UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2004

                             Commission file number
                             ----------------------
                                    0-19365

                            CROWN ENERGY CORPORATION
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

              Utah                                        87-0368981
---------------------------------           ------------------------------------
  (State or other jurisdiction              (I.R.S. Employer Identification No.)
of incorporation or organization)

                 1710 West 2600 South, Woods Cross, Utah, 84087
                -------------------------------------------------
               (Address of principal executive offices, zip code)

                                 (801) 296-0166
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

                                 Not applicable
              ----------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

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

                                Yes [X] No [ ].

         Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act).

                                Yes [ ] No [X].

         Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.

         There were 26,482,388 shares of $0.02 par value common stock
outstanding as of March 31, 2004.

<PAGE>

                            CROWN ENERGY CORPORATION

                                      INDEX
                                                                         PAGE(S)

PART I.           Financial Information

         ITEM 1.  Financial Statements

                  Condensed Consolidated Balance Sheets at March 31,
                     2004 (unaudited) and December 31, 2003                 3

                  Condensed Consolidated Statement of Operations for
                    the Three Months ended March 31, 2004 and 2003
                    (unaudited)                                             5

                  Condensed Consolidated Statement of Cash Flows for
                    the Three Months ended March 31, 2004 and 2003
                    (unaudited)                                             6

                  Notes to Unaudited Condensed Consolidated Financial
                    Statements                                              8


         ITEM 2.  Management's Discussion and Analysis of Financial
                    Condition and Results of Operations                    13

         ITEM 3.  Quantitative and Qualitative Disclosures about
                    Market Risk                                            16

         ITEM 4.  Controls and Procedures                                  17


PART II.          Other Information

         ITEM 1.  Legal Proceedings                                        18

         ITEM 2.  Changes in Securities and Use of Proceeds                18

         ITEM 3.  Defaults upon Senior Securities                          18

         ITEM 4.  Submission of Matters to a Vote of Security Holders      18

         ITEM 5.  Other Information                                        18

         ITEM 6.  Exhibits and Report on Form 8-K                          19


Signatures                                                                 20

Certifications                                                             21

                                       2
<PAGE>
<TABLE>
<CAPTION>
                                         PART I - FINANCIAL INFORMATION

                                          ITEM 1. FINANCIAL STATEMENTS

                                            CROWN ENERGY CORPORATION
                                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                                     ASSETS


                                                                                March 31, 2004         December 31,
                                                                                  [unaudited]              2003
                                                                                  -----------          -----------
<S>                                                                               <C>                  <C>
CURRENT ASSETS:
     Cash and cash equivalents                                                    $   398,347          $ 1,089,862
     Accounts receivable, net of allowance for uncollectible
        accounts of $164,630                                                          560,584              546,309
     Inventory                                                                      1,247,459              636,809
     Prepaid and other current assets                                                 153,696              110,745
                                                                                  -----------          -----------

          Total Current Assets                                                      2,360,086            2,383,725

PROPERTY PLANT, AND EQUIPMENT, Net                                                  8,455,633            8,635,741


OTHER ASSETS                                                                           43,716               57,527
                                                                                  -----------          -----------
TOTAL                                                                             $10,859,435          $11,076,993




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

                                                       3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                            CROWN ENERGY CORPORATION
                                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                      LIABILITIES AND STOCKHOLDERS' DEFICIT


                                                                                March 31, 2004         December 31,
                                                                                  [unaudited]              2003
                                                                                  -----------          -----------
<S>                                                                               <C>                  <C>
CURRENT LIABILITIES
     Accounts payable                                                              $2,191,032          $ 1,592,949
     Preferred stock dividends payable                                              1,500,000            1,400,000
     Accrued expenses                                                                  94,782              105,685
     Accrued interest                                                                 353,797              316,508
     Long-term debt - current portion                                                 485,063              483,245
                                                                                  -----------          -----------
     Total current liabilities                                                      4,624,674            3,898,387

Long-term debt                                                                      2,051,241            2,165,577
Redeemable preferred stock                                                          5,000,000            5,000,000
                                                                                  -----------          -----------
    Total liabilities                                                              11,675,915           11,063,964

MINORITY INTEREST IN CONSOLIDATED
     JOINT VENTURES
                                                                                      554,133              539,579

STOCKHOLDERS DEFICIT:
    Stockholders' equity:
      Common Stock $0.02 par value 50,000,000 shares
        authorized 26,482,388 shares outstanding for
        each period                                                                   529,647              529,647
       Additional paid in Capital                                                   3,419,417            3,519,417
       Stock warrants                                                                 186,256              186,256
       Accumulated deficit                                                         (5,505,933)          (4,761,870)
                                                                                  -----------          -----------
             Stockholders' deficit                                                 (1,370,613)            (526,550)
                                                                                  -----------          -----------

