SECURITIES AND EXCHANGE COMMISSION
                                    
                         Washington, D.C.  20549
                                    
                                    
                               Form 10-QSB
                                    
                                    
               QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
               OF THE SECURITIES AND EXCHANGE ACT OF 1934
                                    
                                    
        For Quarter Ended                  Commission File Number
         April 30, 1997                           1-7965        
                                    
                                    
                            CASPEN OIL, INC.
         (Exact name of registrant as specified in its charter)
                                    
                                    
                  Nevada                              75-1325831
       (State or other jurisdiction of           (I.R.S. Employer
      incorporation or organization)          Identification No.)
                                    
                                    
                       777 S. Wadsworth Boulevard
                          Irongate 3, Suite 201
                           Lakewood, CO  80226
                (Address or principal executive offices)
                                    
                             (303) 987-0925
                                    
          (Registrant's telephone number, including area code)


(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 and Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such
filing requirement for the past 90 days.


       Yes    X                                         No 

As of April 30, 1997, the Registrant had 21,092,222 shares of
Common Stock outstanding.

Transitional Small Business Disclosure Format:  Yes    ;  No   X 







CASPEN OIL, INC.
AND SUBSIDIARIES

Condensed Consolidated Balance Sheets
(Unaudited)
                                       April 30,         July 31,
ASSETS                                   1997              1996
                                         ----              ----
CURRENT ASSETS 
   Cash and cash equivalents        $    163,273    $     94,131 
   Accounts receivable, prepaid  
     expenses, net of allowance          183,223         130,985 
   Other                                   ---             1,603 
                                     ------------    ------------
                                         346,496         226,719 
                                     ------------    ------------
PROPERTY AND EQUIPMENT, AT COST 
   Oil and gas properties, 
     full cost method of accounting   19,880,132      19,873,617 
   Other                                 302,061         302,061 
                                     ------------    ------------
                                      20,182,193      20,175,678 
   Less accumulated depletion,
     depreciation, and amortization   17,160,825      17,006,425 
                                     ------------    ------------
                                       3,021,368       3,169,253 
                                     ------------    ------------
OTHER
   Investments                           893,127         833,520 
   Notes receivable, related party         ---            66,622 
   Other                                   ---             8,832 
                                     ------------    ------------
                                         893,127         908,974
                                     ------------    ------------
       TOTAL ASSETS                 $  4,260,991    $  4,304,946 
                                     ============    ============
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES                
   Notes payable                    $    192,996    $  1,547,500 
   Accounts payable                      703,795         747,918 
   Accrued expenses                      260,239         616,167
   Note payable, other                    35,404          60,000
                                     ------------    ------------
                                       1,192,434       2,971,585 
LONG-TERM LIABILITIES
   Note payable                        1,164,504          10,000 
   Deferred interest                     851,194           ---
   Other                                  59,400          59,400 
                                     ------------    ------------
       TOTAL LIABILITIES               3,267,532       3,040,985
                                     ------------    ------------<PAGE>
SHAREHOLDERS' EQUITY 
   Convertible preferred stock:
    Series A                             600,000         600,000 
    Series C                             300,000         300,000 
    Series E                             125,000         125,000 
   Common stock                          210,922         180,922 
   Additional paid-in capital         20,697,781      21,091,871 
   Accumulated deficit               (20,930,534)    (21,024,122)
                                     ------------    ------------
                                       1,003,169       1,273,671 
   Less treasury stock                     9,710           9,710 
                                     ------------    ------------ 
                                         993,459       1,263,961
                                     ------------    ------------
       TOTAL LIABILITIES AND
          SHAREHOLDERS' EQUITY     $   4,260,991    $  4,304,946 
                                    =============    ============



See accompanying notes to condensed consolidated financial
statements.
CASPEN OIL, INC.
AND SUBSIDIARIES

Condensed Consolidated Statements of Operations
(Unaudited)
                                                                  
             

                                             Three months ended
                                                 April 30,
                                             1997         1996  
REVENUE                                      ----         ----
   Oil and gas sales                      $ 325,404    $ 237,328 
   Gain on sale of oil
    and gas property                        100,000        ---
   Overhead income                           13,355       12,826 
   Interest income                              825        3,601 
   Other                                      4,540           11
                                           ---------    ---------
                                            444,124      253,766 
                                           ---------    --------- 

