| Utah                                                                   | 87-0233535                                |
|------------------------------------------------------------------------|-------------------------------------------|
| (State      or other jurisdiction of incorporation or organization)    | (I.R.S.      Employer Identification No.) |
|                                                                   |                                      |
| 9903 Santa Monica      Blvd, Suite 287, Beverly Hills, California | 90212                                     |
| (Address      of principal executive offices)                          | (Zip      Code)                           |

| Large      accelerated filer [_] | Accelerated      filer [_]                   |
|----------------------------------|----------------------------------------------|
| Non-accelerated      filer [_]   | Smaller      reportingcompany  [X] |

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|   |                                                                                                                                         |  PageNumber |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------|------------------|
|   |                                                                                                                                         |             |
|   | PART      I - FINANCIAL INFORMATION                                                                                                          |             |
|   |                                                                                                                                         |             |
|   |      Item 1. Financial      Statements.                                                                             | 3 –      8 |
|   |                                                                                                                                         |             |
|   |      Item 2. Management’s Discussion      and Analysis of Financial Condition and Results of      Operations. | 9                |
|   |                                                                                                                                         |             |
|   |      Item 3. Quantitative and      Qualitative Disclosures About Market Risk.                                       | 11               |
|   |                                                                                                                                         |             |
|   |      Item 4. Controls and      Procedures.                                                                          | 12               |
|   |                                                                                                                                         |             |
|   | PART      II - OTHER INFORMATION                                                                                                             |             |
|   |                                                                                                                                         |             |
|   |      Item 6.      Exhibits.                                                                                         | 12               |
|   |                                                                                                                                         |             |
|   |      Signatures                                                                                                     | 12               |
|   |                                                                                                                                         |             |
|   |      Certifications                                                                                                 | Attached         |

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|                                                                         |   | September      30, 2008(Unaudited) |     |   | December      31, 2007 |   |
|------------------------------------------------------------------------------|--------|------------------------------------|----------|--------|------------------------|--------|
| ASSETS                                                                       |   |                               |     |   |                   |   |
| CURRENT      ASSETS                                                          |   |                               |     |   |                   |   |
|                                                                         |   |                               |     |   |                   |   |
| Cash      and cash equivalents                                               |   | $                                  | 63,866   |   |                   | $      | 408,634 |   |
| Accounts      receivable                                                     |   |                               | -        |   |                   |   | 86,730 |   |
|                                                                         |   |                               |     |   |                   |   |   |   |
| TOTAL      CURRENT ASSETS                                                    |   |                               | 63,866   |   |                   |   | 495,364 |   |
|                                                                         |   |                               |     |   |                   |   |   |   |
| TOTAL      ASSETS                                                            |   | $                                  | 63,866   |   |                   | $      | 495,364 |   |
|                                                                         |   |                               |     |   |                   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY                              |   |                               |     |   |                   |   |   |   |
|                                                                         |   |                               |     |   |                   |   |   |   |
| LIABILITIES                                                                  |   |                               |     |   |                   |   |   |   |
|                                                                         |   |                               |     |   |                   |   |   |   |
| Accounts      payable                                                        |   | $                                  | 1,191    |   |                   | $      | 7,159 |   |
| Dividends      payable                                                       |   |                               | 32,076   |   |                   |   | - |   |
| Accrued      liabilities                                                     |   |                               | -        |   |                   |   | 70,667 |   |
|                                                                         |   |                               |     |   |                   |   |   |   |
| TOTAL      LIABILITIES                                                       |   |                               | 33,267   |   |                   |   | 77,826 |   |
|                                                                         |   |                               |     |   |                   |   |   |   |
| STOCKHOLDERS’      EQUITY                                              |   |                               |     |   |                   |   |   |   |
|                                                                         |   |                               |     |   |                   |   |   |   |
| Class      A Preferred stock; no par value                                   |   |                               |     |   |                   |   |   |   |
| Authorized      – 10,000,000 shares                                    |   |                               |     |   |                   |   |   |   |
| Issued      and outstanding – 0 shares                                 |   |                               | -        |   |                   |   | - |   |
| Common      stock, par value $0.10 per share                                 |   |                               |     |   |                   |   |   |   |
| Authorized      – 50,000,000 shares                                    |   |                               |     |   |                   |   |   |   |
| Issued      and outstanding – 1,120,743 and 620,743, respectively      |   |                               | 112,064  |   |                   |   | 62,064 |   |
| Additional      paid-in capital                                              |   |                               | 639,615  |   |                   |   | 439,615 |   |
| Treasury      stock, at cost – 102,644 and 69,399 shares, respectively |   |                               | (154,364 | )      |                   |   | (107,794 | ) |
| Retained      (deficit) earnings                                             |   |                               | (566,716 | )      |                   |   | 23,653 |   |
|                                                                         |   |                               |     |   |                   |   |   |   |
| TOTAL      STOCKHOLDERS’ EQUITY                                        |   |                               | 30,599   |   |                   |   | 417,538 |   |
|                                                                         |   |                               |     |   |                   |   |   |   |
| TOTAL      LIABILITIES AND STOCKHOLDERS’ EQUITY                        |   | $                                  | 63,866   |   |                   | $      | 495,364 |   |

