SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q



|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
    ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997

| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO _________


                           COMMISSION FILE NO. 1-12334


                      FORTUNE NATURAL RESOURCES CORPORATION
             (Exact Name of Registrant as specified in its charter)


                Delaware                                        95-4114732
      (State or other jurisdiction of                        (I.R.S. Employer
       incorporation or organization)                       Identification No.)

   One Commerce Green, 515 W. Greens Rd.,
        Suite 720, Houston, Texas                                  77067
 (Address of Principal Executive Offices)                       (Zip Code)


                                  281-872-1170
                            Issuer's telephone number


                                       N/A
               --------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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 | |


Applicable only to corporate issuers:

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

                        12,118,982 as of October 31, 1997

                    ----------------------------------------



<PAGE>
                      FORTUNE NATURAL RESOURCES CORPORATION
                                 BALANCE SHEETS
<TABLE>
<CAPTION>
                                     ASSETS
                                                    September 30,  December 31,
                                                        1997           1996
                                                    ------------   ------------
                                                     (Unaudited)     (Audited)
<S>                                                <C>             <C>  
CURRENT ASSETS:
  Cash and cash equivalents .....................   $  1,239,000   $  2,174,000
  Accounts receivable ...........................        995,000        695,000
  Prepaid expenses ..............................          7,000         25,000
                                                    ------------   ------------
      Total Current Assets ......................      2,241,000      2,894,000
                                                    ------------   ------------

PROPERTY AND EQUIPMENT:
  Oil and gas properties, accounted for
    using the full cost method ..................     26,290,000     23,079,000
  Office and other ..............................        374,000        375,000
                                                    ------------   ------------
                                                      26,664,000     23,454,000
  Less--accumulated depletion, 
   depreciation and amortization ................    (17,343,000)   (12,545,000)
                                                    ------------    -----------

                                                      9,321,000      10,909,000
                                                   ------------    ------------
OTHER ASSETS:
  Materials, supplies and other .................       111,000         188,000
  Debt issuance costs (net of accumulated
    amortization of $303,000 and $238,000 
    at September 30, 1997 and December 31, 1996, 
    respectively) ...............................       158,000          51,000
  Restricted cash ...............................             0       2,293,000
                                                   ------------    ------------
                                                        269,000       2,532,000
                                                   ------------    ------------

TOTAL ASSETS ....................................  $ 11,831,000    $ 16,335,000
                                                   ============    ============
</TABLE>

<TABLE>
<CAPTION>
                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                   September 30,   December 31,
                                                       1997            1996
                                                   ------------    ------------
<S>                                                <C>             <C>         
CURRENT LIABILITIES:
  Current portion of long-term debt ............   $  1,022,000    $  2,253,000
  Accounts payable .............................        498,000          84,000
  Accrued expenses .............................        375,000          77,000
  Royalties and working interests payable ......         51,000         103,000
  Accrued interest .............................         55,000         101,000
                                                   ------------    ------------
      Total Current Liabilities ................      2,001,000       2,618,000
                                                   ------------    ------------

LONG-TERM DEBT,  net of current portion ........        865,000         680,000
                                                   ------------    ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
  Preferred stock, $1.00 par value:
      Authorized --2,000,000 shares
      Issued and outstanding -- None ...........              0               0
  Common stock, $.01 par value :
      Authorized --40,000,000 shares
      Issued and outstanding 12,128,752 and 
      11,853,663 at September 30, 1997 and 
      December 31, 1996, respectively ..........        121,000         119,000
  Capital in excess of par value ...............     30,283,000      29,273,000
  Accumulated deficit ..........................    (21,439,000)    (16,355,000)
                                                   ------------    ------------
NET STOCKHOLDERS' EQUITY .......................      8,965,000      13,037,000
                                                   ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .....   $ 11,831,000    $ 16,335,000
                                                   ============    ============
</TABLE>
                 See accompanying notes to financial statements.


                                       2
<PAGE>

<TABLE>
<CAPTION>

                      FORTUNE NATURAL RESOURCES CORPORATION
                            STATEMENTS OF OPERATIONS

                                                    For the Nine Months Ended
                                                   ----------------------------
                                                   September 30,   September 30,
                                                       1997            1996*
                                                   -------------   ------------
                                                           (Unaudited)
<S>                                                <C>             <C>         
REVENUES
  Sales of oil and gas, net of royalties .......   $  2,870,000    $  2,830,000
  Other income .................................        137,000         160,000
                                                   ------------    ------------
                                                      3,007,000       2,990,000
                                                   ------------    ------------

COSTS AND EXPENSES
  Production and operating .....................        940,000       1,000,000
  Provision for depletion, depreciation 
   and amortization ............................      1,609,000       1,079,000
  Impairment to oil and gas properties .........      3,200,000               0
  General and administrative ...................      1,481,000       1,418,000
  Office relocation and severance ..............              0         207,000
  Debt conversion expense ......................        316,000               0
  Stock offering cost ..........................        323,000               0
  Interest .....................................        222,000         338,000
                                                   ------------    ------------
                                                      8,091,000       4,042,000
                                                   ------------    ------------

LOSS BEFORE PROVISION FOR INCOME TAXES .........     (5,084,000)     (1,052,000)
PROVISION FOR INCOME TAXES .....................              0               0
                                                   ------------    ------------

NET LOSS .......................................   $ (5,084,000)   $ (1,052,000)
                                                   ============    ============

WEIGHTED AVERAGE NUMBER OF
  COMMON SHARES OUTSTANDING ....................     12,074,959      11,284,701
                                                   ============    ============

NET LOSS PER COMMON SHARE ......................   $      (0.42)   $      (0.09)
                                                   ============    ============

</TABLE>

*Restated




                 See accompanying notes to financial statements.

