548,283 
                                                     ------------ ------------
      Total Assets                                  $    287,591  $   633,533 
                                                    ============= =============
</TABLE>

   The accompanying notes are an integral part of these financial statements

                                       16<PAGE>
                      Appalachian Oil & Gas Company, Inc.
                           Balance Sheets -Continued-
                         June 30, 1996 & June 30, 1995
<TABLE>
<CAPTION>
                                                            June         June 
                                                        30, 1996     30, 1995 
                                                     ------------ ------------
<S>                                                 <C>           <C>
Current Liabilities
-------------------
  Current Portion of Long-Term Debt                 $        -0-  $    32,628 
  Notes Payable - Related Party                              -0-      138,500 
  Accounts Payable;
   Trade                                                  12,345       24,674 
   Royalties                                                 -0-       44,193 
   Transported Gas                                           -0-       51,418 
  Accrued Expenses                                         2,000        5,352 
                                                     ------------ ------------

      Total Current Liabilities                           14,345      296,765 

      Long Term Debt Less Current Portion                    -0-       96,862 
                                                     ------------ ------------
      Total Liabilities                                   14,345      393,627 

Commitments & Contingencies
---------------------------
  Stockholders' Equity
  Common Stock, Par Value $0.01 Per Share, 
   100,000,000 Shares Authorized, 3,135,795 &
   3,235,795 Shares Issued & Outstanding                  31,358       32,358 
  Additional Paid In Capital                           1,814,342    1,813,342 
  Retained Deficit                                  (  1,572,454) ( 1,605,794)
                                                     ------------ ------------
      Total Stockholders' Equity                         273,246      239,906 
                                                     ------------ ------------
      Total Liabilities & Stockholders' Equity      $    287,591  $   633,533 
                                                     ============ ============

</TABLE>

   The accompanying notes are an integral part of these financial statements

                                       17

<PAGE>
                      Appalachian Oil & Gas Company, Inc.
                            Statement of Operations
                    For the Years Ended June 30, 1996 & 1995
<TABLE>
<CAPTION>

                                                            1996         1995 
                                                     ------------ ------------
Revenues
--------
<S>                                                 <C>           <C>
  Oil & Gas Sales                                   $    355,225  $   531,943 
  Drilling Programs                                          -0-        2,418 
  Other                                                    2,048        5,034 
                                                     ------------ ------------
     Total Revenues                                      357,273      539,395 

Costs & Expenses
----------------
  Well Abondonments/Impairments                              -0-      121,853 
  Other Operating Expenses                               244,232      220,135 
  Depreciation, Depletion & Amortization                  52,086       83,245 
  Interest                                                21,232       24,368 
  Loss on Sale of Property & Equipment                       -0-       11,545 
  General & Administrative                               113,217      275,379 
                                                     ------------ ------------
     Total Costs & Expenses                              430,767      736,525 
     Loss from Operations                           (     73,494) (   197,130)

Other Income
------------
  Sale of Oil & Gas Leases                               106,834          -0- 
                                                     ------------ ------------
   Net Income (Loss) Before Minority Interest             33,340  (   197,130)
   Minority Interest                                         -0-        2,378 
                                                     ------------ ------------
   Net Income (Loss) After Minority Interest              33,340  (   199,508)
                                                     ------------ ------------
Income Taxes
------------
  Current Tax Expenses                                       -0-          -0- 
  Benefits of Operating Loss Carryforwards                   -0-  (    36,700)
                                                     ------------ ------------
     Total Income Taxes                                      -0-  (    36,700)

  Income (Loss) Before Extraordinary Items                   -0-  (   162,808)
  Extraordinary Item, Net Income taxes Of $36,700            -0-       71,300 
                                                     ------------ ------------

     Net Income (Loss)                              $     33,340  ($   91,508)
                                                     ============ ============
  Income (Loss) Per Share
   Before Extraordinary Item                        $        .01  ($     0.05)
   Extraordinary Item                                        -0-         0.02 
   Net Income (Loss)                                $        .01  ($      .03)

