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

                                 FORM 10-Q
(MARK ONE)
[x]       QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
                    SECURITIES EXCHANGE ACT OF 1934

            For the quarterly period ended June 30, 1997

[ ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                    SECURITIES EXCHANGE ACT OF 1934
 

                                                        

                    Commission File Number0-9965

                       QUESTA OIL & GAS CO.
     (Exact name of registrant as specified in its charter)

             COLORADO                           84-0846588
(State or other jurisdiction of             (I.R.S.Employer
  incorporation or organization)              Identification No.)

                          7030 South Yale
                             Suite 700
                   Tulsa, Oklahoma  74136-5718
             (Address of principal executive offices)

Registrant's telephone number, including area code: (918) 494-6055
                                               
  Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Sections 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required o file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.         Yes  X   No ___


As of August 1, 1997, the Company had 975,133 shares of Common
Stock issued and outstanding.
 

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                          QUESTA OIL & GAS CO.

                               Contents


                                                           Page

Part I - Financial Information

         Consolidated balance sheets at June 30, 1997
         and December 31, 1996                               3

         Consolidated statements of operations for the six
         months ended June 30, 1997 and 1996                 4

         Consolidated statements of cash flow for
         the six months ended June 30, 1997 and 1996         5

         Consolidated notes to financial statements          6

         Management's discussion and analysis of
         financial condition and results of operations       6

Part II - Other Information                                  7

         Signature page                                      8



























                                                         2
<PAGE>

Part I Financial Information
<TABLE>
<CAPTION>

                            QUESTA OIL & GAS CO.
                         Consolidated Balance Sheets
                     June 30, 1997 and December 31, 1996
<S>                                             <C>            <C> 

                                                June 30,
                                                1997           DECEMBER 31,
                                                (UNAUDITED)        1996   
ASSETS
Current Assets:
  Cash and cash equivalents                     $1,210,326      $1,027,793
  Accounts receivable - Trade                       97,727         170,050
                      - Other                       27,812           8,178
                      - Oil & Gas Sales            300,000         382,250
  Notes Receivable                                       0         100,000
  Inventory                                         13,904          14,794
  Prepaid expenses and other assets                  9,204           7,333
                     Total Current Assets        1,658,973       1,710,398

Property and equipment, at cost:
  Oil and gas properties, successful efforts:
           Unproved properties                      90,670         148,372
           Proved properties                    11,345,644      10,501,701
  Furniture, fixture and automobiles               135,668         132,772
                                                11,571,982      10,782,845
  Less accumulated depletion and depreciation   (4,817,463)     (4,157,726)

           Net Property and Equipment            6,754,519       6,625,119

Other Assets                                                                   
         0                                      0
TOTAL ASSETS                                    $8,413,492      $8,335,517 

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Long-term debt due within one year            $  300,000      $  300,000
  Accounts Payable - Trade                          91,761         329,740
  Accounts Payable - Related Parties                20,162          29,482
  Accounts Payable - Oil & Gas                     201,951         232,430
  Short Term Loans Payable                           3,750          14,322
  Other Current Liabilities                         14,540          86,498
  Advances From Drilling Partners                        0          33,832
           Total Current Liabilities               632,164       1,026,304

Other Long-term Liabilities                     $   84,137      $   84,137
Long-term debt due after one year               $1,524,588      $1,655,367
Deferred income tax                             $  702,000      $  550,000

Stockholders' equity:
  Common stock, $.01 par value;
    Authorized 50,000,000 shares;
    Issued 1,358,328 shares                         13,583          13,583
  Additional paid-in capital                     1,098,050       1,098,050
  Accumulated earnings                           4,741,207       4,741,207
  Current earnings                                 475,621               0
  Treasury stock at cost, 383,195 shares at
    June 30,1997 and 379,232 shares at
    December 31,1996                              (857,858)       (833,131)
           Total Stockholders' Equity            5,470,603       5,019,709 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $8,413,492      $8,335,517 

