UNITED STATES
                          SECURITIES AND EXCHANGE COMMISSION
                               Washington, D. C. 20549

                                      FORM 10-Q


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

For the quarterly period ended     June 30, 1998
                               ---------------------

                                          OR

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

For the transition period from                 to
                               ---------------    ---------------

Commission File Number 1-7796


                                TIPPERARY CORPORATION
                (Exact name of registrant as specified in its charter)



          Texas                                        75-1236955
          (State or other jurisdiction of              (I.R.S. Employer
          incorporation or organization)               Identification No.)

          633 Seventeenth Street, Suite 1550
          Denver, Colorado                             80202
          (Address of principal executive offices)     (Zip Code)


          Registrant's telephone number, including area code (303) 293-9379


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


          Class                              Outstanding August 14, 1998
----------------------------                 ---------------------------
Common Stock, $.02 par value                 13,132,855 shares



<PAGE>

                        TIPPERARY CORPORATION AND SUBSIDIARIES

                                  Index to Form 10-Q


                                                                      Page No.


PART I.   FINANCIAL INFORMATION (UNAUDITED)

          Item 1.   Financial Statements

                         Consolidated Balance Sheet
                         June 30, 1998 and September 30, 1997               1

                         Consolidated Statement of Operations
                         Three months and nine months ended
                         June 30, 1998 and 1997                             2

                         Consolidated Statement of Cash Flows
                         Nine months ended June 30, 1998 and 1997           3

                         Notes to Consolidated Financial Statements       4-5

          Item 2.   Management's Discussion and Analysis of
                      Financial Condition and Results of Operations      6-11


PART II.  OTHER INFORMATION

          Item 1.   Legal Proceedings                                      12

          Item 2.   Changes in Securities                                  12

          Item 3.   Defaults Upon Senior Securities                        12

          Item 4.   Submission of Matters to a Vote of Security 
                      Holders                                              12

          Item 5.   Other Information                                      12

          Item 6.   Exhibits and Reports on Form 8-K                       12

SIGNATURES                                                                 13


<PAGE>

                           PART I - FINANCIAL INFORMATION
                           ------------------------------

ITEM 1.  FINANCIAL STATEMENTS


                        TIPPERARY CORPORATION AND SUBSIDIARIES
                              Consolidated Balance Sheet
                                    (in thousands)
                                     (unaudited)


<TABLE>
<CAPTION>
                                               June 30,     September 30,
                                                 1998           1997  
                                             -------------  -------------
<S>                                          <C>            <C>
ASSETS
Current assets: 
     Cash and cash equivalents               $         723  $       3,529
     Receivables                                     1,464          1,966
     Inventory                                         218            197
     Current portion of deferred income 
       taxes, net                                        -            229
     Other current assets                              131            123
                                             -------------  -------------
          Total current assets                       2,536          6,044
                                             -------------  -------------

Property, plant and equipment, at cost:
     Oil and gas properties, full cost 
       method                                      136,138        131,578
     Other property and equipment                    2,558          2,476
                                             -------------  -------------
                                                   138,696        134,054
Less accumulated depreciation, depletion
  and amortization                                 (91,628)       (88,708)
                                             -------------  -------------
     Property, plant and equipment, net             47,068         45,346
                                             -------------  -------------

Noncurrent portion of deferred income
  taxes, net                                         1,573          2,962
Other noncurrent assets                                617            643
                                             -------------  -------------
                                             $      51,794  $      54,995
                                             =============  =============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Current portion of long-term debt       $           -  $           -
     Note payable - related party                    2,300          2,300
     Accounts payable                                1,343          1,275
     Accrued liabilities                               266            288
     Royalties payable                                 160            173
     Production taxes payable                           94            159
     Advances from joint owners                         62            468
                                             -------------  -------------
          Total current liabilities                  4,225          4,663
                                             -------------  -------------

Long-term debt                                      15,644         13,844
Commitments and contingencies (Note 5)                   -              - 

Stockholders' equity
     Common stock; par value $.02;
      20,000,000 shares authorized;
      13,159,655 issued and 13,131,855
      outstanding in 1998; 13,078,071
      issued and 13,050,271 outstanding
      in 1997                                          263            262
     Capital in excess of par value                105,560        105,375
     Accumulated deficit                           (73,827)       (69,078)
     Treasury stock, at cost; 27,800 shares            (71)           (71)
                                             -------------  -------------
          Total stockholders' equity                31,925         36,488
                                             -------------  -------------
                                             $      51,794  $      54,995
                                             =============  =============

</TABLE>

            See accompanying notes to consolidated financial statements.
                                          
                                         1
                                          
                                          
                                          
                                          
<PAGE>


                        TIPPERARY CORPORATION AND SUBSIDIARIES
                         Consolidated Statement of Operations
                        (in thousands, except per share data)
                                     (unaudited)

<TABLE>
<CAPTION>

                                     Three months ended     Nine months ended
                                          June 30,               June 30,
                                     ------------------     ------------------
                                       1998      1997         1998      1997
                                       ----      ----         ----      ----
<S>                                  <C>       <C>          <C>       <C>
Revenues                             $  2,224  $  3,020     $  7,032  $ 10,196

