UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                  FORM 10-KSB


[X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
                    For the fiscal year ended June 30, 1997

[  ]     TRANSITION REPORT UNDER TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________________________ to
_______________________________

                        Commission file number 0-28184
                                               -------

                           MASON OIL COMPANY, INC.
                  ------------------------------------------
             (Exact name of small business issuer in its charter)


             Utah                                          87-109974
           --------                                       -----------
   (State of incorporation)                            (I.R.S. Employer
                                                       Identification No.)


   6337 Ravenwood Drive, Sarasota, FL                         34243    
   ----------------------------------                         -----
(Address of principal executive offices)                   (Zip Code)

Issuer's telephone number:  (941) 351-3102

Securities registered pursuant to Section 12(b) of the Exchange Act:

    Title of each class           Name of each exchange of which registered
    ------------------            -----------------------------------------
          None                                      None

Securities registered pursuant to Section 12(g) of the Exchange Act:

                     0.001 par value Common Stock
                    -----------------------------                     
                          (Title of class)

     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 _____

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB.  [X]

     The issuer's revenues for its most recent fiscal year consisted of
interest income in the amount of approximately $25,507.

     The aggregate market value of the voting Common Stock held by
non-affiliates of the issuer (treating all executive officers and directors of
the issuer, for this purpose, as if they may be affiliates of the issuer) was
approximately $1,385,659 as of September 30, 1997 (based on the average bid
and asked price of such Common Stock).

     Ten million eight hundred ninety thousand five hundred four (10,890,504)
shares of the issuer's Common Stock were outstanding as of September 30, 1997.

                      DOCUMENTS INCORPORATED BY REFERENCE

     The issuer's proxy statement for its 1997 Annual Meeting of Shareholders,
to be filed by the issuer with the Securities and Exchange Commission within
120 days following the end of the fiscal year ended June 30, 1997, is
incorporated by reference into Part III of this Annual Report on Form 10-KSB.


   Transitional Small Business Disclosure Format (check one):
   Yes _______                            No ___X____



<PAGE>


                           MASON OIL COMPANY, INC.
                    FOR FISCAL YEAR ENDED JUNE 30, 1997

                              TABLE OF CONTENTS
                                 Form 10-KSB

PART I

Item                                                               Page

1.  Description of Business                                          1

2.  Description of Property                                          3

3.  Legal Proceedings                                                9

4.  Submission of Matters to a Vote of Security Holders              9

PART II

5.  Market for Common Equity and Related Stockholder Matters         9

6.  Management's Discussion and Analysis or Plan of Operation       10

7.  Financial Statements                                            11

8.  Changes in and Disagreements with Accountants on Accounting
     and Financial Disclosure

PART III

9.  Directors, Executive Officers, Promoters and Control Persons;
     Compliance with Section 16(a) of the Exchange Act

10. Executive Compensation

11. Security Ownership of Certain Beneficial Owners and Management

12. Certain Relationships and Related Transactions

PART IV

13. Exhibits and Reports on Form 8-K

    Signatures



<PAGE>




PART I

     This Form 10-KSB contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934.  The Company's actual results could differ materially
from those set forth in the forward-looking statements.  The forward looking
statements include statements that reflect management's intentions, plans,
beliefs, expectations or predictions of future operations, conditions, and
potential future capitalization of the Company.  These forward-looking
statements are based on current expectations that involve numerous risks and
uncertainties.  Assumptions relating to such current expectations involve
judgments with respect to, among other things, future economic, competitive
and market conditions and future business decisions, all of which are
difficult or impossible to predict accurately and many of which are beyond the
control of the Company.  Although the Company believes that the assumptions
underlying the forward-looking statements are reasonable, any of the
assumptions could be inaccurate and therefore there can be no assurance that
the forward-looking statements included in this Form 10-KSB will prove to be
accurate.  In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation of the Company or any other person
that the objectives and plans of the Company will be achieved.

ITEM 1.   DESCRIPTION OF BUSINESS.
----------------------------------

     General.  Mason Oil Company, Inc., a Utah corporation formed in 1980 (the
     -------
"Company"), is positioning itself to participate in the acquisition,
development and operation of selected oil and gas properties, expected to be
located principally in Australia and Southeast Asia.  From 1981 until 1996,
the Company was dormant, with no significant assets or liabilities.
Controlling interest in the Company was acquired in September, 1996 by Paul B.
Ingram and John L. Naylor, for the purpose of establishing a vehicle for the
identification, exploration, development and operation of promising oil and
gas properties.  Since the date of such transaction, the Company has
investigated potential petroleum exploration and development prospects and
explored how it might participate in the development and operation of such
properties.

     In October of 1996, Mr. Ingram and Mr. Naylor sold a 100% working
interest in two South Australian oil and gas exploration licenses, identified
as Petroleum Exploration Licenses 61 and 63 ("PELs 61 and 63", and
collectively the "PELs"), to the Company, subject to a 3% royalty interest
retained by Mr. Ingram and Mr. Naylor, in exchange for 6,000,000 shares of the
Company's stock.  The PELs are held by Hemley Exploration Pty. Ltd., an
Australian corporation ("Hemley") which, as a result of the transaction with
Mr. Ingram and Mr. Naylor, became a wholly owned subsidiary of the Company.
At the time of the transaction, the PELs constituted the only significant
assets of Hemley, and Hemley had not conducted any significant operations with
respect to the PELs or otherwise.

     In March of 1997, the Company raised gross proceeds of $2,065,000 through
the issuance of 1,475,050 shares of its Common Stock to an affiliate of FAI
Insurance, Ltd., one of Australia's largest insurance underwriting companies.
These funds were intended to finance initial exploration activities under the
PELs, and to permit the Company to pursue other petroleum exploration and
development opportunities in Australia and Southeast Asia.

     The initiation of exploration activities under the PELs has been delayed
pending completion of negotiations with the aboriginal tribes claiming
interests in the geographic areas covered by the PELs.  A native group has
asserted rights to title of the land subject to PEL 63.  The Company is
currently in the process of resolving such claims.  Aeromagnetic surveys in
the northeast portion of the Officer Basin of South Australia, being the
geographic area covered by the PELs, have been recently completed, and the
data is in the process of interpreted.  A report on such data is expected in
the near future.  Additional seismic studies on the areas covered by the PELS
are expected to  be conducted over the course of the next year.

     In July of 1997 the Company entered into a Joint Venture Agreement with
PT. Putra Bakti Mahkota, an Indonesian corporation ("Putra") regarding
participation in the development of the Sambidoyong Oil Field in Indonesia,
pursuant to the terms of a Technical Assistance Contract (the "TAC") with
Perusahaan Pertambangan Minyak Dan Gas Bumi Negara ("Pertamina"), an
Indonesian State Enterprise controlling the development of the field.  In
September of 1997 the Company's joint venture with Putra terminated due to
Pertamina's failure to provide, within the time frame provided in the Joint
Venture Agreement, its approval of modifications to the TAC to permit the
joint development effort to take place.  The Company is investigating the
reasons for Pertamina's failure to approve the joint venture activities and
may approach Pertamina to pursue in another manner the possibility of
participating in the development of the Sambidoyong Oil Field or other
properties within the control of Pertamina.  The Company continues to
investigate other development prospects in Indonesia and elsewhere.

     General Risks and Uncertainties
     -------------------------------

     Currently the Company has not identified any proven reserves, and is not
involved in any oil and gas production activities.  There can be no assurance
that in the future the Company will locate proved reserves, whether associated
with the PELs or otherwise.  Exploration and development activities undertaken
may not result in the establishment of producing wells.  In the event proved
reserves are identified, the feasibility of recovery is strongly dependent
upon world market prices for oil and gas.  There can be no assurance that
amounts capitalized as acquisition, exploration and development costs will be
recoverable through future operations.