</TABLE>

    The accompanying notes are an integral part of these financial statements

                                       18
<PAGE>
                       Appalachian Oil & Gas Company, Inc.
                        Statement of Stockholders' Equity
                       From July 1, 1993 to June 30, 1996

<TABLE>
<CAPTION>
                                                                   Additional 
                                            Common       Paid In  Accumulated 
                               Shares        Stock       Capital      Deficit 
                         -----------------------------------------------------
<S>                        <C>          <C>         <C>           <C>
Balance, July 1, 1993       4,202,399   $   42,024  $  1,743,676  ($1,636,013)

Common Stock Canceled      (1,026,604)  (   10,266)       10,266 

Common Stock Issued            60,000          600        59,400 

Net Income for the Year
Ended June 30, 1994                                                   121,727 
                         -----------------------------------------------------
Balance, June 30, 1994      3,235,795       32,358     1,813,342  ( 1,514,286)

Net Loss for the Year
Ended June 30, 1995                                               (    91,508)
                         -----------------------------------------------------
Balance, June 30, 1995      3,235,795       32,358     1,813,342  ( 1,605,794)

Shares Returned to the 
Company for Cancellation   (  100,000)  (    1,000)        1,000 

Net Income for the Year
Ended June 30, 1996                                                    33,340 
                         -----------------------------------------------------
Balance, June 30, 1996      3,135,795   $   31,358  $  1,814,342  ($1,572,454)
                         =====================================================

</TABLE>

   The accompanying notes are an integral part of these financial statements

                                       19


<PAGE>
                      Appalachian Oil & Gas Company, Inc.
                            Statement of Cash Flows
                    For the Years Ended June 30, 1996 & 1995
<TABLE>
<CAPTION>
                                                          1996           1995 
                                                   ------------   ------------
<S>                                                <C>            <C>
Cash Flows from Operating Activities
------------------------------------
 Net Income (Loss)                                 $    33,340    ($   91,508)
 Adjustments to Reconcile Net Income (Loss)
  to Net Cash Provided by Operating Activities
   Depreciation, Depletion & Amortization               52,086         83,245 
   Well Abandonments & Impairments                         -0-        121,853 
   Loss on Sale of Property & Equipment                    -0-         11,545 
   Gain on Sale of Properties                      (   106,834)         2,378 
  Changes in Operating Assets & Liabilities                    
   (Increase) Decrease in Accounts Receivable           42,211          9,518 
   Increase (Decrease) in Accounts Payable         (   107,940)   (    85,532)
   Increase (Decrease) in Accrued Expenses         (     3,352)   (       303)
                                                   ------------   ------------
     Net Cash Provided by (Used In)
     Operating Activities                          (    90,489)        51,196 
                                                   ------------   ------------
Cash Flows from Investing Activities
------------------------------------
 Purchases of Property & Equipment                         -0-    (    11,810)
 Purchase from Sale of Property & Equipment            450,000            -0- 
 Purchases of Oil & Gas Properties                         -0-    (    11,550)
 Investment in Joint Venture                               -0-    (   109,000)
                                                   ------------   ------------
     Net Cash Provided by (Used In)
     Investing Activities                              450,000    (   132,360)

Cash Flows from Financing Activities
------------------------------------
 Proceeds from Notes Payable                               -0-         73,500 
 Principal Payments on Notes Payable               (   138,500)   (     7,500)
 Principal Payments on Long-Term Debt              (   129,490)   (    36,751)
 Dividends Paid                                            -0-    (     2,085)
                                                   ------------   ------------
     Net Cash Provided by (Used In) 
      Financing Activities                         (   267,990)        27,164 
                                                   ------------   ------------
     Increase (Decrease) in Cash & 
        Cash Equivalents                                91,521    (    54,000)

     Cash & Cash Equivalents,
        Beginning of Year                               12,602         66,602 
                                                   ------------   ------------
     Cash & Cash Equivalents, End of Year          $   104,123    $    12,602 
                                                   ============   ============

Disclosures from Operatin Activities
------------------------------------
 Interest                                          $    21,232    $    24,368 
 Taxes                                                     -0-            -0- 

</TABLE>

   The accompanying notes are an integral part of these financial statements

                                       20<PAGE>
               Appalachian Oil & Gas Company, Inc. And Subsidiary
                         Notes to Financial Statements

NOTE #1 - Summary of Significant Accounting Policies
----------------------------------------------------

     Significant accounting policies of the Company are as follows:

a.   Principles of Consolidation (Applicable to fiscal year 1995 only).

