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  November  30,  1999 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 Company 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  Company  (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 Company
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 January 14, 2000
-----------------------------                    -------------------------------
Common stock, $.001 par value                           10,349,664 Shares

<PAGE>

                           CRESTED CORP. AND AFFILIATE

                                      INDEX

                                                                        Page No.
PART I.   FINANCIAL INFORMATION

ITEM 1.   Financial Statements.

          Condensed Consolidated Balance Sheets
            November 30, 1999 and May 31, 1999...............................3-4

          Condensed Consolidated Statements of Operations
            Three and Six Months Ended November 30, 1999 and 1998..............5

          Condensed Consolidated Statements of Cash Flows
            Six Months Ended November 30, 1999 and 1998........................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 Matter to a vote of Security Holders..................15

ITEM 6.   Exhibits and Reports on Form 8-K....................................15

          Signatures..........................................................16

                                        2

<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1.   Financial Statements.

                           CRESTED CORP. AND AFFILIATE

                      Condensed Consolidated Balance Sheets

                                     ASSETS

                                                  November 30,         May 31,
                                                      1999              1999
                                                  -----------       -----------
                                                  (Unaudited)
<TABLE>
<S>                                               <C>               <C>
CURRENT ASSETS:
  Cash and cash equivalents                       $ 1,996,300       $ 3,509,000
  Accounts receivable
    Trade, net of allowance for doubtful accounts     262,400            72,200
    Affiliates                                      1,778,200         1,875,300
  Current portion of long-term receivable
    Related parties                                   116,200           115,000
  Inventory and other                                  86,800            34,200
                                                  -----------       -----------
          TOTAL CURRENT ASSETS                      4,239,900         5,605,700

LONG-TERM NOTES RECEIVABLE
  Related parties                                      12,800            10,200

INVESTMENTS IN AFFILIATES                             163,900           126,000

PROPERTIES AND EQUIPMENT                            6,535,500         5,951,800
Less accumulated depreciation,
  depletion and amortization                       (3,528,400)       (3,437,400)
                                                  -----------       -----------
                                                    3,007,100         2,514,400

OTHER ASSETS                                          159,700           158,700
                                                  -----------       -----------
                                                  $ 7,583,400       $ 8,415,000
                                                  ===========       ===========
</TABLE>
            See notes to Condensed Consolidated Financial Statements.
                                        3

<PAGE>

                           CRESTED CORP. AND AFFILIATE

                      Condensed Consolidated Balance Sheets

                 LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY

                                                 November 30,         May 31,
                                                    1999               1999
                                                 -----------        -----------
                                                 (Unaudited)
<TABLE>
<S>                                              <C>                 <C>
CURRENT LIABILITIES:
  Accounts payable and accrued expenses          $  205,900          $  371,700
  Deferred GMMV purchase option                   2,000,000           2,000,000
  Current portion of long-term debt
    Affiliate                                     7,224,700           7,054,000
    Others                                           76,400              25,300
                                                 -----------         -----------
TOTAL CURRENT LIABILITIES                         9,507,000           9,451,000

LONG-TERM DEBT                                        5,900              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 10,284,664 shares                       10,300              10,300
    Additional paid-in capital                    6,387,300           6,387,300
    Accumulated deficit                          (9,096,900)         (8,220,100)
                                                 -----------        -----------
TOTAL SHAREHOLDERS' DEFICIT                      (2,699,300)         (1,822,500)
                                                 -----------        -----------
                                                 $ 7,583,400        $ 8,415,000
                                                 ===========        ===========
</TABLE>
            See notes to Condensed Consolidated Financial Statements.
                                        4