See accompanying notes to financial statements.
</TABLE>

                                                             3
<PAGE>

Part I Financial Information
<TABLE>
<CAPTION>

                              QUESTA OIL & GAS CO.
                       Consolidated Statement of Operations
                                  (UNAUDITED)
<S>                            <C>         <C>         <C>         <C>
                               THREE       THREE       SIX         SIX
                               MONTHS      MONTHS      MONTHS      MONTHS
                               ENDED       ENDED       ENDED       ENDED
                               June 30,    June 30,    June 30,    June 30,
                                  1997        1996        1997        1996   
REVENUES:
Oil and gas sales              $  899,346  $  736,323  $2,086,162  $1,392,056
Management fees                    14,400      14,400      28,800      28,800
Administrative charges             68,785      69,976     136,865     139,542
                                  982,531     820,699   2,251,827   1,560,398
OPERATING COSTS AND EXPENSES:
Lease operating expenses          245,431     212,125     484,672     410,838
Dry Hole & geological costs           651     133,449      35,737     155,632
Depletion, depreciation,
         and amortization         295,359     258,855     672,451     476,413
General & administrative          169,734     171,346     381,272     328,930
                                  711,175     771,775   1,574,132   1,371,813 

Income From Operations         $  271,356  $   44,924  $  677,695  $  188,585

OTHER INCOME (EXPENSES):
Dividends                      $        0  $        0  $        0  $        0
Interest income                    17,096           0      30,051       2,074
Interest expense                  (40,013)    (25,836)    (80,125)    (53,213)
Gain (loss) on sale of
         oil & gas properties           0      66,822           0      66,822
                               $  (22,917) $   40,986     (50,074)     15,683
Income before provision
for income taxes               $  248,439  $   85,910  $  627,621  $  204,268

Income tax provision
Current                                 0           0           0           0
Deferred                          (54,000)          0    (152,000)          0 


NET INCOME                     $  194,439  $   85,910  $  475,621  $   204,268 

EARNINGS PER COMMON SHARE:

Net income per common
share and common equivalent
                  PRIMARY      $     .20   $      .09  $      .48  $       .20
                  FULLY DILUTED$     .20   $      .09  $      .48  $       .20 


Weighted average number of common shares
and common share equivalent outstanding:
                  PRIMARY        984,603      999,953    984,596       997,449
                  FULLY DILUTED  984,603      999,953    984,596       997,449 


See accompanying notes to financial statements
</TABLE>





                                                             4
<PAGE>

Part I Financial Information
<TABLE>
<CAPTION>

                             QUESTA OIL & GAS CO.
                      Consolidated Statement of Cash Flows
                                 (Unaudited)

<S>                                                 <C>         <C>
                                                   FOR THE SIX MONTHS ENDED
                                                    June 30,      June 30,
                                                       1997          1996  

Cash Flows From Operating Activities:

Operations:
 Net Income (Loss)                                  $  475,621  $    204,268
 Plus Adjustments to Reconcile Net Income
 (Loss) to Net Cash Flows From Operating Activities:
 Gain (Loss) on Sale of Assets                               0        66,822
 Depreciation,Depletion and Amortization               672,451       476,413
 Dry Hole and Exploration                               35,737       155,632
 Provision for Deferred Income Taxes                   152,000             0

Changes In Operating Assets and Liabilities:
 Accounts Receivable                                   134,939       (24,961)
 Notes Receivable                                      100,000        30,000
 Equipment Inventory                                       890         6,595
 Other Current Assets                                   (1,871)      (21,336)
 Accounts Payable and Accrued Expenses                (349,736)       56,074
 Advances from Drilling Partners                       (33,832)            0 

Net Cash Provided By Operating Activities           $1,186,199   $   949,507


Cash Flows From Investing Activities:
Purchase of Property and Equipment:
 Oil and Gas Properties                               (834,692)     (939,613)
 Furniture, Fixtures & Automobiles                      (2,896)       (5,579) 

Net Cash Used In Investing Activities               $ (837,588)  $  (945,192)

Cash Flows From Financing Activities:
 Proceeds From Borrowing                                     0             0
 Payment of Debt                                      (141,351)     (153,002)
 Purchase of Treasury Stock                            (24,727)      (29,866)

Net Cash (Used In) Provided By Financing Activities $ (166,078)  $  (182,868)

Net Increase (Decrease) In Cash And Cash Equivalent    182,533      (178,553)
Cash and Cash Equivalents, Beginning of Year         1,027,793       143,532 

Cash and Cash Equivalent, End of Period             $1,210,326   $   (35,021)
</TABLE>
 










                                                                    5
<PAGE>

Part I Financial Information

                                 QUESTA OIL & GAS CO.
                     Notes to Consolidated Financial Statements
                                      (Unaudited)
(1)  Note Payable