     The consolidated financial statements include the accounts of Appalachian
Oil & Gas Company, Inc. (AOGI) and its subsidiary, TKGC #1 Limited Partnership.
All significant intercompany accounts and transactions have been eliminated in
consolidation.

b.   Business Activity and Major Customers

     AOGI sold the controlling interest in its oil and gas producing properties
in February of 1996.  AOGI  has no activities in extracting oil or gas or in
marketing the production of oil and gas.  It is AOGI's intention to sell its
remaining 40% interest in the oil and gas properties and the related assets and
to seek other business opportunities.

c.    Cash and Cash Equivalents

     Cash includes amounts on hand and in financial institutions. Cash
equivalents include all highly liquid investments with an original maturity of
three months or less when purchased.

d.    Allowance for Losses

     AOGI uses the specific write-off method to provide for doubtful accounts
since experience and management's estimation indicates an adequate allowance
for such accounts is immaterial.

e.    Oil and Gas Properties

     The Company uses the successful efforts method of accounting for oil and
gas producing activities. Costs to acquire mineral interests in oil and gas
properties, to drill and equip exploratory wells that find proved reserves, and
to drill and equip development wells are capitalized. Costs to drill
exploratory wells that do not find proved reserves, geological and geophysical
costs, and costs of carrying and retaining unproved properties are expensed.

     Unproved oil and gas properties that are individually significant are
periodically assessed for impairment of value, and a loss is recognized at the
time of impairment by providing an impairment allowance. Other unproved
properties are amortized based on the Company's experience of successful
drilling and average holding period. Capitalized costs of producing oil and gas
properties, after considering estimated dismantlement and abandonment costs and
estimated salvage values, are depreciated and depleted by the unit-of-production
method. Support equipment and other property and equipment are
depreciated over their estimated useful lives.


                                       21<PAGE>
               Appalachian Oil & Gas Company, Inc. And Subsidiary
             Notes to Consolidated Financial Statements -Continued-

NOTE #1- Summary of Significant Accounting Policies -Continued-
---------------------------------------------------------------

e.   Oil and Gas Properties -Continued-

     The costs associated with dismantlement and site restoration are
considered immaterial based on past history of AOGI.

     On the sale or retirement of a complete unit of a proved property, the
cost and related accumulated depreciation, depletion, and amortization are
eliminated from the property accounts, and the resultant gain or loss is
recognized. On the retirement or sale of a partial unit of proved property, the
cost is charged to accumulated depreciation, depletion, and amortization with a
resulting gain or loss recognized in income.

     On the sale of an entire interest in an unproved property for cash or cash
equivalent, gain or loss on the sale is recognized, taking into consideration
the amount of any recorded impairment if the property had been assessed
individually. If a partial interest in an unproved property is sold, the amount
received is treated as a reduction of the cost of the interest retained.

f.    Income Taxes

     Deferred income taxes are provided for significant temporary differences
in recognition of revenues and expenses for financial reporting and income tax
reporting purposes.

     For Federal income tax purposes, the Company deducts certain exploration
and developmental costs, which are capitalized and amortized for financial
reporting purposes. The Company uses statutory depletion for income tax
reporting.

     Investment tax credits are accounted for as a reduction of income tax
expense in the year taxes payable are reduced.

g.    Minority Interest

     Effective April 15, 1994, AOGI acquired 53.35 percentage interest in the
TKGC #1 Partnership for $28,000 in cash and a partial assignment of an oil and
gas farm out agreement. The acquisition was accounted for as a purchase.

     AOGI's 53.35 percentage interest requires that TKGC #1's operations be
included in the consolidated financial statements. The remaining interest
(46.65%) is shown as "minority interest" in the June 30, 1994 consolidated
balance sheet. TKGC #1 did not have any operations as of June 30, 1994. April
1, 1995, the TKGC #1 Partnership was dissolved with each partner receiving
their percentage ownership in two oil and gas wells.


