SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     of the Securities Exchange Act of 1934

For the Quarterly Period Ended:
           June 30, 1997                           Commission File No. 0-9675


                           GREAT NORTHERN GAS COMPANY
              ---------------------------------------------------
             (Exact name of registrant as specified in its charter)


           Colorado                                     38-1900351
 ------------------------------                     ------------------
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                      Identification No.)

                             621 Seventeenth Street
                                   Suite 2150
                             Denver, Colorado 80293
                -------------------------------------------------
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (303) 295-0938


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or 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
                               -----            -----

Indicate the number of shares  outstanding  of each of the  Issuer's  classes of
common stock as of the latest practicable date:

                               Shares                   As of Close of
 Title of Class              Outstanding                  Business on

Common Stock,
$.01 Par Value                3,481,584                 August 6, 1997




                    Page 1 of 10 sequentially numbered pages.


<PAGE>



                           GREAT NORTHERN GAS COMPANY




                                      INDEX




PART I. FINANCIAL INFORMATION                                     Page No. (s)
                                                                  -----------

         Balance Sheets as of June 30, 1997
         and December 31, 1996 (Unaudited)                             3-4

         Statements of Earnings for the Three
         Months Ended June 30, 1997 and 1996 (Unaudited)                5

         Statements of Earnings for the Six
         Months Ended June 30, 1997 and 1996 (Unaudited)                6

         Statements of Cash Flows for the Six Months
         Ended June 30, 1997 and 1996 (Unaudited)                       7

         Notes to Unaudited Financial Statements for the Six
         Ended June 30, 1997 and 1996                                   8

         Management's Discussion and Analysis of
         Financial Condition and Results of Operations                  9


PART II.                   OTHER INFORMATION                           10

                               SIGNATURES                              10





                                     Page 2

<PAGE>

                           GREAT NORTHERN GAS COMPANY
                                 BALANCE SHEETS
                       JUNE 30, 1997 AND DECEMBER 31, 1996
                                   (UNAUDITED)


                                     ASSETS
                                     ------

                                                     June 30,       December 31,
                                                      1997             1996
                                                   ----------       -----------
CURRENT ASSETS:
    Cash and cash equivalents                      $1,502,962       $1,404,099
    Short term investments                            654,784          242,474
    Accounts receivable:
         Oil and gas sales                             64,098          132,054
         Joint interest billings                       96,413          116,005
         Income taxes                                    --              6,075
    Accrued interest receivable                          --              7,245
    Other                                               9,619            9,619
                                                   ----------       ----------
                Total current assets                2,327,876        1,917,571
                                                   ----------       ----------


PROPERTY AND EQUIPMENT, at cost:
    Oil and gas properties, accounted for
         using the full cost method                 2,423,754        3,327,289
    Furniture, fixtures and automobile                 60,104           57,660
                                                   ----------       ----------
                                                    2,483,858        3,384,949
    Less accumulated depreciation, depletion
         and amortization                             751,818        1,224,116
                                                   ----------       ----------
            Net property and equipment              1,732,040        2,160,833
                                                   ----------       ----------

                                                   $4,059,916       $4,078,404
                                                   ==========       ==========







         The accompanying notes to unaudited financial statements are an
                       integral part of these statements.

                                     Page 3

<PAGE>



                           GREAT NORTHERN GAS COMPANY
                           BALANCE SHEETS - CONTINUED
                       JUNE 30, 1997 AND DECEMBER 31, 1996
                                   (UNAUDITED)



                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------


                                                    June 30,       December 31,
                                                     1997             1996
                                                  ------------     ------------
CURRENT LIABILITIES:
    Accounts payable:
         Trade                                    $     33,385     $     20,410
         Oil and gas sales                             125,116          115,866
         Ad valorem taxes                               61,235           51,840
                                                  ------------     ------------
                Total current liabilities              219,736          188,116
                                                  ------------     ------------

DEFERRED INCOME TAXES                                  219,903          172,167
                                                  ------------     ------------

STOCKHOLDERS' EQUITY:
    Common Stock, $.01 par value;
      authorized 50,000,000 shares,
      issued 3,481,584 shares at
      June 30, 1997 and 3,603,313
      shares at December 31, 1996                       34,816           36,033
    Additional paid-in-capital                      39,318,095       39,502,517
    Accumulated deficit                            (35,732,634)     (35,820,429)
                                                  ------------     ------------
            Total stockholders' equity               3,620,277        3,718,121
                                                  ------------     ------------

                                                  $  4,059,916     $  4,078,404
                                                  ============     ============





         The accompanying notes to unaudited financial statements are an
                       integral part of these statements.