COSTS AND EXPENSES 
   Production and operating                  88,795      105,694 
   Depletion, depreciation,
    and amortization                         50,360       43,358 
   General and administrative               156,482      189,355 
   Interest expense                       (   1,562)       ---  
                                          ----------    ---------
                                            294,075      338,407 
                                          ----------    ---------
NET INCOME (LOSS)                           150,049     ( 84,641)

DIVIDEND REQUIREMENTS ON PREFERRED STOCK    269,775      269,775 
                                           ---------    ---------
LOSS APPLICABLE TO COMMON STOCK           $(119,726)   $(354,416)
                                           =========    =========
LOSS PER COMMON SHARE                     $  (.01)     $  (.02)  
                                           =========    =========








See accompanying notes to condensed consolidated financial
statements.
CASPEN OIL, INC.
AND SUBSIDIARIES

Condensed Consolidated Statements of Operations
(Unaudited)
                                                                  
           
                                             Nine months ended
                                                  April 30,
                                             -----------------
                                             1997         1996
                                             ----         ----
REVENUE 
 Oil and gas sales                       $  830,234   $  704,600 
 Gain on sale of oil
    and gas property                        100,000        ---
 Overhead income                             40,067       37,193 
 Interest income                              2,050       14,380 
 Other                                        5,605       46,597
                                          ----------   ----------
                                            977,956      802,770 
                                          ----------   ----------
COSTS AND EXPENSES 
 Production and operating                   255,140      347,851 
 Depletion, depreciation, and amortization  154,400      137,962 
 General and administrative                 474,828      467,883 
 Interest expense                                 1           20
                                          ----------   ----------
                                            884,369      953,716 
                                          ----------   ----------
NET INCOME (LOSS)                            93,587     (150,946)

DIVIDEND REQUIREMENTS ON PREFERRED STOCK    809,325      809,325 
                                          ----------   ----------
LOSS APPLICABLE TO COMMON STOCK          $( 715,738)  $( 960,271)
                                          ==========   ==========
LOSS PER COMMON SHARE                    $   (.03)    $   (.05)
                                          ==========   ==========


See accompanying notes to condensed consolidated financial
statements.







<TABLE>
CASPEN OIL, INC.
AND SUBSIDIARIES

Condensed Consolidated Statement of Shareholders' Equity
(Unaudited)
<CAPTION>
                             Preferred Stock          Common Stock           Additional      Accumu-                    Total
                                                                               paid-in        lated        Treasury  shareholders'
                        Series Shares    Amount     Shares      Amount         capital       deficit        stock       equity
                        ------ -------  ---------   ----------  ----------   -----------  -------------  ----------- ------------
<S>                       <C>  <C>       <C>        <C>         <C>         <C>           <C>            <C>           <C>
Balance at July 31, 1996  A    600,000   $600,000   18,092,222  $  180,922   $21,091,871  $(21,024,122)  $(    9,710)  $1,263,961
                          C    300,000    300,000
                          E    125,000    125,000
                                          -------
Net loss                                                                                       (14,318)                   (14,318)

Balance at October 31, 1996
                          A    600,000   $600,000   18,092,222  $  180,922   $21,091,871  $(21,038,440)  $(    9,710)  $1,249,643
                          C    300,000   $300,000               ----------   -----------  -------------  ------------  ---------- 
                          E    125,000   $125,000
                                         --------

Issuance of 3,000,000 shrs.
   Common Stock                                      3,000,000      30,000         3,000                                   33,000

Net loss                                                                                       (42,143)                   (42,143)

Balance at January 31, 1997
                          A    600,000   $600,000   21,092,222  $  210,922   $21,094,871  $(21,080,583)  $(    9,710)  $1,240,500
                          C    300,000   $300,000               ----------   -----------  -------------  ------------  ---------- 
                          E    125,000   $125,000
                                         --------
Adjustment for deferred interest                                                (397,090)                                (397,090) 

Net income                                                                                     150,049                    150,049

Balance at April 30, 1997 A    600,000   $600,000   21,092,222  $  210,922   $20,697,781  $(20,930,534)  $(    9,710)  $  993,459
                          C    300,000   $300,000               ----------   -----------  -------------  ------------  ---------- 
                          E    125,000   $125,000
                                         --------