TOTAL                                                                             $10,859,435          $11,076,993
                                                                                  ===========          ===========

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

                                                       4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                            CROWN ENERGY CORPORATION
                                                   [Unaudited]
                                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS


                                                                                    For the Three Months Ended
                                                                                              March 31,
                                                                                  --------------------------------
                                                                                      2004                 2003
                                                                                  -----------          -----------
<S>                                                                               <C>                  <C>
SALES, Net of demerits                                                            $   176,150          $   114,707

COST OF SALES                                                                         579,593              773,450
                                                                                  -----------          -----------
GROSS PROFIT (LOSS)                                                                  (403,443)            (658,743)

GENERAL AND ADMINISTRATIVE EXPENSES                                                   282,546              336,322
                                                                                  -----------          -----------
INCOME (LOSS) FROM OPERATIONS                                                        (685,989)            (995,065)
                                                                                  -----------          -----------
OTHER INCOME (EXPENSES):
   Interest income and other income                                                       758                1,328
   Interest expense                                                                   (69,402)             (66,235)

        Total other income (expense), net                                             (68,644)             (64,907)
                                                                                  -----------          -----------

INCOME (LOSS) BEFORE INCOME TAXES
  AND MINORITY INTERESTS                                                             (754,633)          (1,059,972)
                                                                                  -----------          -----------

DEFERRED INCOME TAX BENEFIT                                                               ---                  ---

MINORITY INTEREST IN EARNINGS OF
  CONSOLIDATED JOINT VENTURE                                                           10,570               13,472
                                                                                  -----------          -----------

NET INCOME (LOSS)                                                                 $  (744,063)         $(1,046,500)
                                                                                  -----------          -----------
NET INCOME (LOSS) PER COMMON SHARE:

  Basic and diluted                                                               $     (0.03)         $     (0.04)
                                                                                  ===========          ===========


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

                                                       5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                            CROWN ENERGY CORPORATION
                                                   [Unaudited]
                                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                                   For the Three Months Ended
                                                                                            March 31,
                                                                                ---------------------------------
                                                                                    2004                 2003
                                                                                ------------         ------------
<S>                                                                             <C>                  <C>
Cash flows from operating activities:

       Net income (loss)                                                        $   (744,063)        $ (1,046,500)

       Adjustments to reconcile net income (loss) to net cash
         used by operating activities:
           Amortization, depreciation and depletion                                  180,108              181,304
           Minority interest                                                         (10,570)             (13,472)
           Change in assets and liabilities:
             Accounts receivable                                                     (14,275)             255,486
             Inventory                                                              (610,650)            (153,024)
             Prepaid and other assets                                                (29,140)              22,054
             Accounts payable                                                        598,083             (629,886)
             Accrued expenses and interest                                            26,386               (7,500)
                                                                                ------------         ------------
                 Total adjustments                                                   139,942             (345,038)
                                                                                ------------         ------------
                 Net cash used in operating activities                              (604,121)          (1,391,538)
                                                                                ------------         ------------

Cash flows used in investing activities:

       Purchase of property and equipment                                                 --              (34,572)
                                                                                ------------         ------------

Cash flows from financing activities:

       Capital contributions from partners                                            25,124               27,228
       Payments on long-term debt                                                   (112,518)            (101,580)
                                                                                ------------         ------------

                 Net cash provided by (used in) financing
                   activities                                                        (87,394)             (74,352)
                                                                                ------------         ------------


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

                                                       6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                            CROWN ENERGY CORPORATION
                                                   [Unaudited]
                                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                   [Continued]


                                                                                   For the Three Months Ended
                                                                                            March 31,
                                                                                ---------------------------------
                                                                                    2004                 2003
                                                                                ------------         ------------
<S>                                                                             <C>                  <C>
         Net Decrease in Cash:                                                      (691,515)          (1,500,462)

Cash at Beginning of Period                                                     $  1,089,862         $  2,723,068

Cash at End of Period                                                           $    398,347         $  1,222,606
                                                                                ============         ============

Supplemental Disclosure of Cash Flow Information
  Cash paid during the period:
    Interest                                                                    $     42,223         $     43,508
    Income taxes                                                                $        ---         $        ---

</TABLE>

Supplemental Schedule of Non-cash Investing and Financing Activities:

    For the period ended March 31, 2004 we accrued dividends on preferred
      stock of $100,000.