                                       3
<PAGE>

<TABLE>
<CAPTION>

                      FORTUNE NATURAL RESOURCES CORPORATION
                            STATEMENTS OF OPERATIONS


                                                    For the Three Months Ended
                                                   ----------------------------
                                                   September 30,   September 30,
                                                       1997            1996*
                                                   -------------   ------------
                                                            (Unaudited)
<S>                                                <C>             <C>         
REVENUES
  Sales of oil and gas, net of royalties .......   $  1,066,000    $  1,011,000
  Other income .................................         29,000          42,000
                                                   ------------    ------------
                                                      1,095,000       1,053,000
                                                   ------------    ------------
COSTS AND EXPENSES
  Production and operating .....................        204,000         220,000
  Provision for depletion, depreciation 
    and amortization ...........................        640,000         449,000
  General and administrative ...................        467,000         357,000
  Office relocation and severance ..............              0          97,000
  Stock offering cost ..........................         54,000               0
  Interest .....................................         92,000         105,000
                                                   ------------    ------------
                                                      1,457,000       1,228,000
                                                   ------------    ------------

LOSS BEFORE PROVISION FOR INCOME TAXES .........       (362,000)       (175,000)
PROVISION FOR INCOME TAXES .....................              0               0
                                                   ------------    ------------

NET LOSS .......................................   $   (362,000)   $   (175,000)
                                                   ============    ============

WEIGHTED AVERAGE NUMBER OF
  COMMON SHARES OUTSTANDING ....................     12,124,862      11,431,665
                                                   ============    ============

NET LOSS PER COMMON SHARE ......................   $      (0.03)   $      (0.02)
                                                   ============    ============

</TABLE>

*Restated

                 See accompanying notes to financial statements.


                                       4
<PAGE>

<TABLE>
<CAPTION>
                      FORTUNE NATURAL RESOURCES CORPORATION
                       STATEMENTS OF STOCKHOLDERS' EQUITY
                      FOR THE YEAR ENDED DECEMBER 31, 1996
                  AND THE NINE MONTHS ENDED SEPTEMBER 30, 1997


                                                                      Capital in
                                                 Common Stock          Excess of     Accumulated
                                               Shares      Amount      Par Value       Deficit         Net
                                            ----------   ----------   -----------   -------------   -----------
<S>                                         <C>          <C>          <C>           <C>             <C>           
BALANCE, January 1, 1996*................   11,139,709   $  111,000   $27,228,000   $ (15,025,000)  $12,314,000

Common stock issued for
    exercise of stock options............       46,150        1,000       114,000               0       115,000
Common stock issued for
    exercise of warrants.................      255,638        3,000       813,000               0       816,000
Common stock issued for
    directors' fees......................        1,395            0         4,000               0         4,000
Common stock canceled and
    stock issuance cost..................       (1,227)           0       (31,000)              0       (31,000)
Common stock issued for
    stock offerings......................      412,000        4,000     1,145,000               0     1,149,000
Common stock returned to treasury........           (2)           0             0               0             0
Net loss.................................            0            0             0      (1,330,000)   (1,330,000)
                                            ----------   ----------   -----------   -------------   -----------

BALANCE, December 31, 1996...............   11,853,663   $  119,000   $29,273,000   $ (16,355,000)  $13,037,000
                                            ----------   ----------   -----------   -------------   -----------

Common stock issued for
    exercise of stock options............        6,400            0        18,000               0        18,000
Common stock issued for
    exercise of warrants.................       45,000            0        89,000               0        89,000
Common stock issued in exchange
    for debentures, net of offering costs      218,858        2,000       889,000               0       891,000
Common stock contributed t
    Company 401(k) Plan..................        4,835            0        14,000               0        14,000
Common stock returned to treasury........           (4)           0             0               0             0
Net loss.................................            0            0             0      (5,084,000)   (5,084,000)
                                            ----------   ----------   -----------   -------------   -----------

BALANCE, September 30, 1997 (unaudited)..   12,128,752   $  121,000   $30,283,000   $ (21,439,000)  $ 8,965,000
                                            ==========   ==========   ===========   =============   ===========

</TABLE>

*Restated


                 See accompanying notes to financial statements.


                                       5
<PAGE>

<TABLE>
<CAPTION>

                      FORTUNE NATURAL RESOURCES CORPORATION
                            STATEMENTS OF CASH FLOWS


                                                    For the Nine Months Ended
                                                   ---------------------------
                                                   September 30,  September 30,
                                                       1997            1996*
                                                   -----------     -----------
                                                           (Unaudited)
<S>                                                <C>             <C>         
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss ......................................  $(5,084,000)    $(1,052,000)
  Adjustments to reconcile net loss to net
    cash provided by operating activities:
      Common stock issued for directors' fees....            0           4,000
      Depletion, depreciation and amortization...    1,609,000       1,079,000
      Non-cash compensation expense .............       57,000               0
      Amortization of deferred financing cost....       62,000          56,000
      Impairment of oil and gas assets ..........    3,200,000               0
      Debt conversion expense ...................      316,000               0
      Stock offering cost .......................      323,000               0
  Changes in assets and liabilities:
      Accounts receivable .......................     (300,000)        488,000
      Prepaids ..................................       18,000          65,000
      Accounts payable and accrued expenses .....      713,000         (86,000)
      Royalties and working interest payable ....      (52,000)        (74,000)
      Accrued interest ..........................      (46,000)        (62,000)
                                                   -----------     -----------
  Net cash provided by operating activities .....      816,000         418,000
                                                   -----------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Expenditures for oil and gas properties .......   (3,414,000)     (2,253,000)
  Restricted cash used ..........................      138,000         450,000
  Return of exploration venture restricted cash..    2,154,000               0
  Proceeds from sale of properties and equipment.      203,000       2,018,000
  Expenditures for other property and 
     equipment and other assets..................      (26,000)       (233,000)
                                                   -----------     -----------
  Net cash used in investing activities .........     (945,000)        (18,000)
                                                   -----------     -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of long-term debt ......       65,000               0
  Repayment of long term debt ...................     (450,000)     (1,754,000)
  Proceeds from issuance of common stock ........      103,000         903,000
  Expenditures for debenture exchange and stock..     (353,000)        (28,000)
  Expenditures for debt refinancing .............     (171,000)              0
                                                   -----------     -----------
  Net cash used in financing activities .........     (806,000)       (879,000)
                                                   -----------     -----------

NET DECREASE IN CASH AND CASH EQUIVALENTS .......     (935,000)       (479,000)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ..    2,174,000       1,888,000
                                                   -----------     -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD ........  $ 1,239,000     $ 1,409,000
                                                   ===========     ===========
Supplemental information:
  Interest paid in cash .........................  $   160,000     $   283,000
Non-cash transactions
  Common stock issued or issuable as
    directors' fees..............................            0           4,000
  Common stock issued for conversion of debt.....      975,000               0
  Common stock issued for 401(k) 
    Plan contribution.............................       14,000              0

</TABLE>

*Restated


                 See accompanying notes to financial statements.


