FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

[X]  Quarterly  report  pursuant  to section  13 or 15(d) of the  Securities
     Exchange Act of 1934 For the fiscal quarter ended February 29, 2000 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   0-8773

                                  CRESTED CORP.
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)

Colorado                                                     84-0608126
----------------------------------------                     -------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

877 North 8th West, Riverton, WY                             82501
----------------------------------------                     -------------------
(Address of principal executive offices)                     (Zip Code)

Company's Telephone Number, including area code:             (307) 856-9271
                                                             -------------------

                                      NONE
--------------------------------------------------------------------------------
      (Former name, address and 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 the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest practicable date.

            Class                                  Outstanding at April 14, 2000
-----------------------------                      -----------------------------
Common stock, $.001 par value                             10,381,664 Shares

<PAGE>

                           CRESTED CORP. AND AFFILIATE

                                      INDEX

                                                                        Page No.
PART I.   FINANCIAL INFORMATION

ITEM 1.   Financial Statements.

          Condensed Consolidated Balance Sheets
            February 29, 2000 and May 31, 1999...............................3-4

          Condensed Consolidated Statements of Operations
            Three and Nine Months Ended February 29, 2000 and 1999 ............5

          Condensed Consolidated Statements of Cash Flows
             Nine Months Ended February 29, 2000 and 1999......................6

          Notes to Condensed Consolidated Financial Statements.................7

ITEM 2.   Management's Discussion and Analysis of
          Financial Condition and Results of Operations.....................8-12

PART II.  OTHER INFORMATION

ITEM 1.   Legal Proceedings................................................13-14

ITEM 4.   Submission of Matters to Security Holders for Vote..................14

ITEM 6.   Exhibits and Reports on Form 8-K....................................14

          Signatures..........................................................15

                                        2

<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1.   Financial Statements.

                           CRESTED CORP. AND AFFILIATE

                      Condensed Consolidated Balance Sheets
                                     ASSETS

                                                 February 29,          May 31,
                                                     2000               1999
                                                 -----------        -----------
                                                 (Unaudited)
<TABLE>
<S>                                              <C>                <C>
CURRENT ASSETS:
    Cash and cash equivalents                    $   284,800        $ 3,509,000
    Accounts receivable
        Trade, net of allowance
          for doubtful accounts                      568,900             72,200
        Affiliates                                 2,075,900          1,875,300
    Current portion of long-term receivable
        Related parties                              270,500            115,000
    Inventory and other                               54,900             34,200
                                                 -----------        -----------
           TOTAL CURRENT ASSETS                    3,255,000          5,605,700

LONG-TERM NOTES RECEIVABLE
    Related parties                                   24,200             10,200

INVESTMENTS IN AFFILIATES                            432,100            126,000

PROPERTIES AND EQUIPMENT                           6,673,800          5,951,800
    Less accumulated depreciation,
    depletion and amortization                    (3,620,800)        (3,437,400)
                                                 -----------        -----------
                                                   3,053,000          2,514,400

OTHER ASSETS                                         159,700            158,700
                                                 -----------        -----------
                                                 $ 6,924,000        $ 8,415,000
                                                 ===========        ===========
</TABLE>
            See notes to Condensed Consolidated Financial Statements.

                                        3

<PAGE>

                           CRESTED CORP. AND AFFILIATE

                      Condensed Consolidated Balance Sheets

                      LIABILITIES AND SHAREHOLDERS' EQUITY

                                                  February 29,        May 31,
                                                     2000              1999
                                                  -----------       -----------
                                                  (Unaudited)
<TABLE>
<S>                                               <C>               <C>
CURRENT LIABILITIES:
      Accounts payable and accrued expenses       $   227,400       $   371,700
      Deferred GMMV purchase option                 2,000,000         2,000,000
      Current portion of long-term debt
         Affiliate                                  7,374,600         7,054,000
         Others                                        85,700            25,300
                                                  -----------       -----------
TOTAL CURRENT LIABILITIES                           9,687,700         9,451,000

LONG-TERM DEBT                                         26,200            16,700

RECLAMATION LIABILITY                                 725,900           725,900

COMMITMENTS AND CONTINGENCIES

FORFEITABLE COMMON STOCK, $.001 par value
      65,000 shares issued,
      forfeitable until earned                         43,900            43,900

