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, 1996 or
[ ]  Transition report pursuant to section 13 or 15(d) of the
     Securities Exchange Act of 1934
     For the transition period from _____ to _____

Commission file number:  0-8773

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

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

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

Registrant's telephone Number, including area code: (307) 856-9272
                                                    ---------------
                              NONE
-------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)

     Check mark whether the Registrant:  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934  during  the  preceding  12 months (or for
such shorter period that the Registrant was required to file such
reports), and (2)  has been subject to such filing requirements 
for the past 90 days.  

                    YES    X              NO

     Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.

            Class                  Outstanding at January 13, 1997
-----------------------------      -------------------------------
Common stock, $.001 par value             10,213,094 Shares
<PAGE>
                          CRESTED CORP.

                              INDEX

                                                       Page No.
PART I.  FINANCIAL INFORMATION

ITEM 1.  Financial Statements.

           Condensed Consolidated Balance Sheets
           November 30, 1996 and May 31, 1996. . . . . . . . .3-4

           Condensed Consolidated Statements of 
           Operations Three and Six Months 
           Ended November 30, 1996 and 1995. . . . . . . . . .5-6

           Condensed Consolidated Statements of Cash Flows
           Six Months Ended November 30, 1996 and 1995 . . . .7-8

           Notes to Condensed Consolidated 
           Financial Statements. . . . . . . . . . . . . . . 9-10

ITEM 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations . . .11-13

PART II. OTHER INFORMATION

ITEM 1.  Legal Proceedings . . . . . . . . . . . . . . . . . . 14

ITEM 5.  Other Information . . . . . . . . . . . . . . . . .15-16

ITEM 6.  Exhibits and Reports on Form 8-K. . . . . . . . . . . 16

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . 17
<PAGE>
                    PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements.

                      CRESTED CORP. AND AFFILIATE

                 Condensed Consolidated Balance Sheets

                                ASSETS

                                          November 30,       May 31,
                                              1996            1996
                                           ----------      ---------- 
                                           (Unaudited)     (Unaudited)

CURRENT ASSETS:
   Cash                                    $   18,100     $   52,600 
   Accounts receivable
     Trade                                     36,900         58,200 
     Affiliates                               231,300        141,600 
   Current portion of 
     long-term receivable
     Related parties                          289,800        210,100 
     Other                                     98,100        100,100 
   Inventory and other                         97,900         33,600 
                                           ----------     ---------- 
       TOTAL CURRENT ASSETS                   772,100        596,200 

LONG-TERM NOTES RECEIVABLE                    657,300        689,200 

INVESTMENTS IN AFFILIATES                   4,467,700      4,344,700 

PROPERTIES AND EQUIPMENT                    5,207,100      5,189,400 
   Less accumulated depreciation, 
   depletion and amortization              (2,925,900)    (2,832,800)
                                           ----------     ---------- 
                                            2,281,200      2,356,600 

OTHER ASSETS                                  146,900        145,800 
                                           ----------     ---------- 
                                           $8,325,200     $8,132,500 
                                           ==========     ========== 









       See notes to condensed consolidated financial statements.
<PAGE>
                      CRESTED CORP. AND AFFILIATE

                 Condensed Consolidated Balance Sheets

                 LIABILITIES AND SHAREHOLDERS' EQUITY

                                          November 30,      May 31,
                                              1996           1996
                                           -----------    -----------
                                           (Unaudited)    (Unaudited)

CURRENT LIABILITIES:
   Accounts payable
     and accrued expenses                  $  198,500     $  300,000 
   Accounts payable - affiliates               --            --      
   Line of credit (Note 4)                     --             88,000 
   Deferred income (Note 7)                 2,103,800         --     
   Current portion of long-term
     debt to affiliates (Note 4)            5,145,700      6,460,300 
   Others                                      56,400         --     
                                           ----------     ---------- 
TOTAL CURRENT LIABILITIES                   7,504,400      6,848,300 