<PAGE>

                           CRESTED CORP. AND AFFILIATE

                 Condensed Consolidated Statements of Operations

                                      Three Months Ended    Six Months Ended
                                         November 30,          November 30,
                                      ------------------    ----------------
                                    1999        1998        1999        1998
                                (Unaudited)  (Unaudited) (Unaudited) (Unaudited)
<TABLE>
<S>                             <C>        <C>         <C>          <C>
REVENUES:
  Mineral revenue               $  16,400  $   17,800  $   33,500   $    42,300
  Commercial operations            82,300      57,500     187,500       387,300
  Coal bed methane gas operations 381,600         --      381,600          --
  Oil sales                        17,500      17,400      23,000        26,900
  Interest                         29,300      31,000      69,500        68,400
  Management fees and others      150,200      74,700     227,900       295,600
                               ----------- ----------- -----------   -----------
                                  677,300     198,400     923,000       820,500

COSTS AND EXPENSES:
  Mineral operations              268,000     224,800     528,200       552,000
  Commercial operations           200,700     221,700     410,100       423,900
  Coal bed methane gas operations 151,300         --      151,300           --
  Oil Production                    7,600       8,400       8,500        19,500
  Interest                          4,100       6,400       6,100        13,100
  General and administrative      411,400     293,800     653,400       920,900
                               ----------- ----------- -----------   -----------

                                1,043,100     755,100   1,757,700     1,929,400
                               ----------  ----------- -----------    ----------

LOSS BEFORE EQUITY LOSS
  AND TAX PROVISION              (365,800)   (556,700)   (834,700)   (1,108,900)

EQUITY IN LOSS OF AFFILIATES      (19,600)   (248,000)    (42,100)     (310,900)
                               ----------- ----------- -----------  ------------

LOSS  BEFORE
  PROVISION FOR INCOME TAXES     (385,400)   (804,700)   (876,800)   (1,419,800)

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

NET (LOSS)                     $ (385,400) $ (804,700) $ (876,800)  $(1,419,800)
                               =========== =========== ===========  ============

NET (LOSS)  PER SHARE,
  BASIC AND DILUTED            $   (0.04)  $   (0.08)  $   (0.08)   $     (0.14)
                               ==========  ==========  ==========   ===========

BASIC WEIGHTED AVERAGE
  SHARES OUTSTANDING           10,284,664  10,237,694  10,284,664    10,237,694
                               ==========  ==========  ==========    ==========

DILUTED WEIGHTED AVERAGE
  SHARES OUTSTANDING           10,349,664  10,302,694  10,349,664    10,302,694
                               ==========  ==========  ==========    ==========
</TABLE>
            See notes to Condensed Consolidated Financial Statements.
                                        5

<PAGE>

                           CRESTED CORP. AND AFFILIATE

                 Condensed Consolidated Statements of Cash Flows

                                                           Six Months Ended
                                                             November 30,
                                                    ----------------------------
                                                        1999            1998
                                                        ----            ----
                                                     (Unaudited)     (Unaudited)
<TABLE>
<S>                                                 <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                          $  (876,800)    $(1,419,800)
  Adjustments to reconcile net income (loss) to net cash
    provided by (used in) operating activities:
      Depreciation, depletion and amortization           90,900         118,000
      Equity in loss of affiliates                       42,100         310,900
    Net changes in components
      of working capital                               (311,500)      1,310,100
                                                    -----------     -----------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES  (1,055,300)        319,200
                                                    -----------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Decrease (increase) in long-term receivables          (3,800)          18,100
  Investments in affiliates                            (80,000)          (2,500)
  Purchase of property and equipment                  (583,600)         (31,100)
  Increase in other assets                              (1,000)          (1,600)
                                                    -----------     -----------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES   (668,400)         (17,100)
                                                    -----------     -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from third party debt                        93,300          100,500
    Payment on long term debt                          (53,000)         (60,600)
  Net activity on long term debt to affiliate          170,700          345,400
                                                    -----------     -----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES    211,000          385,300
                                                    -----------     -----------

NET INCREASE (DECREASE) IN
  CASH AND CASH EQUIVALENTS                         (1,512,700)         687,400

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

CASH AND CASH EQUIVALENTS AT
  END OF PERIOD                                     $ 1,996,300     $ 1,700,100
                                                    ===========     ===========

SUPPLEMENTAL DISCLOSURES:
  Interest paid                                     $     6,100     $    13,100
                                                    ===========     ===========
</TABLE>
            See notes to Condensed Consolidated Financial Statements.
                                        6

<PAGE>

                                  CRESTED CORP.