                                       22
<PAGE>
               Appalachian Oil & Gas Company, Inc. And Subsidiary
             Notes to Consolidated Financial Statements -Continued-

NOTE #1 - Summary of Significant Accounting Policies -Continued-
----------------------------------------------------------------
h.    Estimates

     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 and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

I.    Environmental Costs

     Environmental expenditures that relate to current operations are expensed
or capitalized as appropriate. Liabilities are recorded when environmental
assessments are probable and the amounts can be reasonably estimated.

NOTE #2 -  Property and Equipment
---------------------------------

     A summary of property and equipment is as follows:
<TABLE>
<CAPTION>
                                                          1996           1995 
                                                   ------------   ------------
<S>                                               <C>            <C>          
     Proved oil and gas properties                $    140,184 
     Less accumulated depreciation,
       depletion and amortization                       88,610         51,574 
                                                   ------------   ------------

     Land                                               12,410 
     Gas gathering system                              196,334 
     Machinery and equipment                           112,788 
     Office furniture and equipment                      5,042 
                                                   ------------   ------------
          Other property and equipment                 326,574 

     Less accumulated depreciation                     225,117 
                                                   ------------   ------------
                                                       101,457 
                                                   ------------
     Net property and equipment                   $    153,031 
                                                   ============   ============
</TABLE>

AOGI incurred depreciation expense of; $52,086, and $67,373, for the years
ended June 30, 1996, and 1995, respectively.



                                       23
<PAGE>
               Appalachian Oil & Gas Company, Inc. And Subsidiary
             Notes to Consolidated Financial Statements -Continued-

NOTE #3 - Income Taxes
----------------------
At June 30, 1995, the Company had net operating loss and investment tax credit
carryforwards for income tax purposes of approximately $1,394,000 and $30,000,
respectively, which expire on or before June 30, 2007. For financial reporting
purposes, a valuation allowance of $484,160 has been recognized to offset the
deferred tax assets related to these items

The net tax effects of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used
for income tax purposes are reflected in deferred income taxes. Significant
components of the Company's deferred tax assets and liabilities as of June 30,
1996 and 1995 are as follows:

<TABLE>
<CAPTION>
                                                             1996          1995 
                                                      ------------  ------------
<S>                                                  <C>           <C>
     Deferred tax assets:
       Net operating loss                            $    462,624 
       Investment tax credit                               10,200 
                                                      ------------  ------------
     Total deferred tax assets                            472,824 
     Valuation allowance for
       deferred tax assets                           (    472,824)
                                                      ------------  ------------

          Deferred tax liabilities                            -0- 
                                                      ------------  ------------
          Net deferred tax asset                     $        -0- 
                                                      ============  ============
</TABLE>

NOTE #4 - Statement of Cash Flows Disclosures
---------------------------------------------
AOGI paid $21,232 and $24,368, in interest during the years ended June 
30, 1996, and 1995, respectively.

NOTE #5 - Earnings (Loss) Per Share
-----------------------------------

Earnings (loss) per share are based on the weighted average number of shares
outstanding of 3,235,795, for the years ended June 30, 1996, and 1995, 
respectively.

NOTE #6 - Sale of Operating Assets & Well Interest
--------------------------------------------------

Effective March 27, 1996, AOGI sold 60% of their operating assets and 60% 
of their well interests for $450,000. The company that purchased the assets 
began operating and managing the majority of AOGI's wells as of February 1, 
1996.

                                          24
<PAGE>
                                      SIGNATURES


In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant 
caused this report to be signed on its behalf of the undersigned, thereunto 
duly authorized.

Dated: April 21, 1999                    Appalachian Oil & Gas Company, Inc.
                                          a Utah Corporation 

                                      By: /S/ Raymond A. Connelly
                                          -------------------------------
                                          Raymond A. Connelly, President

DATE                NAME AND TITLE        SIGNATURE
------------------  -------------------   -------------------------------
April 21, 1999      Raymond A. Connelly   /S/ Raymond A. Connelly
                    President



                                          25