     Operating Hazards and Insurance.  The oil and gas business involves a
     -------------------------------
variety of operating risks, including the risks of fire, explosions, blow
outs, pipe failures, abnormally pressured formations and environmental hazards
such as oil spills, gas leaks, ruptures or discharges of toxic gases, the
occurrence of any of which could result in substantial losses due to injury or
loss of life, severe damage to or destruction of property, natural resources
and equipment, pollution or other environmental damage, clean up
responsibilities, regulatory investigations and penalties and suspension of
operations.  Upon the initiation of development activities, the Company will
seek to obtain a gas and oil lease operator policy that would insure the
Company against certain risks associated with drilling, completing and
operating any wells.  There can be no assurance that such insurance would be
available to the Company or, if it is obtained, that it would be adequate to
cover any losses or exposure to liability.  Once the Company commences
exploration and development activities, even if it obtains insurance as
customary in the industry, such insurance coverage would not provide complete
coverage against all operating risks.  An uninsured or partially insured
claim, if successful and of sufficient magnitude, could have a material
adverse effect on the Company and its financial condition.  Any difficulty in
obtaining or maintaining insurance coverage may impair the Company's ability
to engage in its proposed business activities.

     Regulation.  The oil and gas industry is extensively regulated by
     ----------
national, regional  and local authorities in each jurisdiction in which the
     --
Company may be involved in exploration, development and production activities.
In particular, oil and gas production operations and economics are affected by
price controls, environmental protection statutes, governmental control of
extraction activities, tax statutes and other laws and regulations relating to
the petroleum industry, as well as by changes in such laws, changing
administrative regulations and the interpretations and application of such
laws, rules and regulations.  Oil and gas industry legislation and agency
regulation are under constant review for amendment and expansion for a variety
of political, economic and other reasons.  Numerous governmental and
regulatory authorities, national, regional and local, are empowered to issue
rules and regulations impacting the oil and gas industry, some of which carry
substantial penalties for failure to comply.  The legal and regulatory
framework for conducting petroleum exploration, development and production
activities in foreign countries is also subject to change due to changes in
the parties in power.  The Company's proposed activities would be subject to
the risks associated with political instabilities.  The regulatory burdens and
political risks associated with the oil and gas industry increase the cost of
doing business and, consequently, affect a participant's ability to achieve
profitability.

     Competition.  The oil and gas industry is highly competitive in all of
     -----------
its phases.  The Company will encounter competition from other oil and gas
companies in all areas of its operations, including the acquisition of
interests in exploration and development properties, the marketing of oil and
gas that may be produced, and the availability of drilling rigs.  Many of
these competitors possess greater financial, technical and other resources
than the Company.  Competition for acquisition of rights to exploration and
development of properties is affected by the amount of funds available to the
Company and information about producing properties available to the Company.
Competition may also be presented by alternative fuel sources, including
heating oil and other fossil fuels.  There has been increased competition for
lower risk development opportunities and available sources of financing.

     Environmental Regulation.  Various national, regional and local laws and
     ------------------------
regulations covering the discharge of materials into the environment or
otherwise relating to the protection of the public health and the environment
may affect the Company's operations, expenses and costs.  The Company does not
believe that its environmental risks will be materially different from those
of comparable oil and gas companies operating in similar geographic areas.
Nevertheless, no assurance can be given that environmental laws will not, in
the future, result in the curtailment in production activities or materially
increase the costs of  exploration, development or production, or otherwise
adversely effect the Company's operations and financial condition.

     Bankruptcy Proceeding.  As has been disclosed in prior filings, on
     ---------------------
December 31, 1985, the Company filed a Chapter 11 Petition for Voluntary
     -
Bankruptcy in the United States Bankruptcy Court for the District of Utah,
Central Division.  At the Company's request, on January 14, 1988 the
bankruptcy proceedings were dismissed.

     Employees.  The Company has two employees, both of which work full time
     ---------
for the Company.  The employees are Paul Ingram and John Naylor, the two
officers of the Company, who between themselves handle all administrative
functions and the investigation and evaluation of potential exploration and
development projects.

     Negotiations for Acquisition of Interest in Drilling Rig.  The Company,
     --------------------------------------------------------
directly and through its wholly owned subsidiary, is negotiating for the
acquisition of a 50% interest in a Cabot 1000 drilling rig.  Under the
tentative terms of the acquisition arrangement, this rig would be made
available for use in the Company's Southeast Asia and Australian drilling
programs.  Faced with the worldwide scarcity of good oil field equipment, the
Company has been working to acquire rights to, or an interest in, a drilling
rig.  The tentative acquisition terms call for the Company to pay $300,000 and
deliver 806,666 unregistered shares of the Company's Common Stock to the
seller in consideration for a 50% interest in the rig.  The interest in the
rig would be sold by Desco Inc., an entity doing business in the Philippines,
and would be operated under the management of TD International, an affiliate
of Desco, Inc.  The Company is currently in the final negotiations of the
terms of an acquisition agreement.

ITEM 2.   DESCRIPTION OF PROPERTY.
----------------------------------

     General.  The Company's primary asset is its interests in the PELs, which
     -------
were issued by the State of South Australia, and an access agreement providing
the Company with access to the property covered by the PELs, negotiated with
the Anangu Pitjantjatjari aboriginal tribe.

     The area covered by the PELs is roughly described as a portion of the
Eastern Officer Basin, consisting of 17,188 square kilometers (4.2 million
acres), situated approximately 200 miles south of Alice Springs and
approximately 700 miles north of Adelaide.  Although the location is remote
from populated areas, a modern railway and a year-round, sealed highway
service the site, and provide access from the site to a refinery at Alice
Springs to the north, and a refinery and deep water port at Port Augusta and
Adelaide to the south.  The terrain is relatively flat, making access to rail
and highway uncomplicated.  Due to the remoteness of the site, it is
anticipated that development would cause minimal disturbance to human
population, flora or fauna.  Climatic conditions typically allow operations
350 days of the year.

     Grant and Area of PELs.  The PELs were granted to Hemley on 23 May 1996,
     ----------------------
pursuant to the terms of the Petroleum Act 1940 (South Australia) (the
"Petroleum Act").  Under Australian law, minerals and petroleum are vested in
the Government; rights to explore and extract petroleum within mainland South
Australia are conferred under and regulated by the Petroleum act and
regulations made by the South Australian Government under that Act.

     In broad terms, the PELs confer the right to explore for gas and liquid
hydrocarbons within the license area, but not to undertake commercial
production of any reserves which are discovered.  The initial term of each PEL
is five (5) years, ending on 22 May 2001.  The PELs were issued by the South
Australian Department of Mines and Energy (the "Department") on behalf of the
Minister for Mines and Energy.

     PEL 61 covers an area of approximately 6,258 square kilometers, and falls
entirely within the land area known as the "Pitjantjatjara Lands."  These
lands are subject of the Pitjantjatjara Land Rights Act 1981 (South Australia)
(the "Pitjantjatjara Act").  Pursuant to this Act, ownership of the
Pitjantjatjara Lands had been vested in a corporation, Anangu Pitjantjatjara,
on behalf of the local traditional occupiers of the land.  The vesting of
these lands in Anangu Pitjantjatjara, and the terms of the Pitjantjatjara Act,
do not prevent Hemley Exploration from exercising its rights under PEL 61.
However, in order to comply with the Pitjantjatjara Act, Hemley Exploration is
subject to an Access Agreement with Anangu Pitjantjatjara, which further
regulates Hemley Exploration's activities on the PEL area.

     PEL 63 covers an area which is adjacent to (but outside of) the
Pitjantjatjara Lands area.  The total area covered by the license is 10,930
square kilometers, though the license is expressed only to apply to specified
categories of land within this area.  In essence, these are categories of land
in respect of which, under Australian law, a native title claim will not (or
is most unlikely to) apply.

     PEL 63 is not subject to any separate agreements with third parties.
However, a native group has asserted rights to land subject to this license
agreement.  The Company is currently in the process of resolving such claims
and may be obligated under such circumstances to pay certain amounts and be
subject to additional requirements of an agreement originated with the native
group and the Company.

     Petroleum Exploration Licenses - Rights and Obligations.  The PELs have
     -------------------------------------------------------
been issued for an initial term of five years, subject to the license renewal
provisions contained in the Petroleum Act.  The Petroleum Act prescribes
minimum exploration expenditure requirements to apply during the initial term
of an Exploration License.  However, in the case of each of PELs 61 and 63, a
detailed plan setting out minimum levels of exploration for each year of the
initial term of the PEL is included in the License conditions.  The plan
includes minimum estimated expenditure levels for each year, as follows:



<TABLE>
<CAPTION>

                                PEL 61       PEL 63
<S>                               <C>         <C>

Year 1 (ending 22 May 1997)  A$1,250,000    A$645,000
Year 2 (ending 22 May 1998)    2,000,000      340,000
Year 3 (ending 22 May 1999)    2,450,000    1,700,000
Year 4 (ending 22 May 2000)    3,950,000    1,770,000
Year 5 (ending 22 May 2001)    4,975,000      300,000

Total                       A$14,625,000  A$4,755,000

</TABLE>

     Under the terms of each License, if Hemley fails to comply with the
prescribed exploration requirements in any year of the term, the responsible
Minister may (in his discretion) cancel or vary the License or, alternatively,
vary these expenditure requirements.  The Company has to date been unable to
meet the exploratory requirements of the PELs, as a result of certain
complications associated with the status of one of the PELs .  The South
Australian Department of Mines and Energy ("MESA") has eased the requirements
associated with the Company's PELs and has agreed to work with the Company to
resolve such complications.  Currently the Company believes that both PELs are
in good standing with MESA.