                                     Page 4

<PAGE>



                           GREAT NORTHERN GAS COMPANY
                             STATEMENTS OF EARNINGS
                FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996
                                   (UNAUDITED)



                                                    Three Months Ended June 30,
                                                    ---------------------------
                                                       1997           1996
                                                    -----------     -----------
REVENUES:
    Oil and gas sales                               $   160,981     $   247,482
    Interest and other income                            60,924          22,884
                                                    -----------     -----------
                                                        221,905         270,366
                                                    -----------     -----------


EXPENSES:
    Lease operating                                      70,524          40,778
    Production taxes                                     15,315          17,495
    Depreciation, depletion and amortization             65,823          45,049
    General and administrative                          152,078          75,280
                                                    -----------     -----------
                                                        303,740         178,602
                                                    -----------     -----------

GAIN FROM SALE OF PROPERTIES                            533,901            --
                                                    -----------     -----------

EARNINGS BEFORE INCOME TAXES                            452,066          91,764

INCOME TAX PROVISION                                   (171,786)        (34,870)
                                                    -----------     -----------

NET EARNINGS                                        $   280,280     $    56,894
                                                    ===========     ===========

EARNINGS PER COMMON SHARE                           $       .08     $       .01
                                                    ===========     ===========

WEIGHTED AVERAGE COMMON SHARES
 OUTSTANDING                                          3,486,873       3,872,906
                                                    ===========     ===========







         The accompanying notes to unaudited financial statements are an
                       integral part of these statements.

                                     Page 5

<PAGE>



                           GREAT NORTHERN GAS COMPANY
                             STATEMENTS OF EARNINGS
                 FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                   (UNAUDITED)



                                                     Six Months Ended June 30,
                                                    ---------------------------
                                                       1997            1996
                                                    -----------     -----------
REVENUES:
    Oil and gas sales                               $   498,880     $   488,591
    Interest and other income                           121,883          59,359
                                                    -----------     -----------
                                                        620,763         547,950
                                                    -----------     -----------


EXPENSES:
    Lease operating                                     109,429          67,200
    Production taxes                                     37,359          29,048
    Depreciation, depletion and amortization            144,758         107,265
    General and administrative                          343,475         173,600
                                                    -----------     -----------
                                                        635,021         377,113
                                                    -----------     -----------

GAIN FROM SALE OF PROPERTIES                            155,864            --
                                                    -----------     -----------

EARNINGS BEFORE INCOME TAXES                            141,606         170,837

INCOME TAX (PROVISION) BENEFIT                          (53,810)        (64,918)
                                                    -----------     -----------

NET EARNINGS                                        $    87,796     $   105,919
                                                    ===========     ===========

EARNINGS PER COMMON SHARE                           $       .02     $       .03
                                                    ===========     ===========

WEIGHTED AVERAGE COMMON SHARES
 OUTSTANDING                                          3,520,259       3,887,523
                                                    ===========     ===========







         The accompanying notes to unaudited financial statements are an
                       integral part of these statements.

                                     Page 6

<PAGE>
<TABLE>
<CAPTION>

                                          GREAT NORTHERN GAS COMPANY
                                           STATEMENTS OF CASH FLOWS
                                FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                                 (UNAUDITED)

                                                                                 Six Months Ended June 30,
                                                                           ----------------------------------
                                                                               1997                  1996
                                                                           -----------            -----------
CASH FLOWS FROM OPERATING
 ACTIVITIES:
<S>                                                                        <C>                    <C>        
    Net earnings (loss)                                                    $    87,796            $   105,919
    Adjustments to reconcile net earnings to net cash
     provided by (used in) operating activities:
         Depreciation, depletion and amortization                              144,758                107,265
         Gain on sale of properties                                           (155,865)                  --
         Decrease in accounts receivable                                        94,794                  9,358
         Increase in other current assets                                         --                   (2,196)
         Increase in current liabilities                                        31,620                145,437
         Deferred income tax provision (benefit)                                53,810                 64,918
                                                                           -----------            -----------
            Net cash provided by (used in) operating activities                256,913                430,701
                                                                           -----------            -----------

CASH FLOWS FROM INVESTING
 ACTIVITIES:
    Proceeds from sale of oil and gas properties                             1,412,028                   --
    Additions to property and equipment                                       (972,129)              (967,688)
   Proceeds from sale of short term investments                                   --                1,216,949
   Purchase of short term investments                                         (412,310)                  --
                                                                           -----------            -----------
            Net cash provided by (used in) investing activities                 27,589                249,261
                                                                           -----------            -----------

CASH FLOWS FROM FINANCING
 ACTIVITIES-
    Repurchase of Common Stock                                                (185,639)               (66,638)
                                                                           -----------            -----------
         Net cash provided by (used in) financing activities                  (185,639)               (66,638)
                                                                           -----------            -----------

INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS                                                               98,863                613,324

CASH AND CASH EQUIVALENTS AT
 BEGINNING OF PERIOD                                                         1,404,099              1,176,279
                                                                           -----------            -----------

CASH AND CASH EQUIVALENTS AT
 END OF PERIOD                                                             $ 1,502,962            $ 1,789,603
                                                                           ===========            ===========

            The  accompanying  notes to unaudited  financial  statements  are an
integral part of these statements.