    For the period ended March 31, 2003 we accrued dividends on preferred
      stock of $100,000.



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

                                       7
<PAGE>

                            CROWN ENERGY CORPORATION
                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         We have prepared the accompanying consolidated financial statements
         without an audit. In our opinion, all adjustments (which include only
         normal recurring adjustments) necessary to present fairly our financial
         position as of March 31, 2004, results of operations for the three
         months ended March 31, 2004 and 2003 and cash flows for the three
         months ended March 31, 2004, and 2003 have been made.

         Certain information and footnote disclosures normally included in
         financial statements prepared in accordance with generally accepted
         accounting principles have been condensed or omitted. It is suggested
         that these condensed financial statements be read in conjunction with
         the financial statements and notes thereto included in our December 31,
         2003 Annual Report on Form 10-K. The results of operations for the
         period ended March 31, 2004, are not necessarily indicative of the
         operating results for the full year.

         Summary of Disputes - Four outstanding complaints have been filed
         against us. One filed by Geneva Rock Products, Inc., one filed by
         Oriental New Investments, Ltd., one filed by S & L Industrial, and one
         filed by GATX Financial Corporation. The foregoing actions were
         described in detail in our Annual Report on Form 10-K for the year
         ending December 31, 2003.

         Organization - Crown Energy Corporation ("CEC") and its wholly-owned
         subsidiary, Crown Asphalt Products Company ("CAPCO"), and Crown
         Distribution, an entity in which CAPCO and CEC now own all interests
         (collectively referred to as the "Company"), are engaged in the
         production, manufacturing, distribution and selling of asphalt
         products. Crown Distribution owns a majority interest in Cowboy Asphalt
         Terminal, L.L.C. ("CAT, LLC"). CAT, LLC is a joint venture formed on
         September 16, 1998, between CAPCO and Foreland Asphalt Corporation
         ("Foreland"), which owns an asphalt terminal and storage facility.
         Crown Distribution owns 66.67% and Foreland owns 33.33% of CAT, LLC.

         Principles of Consolidation - The consolidated financial statements
         include the accounts of the Company and its wholly or majority-owned
         subsidiaries. All significant inter-company transactions have been
         eliminated in consolidation.

         Impairment of Long-Lived Assets - The Company reviews its long-lived
         assets for impairment when events or changes in circumstances indicate
         that the book value of an asset may not be recoverable. The Company
         evaluates, at each balance sheet date, whether events and circumstances
         have occurred which indicate possible impairment. The Company uses an
         estimate of future undiscounted net cash flows of the related asset or
         group of assets over the estimated remaining life in measuring whether
         the assets are recoverable

         Stock-Based Compensation - The Company accounts for stock options
         granted to employees under the recognition and measurement principles
         of APB Opinion No. 25, Accounting for Stock Issued to Employees, and
         related Interpretations, and has adopted the disclosure-only provisions
         of Statement of Financial Accounting Standards (SFAS) No. 123,
         "Accounting for Stock-Based Compensation." Accordingly, no compensation
         cost is recognized in the financial statements when options granted
         under those plans have an exercise price equal to or greater than the
         market value of the underlying common stock on the date of grant. The
         Company granted no options during the period ending March 31, 2004 and
         2003.

                                       8
<PAGE>

                            CROWN ENERGY CORPORATION
                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                        FINANCIAL STATEMENTS [Continued]


         Going Concern - The accompanying consolidated financial statements have
         been prepared assuming that the Company will continue as a going
         concern. As of March 31, 2004, the Company had a working capital
         deficit, an accumulated deficit and has had substantial recurring
         losses. The consolidated operations of the Company have not had
         sustained profitability and the Company has relied upon debt financing
         to satisfy its obligations. These conditions raise substantial doubt
         about the ability of the Company to continue as a going concern. The
         consolidated financial statements do not include any adjustments that
         might result from the outcome of these uncertainties.

         The Company's ability to continue as a going concern is subject to the
         attainment of profitable operations or obtaining necessary funding from
         outside sources to fund its cash flow requirements to purchase
         inventory. Management is attempting to secure financing for inventory
         purchases with inventory suppliers or other financing institutions.
         There can be no assurance that the Company will be successful in its
         attempts to obtain financing for its inventory purchases. In addition,
         management is continuing its plans to reduce overhead and other costs.
         Management is also considering consolidation of manufacturing
         facilities to maximize operating efficiency and margins on product
         sales. However, there can be no assurance that management will be
         successful in these efforts.

