**FORM
      10-Q**







**SECURITIES
      AND EXCHANGE COMMISSION**  **Washington,
      D.C. 20549**





MARK
      ONE





X           QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES


EXCHANGE
      ACT OF
      1934




For
      the
      quarterly and six month period ended June 30, 2007




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: 1-100




**CROFF
      ENTERPRISES, INC.**


(Exact
      Name Of Registrant As Specified In Its Charter)




**Utah**
              
              **80209**State
                  of Incorporation
              **3773
                  Cherry Creek Drive North, Suite 1025**
              Zip
                  Code**Denver,
                  Colorado**Address
                  of principal executive offices**(303)
                  383-1555**
              
              **87-0233535**Registrant’s
                  telephone number, including area code
              
              I.R.S.
                  Employer Identification Number


Securities
      registered pursuant to Section 12(b) of the Act:


**Common
      -**


**$0.10
      Par
      Value**                                                                 
**None**


Title
      of each
      class                                       
Name
      of each exchange on
      which registered




Securities
      registered pursuant to Section 12(g) of the Act: 
 **None**





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 has required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90
      days.X
      Yes  _____No





Indicate
      by check mark whether the Registrant is an accelerated filer (as defined in
      Rule
      12b-2 of the Exchange Act). 
      Yes  _____      X
      No





Indicate
      by check mark whether the Registrant is a shell company (as defined in Rule
      12
      b-2 of the Exchange
      Act)    _____Yes     X
      No





There
      were 551,344 shares of common stock outstanding on August 1, 2006, exclusive
      of
      69,399 common shares held in treasury stock.









1


**INDEX**




INDEX
      TO
      INFORMATION INCLUDED IN THE QUARTERLY REPORT (FORM 10-Q) TO THE SECURITIES
      AND
      EXCHANGE COMMISSION FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2007
      (UNAUDITED).




Page
                  NumberPART
                  I.UNAUDITED FINANCIAL INFORMATIONItem
                  1.
              .
              Unaudited
                  Financial Statements
              3Item
                  2.
              .
              Management’s
                  Discussion and Analysis of FinancialCondition
                  and Results of Operations
              8Item3.
              .
              Controls
                  and Procedures
              11PART
                  II. OTHER INFORMATION
              12Item
                  5.
              
              Material
                  Subsequent Events
              12Item
                  6.
              
              Exhibits
                  and Reports on Form 8-K
              12Signatures
              
              
              13Certifications
              
              
              14




Forward-Looking
      Statements




Certain
      information included in this report, other materials filed or to be filed by
      the
      Company with the Securities and Exchange Commission (“SEC”), as well as
      information included in oral statements or other written statements made or
      to
      be made by the Company contain or incorporate by reference certain statements
      (other than statements of historical or present fact) that constitute
“forward-looking statements” within the meaning of Section 27A of the Securities
      Act of 1933 and Section 21E of the Securities Exchange Act of 1934.




All
      statements, other than statements
      of historical or present facts, that address activities, events, outcomes or
      developments that the Company plans, expects, believes, assumes, budgets,
      predicts, forecasts, estimates, projects, intends or anticipates (and other
      similar expressions) will or may occur in the future are forward-looking
      statements. These forward-looking statements are based on management’s current
      belief, based on currently available information, as to the outcome and timing
      of future events. When considering forward-looking statements, you should keep
      in mind the cautionary statements in this Form 10-Q and the Company’s Annual
      Report on Form 10-K/A for the year ended December 31, 2006. Such forward-looking
      statements appear in a number of places and include statements with respect
      to,
      among other things, such matters as: future capital, development and exploration
      expenditures (including the amount and nature thereof), drilling, deepening
      or
      refracing of wells, oil and natural gas reserve estimates (including estimates
      of future net revenues associated with such reserves and the present value
      of
      such future net revenues), estimates of future production of oil and natural
      gas, business strategies, expansion and growth of the Company’s operations, cash
      flow and anticipated liquidity, prospects and development and property
      acquisitions, obtaining financial or industry partners for prospect or program
      development, or marketing of oil and natural gas. We caution you that these
      forward-looking statements are subject to risks and
      uncertainties.  These risks include but are not limited to: general
      economic conditions, the Company’s ability to finance acquisitions and drilling,
      the market price of oil and natural gas, the risks associated with exploration,
      the Company’s ability to find, acquire, market, develop and produce new
      properties, operating hazards attendant to the oil and natural gas business,
      uncertainties in the estimation of proved reserves and in the projection of
      future rates of production and timing of development expenditures, the strength
      and financial resources of the Company’s competitors, the Company’s ability to
      find and retain skilled personnel, climatic conditions, labor relations,
      availability and cost of material and equipment, environmental risks, the
      results of financing efforts, regulatory developments and the other risks
      described in the Company’s Annual Report on Form 10-K/A for the year ended
      December 31, 2006.