Costs and expenses:
  Operating                             1,231     1,278        3,682     4,194
  Depreciation, depletion and
    amortization                        1,020       914        2,965     2,598
  General and administrative              308       376        1,190     1,195
  Write-down oil & gas properties       1,399         -        1,399         -
  Write-down of investment in NGL
    fractionating plant                     -       467            -       467
                                     --------  --------     --------  --------

     Total costs and expenses           3,958     3,035        9,236     8,454
                                     --------  --------     --------  --------

     Operating income (loss)           (1,734)      (15)      (2,204)    1,742

Other income (expense):
  Interest income                           6        24           28        83   
  Interest expense                       (397)     (200)        (948)     (655)
  Loss on disposition of USXP
    common stock                            -      (258)           -      (258)
  Foreign currency exchange loss           (7)        -           (7)        -
                                     --------  --------     --------  --------

     Total other expense                 (398)     (434)        (927)     (830)
                                     --------  --------     --------  --------

     Income (loss) before income
       tax                             (2,132)     (449)      (3,131)      912

Income tax benefit (expense)           (1,618)        3       (1,618)       (2)
                                     --------  --------     --------  --------

Income (loss) before equity in
  loss of NGL fractionating plant      (3,750)     (446)      (4,749)      910

Equity in loss of NGL fractionating
  plant                                     -      (141)           -      (334)
                                     --------  --------     --------  --------

Net income (loss)                    $ (3,750) $   (587)    $ (4,749) $    576
                                     ========  ========     ========  ========

Earnings (loss) per common share
     Basic and diluted(1)            $   (.29) $   (.04)    $   (.36) $    .04
                                     ========  ========     ========  ========

Weighted average shares outstanding
     Basic                             13,131    13,050       13,113    13,050
                                     ========  ========     ========  ========
     Diluted                           13,258    13,269       13,319    13,270
                                     ========  ========     ========  ========

</TABLE>


(1)Potential common shares from the assumed exercise of options and warrants
were antidilutive for the three and nine months ended June 30, 1998, and the
three months ended June 30, 1997.


            See accompanying notes to consolidated financial statements.
                                          
                                         2

<PAGE>


                        TIPPERARY CORPORATION AND SUBSIDIARIES
                         Consolidated Statement of Cash Flows
                                    (in thousands)
                                     (unaudited)

<TABLE>
<CAPTION>

                                                    Nine months ended
                                                        June 30,
                                                  ---------------------
                                                     1998        1997
                                                  ---------   ---------
<S>                                               <C>         <C>
Cash flows from operating activities:
Net income (loss)                                 $  (4,749)  $     576
Adjustments to reconcile net income (loss)
  to net cash provided by operating activities:
     Depreciation, depletion and amortization         2,965       2,598
     Deferred income tax expense                      1,618           -
     Write-down of oil and gas properties             1,399           -
     Equity in loss of NGL fractionating plant            -         334
     Loss on disposition of USXP common stock             -         258
     Write-down of investment in NGL 
       fractionating plant                                -         467
     Change in assets and liabilities:
       (Increase) decrease in receivables               502         (51)
       Increase in inventory                            (21)         (6)
       Increase in other current assets                  (8)       (131)
       Decrease in accounts payable, accrued
          liabilities, production taxes and
          advances from joint owners                   (425)       (370)
       Increase (decrease) in royalties payable         (13)         20
       Other                                             (5)         (1)
                                                  ---------   ---------
Net cash provided by operating activities             1,263       3,694
                                                  ---------   ---------

Cash flows from investing activities:
  Proceeds from asset sales                           1,456          30
  Proceeds from sale of USXP common stock                 -         257
  Investment in NGL fractionating plant                   -        (126)
  Capital expenditures                               (7,511)     (8,205)
                                                  ---------   ---------
Net cash used in investing activities                (6,055)     (8,044)
                                                  ---------   ---------

Cash flows from financing activities:
  Proceeds from borrowing                             1,800       2,300
  Proceeds from issuance of stock                       186           -
  Principal repayments                                    -        (150)
                                                  ---------   ---------
Net cash provided by financing activities             1,986       2,150
                                                  ---------   ---------

Net decrease in cash and cash equivalents            (2,806)     (2,200)

Cash and cash equivalents at beginning of period      3,529       3,575
                                                  ---------   ---------

Cash and cash equivalents at end of period        $     723   $   1,375
                                                  =========   =========

Supplemental disclosure of cash flow information:
  Cash paid during the period for:
  Interest                                        $   1,129   $     658
  Income taxes                                    $       -   $       1

</TABLE>

            See accompanying notes to consolidated financial statements.
                                          
                                         3


<PAGE>

                       TIPPERARY CORPORATION AND SUBSIDIARIES
                     Notes to Consolidated Financial Statements
                                    (unaudited)
                                          
                                          
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation
---------------------

In the opinion of management, the accompanying unaudited financial statements
reflect all adjustments, consisting only of normal recurring adjustments, which
are necessary for a fair presentation of the consolidated financial position of
Tipperary Corporation and its wholly-owned subsidiaries (the "Company") at June
30, 1998, and the results of its operations for the three-month and nine-month
periods ended June 30, 1998 and 1997.  The consolidated financial statements
include the accounts of the Company and its share of assets, liabilities,
revenues and expenses of unincorporated joint ventures and partnerships.  The
accounting policies followed by the Company are included in Note 1 to the
Consolidated Financial Statements in the Annual Report on Form 10-K for the year
ended September 30, 1997.  These financial statements should be read in
conjunction with the Form 10-K.