                                       6
<PAGE>
                      FORTUNE NATURAL RESOURCES CORPORATION
                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 1997

(1)    LINE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING 
       POLICIES AND PROCEDURES

       The condensed  financial  statements  at September 30, 1997,  and for the
three months and nine months then ended  included  herein have been  prepared by
Fortune Natural  Resources  Corporation  ("Fortune" or the  "Company"),  without
audit,  pursuant to the Rules and  Regulations  of the  Securities  and Exchange
Commission.  Certain information and footnote  disclosures  normally included in
financial  statements  prepared in accordance with generally accepted accounting
principles   have  been  condensed  or  omitted   pursuant  to  such  Rules  and
Regulations,  although the Company believes that the disclosures are adequate to
make  the  information  presented  not  misleading.  These  condensed  financial
statements  should be read in conjunction with the financial  statements and the
notes  thereto  included in the  Company's  latest annual report on Form 10-K/A.
Certain  reclassifications  have been made to prior period amounts to conform to
presentation in the current period. In the opinion of the Company, the financial
statements  reflect  all  adjustments,   consisting  only  of  normal  recurring
adjustments,  necessary to present fairly the financial  position of the Company
as of September  30, 1997 and December 31, 1996,  the results of its  operations
for the three months and nine months ended  September 30, 1997 and September 30,
1996, and cash flows for the nine months ended  September 30, 1997 and 1996. The
results  of  the  operations  for  such  interim  periods  are  not  necessarily
indicative of the results for the full year.

       In the  fourth  quarter  of 1996,  the  Company  changed  its  method  of
accounting  for oil and gas operations  from the successful  efforts to the full
cost method.  All prior year  financial  statements  presented  herein have been
restated to reflect the change.

       The Company has in place a  shareholder  rights plan which is designed to
distribute  preferred stock purchase  rights to holders of the Company's  Common
Stock in the event a person acquires beneficial  ownership of fifteen percent or
more of the  Company's  stock or  commences a tender offer which would result in
ownership  of fifteen  percent or more of such  Common  Stock.  The plan,  which
expires February 28, 2007, provides for the issuance of a fraction of a share of
a new series of junior preferred stock of the Company for each outstanding share
of the Company's stock. Depending on the circumstances, such new preferred stock
will enable the holders to either buy  additional  shares of Common Stock of the
Company or any acquiring entity at a 50% discount.

(2)    LONG-TERM DEBT

       At September 30, 1997, a summary of long-term debt is as follows:
<TABLE>
<CAPTION>
                                                      September 30, December 31,
                                                          1997          1996
                                                      -----------   -----------   
  <S>                                                 <C>          <C>        
  Convertible Subordinated  Debentures of 
         $1,028,000 at September 30, 1997 and  
         $1,725,000  at December  31, 1996 
         (net of discount of $6,000 and $57,000) 
         due December 31, 1997, including interest 
         of 10-1/2% per annum paid semi-annually....  $ 1,022,000  $ 1,683,000

       Bank credit facility due July 11, 1999, 
         including interest at 1.25% over bank's 
         base rate payable quarterly................     865,000    1,250,000
                                                     -----------  -----------

       Total long-term debt.........................   1,887,000    2,933,000
       Less current installments....................   1,022,000    2,253,000
                                                     -----------  -----------

       Long-term debt, excluding 
        current installments........................ $   865,000  $   680,000
                                                     ===========  ===========
</TABLE>

                                       7
<PAGE>


       The 10-1/2%  Convertible  Subordinated  Debentures  due December 31, 1997
bear an effective interest rate of 12.13% and are convertible into shares of the
Company's  Common Stock, at a conversion  price of $6.32 per share or 158 shares
per Debenture.  On,  February 26, 1997, the Company closed an Exchange Offer for
these Debentures which resulted in $697,000 ($680,000 net of discount) principal
amount of Debentures  being  converted to 218,858  shares of Common  Stock.  The
Company also issued 174,250 Common Stock  Warrants to the  Debentureholders  who
exchanged their  Debentures in connection  with the Exchange  Offer.  The Common
Stock Warrants are  exercisable  for a period of three years,  one-half at $4.00
per share and one-half at $5.00 per share.  Subsequent  to the  conversion,  the
remaining  balance due on the  Debentures  at December  31, 1997 is  $1,028,000.
Furthermore, the Company recorded a non-cash debt conversion expense of $316,000
during  the  first  quarter  of  1997.  The  non-cash  debt  conversion  expense
represents  the  difference  between the fair market  value of all of the Common
Stock and Common Stock Warrants issued in connection with the Exchange Offer and
the fair market  value of the lower  number of Common Stock that could have been
issued upon the  conversion of the Debentures  under the Indenture  prior to the
Exchange  Offer.  For  purposes of  calculating  the  non-cash  debt  conversion
expense,  the  Company  valued  the  218,858  shares of Common  Stock  issued in
connection  with the Exchange Offer at $547,502  ($2.625 per share) based on the
closing price of the Common Stock on the American Stock Exchange on February 26,
1997. The Company estimated the value of the Common Stock Warrants issued to the
Debentureholders  at $8,713  ($0.05 per warrant).  As of December 31, 1996,  the
Company classified,  as long term liabilities,  the portion, net of discount, of
the Debentures that were converted to Common Stock in the Exchange Offer.

       On July 11, 1997, the Company refinanced its bank debt by entering into a
$20 million  credit  facility  with  Credit  Lyonnais  New York Branch  ("Credit
Lyonnais").  The Credit Lyonnais  facility is due July 11, 1999,  extendable for
one year upon mutual  consent.  Under the new credit  facility,  the Company may
initially  borrow up to a  pre-determined  borrowing base, for  acquisitions and
development  projects  approved by Credit  Lyonnais at either 1.25% above Credit
Lyonnais' base rate or 4% above LIBOR.  The borrowing base,  currently set at $2
million,  was  calculated  based  upon the  Company's  July 1,  1997 oil and gas
reserves and is subject to semi-annual  review.  The Credit Lyonnais facility is
secured  by a  mortgage  on all of the  Company's  existing  proved  oil and gas
properties.  The Company is also required to pay a commitment fee of 0.5% on the
unused  portion of the  borrowing  base.  The  Company  previously  had a credit
facility in place with Bank One, Texas, N.A. which was due October 1, 1997, bore
interest  at 1.5% over Bank One's  prime  rate and  required  monthly  principal
payments of $75,000.