     In brief, some of the principal rights and obligations attaching to
Hemley as the holder of a Petroleum Exploration License are as follows:

          (a)     the Licensee has the exclusive right to engage in petroleum
exploration on the subject area;

          (b)     the Licensee must comply with general conservation and
rehabilitation obligations set out in the Petroleum Act and Regulations;

          (c)     the Licensee is subject to ongoing reporting obligations to
the Department in respect of work undertaken and expenditure incurred;

          (d)     the Licensee must also consult with and obtain the approval
of the Department in respect of work to be undertaken for the remainder of the
term; and

          (e)     where any part of the License area is being used for certain
other purposes, such as for the cultivation of crops or as pasture, the
Licensee must first obtain the consent of the relevant occupier or user.

     A most important obligation of Hemley as the Licensee under the PELs is
to notify the Minister upon the discovery of petroleum (whether liquid or
gaseous) within the relevant License area.  Particulars of the quantity and
quality of the petroleum must be provided as soon as practicable.  The rights
of Hemley to apply for a Production License in this event are referenced
below.

     Extension of Term of PEL.  The Petroleum Act makes provision for the
     ------------------------
renewal of Petroleum Exploration Licensees for further terms of five years.
Hemley would be entitled to apply for and obtain such an extension at the end
of the current term of the PELs, subject to satisfying the Department that all
of the obligations applicable to the initial term have been satisfied.  Upon
any such renewal, the existing area of the PEL would be required to be reduced
by not less than 25% by the excision of area(s) from the existing area of the
License.

     PEL 61 - Access Agreement.  As referenced above, the area of PEL 61 is
     -------------------------
subject to the Pitjantjatjara Act.  Under the terms of that Act, in order for
any exploration or production activities to be undertaken on the
Pitjantjatjara Lands under (inter alia) the Petroleum Act, the permission of
Anangu Pitjantjatjara must first be obtained.  The Access Agreement dated 5
March 1996, between Anangu Pitjantjatjara (on the one hand) and Paul Ingram
and John Naylor (on the other), sets out the terms upon which permission has
been granted for both exploration and production operations within the area of
PEL 61.  The Access Agreement was entered into by Messrs. Ingram and Naylor
prior to the grant of the PEL, but the Agreement contemplates the substitution
of a company owned by them.  Accordingly, Hemley is now bound by the terms of
the Access Agreement.

The Access Agreement provides for certain payments to be made to Anangu
 Pitjantjatjara, based on:

  (a)  annual exploration expenditure on the License area; and

  (b)  the well-head value of any petroleum produced from the License area

     The Access Agreement also entitles Anangu Pitjantjatjara to take up a
participatory interest of up to 10% in any Petroleum Production License which
may be granted in respect to any petroleum discovery within the area of PEL
61.

     Grant of Petroleum Production License.  As the holder of PELs 61 and 63,
     -------------------------------------
Hemley enjoys priority rights in respect of any petroleum reserves which it
discovers within the area of either license.  Provided that it is in
compliance with its obligations under the relevant PEL and the Petroleum Act
at the time of discovery, Hemley will be entitled to apply for a Petroleum
Production License for the area within which the petroleum is discovered.  In
this event, and subject to the foreign investment and native title
considerations referenced below, the Minister will be obliged to grant the
License, unless the reserves or quality of petroleum are not sufficient to
warrant production.  If the holder of a Petroleum Exploration License makes an
economic discovery, and fails to apply for a Production License within twelve
(12) months, the responsible Minister may then grant a Production License in
respect of the field to any third party.

     A Petroleum Production License has a term of twenty-one (21) years, but
may be renewed for further 21 year terms.  The are of such a License may not
exceed 260 square kilometers.  A Production License confers upon the licensee
the exclusive right to conduct operations for the production of petroleum
within the License area, including all necessary construction and other works.

     If Hemley is granted any Petroleum Production Licenses, under the terms
of the Petroleum Act, these will also be subject to a royalty, payable to the
Government, at a rate of 10% of the well-head value of petroleum recovered.

     Foreign Investment Considerations.  Australia's foreign investment policy
     ---------------------------------
is administered by the Federal Treasurer with the assistance of the Foreign
Investment Review Board ("FIRB").  For the purposes of the policy, Hemley will
constitute a "foreign interest."  While the granting of the PELs to Hemley
would not have attracted the operation of the policy, it is likely that Hemley
will be required to obtain the approval of the FIRB under that policy before
being entitled to the grant of one or more Petroleum Production Licenses.
Under the current policy, the level of scrutiny of the proposal will, in broad
terms, depend on the projected level of investment in the development.  If the
planned investment is less than A$50 million, the FIRB will normally approve
the grant without examination.  If this level is exceeded, the FIRB will
examine the proposal, and will approve the grant of the License unless this is
considered by the Government to be contrary to the national interest.

     Native Title Considerations
     ---------------------------

     1.     Native Title.  In 1992, the High Court of Australia handed down
            ------------
its decision in the "Mabo case."  In that decision, the Court rejected the
traditional doctrine that Australia was terra nullius (land belonging to no
one) at the time of British settlement.  It stated that the common law of
Australia recognizes the existence of a form of native title held by
Australia's indigenous inhabitants over their traditional lands where:

          (a)     a group of indigenous people can establish that it has
maintained a substantial connection with the land, in accordance with
traditional laws and customs of the group, since the time of British
settlement; and

          (b)     the native title rights have not been lawfully extinguished.

          The Court found that the content of native title is dependent upon
the traditions, customs and laws of the particular Aboriginal group.  There is
no single, universal native title - rather it will vary from group to group.
Therefore, once a group has established that it has maintained the requisite
connection with the land since British settlement, the court must look to the
traditions, customs and laws of that group to determine the precise content of
native title.

          In response to the High Court's decision, the Commonwealth
Parliament enacted the Native Title Act 1993 (the "NTA") in December 1993.
The NTA has a number of objectives:

          (a)     PROTECTION OF NATIVE TITLE -- to provide for the recognition
and protection of native title.

          (b)     VALIDATION OF PAST ACTS - to provide for, or allow, the
validation of Government acts (including the grant of interests in land) done
before the commencement of the NTA on 1 January 1994, which might otherwise be
invalid because of the existence of native title.

          (c)     COMPENSATION - to provide for compensation to be paid to
native title holders where native title has been extinguished or impaired as a
result of validation of a past act.

          (d)     VALIDITY OF FUTURE ACTS - to establish procedures to be
followed to ensure that Government acts after 1 January 1994 which may affect
native title can proceed without extinguishing or impairing native title, and
are therefore valid.  These include the "right to negotiate" procedure which
applies in relation to the grant, renewal and extension of mining and
exploration titles.

          (e)     NATIVE TITLE CLAIMS - to establish a procedure for native
title claims to be made and determined.

          The NTA also established the National Native Title Tribunal ("NNTT")
for the purposes of carrying out specified functions under the NTA.

     2.     Future Act Regime.  In order to ensure that native title rights
            -----------------
are protected in relation to future grants of interests in land, the NTA
specifies that such grants can only be validly made over land in which native
title might exist if certain conditions are satisfied.  These conditions
include giving native title holders the same procedural rights as the holders
of ordinary "freehold" title to the land, including the right to be notified.

          In addition, the NTA prescribes a special procedure called the
"right to negotiate" procedure (the "RTN procedure") which must be followed to
ensure the validity of certain types of future acts relating to onshore land.
These acts include:

(a)  the creation of a right to mine (which is defined to include exploration 
     and prospecting for petroleum or gas); and

(b)  an extension of the period of a right to mine, where the extension was 
     not part of the original grant of the right to mine.