NOTE 2 - WRITE-DOWN OF OIL & GAS PROPERTIES

At June 30, 1998, the Company recorded a $1,399,000 write-down of its oil and
gas properties. Under the full cost method of accounting, capitalized oil and
gas property costs, less accumulated amortization and related deferred income
taxes, may not exceed the present value of future net revenues from proved
reserves discounted at 10%, plus the lower of cost or market value of unproved
properties, less related income tax effects.  This "ceiling test" must be
performed on a quarterly basis.  Based on June 30, 1998 oil and gas prices, the
Company's full cost pool book value exceeded its ceiling test value by
$1,399,000.  Accordingly, the book value of oil and gas properties was written
down by this amount as of June 30, 1998. 

NOTE 3 - WRITE-DOWN OF DEFERRED INCOME TAX ASSET

Under Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" ("SFAS 109"), the Company has recorded a $21 million asset for the
future benefit of its net operating tax loss carryforwards and other tax
benefits.  As of March 31, 1998, this asset was offset by a valuation allowance
of approximately $18 million based on management's projections of realizability
of the gross deferred tax asset.  Fluctuations in industry conditions and trends
warrant periodic management reviews of the recorded valuation allowance to
determine if an increase or decrease in such allowance is appropriate.  As of
June 30, 1998, NYMEX oil and gas prices had decreased approximately 30% and 20%,
respectively, compared to prices as of September 30, 1997.  As a result of these
price decreases, management revised its assumptions used in projections of
taxable income and utilization of net operating loss carryforwards.  These
revisions, combined with recent net operating tax losses, and the expiration by
2001 of $39 million of approximately $49 million in total tax net operating loss
carryforwards, led management to conclude that the current impact of lower oil
and gas prices warranted an increase of $1,618,000 in the deferred tax asset
valuation allowance, with a corresponding charge to deferred tax expense.

NOTE 4 - RELATED PARTY TRANSACTION

The Company anticipates executing a promissory note for a line of credit of up
to $1,000,000 from Slough Estates USA Inc., the Company's largest shareholder
("Slough").  The unpaid principal balance of this note would be due one year
from the date of the original advance of funds and would bear interest at 8.5%
per annum payable in calendar quarter installments.  In January 1997, Slough
advanced the Company $2,300,000 under a note with similar terms due October 31,
1998.  The former note is, and the new note would be, secured by a 10% interest
in the Company's rights under the Joint Operating Agreement covering the Comet
Ridge project in Queensland, Australia and subject to the terms and provisions
of a subordination agreement with the Company's bank.  It is the intention of
the Company to repay both notes with proceeds from a larger financing
transaction.  The Company is currently discussing such a transaction with
interested parties.  At the date of filing, it is not known if or in what form
the financing will be obtained.

                                         4

<PAGE>

                       TIPPERARY CORPORATION AND SUBSIDIARIES
                     Notes to Consolidated Financial Statements
                                    (unaudited)


NOTE 5 - COMMITMENTS AND CONTINGENCIES

On March 14, 1997, the Company filed a complaint along with several other
plaintiffs in BTA OIL PRODUCERS, ET AL. V. MDU RESOURCES GROUP, INC., ET AL. in
Stark County Court in the Southwest Judicial District of North Dakota.  The
plaintiffs are suing the defendants for breach of gas sales contracts, unjust
enrichment, implied trust and related business torts.  The case concerns the
sale by plaintiffs and certain predecessors of natural gas processed at the
McKenzie Gas Processing Plant in North Dakota to Koch Hydrocarbons Company.  It
also concerns the contracts for resale of that gas to MDU Resources Group, Inc.
and Williston Basin Interstate Pipeline Company.  The defendants have answered
the complaint denying the claims and discovery is in process.

The Company is plaintiff in a lawsuit filed on August 6, 1998, styled TIPPERARY
CORPORATION AND TIPPERARY OIL & GAS (AUSTRALIA) PTY LTD. V. TRI-STAR PETROLEUM
COMPANY, Cause No. CV42,265, in the District Court of Midland County, Texas. 
The complaint, which concerns the Comet Ridge coalbed methane project in
Queensland, Australia, alleges that Tri-Star Petroleum Company ("Tri-Star"),
operator of the project, has failed to perform its duties under the operating
agreement, and seeks the removal of Tri-Star as operator, an accounting of
expenses charged to the joint interest account and unspecified amounts for
damages for breach of contract.  Among the allegations in the complaint are that
Tri-Star has refused to allow the Company to inspect the books and records of
the project, has attempted to block the Company's right to take its
proportionate share of gas production in kind, may have improperly billed
expenses to the joint interest owners and has an impermissible conflict of
interest precluding it from acting as a reasonable and prudent operator.

