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 Quarter Ending September 30, 1997

Commission File Number #33-38119-C

                       THE KENSINGTON COMPANY, INC.

          (Exact name of registrant as specified in its charter)

Minnesota                                          41-1610632    
(State or other                              (IRS Employer
 jurisdiction of                             Identification No.)
 incorporation)

Suite 654 Interchange Tower, 600 S. Hy. 169, Minneapolis,                      
        
                          Minnesota 55426  
(Address of principal executive offices)               (Zip code)

Registrant's telephone number, including area code (612) 546-2075

Indicate by Check mark whether the registration (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 of such shorter period that the
registrant was required to file such reports), and 92) has been subject to
such filing requirements for the past 90 days.

Yes   *                                                    No         

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

     Weighted Number of Shares are 3,021,450  of common stock no par value.

<PAGE>

Part I.  Financial Information

                       Quarter Ended  June 30, 1997

                                 GENERAL

The following financial information is submitted in response to the
requirements of Form 10-QSB and does not purport to be financial statements
prepared in accordance with generally accepted accounting principles.  Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted, although the Company believes the disclosures that are
made are adequate to make the information presented not misleading.  Further,
in the opinion of the management, the interim financial statements reflect
fairly the financial position and results of operations for the period
indicated.

The results of operations for the quarter ended as stated above are not
necessarily indicative of results to be expected for the entire fiscal year
ending December 31st.


Item 1.  Financial Statements

The balance sheet of The Kensington Company, Inc. (the "Company") as of the
Quarter stated above, and the related statement of income and changes in
financial position and note thereto are incorporated herein by reference to
the Company's quarterly report.


Item 2.   Management's Discussion and Analysis of Financial           
                                                                      
                  Condition and Results of Operations


Results of Operations
For the quarter being reported on, the company had revenues of $604k as
compared to $457k for the same period in 1996. During the quarter the company
incurred an operating loss of $28k as compared to a profit of $6k for 1996.
The loss for the quarter stems from higher than normal operating expenses to
cover the annual audit fees and the costs of obtaining a new mortgage.For the
year, revenues are up over 53% over those of 1996. This increase is due to the
fact that in 1996 the company's largest customer had a change in management
structure, which resulted in a lag in receiving orders. A strong backlog of
orders still remains and management is confident of a return to overall
profitabilty for the 4th quarter and for the year. As was stated at the end of
1996, the company has written off virtually all its oil & gas operations, thus
the large discrepancy in total assets. As stated above the company was able to
complete a mortgage financing program to pay off a portion of the debt coming
due. Management has also convinced some of the largest debt holders to extend
the amounts due them for a three year period. There still exists a significant
amount of debentures which mature in the next twelve months, which could cause
a severe cashflow problem. Management is continuing to work with these holders
to achieve extensions to the due dates.  

<PAGE>
      
Liquidity and Capital Resources
For the quarter, the Company had a net loss from operations of $28k.
Management of the Company is of the opinion that the Company will achieve an
operating profit for the 4th quarter.  During the period stated the Registrant
did not sell to directors, management and others, any common stock.

Inflation

The rate of inflation has had a great impact on the Company's results of
operations and is expected to have a continued impact on continuing operations
due to the increase in wood product costs and the fact that we have to bid
most of our projects and we can not pass all of the cost increases to our
customers.

Part II.  Other Information

Item 1.  Legal Proceedings - None

Item 2.  Changes in Securities - None

Item 3.  Defaults upon Senior Securities - None

Item 4.  Submission of Matters to a Vote of Security Holders - None

Item 5.  Other Information - None

Item 6.  Exhibits and Reports on Form 8-K and the October 18, 1995          
S-8 filing as described in Item 2 herein.
           
                     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.

                                                                               
                         THE KENSINGTON COMPANY, INC.

                                                                               
                                                       
                          Mark Haggerty
                          Mark Haggerty
                                                                               
                         Chief Executive Officer

                                   Jeff Etten
                                   Jeff Etten, C.F.O.
                                  
Dated:  February 17, 1998
                       Minneapolis, Minnesota 
<PAGE>

<PAGE>
THE KENSINGTON COMPANY, INC. AND SUBSIDIARIES     
CONSOLIDATING BALANCE SHEET   
SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)    

                                             1997         1996   
ASSETS    
Current assets:     
  Cash                                      $106,683   $12,241   
  Accounts receivable                        214,159   176,379   
  Inventories                                208,370   173,798   
  Other current assets                        86,418    44,915   
     Total current assets                    615,630   407,333   

Other assets:  
  Investment in oil and gas properties, net       85,043    1,206,278 
  Investment in oil and gas partnerships          44,832       47,981   
  Investment in Ives                                   0    
  Investment in KEC partnerships                       0    
  Property and equipment, net                     299,516   329,822   
  Notes receivable - related parties              24,125     74,536   
     Total other assets                           453,516    1,658,617     

