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
    January 31, 1996                           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 January 31, 1996, the Registrant had 18,092,200 shares of
Common Stock outstanding.

Transitional Small Business Disclosure Format: Yes    ;  No    X  





CASPEN OIL, INC.
AND SUBSIDIARIES

FORM 10-QSB

January 31, 1996

                                                                 

PART I - FINANCIAL INFORMATION

Item 1.   Condensed Consolidated Financial Statements:

    Condensed Consolidated Balance Sheets. . . . . .  . . . . .1

    Condensed Consolidated Statements of Operations.  . . . .2-3

    Condensed Consolidated Statement of Shareholders' Equity  .4

    Condensed Consolidated Statements of Cash Flows. . . . .  .5

    Notes to Condensed Consolidated Financial Statements . ..6-8


Item 2.   Management's Discussion and Analysis or
    Plan of Operation. . . . . . . . . . . . . . . . . . . ..9-11


PART II - OTHER INFORMATION

Item 4.   Submission of Matters to a Vote of Security Holders.12

Item 6.   Exhibits and Reports on Form 8-K . . . . . . . .  . 12

Signatures . . . . . . . . . . . . . . . . . . . . . . . .  . 13



















CASPEN OIL, INC.
AND SUBSIDIARIES

Condensed Consolidated Balance Sheets
(Unaudited)
                                       January 31,       July 31,
ASSETS                                    1996            1995  

CURRENT ASSETS 
  Cash and cash equivalents         $      82,175    $    464,876 
  Accounts receivable and prepaid expenses, net of
    allowance for doubtful accounts       256,007         327,038 
  Notes receivable                          8,346           8,346 
                                          346,528         800,260 
PROPERTY AND EQUIPMENT, AT COST 
  Oil and gas prop., full cost method  19,784,977      19,626,347 
  Other                                   240,830         240,830 
                                       20,025,807      19,867,177 
  Less accum. depl., deprec. amort.    16,754,369      16,659,765 
                                        3,271,438       3,207,412 
OTHER
  Investments                             774,244         833,520 
  Notes rec., related party noncurrent     66,622          42,223 
  Notes receivable, noncurrent             48,045          48,045 
  Other                                     1,950           1,950 
                                          890,861         925,738 
      TOTAL ASSETS                   $  4,508,827    $  4,933,410 

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES                
  Notes payable                 1)   $  1,547,500    $  1,597,500 
  Accounts payable                        833,013         956,116 
  Accrued expenses                        405,466         523,973 
  Note payable, other                      10,000          10,000 
                                        2,795,979       3,087,589 
LONG-TERM LIABILITIES
  Accrued expenses                           -             66,667 
  Note payable, other                      20,000          20,000 
                                           20,000          86,667 
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                             180,922        180,922 
  Additional paid-in capital            21,091,871     21,091,871 
  Accumulated deficit                  (20,595,235)  (20,528,929)
                                         1,702,558      1,768,864 
  Less treasury stock                        9,710          9,710 
                                         1,692,848      1,759,154 

      TOTAL LIABILITIES AND
         SHAREHOLDERS' EQUITY        $   4,508,827   $  4,933,410 

See accompanying notes to condensed consolidated financial
statements.

(1) See Note 2.

                                       1
















































CASPEN OIL, INC.
AND SUBSIDIARIES

Condensed Consolidated Statements of Operations
(Unaudited)

                                                                  
                                                                  
                                              Three months ended
                                                 January 31,    
                                                1996    1995

REVENUE 
 Oil and gas sales                          $ 272,808  $ 359,446 
 Overhead income                               12,826     12,909 
 Interest income                                6,793      5,519 
 Other                                          7,801     36,763 
                                              300,228    414,637 

COSTS AND EXPENSES 
 Production and operating                     125,078    159,820 
 Depletion, depreciation, and amortization     45,923    103,144 
 General and administrative                   203,944    279,581 
 Interest expense                                  20     30,006 
                                              374,965    572,551 
NET LOSS                                      (74,737)  (157,914)

DIVIDEND REQUIREMENTS ON PREFERRED STOCK      269,775    269,820 

LOSS APPLICABLE TO COMMON STOCK             $(344,512)  (427,734)