SHAREHOLDERS' EQUITY:
      Preferred stock, $.001 par value;
         100,000 shares authorized;
         none issued or outstanding                        --                --
      Common stock, $.001 par value;
         20,000,000 shares authorized;
         issued 10,316,664 and 10,284,664 shares       10,300            10,300
      Additional paid-in capital                    6,400,100         6,387,300
      Accumulated deficit                          (9,970,100)       (8,220,100)
                                                  -----------       -----------
TOTAL SHAREHOLDERS' DEFICIT                        (3,559,700)       (1,822,500)
                                                  -----------       -----------
                                                  $ 6,924,000       $ 8,415,000
                                                  ===========       ===========
</TABLE>

            See notes to Condensed Consolidated Financial Statements.

                                        4

<PAGE>

                                            CRESTED CORP. AND AFFILIATE

                                 Condensed Consolidated Statements of Operations
                                                   (Unaudited)
<TABLE>
<S>                                          <C>                 <C>                 <C>                  <C>
                                                     Three Months Ended                       Nine Months Ended
                                                     February 29 and 28,                      February 29 and 28,
                                                  ------------------------               ---------------------------
                                                  2000                1999                2000                1999
                                                  ----                ----                ----                ----

REVENUES:
    Mineral revenue                          $     16,600        $     34,000        $     50,100        $     76,300
    Commercial operations                          67,700              52,600             255,200             439,900
    Coalbed methane operations                    680,900                  --           1,062,500                  --
    Oil sales                                      27,000              14,800              50,000              41,700
    Gain on sale of assets                          2,800              (4,600)              2,800             (4,600)
    Interest                                       21,300              37,100              90,800             105,500
    Litigation settlement                              --           3,038,600                  --           3,038,600
    Management fees and other                      41,300             142,800             269,200             438,400
                                             ------------        ------------        ------------        ------------

                                                  857,600           3,315,300           1,780,600           4,135,800
                                             ------------        ------------        ------------        ------------

COSTS AND EXPENSES:
    Mineral operations                            489,100             337,600           1,017,300             889,600
    Commercial operations                         176,000             446,800             586,200             870,700
    Coalbed methane operations                    591,100                  --             742,400                  --
    Oil Production                                 10,200               8,900              18,700              28,400
    Interest                                        3,400              10,100               9,500              23,200
    General and administrative                    427,900             515,100           1,081,300           1,436,000
                                             ------------        ------------        ------------        ------------

                                                1,697,700           1,318,500           3,455,400           3,247,900
                                             ------------        ------------        ------------        ------------

(LOSS) INCOME BEFORE EQUITY LOSS
    AND TAX PROVISION                            (840,100)          1,996,800          (1,674,800)            887,900

EQUITY IN (LOSS) INCOME OF AFFILIATE              (33,100)             96,600             (75,200)           (214,300)
                                             ------------        ------------        ------------        ------------

(LOSS) INCOME BEFORE
 PROVISION FOR INCOME TAXES                      (873,200)        2,093,400            (1,750,000)            673,600

PROVISION FOR INCOME TAXES                             --                  --                  --                  --
                                             ------------        ------------        ------------        ------------

NET (LOSS) INCOME                            $   (873,200)       $  2,093,400        $ (1,750,000)       $    673,600
                                             ============        ============        ============        ============

NET (LOSS) INCOME PER SHARE,
    BASIC AND DILUTED                        $      (0.08)               0.20               (0.17)               0.07
                                             ============        ============        ============        ============

BASIC AND DILUTED WEIGHTED
    AVERAGE SHARES OUTSTANDING                 10,363,531          10,302,694          10,354,219          10,302,694
                                             ============        ============        ============        ============

                               See notes to Condensed Consolidated Financial Statements.
</TABLE>
                                                           5

<PAGE>

                                            CRESTED CORP. AND AFFILIATE
                                 Condensed Consolidated Statements of Cash Flows
<TABLE>
<S>                                                                 <C>                      <C>
                                                                              Nine Months Ended
                                                                             February 29 and 28,