2




Reserve
      engineering is a subjective process of estimating underground accumulations
      of
      oil and natural gas that cannot be measured in an exact way. The accuracy of
      any
      reserve estimate depends on the quality of available data and the interpretation
      of that data by reserve engineers. In addition, the results of drilling, testing
      and production activities may justify revisions of estimates that were made
      previously. If significant, these revisions could change the schedule of any
      further production and/or development drilling. Accordingly, reserve estimates
      are generally different from the quantities of oil and natural gas that are
      ultimately recovered.





In
      addition, the Company is in a transition period, with the Company considering
      various “going forward” proposals that may materially alter the financing,
      structure, and core business of the Company, which may in turn, significantly
      affect current estimates or projections.




Should
      one or more of the risks or
      uncertainties described above or elsewhere in this Form 10-Q or presented in
      the
      Company’s Annual Report on Form 10-K/A for the year ended December 31, 2006
      occur, or should underlying assumptions prove incorrect, actual results and
      plans could differ materially from those expressed in any forward-looking
      statements. We specifically disclaim all responsibility to publicly update
      any
      information contained in a forward-looking statement or any forward-looking
      statement in its entirety and therefore disclaim any resulting liability for
      potentially related damages.




All
      forward-looking statements attributable to us are expressly qualified in their
      entirety by this cautionary statement.





**PART
      I.  UNAUDITED FINANCIAL INFORMATION**








**ITEM
      1.  UNAUDITED FINANCIAL STATEMENTS**


The
      financial statements included
      herein have been prepared in conformity with generally accepted accounting
      principles. The statements are unaudited but reflect all adjustments, which,
      in
      the opinion of management, are necessary to fairly present the Company’s
      financial position and results of operations. All such adjustments are of a
      normal recurring nature.


3




**CROFF
                  ENTERPRISES, INC.**
                BALANCE
                  SHEETS
                (Unaudited)December
                  31,
              
              
              June
                  302006
              
              
              2007ASSETSCurrent
                  assets:Cash and cash equivalents
              
              $
              985,729
              
              
              $
              1,050,929Accounts receivable
              
              
              124,900
              
              
              
              119,1891,110,629
              
              
              
              1,170,118Oil
                  and natural gas properties, at cost, successful efforts method:
              
              
              1,340,362
              
              
              
              1,363,207Accumulated depletion and depreciation
              
              
              (583,830
              )
              
              
              (608,830
              )756,532
              
              
              
              754,377Total
                  assets
              
              $
              1,867,161
              
              
              
              1,924,495LIABILITIES AND STOCKHOLDERS’ EQUITYCurrent
                  liabilities:Accounts payable
              
              $
              58,756
              
              
              
              34,139Current portion of ARO
              
              
              23,000
              
              
              
              23,000Accrued liabilities
              
              
              33,375
              
              
              
              (7,719
              )115,131
              
              
              
              49,420Long-term
                  portion of ARO
              
              
              64,695
              
              
              