LOSS PER COMMON SHARE                       $    (.02) $    (.02) 









See accompanying notes to condensed consolidated financial
statements







                                     2



CASPEN OIL, INC.
AND SUBSIDIARIES

Condensed Consolidated Statements of Operations
(Unaudited)
                                                                  
                                                                  
                                              Six months ended
                                                 January 31,    
                                                1996    1995

REVENUE 
 Oil and gas sales                         $ 467,272  $ 663,358 
 Overhead income                              24,367     27,577 
 Interest income                              10,779     11,741 
 Other                                        46,586    265,106 
                                             549,004    967,782 

COSTS AND EXPENSES 
 Production and operating                    242,157    323,813 
 Depletion, depreciation, and amortization    94,604    206,288 
 General and administrative                  278,528    436,464 
 Interest expense                                 20     60,128 
                                             615,309  1,026,693 
NET LOSS                                     (66,305)  ( 58,911)

DIVIDEND REQUIREMENTS ON PREFERRED STOCK     539,550    539,775 

LOSS APPLICABLE TO COMMON STOCK            $(605,855)  (598,686)

LOSS PER COMMON SHARE                      $    (.03) $    (.03) 
















See accompanying notes to condensed consolidated financial
statements




                                     3
CASPEN OIL, INC.
AND SUBSIDIARIES

Condensed Consolidated Statement of Shareholders' Equity
(Unaudited)

                                                                  
             

                Preferred Stock       Common Stock    Additional  
                                                       paid-in   
                 shares   Amount   Shares    Amount    capital 
Balances at July 31, 1995
 
  Series A       600,000 $600,000 18,092,222 $180,922 $21,091,871
  Series B       300,000  300,000
  Series E       125,000  125,000

                                                Total
                Accumulated    Treasury      shareholders' 
                 deficit        stock          equity

               $(20,528,929)  $( 9,710)       $1,759,154

Net Income for the three months ended
  October 31, 1995                                                
                      8,431                        8,431


Balances at October 31, 1995
  Series A       600,000 $600,000 18,092,222 $180,922 $21,091,871
  Series C       300,000 $300,000
  Series E       125,000 $125,000


                
               $(20,520,498)   $(   9,710)    $1,767,585


Net Loss for the three months 
  ended January 31, 1996                                          
                  (  74,737)                   (  74,737)


Balance at January 31, 1996
  Series A       600,000 $600,000 18,092,222 $180,922 $21,091,871
  Series C       300,000 $300,000
  Series E       125,000 $125,000


                
               $(20,595,235)   $(   9,710)    $1,692,848
                                         4

CASPEN OIL, INC.
AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows
(Unaudited)

                                                                  
             

                                              Six months ended
                                                January 31,    
                                               1996       1995

CASH FLOWS FROM OPERATING ACTIVITIES 
  Net loss                                  $( 66,305) $ (58,911)
   Adjustments to reconcile net income
         to net cash provided by (used in) operating activities:
          Depletion, deprec., and amort.       94,604    206,288 

          Changes in operating assets and liabilities:
           Decrease in accounts receivable
            and prepaid expenses               71,031    112,113 
           (Increase) decrease in other assets 34,877   ( 42,223)
           Increase (decrease) in notes/accounts payable and
accrued expenses                             (358,278)  (312,967)

              NET CASH USED IN
              OPERATING ACTIVITIES           (224,071)  ( 95,700)

CASH FLOWS FROM INVESTING ACTIVITIES 
   Proceeds disposition of prop. and equip.     2,806      2,716 
   Purchase of property and equipment, net of property
         sales and well credits              (161,436)  ( 61,367)

     NET CASH USED IN INVESTING ACTIVITIES   (158,630)  ( 58,651)

CASH FLOWS FROM FINANCING ACTIVITIES
   Sale of treasury stock for working capital    -       207,694 
   Purchase of treasury stock                    -     (     423)

      NET CASH PROVIDED BY FINANCING ACTIVITIES  -       207,271 

      INCREASE (DECREASE) IN CASH
        AND CASH EQUIVALENTS                 (382,701)    52,920 

CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD 464,876    628,955 

CASH AND CASH EQUIVALENTS, END OF PERIOD   $   82,175  $ 681,875  

See accompanying notes to condensed consolidated financial
statements.