                                         5

<PAGE>

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

Information herein contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, which can be identified by
words such as "may," "will," "expect," "anticipate," "estimate" or "continue,"
or comparable words.  In addition, all statements other than statements of
historical facts that address activities that Tipperary Corporation expects or
anticipates will or may occur in the future are forward-looking statements. 
Readers are encouraged to read the SEC reports of Tipperary Corporation,
particularly its Annual Report on Form 10-K for the  year ended September 30,
1997, for meaningful cautionary language disclosing why actual results may vary
materially from those anticipated by management.

OVERVIEW

Tipperary Corporation and its subsidiaries (the "Company") are principally
engaged in the exploration for and development and production of crude oil and
natural gas.  The Company's major areas of operations are in the Permian Basin,
the Rocky Mountain and Mid-Continent areas of the United States, and in
Queensland, Australia, where it is involved in the development and production of
a coalbed methane project.  The Company seeks to increase its oil and gas
reserves through exploration, exploitation and development projects and
occasionally through the purchase of producing properties.

FINANCIAL CONDITION

As of June 30, 1998, NYMEX oil and gas prices had decreased approximately 30%
and 20%, respectively, compared to prices as of September 30, 1997.  Many oil
and gas companies have recently been required to record non-cash write-downs
based on these precipitous price declines.  Based upon prices as of June 30,
1998, the Company wrote down its domestic oil and gas properties and deferred
tax asset for the period then ended.  Noncash charges in connection therewith
were $1,399,000 and $1,618,000, for the U.S. full cost pool and deferred tax
asset writedowns, respectively.  The Company follows the full cost method of
accounting for its oil and gas properties.  Under such method, the net book
value of properties on a country by country basis, less related deferred income
taxes, may not exceed a calculated "ceiling."  The ceiling is the estimated
future after-tax net revenues from proved oil and gas properties, discounted at
10% per year, plus the lower of cost or market value of unproved properties.  In
calculating discounted future net revenues, oil and gas prices in effect at the
time of the calculation are held constant, except for changes which are fixed
and determinable by existing contracts.  Based on June 30, 1998 oil and gas
prices, the Company's full cost pool book value exceeded its ceiling test value
by $1,399,000.  Accordingly, the book value of oil and gas properties was
written down by this amount as of June 30, 1998.  The lower oil and gas prices
as of June 30, 1998, also led management to revise its assumptions used in
projections of taxable income and utilization of net operating loss
carryforwards.  These revisions, combined with recent net operating tax losses,
and the expiration by 2001 of 80% of the Company's net operating loss
carryforwards, led management to conclude that the current impact of lower oil
and gas prices warranted an increase of $1,618,000 in the deferred tax asset
valuation allowance, with a corresponding charge to deferred tax expense.  (See
Notes 2 and 3 to the Company's consolidated financial statements.)

The Company had cash and temporary investments of $723,000 as of June 30, 1998,
versus $3,529,000 as of September 30, 1997.  At June 30, 1998, the Company had a
working capital deficit of $1,689,000.  Excluding a $2,300,000 related party
note due in October 1998, working capital was a positive $611,000.  The Company
anticipates increasing its short-term liquidity through a line of credit for up
to $1,000,000 with its largest shareholder, to whom the note for $2,300,000 is
also due.  The Company has historically funded its exploration, exploitation and
development drilling activities with cash flows from operations, borrowings,
property sales, sales of common stock and sales of partial interests in
exploration projects to industry partners.  During the nine months ended June
30, 1998, cash flows were provided by the Company's oil and gas operations, the
sale of producing oil and gas properties and proceeds from bank borrowing and
issuance of stock.

Net cash provided by operating activities was $1,263,000 during the first nine
months of fiscal 1998, compared to $3,694,000 for the corresponding fiscal 1997
period.  The decrease in net cash provided by operating activities was primarily
attributable to lower oil and gas prices.

During the nine months ended June 30, 1998, the Company incurred capital
expenditures of $7,511,000 and received proceeds of $1,456,000 from a sale of
producing properties, resulting in net cash used in investing activities

                                         6

<PAGE>


of $6,055,000.  The Company expended $4,984,000 for acquisition of an additional
interest in and funding of further development of the Comet Ridge coalbed
methane project in Queensland, Australia.  The balance of  $2,527,000 in capital
expenditures was expended on domestic exploration projects and other capital
items.

The Comet Ridge project expenditures of $4,984,000 included approximately
$3,200,000 for the purchase of an additional 5% interest in the project and
$1,784,000 in gas gathering and compression costs and other capital 
expenditures.  The Company's interest in the project is now 55.75% of capital
costs and 52.50% of operating expenses, and its net revenue interest is 46.22%
prior to project payout.  Subsequent to project payout, the Company's interest
is 45.35% of capital and operating expenses, and its net revenue interest is
39.99%.