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|                                                       |   | Three      Months Ended September 30, 2008 |      |   | Three      Months Ended September 30, 2007(as      restated) |   |    | Nine      Months Ended September 30, 2008 |   |   | Nine      Months Ended September 30, 2007(as      restated) |     |
|------------------------------------------------------------|--------|--------------------------------------------|-----------|--------|--------------------------------------------------------------|--------|---------|-------------------------------------------|--------|--------|-------------------------------------------------------------|----------|
| EXPENSES                                                   |   |                                       |      |   |                                                         |   |    |                                      |   |   |                                                        |     |
|                                                       |   |                                       |      |   |                                                         |   |    |                                      |   |   |                                                        |     |
| General      and administrative                            |   | $                                          | 46,505    |   |                                                         | $      | 28,840  |                                      |   | $      | 137,080                                                     |     |   | $ | 69,613 |   |
| Consulting      fees, non-cash compensation                |   |                                       | -         |   |                                                         |   | -       |                                      |   |   | 250,000                                                     |     |   |   | - |   |
|                                                       |   |                                       |      |   |                                                         |   |    |                                      |   |   |                                                        |     |   |   |   |   |
| TOTAL      EXPENSES                                        |   |                                       | 46,505    |   |                                                         |   | 28,840  |                                      |   |   | 387,080                                                     |     |   |   | 69,613 |   |
|                                                       |   |                                       |      |   |                                                         |   |    |                                      |   |   |                                                        |     |   |   |   |   |
| (LOSS)      FROM OPERATIONS                                |   |                                       | (46,505   | )      |                                                         |   | (28,840 | )                                         |   |   | (387,080                                                    | )        |   |   | (69,613 | ) |
|                                                       |   |                                       |      |   |                                                         |   |    |                                      |   |   |                                                        |     |   |   |   |   |
| OTHER      INCOME (EXPENSE)                                |   |                                       |      |   |                                                         |   |    |                                      |   |   |                                                        |     |   |   |   |   |
| Interest      income                                       |   |                                       | -         |   |                                                         |   | 11,065  |                                      |   |   | 3,429                                                       |     |   |   | 33,397 |   |
|                                                       |   |                                       |      |   |                                                         |   |    |                                      |   |   |                                                        |     |   |   |   |   |
| OTHER      INCOME (EXPENSE)                                |   |                                       | -         |   |                                                         |   | 11,065  |                                      |   |   | 3,429                                                       |     |   |   | 33,397 |   |
|                                                       |   |                                       |      |   |                                                         |   |    |                                      |   |   |                                                        |     |   |   |   |   |
| (LOSS)      FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |   |                                       | (46,505   | )      |                                                         |   | (17,775 | )                                         |   |   | (383,651                                                    | )        |   |   | (36,216 | ) |
| Provision      for income taxes                            |   |                                       | -         |   |                                                         |   | -       |                                      |   |   | -                                                           |     |   |   | - |   |
| (LOSS)      FROM CONTINUING OPERATIONS                     |   |                                       | (46,505   | )      |                                                         |   | (17,775 | )                                         |   |   | (383,651                                                    | )   |   |   | (36,216 | ) |
|                                                       |   |                                       |      |   |                                                         |   |    |                                      |   |   |                                                        |     |   |   |   |   |
| DISCONTINUED      OPERATIONS                               |   |                                       |      |   |                                                         |   |    |                                      |   |   |                                                        |     |   |   |   |   |
| Income      discontinued operations                        |   |                                       | -         |   |                                                         |   | 132,711 |                                      |   |   | -                                                           |     |   |   | 322,970 |   |
| Provision      for income taxes                            |   |                                       | -         |   |                                                         |   | (22,000 | )                                         |   |   | -                                                           | (74,000) |   |   |   |   |
|                                                       |   |                                       |      |   |                                                         |   |    |                                      |   |   |                                                        |     |   |   |   |   |
| INCOME      FROM DISCONTINUED OPERATIONS                   |   |                                       | -         |   |                                                         |   | 110,711 |                                      |   |   | -                                                           |     |   |   | 248,970 |   |
|                                                       |   |                                       |      |   |                                                         |   |    |                                      |   |   |                                                        |     |   |   |   |   |
| NET      (LOSS)                                            |   | $                                          | (46,505   | )      |                                                         | $      | 92,936  |                                      |   | $      | (383,651                                                    | )        |   | $ | 212,754 |   |
|                                                       |   |                                       |      |   |                                                         |   |    |                                      |   |   |                                                        |     |   |   |   |   |
| NET      (LOSS) INCOME PER COMMON SHARE                    |   |                                       |      |   |                                                         |   |    |                                      |   |   |                                                        |     |   |   |   |   |
|                                                       |   |                                       |      |   |                                                         |   |    |                                      |   |   |                                                        |     |   |   |   |   |
| Basic      and diluted:                                    |   |                                       |      |   |                                                         |   |    |                                      |   |   |                                                        |     |   |   |   |   |
| Continuing      operations                                 |   | $                                          | (0.04     | )      |                                                         | $      | (0.03   | )                                         |   | $      | (0.47                                                       | )        |   | $ | (0.07 | ) |
| Discontinued      operations                               |   |                                       | -         |   |                                                         |   | 0.20    |                                      |   |   | -                                                           |     |   |   | 0.44 |   |
| Net      (loss) income                                     |   | $                                          | (0.04     | )      |                                                         | $      | 0.17    |                                      |   | $      | (0.47                                                       | )        |   | $ | 0.39 |   |
|                                                       |   |                                       |      |   |                                                         |   |    |                                      |   |   |                                                        |     |   |   |   |   |
| WEIGHTED      AVERAGE NUMBER OF COMMON SHARES OUTSTANDING  |   |                                       |      |   |                                                         |   |    |                                      |   |   |                                                        |     |   |   |   |   |
| Basic      and diluted                                     |   |                                       | 1,120,743 |   |                                                         |   | 551,224 |                                      |   |   | 810,524                                                     |     |   |   | 551,224 |   |