                                         5
CASPEN OIL, INC.
AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Six Months Ended January 31, 1996

(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 January 31, 1996, and the results of operations for the six
month periods ended January 31, 1996, and 1995.  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) Daiwa Bank, Ltd. Loan

In December 1990, at the request of Daiwa, the Company sold
property, which was mortgaged to Daiwa, for approximately
$5,200,000.  From the proceeds of the sale, Daiwa received the
total $5,200,000.  Daiwa applied $4,700,000 to the reduction
of principal.  Simultaneously, the Company executed a 30-month
extension note in the amount of $2,000,000, with the guarantee by
Daiwa that, upon payment of $500,000 in June 1993, the note would
be renewed or restructured.  Daiwa recognized that the Company
would be unable to make the $500,000 principal payment in June
1993 and therefore returned $500,000 from the December 1990 sale
of property to the Company.

In June 1993, after the Company paid interest for thirty (30)
months of approximately $425,000, Daiwa refused to accept the
$500,000 principal reduction payment offered by the Company and
refused to renew or restructure the note claiming no legal
obligation to do so and citing its decision to divest itself of
oil and gas loans. 

On July 9, 1993, the Company received a demand notice from Daiwa
for $1,997,500 in payment of the loan balance remaining on the
$15,000,000 Credit Revolver established by Daiwa in late 1988. 
On February 17, 1994, the Company sold certain oil and gas
properties for $300,000 the proceeds of which were used to reduce
the bank debt principal to $1,697,500.

As of January 31, 1996, the Company has voluntarily reduced the
outstanding principal balance to $1,547,500.
                                         6 
The Company has attempted to resolve the loan dispute.  The
Company expects one of two developments between the Company and
Daiwa in fiscal year 1996:  (a) the Company and Daiwa reach an
agreement to reduce to zero the outstanding loan balance
inclusive of interest (However, there can be no assurance that
Daiwa will agree to do so, nor can there be any assurance that
Daiwa will not proceed to foreclose on the oil and gas properties
which secure the debt.); or  (b) litigation results in which the
Company asserts lender liability claims for refusal to renew the
credit as represented, and Daiwa asserts claims for default
interest and attorneys' fees.  Under the second alternative, the
Company estimates legal fees in the range of $150,000 in fiscal
years 1996-1997.








































                                         7
CASPEN OIL, INC.
AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

Six Months Ended January 31, 1996

                                                                  
             
(2)     Daiwa Bank, Ltd. Loan (Continued)

   The Company received correspondence in late January 1996 from
The Daiwa Bank, Ltd. notifying Caspen Oil that it (Daiwa) had
decided to "re-book" its account with the Company and effectively
assign the account to another Japanese bank, The Sumitomo Bank,
Limited, whereby, The Sumitomo Bank would now be the servicer of
the account.  In the correspondence, Daiwa Bank further stated 
that unless told so in writing, they would assume that the
Company would have no objections to the "re-booking" of the
account.

   Upon receipt of the letter from Daiwa Bank, the Company
immediately objected telephonically and followed with written
objection dated January 31, 1996, whereby, the Company directly
objected to the "re-booking" of the account by Daiwa Bank and
further clarified that the Company's account, related to our
respective agreements, should not be "re-booked", nor should the
account be serviced by anyone other than Daiwa Bank.  The Company
further stated in the objection that Daiwa Bank's present account
relative to the Company's respective agreements should a) reflect
a receivable remaining due from the Company of $50,000, b) show
total amounts paid by the Company on account to date of
$14,885,114, c) reflect a contingent liability to the Company of
$10,355,000, and d) reflect a contingent liability to Torch
Operating Company of $192,733.

   Simultaneous to the formal written objection described above,
the Company has forwarded a copy of the same written objection to
Daiwa Bank's legal counsel.

   Even though the Company's management feels strongly that it
will not pay Daiwa Bank any amount greater than $50,000 in total
settlement (inclusive of principal and interest), because of
Generally Accepted Accounting Principals (GAAP), it is obliged to
retain the total alleged indebtedness on its books. 