         The Company has a line of credit and a term loan with a local
bank. For the first half of 1997 the interest rate on both the line and
the term loan was at New York prime, 8%. As of June 30, 1997, the
outstanding principal amount of the term loan was $1,800,000 and zero
on the line of credit. The aggregate borrowing limits were $3,100,000.
The term loan was $2,100,000 with quarterly installments of $75,000
plus accrued interest with the final payment due September 30, 1999.
The line of credit is $1,000,000 with interest of one quarter of one
percent on the amount not used. Loans are secured by certain of the
Company's interests in oil and gas properties. The Company is not
required by the loan agreement to maintain a certain balance in our
demand accounts with the bank. The Company also has a automobile loan
with another bank. The loan is for 60 months, 6.39% rate, with final
payment due April, 1999.

(2)  Accounting Policies

     The accompanying unaudited financial statements have been prepared
in accordance with the instructions to Form 10-Q and do not include all
of the information and footnotes required by generally accepted acco
unting principles for complete financial statements. In the opinion
of management, all adjustments (consisting of only normal reoccurring
items) considered necessary for a fair presentation have been incl
uded. These statements should be read in conjunction with the Questa
Oil & Gas Co. financial statements and notes thereto as of December 31,
1996, which are included in the Company's annual report and Form 10-K.

                              QUESTA OIL & GAS CO.
                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations
                                   June 30, 1997

Liquidity and Capital Resources

         At June 30, 1997, the Company had current assets of $1,659,000
compared to current liabilities of approximately $ 632,000 resulting
in positive working capital of $1,027,000. As of June 30, 1997 the
total outstanding bank loan balance was $1,800,000 compared to
$1,950,000 as of December 31, 1996.The Company is in a positive
position to participate in new acquisitions and offset drilling
available through  current cash flows and the line of credit of
$1,000,000. Working capital will continue to fluctuate during the year
as the Company acquires interest in additional wells and wells that are
drilled are completed and connected to a sales outlet.


                                                            6
<PAGE>

         During the first six months of 1997 the Company participated in
the drilling of eight wells, two dry holes, four gas wells and two oil
wells. The Company's working interest in the eight wells is 6 to 30%
with the Company participating as an outside joint owner in all wells.
         In the second quarter of 1997 the Company purchased units in two
drilling partnerships managed by the Company. Questa is the general
partner of eight drilling partnerships. The Company spent $526,000 in
acquiring an additional 25 to 75 percent in the two programs. The
Company has budgeted an additional $430,000 to acquire units in four
other Company managed drilling partnerships during the second half of
the year.
         In the third quarter of 1997 the Company is offering to repurchase
Questa common stock from shareholders holding 99 shares or less. The
offering price of $11 per share is open to shareholders of record on
June 30, 1997, the offer will close September 5, 1997.

Results of Operations

1996 to 1997
         Oil and gas sales during the two quarters ending June 30, 1997
increased from $1,400,000 to $2,000,000 over the comparable period last
year due to increases in the number of wells producing and higher oil
and gas prices (oil prices have increased by 8% and gas prices have
increased by 37% for this same period in 1997).
         The lease operating expenses for the two quarters increased from
$410,000 to $485,000 over the same period last year. This increase is
the result of the increase in the  number of wells producing. The
increase in depletion, depreciation, and amortization from $472,000 to
$672,000 for the first half is due to the increase volume and prices.
Changes in the Company's general and administrative expenses was due
to bonuses paid to employees.
         Interest income increased due to larger cash balances in the
banks. Interest expenses increased due to the larger principal balance
on the new loan negotiated in July of 1996.
         Net income for the first six month period increased from a
$208,000 profit to a $476,000 profit due to increases in the Company's
oil and gas prices and production volume.

Part II Other Information

Item 1 - Not Applicable.

Item 2 - Not Applicable.

Items 3 through 5 - Not Applicable.

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

        (a)  Exhibits - None

        (b)  No reports on Form 8-K have been filed during the
quarter for which this report is filed.

                                                            7
<PAGE>

                                                    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.


                                   QUESTA OIL & GAS CO.



Date   August 6, 1997              /S/ WARREN MEEKS          
                                  Warren L. Meeks, President




Date   August 6, 1997              /S/ DONALD A TOWNER       
                                   Donald A. Towner, Controller
                                   and Chief Financial Officer
































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