NOTE 2 - LONG-TERM DEBT

         During 2003 we entered into a financing arrangement with GE Capital for
         $400,000 to finance an expansion of the emulsion facility at our
         Rawlins facility to increase production capacity. The loan bears
         interest at 8.77%, is payable in equal monthly installments over 5
         years, matures in June 2008 and is secured by property and equipment.

NOTE 3 - CAPITAL TRANSACTIONS

         Preferred Stock and Related Warrant- In 1997 we sold to an unrelated
         third party for $5.0 million in cash 500,000 shares of $10 Series A
         Cumulative Convertible Preferred Stock and a warrant to purchase at
         $0.002 per share an amount equal to 8% of the shares of common stock
         then outstanding and reserved for issuance, or approximately 925,771
         shares. In 2002, the Series A Preferred Stock, the warrant, and all
         associated rights were acquired by the Mealey Family Limited
         Partnership, which is the current holder of the Series A Preferred
         Stock, the warrant, all associated rights, and accrued dividends. Jay
         Mealey, our Chief Executive Officer, President and a director, owns
         48.5% of the Mealey Family Limited Partnership and is its general
         partner and his immediate family is its beneficiary.

         As of December 31, 2003, and March 31, 2004, there were dividends
         payable to the holder of the Series A Preferred Stock of $1.4 million
         and $1.5 million, respectively. Future dividends of 8% per annum may,
         at the election of the holder, be taken in cash or common stock. At the
         market price of $0.01 per share as of April 30, 2004, 150.0 million
         shares of common stock would have to be issued to satisfy the dividend
         payable. The Series A Preferred Stock is convertible to 4,285,000
         shares of common stock, if so elected by the holder of the Series A
         Preferred Stock. The holder of the Series A Preferred Stock may also
         require the Company to redeem the Series A Preferred Stock after the
         eighth anniversary of the Series A Preferred Stock's issuance. In
         addition, in the event of a sale of all or substantially all of the
         Company's assets, or a merger or consolidation in which control of the
         Company is transferred, may, at the option of the Series A Preferred
         Stockholder, be treated as a liquidation, thus resulting the repurchase
         of the Series A Preferred Stock at its stated value and all outstanding
         related dividends.

                                       9
<PAGE>

                            CROWN ENERGY CORPORATION
                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                        FINANCIAL STATEMENTS [Continued]


         We currently have an authorized capital of 50.0 million shares of
         common stock, of which approximately 26.5 million shares are issued and
         outstanding and approximately 3.1 million shares are reserved for
         issuance on the exercise of outstanding options and warrants, for a
         total of approximately 29.6 million shares, excluding the shares
         issuable on conversion of the Series A Preferred Stock, the payment in
         common stock of dividends that may accrue in the future thereon, and
         exercise of the warrant. Therefore, there are only approximately 20.4
         million shares available for issuance, and we could not satisfy all of
         our current obligations under the Series A Preferred Stock on
         conversion or the payment of dividends or on exercise of the warrant.
         We have not undertaken to renegotiate with the Mealey Family Limited
         Partnership any of the terms of the Series A Preferred Stock or the
         warrant, do not know whether we will attempt to do so, and have not
         analyzed our obligations or responsibilities if the Mealey Family
         Limited Partnership would elect to convert the Series A Preferred
         Stock, demand payment of the dividends in common stock, or exercise the
         warrant.

NOTE 4 - PROFIT/ LOSS PER SHARE

         The following table is a reconciliation of the net loss numerator of
         basic and diluted net loss per common share for the three month periods
         ended March 31, 2004 and March 31, 2003:
<TABLE>
<CAPTION>
                                          Three Months           Three Months
                                             2004                   2003
                                    --------------------- ----------------------
                                                   Per                     Per
                                       Profit     Share       Profit      Share
                                       ------     -----       ------      -----
             <S>                    <C>           <C>      <C>          <C>
             Net Profit (Loss)        ($744,063)           ($1,046,500)

             Redeemable preferred
               stock dividends
               and accretion           (100,000)              (100,000)

             Add back stock
               dividends and
               accretion                100,000                100,000
                                        -------                -------

             Net profit (loss)
               attributable to
               common stockholders    ($744,063)  ($0.03)  ($1,046,500)  ($0.04)

             Weighted average
               common shares basic
               and diluted           26,482,388             26,482,388
</TABLE>
                                 10
<PAGE>

                            CROWN ENERGY CORPORATION
                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                        FINANCIAL STATEMENTS [Continued]