       The Company's  maturities of long-term debt over the next three years are
as follows:

                  Year                      Debt
                --------               ------------
                  1997                 $  1,022,000
                  1998                            0
                  1999                      865,000
                                       ------------
                                       $  1,887,000


(3)    INCOME TAX EXPENSE

       No provision  for income taxes was required for the three months and nine
months ended September 30, 1997.

       At  September  30, 1997,  the Company  estimates  it had  cumulative  net
operating  loss  carryforwards  for federal  income tax  purposes of $14 million
which are  significantly  restricted under IRC Section 382. These  carryforwards
are  available to offset future  federal  taxable  income,  if any, with various
expirations  through 2010. The Company is uncertain as to the  recoverability of
the above  deferred  tax  assets  and has  therefore  applied  a 100%  valuation
allowance.

                                       8
<PAGE>

       The Company has  available IRC Section 29 Tax Credits that may be used to
reduce  or  eliminate  any  corporate  taxable  income in  future  years.  It is
uncertain at this time to what extent the Company will be able to utilize  these
federal tax credits,  as their utilization is dependent upon the amount, if any,
of future  federal income tax incurred,  after  application of the Company's net
operating loss carryforwards.


(4)    LEGAL PROCEEDINGS

       There are no material  pending  legal  proceedings  involving  any of the
Company's  properties  or which  involve a claim for damages which exceed 10% of
the Company's current assets.

       On April 16, 1996,  Fortune was served with two  lawsuits  which had been
filed in the Federal  District Court in New York by purchasers of Fortune Common
Stock in an offering in December 1995 under Regulation S. Under the terms of the
subscription  agreement pursuant to which the plaintiffs  acquired their shares,
each was entitled to receive  additional  shares of Fortune  Common Stock if the
market price fell below a stated level during a specified  period  following the
40-day  holding  period  prescribed by  Regulation  S. Fortune  responded to the
suits,  admitting  that the stock price  declined  but alleged  that  suspicious
trading activity in Fortune stock occurred  immediately  prior to and during the
time  period in which the  additional-share  allocation  was  computed.  Fortune
believes that it has discovered  evidence of active market  manipulation  in the
Common Stock by these  plaintiffs;  accordingly,  it has commenced a countersuit
for damages  suffered by the Company and its  shareholders  as a result of these
acts and has also received leave of court to add  third-party  defendants  whose
actions  furthered  this  market  manipulation.  Fortune  intends to continue to
vigorously  defend  plaintiff's  actions and  prosecute  its own  counterclaims.
Discovery is continuing in these actions and a consolidated trial is expected in
the first quarter of 1998.


(5)    COMPUTATION OF LOSS PER SHARE

       Primary  loss per common  share is computed  by dividing  net loss by the
weighted  average  number of common and common  equivalent  shares  outstanding.
Common  equivalent  shares are shares  which may be  issuable  upon  exercise of
outstanding  stock options and warrants;  however,  they are not included in the
computation for the nine-month and three-month  periods ended September 30, 1997
since they would not have a dilutive effect on earnings per share.

       Fully  diluted  earnings  per common share are not  presented,  since the
conversion of the Company's 10-1/2%  Convertible  Subordinated  Debentures would
have an anti-dilutive effect.


 (6)   RETURN OF EXPLORATION VENTURE RESTRICTED CASH

       On June 4, 1997,  the Company  exercised its right under the  exploration
agreement between it and Zydeco Exploration,  Inc. ("Zydeco") to have unexpended
capital contributions  returned to Fortune.  Under the terms of the February 13,
1995  agreement,  Fortune  contributed  a total of  $4,800,000  which  was to be
expended for certain  leasehold and seismic costs incurred by the venture within
the Transition Zone and Timbalier  Trench areas of offshore  Louisiana.  Of that
total,  $2,154,000 remained unspent as of June 4, 1997. This amount was returned
to Fortune in June 1997.  Fortune will retain its current  undivided 50% working
interest in each of the existing exploration projects that are currently subject
to the agreement.  The Company's 50% working interest in each project is subject
to a proportionate  reduction in the event that Zydeco expends  additional funds
on such project.


                                       9
<PAGE>

(7)    IMPAIRMENT TO OIL AND GAS PROPERTIES

       In connection  with  requesting  the return of unexpended  funds from its
exploration  venture with Zydeco,  the Company  reviewed for impairment its $4.3
million  remaining  unevaluated  investment  in the Zydeco  exploration  venture
properties. The $4.3 million investment includes the value of the Fortune Common
Stock that was issued in 1995 to acquire its interest in the exploration venture
as well as the funds that  Fortune  has  incurred  for leases and seismic in the
exploration  venture. As a result of this review,  Fortune impaired $2.6 million
of costs associated with the Zydeco  exploration  venture  properties during the
second quarter of 1997. At the same time, the Company also impaired its $300,000
remaining unevaluated investment in its New Mexico properties.  Furthermore, the
Company's  unsuccessful  well at South Lake Arthur was charged to the  evaluated
property  account in the second  quarter of 1997.  As a result,  the Company has
recorded  impairments  to oil and gas  properties  through the second quarter of
1997 of $3.2 million.


