UNITED STATES

                       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 September 30, 1998


                         Commission file number 0-19766


                       HOME-STAKE OIL & GAS COMPANY 
       (Exact name of small business issuer as specified in its charter)


               Oklahoma                                    73-0288030
    (State or other jurisdiction of                     (I.R.S. Employer
     incorporation or organization)                    Identification No.)


                         15 East 5th Street, Suite 2800
                             Tulsa, Oklahoma 74103
                    (Address of principal executive offices)


                                 (918) 583-0178
                         (Registrant's telephone number)



        Check whether the issuer (1) has filed all reports  required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for 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 | |


        The number of shares  outstanding of the Registrant's  common stock, all
of which comprise a single class with $ .01 par value,  as of November 13, 1998,
the latest practicable date, was 4,295,238.



                                      - 1 -

<PAGE>



                          HOME-STAKE OIL & GAS COMPANY

                                   FORM 10-QSB
                               SEPTEMBER 30, 1998

                                TABLE OF CONTENTS

                                                                          Page
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

        Condensed Balance Sheets - 
          September 30, 1998 and December 31, 1997........................  4

        Condensed Statements of Income and Retained
          Earnings - nine months ended September 30, 1998 and 1997 .......  5

        Condensed Statements of Income (Loss) and Retained
          Earnings - three months ended September 30, 1998 and 1997 ......  6

        Condensed Statements of Cash Flows - 
          nine months ended September 30, 1998 and 1997 ..................  7

        Notes to Condensed Financial Statements ..........................  8

Item 2. Management's Discussion and Analysis of Financial Condition and
          Results of Operations ..........................................  11


PART II - OTHER INFORMATION

Item 1. Legal Proceedings ................................................  14

Item 2. Changes in Securities and Use of Proceeds ........................  14

Item 3. Defaults upon Senior Securities ..................................  14

Item 4. Submission of Matters to a Vote of Security Holders ..............  14

Item 5. Other Information ................................................  14

Item 6. Exhibits and Reports on Form 8-K .................................  14

SIGNATURES ...............................................................  15


                                      - 2 -

<PAGE>



                         PART I - FINANCIAL INFORMATION

                          Item 1. Financial Statements.

                                      - 3 -

<PAGE>



                          HOME-STAKE OIL & GAS COMPANY
                            CONDENSED BALANCE SHEETS
                                   (Unaudited)



                                     ASSETS

                                                  September 30,    December 31,
                                                      1998             1997
                                                      ----             ----
Current assets:
  Cash and cash equivalents...................... $     417,881    $  1,507,782
  Accounts receivable............................     1,624,855       1,730,114
  Prepaid expenses...............................       232,868         188,461
                                                  -------------    ------------
         Total current assets....................     2,275,604       3,426,357

Property and equipment, at cost:.................    48,731,939      40,624,204
    Less accumulated depreciation,  
      depletion and amortization.................    17,906,668      15,613,520
                                                  -------------    ------------
         Net property and equipment..............    30,825,271      25,010,684

Other assets.....................................       236,175         246,918
                                                  -------------    ------------
                                                  $  33,337,050    $ 28,683,959
                                                  =============    ============
   



                      LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:
  Accounts payable and accrued liabilities....... $   1,293,854    $  1,517,932
  Income taxes payable...........................             -          92,822
  Current note payable (Note 3)..................     1,320,000               -
                                                  -------------    ------------
         Total current liabilities...............     2,613,854       1,610,754

Long-term note payable (Note 3)..................     4,620,000               -

Deferred income taxes............................     5,150,397       5,207,548

Stockholders' equity:
  Preferred stock, $1 par value -
    2,000,000  shares  authorized; none issued
  Common stock,  $ .01 par value -
    12,000,000 shares authorized,
    4,517,363 shares issued......................        45,174          45,174
  Additional paid-in capital.....................    15,460,621      15,460,621
  Retained earnings..............................     6,098,080       6,359,862
                                                  -------------    ------------
                                                     22,028,666      21,865,657
  Less treasury stock, at cost - 112,140 shares..      (651,076)              -
                                                  -------------    ------------
         Total stockholders' equity..............    20,952,799      21,865,657
                                                  -------------    ------------
                                                  $  33,337,050    $ 28,683,959
                                                  =============    ============

                             See accompanying notes.