ACCRUED RECLAMATION COSTS (See Note 5)        725,900        725,900 

LONG TERM DEBT                                 28,100          --    

COMMITMENTS AND CONTINGENCIES

FORFEITABLE COMMON STOCK,
   $.001 par value, 57,000 shares              36,400         36,400 

SHAREHOLDERS' EQUITY:
   Preferred stock, $.001 par value;
     authorized, 100,000 shares;
     none issued or outstanding                 --             --    
   Common stock, $.001 par value;
     authorized 20,000,000 shares;
     issued 10,156,094 shares                  10,100         10,100 
   Additional paid-in capital               6,319,400      6,319,400 
   Accumulated deficit                     (6,299,100)    (5,807,600)
                                           ----------     ---------- 
                                               30,400        521,900 
                                           ----------     ---------- 
                                           $8,325,200     $8,132,500 
                                           ==========     ========== 





       See notes to condensed consolidated financial statements.
<PAGE>
                         CRESTED CORP. AND AFFILIATE

               Condensed Consolidated Statements of Operations

                            Three Months Ended          Six Months Ended
                               November 30,               November 30,
                         ------------------------   -------------------------
                            1996          1995          1996         1995
                         ---------    -----------   ----------    -----------
REVENUES:
 Mineral property 
   transactions and
   mineral sales         $  27,500    $   --        $   48,400    $1,087,200 
 Oil and gas sales          11,600        20,300        31,100        41,000 
 Interest                    8,500         4,000        14,900         8,100 
 Commercial operations      61,300        85,600       129,100       170,900 
 Gain on sale of assets      --            8,500         --           25,000 
 Management fees            75,800        58,500       131,700       114,000 
 Other                      17,100        17,700        31,900        47,500 
                         ---------    ----------    ----------    ---------- 
                           201,800       194,600       387,100     1,493,700 
COSTS AND EXPENSES:
 Cost of Mineral Sales      --            --             --          912,200 
 Cost of sales              22,700        18,600        49,200        48,200 
 Mineral operations         77,100        69,900       158,500       100,700 
 Interest                    6,200         8,100        13,700        24,100 
 General and 
   administrative          258,200       361,300       437,200       556,700 
 Depreciation and
   amortization             49,000        60,600        93,100       124,200 
                         ---------    ----------    ----------    ---------- 
                           413,200       518,500       751,700     1,766,100 
                         ---------    ----------     ---------     --------- 
LOSS BEFORE EQUITY 
 LOSS AND TAX PROVISION   (211,400)     (323,900)     (364,600)     (272,400)

EQUITY IN LOSS OF 
 AFFILIATES                (68,100)      (70,800)     (126,900)     (277,700)
                         ---------    ----------    ----------    ---------- 

Continued










          See notes to condensed consolidated financial statements.
<PAGE>
                         CRESTED CORP. AND AFFILIATE

               Condensed Consolidated Statements of Operations


                            Three Months Ended          Six Months Ended
                               November 30,               November 30,
                         ------------------------   -------------------------
                            1996          1995          1996         1995
                         ---------    -----------   ----------    -----------
LOSS BEFORE PROVISION 
 FOR INCOME TAXES         (279,500)     (394,700)     (491,500)     (550,100)

PROVISION FOR 
 INCOME TAXES                --            --           --            --     
                         ---------    ----------    ----------    ---------- 
NET LOSS                 $(279,500)   $ (394,700)   $ (491,500)   $ (550,100)
                         =========    ==========    ==========    ========== 
NET LOSS PER SHARE       $    (.03)   $     (.04)   $     (.05)   $     (.05)
                         =========    ==========    ==========    ========== 
WEIGHTED AVERAGE
 NUMBER OF SHARES
 OUTSTANDING            10,156,094    10,156,094    10,156,094    10,156,094 
                        ==========    ==========    ==========    ========== 



