During the fourth quarter of fiscal 1997, a large pipeline company completed
construction of a 17-mile extension of its pipeline system into the core
Fairview area of the Comet Ridge project.  The Company and its co-venturers in
the project completed construction of gas gathering lines and compression
facilities during the quarter ended December 31, 1997.  The gathering system
currently connects nine wells, through the 17-mile spur line, to a pipeline
system serving the Queensland markets.  During the quarter ended March 31, 1998,
the Company entered into a contract for the sale of gas and began selling
approximately 1,000 Mcf per day in early February.  As of June 30, the Company
was selling gas at the rate of approximately 1,750 Mcf per day, net to the
Company's interest.  As of the date of filing, the Company is in the final
stages of negotiating a contract for the sale of up to an additional 2,700 Mcf
per day, net to the Company's  interest.  While such increased sales would be of
significant benefit to the operations of the Comet Ridge project, the ability to
deliver gas under the contract would require further development of the project
in order to produce sufficient volumes, and there is no assurance that the
contract will be executed.

Domestic capital expenditures of $2,527,000 included exploration costs of
$1,635,000 and non-producing leasehold acquisition costs of $583,000.  The
Company's domestic exploration activities are focused in the Williston Basin of
Montana and North Dakota.  During the second half of fiscal 1997 and the first
half of fiscal 1998, the Company has participated in the drilling of seven wells
in Montana and North Dakota, of which six were completed as producers.  These
wells were all exploratory wells based upon three-dimensional ("3-D") seismic
data.  In April, the Company agreed to transfer to an industry partner 50% of
its interest in approximately 31,000 net leasehold acres in its Missouri River
project area in Montana in exchange for certain technically defined prospects
and proprietary seismic data.  Together the companies will conduct 3-D seismic
surveys over the areas of interest.

During the nine months ended June 30, 1997, net cash of $8,044,000 was used in
investing activities.  The Company incurred capital expenditures of $8,205,000,
received proceeds of $257,000 from the sale of common stock in United States
Exploration, Inc. ("USXP") and $30,000 from miscellaneous oil and gas property
sales.  The Company invested an additional $126,000 in an Alabama natural gas
liquids ("NGL") fractionating plant, which it sold on September 30, 1997.  The
capital expenditures of $8,205,000 included an investment of $5,312,000 in the
Comet Ridge project, $1,480,000 in domestic development drilling costs and
$1,413,000 in other capital expenditures, of which approximately $800,000 was
for domestic leasehold and 3-D seismic data acquisitions.  The investment in the
Comet Ridge project included approximately $2,300,000 for the purchase price of
an additional 5% interest in the project.  The balance of $3,012,000 was
expended primarily for the Company's share of costs to drill and complete three
wells, continued costs of de-watering and producing the Fairview area wells and
to advance funds for construction of the gas gathering system and compression
facilities.

During the nine months ended June 30, 1998, net cash provided by financing
activities of $1,986,000 included additional bank borrowings of $1,800,000 and
proceeds received in connection with the issuance of 50,000 shares of the
Company's common stock to a former director pursuant to the exercise of warrants
and 31,584 common shares to a director and employees pursuant to warrants and
the 1987 Employee Stock Option Plan.  During the nine months ended June 30,
1997, the Company received a loan of $2,300,000 from its largest shareholder. 
These proceeds were used to acquire an additional 5% interest in the Comet Ridge
project.  During the 1997 period, the Company also made principal payments of
$150,000 on its long term debt, all of which was owed to the Company's
commercial bank lender.

While the Company's cash flows have been adversely affected by the precipitous
decreases in oil and gas prices, hedges of between 50% and 55% of the Company's
crude oil production have resulted in additional revenues of $378,000, or over
$2.00 per barrel on hedged volumes, during the nine months ended June 30, 1998.
The Company is currently a party to outstanding swap agreements which provide a
hedge on approximately 65% of its projected oil production from

                                         7

<PAGE>


July through September 1998 and approximately 15% of projected oil production
during October and November 1998.  Swap agreements covering 15,000 barrels of
oil per month from July through September 1998, provide for the Company to
receive an average NYMEX floor price of $15.77 per barrel, with the Company
retaining 50% of price increases above an average of approximately $16.40 per
barrel on 10,000 barrels.  The Company entered into a swap agreement covering
5,000 barrels of oil per month from July through September 1998 at a NYMEX floor
price of $16.70 per barrel.  This swap is extendable for three months at the
option of the counterparty to October through December 1998.  The Company has
also entered into an extendable swap agreement covering 5,000 barrels of oil per
month for August through November 1998 at a floor price of $16.00.  The
Company's counterparty may elect to extend the terms of this swap for the four
months ending March 31, 1999.  The Company's actual price received for oil at
the wellhead during the nine months ended June 30, 1998, averaged $2.56 per
barrel below the average NYMEX oil price.  This difference varies based on
location and quality of oil sold.  Notwithstanding the Company's hedge
positions, continued depressed oil and gas prices subsequent to June 30, 1998,
would further reduce cash flows available for exploratory and development
drilling and could negatively impact the Company's efforts to secure new
financing.