----

|                                |   | Common      Stock |      |   | AdditionalPaid-in |   |    | Treasury |   |   | Retained |   |   |    |      |   |
|-------------------------------------|--------|-------------------|-----------|--------|-------------------|--------|---------|----------|--------|--------|----------|--------|--------|---------|-----------|--------|
|                                |   | Shares            |      |   | Amount            |   |    | Capital  |   |   | Stock    |   |   | Deficit |      |   | Total |   |
|                                |   |              |      |   |              |   |    |     |   |   |     |   |   |    |      |   |   |   |   |   |   |   |   |   |
| Balance,      December 31, 2007     |   |              | 620,743   |   |              | $      | 62,064  |     |   | $      | 439,615  |   |   | $       | (107,794) |   |   | $ | 23,653 |   |   | $ | 417,538 |   |
|                                |   |              |      |   |              |   |    |     |   |   |     |   |   |    |      |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock for   |   |              |      |   |              |   |    |     |   |   |     |   |   |    |      |   |   |   |   |   |   |   |   |   |
| deferred      consulting fees       |   |              | 500,000   |   |              |   | 50,000  |     |   |   | 200,000  |   |   |    | -         |   |   |   | - |   |   |   | 250,000 |   |
|                                |   |              |      |   |              |   |    |     |   |   |     |   |   |    |      |   |   |   |   |   |   |   |   |   |
| Purchase      of treasury stock     |   |              | -         |   |              |   | -       |     |   |   | -        |   |   |    | (46,570)  |   |   |   | - |   |   |   | (46,570) |   |
|                                |   |              |      |   |              |   |    |     |   |   |     |   |   |    |      |   |   |   |   |   |   |   |   |   |
| Dividend                            |   |              | -         |   |              |   | -       |     |   |   | -        |   |   |    | -         |   |   |   | (206,718) |   |   |   | (206,718) |   |
|                                |   |              |      |   |              |   |    |     |   |   |     |   |   |    |      |   |   |   |   |   |   |   |   |   |
| Net      (loss) for the nine months |   |              |      |   |              |   |    |     |   |   |     |   |   |    |      |   |   |   |   |   |   |   |   |   |
| Ended      September 30, 2008       |   |              | -         |   |              |   | -       |     |   |   | -        |   |   |    | -         |   |   |   | (383,651) |   |   |   | (383,651) |   |
|                                |   |              |      |   |              |   |    |     |   |   |     |   |   |    |      |   |   |   |   |   |   |   |   |   |
| Balance,      September 30, 2008    |   |              | 1,120,743 |   |              | $      | 112,064 |     |   | $      | 639,615  |   |   | $       | (154,364) |   |   | $ | (566,716) |   |   | $ | 30,599 |   |