          See notes to condensed consolidated financial statements.
<PAGE>
                       CRESTED CORP. AND AFFILIATE

             Condensed Consolidated Statements of Cash Flows
                               (Unaudited)

                                                  Six Months Ended
                                                    November 30,       
                                              -------------------------
                                                1996            1995
                                             ----------      ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                   $ (491,500)     $(550,100)
  Adjustments to reconcile net
    loss to net cash used 
    in operating activities:
      Depreciation, depletion
        and amortization                         93,100        124,200 
      Equity loss from investments              126,900        277,700 
      (Gain) on sale of assets                    --            (9,800)
      Other                                      (1,100)         1,100 
      Deferred income from SMP                2,103,800          --    
    Net changes in components
      of working capital                       (322,200)       522,300 
                                             ----------     ---------- 
  NET CASH USED IN OPERATING ACTIVITIES       1,509,000        365,400 
                                             ----------     ---------- 
CASH FLOWS FROM INVESTING ACTIVITIES:
  Increase in notes receivable                    --            (6,700)
  Proceeds from collection
    of notes receivable                         (45,800)        38,200 
  Investments in affiliates                    (249,900)      (261,000)
  Purchase of property and equipment            (17,700)       (45,200)
  Proceeds from sale of assets                    --            14,300 
                                             ----------     ---------- 
NET CASH (USED IN)INVESTING ACTIVITIES         (313,400)      (260,400)
                                             ----------     ---------- 
CASH FLOWS FROM FINANCING ACTIVITIES:
  Increase in debt                              112,600        425,100 
  Payment on long-term debt                  (1,342,700)      (548,700)
                                             ----------     ---------- 
NET CASH (USED IN) PROVIDED BY
  FINANCING ACTIVITIES                       (1,230,100)      (123,600)
                                             ----------     ---------- 
NET INCREASE (DECREASE) IN
  CASH AND CASH EQUIVALENTS                     (34,500)       (18,600)




(Continued)

        See notes to condensed consolidated financial statements.
<PAGE>
                       CRESTED CORP. AND AFFILIATE

             Condensed Consolidated Statements of Cash Flows
                               (Unaudited)

                                                  Six Months Ended
                                                    November 30,       
                                              -------------------------
                                                1996            1995
                                             ----------      ----------
CASH AND CASH EQUIVALENTS AT
  BEGINNING OF PERIOD                            52,600         24,400 
                                             ----------     ---------- 
CASH AND CASH EQUIVALENTS AT
  END OF PERIOD                              $   18,100      $   5,800 
                                             ==========     ========== 


SUPPLEMENTAL DISCLOSURES:
  Income tax paid                            $    --         $   --    
                                             ==========     ========== 
  Interest paid                              $   13,700      $  24,100 
                                             ==========     ========== 





























        See notes to condensed consolidated financial statements.
<PAGE>
                          CRESTED CORP.

      Notes to Condensed Consolidated Financial Statements


     1)   The Condensed Consolidated Balance Sheet as of November
30, 1996, the Condensed Consolidated Statements of Operations for
the six months and the three months ended November 30, 1996 and
1995, and Condensed Consolidated Statements of Cash Flows for the
six months ended November 30, 1996 and 1995, have been prepared by
the Registrant without audit.  The Condensed Consolidated Balance
Sheet of May 31, 1996, has been taken from the audited financial
statements included in the Registrant's Annual Report on Form 10-K
filed for the year then ended.  In the opinion of the Registrant,
the accompanying financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to fairly
present the financial position of the Registrant and its affiliate
as of November 30, 1996 and May 31, 1996, the results of operations
for the three months and six months ended November 30, 1996 and
1995, and the cash flows for the six months then ended.

     2)   Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted.  It is suggested that these financial statements be read
in conjunction with the Registrant's May 31, 1996 Form 10-K.  The
results of operations for the periods ended November 30, 1996 and
1995 are not necessarily indicative of the operating results for
the full year.