(8)    SUBSEQUENT EVENTS

       Through  November  13,  1997,  the  Company  has sold  $2,800,000  of 12%
Convertible Subordinated Notes due December 31, 2007 (the "Notes") in connection
with a private  placement  of up to $4.5  million of such  Notes.  The Notes are
convertible  into the Company's  Common Stock at a conversion price of $3.00 per
share, subject to adjustment. The Notes are convertible by the holders after May
1,  1999,  subject  to a  one-time  option by the  holders to convert at a lower
conversion  price prior to that date in the event that the Company  sells shares
of its  Common  Stock at a price  below  the  conversion  price.  The  Notes are
redeemable by the Company  after May 1, 1999, at a premium that reduces  monthly
from 10% to zero over an 18-month  period.  Any such  premium on  redemption  is
waived in the event that the  Company's  Common  Stock  price  averages at least
$4.50 per share for 30  consecutive  trading days. The holders of the Notes will
be entitled to receive  additional  shares upon conversion in the event that the
Company's  Common  Stock price  averages  less than the  conversion  price for a
certain  period prior to May 1, 1999.  The Notes are  subordinate  to all of the
Company's secured debt, including the credit facility with Credit Lyonnais.  The
Notes bear interest at a rate of 12% per year,  payable  quarterly.  The Company
has received  proceeds,  net of offering  fees and  commissions,  of  $2,446,000
through  November 13, 1997.  The private  placement of Notes is set to expire on
November 19, 1997; however, there can be no assurance that the Company will sell
any additional  Notes prior to the expiration  date. The proceeds of the private
placement will be used to refinance  existing  debt,  including the repayment of
the  Company's  Debentures  that  are  due  December  31,  1997.  In  connection
therewith,  the Company has called for the  redemption of those  Debentures  for
December 5, 1997. Additionally, up to $855,000 of the net proceeds received from
the  private  placement  in excess of $2.5  million  will be used to reduce  the
Company's $865,000 of borrowings under its credit facility with Credit Lyonnais.
Net proceeds  through  November 13, 1997 are $2.4 million,  thus no reduction to
the credit  facility has occurred.  All other proceeds from the offering will be
used for general corporate purposes.

       The  Notes  were  sold  under  a  placement  agreement  with  J.  Robbins
Securities,  L.L.C. (the "Placement Agent"). The Placement Agent is receiving a
ten percent sales commission,  a three percent non-accountable expense allowance
and  warrants to  purchase a number of shares of Common  Stock  determinable  by
multiplying the gross proceeds received in the offering by approximately  .0278.
The warrants are exercisable over a five-year  period at $3.60 per share.  Barry
W. Blank, a beneficial  owner of more than five percent of the Company's  Common
Stock,   is  a  branch  manager  for  the  Placement   Agent  and  is  marketing
substantially the entire private placement.  As such, Mr. Blank will earn 50% of
the fees and commissions  paid to the Placement Agent for the Notes sold by him.
Mr. Blank will also receive 20% of the warrants  payable to the Placement Agent.
Five  hundred  thousand  dollars  of the  Notes  has  been  acquired  by a trust
established by and, under certain  circumstances,  for the benefit of Mr. Blank.
Barry Feiner,  a director of the Company,  is acting as outside  counsel for the
Placement  Agent in connection with the private  placement.  If all of the Notes
are sold,  Mr. Feiner will earn $45,000 in legal fees from the Placement  Agent,
$20,000 of which have been paid to Mr. Feiner as of November 13, 1997.


                                       10
<PAGE>

                      FORTUNE NATURAL RESOURCES CORPORATION


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


COMPARISON OF 1997 OPERATING RESULTS TO 1996

       Third Quarter Ended September 30, 1997 vs. 1996

       During the third  quarter  of 1997,  Fortune  had a net loss of  $362,000
compared to a net loss of $175,000  for the same 1996  period.  The  increase in
loss in 1997  primarily  results  from  increased  depreciation,  depletion  and
amortization expense in 1997.

       In spite of lower oil and gas prices,  net oil and gas revenues increased
by $55,000 (5%) in the third quarter of 1997,  compared to the same 1996 period.
1997 revenues were higher because they included revenues from the Company's 1996
exploration  discovery at East Bayou Sorrel.  The  discovery  well in this field
began  producing  from permanent  production  facilities in January 1997 and the
first  development well was placed on production June 23, 1997. During the third
quarter of 1997, this field  contributed  approximately  $497,000 of oil and gas
revenues versus none from the field during the same 1996 period.  As a result of
the East Bayou Sorrel  production,  the Company's oil  production  increased 69%
during the third  quarter of 1997 versus  1996.  Gas  production  decreased  19%
during the third quarter of 1997 versus 1996,  primarily because of depletion on
the Company's  other  properties.  The East Bayou Sorrel  development  well, the
Schwing  No. 2, was  completed  as a dual  producer  and  produced as such until
September 19, 1997 when the shallow zone was shut-in to investigate unusual sand
production from the zone. That zone  contributed  approximately  $151,000 to oil
and gas revenues  during the third  quarter of 1997.  If the shallow zone is not
brought back on production  soon, the Company may  experience  lower oil and gas
production during the fourth quarter of 1997. The Company does anticipate higher
oil and gas  prices  during  the  fourth  quarter  which  may  offset,  at least
partially,  production declines. Also, see Liquidity and Capital Resources below
for a discussion of the Company's current and future drilling plans.

       Natural gas prices on the Company's production averaged $2.36 per MCF for
the third  quarter of 1997 as compared to $2.61 per MCF for the same 1996 period
(a 10% decrease). Oil prices averaged $18.46 per barrel for the third quarter of
1997 compared to $21.61 per barrel for the same 1996 period (a 15% decrease).

       Interest expense decreased by $13,000 (12%) for the third quarter of 1997
over 1996 due to the lower debt balance.  The Company's provision for depletion,
depreciation  and  amortization  (DD&A) increased by $191,000 (43%) in the third
quarter of 1997 as compared to 1996 primarily  because of higher  property costs
in 1997.  Interest  expense will  increase in future  periods as a result of the
convertible debt offering discussed in note 8 to the financial statements.

       Nine Months Ended September 30, 1997 vs. 1996

       During the nine months ended  September 30, 1997,  Fortune had a net loss
of $5,084,000 compared to a net loss of $1,052,000 for the same 1996 period. The
increase in loss in 1997 is primarily attributable to the $316,000 non-cash debt
conversion  expense  incurred in connection with closing the Company's  Exchange
Offer on February 26, 1997,  the $323,000 of stock  offering  costs  incurred in
1997 for the public  offering  which was withdrawn in April 1997, the $3,200,000
non-cash  impairments to oil and gas  properties  recorded in 1997 and increased
depreciation,  depletion and amortization expense in 1997. (See notes 2, 6 and 7
to the financial statements included herein.)