The Company's bank credit agreement (the "agreement") provides a maximum loan
facility of $40,000,000 subject to borrowing base limitations described below.
The agreement contains provisions for both fixed rate and variable rate
borrowings.  The Company and its bank entered into an amendment to the loan
agreement which provides for a two-tranche revolver with interest of either
LIBOR plus 2.5% or the bank's Base Rate on the first $12,000,000 and either
LIBOR plus 3.8% or the bank's Base Rate plus 1% on the remainder.  The Company
may make the selection between LIBOR or the bank's Base Rate, with the LIBOR-
based option available for periods not exceeding 90 days.  The outstanding loan
balance at June 30, 1998, and September 30, 1997, was $15,644,000 and
$13,844,000, respectively.  The weighted average interest rate was 8.49% as of
June 30, 1998, and 7.19% as of September 30, 1997.  Upon expiration of the
revolver (the "Conversion Date"), the principal balance will convert to a four-
year term loan.  During the first quarter of fiscal 1998, the Conversion Date
was extended by the bank from October 5, 1998, to October 5, 1999.  It may be
extended again, although the Company has no such assurance from the bank.

Certain of the Company's domestic oil and gas properties have been pledged as
security for the bank loan, and the bank has the option to place additional
liens on other unencumbered properties.  The maximum borrowing base is
determined solely by the bank and is based upon its assessment of the value of
the Company's properties.  This bank valuation is based upon the bank's
assumptions about reserve quantities, oil and gas prices, operating expenses and
other assumptions, all of which may change from time to time and which may
differ from the Company's assumptions.  At September 30, 1997, the borrowing
base was $14,500,000.  In February 1998, the bank increased the borrowing base
by $2,000,000, to $16,500,000.  The borrowing base is subject to redetermination
semi-annually, with the next redetermination on August 31, 1998.  Based on
current oil and gas prices, the Company expects the bank to reduce the borrowing
base significantly.  Current efforts to secure additional financing include
provision for anticipated bank debt reduction.  There is no guarantee that
financing will be obtained and the Company may be unable to provide collateral
if required by the bank.  The Company is obligated to pay a commitment fee of 
3/8% per annum on any excess of the borrowing base over the average 
outstanding loan balance.

The Company intends to use existing cash, operating cash flows and its
additional borrowing capacity to fund a limited amount of domestic exploration
and Comet Ridge project capital expenditures.  The above funding will have to be
supplemented with project financing and/or additional corporate debt or equity
offerings in order for the Company to execute its foreign and domestic
exploration and development plans.  The Company is actively pursuing additional
capital to reduce bank debt, repay the related party debt and fund both domestic
exploration activities and further development of the Comet Ridge project.

                                         8

<PAGE>

IMPACT OF THE YEAR 2000 ISSUE

The Company is working to resolve the potential impact of the year 2000 on the
ability of the Company's computerized information systems to accurately process
information that may be date-sensitive.  Any of the Company's programs that
recognize a date using "00" as the year 1900 rather than the year 2000 could
result in errors or system failures.  The Company utilizes a number of computer
programs in its operations and, while it has not completed its assessment, the
Company currently believes that costs of addressing this issue will not have a
material adverse impact on its financial position.  However, if the Company and
third parties upon which it relies are unable to address this issue in a timely
manner, it could result in a material financial risk to the Company.  In order
to assure that this does not occur, the Company plans to devote all resources
required to resolve any significant year 2000 issues in a timely manner.

RESULTS OF OPERATIONS - COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 1998, AND
1997

The Company reported a net loss of $3,750,000 for the three months ended June
30, 1998, compared to a net loss of $587,000 for the three months ended June 30,
1997.  The 1998 third quarter loss includes a $1,399,000 write-down of oil and
gas properties and deferred income tax expense of $1,618,000 resulting from a
write-down of the net deferred tax asset.  Operating income decreased $1,719,000
to a loss of $1,734,000 in the fiscal 1998 quarter from an operating loss of
$15,000 in the corresponding quarter of fiscal 1997.  The increase in operating
loss is due to lower oil and gas prices during the three months ended June 30,
1998, as compared to the prior year quarter and to the write-down of oil and gas
properties.  Following are detailed comparisons of the components of the
respective periods.

