**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 nine month period ended September 30, 2007
  OR
  r       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: 000-16731
 
 **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 registeredSecurities
                  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   o  No
 
 Indicate
      by check mark whether the Registrant is an accelerated filer (as defined in
      Rule
      12b-2 of the Exchange Act).  o  
      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)   o 
Yes    x
      No
 
 There
      were 551,344 shares of common stock outstanding on October 1, 2007, exclusive
      of
      69,399 common shares held in treasury stock.
  
  
  **INDEX**
  INDEX
      TO
      INFORMATION INCLUDED IN THE QUARTERLY REPORT (FORM 10-Q) TO THE SECURITIES
      AND
      EXCHANGE COMMISSION FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 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
                8Item
                    3.
                
                Controls
                    and Procedures
                10PART
                    II. OTHER INFORMATION
                11Item
                    5.
                
                Material
                    Subsequent Events
                11Item
                    6.
                
                Exhibits
                    and Reports on Form 8-K
                12Signatures
                
                
                13
 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,
              
              
              September
                  302006
              
              
              2007ASSETSCurrent
                  assets:Cash and cash equivalents
              
              $
              985,729
              
              
              $
              1,128,984Accounts receivable
              
              
              124,900
              
              
              
              124,1421,110,629
              
              
              
              1,253,126Oil
                  and natural gas properties, at cost, successful efforts method:
              
              
              1,340,362
              
              
              
              1,404,571Accumulated depletion and depreciation
              
              
              (583,830
              )
              
              
              (621,330
              )756,532
              
              
              
              783,241Total
                  assets
              
              $
              1,867,161
              
              
              $
              2,036,367LIABILITIES AND STOCKHOLDERS’ EQUITYCurrent
                  liabilities:Accounts payable
              
              $
              58,756
              
              
              $
              39,098Current portion of ARO
              
              
              23,000
              
              
              
              23,000Accrued liabilities
              
              
              33,375
              
              
              
              4,645Total Current Liabilities
              
              
              115,131
              
              
              
              66,743Long-term
                  portion of ARO
              
              
              64,695
              
              
              
              69,535Stockholders’
                  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
              
              
              
              1,583,642Common 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
              
              
              
              206,4621,687,335
              
              
              
              1,900,089Total liabilities and stockholders’ equity
              
              $
              1,867,161
              
              
              $
              2,036,367
 
  See
        accompanying notes to unaudited condensed financial statements  4
 **CROFF
                ENTERPRISES, INC.**STATEMENTS
                OF OPERATIONS(Unaudited)Three
                months ended
            
            
            Nine
                months endedSeptember
                30,
            
            
            September
                30,2006
            
            
            2007
            
            
            2006
            
            
            2007Revenues:Oil
                and natural gas sales
            
            $
            231,180
            
            
            $
            242,863
            
            
            $
            666,286
            
            
            $
            664,984Interest
                income
            
            
            24,657
            
            
            
            11,065
            
            
            
            38,536
            
            
            
            33,397Other
                income
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            2,760Gain
                on Sale of Asset
            
            
            112,543
            
            
            
            --
            
            
            
            112,543
            
            
            
            --.368,380
            
            
            
            253,928
            
            
            
            817,365
            
            
            
            701,237Expenses:Lease
                operating expense includingproduction
                taxes
            
            
            73,394
            
            
            
            74,372
            
            
            
            196,552
            
            
            
            212,795General
                and administrative
            
            
            36,346
            
            
            
            33,429
            
            
            
            135,172
            
            
            
            118,090Overhead
                expense, related party
            
            
            19,020
            
            
            
            17,077
            
            
            
            43,464
            
            
            
            41,257Accretion
                expense
            
            
            1,467
            
            
            
            1,614
            
            
            
            4,401
            
            
            
            4,841Depletion
                and depreciation
            
            
            12,000
            
            
            
            12,500
            
            
            
            36,500
            
            
            
            37,500142,227
            
            
            
            138,992
            
            
            
            416,089
            
            
            
            414,183Income
                before income taxes
            
            
            226,153
            
            
            
            114,936
            
            
            
            401,276
            
            
            
            286,754Income
                taxes expense
            
            
            72,000
            
            
            
            22,000
            
            
            
            110,000
            
            
            
            74,000Net
                income
            
            $
            154,153
            
            
            $
            92,936
            
            
            $
            291,276
            
            
            $
            212,754Net
                income applicable topreferred
                B shares
            
            
            75,358
            
            
            
            89,899
            
            
            
            207,449
            
            
            
            203,255Net
                income applicable tocommon
                shares
            
            $
            78,795
            
            
            $
            3,037
            
            
            $
            83,827
            
            
            $
            9,499Basic
                and diluted net incomeper
                common share
            
            $
            0.14
            
            
            $
            0.01
            
            
            $
            0.15
            
            
            $
            0.02Weighted
                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’ EQUITYFor
                the year ended December 31, 2006 and the nine months ended September
                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 nine monthsended September 30, 2007
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              212,754Preferred stock reallocation
              
              
              -
              
              
              