   This in no way should be interpreted that the Company will pay
or owes the alleged indebtedness.





                                         8
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, 1995.

Liquidity and Capital Resources

During the six months ended January 31, 1996, the working capital
deficit increased from July 31, 1995, by approximately $162,122. 
This increase is due largely to the reduction of severance tax
liability, due to settlement with Torch Operating Company.  (The
Consent Judgment for dismissal of the litigation with Torch was
filed with the Louisiana federal district court and approved on
January 5, 1996.) And to the pay down of certain outstanding
trade payables, as well as principal loan reduction to the Daiwa
Bank debt of $50,000.

The Company's current liabilities exceed current assets by
$2,449,451 at January 31, 1996.  The working capital deficit at
January 31, 1996, is due primarily to the $1,547,500 of the
Company's debt due to Daiwa Bank which matured in June 1993 (See
Note 2) and to outstanding trade and note payables of an
approximate $850,000.

The Company anticipates that given its current cash position and
assuming a satisfactory resolution of the Daiwa matter, it will
have sufficient working capital to meet its obligations during
the ensuing fiscal year.
















                                         9

CASPEN OIL, INC.
AND SUBSIDIARIES

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


                                                                  
             
Results of Operations

Oil and gas revenues were substantially lower in the six months
ended January 31, 1996, as compared to the six months ended
January 31, 1995.  This was primarily attributable to lower unit
production at both the Vermilion Bay and the Werner Sawmill
leases in fiscal year 1996 as compared to fiscal year 1995, and
to a workover on a non-operated Texas well, the Hill - 1T.

The Company experienced slightly higher gas prices in the six
months ended January 31, 1996, compared with those received in
the same period last year, whereas relatively stable oil prices
were experienced in the first six months of fiscal year 1996 when
compared with the same period last year.  Average oil and gas
prices received in the six months ended January 31, 1996, were
approximately $15.90 per barrel of oil and $1.45 per MCF gas as
compared to approximately $15.60 per barrel of oil and $1.40 per
MCF gas for the six months ended January 31, 1995.

The Company reported a net loss of $(66,305) for the six months
ended January 31, 1996, compared to a net loss of $(58,911) for
the six months ended January 31,1995.  This is primarily due to
higher oil and gas revenues and comparatively lower production
and operating expenses for the six months ended January 31, 1995
as compared with the six months ended January 31, 1996.  Oil and
gas revenues approximated $467,000 for the six months ended
January 31, 1996, while revenues for the same period in 1995
approximated $663,000.  Production and operating expenses for the
period ended January 31, 1996, were approximately $242,000, as
compared to the period ended January 31, 1995, which were
approximately $324,000. The increase in lease operating expenses
to 52 percent of oil and gas sales from 49 percent generally
reflects the activities detailed above with respect to the
decrease in oil and gas revenues for the six months ended January
31, 1996.

General and administrative expenses for the six months ended
January 31, 1996, decreased by approximately $158,000 from the
corresponding six months ended January 31, 1995.  This decrease
primarily related to lower costs of merger and acquisition
activities, including legal and accounting costs.

Series A Preferred Stock Cumulative Dividends In Arrears

                                         10
The terms of the Series A Shares provide that no dividends may be
paid on theCommon 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 January 31, 1996, dividends on the Company's Series
A Shares are in arrears $16.19 per share for a total of
$9,705,527.














































                                         11
CASPEN OIL, INC.
AND SUBSIDIARIES

Part II.  Other Information


                                                                  
             

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

   None


Item 6. Exhibits and Reports on Form 8-K


(a)     Exhibits - none

(b)     Reports on Form 8-K:

   A report dated February 13, 1996, was filed reporting
information under Item
   4 - Changes in Registrant's Certifying Accountant.





























                                        12

                                    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.




March 15, 1996                             By:                    
                
    
                                          Gary N. Davis,
Treasurer



































                                        13

                                    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.




March 15, 1996                             By:/s/ Gary N. Davis   
                
              
                                          Gary N. Davis,
Treasurer



































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