Operating revenues for the three months ended June 30, 1998, decreased $796,000,
or 26%, to $2,224,000 from $3,020,000 in the corresponding fiscal 1997 quarter.
Oil volumes decreased 6,000 barrels, or 5%, to 111,000 barrels versus 117,000
barrels in the prior year quarter, decreasing revenue by $110,000.  Gas volumes
sold from the Company's domestic properties decreased 67,000 Mcf, or 17%, to
333,000 Mcf in the current quarter compared to 400,000 Mcf in the three months
ended June 30, 1997, resulting in a $139,000 decrease in revenues.  Decreases in
domestic production volumes attributable to sales of producing properties and
natural declines in production rates were partially offset by new production
from domestic exploration projects completed during the fourth quarter of fiscal
1997 and first nine months of fiscal 1998.  Average oil prices decreased 27% to
$13.40 per barrel for the three months ended June 30, 1998, from $18.37 per
barrel for the corresponding prior year quarter, resulting in a $552,000
decrease in revenue.  Domestic gas prices decreased 19% to $1.68 per Mcf in the
current year quarter versus $2.07 in the prior year quarter, resulting in a
$130,000 revenue decrease.  Included in revenue for the quarter ended June 30,
1998, are revenues of US$157,000 on sales of 128,000 Mcf from the Comet Ridge
coalbed methane project in Queensland, Australia.  There was no revenue from
Australian gas sales during the prior year quarter, as sales from the project
commenced in February 1998.  Saltwater disposal and other income decreased
$22,000 from the corresponding fiscal 1997 quarter.

Operating expenses for the three months ended June 30, 1998, decreased $47,000,
or 4%, to $1,231,000 from $1,278,000 reported in the corresponding quarter of
fiscal 1997.  Operating expenses attributable to the Company's domestic
properties decreased $226,000, or 18%, with the average lifting cost per
equivalent barrel of domestic production decreasing 12% to $6.11 in the three
month period of fiscal 1998 from $6.92 in the prior year period.  These
decreases are attributable to sales of marginal producing properties during the
first quarter of fiscal 1998 and to a decrease in production taxes resulting
from lower oil and gas prices.  Operating expenses of $179,000 during the
quarter ended June 30, 1998, were related to the sales from the Comet Ridge
project, which commenced in February 1998.  The Company anticipates that
operating expenses for the Comet Ridge project on a per-well basis will decrease
with improved cost management and better economies of scale resulting from
increased gas sales.

General and administrative expenses decreased by $68,000, or 18%, to $308,000
during the three months ended June 30, 1998, compared to $376,000 for the prior
year period.  The decrease was primarily due to a decrease in payroll costs.

Depreciation, depletion and amortization ("DD&A") expense for the three months
ended June 30, 1998, increased by $106,000, or 12%, to $1,020,000 from $914,000
reported for the comparable fiscal 1997 period.  The increase is attributable to
$111,000 of DD&A related to the Company's Australia project, as to which there
was no DD&A expense in the prior year quarter.

                                         9

<PAGE>

Interest income decreased $18,000, or 75%, to $6,000 in the quarter ended June
30, 1998, from $24,000 in the corresponding prior year quarter.  This decrease
is due to a decrease in the average balance of cash and cash equivalents.

Interest expense for the three months ended June 30, 1998, increased $197,000,
or 99%, to $397,000 from $200,000 for the three months ended June 30, 1997.
When capitalized interest is included, interest expense increased by $94,000.
Such increase is attributable to an increase in debt and to higher interest
rates.

The net loss for the third quarter of fiscal 1998 includes a foreign currency
exchange loss of $7,000 related to gas sales from the Comet Ridge project in
Queensland, Australia, which commenced in February 1998.

Income tax expense of $1,618,000 for the quarter ended June 30, 1998, resulted
from an increase in the deferred tax asset valuation allowance.  As discussed
above, the increase in the valuation allowance is attributable to a decrease in
oil and gas prices.  An income tax benefit of $3,000 for the third quarter of
fiscal 1997 resulted from adjustments to the expected income tax liability.

The Company reported equity in loss of an NGL fractionating plant of $141,000 in
the three months ended June 30, 1997.  The Company sold its investment in the
plant on September 30, 1997.

RESULTS OF OPERATIONS - COMPARISON OF THE NINE MONTHS ENDED JUNE 30, 1998, AND
1997

The Company reported a net loss of $4,749,000 for the nine months ended June 30,
1998, versus net income of $576,000 for the nine months ended June 30, 1997.
The 1998 nine-month loss includes a $1,399,000 write-down of oil and gas
properties and deferred income tax expense of $1,618,000 resulting from a
write-down of the net deferred tax asset.  Operating income decreased $3,946,000
to a loss of $2,204,000 in the first nine months of fiscal 1998 from income of
$1,742,000 in the prior year period.  This decrease was attributable to lower
oil and gas prices and a decrease in production volumes during the first nine
months of fiscal 1998 as compared to the first half of fiscal 1997, as well as
to the write-down of oil and gas properties.  Following are detailed comparisons
of the components of the respective periods.