     3)   The condensed consolidated financial statements of the
Registrant include its proportionate share of the accounts of USECB
Joint Venture (USECB) which is owned 50% by Registrant and 50% by
Registrant's parent, U.S. Energy Corp. (USE).  All material
intercompany profits and balances have been eliminated.

     4)   Debt at November 30, 1996 and November 30, 1995 consists
primarily of an accounts payable to the Registrant's parent USE of
$5,145,700 and $6,460,300, respectively.  The remaining debt is for
various equipment, a hangar and operating loans through financial
institutions.

     5)   Accrued reclamation obligations of $725,900 are the
Registrant's share of the reclamation liability at the Crooks Gap
Mining District.  This reclamation work may be performed over
several years.

     6)   Certain reclassifications have been made in the May 31,
1996 financial statements to conform to the classifications used in
November 30, 1996.
<PAGE>
                          CRESTED CORP.

      Notes to Condensed Consolidated Financial Statements


     7)   On November 4, 1996, the U.S. District Court of Colorado
confirmed the Order and Award in the Arbitration proceedings with
Nukem and its subsidiary CRIC.  The Arbitration Panel issued the
Order and Award on April 18, 1996 and clarified the Award on  July
3, 1996.  As a result, USECC received a partial distribution of the
funds held in escrow of $4,367,500 on November 5, 1996.  A portion
of these funds, $159,800 was paid directly to USE for U3O8 it had
purchased for a SMP delivery and interest thereon.  One-half of the
balance, $2,103,800 is carried as a deferred income item until
final resolution of the SMP arbitration is reached.

<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 Registrant's liquidity,
capital resources and results of operations during the periods
included in the accompanying financial statements.

Liquidity and Capital Resources

     Working capital declined during the six months ended November
30, 1996 by $480,200 to a working capital deficit of $6,732,300. 
This decrease was primarily caused by deferred income of $2,103,800
being recorded during the six months ended November 30, 1996.  On
November 4, 1996, the U. S. District Court in Denver, CO confirmed
the April 18, 1996 Order and Award as clarified on July 3, 1996.  
Based on the Court's judgment, the First Interstate Bank of
Riverton and the Norwest Bank of Denver released $367,475 and
$4,000,000, respectively, to the Registrant and USE.  A similar
amount was made available to Nukem.  To date of this filing,
Nukem/CRIC has only withdrawn its share of the escrowed funds from
the First Interstate Bank of Riverton.  All remaining funds,
approximately $15 million, remain in the SMP Norwest Bank escrow
account.  These funds are in dispute and a decision on their
distribution is pending.  A hearing on this and other issues has
been set by the Court for February 21, 1997.  Of the $4,367,475
received by USECC, USE was paid $159,800 for its cost with interest
of U3O8 for a SMP delivery of uranium concentrates.  One-half of the
balance $4,207,700 or $2,103,800 is carried as a current deferred
income item pending final resolution of the SMP arbitration.  

     This reduction of working capital was partially offset by
reductions in accounts payable to USE of $1,314,600.  As of
November 30, 1996, the Registrant and USE had repaid all advances
under their line of credit of $1,000,000 with a financial
institution.  There were also changes in current asset balances. 
Accounts receivable-affiliates and prepaid insurance increased by
$89,700 and $64,300, respectively.  These increases in current
assets were offset by reductions in accounts receivable-trade,
$21,300 and the current portion of long-term receivables-other of
$2,000.  Cash and cash equivalents decreased by $34,500 during the
six months ended November 30, 1996.  This decrease was primarily as
a result of operating and investing activities.  