              Notes to Condensed Consolidated Financial Statements


     1) The Condensed  Consolidated  Balance Sheet as of November 30, 1999,  the
Condensed  Consolidated  Statements of  Operations  for the three and six months
ended  November  30, 1999 and 1998,  have been  prepared by the Company  without
audit.  The  Condensed  Consolidated  Statement of Cash Flows for the six months
ended  November  30, 1999 and 1998 have been  prepared  by the  Company  without
audit. The Condensed  Consolidated Balance Sheet at May 31, 1999, has been taken
from the audited financial statements included in the Company's Annual Report on
Form 10-K filed 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  affiliate  as of November  30, 1999 and May 31,  1999,  the
results of operations  for the three and six months ended  November 30, 1999 and
1998, and the cash flows for the six months 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  November 30, 1999 and 1998 are not
necessarily indicative of the operating results for the full year.

     3) The condensed  consolidated  financial statements of the Company include
its  proportionate  share 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"). All material  inter-company profits and balances have been
eliminated.

     4) Deferred  GMMV  Purchase  Option at  November  30, 1999 and May 31, 1999
consists of the Company's half of the $4,000,000 Signing Bonus received when the
Company and its parent, USE entered into an Acquisition Agreement with Kennecott
Uranium Company to acquire properties. (See GMMV discussion in Item 2).

     5) Debt at May 31, 1999 and  November  30, 1999  consists  primarily of the
balance  on a note  payable  to the  Company's  parent  USE  of  $7,224,700  and
7,054,000, respectively. The remaining long-term debt of $82,300 at November 30,
1999 and  42,000 at May 31,  1999 is for  various  equipment  purchases  and the
financing of annual insurance premiums through financial institutions.

     6) The reclamation  liability of $725,900 represents the Company's share of
the  liability at the Sheep  Mountain  Mines in the Crooks Gap Mining  District.
This  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 are  abandoned.  It is not  anticipated
that either of these events will occur for sometime into the future.

     7) Certain  reclassifications  have been made in the May 31, 1999 financial
statements to conform to the classifications used in November 30, 1999.

                                        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.

Liquidity and Capital Resources

     During the six months ended  November 30, 1999,  the Company  experienced a
decrease  in  working  capital  in the  amount of $1.4  million.  This  decrease
resulted in a working  capital  deficit  $5.2  million at  November  30, 1999 as
compared  to a working  capital  deficit of $3.8  million at May 31,  1999.  The
primary  components  of  this  increase  in the  working  capital  deficit  were
reductions of $1.5 million in cash and cash equivalents,  a reduction of $97,100
in  accounts  receivable  affiliates  and an increase of $221,800 in the current
portion of long term debt.

     Accounts  receivable  affiliates  decreased  primarily  as a result  of the
Company  receiving  payments from its affiliates  Green Mountain  Mining Venture
("GMMV"), $216,200, Sutter Gold Mining Company ("SGMC"), $91,400, and Four Nines
Gold, ("FNG"),  $74,500. These reductions in accounts receivable affiliates were
partially  offset by  increased  receivables  from  other  affiliates  - Plateau
Resources,  "(Plateau"),  $271,600,  and  Yellow  Stone  Fuels  Corp.  ("YSFC"),
$64,600.