Operating revenues for the nine months ended June 30, 1998, decreased
$3,164,000, or 31%, to $7,032,000 from $10,196,000 in the corresponding fiscal
1997 period.  Oil volumes decreased 51,000 barrels, or 14%, to 319,000 barrels
versus 370,000 barrels in the prior year period, decreasing revenue by
$1,014,000.  Domestic gas volumes decreased 178,000 Mcf, or 15%, to 983,000 Mcf
in the current year period compared to 1,161,000 Mcf in the nine months ended
June 30, 1997, resulting in a $417,000 decrease in revenues.  These volume
decreases were due to the sale of producing properties and to declining
production rates.  Average oil prices decreased 22% to $15.48 per barrel for the
nine months ended June 30, 1998, from $19.88 per barrel for the corresponding
prior year period, resulting in a $1,404,000 decrease in revenue.  Prices
received by the Company for domestic gas sales decreased 24% to $1.78 per Mcf in
the current year period versus $2.34 in the prior year period, resulting in a
$550,000 revenue decrease.  The Company recorded revenues of US$232,000 on sales
of 184,000 Mcf from initial gas sales commencing in February 1998 from the Comet
Ridge coalbed methane project in Queensland, Australia.  Saltwater disposal and
other income decreased $11,000 from the corresponding fiscal 1997 period.

Operating expenses decreased $512,000, or 12%, to $3,682,000 from $4,194,000
reported in the fiscal 1997 period.  Operating expenses attributable to the
Company's domestic properties decreased $772,000, or 18%, with the average
lifting cost per equivalent barrel of domestic production decreasing 5% to $6.86
in the first nine months of fiscal 1998 from $7.19 in the prior year period. 
These decreases are attributable to sales of marginal producing properties
during the first quarter of fiscal 1998 and to a decrease in production taxes
resulting from lower oil and gas prices.  Operating expenses during the nine
month period ended June 30, 1998, included $260,000 of operating expenses
attributable to the Comet Ridge project in Australia.  There were no operating
expenses related to the Australia project during the prior year period.  As
mentioned above under the results for the three months ended June 30, 1998 and
1997, operating expenses on a per-well basis are anticipated to decrease with
improved cost management and better economies of scale resulting from increased
gas sales.

General and administrative expenses remained flat, decreasing $5,000 to
$1,190,000 during the nine months ended June 30, 1998, compared to $1,195,000
for the prior year period.

                                         10

<PAGE>

DD&A expense for the nine months ended June 30, 1998, increased by $367,000, or
14%, to $2,965,000 from $2,598,000 reported for the comparable fiscal 1997
period.  The increase is attributable both to $145,000 of DD&A related to the
Comet Ridge project in Australia and to a higher domestic DD&A rate per
equivalent barrel of production resulting primarily from shorter economic
reserve life based on lower oil and gas prices.  There was no DD&A expense
related to the Comet Ridge project in the prior year period.

Interest income decreased $55,000, or 66%, to $28,000 in the nine months ended
June 30, 1998, from $83,000 in the corresponding prior year period.  This
decrease is due to a decrease in the average balance of cash and cash
equivalents.

Interest expense for the nine months ended June 30, 1998, increased $293,000, or
45%, to $948,000 from $655,000 for the nine months ended June 30, 1997.  When
capitalized interest is included, interest expense increased by $200,000.  Such
increase is attributable to an increase in debt and to higher interest rates.

The net loss for the nine months ended June 30, 1998, includes a foreign
currency exchange loss of $7,000 related to gas sales from the Comet Ridge
project in Queensland, Australia, which commenced in February 1998.

Income tax expense of $1,618,000 for the nine months ended June 30, 1998,
resulted from an increase in the deferred tax asset valuation allowance.  As
discussed above, the increase in the valuation allowance is attributable to a
decrease in oil and gas prices.

The Company reported equity in the loss of an NGL fractionating plant of
$334,000 in the nine months ended June 30, 1997.  The Company sold its
investment in the plant on September 30, 1997.

IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133").  This statement is effective
for all fiscal quarters of fiscal years beginning after June 15, 1999, and will
be adopted by the Company effective October 1, 1999.  SFAS 133 requires
companies to report the fair-market value of derivatives on the balance sheet
and record in income or other comprehensive income, as appropriate, any changes
in the fair value of the derivative.  The Company is currently evaluating the
impact of the statement.

                                         11


<PAGE>


                             PART II - OTHER INFORMATION


ITEM 1.   LEGAL PROCEEDINGS

          See Note 5 to the consolidated financial statements under Part I -
          Item 1 of this report as well as the report for the quarterly period
          ended June 30, 1997.

ITEM 2.   CHANGES IN SECURITIES

          None

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

          None

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

          None

ITEM 5.   OTHER INFORMATION

          None
     
ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          (a)  EXHIBITS:

               Filed in Part I

                    11.  Computation of per share earnings

               Filed in Part II

                    Exhibit 27 - Financial Data Schedule

          (b)  REPORTS ON FORM 8-K:

                    None


                                         12


<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.


                                   Tipperary Corporation
                                   ----------------------------------------
                                   Registrant



Date:     August 14, 1998          By:  /s/ David L. Bradshaw
                                   ----------------------------------------
                                        David L. Bradshaw, President, Chief
                                        Executive Officer and Chairman of
                                        the Board of Directors




Date:     August 14, 1998          By:  /s/ Lisa S. Wilson
                                   ----------------------------------------
                                        Lisa S. Wilson, Chief Financial
                                        Officer



                                         13