                                      - 4 -

<PAGE>



                          HOME-STAKE OIL & GAS COMPANY
                         CONDENSED STATEMENTS OF INCOME
                              AND RETAINED EARNINGS
                  Nine months ended September 30, 1998 and 1997
                                   (Unaudited)



                                                      1998             1997
                                                      ----             ----

Revenues:
  Oil and gas sales.............................. $   7,473,959    $  5,374,276
  Gain on sales of assets........................        23,342         111,073
  Income from equity affiliates..................             -         333,541
  Other income...................................       247,188         181,643
                                                  -------------    ------------
                                                      7,749,489       6,000,533

Costs and expenses:
  Production.....................................     2,481,057       1,648,867
  Exploration....................................       574,857         515,051
  General and administrative.....................     1,778,646         833,264
  Depreciation, depletion and amortization.......     2,410,359         914,248
  Interest.......................................       256,856          37,713
  Property and other taxes.......................       218,683         112,469
                                                  -------------    ------------
                                                      7,742,458       4,061,612
                                                  -------------    ------------

Income before provision for income taxes.........        29,031       1,938,921

Provision for (benefit from) income taxes:
  Current........................................        78,545         268,937
  Deferred.......................................       (57,151)        199,158
                                                  -------------    ------------
                                                         21,394         468,095
                                                  -------------    ------------
Net income.......................................         7,637       1,470,826

Retained earnings at beginning of year...........     6,359,862       4,385,862

Cash dividends ($ .08 per share - 1998, 
     $ .06 per shares - 1997)....................      (269,419)       (188,482)
                                                  -------------    ------------

Retained earnings at end of period............... $   6,098,080    $  5,668,206
                                                  =============    ============
Weighted average number of 
     common shares outstanding:
  Basic..........................................     4,517,877       3,396,857
                                                  =============    ============
  Diluted........................................     4,671,127        n/a
                                                  =============    

Net income per common share:
  Basic..........................................         $ .00           $ .43
                                                          =====           =====
  Diluted........................................         $ .00            n/a
                                                          =====

                             See accompanying notes.

                                      - 5 -

<PAGE>



                          HOME-STAKE OIL & GAS COMPANY
                      CONDENSED STATEMENTS OF INCOME (LOSS)
                              AND RETAINED EARNINGS
                 Three months ended September 30, 1998 and 1997
                                   (Unaudited)



                                                      1998             1997
                                                      ----             ----

Revenues:
  Oil and gas sales.............................. $   2,358,282    $  1,498,282
  Gain on sales of assets........................        14,216          11,365
  Income from equity affiliates..................             -          62,402
  Other income...................................        87,760          77,876
                                                  -------------    ------------
                                                      2,460,258       1,648,925

Costs and expenses:
  Production.....................................       809,023         563,857
  Exploration....................................       421,571          97,789
  General and administrative.....................       484,916         293,331
  Depreciation, depletion and amortization.......       986,559         238,082
  Interest.......................................       124,895           1,627
  Property and other taxes.......................        95,294          25,272
                                                  -------------    ------------
                                                      2,922,258       1,219,958
                                                  -------------    ------------

Income (loss) before provision for income taxes..      (462,000)        428,967

Provision for (benefit from) income taxes:
  Current........................................       (37,815)         31,927
  Deferred.......................................       (88,118)         17,352
                                                  -------------    ------------
                                                       (125,933)         49,279
                                                  -------------    ------------
Net income (loss)................................      (336,067)        379,688

Retained earnings at beginning of period.........     6,522,871       5,351,346

Cash dividends ($ .02 per share).................       (88,724)        (62,828)
                                                  -------------    ------------

Retained earnings at end of period............... $   6,098,080    $  5,668,206
                                                  =============    ============
Weighted average number of 
     common shares outstanding:
  Basic..........................................     4,503,840       3,396,857
                                                  =============    ============
  Diluted........................................     4,659,090         n/a
                                                  =============

Net income (loss) per common share:
  Basic..........................................         $(.07)          $ .11
                                                          =====           =====
  Diluted........................................         $(.07)           n/a
                                                          =====
                             See accompanying notes.

                                      - 6 -

<PAGE>



                          HOME-STAKE OIL & GAS COMPANY
                       CONDENSED STATEMENTS OF CASH FLOWS
                  Nine months ended September 30, 1998 and 1997
                                   (Unaudited)



                                                      1998             1997
                                                      ----             ----
Operating activities:
  Oil and gas sales, net of production taxes..... $   7,451,190    $  5,054,696
  Other..........................................       247,188         238,698
                                                  -------------    ------------
                                                      7,698,378       5,293,394

  Cash paid to suppliers and employees...........     4,196,546       2,175,858
  Interest paid..................................       256,856          37,713
  Property and other taxes.......................       218,683         112,469
  Income taxes paid..............................       284,678         337,535
                                                  -------------    ------------
                                                      4,956,763       2,663,575
                                                  -------------    ------------
    Net cash provided by operating activities....     2,741,615       2,629,819