                                       11
<PAGE>

       Net oil and gas revenues in the first nine months of 1997 were comparable
to revenues for the same 1996 period.  1996 revenues  included revenues from the
Company's California  properties that were sold in February and March 1996 and a
higher  ownership  interest at South  Timbalier  Block 76 through March 1996. On
March 8, 1996, the Company sold 25% of its interest in the South Timbalier Block
76 for  $940,000  pursuant  to a  preexisting  arrangement.  Both  1996 and 1997
revenues were adversely  affected by the workovers at South  Timbalier Block 76.
Offsetting  the above  decreases was the  commencement  of  production  from the
discovery well at East Bayou Sorrel as discussed  above. The Company has a 12.9%
before-payout  working  interest in this field.  Oil  production  increased  47%
during the first nine months of 1997 versus 1996 as a result of this  discovery.
Gas  production  decreased 19% during the first nine months of 1997 versus 1996,
primarily  because of depletion on the  Company's  properties  and the sale of a
portion of South Timbalier Block 76, as discussed above.

       For the first  nine  months of 1997,  the  Company's  natural  gas prices
averaged  $2.56 per MCF as compared  to $2.49 per MCF for the same 1996  period.
Oil prices averaged $19.20 per barrel for the first nine months of 1997 compared
to $19.61 per barrel for the same 1996 period.

       The Company incurred  non-recurring  office relocation and severance cost
of $207,000 in the first nine months of 1996 in  connection  with the  Company's
move to Houston. However, in the first nine months of 1997, the Company expensed
$323,000 of costs associated with a public offering that the Company withdrew on
April 25, 1997 and $316,000 of debt conversion  expense associated the Debenture
exchange offer discussed in note 2 to the financial statements included herein.

       Interest expense decreased by $116,000 (34%) for the first nine months of
1997 versus 1996 due to the lower debt  balance.  The  Company's  provision  for
depletion,  depreciation and amortization  (DD&A) increased by $530,000 (49%) in
the first nine  months of 1997 as compared  to 1996  because of higher  property
costs and lower proved reserves in 1997. See note 7 to the financial  statements
included  herein for a discussion of the $3.2 million  impairment to oil and gas
properties in 1997.

LIQUIDITY AND CAPITAL RESOURCES

       Cash Balance, Working Capital and Cash Flows from Operating Activities

       Fortune's  cash flow provided by operating  activities  increased for the
first nine months of 1997 to $816,000 as compared to $418,000  for 1996.  Before
considering the effect of changes in assets and liabilities, operating cash flow
was  $483,000  for 1997 as compared to $87,000 for 1996.  Lower  production  and
operating  expense and  interest  expense  and the absence of office  relocation
costs in 1997, as discussed  above,  contributed to the increase.  The Company's
working capital of $240,000 at September 30, 1997 was comparable to December 31,
1996.  Working  capital at September 30, 1997 is net of $1,022,000 of Debentures
that are due December 31, 1997.  The Company plans to repay these  Debentures on
December 5, 1997 with a portion of the  proceeds  from the private  placement of
the convertible  subordinated Notes due December 2007 discussed in note 8 to the
financial statements, thus converting short-term debt to long-term.

       Fortune's  internal liquidity and capital resources in the near term will
consist of working  capital and cash flow from its oil and gas  operations,  the
net proceeds from the private  placement of Notes discussed above and its unused
borrowing capacity under its new credit facility.


                                       12
<PAGE>

       Cash Used in Investing Activities -- Capital Expenditures

       Cash expenditures for oil and gas properties for the first nine months of
1997 were  $3,414,000 as compared to $1,059,000 for 1996. The 1997  expenditures
include  primarily  the  acquisition  of an  additional  interest  at East Bayou
Sorrel,  an exploratory  well at South Lake Arthur,  a development  well at East
Bayou  Sorrel  and  seismic  and land  acquisition  at  Espiritu  Santo  Bay.  A
significant  portion of the  Company's  1997  expenditures  were funded with the
funds returned by Zydeco under the terms of the Fortune/Zydeco joint venture. In
June 1997, Zydeco returned to the Company $2,154,000 of exploration venture cash
under  the  terms  of the  venture  agreement,  as  discussed  in  Note 6 to the
financial statements.  The cash was previously reported on the Company's balance
sheet as restricted cash in other assets. Fortune's net capital expenditures for
all of 1997 are currently estimated to be approximately $4.0 million.

       The Company has been involved in two  significant  proprietary 3D seismic
projects  along  the  Texas  coast.  The  La  Rosa  project,  a 24  square  mile
proprietary  3D survey over one of the Company's  existing  producing  fields in
Refugio  County,  Texas has been shot and is currently  being  interpreted.  The
Company sold one-half of its interest in the non-producing portion of this field
in exchange for the  acquiring  parties  paying 100% of the Company's 3D seismic
costs.  The  Company is  encouraged  by the  results of the survey  thus far and
expects to begin identifying  drillable  projects during late 1997 and 1998. The
Company  holds a 37.5%  working  interest in the  producing  wells and an 18.75%
working interest in the prospective projects covered by this 3D survey.

       The  second  project  is  offshore  Texas in the  intracoastal  waters of
Espiritu Santo Bay, Calhoun County.  This involves a 135 square mile proprietary
3D seismic survey in which the Company owns a 12.5% working  interest.  The area
covered by the survey also includes producing fields.  This survey has also been
completed  and is being  interpreted.  The Company is  encouraged by the results
thus far and expects to begin identifying drillable projects by early 1998.

       The  Company  is  currently  participating  in a third well at East Bayou
Sorrel and expects to see additional drilling on this project in 1998. This well
was spud on October 8, 1997,  however,  the  Company  prepaid its portion of the
drilling costs of the well prior to September 30, 1997. The 3D seismic  projects
and the East Bayou Sorrel project are expected to be multi-year  projects which,
if successful can have a significant  positive impact on the Company's cash flow
and results of operations. The Company intends to provide for these expenditures
with its available  cash, its cash flow from  operations and the proceeds of the
private  placement of convertible  Notes  discussed  above.  Should funds not be
available  to the Company as required for  participation  in the  projects,  the
Company  can reduce  its  working  interest  share of the  projects.  Should the
Company's working interest in exploration projects be reduced, the Company would
not derive as great a benefit in the event of an exploration success.