                                                                        2000                     1999
                                                                    -----------              -----------
                                                                     (Unaudited)             (Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (loss) income                                                 $(1,750,000)             $   673,600
  Adjustments to reconcile net (loss) income to net cash
      (used in) provided by operating activities:
         Depreciation, depletion and amortization                       183,400                  169,200
         Equity in loss of affiliates                                    75,200                  214,300
         Non cash compensation                                           12,800                       --
         Loss (gain) on sale of assets                                   (2,800)                   4,600
         Net changes in components
             Of working capital                                        (862,300)               1,403,100
                                                                    -----------              -----------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES                  (2,343,700)               2,464,800
                                                                    -----------              -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  (Increase) decrease in long-term receivables                         (169,500)                  18,600
  Investments in affiliates                                            (381,300)                  (3,000)
  Purchase of property and equipment                                   (725,500)                 (35,900)
  Proceeds from sale of assets                                            6,300                   50,000
  Increase in other assets                                               (1,000)                  (1,500)
                                                                    -----------              -----------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES                  (1,271,000)                  28,200
                                                                    -----------              -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from third party debt                                        169,300                  100,500
      Payment on long term debt                                         (99,400)                (103,200)
  Net activity on long term debt due to affiliate                       320,600                  615,500
                                                                    -----------              -----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                     390,500                  612,800
                                                                    -----------              -----------

NET (DECREASE) INCREASE IN
  CASH AND CASH EQUIVALENTS                                          (3,224,200)               3,105,800

CASH AND CASH EQUIVALENTS AT
  BEGINNING OF PERIOD                                                 3,509,000                1,012,700
                                                                    -----------              -----------

CASH AND CASH EQUIVALENTS AT
  END OF PERIOD                                                     $   284,800              $ 4,118,500
                                                                    ===========              ===========
SUPPLEMENTAL DISCLOSURES:
  Interest paid                                                     $     9,500              $    23,200
                                                                    ===========              ===========

  Income tax paid                                                   $        --              $    6,300
                                                                    ===========              ===========

                                See notes to Condensed Consolidated Financial Statements.
                                                            6
</TABLE>

<PAGE>

                                  CRESTED CORP.

              Notes to Condensed Consolidated Financial Statements


     1) The Condensed Consolidated Balance Sheet as of February 29, 2000 and the
Condensed  Consolidated  Statements of Operations  for the three and nine months
and Cash Flows for the nine months ended February 29, 2000 and February 28, 1999
have been prepared by the Company  without  audit.  The  Condensed  Consolidated
Balance  Sheet as of May 31,  1999,  has been taken from the  audited  financial
statements  included in the  Company's  Annual  Report on Form 10-K for the year
then ended. In the opinion of the Company, the accompanying financial statements
contain all adjustments (consisting of only normal recurring accruals) necessary
to fairly present the financial position of the Company and its subsidiary as of
February 29, 2000 and May 31, 1999,  the results of operations for the three and
nine months ended  February  29, 2000 and February 28, 1999,  and the cash flows
for the nine months then ended.

     2) 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 financial
statements be read in conjunction with the Company's May 31, 1999 Form 10-K. The
results of operations  for the periods ended  February 29, 2000 and February 28,
1999 are not necessarily indicative of the operating results for the full year.

     3) The consolidated  financial statements of the Company include 50% of the
accounts of USECB Joint Venture  ("USECB" or "USECC")  which is owned 50% by the
Company and 50% by the Company's parent, U.S. Energy Corp. ("USE").

     4) Deferred  GMMV  Purchase  Option at  February  29, 2000 and May 31, 1999
consists  of the  $2,000,000  Signing  Bonus  received  when the Company and USE
entered into an Acquisition  Agreement with Kennecott Uranium Company to acquire
properties. (See GMMV discussion in Item 2).

     5) Accrued  reclamation  obligations of $725,900 are the Company's share of
the reclamation liability at the SMP mining properties. The reclamation work may
be performed over several years and will not be commenced until such time as all
the  uranium  mineralization  contained  in the  properties  is  produced or the
properties  abandoned.  It is not  anticipated  that either of these events will
occur for sometime into the future.

                                        7

<PAGE>

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

     The  following  is  Management's  Discussion  and  Analysis of  significant
factors  which have  affected the  Company's  liquidity,  capital  resources and
results of operations during the periods included in the accompanying  financial
statements.  The discussion  contains  forward-looking  statements  that involve
risks and  uncertainties.  Our actual  results  may differ  materially  from the
results discussed in any such forward-looking statements.