     The Registrant utilized $313,400 in its investing activities
during the six months ended November 30, 1996.  This was primarily
as a result of the Registrant and its parent USE funding the care
and maintenance of the Sheep Mountain Partners mining properties,
operational expenses of Plateau Resources Limited ("PRL"); Energx
Limited ("Energx"); and Sutter Gold Mining Company ("SGMC").  As
the Registrant and USE provide various services for GMMV and SMP,
these non-affiliated participants are invoiced for their
proportionate share of the approved operating costs.  GMMV is
<PAGE>
current on its reimbursements to the Registrant and USE for all the
operating costs.  Due to disputes existing between the SMP
partners, the Registrant and USE have not been reimbursed for care
and maintenance costs expended on the SMP mineral properties in
Wyoming since the spring of 1991.  As a result of the uncertainty
of the receivable from SMP, it is being reported on the Financial
Statements as an investment in affiliates.  Financing activities
consumed a net of $1,230,100 as a result of increased long-term
debt of $112,600 and payment of long-term debt of $1,342,700.

     The primary requirements for the Registrant's working capital
continue to be funding of the on-going administrative expenses, 
and uranium delivery costs and property holding costs of SMP.  As
a result of the disputes between the SMP partners, the Registrant
and USE have been delivering certain of their respective portions
of the uranium concentrates required to fill various SMP delivery
requirements on long-term U3O8 contracts with domestic utilities. 
The Registrant and USE made one U3O8 delivery during the six months
ended November 30, 1995, but no deliveries were made by USECC
during the six months ended November 30, 1996.  The capital
requirements to fill the Registrant's and USE's portion of the
remaining commitments in fiscal 1997 will depend on the spot market
price of uranium and is also dependent on either the outcome of
proceedings involving Nukem/CRIC or agreements with Nukem/CRIC on
such deliveries.

     The primary source of the Registrant's capital resources for
the remainder of fiscal 1997 will be cash on hand, continued
borrowing from USE and borrowing from financial institutions
(primarily the line of credit), possible proceeds from the sale of
uranium under the SMP contracts after the Arbitration Panel's
ruling, and the sale of equity or interests in investment
properties.  Fees from oil production, rentals of various real
estate holdings and equipment, aircraft chartering and the sale of
aviation fuel will also provide cash.  Additional sources of
capital will be required to hold and maintain mineral properties,
permitting, the construction of a gold processing mill and mine
development of SGMC, and administrative costs.  The Registrant and
USE are currently seeking a joint venture partner and/or other
means of financing the construction of the gold processing mill and
mine development at SGMC.  The funding of SMP care and maintenance
costs may require additional funding, depending on the outcome of
the SMP arbitration.

Results of Operations

Six Months Ended November 30, 1996 Compared to Six Months Ended
November 30, 1995

     Total revenues for the six months ended November 30, 1996
decreased by $1,106,600 compared to the same period of the previous
year.  Revenues during the six month period ended November 30, 1996
decreased primarily as a result of the Registrant reporting
revenues of $1,087,200 in the six months ended November 30, 1995
from the sale of U3O8 to fill delivery contracts on behalf of SMP
<PAGE>
and a mineral option.  No such revenues were recorded during the
six months ended November 30,1996.

     Commercial revenues decreased by $41,80 primarily as a result
of the Registrant and USE selling Wind River Estates during fiscal
1996.  These decreases in revenues were offset by an increase of
$48,400 in royalties received from Cyrpus/AMAX on the Mt. Emmons
molybdenum property and $6,800 in interest.  No royalties were
received during the six months ended November 30, 1995 as a result
of the Registrant and USE exchanging six quarters of the molybdenum
royalty for real estate property.

     Costs and expenses decreased by $1,014,400 during the six
months ended November 30, 1996, compared to the same period of the
previous year.  This decrease is primarily as a result of cost of
U3O8 sold under the SMP contract of $912,200 during the six months
ended November 30, 1995.  There were no sales of U3O8 recorded by
the Registrant during the six months ended November 30, 1996.  This
decrease in cost was partially offset by an increase in mineral
operations of $57,800.