     The Company and its parent U.S. Energy Corp.  ("USE") determined during the
six  months  ended  November  30,  1999 to enter into the coal bed  methane  gas
business.  (See  "Capital  Resources  Financing"  below")  As a  result  of this
decision  the Company  invested  $80,000 in a newly formed  subsidiary  company,
Rocky  Mountain  Gas,  Inc.  ("RMG").  Additionally,  the  Company  and USE have
completely  refurbished  various  drill  rigs  and  support  equipment  and have
purchased  additional drill equipment.  These capital  expenditures for drilling
equipment consumed an additional $583,600 in cash.

     The increase in cash from financing  activities is as a result of increased
debt due to USE, in the amount of $170,700 and debt to third  parties  primarily
for the financing of prepaid insurance  premiums and miscellaneous  equipment in
the amount of $93,300.  During the six months ended November 30, 1999, long term
debt was reduced by $53,000.

     Reductions  of  working  capital  were  partially  offset by  increases  in
accounts  receivable  trade,  $190,200,  other assets $52,700 and a reduction of
$165,800 in accounts payable and accrued liabilities.  Accounts receivable trade
increased  primarily as a result of contract drilling and construction work that
is being  performed by the Company in the coal bed methane gas  business.  Other
assets increased as a result of the Company  recording prepaid insurance amounts
which will be amortized over the entire fiscal year.

     The Company reported a $2,000,000  deferred purchase option at November 30,
1999 and May 31, 1999.  This option is as the result of Kennecott  Energy paying
the Company a signing bonus upon the execution of the  Acquisition  Agreement on
June 23, 1997. The option is non-refundable  and will be offset against any cash
commitments the Company may incur on the GMMV properties in the future.

Capital Resources

     General:  The primary  source of the  Company's  capital  resources for the
remaining six months of fiscal 2000,  are the cash on hand at November 30, 1999;
contract drilling and construction  operations in coal bed methane gas; possible
equity financing from affiliated  companies;  proceeds under the line of credit;
and the potential  receipt of cash from the SMP  Arbitration  Award.  During the
quarter and six months ended November 30, 1999, the company recognized  $381,600
in revenues from the drilling and construction  contracts.  The majority of this
amount was recorded during the month of November 1999.

                                       8

<PAGE>

     The  Company  will  continue  to rely  on USE to  provide  funding  for its
expenditures  for the remaining  six months of fiscal 2000.  The Company and USE
have successfully  financed a portion of the new equipment  acquisitions as well
as equipment that they had purchased  previously.  To preserve cash, the Company
and USE continue to seek equipment financing.  Additionally, the Company and USE
will continue to offer for sale various assets such as equipment, lots and homes
in Ticaboo, Utah, real estate holdings in Wyoming, Colorado and Utah and mineral
interests. Interest, rentals of real estate holdings and equipment, and aviation
fuel sales, also will provide cash.

     Financing:  During the six months ended  November 30, 1999, the Company and
USE became involved in the exploration phase of coal bed methane gas as drilling
and construction contractors for third parties. The Company and USE also entered
into an agreement to purchase  185,000  acres of coal bed methane gas  leasehold
interests  land. To secure the land, the Company and USE formed RMG. To fund the
purchase and development of the coal bed methane gas lease hold interests RMG is
seeking equity funding.

     To acquire a 50% working  interest in the 185,000 acres of leaseholds,  RMG
paid $3.2 million to Quantum Energy,  ("Quantum") at closing on January 3, 2000.
RMG agreed to pay  Quantum an  additional  $1.0  million on May 1, 2000 and $1.3
million on or before  December 31, 2000. If these payments are not made, the 50%
working interest could be reduced.  It is contemplated  that the Company and USE
will conduct the drilling and  construction  work on these and other  properties
which will generate significant  revenues. It is further projected that RMG will
receive  significant  revenues  from the coal bed  methane  gas  production.  No
assurance can be given as to the actual amount of coal bed methane gas that will
be produced  from the RMG  properties.  The  Company  and USE own a  controlling
interest in RMG.

