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|UNITED STATES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|SECURITIES AND EXCHANGE COMMISSION                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Washington, D.C. 20549                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|FORM 10-Q                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|[X]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|[  ]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Commission File Number 1-1525                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|GLADSTONE ENERGY, INC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(Exact name of Registrant as specified in its charter)                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Delaware
(State of Incorporation)                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|3500 Oak Lawn Avenue, Suite 590, LB 49, Dallas, TX
(Address of principal executive offices)                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(214) 528-9710                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(Registrant's telephone number,                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|including area code)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Securities registered pursuant to Section 12(b) of the Act:                                                                                                                                                                                                                                                                                                                                                                                                                                             
|None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Securities registered pursuant to Section 12(g) of the Act:                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Common Stock Par Value $.001 Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(Title of Class)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|______________________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve (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 ninety (90) days.
YES [X]     NO [   ]
Indicate the number of shares outstanding of each of the issuer's classesof common stock at May 1, 2001.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Class:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        



|GLADSTONE ENERGY, INC.
|----------------------
|                      
|INDEX                 
|                      
|                      
|Part 1.               
|                      
|Item 1.               
|                      
|                      
|                      
|                      
|                      
|                      
|                      
|Item 2.               
|                      
|Part II.              
|                      
|Item 4.               
|                      
|Item 5.               
|                      
|Item 6.               
|                      
|Signatures            
|                      
|                      



|HAROLDL. RATCLIFF                                                                                                                                                  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------
|CERTIFIEDPUBLICACCOUNTANT                                                                                                                                          
|12700 Park Central Drive                                                                                                                                           
|Suite 1600                                                                                                                                                         
|DALLAS, TEXAS 75251                                                                                                                                                
|MEMBER                                                                                                                                                             
|(972) 404-4010                                   
                                          
                                          
         AMERICAN INSTITUTE
|(972) 404-4042 - FAX                                  
                                          
                               CERTIFIED PUBLIC ACCOUNTANTS      

ACCOUNTANT'S REVIEW REPORT

Board of Directors
Gladstone Energy, Inc.
Dallas, Texas

I have reviewed the accompanying balance sheet of Gladstone Energy, Inc., as of 
March 31, 2001, and the related statements of operation, stockholders' equity and 
changes in cash flows for the three months then ended and statements of operation 
and changes in cash flows for the three months ended March 31, 2000, in accordance
with the Statements on Standards for Accounting and Review Services by the 
American Institute of Certified Public Accountants. All information included in these 
statements is the representation of the management of Gladstone Energy, Inc.

A   review  consists   principally  of   inquiries of   Company  personnel and
analytical   procedures  applied to  financial data.   It  is substantially less in scope  
than  an  audit  in   accordance  with   generally    accepted  auditing standards,  the 
objective of which is the expression of an opinion regarding the financial statements 
as a whole.   Accordingly, I do not express such an opinion.

Based  on  my  review,  I  am  not aware of  any material modifications that should  
be made to the accompanying financial statements in order for them to be in 
conformity with generally accepted accounting principles.

The  financial  statements  for  the  year  ended  December  31,  2000, were audited 
by me and I expressed an unqualified opinion on them in my report dated  March 9, 
2001, but I have not performed any auditing procedures since that date.

/s/ Harold L. Ratcliff 
                                          
                            Certified Public Accountant

Dallas, Texas
May 2, 2001



|Part I. Financial Information
Item 1. Financial Statements                                         
|---------------------------------------------------------------------------------------------------
|                                                                                                   
|GLADSTONE ENERGY, INC.
BALANCE SHEETS
At March 31, 2001 (Unaudited) and December 31, 2000 (Audited)
|                                                                                                   
|ASSETS                                                                                             
|                                                                                                   
|Current assets:                                                                                    
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                               
|                                                                                                   
|Current liabilities:                                                                               
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Deferred income taxes                                                                              
|                                                                                                   
|Stockholders' equity:                                                                              
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|See accompanying notes                                                                             
|                                                                                                   



|GLADSTONE ENERGY, INC. 
STATEMENTS OF OPERATIONS
For the three months ended March 31, 2001 and 2000(Unaudited)
|--------------------------------------------------------------------------------------------------------------
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Sales:                                                                                                        
|                                                                                                              
|                                                                                                              
|Cost of sales:                                                                                                
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Gross profit on sales                                                                                         
|                                                                                                              
|Expenses:                                                                                                     
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Other income:                                                                                                 
|                                                                                                              
|                                                                                                              
|Income (loss) before taxes                                                                                    
|                                                                                                              
|Income taxes                                                                                                  
|NET INCOME (LOSS)                                                                                             
|                                                                                                              
|Earnings per share:                                                                                           
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|See accompanying notes                                                                                        
|                                                                                                              