Overview of Business

     The Company does its business  through USECB Joint Venture  ("USECB") which
is owned 50% by the Company and 50% by the Company's  parent,  U.S. Energy Corp.
("USE").  Certain  assets are managed  outside  USECB such as Sutter Gold Mining
Company  ("Sutter").  which is owned 4% by the  Company  and  Plateau  Resources
("Plateau")  which is owned 100% by USE. The Company  participates in 50% of the
cash flows of Plateau.

     During the nine and three  months  ended  February  29,  2000,  the Company
recognized  revenues in four major areas;  Coalbed methane contract drilling and
construction work, commercial operations, management fees and interest earned on
cash and cash  equivalents.  Other sources of revenue continue to be sale of oil
and the receipt of royalty interests on mineral properties.

     Due to current depressed uranium prices, the Company has placed its uranium
properties on care and maintenance status.  Until uranium market prices improve,
the Company  has  determined  that it would  enter into the coalbed  methane gas
business.  The Company and USE own and have  purchased  additional  drilling and
construction  equipment  that is  currently  being used on a contract  basis for
non-related companies. In addition, the Company has entered into a contract with
a third party through a newly formed subsidiary, Rocky Mountain Gas, Inc. (RMG),
to purchase a 50% interest in 185,000 acres for coalbed methane  exploration and
development  in the Powder River Basin of Montana.  The Company owns 41% of RMG.
It is  anticipated  that the business  operations of the Company will be largely
directed  toward  this new  venture  for at least the next  twelve  to  eighteen
months.

     As in all mineral  development  operations,  there is risk  involved in the
development  of  coalbed  methane  gas  fields.  Some of the known  risks in the
coalbed methane development and production business are: government regulations,
environmental  restrictions,  market price for methane gas, availability of pipe
lines and capacity in the existing  pipe lines.  The Company can not  accurately
predict what if any of these risks will have on its business in the future.

Liquidity and Capital Resources

     During the nine months  ended  February  29, 2000,  the  Company's  working
capital  deficit  increased  from  $3,845,300  at May 31,  1999  to  $6,432,700.
Included  in the  working  capital at May 31,  1999 and  February  29, 2000 is a
$2,000,000  signing bonus which was paid by Kennecott Uranium Company ("KUC") in
June of 1997 when the Company and USE entered into an Acquisition Agreement with
KUC. This signing bonus of $2,000,000 is  non-refundable  to KUC and will not be
paid back to KUC.  Another large  contributor to the working  capital deficit is
the amount due to USE. The debt due to USE was  $7,374,600  and $7,054,000 as of
February 29, 2000 and May 31, 1999, respectively.

                                        8

<PAGE>

     Cash was consumed by  operations,  $2,343,700,  and  investing  activities,
$1,271,000,  while  financing  activities  provided  $390,500  in cash  and cash
equivalents.  The operating loss of $1,750,000  minus non cash  depreciation  of
$390,500, plus other working capital component decreases of $862,300 resulted in
using  $2,343,700  for  operations  for the nine month period ended February 29,
2000. Cash of $1,271,000 used in investing activities resulted primally from the
Company's  decision to invest  $381,300 in a newly  formed  subsidiary  company,
Rocky  Mountain  Gas,  Inc.  and enter  into the  exploration,  development  and
production of coalbed  methane gas. In connection  therewith,  the Company spent
$725,500 in  refurbishing  existing  drilling  related  equipment and purchasing
additional equipment for use in the drilling business.

     The  increase  in cash  from  financing  activities  of  $390,500  resulted
primally from  equipment  financing of $169,300 less  equipment debt payments of
$99,400 and increased debt to USE of $320,600.

Capital Resources

     The primary sources of the Company's capital resources for the remainder of
Fiscal 2000 are the cash on hand at February 29, 2000;  revenues  from  contract
drilling  and  construction  activities  for  coalbed  methane  gas  operations;
possible equity financing from affiliated companies;  proceeds under the line of
credit, and the potential receipt of cash from the SMP arbitration.

     The  Company  has  successfully  financed  a portion  of its new  equipment
acquisitions.  To preserve  cash,  the Company will  continue to seek  equipment
financing  opportunities.  Additionally,  the Company will continue to offer for
sale various assets such as real estate  holdings in Wyoming,  Colorado and Utah
and mineral interests.  Interest,  rentals of real-estate holdings and equipment
and aviation fuel sales will also provide cash.