     Equity  financing for Sutter Gold Mining  Company  ("SGMC") and Plateau are
dependent on the market price of gold and uranium among other conditions.  As of
November 30, 1999, the prices for these metals remained  depressed and it is not
known when they will  recover.  The  Company and USE  continue 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 price for
these  metals do not  increase  in the short term,  the  working  capital of the
Company  and USE  could  be  impacted  negatively  due to  holding  costs of the
properties.  The Company and USE continue to pursue  alternative  uses for these
properties  including tourism at the SGMC properties and alternate feed or waste
disposal at the Plateau properties.

     Line of Credit: 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. It is anticipated that this line
of credit may be used to finance short term working  capital needs.  The Company
and USE are  currently  seeking  an  increase  in their  line of credit  through
financial institutions to fund expanding operations.

     Summary:  The  Company  believes  that cash on hand at November  30,  1999,
proceeds from drilling and construction  contracts,  its line of credit, and the
Company's  continued  reliance on USE, 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  mineral  property  acquisitions
and development or projected business expansions.

Capital Requirements

     General:  The primary requirements for the Company's working capital during
the  remainder of fiscal 2000 are expected to be the costs  associated  with the
development  activities of Plateau, care and maintenance costs of the former SMP
uranium  properties,  payments  of  holding  fees for  mining  claims,  business
expansion and  development  costs  associated  with the coal bed methane gas and
alternative   feed/waste   disposal   businesses   and  corporate   general  and
administrative expenses.

                                        9

<PAGE>

     SGMC:  The Company owns a minority  interest in SGMC and is  therefore  not
directly responsible for the ongoing administrative and development costs of the
properties owned by SGMC.  Through its affiliation with USE, the Company assists
in the efforts to secure  financing to place the SGMC  properties  in California
into production.

     SGMC is developing alternate uses of its mineral properties until such time
as production of gold is profitable.  SGMC is developing  various  facilities to
utilize its properties in the tourism business. SGMC is currently seeking either
debt or equity  financing  to fund these  operations.  Should  these  efforts be
unsuccessful,  the development of the tourism  business will be curtailed or the
cash reserves of the Company and USE will be needed to complete the  development
of these assets.

     Sheep Mountain Mines: The holding and reclamation costs associated with the
Sheep Mountain uranium mineral  properties are the responsibility of the Company
and USE. The holding costs during 1999 were approximately $57,000 per month. The
Company and USE  continue  to search for  improved  techniques  that will reduce
these  monthly  costs.  The  future  reclamation  costs  on the  Sheep  Mountain
properties  are covered by a reclamation  bond which is secured by the pledge of
certain of the  Company's and USE'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  and  is  shown  as  "Reclamation  liability  "  within  the  condensed
consolidated balance sheet.

     It is not  anticipated  that the Sheep Mountain  properties  will be placed
into production during Fiscal 2000. The Company and USE have determined that the
Sheep  Mountain  mining   properties  should  be  maintained  and  prepared  for
production in the future when the price of uranium  increases to the level where
the  Company  and USE are able to  obtain  long  term  delivery  contracts  with
favorable  price terms and the  Sweetwater  Mill (which is owned and operated by
the GMMV) is placed into production. There are no major reclamation expenditures
expected during the balance of Fiscal 2000 that the Company and USE are aware of
on the Sheep Mountain properties.

     GMMV: 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 in the short term uranium market.
The management  committee of the GMMV is endeavoring to reduce the holding costs
of 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  and  reclamation  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 and USE's ownership interest in the GMMV.

     On November 10, 1999,  Kennecott  Uranium  Company,  ("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 GMMV and the  dissolution  of assets.  The Company and USE do not
agree with the  allegation  made by KUC and are in the  process of filing  their
responses.  The ultimate  outcome of these actions on the cash  resources of the
Company cannot be predicted as of November 30, 1999.