              67,922Stockholders’
                  equity:Class A Preferred stock, no par value5,000,000 shares authorized, none issued
              
              ****
              **--**
              
              
              ****
              **--**Class B Preferred stock, no par value; 1,000,000 shares
                  authorized,540,659 shares issued and outstanding
              
              
              1,380,387
              
              
              
              1,493,743Common stock, $.10 par value; 20,000,000 shares
                  authorized,620,643 shares issued and outstanding
              
              
              62,064
              
              
              
              62,064Capital in excess of par value
              
              
              155,715
              
              
              
              155,715Treasury stock, at cost, 69,399 sharesissued and outstanding in 2005 and 2006
              
              
              (107,794
              )
              
              
              (107,794
              )Retained earnings
              
              
              196,963
              
              
              
              203,4251,687,335
              
              
              
              1,807,153Total liabilities and stockholders’ equity
              
              $
              1,867,161
              
              
              $
              1,924,495
  See
        accompanying notes to unaudited condensed financial
        statements


4


**CROFF
                ENTERPRISES, INC.**STATEMENTS
                OF OPERATIONS(Unaudited)Three
                months ended
            
            
            Six
                months endedJune
                30,
            
            
            June
                30,2006
            
            
            2007
            
            
            2006
            
            
            2007Revenues:Oil
                and natural gas sales
            
            $
            209,032
            
            
            $
            211,792
            
            
            $
            435,106
            
            
            $
            422,121Interest
                income
            
            
            7,221
            
            
            
            11,279
            
            
            
            13,879
            
            
            
            22,428Other
                income
            
            
            --
            
            
            
            2,760
            
            
            
            --
            
            
            
            2,760216,253
            
            
            
            225,831
            
            
            
            448,985
            
            
            
            447,309Expenses:Lease
                operating expense includingproduction
                taxes
            
            
            57,469
            
            
            
            62,927
            
            
            
            123,158
            
            
            
            138,423General
                and administrative
            
            
            35,874
            
            
            
            40,789
            
            
            
            98,826
            
            
            
            84,661Overhead
                expense, related party
            
            
            8,126
            
            
            
            12,055
            
            
            
            24,444
            
            
            
            24,180Accretion
                expense
            
            
            1,467
            
            
            
            1,614
            
            
            
            2,934
            
            
            
            3,227Depletion
                and depreciation
            
            
            12,000
            
            
            
            12,500
            
            
            
            24,500
            
            
            
            25,000114,936
            
            
            
            129,885
            
            
            
            273,862
            
            
            
            275,491Income
                before income taxes
            
            
            101,317
            
            
            
            95,946
            
            
            
            175,123
            
            
            
            171,818Income
                taxes expense
            
            
            23,000
            
            
            
            30,000
            
            
            
            39,000
            
            
            
            52,000Net
                income
            
            $
            78,317
            
            
            $
            65,946
            
            
            $
            136,123
            
            
            $
            119,818Net
                income applicable topreferred
                B shares
            
            
            76,682
            
            
            
            62,965
            
            
            
            132,091
            
            
            
            113,356Net
                income applicable tocommon
                shares
            
            $
            1,635
            
            
            $
            2,981
            
            
            $
            4,032
            
            
            $
            6,462Basic
                and diluted net incomeper
                common share
            
            $
            *
            
            
            
            *
            
            
            $
            0.01
            
            
            $
            0.01Weighted
                average common shares outstanding
            
            
            551,224
            
            
            
            551,224
            
            
            
            551,224
            
            
            
            551,224




*
      less
      than $0.01 per common share.





See
      accompanying notes to unaudited condensed financial statement.