     It is  contemplated  that  the  Company  will  begin to  generate  revenues
sufficient to continue to  participate  in the coalbed  methane gas  contracting
work. The entry  threshold into the coalbed methane gas business was significant
but now that it has been  expended  and the  summer  months  have  arrived,  the
Company  anticipates  receiving  a  return  on  its  investment.  It is  further
anticipated that RMG will receive significant  revenues from coalbed methane gas
production  for its own account.  However,  no assurances can be given as to the
actual amount or timing of coalbed methane gas production from the properties in
which RMG owns an interest.

     The Company  and USE have a  $1,000,000  line of credit  with a  commercial
bank.  The line of credit  is  secured  by  various  real  estate  holdings  and
equipment  belonging to the Company and USE. At February  29,  2000,  the entire
line of credit was  available.  At the time of the filing of this report a total
of $800,000  was  available  on the line of credit.  The line of credit is being
used for short term working capital needs.

     The Company believes that cash on hand at February 29, 2000,  proceeds from
drilling and construction contracts, revenues from commercial operations, equity
financings  and its line of credit  will be  adequate  to fund  working  capital
requirements  through Fiscal 2000. However,  these capital resources will not be
sufficient  to provide  funding  for the  Company's  development  of its coalbed
methane gas business.  RMG is seeking additional equity financing to develop its
coalbed methane leases.

                                        9

<PAGE>

Capital Requirements

     The primary  requirements  for the Company's  working capital during Fiscal
2000 are expected to be the costs  associated with the expansion and development
of the coalbed methane gas and alternative  feed /waste  management  businesses,
the development activities of Plateau and Sutter; the care and maintenance costs
of the former  SMP  mineral  properties;  payments  of  holding  fees for mining
claims,  the Company's  portion of the costs associated with the GMMV properties
should the  Company  elect to  participate  in the holding  costs and  corporate
general and administrative expenses.

                                  New Business

     To fund the purchase and  development of the coalbed  methane gas leasehold
interests  described  above,  RMG is seeking  equity  funding.  To acquire a 50%
working interest in 185,000 acres of leaseholds,  RMG paid $3,200,000 to Quantum
Energy,  ("Quantum")  in January  2000.  RMG  further  agreed to pay  Quantum an
additional $1,000,000 in May 2000 and $1,300,000 on or before December 31, 2000.
If these  payments are not made,  RMG's 50% working  interest in the  leaseholds
could be reduced.  RMG also has a $2,500,000  work commitment for drilling wells
or completing infrastructure on the Quantum properties.

     Equity  financing  for the  mineral  development  of Sutter and Plateau are
dependent  on the market  price of gold and uranium  among other  things.  As of
February 29, 2000, the prices of these metals  remained  depressed and it is not
known when they will recover. The Company continues to be optimistic  concerning
the future  markets for these  metals but cannot  accurately  forecast  what the
prices will be in the short or long term markets. If the prices for these metals
do not increase in the short term,  the working  capital of the Company would be
impacted  negatively due to permitting and stand-by costs  associated with these
properties.

     Plateau owns and operates the Ticaboo townsite,  motel,  convenience store,
boat storage,  restaurant and lounge.  Additionally,  Plateau owns and maintains
the Tony M uranium mine and Shootaring  Canyon Uranium Mill. The Company and USE
share the cash flow streams of the properties on a 50-50 basis.  The Company and
USE are pursuing  alternative  uses for these properties  including  alternative
feed or waste  disposal of low level  nuclear  waste.  The Companies are seeking
joint venture  partners and equity  financing to enter into the alternative feed
and waste  disposal  business as the  expansion  into this business will require
additional capital.

     Sutter is also seeking to develop alternate uses of its mineral  properties
until such time as the market price of gold increases to a  economically  viable
level.  Sutter  is  developing  a tourism  related  business  that may  generate
sufficient  cash  flows to cover the  holding  costs of its  property.  Prior to
placing  the  property  into  production  additional  capital  will  need  to be
obtained.

                              Mineral Holding Costs

     The care and maintenance  costs  associated with the Sheep Mountain uranium
mineral  properties are the  responsibility  of the Company and USE. The holding
costs during 2000 have been approximately $48,300 per month. The Company and USE
are  currently  seeking  alternative  methods of managing the  properties  in an
effort to reduce these holding costs.