                                       10

<PAGE>

     Plateau: Plateau owns and operates the Ticaboo townsite, motel, convenience
store  and  restaurant.  Additionally,  Plateau  owns and  maintains  the Tony M
uranium mine and  Shootaring  Canyon  Uranium mill. The Company does not own any
portion of Plateau but shares in the cash flow  streams of the  properties  with
USE on a 50-50 basis.  The Company and USE are  currently  seeking joint venture
partners  and  equity  financing  to enter into the  alternative  feed and waste
disposal businesses.  Currently, discussions are underway with third parties and
investment   banking  firms   regarding  the  expansion   into  these   business
opportunities. The Company and USE will continue to fund the costs of permitting
and stand-by costs associated with the properties.  Expansion into the alternate
feed  and  waste  disposal  businesses  will  require  additional  capital.  The
commercial operations of Plateau continue to improve.

     Yellow  Stone Fuels  Corp.  ("YSFC"):  In  Management's  opinion,  YSFC has
sufficient cash to fund its limited  operations.  YSFC continues to maintain its
mineral  interests and look for  additional  business  opportunities.  It is not
anticipated that the Company or USE will be obligated to advance funds on behalf
of YSFC.

     Term Debt and Other Obligations: Debt to non-related parties at
November 30, 1999, was $82,300 compared to $42,000 at May 31, 1999. The increase
in debt to non-related  parties consists  primarily of debt due on the financing
of annual insurance premiums.  The balance of the debt to non-related parties is
for the  purchase  of  various  pieces of heavy  equipment  and bears  different
interest  rates  with  various  maturity  dates.  All  payments  on the debt are
current.

     As of November  30,  1999,  the  Company  was  indebted to USE in the total
amount of $7.2 million.  USE has not indicated that it will call the debt,  when
it is due. The Company has had preliminary  discussions  with USE to potentially
retire the note with shares of its common stock.

     Reclamation  Obligations:  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.  It is not
anticipated  that any of the  mining  properties  in which the  Company  owns an
interest will enter the reclamation  phase prior to May 31, 2000. GMMV is in the
process of  reclaiming  of 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 million
in reclamation. These funds are to be recovered from a future production through
the Sweetwater Mill override until such time as they are repaid.

     Other:  The Company and USE are  currently not in production on any mineral
properties.  The Company  and USE are not using  hazardous  substances  or known
pollutants to any great degree in the  maintenance of mineral  properties or the
development  of new  businesses.  Consequently,  recurring  costs  for  managing
hazardous   substances,   and  capital  expenditures  for  monitoring  hazardous
substances or pollutants have not been significant.  The Company and USE are not
aware of any claims for  personal  injury or  property  damages  that need to be
accrued or funded.  The Company and USE maintain both workers  compensation  and
liability insurance coverage which they believe cover any claims that may exist.

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


                                       11

<PAGE>

Results of Operations

     Six and Three  Months  Ended  November  30, 1999  Compared to Six and Three
Months Ended  November  30, 1998

     During  the six  months  ended  November  30,  1999,revenues  increased  by
$102,500 to  $923,000 as compared to revenues of $820,500  during the six months
ended  November 30, 1998.  During the quarter  ended  November 30, 1999 revenues
increased by $478,900.  This increase was primarily associated with the contract
drilling and  construction  work the Company and USE have been doing in the coal
bed methane gas business.  During the six months and quarter ended  November 30,
1999, the Company recorded revenues of $381,600 from these contracts. No similar
revenues  were  recognized  during the  comparative  periods of 1998.  The other
increases  in  revenues  during  the six months  ended  November  30,  1999 were
commercial  revenues,  $45,200,  as a  result  of  increased  fuel  sales at the
Company's airport operations and increased other revenues, $102,200.