5





**CROFF
                  ENTERPRISES, INC.**
                STATEMENTS
                  OF STOCKHOLDERS’ EQUITY
                For the year ended December 31, 2006 and the six months
                  ended June
                  30, 2007
                (Unaudited)Capital
                  inPreferred
                  B
                  stock
              
              
              Common
                  stock
              
              
              excess
                  of
              
              
              Treasury
              
              
              AccumulatedShares
              
              
              Amount
              
              
              Shares
              
              
              Amount
              
              
              par
                  value
              
              
              stock
              
              
              earningsBalance
                  at December 31, 2006
              
              
              540,659
              
              
              $
              1,380,387
              
              
              
              620,643
              
              
              $
              62,064
              
              
              $
              155,715
              
              
              $
              (107,794
              )
              
              $
              196,963Net
                  income for the six monthsended June 30, 2007
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              119,818Preferred stock reallocation
              
              
              -
              
              
              
              113,356
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (113,356
              )Balance
                  at June 30, 2007
              
              
              540,659
              
              
              
              1,493,743
              
              
              
              620,643
              
              
              $
              62,064
              
              
              $
              155,715
              
              
              $
              (107,794
              )
              
              $
              203,425
  See
        accompanying notes to unaudited condensed financial statement




6


**CROFF
                ENTERPRISES, INC.**STATEMENTS
                OF CASH FLOWSFor
                the six months ended June 30, 2006 and 2007(Unaudited)2006
            
            
            2007Cash
                flows from operating activities:Net
                income
            
            $
            136,123
            
            
            $
            119,818Adjustments
                to reconcile net income tonet
                cash provided by operating activities:Depletion,
                depreciation and accretion
            
            
            27,434
            
            
            
            28,227Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            19,232
            
            
            
            5,711Accounts
                payable
            
            
            (6,814
            )
            
            
            (24,617
            )Accrued
                liabilities
            
            
            (48,903
            )
            
            
            (41,094
            )Net
                cash provided by operating activities
            
            
            127,072
            
            
            
            88,045Cash
                flows from investing activities:Deposit
                received for sale of assets
            
            
            100,000
            
            
            
            --Acquisition
                of property leases and improvements
            
            
            (50,454
            )
            
            
            (22,845
            )Net
                cash provided by investing activities
            
            
            49,546
            
            
            
            (22,845
            )Cash
                flows from investment activities:Costs
                incurred for the benefit of farmout agreement
            
            
            (300,621
            )
            
            
            --Net
                cash (used) by financing activities
            
            
            (300,621
            )
            
            
            --Net
                increase (decrease) in cash and cash equivalents
            
            
            (124,003
            )
            
            
            65,200Cash
                and cash equivalents at beginning of period
            
            
            902,257
            
            
            
            985,729Cash
                and cash equivalents at end of period
            
            $
            778,254
            
            
            $
            1,050,929Supplemental
                disclosure of non-cash investing and financing
                activities: None





See
      accompanying notes to unaudited condensed financial statement.


7


**CROFF
      ENTERPRISES, INC**.


**NOTES
      TO UNAUDITED CONDENSED FINANCIAL STATEMENTS**





*Basis
      of Preparation*





The
      condensed financial statements for
      the three and six month periods ended June 30, 2006 and 2007 in this report
      have
      been prepared by the Company without audit pursuant to the rules and regulations
      of the Securities and Exchange Commission and reflect, in the opinion of the
      management, all adjustments necessary to present fairly the results of the
      operations of the interim periods presented herein.  Certain
      information in footnote disclosures normally included in financial statements
      prepared in accordance with accounting principles generally accepted in the
      United States of America have been omitted pursuant to such rules and
      regulations, although the Company believes the disclosures presented herein
      are
      adequate to make the information presented not misleading.  It is
      suggested that these condensed financial statements be read in conjunction
      with
      the financial statements and notes thereto included in the Company’s Annual
      Report on Form 10-K/A for the year ended December 31, 2006, which report has
      been filed with the Securities and Exchange Commission.  The Annual
      Report is available from the Company’s website
      at  www.croff.com, and online at the Securities and Exchange
      Commission website at www.sec.gov/edgar.