         We had at March 31, 2004, and March 31, 2003, incremental options and
         warrants to purchase, 3,372,919 shares and 3,988,919 shares of common
         stock, respectively, that were not included in the computation of
         diluted earnings (loss) per share because their effect was
         anti-dilutive. We also had preferred stock outstanding at March 31,
         2004, and March 31, 2003, which is convertible into approximately
         4,285,000 shares of common stock that was not included in the
         computation of diluted loss per share as its effect was anti-dilutive.
         Accordingly, diluted loss per share does not differ from basic loss. As
         of March 31, 2004, there were preferred stock dividends payable in the
         amount of $1,500,000. Pursuant to the designations and preferences of
         the preferred stock, the holder of the preferred stock can elect to
         require us to pay dividends accruing in the future, by the issuance of
         common stock in lieu of cash payments at a price generally equivalent
         to the trading price for our common stock in the over-the-counter
         market, as detailed in the designations and preferences. The market
         price for our common stock was $0.01 per share as of April 30, 2004.


NOTE 5 - RECENT ACCOUNTING PRONOUNCEMENTS

         In January 2003, the Financial Accounting Standards Board (FASB) issued
         Interpretation No. 46 (FIN 46), "Consolidation of Variable Interest
         Entities." FIN 46 addresses when a company should consolidate in its
         financial statements the assets, liabilities and activities of a
         variable interest entity (VIE). It defines VIEs as entities that either
         do not have any equity investors with a controlling financial interest,
         or have equity investors that do not provide sufficient financial
         resources for the entity to support its activities without additional
         subordinated financial support. FIN 46 also requires disclosures about
         VIEs that a company is not required to consolidate, but in which it has
         a significant variable interest. The consolidation requirements of FIN
         46 applied immediately to variable interest entities created after
         January 31, 2003. The Company has not obtained an interest in a VIE
         subsequent to that date. A modification to FIN 46 (FIN 46 (R)) was
         released in December 2003. FIN 46 (R) delayed the effective date for
         VIEs created before February 1, 2003, with the exception of
         special-purpose entities, until the first fiscal year or interim period
         ending after March 15, 2004. FIN 46 (R) delayed the effective date for
         special-purpose entities until the first fiscal year or interim period
         after December 15, 2003. The Company is not the primary beneficiary of
         any SPEs at December 31, 2003. The Company adopted FIN 46 (R) for
         non-SPE entities as of March 31, 2004. The adoption of FIN 46 (R) did
         not have a material impact on results of operations or financial
         position.

         In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133
         on Derivative Instruments and Hedging Activities. SFAS No. 149 amends
         and clarifies financial accounting and reporting for derivative
         instruments, including certain derivative instruments embedded in other
         contracts (collectively referred to as derivatives) and for hedging
         activities under SFAS No. 133, Accounting for Derivative Instruments
         and Hedging Activities. This Statement is effective for contracts
         entered into or modified after June 30, 2003, with certain exceptions,
         and for hedging relationships designated after June 30, 2003.
         Management is currently evaluating the effect of the adoption of SFAS
         No. 149.

         In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
         Financial Instruments with Characteristics of both Liabilities and
         Equity." SFAS No. 150 requires that certain financial instruments,
         which under previous guidance may have been accounted for as equity,
         must now be accounted for as liabilities (or an asset in some
         circumstances). The financial instruments affected include mandatory
         redeemable stock, certain financial instruments that require or may
         require the issuer to buy back some of its shares in exchange for cash
         or other assets and certain obligations that can be settled with shares
         of stock.

                                       11
<PAGE>

                            CROWN ENERGY CORPORATION
                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                        FINANCIAL STATEMENTS [Continued]


         This Statement is effective for all such financial instruments entered
         into or modified after May 31, 2003, and otherwise is effective at the
         beginning of the first interim period beginning after June 15, 2003.
         SFAS 150 resulted in the reclassification of $5 million of Series A
         Preferred Stock from mezzanine capital to liabilities.