                                       10

<PAGE>

     In July 1998, the GMMV management committee unanimously agreed to place the
Jackpot Mine and  Sweetwater  Mill on active standby  status.  This decision was
made as a result of uncertainties  relative to the price and supply in the short
term uranium  market.  The  management  committee of the GMMV is  endeavoring to
reduce the holding costs for the GMMV mineral and mill  properties.  The Company
and USE have notified the GMMV management committee that they have elected to be
a  non-participating  partner in funding  current  holding costs. By making this
election,  the Company and USE will be diluted pursuant to the terms of the GMMV
contract.  It is not  believed  that the  dilution  in the  short  term  will be
material to the Company's  ownership  interest in the GMMV. The Company received
and deferred  recognition  of a $2,000,000  signing bonus in a prior year.  This
bonus  payment was  received  from KUC as a signing  upon the  execution  of the
Acquisition  Agreement on June 23, 1997. The Bonus is non-refundable and will be
used to off-set any future costs the Company may incur on the GMMV properties.

     On November 10, 1999, KUC and Kennecott Energy Company filed a court action
in the  Wyoming  State Court  against  the  Company and USE. In its action,  KUC
expressed its opinion that the GMMV was no longer  economically viable and asked
relief from the court to allow the termination of the GMMV and the  distribution
of the assets. The Company and USE do not agree with the allegations made by KUC
and have filed their response. The ultimate outcome of these actions on the cash
requirements of the Company cannot be predicted as of February 29, 2000.

                                  Debt Payments

     Debt to non -related  parties at February 29, 2000 was $111,900 as compared
to $42,000 at May 31, 1999. The increase in debt to non-related parties consists
primally  of  debt  due on the  financing  of  equipment  and  annual  insurance
premiums. All payments on the debt are current.

                            Federal Income Tax Issues

     The tax years  through May 31, 1994 are closed  after audit by the IRS. The
Company is currently  attending appeals hearings with the IRS in Denver Colorado
to  discuss  resolving  issues  raised  for fiscal  1995 and 1996.  Although  no
definite outcome can be predicted, the Company believes that there will not be a
material impact from the ultimate outcome of these hearings.

                                Reclamation Costs

         It is not anticipated that any of the Company's working capital will be
used  in  Fiscal  2000  for  the  reclamation  of any of  its  mineral  property
interests. The reclamation costs are long term and are either bonded through the
use of cash  bonds  or the  pledge  of  assets.  The GMMV is in the  process  of
reclaiming  an open pit mine near the  Sweetwater  Mill which was developed by a
previous owner. It is believed that the cost of reclamation will be covered by a
commitment by the prior owner to provide the initial  $8,000,000 in reclamation.
These funds are to be repaid  from an  overriding  royalty on future  production
through the Sweetwater Mill.

     The future  reclamation costs on the Sheep Mountain  properties are covered
by a  reclamation  bond which is secured by a pledge of certain of the Company's
real estate  assets.  The  reclamation  bond amount is reviewed  annually by the
State regulatory agencies. The Company's portion of the reclamation liability on
the Sheep Mountain properties is $725,900.

                                       11

<PAGE>

Results of Operations

Three and Nine months  ended  February  29, 2000  Compared to the Three and Nine
months ended February 28, 1999

     During  the  three  and nine  months  ended  February  29,  2000,  revenues
decreased from those revenues  reported  during the same periods of the previous
year by $2,457,700 and $2,355,200 respectively. During the three and nine months
ended February 28, 1999 the Company  received  $3,038,600 as a settlement of the
monetary  damages  in the SMP  arbitration/litigation.  There  were  no  similar
revenues  received in the three and nine months  ended  February  29,  2000.  In
addition  to  the  reduction  in  SMP  settlement  revenues,  mineral  revenues,
management fees and interest revenues decreased during the three and nine months
ended February 29, 2000.  These reductions were caused by reduced mineral prices
paid on  royalties,  no uranium  deliveries  during the current year and reduced
activity at the GMMV and SMP properties on which management fees were charged.