          Under the RTN procedure, a State Government that is planning to do
the act (for example, the granting of a petroleum exploration license) must
give notice of its intention to do so to various parties, including:


(a)  any registered native title holders or claimants (native title parties)
     in relation to the land;

(b)  any representative Aboriginal body that will be affected by the proposed
     act; and

(c)  the general public.


          Aboriginal groups which wish to oppose or have input in relation to
the proposed future act have two months from the issuance of the notice in
which to notify the NNTT.  The Government must then give the native title
parties an opportunity to make submissions in relation to the proposed future
act, and must negotiate in good faith with the native title parties and the
grantee with a view to obtaining the agreement of the native title parties to
the doing of the act.  If the parties fail to reach an agreement within a
specified period of time, the NNTT can be requested to make a determination.

     3.     Conditions Relating to Grant of Petroleum Exploration Licenses 61
            -----------------------------------------------------------------
and 63.  Both PELs were granted after the commencement of the NTA.
------
Accordingly, the future act regime and the RTN procedure applied to the grant
------
of the Licenses.  Although it is not apparent from the terms of the License
documents themselves, it is assumed that these procedures were followed by the
South Australian Department of Mines and Energy and the Licenses were
therefore validly granted under the NTA.

          PEL 63 is a "Swiss cheese" grant, in that the License relates only
to land for which native title is likely to have been extinguished.  This land
is described in the License document as including:


(a) land that is now or was formerly the subject of a grant of freehold title 
    or of a perpetual Government lease; and

(b) land which is or was formerly subject to a pastoral lease granted by the 
    South Australian Government.

Land over which native title may still exist is intended to be excluded from 
the scope of the License.

     4.     Native Title Claims.  As mentioned above, the NTA allows for
            -------------------
Aboriginal groups to register claims for native title with the NNTT.  Once a
claim is accepted and registered, the claimants are then entitled to receive
notice of any proposed dealing in the claimed land by the relevant Government.
If other parties, such as the relevant State or Territory Government or
underlying landowners, oppose the claim, the NNTT must direct the parties to
try and reach an agreement about the existence of native title.

          On the basis of a search of the Register of Native Title Claims kept
by the NNTT, the only claim which has been registered with the NNTT and which
may affect the PELs is a claim lodged by William Lennon Snr on behalf of the
Antakirinja Muntuntjarra people (Claim No. SC 95/7).  This claim would only
affect land within the boundary of PEL 63.  The claim was accepted by the
Registrar on August 29, 1996.

     5.     Renewal of the PELs and Grant of Petroleum Production Licenses.
            --------------------------------------------------------------
Under the current regime, renewal of the PELs or the grant of a Petroleum
Production License to Hemley will constitute a future act to which the RTN
procedure applies.  Therefore, prior to renewal or grant, the governmental
authority will be required to notify any registered native title holders or
claimants, who will then have the opportunity to oppose the renewal or grant.

          On the assumption that no further native title claims are lodged
over the areas covered by the PELs, it appears that the renewal of PEL 61, or
a grant of a PPL in substitution for it, is unlikely to be opposed by any
aboriginal groups.  This is because the area covered by the PEL (or PPL) is
part of the Pitjantjatjara Lands, and so covered by the Pitjantjatjara Act and
the Access Agreement.  However, the position is less certain in respect of PEL
63.

     6.     Legislative Amendments; Recent Developments.  The current Federal
            -------------------------------------------
Government has proposed extensive amendments to the NTA.  These amendments
include the exclusion of certain exploration and mining tenements from the RTN
procedure, provided certain conditions are met.  It is expected that
substantial revisions will be made to the amendments before they are passed.

          The content of the amendments will also be affected by the
Government's response to the High Court's decision in the recent "Wik case,"
which was handed down on 23 December 1996.  In that case, the Court held that
pastoral leases did not necessarily extinguish native title rights.  This
decision may have some impact on PEL 63, as it appears to cover substantial
areas of land which are or have been the subject of pastoral leases.  The
South Australian Government may also take steps to clarify the status of
mineral and petroleum tenements granted over pastoral lease land, as a result
of the High Court's decision.

     No Active Exploration Activities or Wells.  The Company has not yet
     -----------------------------------------
commenced active exploration and production activities, has drilled no wells
and has no production wells or developed acres.

     Company Facilities.  The Company currently conducts its business
     ------------------
operations out of facilites located in Sarasota, Florida provided by its
     ---
officers, at no cost to the Company.  In March 1997, Hemley entered into an
operating lease for office space in AustraliaThe terms of the lease provide
for payments of approximately $10,500 annually and the lease expires in March
of 1999.  It is anticipated that at the time of commencement of substantial
exploration and development activities, offices and facilities will be
established at the site of such operations

ITEM 3.   LEGAL PROCEEDINGS.
----------------------------

     Not applicable.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
-------------------------------------------------------------

     No matters were submitted to a vote of the Company's security holders
during the fourth quarter of the fiscal year covered by this report.

     PART II
     -------

ITEM 5.   MARKET FOR ISSUER'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
----------------------------------------------------------------------------

     The Company's Common Stock is traded on the NASDAQ bulletin board, under
the symbol MSNO.  The Company estimates that at September 30, 1997, there were
approximately 2,365 holders of record of the Company's Common Stock.

     The Company has not declared or paid any cash dividends on its Common
Stock during the last two fiscal years, and does not anticipate the
declaration or payment of dividends in the foreseeable future.  The Company is
not subject to any restrictions that limit its ability to pay dividends, other
than the unavailability of funds and a statutory restriction found in the Utah
Revised Business Corporation Act, which prohibits the payment of distributions
to sharehodlers if, after giving effect to such distribution:

(a)  The Company would not be able to pay its debts as they become due in the
     usual course of business; or

(b)  The Company's total assets would be less than the sum of its total 
     liabilities.

     The following table sets forth the range of high and low bid information,
as reported by the bulletin board services, for the Company's Common Stock for
each quarter since Mr. Naylor and Mr. Ingram acquired a controlling interest
in the Company and transferred the PELs to the Company, reviving it from its
dormant status.  Over-the-counter quotations reflect inter-dealer prices
without retail mark-up, mark-down, or commission and may not represent actual
transactions.



<TABLE>
<CAPTION>

                       Quarter Ended      Common Stock
                      -----------------  -------------     
                            High              Low
                      -----------------  -------------
  <S>                          <C>            <C>
June 30, 1997             $ 0.4375          $0.4375
March 31, 1997            $   1.50          $1.4373
December 31, 1996         $   1.00          $  1.00
</TABLE>



     Since the filing by the Company of a General Form for Registration of
Securities of Small Business Issuers on Form 10-SB in May of 1996, the Company
has sold securities that were not registered under the Securities Act of 1933,
as follows:

     A.     On or about October 14, 1996, the Company issued 3,000,000 shares
of Common Stock to Paul Ingram and 3,000,000 shares of Common Stock to John
Naylor, in exchange for the transfer to the Company from each purchaser of a
fifty percent (50%) equity interest in Hemley.

     B.     On or about February 28, 1997, the Company issued 1,475,050 shares
of Common Stock to FAI Overseas Investments Pty. Ltd. in consideration for the
payment to the Company $2,065,000.

     No underwriters were involved in any of the transactions described in the
preceding paragraph.  No underwriting discounts or commissions were paid with
respect to such transactions.  The Company claimed exemption under Section
4(2) of the Securities Act of 1933 with respect to the first transaction
listed above, and under Section 4(2) and/or Regulation S as with respect to
the second transaction.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
--------------------------------------------------------------------

     The Company has not had revenues from operations in either of the last
two fiscal years.  The Company's plan of operation for the next twelve months
is set forth below.

     Given its current cash position and resources, the Company anticipates
that it can satisfy its cash requirements, at current operating levels, for a
period of  one year.  The Company will continue to conduct investigations and
evaluations of promising exploration and development opportunities, and will
conduct testing and gather data with respect to such properties, but will
defer any substantial exploration or production activities pending receipt of
additional financing.

     The Company plans to seek to raise additional capital to fund future
exploration and development operations, through the issuance of additional
equity in either the private or public markets within the next 12 months.
There can be no assurance that the Company will be able to obtain any such
financing.

     The Company is proceeding with negotiations for the purchase of a 50%
equity interest in a drilling rig, as referenced in Item 1 above.

     The Company does not anticipate any significant changes in the number of
employees, pending receipt of additional funding and commencement of
exploration and development activities.