NOTE 6 - SUBSEQUENT EVENT

         On June 7, 2004, the Company entered into an agreement with an
         unrelated asphalt distribution firm to organize a joint venture that
         will be owned 51% by the other firm and 49% by us. Substantially all of
         the Company's asphalt business, operations and assets will be
         transferred to the joint venture entity in consideration of a
         promissory note for $7.5 million, the payment of which will be largely
         contingent upon the joint venture having earnings sufficient to permit
         such payment, assumption of approximately $2.3 million in liabilities,
         and a 49% interest in the joint venture entity. The promissory note
         will be secured by the sold assets and business. In addition, the other
         joint venture participant will provide the joint venture with an
         operating line of credit through the end of calendar year 2004, which
         may be extended in subsequent years at the election of our joint
         venture partner. In anticipation of completing this transaction the
         joint venture partner has advanced interim operating capital, secured
         by the Company's inventory, work in progress, finished goods and
         accounts receivable. Formation of the joint venture is contingent on a
         number of factors, including approval by the Company's stockholders.
         Officers, directors and principal stockholders and their affiliates
         holding of a majority of the issued and outstanding common stock have
         indicated that they intend to approve the foregoing transactions. In
         addition, the holder of the Series A Preferred Stock has indicated that
         it intends approve the transaction and to waive its right to require
         the Company to redeem the preferred stock at its stated value plus all
         accrued but unpaid dividends, or for approximately $6.5 million as of
         March 31, 2004.

                                       12
<PAGE>

                  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


         The following discussion and analysis of our financial condition,
results of operations and related matters includes a number of forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Forward-looking statements
include, by way of illustration and not limitation, statements containing the
words "anticipates," "believes," "expects," "intends," "future" and words of
similar import that express, either directly or by implication, management's
beliefs, expectations or intentions regarding our future performance or future
events or trends that may affect us or our results of operations.

         Forward-looking statements are subject to known and unknown risks,
uncertainties and other factors, including, but not limited to changes in
economic conditions generally or with respect to our asphalt products market in
particular, new or increased governmental regulation, increased competition,
shortages in labor or materials, delays or other difficulties in shipping or
transporting, the risk of loss of certain operating assets serving as collateral
to secure financing, and other similar risks inherent in our operations or in
business operations generally. Any such risks or uncertainties, either alone or
in combination with other factors, may cause our actual results, performance or
achievements to differ materially from our anticipated future results,
performance or achievements (which may be expressed or implied by such
forward-looking statements). Consequently, the following management's discussion
and analysis, including all forward-looking statements contained therein, is
qualified and limited by the foregoing cautionary factors. Interested persons
are advised to consider all forward-looking statements within the context of
such cautionary factors.

Liquidity and Capital Resources

         At March 31, 2004, we had cash and other current assets of $2.36
million, as compared to cash and other current assets of $2.38 million at
December 31, 2003. The decrease of approximately $20,000 was generally due to an
increase in accounts receivable and inventory which is more than offset by a
corresponding increase in accounts payable.

         Our business requires a large amount of working capital to fund raw
material purchases and accounts receivable. During the colder quarters ending
December 31 and March 31, we require working capital to purchase raw materials
when prices are typically at their annual low and store these materials until
they are processed and sold during the warmer summer months when most paving
occurs. As discussed below, in recent years we have not had sufficient working
capital to take advantage of low raw material prices during the winter months
and have, therefore, been required to fill our raw material needs in the warmer
summer months when prices are typically higher. We typically generate a large
majority of our sales during the warmer summer months. For example, during the
preceding year we generated approximately 91% of our annual sales during the
quarters ended June 30 and September 30, 2003. Therefore, during these periods
we require large amounts of working capital to fund accounts receivable and
general operations. We have not had third party working capital financing since
1999 and we have been unable to obtain adequate financing on acceptable terms

         Our auditor's report on our financial statements for the year ended
December 31, 2003, as for prior years, contained an explanatory paragraph about
our ability to continue as a going concern. We have continued to suffer from
shortages of working capital needed to optimize operating economies and that has
threatened the survival of the Company. Given our financial condition,
generally, outside working capital funding requires personal guarantees, and our
officers and directors have been unwilling to provide such guarantees for our
benefit as a publicly-held company. As previously reported, our Board of
Directors approved the investigation of alternatives for a "going-private"
transaction. In order to ensure the survival of the Company and resolve its
working capital problems, the Board has approved the sale of all of its asphalt
manufacturing and distribution assets and related business. Formation of the
joint venture is contingent on a number of factors, including approval by the
Company's stockholders. Officers, directors and principal stockholders and their
affiliates holding of a majority of the issued and outstanding common stock have
indicated that they intend to approve the foregoing transactions. In addition,
the holder of the Series A Preferred Stock has indicated that it intends approve
the transaction and to waive its right

                                       13
<PAGE>

                  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)


to require the Company to redeem the preferred stock at its stated value plus
all accrued but unpaid dividends, or for approximately $6.5 million as of March
31, 2004.