     These  increased  revenues for the six months ended November 30, 1999, were
partially offset by decreased revenues from the rental of equipment to the GMMV,
$261,900,  and the  management  fees that the  Company  received  from the GMMV,
$164,100.  The reduction of work on the GMMV  properties  was as a result of low
spot prices for uranium  and the  inability  of the Company and USE to raise the
funds  to  purchase  Kennecott  Energy's  50%  interest  in the  GMMV.  The GMMV
management  committee  determined  in late  July  1998 to  significantly  reduce
expenditures at its mineral  properties.  This curtailment reduced the rental of
equipment  revenues and management fees  previously  received by the Company and
USE from GMMV.

     Costs and Expenses for the six months ended November 30, 1999, decreased by
$171,700 when compared with those expenses  incurred during the six months ended
November  30,  1998 while  expenses  for the  quarter  ended  November  30, 1999
increased  by  $288,000.  During the quarter and six months  ended  November 30,
1999, the Company  reported coal bed methane gas  associated  costs of $151,300.
General and Administrative  expenses decreased for the six months ended November
30, 1999 by  $$267,500.  This decrease is primarily as a result of a bonus which
was paid during the six months  ended  November  30, 1998 to two  employees  for
their work on the SMP  settlement.  The bonus was the award of common  shares of
USE stock, of which the Company was responsible for half.

     Operations for the six months ended  November 30, 1999,  resulted in a loss
of $876,800 or $0.08 per share as compared to a loss of  $1,419,800 or $0.14 per
share for the six  months  ended  November  30,  1999.  The  improvement  in the
profitability  of the Company  during the six months ended November 30, 1999, is
primarily  attributable  to the contract  drilling and contract work in the coal
bed methane gas business.

                                       12

<PAGE>

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 and  entered  an Order  and  Award in April  1996 and
supplemented  it in July  1996,  which  were  ultimately  confirmed  by the U.S.
District  Court of Colorado in its Second  Amended  Judgment  (the  "Judgment").
Please  see Item 3 of the  Company's  1999  Form 10-K for more  details  of this
arbitration/litigation.  Nukem appealed the Judgment of the U.S.  District Court
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).  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.

     On  November  13,  1998,   Nukem/CRIC  filed  motions  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 motions
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.  USECC also filed a motion to dismiss the
appeal of Nukem/CRIC  to the 10th CCA. The post judgment  request and the motion
to dismiss are pending before the Courts.

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 for more details.  After a five day trial,  a jury
denied the claims of two of three  plaintiffs  but awarded  the third  plaintiff
$156,000  in  compensatory  and  punitive  damages  against  USE and awarded the
plaintiff Dejavue,  Inc. $91,668 in attorney fees. USE posted a supersedeas bond
for $275,000 to appeal the judgment and plaintiffs also appealed the judgment to
the Utah Court of Appeals.  The Utah Court of Appeals  affirmed  the judgment on
December 3, 1999 against USE and USE plans to petition the Supreme Court of Utah
for a writ of  certiorari  to appeal the  decision of the Court of Appeals.  The
petition is due to be filed on or before February 3, 2000.

                                       13

<PAGE>

BGBI Litigation

     USE and Crested are defendants and  counter-or  cross-claimants  in certain
litigation in the District Court of the Fifth  Judicial  District of Nye County,
Nevada, brought by Bond Gold Bullfrog Inc. ("BGBI") on July 30, 1991. Please see
Item 3 of  Company's  1999 Form 10K.  The Trial  Court  ruled  against  both the
plaintiff  and  defendants  on  their  respective  claims.   BGBI,  Parador  and
USE/Crested all appealed the decision to the Nevada Supreme Court.  Briefing has
been substantially completed and oral arguments have not yet been scheduled.

Sutter Gold Mining Company (SGMC) Litigation

     In 1993,  Amador County issued a  conditional  use permit  ("CUP") to allow
SGMC to develop the Sutter Gold Mine (SGM) near the town of Sutter Creek, Amador
County,  California.  A number of  conditions  were included in the original CUP
which  accommodated  local citizen and government  agency  concerns about noise,
waste  disposal,  traffic and other  aspects of the proposed  mining  operation.
Please see Item 3 of the Company's 1999 Form 10K.