</TABLE>

CASPEN OIL, INC.
AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
                                                                   Nine months ended
                                                                        April 30,
                                                                   -----------------
                                                                    1997        1996
                                                                    ----        ----
<S>                                                              <C>        <C>    
CASH FLOWS FROM OPERATING ACTIVITIES 
Net income (loss)                                                $  93,587   $(150,946)
Adjustments to reconcile net income
to net cash provided by (used in) operating activities:
    Depletion, depreciation, and amortization                      154,400     137,962 
    Issuance of common stock                                        33,000       ---   
    Deferred interest                                             (397,090)      --- 
Changes in operating assets and liabilities:
    (Increase) decrease in accounts receivable
      and prepaid expenses                                         (52,238)     51,380 
    Decrease in notes receivable                                     ---         2,079
    Decrease in other assets                                        17,450      34,877 
    Increase (decrease) in accounts payable
      and accrued expenses                                         451,144    (267,746)
                                                                  ---------   ---------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                300,253    (192,394)
                                                                  ---------   ---------
CASH FLOWS FROM INVESTING ACTIVITIES 
    Proceeds from disposition of property and equipment              4,506       2,957 
    Purchase of property and equipment, net of property
     sales and well credits                                        (11,021)   (196,251)
                                                                  ---------   ---------
NET CASH USED IN INVESTING ACTIVITIES                               (6,515)   (193,294)
                                                                  ---------   ---------
CASH FLOWS FROM FINANCING ACTIVITIES
    Payment of debt                                               (224,596)    (50,000)
                                                                  ---------   ---------
          NET CASH USED IN FINANCING ACTIVITIES                   (224,596)    (50,000)
                                                                  ---------   ---------
          INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS          69,142    (435,688)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                      94,131     464,876 
                                                                  ---------   ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD                          $ 163,273  $  29,188 
                                                                  =========  ==========

</TABLE>




See accompanying notes to condensed consolidated financial statements.
CASPEN OIL, INC.
AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Nine Months Ended April 30, 1997

(1)  Basis of Presentation

     The condensed interim consolidated financial statements
     included herein are unaudited but in the opinion of
     management reflect all adjustments (consisting of normal
     recurring accruals) necessary for a fair presentation of the
     financial position of the Company at April 30, 1997, and
     the results of operations for the nine month periods ended
     April 30, 1997, and 1996.  Interim results are not
     necessarily indicative of expected annual results because of
     the impact of prices obtained for oil and gas and other
     factors.  These condensed consolidated financial statements
     should be read in conjunction with the consolidated
     financial statements of the Company, and related notes
     thereto, included in its annual report on Form 10-KSB.


(2)  Loan Debt

     In April 1997, the Company and its lender agreed to          
     restructure the terms of the Revolving Line of Credit note   
     and the Amended and Restated Loan Agreement, whereby, as of  
     April 1997, all technical deficiencies as they existed prior 
     to the restructure of terms, were satisfied.  At April 1997, 
     the terms are as follows.  Initially, thirty monthly         
     principal only payments will be due in the amount of         
     $16,083.33, computed on a principal loan balance owing of    
     $1,447,500 at the time of restructure.  The principal        
     balance owing at September 30, 1999 will then be $965,000.   
     Following a second thirty-month tranche of principal only    
     payments of $16,083.33, the principal balance owing at March 
     31, 2002 will be $482,500, until paid off after a third and  
     final thirty-month tranche of principal only payments of     
     $16,083.33 at September 30, 2004.

     Pursuant to the terms, the Company and its lender further    
     agreed that previously contested default interest on the     
     original Amended and Restated Loan Agreement dated December  
     14, 1990, computed through March 31, 1997 totalling          
     $851,193.74, would be deferred and become due and payable    
     in full on September 30, 2004.

     The Company and its lender additionally agreed that current  
     interest would remain at the prime rate plus one percent,    
     computed monthly, but payable in balloon payments            
     corresponding with the end of each of the thirty-month       
     principal only payment cycles, whereby, the first interest   
     balloon payment would be due and payable on September 30,    
     1999; the second on March 31, 2002; and, the third and       
     final on September 30, 2004.

     The Company's lender required an advanced principal          
     reduction payment of $100,000, which was paid during the     
     period ended April 30, 1997.

     The current principal note balance due at April 30, 1997 is  
     $192,996.  

     The total deferred long-term interest balance is             
     $851,193.74 at April 30, 1997.

     Long-term debt related to the principal balance of the note  
     totalled $1,154,504 at April 30, 1997.

(3)  Arbitration Award

     In June 1996, the Company filed a Demand for Arbitration        
     against Quantum Soil Remediation, Inc., et al for defaulting
     on two promissory notes due to the Company.  The Company     
     prevailed and, on March 31, 1997, was awarded the principal  
     amounts of the promissory notes, including interest thereon, 
     totalling $240,000.

     The Company has recorded approximately $211,000 of the award
     amount and has impaired the remaining $29,000 pending
     collection.