ITEM 7.   FINANCIAL STATEMENTS.
-------------------------------



ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
-------------------------------------------------------------------------
FINANCIAL DISCLOSURE.
---------------------

     As previously reported in a current report on Form 8-K dated September
22, 1997, effective as of September 22, 1997, the firm of Mantyla, McReynolds
& Associates ("Mantyla") was dismissed as the Company's principal independent
accountant, and the accounting firm of Ehrhardt Keefe Steiner & Hottman PC was
engaged by the Company to serve as the principal accountants to audit the
Company's financial statements.

     The reports of Mantyla on the Company's financial statements for the two
fiscal years ended December 31, 1995 and December 31, 1994 did not contain an
adverse opinion or disclaimer of opinion and were not qualified or modified as
to uncertainty, audit, scope, or accounting principles.  The decision to
change accountants was approved by the Company's Board of Directors.  There
were no disagreements with Mantyla, whether or not resolved, on any matter of
accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which, if not resolved to Mantyla's satisfaction,
would have caused Mantyla to make reference to the subject matter of the
disagreement in connection with its report.

                                   PART III
                                   --------

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
-----------------------------------------------------------------------
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
--------------------------------------------------

     The information required by this item is hereby incorporated by reference
to the Company's proxy statement which will be filed with the Commission
within one hundred twenty (120) days of the close of the fiscal year.

ITEM 10.   EXECUTIVE COMPENSATION.
----------------------------------

     The information required by this item is hereby incorporated by reference
to the Company's proxy statement which will be filed with the Commission
within one hundred twenty (120) days of the close of the fiscal year.

ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
--------------------------------------------------------------------------

     The information required by this item is hereby incorporated by reference
to the Company's proxy statement which will be filed with the Commission
within one hundred twenty (120) days of the close of the fiscal year.

ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
----------------------------------------------------------

     The information required by this item is hereby incorporated by reference
to the Company's proxy statement which will be filed with the Commission
within one hundred twenty (120) days of the close of the fiscal year.

ITEM 13.   EXHIBITS AND REPORTS ON FORM 8-K.
--------------------------------------------

 (a)  Exhibits

*Exhibit 3.1   Articles of Incorporation of the Registrant.  (Filed as Exhibit
               3.1 to the Registrant's Form 10-SB-A1, Reg. No. 0-28184 filed
               May 31, 1996).

*Exhibit 3.2   Articles of Amendment to Articles of Incorporation.  (Filed as 
               Exhibit 3.2 to the Registrant's Form 10-SB-A1, Reg. No. 0-28184 
               filed May 31, 1996).

*Exhibit 3.3   Bylaws of the Registrant.  (Filed as Exhibit 3.3 to the
               Registrant's Form 10-SB-A1, Reg. No. 0-28184 filed May 31, 1996).

*Exhibit 3.4   Amended Bylaws of the Registrant.  (Filed as Exhibit 3.4 to the
               Registrant's Form 10-SB-A1, Reg. No. 0-28184 filed May 31, 1996).

*Exhibit 10    Stock Purchase Agreement, dated September 10, 1996, by and
               between Craig Carpenter, Mason Oil Company, Inc., Paul B. Ingram
               and John L. Naylor.  (Filed as Exhibit 2.1 to the Registrant's
               Form 10-QSB Reg. No. 000-28184 filed November 15, 1996).

*Exhibit 10.1  Stock Purchase and Sale Agreement, dated October 14, 1996, 
               between Registrant, Paul B. Ingram and John L. Naylor.  (Filed 
               as Exhibit 2.2 to the Registrant's Form 10-QSB Reg.
               No. 000-28184 filed November 15, 1996).

*Exhibit 10.2  Access Agreement between Anangu Pitjantjatjara and John Leonard
               Naylor and Paul Bryan Ingram.  (Filed as Exhibit 2.5 to the
               Registrant's Form 10-QSB, Reg. No. 000-28184 filed February 21,
               1997).

*Exhibit 10.3  Petroleum Exploration License (PEL) No. 61 and PEL Agreement. 
               (Filed as Exhibit 2.3 to the Registrant's Form 10-QSB Reg. No.
               000-28184 filed February 21, 1997).

*Exhibit 10.4  Petroleum Exploration License No. 63 and PEL Agreement. (Filed
               as Exhibit 2.4 to the Registrant's Form 10-QSB Reg.
               No. 000-28184 filed February 21, 1997).

Exhibit 10.5   Joint Venture Agreement between Hemley Exploration PTY.  LTD.,
               an Australian corporation and PT. PUTRA BAKTI MAHKOTA, an 
               Indonesian corporation.

*Exhibit 10.6  Subscription Agreement and Investment Representation, dated
               February 28, 1997.  (Filed as Exhibit 10.1 to the Registrant's
               Form 10-QSB Reg. No. 000-28184 filed May 20, 1997).

*Exhibit 10.7  Consulting Fee Agreement dated February 28, 1997.  (Filed as 
               plan to the Registrant's Registration Statement in Form S-8
               Reg. No. 333-24467 filed April 3, 1997).

*Exhibit 10.8  Amendment No. 1 to Consulting Fee Agreement dated May 8, 1997,
               amending the Consulting Fee Agreement dated February 28, 1997,
               and previously filed with the Securities and Exchange Commission
               on a Form S-8 Registration Statement dated March 25, 1997.
               (Filed as Exhibit 10.2 to the Registrant's Form 10-QSB Reg.
               No. 000-28184 filed May 20, 1997).

*Exhibit 16    Letter on Change in Certifying Accountant.  (Filed as Exhibit 16 
               to the Registrant's Form 8K Reg. No. 0-28184 filed September 29,
               1997.

Exhibit 21     Subsidiaries of the Registrant

Exhibit 24     Power of Attorney

Exhibit 27     Financial Data Schedule

*Exhibits incorporated herein by reference.

(b)  Reports on Form 8-K
       No reports on Form 8-K were filed during the fourth quarter.



                                SIGNATURES

     In accordance with Section 13 or 15(d) of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

     October 13, 1997


                              MASON OIL COMPANY, INC.



                              By:  /s/Paul B. Ingram
                                  ------------------
                                  Paul B. Ingram, President (Principal
                                  Executive Officer) and Director


<PAGE>
                            MASON OIL COMPANY, INC.
                                AND SUBSIDIARY

                       CONSOLIDATED FINANCIAL STATEMENTS
                       FOR THE YEAR ENDED JUNE 30, 1997
                         AND THE PERIOD FROM INCEPTION
                     (FEBRUARY 29, 1996) TO JUNE 30, 1996





<PAGE>
                    MASON OIL COMPANY, INC. AND SUBSIDIARY


                               TABLE OF CONTENTS
                               -----------------



                                                                    Page
                                                                    ----

Independent  Auditors'  Report                                      1

Consolidated  Financial  Statements          

Consolidated Balance Sheet                                          2

Consolidated Statements of Operations                               3

Consolidated Statement of Changes in Stockholders' Equity           4

Consolidated Statements of Cash Flows                               5

Notes to Consolidated Financial Statements                          7





<PAGE>


                         INDEPENDENT AUDITORS' REPORT

To  the  Board  of  Directors  and  stockholders
Mason  Oil  Company,  Inc.  and  Subsidiary


We  have  audited  the  accompanying  consolidated  balance sheet of Mason Oil
Company,  Inc.  and  Subsidiary  (the  Company)  as  of June 30, 1997, and the
related  consolidated  statements  of  operations,  changes  in  stockholders'
equity,  and  cash  flows for the year ended June 30, 1997 and the period from
inception  (February  29,  1996) to June 30, 1996.  These financial statements
are  the responsibility of the Companys' management.  Our responsibility is to
express  an  opinion  on  these  financial  statements  based  on  our  audit.

We  conducted  our  audits  in  accordance  with  generally  accepted auditing
standards.    Those  standards  require  that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting  the amounts and disclosures in the financial statements.  An audit
also  includes  assessing  the  accounting  principles  used  and  significant
estimates  made  by  management,  as  well as evaluating the overall financial
statement  presentation. We believe that our audits provide a reasonable basis
for  our  opinion.

In our opinion the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Mason Oil Company,
Inc.  and  Subsidiary as of June 30, 1997, and the results of their operations
and  their  cash  flows  for  the year ended June 30, 1997 and the period from
inception  (February  29,  1996) to June 30, 1996 in conformity with generally
accepted  accounting  principles.