     In 1997 and 1998,  SGMC proposed  amendments to the CUP for a new design of
the SGM  which  would  lower  its  environmental  impact  by  reducing  traffic,
potentially  eliminating  the use of cyanide  on-site,  and  removing  two large
tailings dams which would have been built to hold mine and mill waste. In August
and September 1998, the Board of Supervisors approved the amendments to the CUP.

     On September 28, 1998, a lawsuit was filed in Amador County Superior Court,
California  (Case  No. 98 CV 3298) by  Concerned  Citizens  of Amador  County as
plaintiffs,  against  the  County  of  Amador  and the  Amador  County  Board of
Supervisors,  and  against  SGMC  as a  real  party  in  interest.  The  lawsuit
challenged  the  actions  of  Amador  County  and its  Board of  Supervisors  in
approving  the  amended  CUP.  A hearing  was held on June 7, 1999 and the Court
denied  plaintiffs'  lawsuit on August 30, 1999.  Plaintiffs  have  appealed the
decision to the California appellate court.

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  among other  relief,  the judicial
approval of a plan to sell the GMMV or liquidate  its assets plus  attorney fees
and costs.  Defendants have filed a motion to change venue to the District Court
in Fremont County,  Wyoming.  The motion is pending.  The parties have initiated
discovery proceedings each seeking production of documents from the other.

     USE and Crested are involved in other  litigation as reported in their Form
10-Ks for the fiscal year ended May 31, 1999.  There were no material changes in
the status of the various cases during the quarter ended November 30, 1999.

                                       14

<PAGE>

ITEM 4.  Submission of Matter to a vote of Security Holders

     On December 10, 1999, the annual meeting of  shareholders  was held and the
only issue considered was the reelection of the five directors:  John L. Larsen,
Max T. Evans, Daniel P. Svilar,  Kathleen R. Martin and Michael D. Zwickl. These
directors  were  reelected  for a term  expiring at the next  succeeding  annual
meeting and until their  successors are duly elected or appointed and qualified.
With respect to the  reelection  of the five  directors,  the votes cast were as
follows:

     Name of Director          For        Against     Abstain     Withheld
     ----------------          ---        -------     -------     --------
     John L. Larsen         8,806,593     10,330      14,050       1,207
     Max T. Evans           8,804,743     12,930      14,050         457
     Daniel P. Svilar       8,807,743     10,930      13,050         457
     Kathleen R. Martin     8,806,743     10,430      14,050         957
     Michael D. Zwickl      8,804,743     12,930      13,850         457

ITEM 5.   Other Information

     On January 5, 2000, USE and Crested announced in a public news release that
their newly formed subsidiary,  Rocky Mountain Gas, Inc. ("RMG"),  had closed on
an agreement to purchase a 50% working  interest and 40% net royalty interest on
approximately  185,000 acres of leaseholds  prospective for coal bed methane gas
in the Powder River Basin of Montana.  RMG paid Quantum $3,200,000 at closing on
January 3, 2000, and agreed to pay Quantum an additional $1,000,000 on or before
May 1, 2000 and $1,300,000 on or before December 31, 2000.

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

         (a)  Exhibits.  None.

         (b) Reports on Form 8-K.  On November  22,  1999,  the Company  filed a
Report in Item 5 on Form 8-K during the second  quarter ended November 30, 1999.
The Report was  reporting  (1) the entry of the  Company and USE into a purchase
agreement for coal bed methane gas properties  and (2) the  litigation  filed by
Kennecott Uranium Company et al.

                                       15

<PAGE>

                                   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: January 14, 2000                         By:  /s/ John L. Larsen
                                                    ----------------------------
                                                    JOHN L. LARSEN,
                                                    Chairman and Vice President



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

                                       16

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