----

|                                                                                      |   | Nine      Months Ended September 30, 2008 |     |   | Nine      Months Ended September 30, 2007 |   |
|-------------------------------------------------------------------------------------------|--------|-------------------------------------------|----------|--------|-------------------------------------------|--------|
| CASH      FLOWS FROM OPERATING ACTIVITIES:                                                |   |                                      |     |   |                                      |   |
| Net      (loss) from continuing operations                                                |   | $                                         | (383,651 | )      |                                      | $      | (36,216 | ) |
| Adjustments      to reconcile net (loss) to net cash (used) by operating      activities: |   |                                      |     |   |                                      |   |   |   |
| Income      from discontinued operations                                                  |   |                                      | -        |   |                                      |   | 248,970 |   |
| Depletion,      depreciation and accretion                                                |   |                                      | -        |   |                                      |   | 42,341 |   |
| Consulting      fees, non-cash compensation                                               |   |                                      | 250,000  |   |                                      |   | - |   |
| Changes      in operating assets and liabilities:                                         |   |                                      |     |   |                                      |   |   |   |
| Accounts      receivable                                                                  |   |                                      | 86,730   |   |                                      |   | 757 |   |
| Accounts      payable                                                                     |   |                                      | (5,968   | )      |                                      |   | (19,658 | ) |
| Accrued      liabilities                                                                  |   |                                      | (70,667  | )      |                                      |   | (28,730 | ) |
| NET      CASH (USED) PROVIDED BY OPERATING ACTIVITIES                                     |   |                                      | (123,556 | )      |                                      |   | 207,464 |   |
|                                                                                      |   |                                      |     |   |                                      |   |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES:                                                |   |                                      |     |   |                                      |   |   |   |
| Acquisition      of property leases and improvements                                      |   |                                      | -        |   |                                      |   | (64,209 | ) |
| NET      CASH (USED) PROVIDED BY INVESTING ACTIVITIES                                     |   |                                      | -        |   |                                      |   | (64,209 | ) |
|                                                                                      |   |                                      |     |   |                                      |   |   |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES:                                                |   |                                      |     |   |                                      |   |   |   |
| Dividends      paid                                                                       |   |                                      | (174,642 | )      |                                      |   | - |   |
| Purchase      of treasury stock                                                           |   |                                      | (46,570  | )      |                                      |   | - |   |
| NET      CASH (USED) BY FINANCING ACTIVITIES                                              |   |                                      | (221,212 | )      |                                      |   | - |   |
|                                                                                      |   |                                      |     |   |                                      |   |   |   |
| NET      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                 |   |                                      | (344,768 | )      |                                      |   | 143,256 |   |
|                                                                                      |   |                                      |     |   |                                      |   |   |   |
| CASH      AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD                             |   |                                      | 408,634  |   |                                      |   | 985,729 |   |
| CASH      AND CASH EQUIVALENTS AT THE END OF THE PERIOD                                   |   | $                                         | 63,866   |   |                                      | $      | 1,128,984 |   |

----

| Revenues:                                               |   |   |    |
|---------------------------------------------------------|--------|--------|---------|
| Oil      and natural gas sales                          |   | $      | 664,984 |   |
| Other      income                                       |   |   | 2,760   |   |
|                                                    |   | $      | 667,744 |   |
| Expenses:                                               |   |   |    |   |
| Lease      operating expense including production taxes |   |   | 212,795 |   |
| General      and administrative                         |   |   | 89,638  |   |
| Accretion      expense                                  |   |   | 4,841   |   |
| Depletion      and depreciation                         |   |   | 37,500  |   |
|                                                    |   |   | 344,774 |   |
| Income      from discontinued operations                |   |   | 322,970 |   |
| Provision      for income taxes                         |   |   | 74,000  |   |
| Net      income from discontinued operations            |   | $      | 248,970 |   |

----

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|   | 31 | Rule      13a-14(a)/15d-14(a) Certification. |
|--------|----|----------------------------------------------|

|   | 32 | Section      1350 Certification. |
|--------|----|----------------------------------|

| Dated:      October      29, 2008 | CROFF      ENTERPRISES, INC. |
|-----------------------------------|------------------------------|
|                              |                         |   |
|                              | By:                          | /s/  GREGORY R.      WOODHILL       |
|                              |                         |  Gregory      R. Woodhill, President and |
|                              |                         |      Chief      Financial Officer |

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|   | Exhibit      Number | Description                                  |
|--------|---------------------|----------------------------------------------|
|   |                |                                         |
|   | 31                  | Rule      13a-14(a)/15d-14(a) Certification. |
|   |                |                                         |
|   | 32             | Section      1350 Certification.             |

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