              203,255
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (203,255
              )Balance
                  at September 30, 2007
              
              
              540,659
              
              
              $
              1,583,642
              
              
              
              620,643
              
              
              $
              62,064
              
              
              $
              155,715
              
              
              $
              (107,794
              )
              
              $
              206,462
  See
      accompanying notes to unaudited condensed financial statement
 6
  **CROFF
                ENTERPRISES, INC.**STATEMENTS
                OF CASH FLOWSFor
                the nine months ended September 30, 2006 and 2007(Unaudited)2006
            
            
            2007Cash
                flows from operating activities:Net
                income
            
            $
            291,449
            
            
            $
            212,754Adjustments
                to reconcile net income tonet
                cash provided by operating activities:Depletion,
                depreciation and accretion
            
            
            40,901
            
            
            
            42,341Gain
                on sale of assets
            
            
            (112,543
            )
            
            
            --Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            26,104
            
            
            
            757Accounts
                payable
            
            
            49,941
            
            
            
            (19,658
            )Accrued
                liabilities
            
            
            20,587
            
            
            
            (28,730
            )Net
                cash provided by operating activities
            
            
            316,439
            
            
            
            207,464Cash
                flows from investing activities:Proceeds
                from sale of assets
            
            
            210,550
            
            
            
            --Acquisition
                of property leases and improvements
            
            
            (110,065
            )
            
            
            (64,209
            )Net
                cash provided by investing activities
            
            
            100,485
            
            
            
            (64,209
            )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 in cash and cash equivalents
            
            
            116,303
            
            
            
            143,256Cash
                and cash equivalents at beginning of period
            
            
            902,257
            
            
            
            985,729Cash
                and cash equivalents at end of period
            
            $
            1,018,560
            
            
            $
            1,128,984Supplemental
                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 nine month periods ended September 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 42 wells or units of several wells.  Croff holds small
      royalty interests in approximately 212 wells.
 
 *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.
  8
 
 *Liquidity
      and Capital Resources*
 
 At
      September 30, 2007, the Company had
      assets of $2,036,367 and current assets totaled $1,253,126 compared to current
      liabilities of $66,743.  Working capital at September 30, 2007 totaled
      $1,176,383 an increase of 18.17% compared to $995,498 at December 31,
      2006.  The Company had a current ratio at September 30, 2007, of
      approximately 19:1. During the nine month period ended September 30, 2007,
      net
      cash provided by operations totaled $207,464, as compared to $316,439 for the
      same period in 2006. This decrease was due primarily to a one time sale,
      providing the additional cash in 2006. 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 September 30, 2007.
 
 Capital
      expenditures were not significant during the first nine months of
      2007.  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.  To date, the Company has utilized 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.
 
 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 September 30, 2007 compared to three months ended September 30,
      2006.*
 
 The
      Company had a net income for the
      third quarter of 2007 which totaled $92,936 compared to a net income of $154,153
      for the same period in 2006.  This decrease in income from 2006 was
      due to gain from the one time sale of leases in 2006 and one time higher
      interest income in the third quarter of 2006.  Oil and gas operations
      produced more income in the third quarter of 2007 than in the same quarter
      of
      2006. The company expects lease operating expenses to remain relatively stable
      and general and administrative expenses to be higher due to strategic corporate
      changes.
 
 Oil
      and natural gas sales for the third
      quarter of 2007 totaled $242,863, a 5.1% 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 third quarter of 2007 was approximately $5 per barrel higher than
      the
      same period in 2006.  The Company’s average sales price of natural gas
      in the third quarter of 2006 was approximately $5.50 per Mcf (Mcf equates to one
      thousand
      cubic feet), approximately the same as the third quarter of
      2007.
 
 For
      the third quarter of 2007, lease
      operating expenses, which include all production related taxes, totaled $74,372
      compared to $73,394 incurred for the same period in 2006.
  9
  Estimated
      depreciation and depletion
      expense for the third quarter of 2007 totaled $12,500 and for 2006, totaled
      $12,000.
 
 General
      and administrative expense,
      including overhead expense paid to a related party, for the third quarter of
      2007 totaled $50,506 compared to $55,366 for the same period in
      2006.  This decrease related primarily to the costs incurred in the
      TRBT acquisition and proxy in 2006. The Company has incurred additional costs
      during the third quarter in both 2006 and 2007, associated with compliance
      with
      the Sarbanes-Oxley Act of 2002, and anticipated augmented compliance in
      2008.
 
 Provision
      for income taxes for the
      third quarter of 2007 totaled $22,000 compared to $72,000 for the same period
      in
      2006.  In the third quarter of 2006 the Company made a one time larger
      estimate for income taxes.
 
 *Nine
      Months ended September 30, 2007 compared to the nine months ended September
      30,
      2006.*
 
 Net
      income for the nine months ended
      September 30, 2007 and 2006 totaled $212,754 and $291,276 respectively. This
      decrease in the net income was due to no gain on sale of assets in
      2007.
 