     Operations for the six months ended November 30, 1996 resulted
in a pre-tax loss of $364,600 before equity in loss of affiliates
of $126,900 as compared to a loss of $272,400 before equity in
income of affiliates of $277,700 during the same period of the
previous year.  After recognizing equity losses, the Registrant
recognized a net loss of $491,500 compared to a loss of $550,100
for the comparative period of the previous year.

<PAGE>
                   PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings.
          -------------------

     The information called for in this Item 1 has been previously
reported in the Registrant's Form 10-K (Item 3) for the fiscal year
ended May 31, 1996 and in Registrant's Form 10-Q (Item 1 of Part
II.) for the fiscal quarter ended August 31, 1996.  Hearings under
a consensual arbitration agreement involving the Registrant and USE 
d/b/a USECC and Nukem, Inc. and Cycle Resource Investment Corp.
(CRIC) over the Sheep Mountain Partners (SMP) partnership agreement
on uranium operations in Wyoming were held before the U.S. District
Court of Colorado on November 1, 1996.  Defendants Nukem/CRIC had
filed various documents including:  (1) Objections to Confirmation
of the Arbitration Panel's Order and Award; (2) Motion to Modify
and/or Vacate Portions of the Order and Award and (3) Motion to
Confirm Portions of the Order and Award.  Registrant and USE filed
their Second Corrected Amended Petition for the Confirmation and
Correction of the Arbitration Award.  On November 4 and 5, 1996,
the Court entered two orders and a Judgment in Civil Action No.
91B-1153 granting Registrant's and USE's Motion to Confirm Portions
of the Order and Award consistent with its Order and overruled
Nukem/CRIC's Objections to Confirmation of the Order and Award and
denied their Motion to Modify and/or Vacate Portions of the Order
and Award.  The Court granted Nukem/CRIC's Motion to Confirm
Portions of the Order and Award to the extent consistent with the
Court's Order.  The Court also entered a Judgment consistent with
the Order and Award of the Arbitration Panel with one exception on
the named parties to one claim which is subject of a motion by
Registrant and USE to correct the Order so that the Judgment is
consistent with the Arbitration Panel's Order and Award in naming
the Parties to one paragraph of the Judgment.

     Thereafter, plaintiffs Registrant and USE also filed a Motion
to Enter a Final Judgment on the Orders entered by the Court on
November 4, 1996.  In these Orders, the Court confirmed the 
Registrant's and USE's Seconded Corrected Amended Petition for
Confirmation which included the confirmation of the Arbitration
Panel's Award placing the contracts defendant Nukem had entered
into with three CIS republics, in constructive trust for the
benefit of Sheep Mountain Partners.  Plaintiffs are requesting that
the Court reduce its Order to a Judgment so that the terms of the
Order can be enforced in other jurisdictions.  Plaintiffs
Registrant and USE also filed an Amended Motion for an Order
Directing Distribution of the Proceeds on Deposit with the Norwest
Bank of Denver so that plaintiffs will receive the $12,227,460 as
provided in the Judgment entered on November 4, 1996 less $4
million which was distributed to plaintiffs out of the Norwest
account leaving a balance owing to USECC of $8,227,460 plus
interest accrued since November 5, 1996.  

     Defendant's Nukem/CRIC filed motions for Entry of Judgment on
the Court's Order of November 4, 1996 and Opposition to Plaintiffs'
Motion to Enter Final Judgment on Said Order.  Defendants contend
<PAGE>
that the Arbitration Panel's Order and Award do not award Sheep
Mountain Partners the CIS contracts Nukem had entered into in
constructive trust.  On December 18, 1996, the Court entered an
order scheduling a hearing on all remaining pending motions for
Friday, February 21, 1997 at 3:30 p.m. in Denver, Colorado.  