|GLADSTONE ENERGY, INC. 
STATEMENTS OF STOCKHOLDERS' EQUITY
For the three months ended March 31, 2001 (Unaudited)
And the year ended December 31, 2000 (Audited)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                               
|                                                                                                                                                               
|                                                                                                                                                               
|                                                                                                                                                               
|                                                                                                                                                               
|                                                                                                                                                               
|                                                                                                                                                               
|Balance at December 31, 1999                                                                                                                                   
|Purchase Partial Shares                                                                                                                                        
|Net income for the year 2000                                                                                                                                   
|                                                                                                                                                               
|Balance at December 31, 2000                                                                                                                                   
|                                                                                                                                                               
|Net income for the period                                                                                                                                      
|                                                                                                                                                               
|Balance at March 31, 2001                                                                                                                                      
|                                                                                                                                                               
|                                                                                                                                                               
|See accompanying notes                                                                                                                                         
|                                                                                                                                                               



|GLADSTONE ENERGY, INC.                            
|--------------------------------------------------
|STATEMENTS OF CASH FLOWS                          
|For the three months ended March 31, 2001 and 2000
|(Unaudited)                                       
|                                                  
|                                                  
|                                                  
|                                                  
|Cash flows from (to) operating activities:        
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|Cash flows from (to) investing activities:        
|                                                  
|                                                  
|                                                  
|                                                  
|Cash flows (to) financing activities:             
|                                                  
|                                                  
|                                                  
|                                                  
|Net increase (decrease) in cash                   
|                                                  
|Cash beginning of period                          
|                                                  
|Cash at end of period                             
|                                                  
|                                                  
|Supplemental disclosure of cash flow information: 
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|See accompanying notes                            
|                                                  

GLADSTONE ENERGY, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
March 31, 2001



NOTE 1 - ORGANIZATION

Gladstone Energy, Inc. (f/k/a Gladstone Resources, Inc.) (the "Company") was incorporated in the State of Washington on July 19, 1916. The Company sells oil and gas in
Louisiana, Texas and New Mexico. As of



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

On an accrual basis, the Company uses the successful efforts method of accounting for oil and gas properties. This method follows the premise that an enterprise is to capitalize only those costs it incurs
that directly result in an asset that has future benefits measured in terms of future cash flows.

For purposes of the statements of cash flows, the Company considers all short-term debt securities purchased with a maturity of three months or less to be cash equivalents. There were no cash equivalents
at March 31, 2001, or December 31, 2000. There were no significant non-cash investing or financing activities during the periods ended March 31, 2001 and December 31, 2000.

Depreciation, depletion and amortization are calculated using the straight-line and unit of production method over the estimated useful lives of the assets or production of the estimated recoverable oil
and gas reserves.

For income tax reporting, the Company uses accounting methods that recognize depreciation sooner than for financial statement reporting As a result, the basis of property and equipment for financial
reporting exceeds its tax basis by the cumulative amount that accelerated depreciation exceeds straight-line depreciation. Also, for tax purposes the Company deducts intangible drilling costs and capitalizes them on the successful efforts accounting
method. Deferred income taxes had been recorded in prior years for the excess deductions, which will be taxable in future periods through reduced depreciation and cost depletion deductions for tax purposes. Currently the Company has not assigned any
future tax benefits to the accumulated losses.

Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used.

NOTE 3 - ACCOUNTS RECEIVABLE

The sales to the customers are on open accounts receivable, which are unsecured.

NOTE 4 - PROPERTY AND EQUIPMENT

Gas and oil properties

Currently, the Company does not own any oil and gas properties or equipment. All properties were sold in 1999 and 2000.

A summary of changes in the Company's gas reserves (in MCF's) is as follows (oil reserves have been included as MCF's by multiplying barrels by 6). ALL RESERVE AMOUNTS, INCLUDING THE
REVISIONS, HAVE BEEN FURNISHED BY THE COMPANY MANAGEMENT AND HAVE NOT BEEN VERIFIED BY ANY INDEPENDENT PETROLEUM ENGINEERS. The Company believes there are no "proved undeveloped reserves" at March 31, 2001.





|                                | Total for United States in MCF's                                                                                                    
|------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------
|                                | March 31,      2001                                                                                                                 
|Beginning of period (January 1) | -                                                                                                                                   
|Deduction for sale of leases    | -                                                                                                                                   
|Production (total to date)      | -                                                                                                                                   
|Balance at end of period        | -                                                                                                                                   
|                                |                                                                                                                                     
|(1)                             | Based on reevaluation of estimated reserves by the Company. The estimates were based on current production levels of all properties.