The  accompanying  financial  statements  have been prepared assuming that the
Company  will  continue  as  a  going  concern.  As discussed in Note 2 to the
financial  statements,  the  Company's  future  exploration  and  development
commitments and recurring net losses raise substantial doubt about its ability
to  continue  as  a going concern.  Management's plans regarding those matters
are also described in Note 2.  As further described in Note 5, the Company has
been  unable  to meet the exploratory operation requirements for its petroleum
leases  (PEL's).    These  PEL's  reflect  the  Company's only cost center and
potential  revenue  source  at  this  time.    The financial statements do not
include  any  adjustments  that  might  result  from  the  outcome  of  this
uncertainty.




                                        /S/Ehrhardt Keefe Steiner & Hottman PC
                                           Ehrhardt Keefe Steiner & Hottman PC
October  10,  1997
Denver,  Colorado

<PAGE>



                    MASON OIL COMPANY, INC. AND SUBSIDIARY

                          CONSOLIDATED BALANCE SHEET
                                 JUNE 30, 1997


                                    ASSETS

Current  Assets

<TABLE>
<CAPTION>

<S>                                                          <C>
 Cash and cash equivalents. . . . . . . . . . . . . . . . .  $1,587,627 
 Prepaid expenses and other . . . . . . . . . . . . . . . .       1,904 
                                                             -----------
   Total current assets . . . . . . . . . . . . . . . . . .   1,589,531 
                                                             -----------

Property and equipment, at cost
 Unproved oil and gas properties, full cost method
  (Notes 3 and 5) . . . . . . . . . . . . . . . . . . . . .     192,893 
 Vehicles . . . . . . . . . . . . . . . . . . . . . . . . .      33,825 
 Other. . . . . . . . . . . . . . . . . . . . . . . . . . .       2,530 
                                                             -----------
                                                                229,248 
 Less accumulated depreciation. . . . . . . . . . . . . . .      (1,786)
                                                             -----------
                                                                227,462 
Other assets
 Intangible asset (net of accumulated amortization of $281)       1,048 
 Deposits . . . . . . . . . . . . . . . . . . . . . . . . .      24,643 
                                                             -----------
                                                                 25,691 
                                                             -----------

Total assets. . . . . . . . . . . . . . . . . . . . . . . .  $1,842,684 
                                                             ===========

LIABILITIES AND STOCKHOLDERS' (DEFICIT)

Current liabilities
 Accounts payable . . . . . . . . . . . . . . . . . . . . .  $   19,165 
 Notes payable - related parties (Note 4) . . . . . . . . .     196,591 
 Current portion of notes payable (Note 4). . . . . . . . .      11,358 
                                                             -----------
   Total current liabilities. . . . . . . . . . . . . . . .     227,114 
                                                             -----------

Long-term notes payable (Note 4). . . . . . . . . . . . . .      11,011 
Deferred salary - stockholder . . . . . . . . . . . . . . .      24,000 
                                                             -----------

Commitments and contingencies (Notes 2, 4, 5 and 7)

Stockholders' (equity)
 Common stock, $.001 par value, 200,000,000 shares
  authorized; 10,890,504 issued and outstanding . . . . . .      10,890 
 Additional paid in capital . . . . . . . . . . . . . . . .   1,881,801 
 Retained deficit . . . . . . . . . . . . . . . . . . . . .    (310,554)
 Foreign currency translation adjustment. . . . . . . . . .      (1,578)
                                                             -----------
                                                              1,580,559 
                                                             -----------

Total liabilities and stockholders' equity. . . . . . . . .  $1,842,684 
                                                             ===========
</TABLE>

                 See notes to consolidated financial statements.



<PAGE>

                      MASON OIL COMPANY, INC. AND SUBSIDIARY

                       CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>

                                                               For the Period
                                                               from Inception
                                                                (February 29,
                                             For the Year         1996) to
                                             Ended June 30,        June 30,
                                                 1997                1996
                                             -------------      -------------

<S>                                         <C>                       <C>
General and administrative expenses. . . .  $    (312,940)       $(1,211)

Other (expense) income
 Interest income . . . . . . . . . . . . .         25,507             95 
 Interest expense. . . . . . . . . . . . .        (13,939)             - 
                                            -------------        --------
                                                   11,568             95 
                                            -------------        --------

Net loss . . . . . . . . . . . . . . . . .  $    (301,372)       $(1,116)
                                            =============        ========

Net loss per common share. . . . . . . . .           (.04)       $(11.16)
                                            =============        ========

Weighted average common shares outstanding      8,028,767            100 
                                            =============        ========
</TABLE>



                        See notes to financial statements.



<PAGE>
                    MASON OIL COMPANY, INC. AND SUBSIDIARY

           CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY



<TABLE>
<CAPTION>


                                   Additional                 Foreign
                    Common Stock     Paid in                  Currency
                    ------------                Accumulated  Transaction     
                  Shares    Amount   Capital      Deficit     Adjustment  Total
                 --------  -------- ---------   -----------  ----------- -------
<S>                 <C>      <C>       <C>         <C>            <C>      <C>
Inception . .        -     $     -  $       -   $        -   $        -  $    -

Exchange of 100 
 shares of common
 stock for 
 shareholders
 interest in
 Hemley Petroleum
 Pty. Ltd. . . .     100       100         900           -            -   1,000

Net loss . . . .      -          -           -       (1,116)          -  (1,116)

Foreign currency
 translation 
 adjustment. . .      -          -           -           -          (231)  (231)
                   -------   --------    --------   --------      -------  -----

Balance at
 June 30, 1996 .     100       100         900       (1,116)      (231)    (347)

Recapitalization
 and issuance of
 stock for assets
 in connection
 with reverse
 acquisition 
 (Note 1) . .  9,225,354     9,125       (900)       (8,066)        -       159

Issuance of 
 stock for 
 consulting 
 services
 (Note 6) . .    190,000       190     34,776            -          -    34,966

Issuance of 
 stock, net of
 related costs
 of $216,500 
 (Note 6). .   1,475,050     1,475  1,847,025            -          - 1,848,500

Net loss . .         -         -          -         (301,372)       -  (301,372)

Foreign currency
 translation
 adjustment .        -         -         -               -      (1,347)  (1,347)
              ------------ -------- -----------     ---------  -------  --------

Balance at
 June 30, 
 1997. . . .  10,890,504  $ 10,890  $  1,881,801  $(310,554) $(1,578) $1,580,559
              ==========  ========  ===========  ==========  ========  =========
</TABLE>

                      See notes to consolidated financial statements.

<PAGE>


                            MASON OIL COMPANY, INC. AND SUBSIDIARY
 
                             CONSOLIDATED STATEMENT OF CASH FLOWS


<TABLE>
<CAPTION>

                                                                 For the Period
                                                                 from Inception
                                                                  (February 29,
                                               For the Year          1996) to
                                               Ended June 30,        June 30,
                                                   1997                1996
                                               --------------     --------------
<S>                                                 <C>                 <C>
Cash used in operations
 Net loss . . . . . . . . . . . . . . . .      $    (301,372)     $     (1,116)
                                               -------------      ------------
 Changes to reconcile net loss to net
  cash used in operations
   Stock issued for services. . . . . . .             34,966                - 
   Depreciation and amortization. . . . .              2,067                - 
   Changes in assets and liabilities
     Prepaid expenses and other . . . . .             (1,857)              (47)
     Deposits . . . . . . . . . . . . . .               (943)          (23,700)
     Organizational costs . . . . . . . .                 77            (1,406)
     Accounts payable and accrued 
      expenses. . . . . . . . . . . . . .             36,916             6,249 
                                                ------------      ------------
                                                      71,226           (18,904)
                                                ------------      ------------
       Net cash used in operations. . . .           (230,146)          (20,020)
                                                ------------      ------------

Cash used in investing activities
 Acquisition of oil and gas leases. . . .                 -            (28,921)
 Oil and gas exploration capital
  expenditures. . . . . . . . . . . . . .            (16,433)         (147,539)
 Purchase of vehicles and equipment . . .            (11,754)               - 
                                                ------------      ------------
       Net cash used in investing 
        activities. . . . . . . . . . . .            (28,187)         (176,460)
                                                ------------      ------------