                                                          Page 7
</TABLE>

<PAGE>
                           GREAT NORTHERN GAS COMPANY
                     NOTES TO UNAUDITED FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996

Note 1 - Financial Statements - Basis of Presentation
-----------------------------------------------------

     Great Northern Gas Company (the  "Company") is  exclusively  engaged in the
business of oil and gas exploration, development and production.

     The financial  statements included herein are unaudited.  In the opinion of
management,  such  statements  include  all  adjustments,  consisting  of normal
recurring  adjustments,  necessary  to present  fairly the  Company's  financial
position for all periods presented.

     Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting  principles
have been condensed or omitted as permitted by the rules and  regulations of the
Securities  and  Exchange  Commission.  Although the Company  believes  that the
disclosures are adequate to make the information presented not misleading, it is
suggested  that  these  financial  statements  be read in  conjunction  with the
December 31, 1996 financial  statements and the notes thereto as reported on the
Company's Annual Report on Form 10-KSB.

     Results of operations  for the six month period ended June 30, 1997 are not
necessarily indicative of the results to be expected for the full year.

Note 2 - Income Taxes
---------------------

     The  Company's net deferred tax liability at June 30, 1997 and December 31,
1996  primarily  relates  to book basis  being in excess of tax basis  partially
offset by loss carryforwards.

Note 3 - Sale of Properties
---------------------------

     On April 11, 1997 and May 9, 1997, respectively,  the Company closed on the
sale of its  interest  in the  White  River  Dome  properties  and  the  Gasaway
properties.  The White River Dome  properties  are located in Rio Blanco County,
Colorado and the Gasaway  properties are located in Garfield  County,  Colorado.
The White River Dome properties and the Gasaway properties were sold for a total
of $739,223,  resulting  in a gain on the sale of $533,901.  This gain was taken
against the $378,037 loss from the sale of the South  Douglas  Creek  properties
which occurred in the first quarter of 1997.

Note 4 - Repurchase of Common Stock
-----------------------------------

     During  the first  and  second  quarters  of 1997 the  Company  repurchased
121,720 shares of the Company's Common Stock. The shares were retired.



                                     Page 8

<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Liquidity and Capital Resources
-------------------------------

     At June 30, 1997 the Company had working capital of $2,108,140  compared to
working  capital of  $1,729,455  at December 31,  1996.  The increase in working
capital is primarily  related to the  proceeds  from the sale of the White River
Dome properties and the Gasaway properties.

     Net cash  provided by operating  activities  was $256,913 for the first six
months of 1997 compared to net cash provided by operating activities of $430,701
for the comparable  period of 1996. Such change is primarily due to the decrease
in oil and gas sales payable for 1997.

Analysis of Results of Operations
---------------------------------

     The  $498,880  in oil and gas sales  for the  first  six  months of 1997 is
$10,289 greater than for the same period in 1996. Other income has increased due
to the  well  operation  income  generated  by  Gasaway  and  White  River  Dome
properties  which were purchased in the fourth quarter of 1997.  Lease operating
expenses  and  production  taxes are  greater  than 1996 mainly due to the White
River Dome and Gasaway purchase. General and administrative expenses for the six
months ended June 30, 1997 increased  significantly  compared to the same period
in 1996 mainly due to an increase in salaries and consulting fees.


                                     Page 9

<PAGE>




                           PART II - OTHER INFORMATION



Items 1 thru 5 not applicable.

Item 6 - Exhibits and Reports on Form 8-K None.



                                   SIGNATURES

     Pursuant to the  requirements  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.


                                   GREAT NORTHERN GAS COMPANY
                                   (Registrant)



Dated:  August 12, 1997            By:  /s/  Frank S. DiGrappa
                                        ----------------------------------------
                                        Frank S. DiGrappa
                                        Chairman of the Board,
                                        and Treasurer



Dated:  August 12, 1997            By:  /s/  Thomas L. DiGrappa
                                        ----------------------------------------
                                        Thomas L. DiGrappa
                                        President and Chief
                                        Operating Officer



                                     Page 10

<PAGE>









Thomas DiGrappa, President
Great Northern Gas Company
621 17th Street, Suite 2150
Denver, CO  80293



We have compiled the  accompanying  balance sheets of Great Northern Gas Company
as of June 30, 1997 and the related  unaudited  statements  of earnings and cash
flows for the six months then ended in accordance  with  Statements on Standards
for Accounting and Review Services issued by the American Institute of Certified
Public Accountants.

Quinn & Associates, P.C. is not independent of the Company.

A  compilation  is limited to  presenting  in the form of  financial  statements
information  that is the  representation  of management.  We have not audited or
reviewed the  accompanying  financial  statements  and,  accordingly,  we do not
express an opinion or any form of assurance on them.

Management has elected to omit substantially all of the disclosures  required by
generally  accepted  accounting  principles.  If the  omitted  disclosures  were
included  in  the  financial   statements,   they  might  influence  the  user's
conclusions about the company's financial position,  results of operations,  and
cash flows.  Accordingly,  these financial statements are not designed for those
who are not informed about such matters.



Quinn & Associates, P.C.
August 8, 1997