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





*Overview*





Croff
      Enterprises, Inc. (“Croff’ or the
“Company”) was incorporated in Utah in 1907.  Croff is an independent
      energy company engaged in the business of oil and natural gas exploration and
      production, primarily through the acquisition of producing oil and natural
      gas
      leases as well as the ownership of perpetual mineral interests.  Other
      companies operate almost all of the wells from which Croff receives revenues
      and
      Croff has no control over the factors which determine royalty or working
      interest revenues, such as markets, prices and rates of
      production.  Today, Croff participates as a working interest owner in
      approximately 40 wells or units of several wells.  Croff holds small
      royalty interests in approximately 212 wells.





*Summary
      of Current Events – Primarily Termination of the Tiayuan Rongan Business Trading
      Company Ltd. Acquisition Agreement*





Croff
      Enterprises, Inc. announced on December 14, 2006, a Stock Exchange Agreement
      (providing for shareholder approval) providing for the majority acquisition
      of
      the Tiayuan Rongan Business Trading Company Limited, hereafter “TRBT”, a Chinese
      company, which operates shopping malls, located in the city of Taiyuan, Shanxi
      Province, in the Peoples Republic of China. The stock for stock equivalent
      Exchange Agreement (hereafter “exchange agreement”) provided for a change in
      control of Croff, a change in the business of Croff, and new management team.
      As
      part of that agreement, Croff was to cancel its Preferred B stock by exchanging
      all Preferred B assets (oil and gas assets and cash) in exchange for all (67.2%)
      of the Preferred B shares of the principal shareholder. The 67.2% of the
      Preferred B shares held by C. S. Financial LLC and Jensen Development Company,
      which are owned by Croff’s Chairman, Gerald L. Jensen, would be exchanged for
      67.2% of the assets and the balance of the Preferred B assets purchased for
      $600,000.





On
      June 1, 2007, Croff Enterprises,
      Inc. announced that it had terminated the exchange agreement with “TRBT”. The
      agreement was cancelled due to the failure of TRBT to timely supply qualifying
      financial statements to complete the proxy process and to comply with reporting
      requirements of a public company.  As part of the “TRBT” agreement,
      Croff had agreed to cancel all of its Preferred B shares and sell the remaining
      32.8% of its oil and gas assets not held by the principal shareholders in return
      for receiving all of the principal shareholders Preferred B shares constituting
      67.2% of all Preferred B shares and the sum of $600,000.





8





Subsequent
      to the cancellation of the “TRBT” Exchange Agreement, the Board appointed an
      Independent Committee to determine whether to seek the continuation of the
      Preferred B sale and pursue other strategic alternatives. The Independent
      Committee was constituted on June 15, 2007. The Independent Committee is
      reviewing the strategic options available to the Company with the goals of
      simplifying the corporate structure, becoming a larger company and lowering
      the
      costs of compliance for a small public company.





*Critical
      Accounting Policies and Estimates*





The
      Company’s discussion and analysis
      of its financial condition and results of operation are based upon financial
      statements, which have been prepared in accordance with accounting principles
      generally accepted in the United States of America.  The preparation
      of these financial statements requires the Company to make estimates and
      judgments that affect the reported amounts of assets and liabilities and
      disclosures of contingent assets and liabilities at the date of the financial
      statements and the reported amounts of revenues and expenses during the
      year.  The Company analyzes its estimates, including those related to
      oil and natural gas revenues, oil and natural gas properties, marketable
      securities, income taxes and contingencies.