Cash provided from financing activities
 Notes payable and advances from 
  stockholders. . . . . . . . . . . . . .                 -            208,988 
 Payments on notes payable. . . . . . . .            (15,629)               - 
 Issuance of common stock . . . . . . . .          1,848,500                - 
 Cash acquired in reverse acquisition . .              2,159                - 
                                                ------------      ------------
       Net cash provided by financing
        activities. . . . . . . . . . . .          1,835,030           208,988 
                                                ------------      ------------

Effect of exchange rates on cash. . . . .             (1,347)             (231)
                                                ------------      ------------

Net increase in cash and cash 
 equivalents. . . . . . . . . . . . . . .          1,575,350            12,277 

Cash and cash equivalents at beginning 
 of period. . . . . . . . . . . . . . . .             12,277                - 
                                                ------------      ------------

Cash and cash equivalents at end of
 period . . . . . . . . . . . . . . . . .       $  1,587,627      $     12,277 
                                                ============      ============
</TABLE>

Supplemental  disclosure  of  non-cash  financing  and  investing  activities:

     During  the  year  ended June 30, 1997, the Company entered into a merger
agreement  which  has  been  accounted  for  as  a  reverse  acquisition.  The
following  assets  were  acquired and liabilities were assumed in exchange for
all  common  stock  of  the  surviving  company  (Note  1):


<TABLE>
<CAPTION>

<S>                                       <C>
 Cash. . . . . . . . . . . . . . . . . .  $    2,159 
 Notes payable . . . . . . . . . . . . .      (2,000)
                                          ----------

 Net assets acquired . . . . . . . . . .  $      159 
                                          ==========

 Net common stock received . . . . . . .  $    9,125 
 Reduction of additional paid-in-capital        (900)
 Net effect on retained earnings . . . .      (8,066)
                                          ----------

 Net effect on equity. . . . . . . . . .  $    (159)
                                          =========
</TABLE>

During fiscal year 1997, the Company financed $24,601 of the purchase price of
 two vehicles.

                     See notes to financial statements.



<PAGE>
                  MASON OIL COMPANY, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE  1  -  ORGANIZATION  AND  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
-----------------------------------------------------------------------------

Nature  of  Business  and  Organization
---------------------------------------

Mason  Oil Company, Inc. and Subsidiary (the Company) was incorporated in Utah
and conducts principally oil and gas acquisition, exploration, and development
activities  in  South  Australia through a wholly owned Australian subsidiary;
Hemley  Exploration  Pty.  Ltd.

In  October  1996,  Mason  Oil  Company,  Inc. (Mason Oil) acquired all of the
issued  and  outstanding  common  shares  of    IAN    Holdings  Limited  and
Subsidiaries  (IAN)  in exchange for 6,000,000 shares of common stock of Mason
Oil.  For financial reporting purposes, the business combination was accounted
for as an additional capitalization of the Company (a reverse acquisition with
IAN as the acquirer).  IAN is considered the surviving entity.  The historical
financial  statements prior to the merger are those of  IAN.  Mason Oil's only
assets    consisted  of  cash  and  a liability with a net book value of $159.
Mason  Oil    and  IAN subsequently merged with Mason Oil (the Company) as the
legal  survivor  and  continues  to  be  governed  under  such  Articles  of
Incorporation  and  bylaws  in effect immediately prior to consummation of the
merger.

Principles  of  Consolidation
-----------------------------

The  consolidated financial statements include the accounts of Mason Oil, Inc.
and  its  wholly  owned subsidiary.  All significant intercompany accounts and
transactions  have  been  eliminated  in  consolidation.

Risks  and  Uncertainties
-------------------------

Currently  the  Company has not identified any proven reserves, and therefore,
is  not  involved  in  any  oil  & gas production activities.  There can be no
assurance  that  in  the  future  the  Company  will  locate  proved  reserves
associated  with  its  leasehold  interests.  In the event proved reserves are
identified the feasibility of recovery is strongly dependent upon world market
prices  for  oil & gas, and accordingly there can be no guarantee that amounts
capitalized  as  acquisition,  exploration,  and  development  costs  will  be
recoverable  through  future  operations.

The  Company's principal operations are conducted in South Australia where the
Australian  dollar  is  the  functional  currency.    Future operations of the
Company  could  be  adversely  affected  by  unfavorable  foreign  currency
fluctuations.


Foreign  Currency  Translation
------------------------------

All  assets  and  liabilities  of the Company's subsidiary are translated into
U.S. dollars using the prevailing exchange rates as of the balance sheet date.
Income  and  expenses are translated using the weighted average exchange rates
for  the  period.   Stockholders' investments are translated at the historical
exchange  rates  prevailing  at  the  time  of such investments.  Any gains or
losses  from foreign currency translation are included as a separate component
of  stockholders'  equity.   The prevailing exchange rate at June 30, 1997 was
approximately  1  U.S.  dollar  to  1.34  Australian  dollars.

Cash  and  Cash  Equivalents
----------------------------

The  Company  considers all highly liquid investments with original maturities
of  three  months or less to be cash equivalents.  The Company had balances in
excess  of  FDIC  limits  of  approximately  $1,461,000  at  June  30,  1997.

Deposits
--------

Deposits  at  June  30,  1997  consist  of  security bonds on deposit with the
Australian  department  of  Mines  and  Energy  as  required by the associated
license  agreements.

Intangible  Asset
-----------------

The  intangible  asset reflects organizational costs which are being amortized
using  the  straight-line  method  over  five  years.

Property  and  Equipment
------------------------

Property  and  equipment  are stated at cost.  Depreciation is computed on the
straight-line  method  over  the estimated useful lives of the assets which is
five  to  seven  years.

Oil  and  Gas  Properties
-------------------------

The  Company  follows  the  full  cost  method  of  accounting for oil and gas
properties.   Accordingly, all costs associated with acquisition, exploration,
and  development  of oil and gas reserves, including directly related overhead
costs,  are  capitalized.    Amounts capitalized by the Company as exploration
costs  currently consist of geological and geophysical (G&G) costs in addition
to  leasehold  maintenance  costs.

Investments  in  unproved  properties  are not amortized until proved reserves
associated with the projects can be determined or until impairment occurs.  If
the  results  of  an assessment indicate that the properties are impaired, the
amount  of  the  impairment  is included in capitalized costs to be amortized.
Management  of  the  Company  assesses  costs excluded from the full cost pool
periodically  for  impairment.

Income  Taxes
-------------

The  Company  is  subject  to U.S. Federal income taxes and subject to foreign
taxes  in  Australia  for  earnings of its Australian subsidiaries.  No income
taxes  are  currently  due.    The  Company recognizes deferred tax assets and
liabilities  for  future  tax consequences attributable to differences between
financial statement carry amounts of existing assets and liabilities and their
respective  tax bases.  Deferred tax assets and liabilities are measured using
enacted  tax  rules  expected to apply to taxable income in the years in which
those  temporary  differences are expected to be recovered and settled at June
30,  1997.    The  Company  has  foreign  net  operating loss carryforwards of
approximately  $63,000,  which  can be used to offset future Australian income
taxes  payable.  The net operating loss carryforwards have been fully reserved
for  by  a  valuation  allowance.

Fair  Value  of  Financial  Instruments
---------------------------------------

The carrying amount for cash, receivables, accounts payable, notes payable and
accrued expenses approximated their fair values as of June 30, 1997 due to the
relatively  short  maturities  of  these  instruments.

Use  of  Estimates
------------------

The  preparation  of  consolidated  financial  statements  in  conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure  of  contingent  assets  and  liabilities  at  the  date  of  the
consolidated  financial  statements  and  the reported amounts of revenues and
expenses  during the reporting period.  Actual results could differ from those
estimates.

Net  Loss  Per  Common  Share
-----------------------------

Net  loss  per  common  share  has been computed based on the weighted average
number  of  common shares outstanding during each period.  There are no common
stock  equivalents  as  of  June  30,  1997.


NOTE  2  -  GOING  CONCERN
--------------------------

The  Company's  commitments  for future exploration and development activities
required under its Petroleum Exploration Leases coupled with the recurring net
losses  from  inception  to  June  30,  1997 raise substantial doubt about the
entity's  ability  to continue as a going concern.  Management's plans to fund
such  commitments  include  raising  additional  capital  through  a  private
placement  and  the public markets.  Management believes that the Company will
be  able  to  raise  adequate  capital  to  fund  such  future exploration and
development  operations.