NOTE 5 - FEDERAL AND STATE INCOME TAXES

A reconciliation of income tax expense computed by applying the U.S. federal and state income tax rates to income from continuing operations before income taxes and extraordinary items and the recorded
income tax expense is as follows:



|                               | 2001      | 2000     
|------------------------------ | --------- | ---------
|Tax expense at statutory rates | $   2,675 | $  26,862
|                               | _______   | _______  
|                               | $   2,675 | $  26,862
|                               |           |          



There were no deferred income taxes at March 31, 2001 or December 31, 2000. The Company has statutory depletion carry over of $207,708 at December 31, 2000 and $174,582 at March 31, 2001. The deduction is limited to 65%
of taxable income before depletion expense deductions. No deferred tax benefit has been recorded for possible use of the depletion due to its limitations.





NOTE 6 - COMMITMENT AND CONTINGENCY

At March 31, 2001, the Company had no material commitments. Currently, the Company is planning to liquidate all assets and distribute all cash to the shareholders for a 100% redemption of shares outstanding.





NOTE 7 - COMMON STOCK

Currently the Company's common stock is not traded on any exchange or automated quotation system.

At March 31, 2001, there were no outstanding stock options issued by the Company.

The following shares of common stock were outstanding for the periods under report.

|                              | March 31,2001 | December 31,2000
|----------------------------- | ------------- | ----------------
|Common stock, $.001 par value | 848,782       | 848,782         
|                              |               |                 

At the Annual Shareholders' Meeting, held on July 15, 1999, a one for five reverse split was approved, which was effected August 10, 1999. All share and per share numbers have been adjusted retroactively to record the effects of the
reverse split.

With the reincorporation to Delaware, 10,000,000 shares of common stock, par value $.001 per share were authorized and 5,000,000 shares of preferred stock, par value $.001, were authorized.



NOTE 8 - SIGNIFICANT ESTIMATES AND CONCENTRATIONS

Generally accepted accounting principles require disclosure of certain significant estimates and current vulnerabilities due to certain concentrations. Those matters included the following:



1. Major Customers

In 2000, the Company had two customers which represented 81% and 16% of their total revenue.



NOTE 9 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND RENT EXPENSE

The Company currently pays rent of $500.00 per month to Humphrey Oil Corporation, inclusive of phone service. Rent expense through March 31, 2001 was $1,000. The Company does not have a commitment on a lease contract. Rent expense for
2000 was $7,060.















Item 2.

Gladstone Energy, Inc.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS





This quarterly report on form 10-Q of the Company contains "forwarding-looking statements" within the meaning of, Section 27a of the Securities Act of 1933, as amended (the "Securities Act"), and
section 21e of the Securities Exchange Act of 1934, as amended (the "exchange act"). Specifically, all statements other than statements of historical facts included in this report regarding the Company's financial position, business strategy and plans and
objectives of management of the Company for future operations are forward- looking statements. These forward-looking statements are based on the beliefs of the Company's management as well as assumptions made by and information currently available to the
Company's management. When used in this report, the words "anticipate," "believe," "estimate," "expect" and "intend" and words or phrases of similar import, as they relate to the Company or Company management, are intended to identify forward-looking
statements. Such statements reflect the current view of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions related to certain factors including, without limitation, the approval by the stockholders of
the plan of liquidation of the Company, general economic conditions, governmental regulation, one time events and other factors described herein ("cautionary statements"). Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Based upon changing conditions, should any one or more of these risks or uncertainties materialize, or should any underlying
assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. The Company does not intend to update these forward- looking statements. All subsequent written and oral
forward- looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the applicable cautionary statements. Reference is made to "Management's Discussion and Analysis of Financial Condition
and Results of Operations - Forward-Looking Information - Cautionary Statements" included in the Company's Annual Report on Form 10-K for the year ended December 31, 2000, which is incorporated herein by reference.