     On or about December 4, 1996, Defendants Nukem and CRIC filed
their Notice of Appeal to the Tenth Circuit Court of Appeals from
the November 4, 1996 Order and the November 5, 1996 Judgment of the
District Court.  The defendants raised the issues of the
Arbitration Panel's Order and Award to Sheep Mountain Partners of
$31,355,070 plus interest (1/2 to Registrant and USE) asserting
that the District Court committed a reversible error in confirming
that portion of the Award.  Defendants-Appellants raised further
issues claiming among other things that the District Court
committed reversible error in not making inquiries to the United
States Department of Commerce and not allowing CRIC to expel USECC
from the SMP Partnership Agreement.  On January 8, 1997 an Order
was entered by the Clerk of the Tenth Circuit Court of Appeals
Tolling the Briefing on the merits of the Appeal.  The Court
requested briefs on jurisdictional issues regarding the
appealability of Orders of the District Court since motions are
still pending before the District Court.  The Parties have 21 days
from January 8, 1997 to file briefs on those jurisdictional issues.

Item 5.   Other Information
          -------------------

     On November 22, 1996, The Registrant's parent USE signed a
letter of intent with Kennecott Energy and Coal Company
(Kennecott") for Registrant and Crested to acquire Kennecott's 50%
interest in the Green Mountain Mining Venture (GMMV) through the
acquisition of the stock of a Kennecott subsidiary within 18
months.  The GMMV was formed in 1990 to explore for and if
warranted, to develop the uranium deposits in south central
Wyoming.  The proposed change in the GMMV would make U.S. Energy
Corp. and Crested Corp., dba USECC, 100% owners of the GMMV should
Registrant and USE arrange the necessary consideration to exercise
the option.  

     Kennecott originally paid USECC $15 million and agreed to
spend an additional $50 million for a 50% interest in the Green
Mountain properties which were conveyed to the GMMV.  To date,
Kennecott has spent approximately $17 million on the project in
maintaining the GMMV mine and mill properties on a care and
maintenance basis; preparing to file an application with the U. S. 
Nuclear Regulatory Commission (NRC) to change the mill license from
standby to production status; obtaining all permits necessary to
mine ore from the proposed Jackpot Mine on the world class Green
Mountain uranium deposits, and engineering the GMMV mine plan.

     Under the Letter of Intent, Kennecott has agreed to advance up
to $20 million to USECC during the next 15 months for the
development of the Jackpot Mine and changing the Sweetwater Mill
status to operational.  The agreement further provides that USECC

will acquire Kennecott's 50% interest for $15 million in cash or
$30 million in equity.  USECC will be required to repay Kennecott
in cash or stock at USECC's election for the advance of the
additional $20 million investment with interest and will also be
required to take over the operating permit and reclamation bonding
liabilities at the time the sale is closed.

     Effective upon the execution of the definitive agreements
expected in January 1997, USECC will take over full management of
the Jackpot Mine and Sweetwater Mill.  USECC will be responsible
for driving the twin declines into the ore deposit(s), and will
work with Kennecott to permit the Mill for operation.  Various
terms of the definitive agreements are still being negotiated.
Nevertheless, mining and construction crews are currently being
hired and additional mining equipment is being moved to the
Jackpot site to commence driving the double declines.  The first
production of ore from the Jackpot deposit is planned for calendar
year 1997.

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

     (a)  Exhibits.  None.

     (b)  Reports on Form 8-K.  The Registrant filed two Reports on
Form 8-K during the quarter ended November 30, 1996 under Item 5 -
Other Events, reporting events of September 25, 1996, November 1
and 4, 1996 regarding the Sheep Mountain Partners Arbitration Order
and Award.

<PAGE>
                           SIGNATURES

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

                                   CRESTED CORP.
                                   (Registrant)



Date:  January 13, 1997       By:    s/ Max T. Evans
                                   ------------------------------
                                   MAX T. EVANS,
                                   President



Date:  January 13, 1997       By:    s/ Max T. Evans
                                   ------------------------------
                                   ROBERT SCOTT LORIMER,
                                   Principal Financial Officer 
                                   and Chief Accounting Officer