         On June 7, 2004, the Company entered into an agreement with an
unrelated asphalt distribution firm to organize a joint venture that will be
owned 51% by the other firm and 49% by us. Substantially all of the Company's
asphalt business, operations and assets will be transferred to the joint venture
entity in consideration of a promissory note for $7.5 million, the payment of
which will be largely contingent upon the joint venture having earnings
sufficient to permit such payment, assumption of liabilities, and a 49% interest
in the joint venture entity. The promissory note will be secured by the sold
assets and business. In addition, the other joint venture participant will
provide the joint venture with an operating line of credit through the end of
calendar year 2004, which may be extended in subsequent years at the election of
our joint venture partner. In anticipation of completing this transaction the
joint venture partner provided the Company with interim operating capital,
secured by the Company's inventory, work in progress, finished goods and
accounts receivable. Formation of the joint venture is contingent on a number of
factors, including approval by the Company's stockholders, a majority of which
have indicated that they intend to do so.

         A portion of our accounts receivable is subject to the risks and
uncertainties of litigation and related collection risks. In the event that we
are unable to collect our current accounts receivables, we are unable to secure
the necessary working capital line of credit for our operations, our operating
losses and working capital deficits continue, or if we are unable to recoup our
losses, we may not have sufficient capital to operate through 2004 and into
2005.

         As of March 31, 2004, we had a working capital deficit of approximately
$2.3 million, an accumulated deficit of $5.5 million, and total stockholders'
deficit of $1.37 million.

         The consolidated operations of the Company have not sustained
profitability and the Company has relied on debt financing to satisfy its
obligations. The Company's ability to continue as a going concern is subject to
the attainment of profitable operations or obtaining necessary funding from
outside sources to fund its cash flow requirements to purchase inventory.
Failure of the Company to complete the foregoing transaction will have a
significant negative effect and could result in the failure of the Company.

Critical Accounting Policies

         Inventory consists principally of refined products and chemical
supplies, which are valued at the lower of cost (computed on a first in, first
out basis) or market.

         Revenue recognition for sales of product is recognized when a contract
is executed or a valid purchase order has been received, product has been
shipped, the selling price is fixed or determinable, and collectibility is
reasonably assured.

         Property, plant and equipment are recorded at cost and are depreciated
over the estimated useful lives of the related assets. Depreciation is computed
using the straight-line method for financial reporting purposes. The estimated
useful lives of property, plant and equipment are as follows:

                  Plant and improvements and tankage               10-30 years
                  Equipment                                            7 years
                  Vehicles                                             5 years
                  Computer equipment, furniture and fixtures           3 years

                                       14
<PAGE>

                  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

         The Company reviews its long-lived assets for impairment when events or
changes in circumstances indicate that the book value of an asset may not be
recoverable. The Company evaluates, at each balance sheet date, whether events
and circumstances have occurred which indicate possible impairment. The Company
uses an estimate of future undiscounted net cash flows of the related asset or
group of assets over the estimated remaining life in measuring whether the
assets are recoverable

         Financial instruments that potentially subject the Company to
concentration of credit risk consist primarily of receivables. In the normal
course of business, the Company performs ongoing credit evaluations of its
customers and maintains allowances for possible losses that, when realized, have
been within the range of management's expectations.

         The Company maintains its cash in bank deposit accounts that, at times,
may exceed federally insured limits. The Company has not experienced any losses
in such accounts and believes it is not exposed to any significant credit risk
on cash and cash equivalents.

Results of Operations

         For the three month period ending March 31, 2004, compared to the three
month period ending March 31, 2003

         Total revenue increased from $114,707 for the three-month period ended
March 31, 2003, to $176,150 for the three-month period ended March 31, 2004, an
increase of $61,443. Cost of sales decreased from $773,450 for the same period
in 2003 to $579,593 for the same period in 2004, an decrease of $193,857. The
increase in revenues was primarily the result of an increase in sales volume of
approximately 469 tons. The decrease in cost of sales in the 2004 interim period
is primarily the result of reduced facility operating costs predominately made
up of salaries and wages.

         General and administrative expenses decreased from $336,322 for the
three-month period ended March 31, 2003, to $282,546 for the three-month period
ended March 31, 2004, a decrease of $53,776. This decrease is primarily due to a
reduction in salaries and wages.

         Net other income/expenses increased from an expense of $64,907 for the
three-month period ended March 31, 2003, to an expense of $68,644 for the
three-month period ended March 31, 2004, a increase of $3,737.

         Minority interest of $10,570 represents Foreland's approximate 33%
interest in the loss of CAT, LLC.