       Cash Flows from Financing Activities

       On July 11, 1997,  the Company  refinanced  its bank credit  facility and
extended  the  maturity  of its bank  debt to July 11,  1999.  See note 2 to the
financial  statements.  As  discussed  above  and in  note  8 to  the  financial
statements,  the Company  has sold $2.8  million  ($2.4  million net of fees and
commissions)  of 12%  convertible  subordinated  Notes due  December 31, 2007. A
portion of the proceeds of these Notes will be used to repay the  Debentures due
in December 1997.  Furthermore,  any net proceeds in excess of $2.5 million will
be used to pay down the bank credit facility.

       Oil and Gas Prices

       Conditions  outside  of the  Company's  control  influence  the  price it
receives for oil and gas. As of November 14, 1997,  the Company was receiving an
average of approximately  $20.00 per barrel for its oil production and $3.50 per
MCF as an average price for its gas production.

                                       13
<PAGE>

       Recently Issued Financial Accounting Statements

       In February  1997,  the Financial  Accounting  Standards  Board  ("FASB")
issued Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
("SFAS  128").  SFAS  128  changes  the  calculation  and  financial   statement
presentation  of earnings per share.  SFAS 128 requires the restatement of prior
period earnings per share amounts. The Statement will be effective for financial
statements issued for periods beginning after December 15, 1997.

       Effective  December 1997, the Company will be required to adopt Statement
of Financial  Accounting  Standards No. 129,  "Disclosure of  Information  about
Capital Structure" ("SFAS 129"). SFAS 129 requires that all entities disclose in
summary form within the financial  statement the pertinent rights and privileges
of the  various  securities  outstanding.  An entity is to  disclose  within the
financial  statement the number of shares issued upon conversion,  exercise,  or
satisfaction  of  required  conditions  during at least the most  recent  annual
fiscal  period  and any  subsequent  interim  period  presented.  Other  special
provisions apply to preferred and redeemable  stock. The Company will adopt SFAS
129 in the fourth quarter of 1997.

       In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 130,  "Reporting  Comprehensive  Income"  ("SFAS  130"),  which  establishes
standards for reporting and display of comprehensive  income and its components.
The components of comprehensive  income refer to revenues,  expenses,  gains and
losses that are excluded  from net income under  current  accounting  standards,
including  foreign  currency   translation  items,   minimum  pension  liability
adjustments and unrealized  gains and losses on certain  investments in debt and
equity  securities.  SFAS 130 requires that all items that are recognized  under
accounting  standards as  components  of  comprehensive  income be reported in a
financial  statement  displayed  in equal  prominence  with the other  financial
statements.  The total of other comprehensive income for a period is required to
be  transferred  to a component  of equity  that is  separately  displayed  in a
statement of financial position at the end of an accounting period.  SFAS 130 is
effective for both interim and annual periods beginning after December 15, 1997.

       In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 131,  "Disclosures about Segments of an Enterprise and Related  Information"
("SFAS 131"). SFAS 131 establishes  standards for the way public enterprises are
to report  information about operating  segments in annual financial  statements
and requires the reporting of selected  information about operating  segments in
interim financial reports issued to shareholders.  It also establishes standards
for related disclosures about products and services, geographic areas, and major
customers. SFAS 131 is effective for periods beginning after December 15, 1997.


FORWARD LOOKING STATEMENTS

       This Report on Form 10-Q contains  forward-looking  statements within the
meaning of Section 27A of the Securities Act of 1933. Forward looking statements
include statements  regarding:  future oil and gas production and prices, future
exploration  and development  spending,  future drilling and operating plans and
expected results,  reserve and production  potential of the Company's properties
and prospects and the Company's strategy.  Actual events or results could differ
materially from those discussed in the forward-looking statements as a result of
various factors including,  without limitation,  the factors set forth below and
elsewhere in this 10-Q, and in the Company's annual report on Form 10-K/A.

       Exploration Risks. The business of exploring for and, to a lesser extent,
of acquiring and developing oil and gas properties is an inherently  speculative
activity that involves a high degree of business and  financial  risk.  Although
available  geological and geophysical  information can provide  information with
respect to a  potential  oil or gas  property,  it is  impossible  to  determine
accurately the ultimate production  potential,  if any, of a particular property
or well.

                                       14
<PAGE>

       Dependence  on a Limited  Number of Wells.  Over 70% of the Company's oil
and gas  revenues,  cash  flow and  proved  oil and gas  reserves  is  currently
accounted for by three wells, the South Timbalier Block 76 well and the two East
Bayou Sorrel wells.  The South Timbalier Block 76 well was recently  shut-in for
repairs  and was  shut-in  for over two  months  during  1996 as the result of a
mechanical  failure. A significant  curtailment or loss of production from these
wells for a prolonged  period  before the  Company  could  replace the  reserves
through new discoveries or acquisitions  would have a material adverse effect on
the Company's projected operating results and financial condition in 1997.

       Volatility of Oil and Gas Prices. The Company's  revenues,  profitability
and future rate of growth are  substantially  dependent upon  prevailing  market
prices for natural gas and oil,  which can be  extremely  volatile and in recent
years have been depressed by excess domestic and imported supplies.

       Uncertainty  of  Estimates of Proved  Reserves  and Future Net  Revenues.
There are numerous  uncertainties  inherent in  estimating  quantities of proved
reserves and in projecting  future rates of production and timing of development
expenditures,  including  many  factors  beyond  the  control  of the  producer.
Estimating quantities of proved reserves is inherently imprecise. Such estimates
are based upon  certain  assumptions  about  future  production  levels,  future
natural gas and crude oil prices and future operating costs made using currently
available geologic engineering and economic data, some or all of which may prove
to be incorrect over time.

       Operating  and  Weather  Hazards.   The  cost  and  timing  of  drilling,
completing and operating wells is often  uncertain.  Drilling  operations may be
curtailed,  delayed or canceled  as a result of a variety of factors,  including
unexpected drilling conditions,  equipment failures,  accidents, adverse weather
conditions,  encountering  unexpected  formations  or  pressures in drilling and
completion operations, corrosive or hazardous substances,  mechanical failure of
equipment,  blowouts,  cratering  and fires.  These  conditions  could result in
damage or injury to, or  destruction  of,  formations,  producing  facilities or
other property or could result in personal  injuries,  loss of life or pollution
of the environment.