CASPEN OIL, INC.
AND SUBSIDIARIES

Item 2.   Management's Discussion and Analysis or Plan of
Operation

The following discussion of the Company's financial condition and
results of operations should be read in conjunction with the
condensed consolidated financial statements included in this
report and the consolidated financial statements and notes
contained in the Company's annual report on Form 10-KSB for the
fiscal year ended July 31, 1996.

Liquidity and Capital Resources

During the nine months ended April 30, 1997, the working capital
deficit decreased from July 31, 1996, by approximately
$1,899,000. This decrease is primarily due to the
reclassification of defaulted note and accrued interest
previously classified, pursuant to Generally Accepted Accounting
Principles, as current liabilities.  However, as of April 4,
1997, terms of the note principal and interest were settled
leaving approximately $193,000 of current principal only due,
with approximately $1,155,000 of long-term principal and
approximately $851,000 of deferred long-term interest due,
pursuant to the note terms (see Note 2). 

The Company's current liabilities exceed current assets by
$845,938 at April 30, 1997.  The working capital deficit at
April 30, 1997, is due primarily to the $964,000 of trade
accounts payable and accrued expenses.

The Company anticipates that given its current cash position it
will have sufficient working capital to meet its obligations
during the ensuing fiscal year.

Results of Operations

Oil and gas revenues were somewhat higher in the nine months
ended April 30, 1997, as compared to the nine months ended April
30, 1996.  

The Company experienced higher oil and gas prices in the nine
months ended April 30, 1997, compared with those received in
the same period last year. Average oil and gas prices received in
the nine months ended April 30, 1997, were approximately $19.00
per barrel of oil and $2.00 per MCF gas as compared to
approximately $16.00 per barrel of oil and $1.60 per MCF gas for
the nine months ended April 30, 1996.<PAGE>
CASPEN OIL, INC.
AND SUBSIDIARIES

Item 2.   Management's Discussion and Analysis or Plan of
Operation, Continued

Results of Operations

The Company reported a net income of $93,587 for the nine months
ended April 30, 1997, compared to a net loss of $(150,946) for
the nine months ended April 30, 1996. This was primarily a
result of higher oil and gas prices received during the nine
months ended April 30, 1997, as compared to the same period in
fiscal year ended 1996. Oil and gas revenues approximated
$830,000 for the nine months ended April 30, 1997, while
revenues for the same period in 1996 approximated $705,000. 
Production and operating expenses for the period ended April 30,
1997, were approximately $255,000, as compared to the period
ended April 30, 1996, which were approximately $348,000.  The
decrease in lease operating expenses to 31 percent of oil and gas
sales from 49 percent generally reflects the activities detailed
above with respect to the increase in oil and gas revenues for
the nine months ended April 30, 1997.

General and administrative expenses for the nine months ended
April 30, 1997, increased by approximately $7,000 from the
corresponding nine months ended April 30, 1996.  

Series A Preferred Stock Cumulative Dividends In Arrears

The terms of the Series A Shares provide that no dividends may be
paid on the Common Shares or Series C or E Preferred Shares while
dividends on the Series A Shares are in arrears.  The Company has
not paid any dividends on the Series A Shares since June 30,
1988.  As of April 30, 1997, dividends on the Company's Series
A Shares are in arrears $18.44 per share for a total of
$11,054,402.
CASPEN OIL, INC.
AND SUBSIDIARIES

Part II.  Other Information

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

     None

Item 5. Other Information

New Accounting Pronouncement
                 
The Financial Accounting Standards Board ("FASB") has recently
issued Statement of Financial Accounting Standards No. 128
"Earnings Per Share" ("SFAS No. 128").  This pronouncement
provides a different method of calculating earnings per share
than is currently used in accordance with Accounting Board
Opinion (APB) No. 15, "Earnings Per Share".  SFAS No. 128
provides for the calculation of "Basic" and "Diluted" earnings
per share.  Basic earnings per share includes no dilution and is
computed by dividing income available to common shareholders by
the weighted average number of common shares outstanding for the
period.  Diluted earnings per share reflects the potential
dilution of securities that could share in the earnings of an
entity, similar to fully diluted earnings per share.  The Company
will adopt SFAS No. 128 in its fiscal year ended in 1998 and its
implementation is not expected to have a material effect on the
consolidated financial statements.

Item 6.   Exhibits and Reports on Form 8-K

(a)  Exhibits - none

(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.



                                   CASPEN OIL, INC.




June 18, 1997                          By:                       

                                       Gary N. Davis, Treasurer