     These reductions in revenues were partially offset by increased revenues in
coalbed  methane gas operations and oil sales.  As noted above,  the Company has
entered into the coalbed methane  business and has contracted with third parties
to perform drilling and construction  work. Oil sales increased due to increased
market  prices for oil which  allowed the Company to begin  pumping its wells at
the Lustre Field during the nine months ended February 29, 2000.

     Costs and Expenses increased by $379,200 and $207,500  respectively for the
three and nine months ended February 29, 2000. Increased costs and expenses came
primary as a result of increased  drilling  activity in the coalbed  methane gas
business  which  required  a  certain  amount  of start  up  cost.  Additionally
construction   costs  and  expenses  increased  as  a  result  of  the  contract
construction  work being  performed  for third  party  companies  in the coalbed
methane business. Offsetting to the increases for the nine months ended February
29, 2000 in costs and  expenses  was a reduction  in General and  Administrative
expenses.  This  reduction  came as a result of  decreased  costs and  expenses,
including bonus payments, relating to the SMP arbitration/litigation.

     These  reductions in revenues and increased costs and expenses  resulted in
losses of $873,200 and  $1,750,000  for the three and nine months ended February
29, 2000 respectively as compared to earnings during the comparative  periods of
the previous year of $2,093,400 and $673,600.

                                       12

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

        Sheep Mountain Partners Arbitration/Litigation

     In 1991,  disputes arose between USE/Crested  (USECC),  and Nukem, Inc. and
its  subsidiary  Cycle  Resource  Investment  Corp.  ("CRIC"),   concerning  the
formation and operation of the Sheep Mountain  Partners ("SMP")  partnership for
uranium  mining and  marketing,  and  activities  of the  parties  outside  SMP.
Arbitration proceedings were initiated against USECC by CRIC in June 1991 before
the American  Arbitration  Association  ("AAA"). A three member panel of the AAA
held hearings on the SMP issues and entered an Order and Award in April 1996 and
clarifying  it in July  1996.  The Order and Award  were  confirmed  by the U.S.
District  Court of Colorado in its Second Amended  Judgment (the  "Judgment") in
June 1997.  The Judgment  ordered  Nukem/CRIC to pay USECC a monetary  award and
ordered  the  uranium  purchase  contracts  Nukem  entered  into with  three CIS
republics  including the purchase rights, the uranium acquired pursuant to those
rights and the profits  therefrom,  be impressed  with a  constructive  trust in
favor of SMP of which USECC owned one half.  Nukem  appealed the Judgment to the
10th Circuit  Court of Appeals  (10th CCA).  On October 22,  1998,  the 10th CCA
issued its Order and Judgment  affirming the District Court's Judgment  (without
modification).

     On  November  13,  1998,  Nukem/CRIC  filed  a  motion  for  entry  of full
satisfaction of the Judgment if Nukem/CRIC  paid only the balance  remaining due
on the monetary portion of the Judgment. USECC responded opposing the motion and
requesting  payment of the balance of the monetary  award.  On February 8, 1999,
the  District  Court  denied  the  motion  of  Nukem/CRIC  for  entry  of  final
satisfaction  of the Judgment and ordered  Nukem/CRIC to forthwith pay USECC the
balance of $5,971,600 plus interest of $105,700. Nukem/CRIC made that payment to
USECC on February 9, 1999.

     On April 28,  1999,  USECC filed a petition in the U.S.  District  Court to
dissolve SMP and for an accounting. Nukem/CRIC responded that the District Court
did not  have  jurisdiction  and  again  filed a motion  seeking  entry of final
satisfaction of the Judgment.  On July 16, 1999, the District Court again denied
the motion of Nukem/CRIC for entry of final  satisfaction of Judgment and denied
USECC's petition for dissolution because neither USECC nor Nukem/CRIC petitioned
the Court for  dissolution  of SMP before the Court  entered its Second  Amended
Judgment. On August 2, 1999, Nukem/CRIC filed a Notice of Appeal to the 10th CCA
of the District Court's July 16, 1999 Order.  Thereafter,  USECC filed a request
with the District Court for post judgment  assistance to compel Nukem to account
for its profits on the CIS contracts.  This request was denied. USECC also filed
a motion to dismiss the appeal of Nukem/CRIC to the 10th CCA,  which is pending.
On or about  March 7, 2000,  Nukem and CRIC filed their  opening  brief with the
10th CCA. U.S.  Energy and Crested  Corp.  filed their answer brief on April 10,
2000 and Nukem and CRIC may file a reply brief within 20 days thereafter. Please
see Item 3 of the Company's 1999 Form 10-K and Item 1 of PART II of the November
30, 1999 Form 10-Q for more details of this arbitration/litigation.