The
      Company bases its estimates on
      historical experience and various other assumptions that are believed to be
      reasonable under the circumstances.  Actual results may differ from
      these estimates under different assumptions or conditions.  The
      Company believes the following critical accounting policies affect its more
      significant judgments and estimates used in the preparation of its financial
      statements and the uncertainties that it could impact results of operations,
      financial conditions and cash flows.  The Company accounts for its oil
      and natural gas properties under the successful efforts method of
      accounting.  Depletion, depreciation and amortization of oil and
      natural gas properties and the periodic assessments for impairment are based
      on
      underlying oil and natural gas reserve estimates and future cash flows using
      then current oil and natural gas prices combined with operating and capital
      development costs. There are numerous uncertainties inherent in estimating
      quantities of proved oil and natural gas reserves and in projecting future
      rates
      of production and timing of development expenditures. Historically, oil and
      natural gas prices have experienced significant fluctuations and have been
      particularly volatile in recent years. Price fluctuations can result from
      variations in weather, levels of regional or national production and demand,
      availability of transportation capacity to other regions of the country and
      various other factors. Increases or decreases in oil and natural gas prices
      received could have a significant impact on future results.





*Liquidity
      and Capital Resources*





At
      June 30, 2007, the Company had
      assets of $1,924,495 and current assets totaled $1,170,118 compared to current
      liabilities of $49,420.  Working capital at June 30, 2007 totaled
      $1,120,698 an increase of 13% compared to $995,498 at December 31,
      2006.  The Company had a current ratio at June 30, 2007 of
      approximately 24:1. During the six month period ended June 30, 2007, net cash
      provided by operations totaled $88,045, as compared to $127,072 for the same
      period in 2006. This decrease was primarily due to reduction of current
      liabilities in 2007.  The Company’s cash flow from operations is
      highly dependent on oil and natural gas prices.  The Company had no
      short-term or long-term debt outstanding at June 30, 2007.





Capital
      expenditures in the second quarter included $22,845 paid for completion of
      the
      Shriners II well which was started in 2006. This well is currently
      producing.  The Company’s plans for ongoing development, acquisition
      and exploration expenditures, and possible equity repurchases over and beyond
      the Company’s operating cash flows will depend entirely on the Company’s ability
      to secure acceptable financing, and reasonably priced
      opportunities.  Bank borrowings may be utilized to finance the
      Company’s 2007 capital budget.  In addition, the Company will utilize
      its internal operating cash flows.  Future cash flows are subject to a
      number of variables, including the level of production and oil and natural
      gas
      prices.  There can be no assurance that operations and other capital
      resources will provide cash in sufficient amounts to maintain planned levels
      of
      capital expenditures or that increased capital expenditures will be
      undertaken.





The
      Company believes that borrowings
      from financial institutions, projected operating cash flows and the cash on
      hand
      will be sufficient to cover its working capital requirements for the next 12
      months, if continuing its current oil and gas activities.  In
      connection with consummating any significant acquisition or funding an
      exploratory or development drilling program, additional debt or equity financing
      will be required, which may or may not be available on terms that are acceptable
      to the Company.


9




While
      certain costs are affected by the general level of inflation, factors unique
      to
      the oil and natural gas industry result in independent price fluctuations.
      Over
      the past five years, significant fluctuations have occurred in oil and natural
      gas prices. Although it is particularly difficult to estimate future prices
      of
      oil and natural gas, price fluctuations have had, and will continue to have,
      a
      material effect on the Company.  Overall, it is management’s belief
      that inflation is generally favorable to the Company since it does not have
      significant operating expenses.





*Results
      of Operations*





*Three
      months ended June 30, 2007 compared to three months ended June 30,
      2006.*





The
      Company had a net income for the
      second quarter of 2007 which totaled $65,946 compared to a net income of $78,317
      for the same period in 2006.  This decrease in income from 2006 was
      due to lower prices for natural gas, higher lease operating expenses, and higher
      general and administrative expenses. The company expects lease operating
      expenses to remain relatively stable and general and administrative expenses
      to
      be higher due to strategic corporate changes.