                                               $1,069,146   $2,065,950
     
LIABILITIES AND STOCKHOLDERS' EQUITY    

Current liabilities:     
  Note payable -                                  $53,857   $49,247   
  Note payable - related parties                  299,041   334,333   
 Current portion of long-term debt                375,633    93,310   
  Current portion of obligations under 
  capital leases                                  13,341     26,548   
  Accounts payable                               264,490    397,158   
  Accrued payroll & related taxes                125,360     79,274
     
  Accrued interest                               29,412     25,830   
  Accrued Expenses                               20,255     91,085   
Intercompany                                          0          0   
     Total current liabilities                1,181,389  1,096,785     

Long-term debt, net of current portion          442,849   543,450   
Obligations under capital leases, net 
of current portion                               10,000     45,017   
Minority interest in consolidated Subsidiaries   11,239     13,332   
     Total liabilities                        1,645,477    1,698,584     


STOCKHOLDERS' EQUITY     
  Common stock                                  3,692,923    3,660,377     
  Additional paid-in capital                            0            0   
  Accumulated deficit                          (3,971,922)  (3,040,591)
  Stock subscriptions receivable                 (297,332)    (252,420)
     Total stockholders' equity                  (576,331)     367,366   

                                                $1,069,146   $2,065,950
     

<PAGE>
THE KENSINGTON COMPANY, INC. AND SUBSIDIARIES     
CONSOLIDATING STATEMENT OF OPERATIONS   
FOR THE QUARTER ENDED SEPTEMBER 30, 1997 AND 1996 
                                   (UNAUDITED)    

                                                  1997       1996     

Revenues: 
  Product sales                                $604,618   $457,149 
  Distributions from oil and 
  gas partnerships                                    0         0   
  Oil and gas sales                                 513       513   
     Total revenues                             605,131   457,662   

Cost of sales: 
  Cost of products sold                        400991   294136   
  Oil and gas costs                                 0         0   
     Total cost of sales                       400991   294136   

     Gross profit                              204140   163526   

Operating expenses                             232140   157397   

Income (loss) from operations                  (28000)    6129   

Other income (expense):  
  Interest expense                             (38693)  (26350)  
  Litigation settlement                             0         0   
Minority Interest in Earnings of Consolidated 
Oil & Gas Ptsp                                  32446    32446   
  Miscellaneous income                              0         0   
    Total other income (expense)               (39015)  (26672)  

Income (loss) before income taxes and 
extraordinary item                             (67015)  (20221)  
  Provision for income taxes (benefit)              0         0   

Income before extraordinary item               (67015)  (20221)  
  Extinguishment of debt, net of 
  income taxes of $0                               0         0   

Net income (loss)                              (67015)    (20221)     

Accumulated deficit, beginning               (2879598)  (2879598)     

Accumulated deficit, ending                  (2946613)  (2899819)     

Earnings Per Share             (0.022123302210283)    (0.0065586159474818 )

WEIGHTED NUMBER OF SHARES OUTSTANDING         3021450  2945894

<PAGE>

<PAGE>
THE KENSINGTON COMPANY, INC. AND SUBSIDIARIES     
CONSOLIDATING STATEMENT OF CASH FLOWS   
FOR THE QUARTER ENDED SEPTEMBER 30, 1997 & 1996   
                                   (UNAUDITED)    

                                                     1997       1996     

Cash flows from operating activities:   
  Net income (loss)                                 (67015)   (20221)
  Adjustments to reconcile net income (loss) 
   to cash flows from operating activities:  
   Depreciation, depletion and amortization          12286     10467    
   Extinguishment of debt                                          0    
   Changes in operating assets and liabilities:   
    Accounts receivable                             (28234)   (68606)   
    Inventories                                     (27229)   (33185)   
    Other current assets                            (83991)   (37500)   
    Other assets                                      3472         0    
    Accounts payable                                (16598)   (147981)     
    Other current liabilities                         18761      7542    
      Cash flows from operating activities          (188548)     6478
     
Cash flows from investing activities:   
 Distributions from Unconsolidated Gas &
 Oil Partnerships                                     0               0    
  Decrease in notes receivable - related parties    661               0    
  Purchase of property and equipment                667            2535    
  Sale of Stock                                       0     
      Cash flows from investing activities           (6)           2535  

Cash flows from financing activities:   
  Increase (decrease) in notes 
  payable - related parties                       20485               0    
  Proceeds short, long-term debt                  365000          40047    
  Payments on long-term debt                     (106921)       (40568)
  Payments on obligations under capital leases     (3600)        (3600)
     Cash flows from financing activities         274964         (4121)   

Increase (decrease) in cash                       86422            (178)   

Cash, beginning                                    20261           12419   
                                                       
Cash, ending                                      106683           12241