     Ticaboo Townsite Litigation

     In fiscal 1998, a prior  contract  operator of the Ticaboo  restaurant  and
lounge,  and two employees  supervising the motel and convenience  store in Utah
(owned by Canyon Homesteads, Inc.) and their corporation Dejavue, Inc. sued USE,
Crested and others in the Utah 3rd Judicial  District State Court. See Item 3 of
the Company's 1999 Form 10K and Item 1. of PART II of the November 30, 1999 Form
10-Q

                                       13

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for more details.  USE  petitioned  the Supreme Court of Utah for a writ of
certiorari  to allow the approval of the  decision of the Court of Appeals.  The
petition is pending.

     Kennecott Uranium Litigation

     On November  10,  1999,  Kennecott  Uranium  Company and  Kennecott  Energy
Company ("Kennecott") filed a civil action against defendants U.S. Energy Corp.,
Crested Corp. and USECC in the Sixth Judicial  District Court,  Campbell County,
Wyoming, No. 22406. Kennecott is seeking to dissolve the GMMV joint venture with
USECC and judicial  approval of a plan to sell the GMMV or liquidate  its assets
plus attorney fees and costs.  Defendants  filed a motion to change venue to the
District Court in Fremont County,  Wyoming and the Sixth Judicial District Court
granted the motion. The case was then transferred to the Ninth Judicial District
Court of  Fremont  County,  WY in Civil  Action  No.  31322.  The  parties  have
initiated  discovery  proceedings each seeking  production of documents from the
other and certain documents of the parties have been reviewed.

     On March 13, 2000, Defendants U.S. Energy, Crested Corp. and USECC filed an
answer denying the various  allegations of Kennecott and  counterclaims  against
Plaintiff  Kennecott  and its  parent  Rio Tinto  plc.  Defendants  also filed a
separate third party complaint against Rio Tinto plc.

     In their  counterclaims  and cross  complaint U.S. Energy and Crested Corp.
allege  various  claims of breach of contract  and  fiduciary  duties  including
violation of laws  against  entry into  agreements  to prevent  competition  and
influence the  production  and market of uranium  concentrate.  U.S.  Energy and
Crested  Corp.  are  seeking   $1,250,000,000   in   compensatory   damages  and
$2,000,000,000 in punitive damages.  Kennecott has filed a motion to dismiss the
complaint  and Rio Tinto  has  filed a motion  for  judgment  on the  pleadings.
Briefings  supporting the motions are underway. A hearing date on the respective
motions is currently set for May 30, 2000.

ITEM 4.   Submission of Matters to Shareholders Holders for Vote.

     On December 4, 1999, an annual meeting of shareholders was held and for the
election of directors. The results of the meeting were reported in the Company's
Form 10Q for the fiscal quarter ended November 30, 1999.

ITEM 5.   Other Information.

     On December 28, 1999,  the Utah  Department  of Water  Quality began public
advertisement of a notice for a public hearing on the water discharge permit for
the  Shootaring  Canyon  uranium mill.  The state issued the permit on March 17,
2000  and  will be  reviewed  by the  Nuclear  Regulatory  Commission  (NRC)  to
determine if the permit is in compliance.

ITEM 6. Exhibits and Reports on Form 8-K.

         (a)      Exhibits.  None.

         (b)  Reports on Form 8-K.  No reports  were filed on Form 8K during the
quarter ended February 29, 2000.

                                       14

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SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Company  has  duly  caused  this  report  to be  signed  on  its  behalf  by the
undersigned, there unto duly authorized.

                                                  CRESTED CORP.
                                                  (Company)



Date: April 14, 2000                    By:       /s/ Max T. Evans
                                                  ------------------------------
                                                  MAX T. EVANS,
                                                  President



Date: April 14, 2000                    By:       /s/ Robert Scott Lorimer
                                                  ------------------------------
                                                  ROBERT SCOTT LORIMER,
                                                  Principal Financial Officer
                                                  and Chief Accounting Officer

                                       15

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