 Oil
      and gas sales for the nine months
      ended September 30, 2007 totaled $664,984 a .01% decrease from the $666,286
      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.
 
 Lease
      operation expense which includes
      all production related taxes for the nine months ended September 30, 2007
      totaled $212,795 an 8.3% increase from $196,552 in 2006. This increase was
      primarily due to higher oilfield service costs in 2007.
 
 Depletion
      and depreciation expense for
      the nine months ended September 30, 2007 totaled $37,500 from the sum of $36,500
      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 nine months ended
      September 30, 2007 totaled $159,347 compared to $178,636 for the same period
      in
      2006. Overhead expense paid to related party for the nine months ended September
      30, 2007 totaled $41,257 compared to $43,464 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 and Sarbanes Oxley compliance.
 
 Provision
      for income taxes for the nine
      months ending September 30, 2007 totaled $74,000 compared to $110,000 from
      the
      same period in 2006. This increase is primarily attributable to the gain on
      the
      sale of assets in 2006.
 
 
 **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 based on the prevailing
      domestic price for oil and natural gas.  Historically, prices received
      for oil and natural gas production have been volatile and
      unpredictable.  The price for oil is driven primarily by international
      political events, trading factors, and world wide supply and demand, including
      the safety of delivery.  Pricing volatility is expected to
      continue.  Croff has no control over oil and gas
      prices.  Natural gas price realizations for the nine months ended
      September 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
      $80 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 nine months ended September 30, 2007, a 10%
      reduction in oil and natural gas prices would have reduced revenues by
      approximately $66,000.
  10
 
 **ITEM
      4.   CONTROLS AND PROCEDURES**
 
 As
      of
      September 30, 2007, our Chief Executive Officer and Chief Accounting 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.
 
 Further,
      there were no changes in our internal control over financial reporting during
      the first two fiscal quarters that have materially affected, or are reasonably
      likely to materially affect, our internal control over financial
      reporting
 
 
 **PART
      II.        OTHER
      INFORMATION**
 
 **ITEM
      5.  SUBSEQUENT EVENTS**
 
 (a)
            On
                September 27, 2007 the Croff Board of Directors adopted a Plan of
                Corporate Division and Reorganization. The Plan was then drafted
                and
                executed by all the directors. The Plan, in essence, divides Croff
                into a
                new private company containing the assets pledged to the Preferred B
                shares, and the existing public company holding the remaining assets.
                The
                new company would contain all the Preferred B share assets and liabilities
                and be owned by the Preferred B shareholders.  The Preferred B
                shares have all of the oil and gas assets pledged to them. The common
                shares would then be left with the currently traded public company
                with
                the primary asset being cash. This plan will require shareholder
                approval
                after submission of a proxy to the S.E.C. On October 25, 2007, the
                Company
                submitted a proxy to the S.E.C. for a shareholder meeting to approve
                this
                Plan, along with the election of directors and other routine matters.
                The
                proxy materials will be sent to all shareholders upon completion
                of the
                S.E.C. review.  The
                Plan requires the formation of a new Utah corporation to be known
                as Croff
                Oil Company, as a separate corporation from Croff Enterprises, Inc.
                All of
                the oil and gas assets, bank accounts, and other oil and gas assets
                and
                liabilities will be exchanged to this new corporation. Each Croff
                Preferred B shareholder will be entitled to one restricted common
                share in
                the new corporation for each Preferred B currently held. The Croff
                Preferred B shares will then be cancelled of record. All Croff Preferred
                B
                share holders will have the right to receive the new common shares.
                Three
                of the existing Croff directors, Richard Mandel, Gerald Jensen, and
                Julian
                Jensen will serve as the initial Board of directors of Croff Oil
                Company.
                Croff Enterprises, Inc. will continue as a public corporation seeking
                various merger or acquisition or other reorganization opportunities.
                Under
                Utah law dissenting shareholders will be offered a cash buyout
                alternative. A copy of this Plan is attached to this Form
                10-Q.  (b)
            On
                September 27, 2007, the Board of Directors elected Sarah Straughan
                as the
                Chief Accounting Officer for Croff Enterprises Inc. to fill the existing
                vacancy.
  11
  **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:Exhibit
                  2 – The Plan of Corporate Division and Reorganization dated October
                  25,
                  2007 is filed as an Exhibit hereto. *Exhibits:31.1
              Certification
                of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002. *31.2
              Certification
                of Chief Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002. *32.1
              Certification
                of Chief Executive Officer, dated November 12, 2007, pursuant to
                18 U.S.C.
                Section 1350, as adopted to Section 906 of the Sarbanes-Oxley Act
                of 2002.
                *32.2
              Certification
                  Chief Accounting Officer, dated November 12, 2007, 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 during the quarter
      ended September 30, 2007:
  None
  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:
                November 12, 2007
            By:
            /s/
              Gerald L. JensenGerald
                L. Jensen, President,
              Chief
                Executive OfficerDate:
              November 12, 2007
            By:
            /s/
              Sarah StraughanSarah
                Straughan,Secretary/TreasurerChief
                Accounting Officer
 
   13