       Additional factors.  Additional factors that could cause actual events to
vary from those  discussed  above and  elsewhere in this report  include,  among
others:   loss  of  key  company  personnel;   adverse  change  in  governmental
regulation;  inability to obtain critical supplies and equipment,  personnel and
consultants; and inability to access capital to pursue the Company's plans.


                                       15
<PAGE>
                      FORTUNE NATURAL RESOURCES CORPORATION
                           PART II - OTHER INFORMATION


ITEM 5.

       Through  November  13,  1997,  the  Company  has sold  $2,800,000  of 12%
Convertible Subordinated Notes due December 31, 2007 (the "Notes") in connection
with a private  placement  of up to $4.5  million of such  Notes.  The Notes are
convertible  into the Company's  Common Stock at a conversion price of $3.00 per
share, subject to adjustment. The Notes are convertible by the holders after May
1,  1999,  subject  to a  one-time  option by the  holders to convert at a lower
conversion  price prior to that date in the event that the Company  sells shares
of its  Common  Stock at a price  below  the  conversion  price.  The  Notes are
redeemable by the Company  after May 1, 1999, at a premium that reduces  monthly
from 10% to zero over an 18-month  period.  Any such  premium on  redemption  is
waived in the event that the  Company's  Common  Stock  price  averages at least
$4.50 per share for 30  consecutive  trading days. The holders of the Notes will
be entitled to receive  additional  shares upon conversion in the event that the
Company's  Common  Stock price  averages  less than the  conversion  price for a
certain  period prior to May 1, 1999.  The Notes are  subordinate  to all of the
Company's secured debt, including the credit facility with Credit Lyonnais.  The
Notes bear interest at a rate of 12% per year,  payable  quarterly.  The Company
has received  proceeds,  net of offering  fees and  commissions,  of  $2,446,000
through  November 13, 1997.  The private  placement of Notes is set to expire on
November 19, 1997; however, there can be no assurance that the Company will sell
any additional  Notes prior to the expiration  date. The proceeds of the private
placement will be used to refinance  existing  debt,  including the repayment of
the  Company's  Debentures  that  are  due  December  31,  1997.  In  connection
therewith,  the Company has called for the  redemption of those  Debentures  for
December 5, 1997. Additionally, up to $855,000 of the net proceeds received from
the  private  placement  in excess of $2.5  million  will be used to reduce  the
Company's $865,000 of borrowings under its credit facility with Credit Lyonnais.
Net proceeds  through  November 13, 1997 are $2.4 million,  thus no reduction to
the credit  facility has occurred.  All other proceeds from the offering will be
used for general corporate purposes.

       The  Notes  were  sold  under  a  placement  agreement  with  J.  Robbins
Securities,  L.L.C. (the "Placement Agent").  The Placement Agent is receiving a
ten percent sales commission,  a three percent non-accountable expense allowance
and  warrants to  purchase a number of shares of Common  Stock  determinable  by
multiplying the gross proceeds received in the offering by approximately  .0278.
The warrants are exercisable over a five-year  period at $3.60 per share.  Barry
W. Blank, a beneficial  owner of more than five percent of the Company's  Common
Stock,   is  a  branch  manager  for  the  Placement   Agent  and  is  marketing
substantially the entire private placement.  As such, Mr. Blank will earn 50% of
the fees and commissions  paid to the Placement Agent for the Notes sold by him.
Mr. Blank will also receive 20% of the warrants  payable to the Placement Agent.
Five  hundred  thousand  dollars  of the  Notes  has  been  acquired  by a trust
established by and, under certain  circumstances,  for the benefit of Mr. Blank.
Mr.  Blank's  mother  has also  acquired  $50,000  of Notes for which Mr.  Blank
disclaims  beneficial  ownership.  Barry Feiner,  a director of the Company,  is
acting as outside counsel for the Placement Agent in connection with the private
placement.  If all of the Notes are sold,  Mr. Feiner will earn $45,000 in legal
fees from the Placement Agent,  $20,000 of which have been paid to Mr. Feiner as
of November 13, 1997. Mr. Feiner's wife has acquired  $50,000 in Notes for which
Mr. Feiner disclaims beneficial  ownership.  Mr. Feiner has recused himself from
voting on all Company  board of  director  matters  associated  with the private
placement.


                                       16
<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(A)      EXHIBITS

         Exhibit No.    Description
         -----------    -----------
            1.1*       Placement  Agent  Agreement  between  Registrant  and
                       J. Robbins  Securities,  L.L.C., including amendments
                       thereto.
            4.1*       Form of Note between Registrant and holders of 12% 
                       Convertible Subordinated Notes.
            4.2*       Form  of  Placement  Agent  Warrant   Agreement   
                       between   Registrant  and  J.  Robbins Securities, L.L.C.
           10.1*       Amendment  dated  November 3, 1997 to Credit  Agreement
                       between  Registrant  and Credit Lyonnais New York Branch
                       and Certain Lenders.
           10.2*       Form of Subscription Agreement and Investment Letter
                       in connection with private placement of 12% Subordinated
                       Convertible Notes due December 31, 2007.
           27.1*       Financial Data Schedule.
           99.1        Notes to Financial  Statements  included in the  
                       Registrant's  Form 10-K/A filed for the fiscal year 
                       ended December 31, 1996 incorporated herein by reference.

(B)      REPORTS ON FORM 8-K / 8K-A

         None.


*Filed herewith.

                                       17
<PAGE>

                      FORTUNE NATURAL RESOURCES CORPORATION

                                   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.

                               FORTUNE NATURAL RESOURCES CORPORATION



                               By:   /s/ TYRONE J. FAIRBANKS
                                     -------------------------------------------
                                     Tyrone J. Fairbanks
                                     President and Chief Executive Officer



                               By:   /s/ J. MICHAEL URBAN
                                     -------------------------------------------
                                     J. Michael Urban
                                     Vice President and Chief Financial
                                     and Accounting Officer


Date:  November 14, 1997


                                       18
<PAGE>