NOTE  3  -  UNPROVED  OIL  AND  GAS  PROPERTIES
-----------------------------------------------

The  Company  maintains  two petroleum exploration leases (PEL's) with 5 years
terms  expiring May 22, 2001.  The Company may renew the leases for additional
5  year  terms  subject  to  the  terms  contained  in  the  PEL's  (Note  5).

The  Company  is currently participating in oil and gas exploration activities
on  approximately  4,200,000  acres  in  the  state  of South Australia.  Such
acreage  comprises  the  Company's  only cost center.  The Company anticipates
commencement  of  drilling  activities  during  fiscal  year  1998.

Costs  excluded  from  amortization consist of the following at June 30, 1997:


<TABLE>
<CAPTION>

       Period               Acquisition   Exploration
      Incurred                  Costs         Costs       Total
--------------------------  ------------  ------------  --------

<S>                         <C>           <C>           <C>
Inception to June 30, 1997  $     27,339  $    165,553  $192,893
                            ============  ============  ========
</TABLE>


NOTE  4  -  NOTES  PAYABLE
--------------------------

Notes  payable  consists  of  the  following  at  June  30,  1997:

<TABLE>
<CAPTION>

<S>                                                   <C>
Note  payable  -  shareholder,  interest  at  
 8%,  due  on  demand.  The  note  is  
 without  collateral.                            $    177,498

Note  payable  -  shareholder,  interest 
 at  8%,  due  on  demand.  The note is 
 without collateral                                    19,093
                                                  -----------

Total related party notes payable                $    196,591 
                                                 ============
</TABLE>

<TABLE>
<CAPTION>

<S>                                                   <C>

Note payable - finance corporation, interest at 
 11%, due in monthly installments of $903
 including interest through April 2000.  The
 note is collateralized by a vehicle.               $ 12,825 

Note payable - finance corporation, interest
 at 10.35%, due in monthly installments of 
 $615 through June 2000.  The note is 
 collateralized by a vehicle                           9,544 
                                                   ---------
                                                      22,369 
 Less current portion                                (11,358)
                                                   ---------

                                                    $ 11,011 
                                                    =========
</TABLE>

Installments due on notes payable subsequent to June 30, 1997 are as follows:

<TABLE>
<CAPTION>

   Year Ending June 30,
---------------------------
           <S>                                        <C>
          1998 . . . . . . . . . . . . . . .        $ 11,358 
          1999 . . . . . . . . . . . . . . .          11,011 
                                                   ---------

                                                    $ 22,369 
                                                   =========
</TABLE>


NOTE  5  -  COMMITMENTS  AND  CONTINGENCIES
-------------------------------------------

Petroleum  Exploration  Leases  (PEL's)
---------------------------------------

The  Company  has two Petroleum Exploration Licenses (PEL's) with the state of
South  Australia  which  contain  certain  commitments  related to exploratory
operations  to  be incurred over the five year term of each lease.  The leases
contain  estimates  of  the  costs  to  complete  such  exploratory  operation
requirements,  stated  in  both  Australian  dollars  (A  $) and United States
dollars  using  the  June  30,  1997  exchange  rate  (U.S.  $)  as  follows:

<TABLE>
<CAPTION>

                                                        A $        U.S. $
                                                    -----------  -----------

<S>                                                 <C>          <C>
Year one, ending May 22, 1997. . . . . . . . . . .  $ 1,895,000  $ 1,414,000
Year two, ending May 22, 1998. . . . . . . . . . .    2,340,000    1,746,000
Year three, ending May 22, 1999. . . . . . . . . .    4,150,000    3,097,000
Year four, ending May 22, 2000 . . . . . . . . . .    5,720,000    4,269,000
Year five, ending May 22, 2001 . . . . . . . . . .    5,275,000    3,937,000
                                                    -----------  -----------

Total estimated exploratory costs. . . . . . . . .  $19,380,000  $14,463,000
                                                    ===========  ===========

</TABLE>


As  of  June  30,  1997,  the  Company has been unable to meet the exploratory
operation  requirements  of  the  PEL's,  as a result of certain complications
associated  with  the  status  of  one of the Company's PEL's.  The Australian
Department  of  Mines  and Energy (MESA) has eased the requirements associated
with  the  Company's  PEL's and has agreed to work with the Company to resolve
such  complications.    Currently,  the Company's management and legal counsel
believes that both PEL's are in good standing with MESA.  Although the Company
has not yet received a modified program of exploratory requirements with MESA,
management  believes  a  revised  program  of  exploratory commitments will be
reached  very  soon.

In addition to the exploration operation requirements of the PEL's, one of the
PEL's granted is also subject to the provisions of a separate Access Agreement
with Anangu Pitjanjatjara (AP), a corporate body constituted under the name by
the  Pitjanjatjara  Land  Rights  Act  1981  of  South  Australia.  The access
agreement  with  AP  provides  for  annual  rental  payments to be made, which
consists  of  a  minimum annual rental of approximately $15,000 and additional
amounts  payable  based  upon  the  amount  of Annual Exploration Expenditures
(AEE's)  incurred  as  follows:

         2.5% of AEE's less than or equal to $373,400, and
         1.5% of AEE's in excess of $373,400

The  conversion  rate used for these financial statement disclosures are as of
June  30, 1997 and reflect an exchange rate of approximately 1.34 U.S. dollars
to  1  Australian  dollar.

Under  the  terms  of the Access Agreement,  any  application for a PPL by the
Company would entitle AP at their option to obtain a participatory interest in
any exploration and production joint venture agreement (JVA).  AP may elect to
take  up  to  a  maximum  10%  participating  interest  and  a minimum of a 1%
participating  interest  in  any  respective  JVA.

The  access  agreement  with  AP  also provides for certain overriding royalty
payments  to  be  made  for  all  petroleum  recovered  under any PEL's or any
Petroleum  Production License (PPL) granted by the South Australian Department
of   Mines and Energy.  In addition, certain stockholders' of the Company have
been  personally granted a 3% overriding royalty interest in any PPL's granted
to  the  Company's  subsidiary  Hemley  Exploration  Pty.  Ltd.

One  of the license agreements currently held by the Company is not subject to
any  separate  agreements  with  third  parties,  however,  a native group has
asserted  rights  to title of  the land subject to the license agreement.  The
Company  is  currently  in  the  process  of  resolving such claims and may be
obligated  under  such  circumstances to pay certain amounts and be subject to
additional  requirements  of  an  agreement  similar  in  terms  to the Access
Agreement  with  AP.

Operating  Leases
-----------------

In  March  1997, the Company's Australian subsidiary entered into an operating
lease  for  office  space.    The  terms  of the lease provide for payments of
approximately  $10,500  annually  and the lease expires in March 1999.  Future
minimum  lease  payments  under the office lease are approximately as follows:

<TABLE>
<CAPTION>

 Fiscal  Year  Ended
 -------------------
        <S>                                        <C>

        1998. . . . . . . . . . . . . . .        $10,500
        1999. . . . . . . . . . . . . . .          7,875
                                                 -------

                                                 $18,375
                                                 =======
</TABLE>

Rental expense under the office lease was approximately $2,860 for the year 
ended June 30, 1997.


NOTE 6 - EQUITY
---------------

In  February  1997,  the Company entered into a subscription agreement with an
Australian  Investment  Company.   Pursuant to the terms of the agreement, the
Investment Company purchased 1,475,050 shares of the Company's common stock at
a price of $1.40 per share under a Regulation S offering of the Securities and
Exchange  Act  of  1933.    The Company realized net proceeds of approximately
$1,850,000  from  this  transaction.

In  February 1997, the company entered into an agreement with four consultants
for  the  performance of certain services.  In connection with this agreement,
the  Company  issued  190,000  shares  of common stock for consulting services
provided  from  February 1997 through June of 1997.   The Company has recorded
$34,966  of  consulting  expense  which  is  reflected  in  the  accompanying
Consolidated  Statement  of  Operations  for  the year ended June 30, 1997 and
represents  the  fair  market  value  of  such  services  provided.


NOTE  7  -  SUBSEQUENT  EVENTS
------------------------------

In  September  1997,  the  Company entered into an agreement to purchase a 50%
interest in a drilling rig.  Based on the terms of the agreement, the purchase
price  of  $905,000  is expected to be funded by issuing approximately 800,000
shares  of  common  stock  valued  at  $600,000  and  $305,000  cash.