                                       15
<PAGE>

                      ITEM 3. QUANTITATIVE AND QUALITATIVE
                          DISCLOSURES ABOUT MARKET RISK


         We do not engage in transactions involving market risk sensitive
instruments intended to reduce our exposure to interest rate risks, foreign
currency exchange rate risks, commodity price risks or similar risks, and
therefore we do not believe we are subject to material market risks resulting
from such market rate sensitive instruments. However, we are subject to general
market fluctuations related to the purchase of base stock asphalt and may suffer
reduced operating margins to the extent our increased costs cannot be passed
through to our customers. Such prices generally fluctuate with the price of
crude oil.

         We are also subject to certain price escalation and de-escalation
clauses in our asphalt distribution sales contracts. We supply asphalt to
projects in certain states where regulations provide for escalation and
de-escalation of the price for such asphalt relative to the price difference
from the time the project is awarded to the successful bidding company and the
time the project is completed. We factor such de-escalation risk into our bid
prices and do not believe we have material exposure to risk resulting from these
regulations.

                                       16
<PAGE>

                         ITEM 4. CONTROLS AND PROCEDURES

         (a) Evaluation of disclosure controls and procedures:

         Based on their evaluations as of the filing date of this report, the
principal executive officer and principal financial officer of the Company have
concluded that the Company's disclosure controls and procedures (as defined in
Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act) are effective
to ensure that information required to be disclosed by the Company in reports
that the Company files or submits under the Securities Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
rules and forms of the Securities and Exchange Commission.

         (b) Changes in internal controls:

         There were no significant changes in the Company's internal controls or
in other factors that could significantly affect these internal controls
subsequent to the date of the most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

                                       17
<PAGE>

                           PART II - OTHER INFORMATION


                            ITEM 1. LEGAL PROCEEDINGS

         No change from 10-K year ended December 31, 2003.


                   ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

         None.


                     ITEM 3. DEFAULTS UPON SENIOR SECURITIES

         As of March 31, 2004, there were arrearages in the amount of $1,500,000
on dividends on our preferred stock.



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

         None.


                            ITEM 5. OTHER INFORMATION

         Memorandum of Understanding to Sell Asphalt Manufacturing and
Distribution Assets and Related Business

         On June 07, 2004 the Company entered into a Memorandum of Understanding
with an unrelated asphalt company to form a new limited liability company to
purchase all of the Company's asphalt manufacturing and distribution assets and
related business. At closing of the transaction, the Company will own 49% of the
membership interest in the new limited liability company and the other asphalt
company will own the remaining membership interest. The new limited liability
company will purchase the assets and business for $7.5 million and will in
addition purchase the Company's current inventory. The purchase price will be
paid in the form of a six-year promissory accruing interest at Prime plus 1%.
The promissory note will be secured by the sold assets and business. As part of
the transaction, the other member of the limited liability company will supply
the working capital financing to enable the new company to take advantage of
off-season asphalt purchase to fill the storage tank capacity.

                                       18
<PAGE>

                     ITEM 6. EXHIBITS AND REPORT ON FORM 8-K

         (a) Exhibits: The following exhibits are included as part of this
report:

                   SEC
   Exhibit      Reference
   Number         Number            Title of Document                Location
--------------------------------------------------------------------------------
    31.01           31       Certification of Chief Executive      This filing
                             Officer Pursuant to Rule 13a-14
--------------------------------------------------------------------------------
    31.02           31       Certification of Chief Financial      This filing
                             Officer Pursuant to Rule 13a-14
--------------------------------------------------------------------------------
    32.01           32       Certification Pursuant to 18 U.S.C.   This filing
                             Section 1350, as Adopted Pursuant to
                             Section 906 of the Sarbanes-Oxley
                             Act of 2002 (Chief Executive Officer)
--------------------------------------------------------------------------------
    32.02           32       Certification Pursuant to 18 U.S.C.   This filing
                             Section 1350, as Adopted Pursuant to
                             Section 906 of the Sarbanes-Oxley
                             Act of 2002 (Chief Financial Officer)

         (b) Reports on Form 8-K: We did not file any reports on Form 8-K for
the quarter ended September 30, 2003.

                                       19
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements 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.

                                         CROWN ENERGY CORPORATION
                                         (Registrant)



Date: July 2, 2004                       By:  /s/ Jay Mealey
                                            ------------------------------------
                                            Jay Mealey, Chief Executive Officer


Date: July 2, 2004                       By: /s/ Alan Parker
                                            ------------------------------------
                                            Alan Parker, Controller

                                       20