Revenues
      for the second quarter of 2007
      totaled $225,831, a slight increase from the same period in 2006. Oil and
      natural gas sales for the second quarter of 2007 totaled $211,792, a 1.3%
      increase from the same period in 2006.  Increased oil prices were
      mostly offset with lower natural gas prices in the current
      quarter.  The Company’s average sales price of oil in the second
      quarter of 2007 was slightly higher than the same period in 2006.  The
      Company’s average sales price of natural gas in the second quarter of 2006 was
      approximately $5.50 per Mcf (Mcf equates to one
      thousand
      cubic feet). The price in the second quarter of 2007 was approximately
      $5.00 per Mcf.





For
      the second quarter of 2007, lease
      operating expenses, which include all production related taxes, totaled $62,927
      compared to $57,469 incurred for the same period in 2006.  This
      increase was primarily due to inflation in oil service pricing in
      2007.





Estimated
      depreciation and depletion
      expense for the second quarter of 2007 totaled $12,500 and for 2006, totaled
      $12,500.





General
      and administrative expense,
      including overhead expense paid to a related party, for the second quarter
      of
      2007, totaled $52,844 compared to $44,000 for the same period in
      2006.  This increase related primarily to the higher costs incurred in
      the TRBT acquisition and proxy.  The Company has incurred additional
      costs during the second quarter in both 2006 and 2007, associated with
      compliance with the Sarbanes-Oxley Act of 2002.





Provision
      for income taxes for the
      second quarter of 2007 totaled $30,000 compared to $23,000 for the same period
      in 2006.  This increase is primarily attributable to the expiration of
      offsetting tax loss carry forwards in 2007 and being in a higher tax
      bracket.





*Six
      Months ended June 30, 2007 compared to the six months ended June 30,
      2006.*




Revenues
      for the six months ended June
      30, 2007 totaled $ 447,309 essentially equal with revenues of $448,985 at June
      30, 2006. Net income for the six months ended June 30, 2007 and 2006 totaled
      $119,818 and $136,123 respectively. This decrease in the net income was
      primarily due to a higher provision for income taxes.





Oil
      and gas sales for the six months
      ended June 30, 2007 totaled $422,121 a 3% decrease from the $435,106 for the
      same period in 2006. This slight decrease in oil and gas sales in 2007 compared
      to 2006 is primarily attributed to a decrease in natural gas
      prices.





10




Lease
      operation expense which includes all production related taxes for the six months
      ended June 30, 2007 totaled $138,423 an 11% increase from $123,158 in 2006.
      This
      increase was primarily due to higher oilfield service costs in
      2007.





Depletion
      and depreciation expense for
      the six months ended June 30, 2007 totaled $25,000 from the sum of $24,500
      incurred for the same period in 2006. This increase was due to the small
      increase in producing assets in 2007.





General
      and administrative expenses,
      including overhead expense paid to related party, for the six months ended
      June
      30, 2007 totaled $108,841 compared to $123,270 for the same period in 2006.
      Overhead expense paid to related party for the six months ended June 30, 2007
      totaled $24,180 compared to $24,444 incurred for the same period in 2006. The
      decrease in overhead expenses is primarily attributed to timing of professional
      fees in the cancelled TRBT acquisition.  The Company has also incurred
      additional costs during both 2006 and 2007 with respect to strategic
      planning.[This should conform to the quarter above]





Provision
      for income taxes for the six
      months ending June 30, 2007 totaled $52,000 compared to $39,000 from the same
      period in 2006. This increase is primarily attributable to the expiration of
      offsetting tax loss carry forwards in 2007 and being in a higher tax
      bracket.






**ITEM
      3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK**





The
      Company’s major current market risk exposure is in crude oil and natural gas
      prices.  Realized pricing is primarily driven by the prevailing
      domestic price for oil and natural gas.  Historically, prices received
      for oil and natural gas production have been volatile and
      unpredictable.  Pricing volatility is expected to
      continue.  Natural gas price realizations for the Six months ended
      June 30, 2007, ranged from a monthly low of approximately $3.50 per Mcf to
      a
      monthly high of approximately $8 per Mcf.  Oil prices ranged from a
      monthly low of approximately $55 per barrel to a monthly high of approximately
      $70 per barrel. A decline in prices of oil or natural gas could have a material
      adverse effect on the Company’s financial condition and results of
      operations.  For the six months ended June 30, 2007, a 10% reduction
      in oil and natural gas prices would have reduced revenues by approximately
      $42,000.