Overview

During the third and fourth quarters of 2000, the Company sold all of its oil and gas properties, which constituted substantially all of its operating assets, for cash. The Company's Board of Directors has determined that it is
advisable to dissolve the Company. The Company has filed a Preliminary Proxy Statement for a meeting of stockholders to consider a plan of liquidation and dissolution of the Company. The Company has converted its marketable securities held at March 31,
2001 to cash and expects to maintain its assets in cash in anticipation of the approval by the stockholders of the plan of liquidation and dissolution of the Company.

The sale of substantially all of the Company's operating assets had an effect upon the comparative results of operations in terms of net income, revenues, costs and expenses and other income referred to in the following analysis.

Results of Operations - Comparison of Three Month Periods Ended March 31, 2001 and 2000

Net Income (Loss). The Company had net income for the three month period ended March 31, 2001 of $48,288 compared to the net loss of ($90,144) for the corresponding period of 2000, representing $.06 per share for the period in 2001
and ($.11) per share for the same period in 2000.

Revenues. As a result of the sale of all of the Company's oil and gas properties in 2000 for cash, the Company had no revenues for the three month period ended March 31, 2001 compared with $82,564 for the corresponding period in
2000, a 100% decrease.

Costs and Expenses. Costs and expenses for the three month period ended March 31, 2001 decreased $151,016, or 87%, to $21,708 versus $172,724 for the corresponding period of 2000. General and administrative expenses decreased
$10,631, or 49 % to 10,877, from $21,508 for the corresponding period of 2000 as a result of the sale of all oil and gas properties that reduced the level of such services that are required by the Company. Legal, auditing, and accounting fees decreased
$6,191, or 57%, from $10,776 for the three month period ended March 31, 2000 to $4,585 for the same period in 2001 as a result of the sale of all oil and gas properties in 2000 that reduced the levels of such services that are required by the Company.

Other Income. Other income, consisting of unrealized gains on marketable securities, and interest and dividend income, increased by $56,350 and $16,275, respectively, from $-0- and $16, as a result of the cash and the marketable
securities acquired from a portion of the cash received from the sales of the Company's oil and gas properties in 2000.

Liquidity and Capital Resources. Cash increased $7,917 to $592,977 at March 31, 2001, from $585,060 at December 31, 2000, as a result of the interest and dividends. Accounts receivable decreased $23,750 to $59 from $23,809
during the three months ended March 31, 2001 and accounts payable decreased $4,118 to $73 from $4,191 during the three months ended March 31, 2001. The decrease in accounts receivable resulted from the sale of all oil and gas properties, as a result of
which accrual of revenue also ceased. The decrease in accounts payable is primarily due to the termination of all operations which resulted in substantial decreases in operating expenses and related accruals.

Earnings (loss) before interest, taxes, depreciation, depletion and amortization ("EBITDA") for the three month period ended March 31, 2001 was ($15,462) or (.02) per share for the three month period in 2001 compared to ($56,932), or
($.11) per share for the same period in 2000.

For the three months ended March 31, 2001, net cash from operating activities was $7,917 compared to $68,619 used for the three months ended March 31, 2000. Cash from operations for the three months ended March 31, 2001, was from
collection of accounts receivable.

The Company anticipates that its existing cash will be sufficient to maintain its administrative operations until the expected adoption of the plan of liquidation and dissolution.

Inflation and Changing Prices

The impact of inflation, as always, is difficult to assess. The Company cannot anticipate where cost and revenue trends will head; however, a sudden increase in inflation could have an adverse effect on the financial condition of
the Company.





Part II. Other Information



Item 3.	Quantitative And Qualitative Disclosures About Market Risk

We currently do not engage in commodity futures trading or hedging activities and do not enter into derivative financial instrument transactions for trading or other speculative purposes. We also do not currently engage in
transactions in foreign currencies or in interest rate swap transactions that could expose us to market risk.

We may be exposed, in the normal course of doing business, to market risk through changes in interest rates as such changes may affect the price of the marketable securities held at March 31, 2001. We did not use any derivatives to
manage interest rate risk. All marketable securities held at March 31, 2001 have been converted to cash.



Item 4. Submission of Matters to a Vote of Security Holders

None



Item 5. Other Information

Not applicable



Item 6. Exhibits and Reports on Form 8-K

|(a) | Exhibits - Not applicable. 
|--- | ---------------------------
|    |                            
|(b) | Reports on Form 8-K - 	None









|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.



|                   | GLADSTONE ENERGY, INC.        
|------------------ | ------------------------------
|                   |                               
|Date: May 15, 2001 | By:/s/ Katherine R. Murphy    
|                   | Katherine R. Murphy, Treasurer