**ITEM
      4.   CONTROLS AND PROCEDURES**





As
      of
      June 30, 2007, our Chief Executive Officer and Chief Financial Officer (the
      “Certifying Officers”) conducted evaluations of our disclosure controls and
      procedures. As defined under Sections 13a-15(e) and 15d-15(e) of the Exchange
      Act, the term “disclosure controls and procedures” means controls and other
      procedures of an issuer that are designed to ensure that information required
      to
      be disclosed by the issuer in the reports that it files or submits under the
      Exchange Act is recorded, processed, summarized and reported, within the time
      periods specified in the SEC’s rules and forms. Disclosure controls and
      procedures include, without limitation, controls and procedures designed to
      ensure that information required to be disclosed by an issuer in the reports
      that it files or submits under the Exchange Act is accumulated and communicated
      to the issuer’s management, including the Certifying Officers, to allow timely
      decisions regarding required disclosure. Based on this evaluation, the
      Certifying Officers have concluded that our disclosure controls and procedures
      were effective to ensure that material information is recorded, processed,
      summarized and reported by our management on a timely basis in order to comply
      with our disclosure obligations under the Exchange Act, and the rules and
      regulations promulgated thereunder.




11





**PART
      II.                      OTHER
      INFORMATION**





**ITEM
      5.  SUBSEQUENT EVENTS**







(a)
            On
                August 15, 2007, Jennifer Miller resigned as the chief accounting
                officer
                and secretary of the corporation. The Board expects to appoint a
                new
                officer at its next meeting.





(b)  Within the next five days, the company intends to file an
      Amended 10-K to correct what the Company regards as certain technical accounting
      disclosure matters.  In all events, the Company does not believe that
      the accounting changed any of the actual performance data, such as revenues,
      net
      earnings or balance sheet data, but were made primarily to conform the
      categorizations and descriptions of certain financial information as requested
      by the SEC.  Further, the Company does not intend to, for the
      foregoing reasons, restate any of its prior financial statements or prior
      filings.  Any person wishing to obtain a listing of and directory to
      the specific amendments in the financial data and narrative information within
      the 10-K/A may obtain a copy identifying those changed sections from the Company
      upon written request.










**ITEM
      6.  EXHIBITS AND REPORTS ON FORM 8-K**








(a)
            Exhibits
                – The following documents are filed as exhibits to this Quarterly Report
                on Form 10-Q:





31.1
                Certification of Chief Executive Officer pursuant to Section 302
                of the
                Sarbanes-Oxley Act of 2002. *


31.2
                Certification of Acting Chief Financial Officer pursuant to Section
                302 of
                the Sarbanes-Oxley Act of 2002. *


32.1
                Certification of Chief Executive Officer, dated May 12, 2006, pursuant
                to
                18 U.S.C. Section 1350, as adopted to Section 906 of the Sarbanes-Oxley
                Act of 2002. *


32.2
                Certification of Acting Chief Financial Officer, dated May 12, 2006,
                pursuant to 18 U.S.C. Section 1350, as adopted to Section 906 of
                the
                Sarbanes-Oxley Act of 2002. *





***
            *Filed
                herewith*













(b)
              The
                    following reports on Form 8-K were filed by Registrant





The
      Company filed a current report on Form 8-K on June 1, 2007 announcing that
      the
      Exchange Agreement with Taiyuan Rongan Business Trading Company has been
      terminated.




12


SIGNATURES





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





CROFF
      ENTERPRISES, INC.








Date:
      August 20,
      2007                                                                           By
/s/ Gerald L.
      Jensen


Gerald
      L. Jensen,


Acting
      Chief Financial Officer and
      Chief Executive Officer











13