Investing activities:
  Proceeds from sales of property and equipment..       118,453         509,539
  Acquisition of property and equipment..........    (8,975,424)     (1,465,689)
  Dividends from equity affiliate................        -               45,506
                                                  -------------    ------------
    Net cash used in investing activities........    (8,856,971)       (910,644)


Financing activities:
  Loan proceeds..................................     6,600,000               -
  Note payments..................................      (660,000)     (1,366,035)
  Purchase of treasury stock.....................      (651,076)              -
  Cash dividends paid............................      (263,469)       (189,760)
                                                  -------------    ------------
    Net cash provided by (used in) 
     financing activities........................     5,025,455      (1,555,795)
                                                  -------------    ------------
Net increase (decrease) in cash 
     and cash equivalents........................    (1,089,901)        168,380

Cash and cash equivalents at beginning of year...     1,507,782         626,864
                                                  -------------    ------------
Cash and cash equivalents at end of period....... $     417,881    $    790,244
                                                  =============    ============

                             See accompanying notes.

                                      - 7 -

<PAGE>



                          HOME-STAKE OIL & GAS COMPANY
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

Description of business

Home-Stake Oil & Gas Company ("HSOG" or the "Company") is an independent oil and
gas producer actively engaged in the acquisition,  exploration,  development and
production of oil and gas  properties.  Oil and gas  exploration  and production
activities are subject to numerous risks inherent in the business. These include
the volatility of oil and gas prices,  environmental  concerns and  governmental
regulations,  general  business risks and hazards  involving the acquisition and
operation  of oil and gas  properties,  the  ability  to  continue  to find  new
reserves to replace those being  depleted and the highly  competitive  nature of
the business.  Its principal geographic operating areas lie within the states of
Oklahoma, Montana and Texas.

Note 1 - General

The unaudited financial  information provided in this report includes all normal
recurring  adjustments  which are, in the opinion of  management,  necessary  to
fairly present the financial  position,  results of operations and cash flows of
the Company.  Certain information and footnote  disclosures normally included in
financial  statements  prepared in accordance with generally accepted accounting
principles  have been  omitted  or  condensed.  The  Company  believes  that the
disclosures   herein  are  adequate  to  make  the  information   presented  not
misleading;  however,  these financial  statements should be read in conjunction
with the audited financial  statements and related notes thereto included in the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1997.

The results for interim periods are not  necessarily  indicative of trends or of
results to be expected for the full year.

Note 2 - Merger and pro forma financial information

On  March  31,  1998,  the  Company  purchased  certain  natural  gas  producing
properties from Sid R. Bass, Inc. et al (the "Bass  Properties")  for a purchase
price  of  approximately  $6.6  million,  subject  to  certain  adjustments  for
operations  subsequent  to January 1, 1998.  The third  quarter  1998  condensed
financial  statements include the 1998 operating results of the Bass Properties.
The following pro forma financial  information  reflects the combined historical
amounts  of the  Company  and the  Bass  Properties  as if the  acquisition  had
occurred on January 1, 1997:


                                                        Nine months ended
                                                        -----------------
                                                 Sept. 30, 1998  Sept. 30, 1997
                                                 --------------  --------------
Revenue........................................  $    7,945,732  $    5,296,717
Income (loss) before provision 
     for income taxes..........................          (5,907)        905,707
Net income (loss)..............................          (1,554)        758,936
Basic net income per share.....................            0.00            0.22


On December 31, 1997, The  Home-Stake  Royalty  Corporation  ("HSRC") was merged
with and into the Company.  This  transaction  was accounted for by the purchase
method of accounting for business combinations. The merged companies adopted the
name of HSOG,  which  was  deemed  to be the  purchased  entity  for  accounting
purposes since the former HSRC  stockholders  received  approximately 61% of the
merged entity's common stock. Accordingly, the condensed statement of income and
retained  earnings and statement of cash flows for the periods  ended  September
30, 1997, have been restated to reflect the historical  operations of HSRC prior
to the merger.  The balance  sheets at September 30, 1998 and December 31, 1997,
reflect the assets and liabilities of the merged entities. All references to the
number of shares and per share amounts  reflect the  historical  shares of HSRC,
adjusted for the 48.66 exchange ratio.

                                      - 8 -

<PAGE>



                          HOME-STAKE OIL & GAS COMPANY
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

Note 2 - Merger and pro forma financial information (continued)

Since the  merger of the  Company  and HSRC was  accounted  for by the  purchase
method of  accounting,  the  accompanying  1997 statement of income and retained
earnings does not include any revenues or expenses of the former HSOG. Following
is summarized pro forma 1997  information  for the nine months and quarter ended
September 30, 1997,  assuming the  acquisition  had occurred on January 1, 1997.
This pro forma information  reflects the combined historical amounts for the two
companies,  adjusted to eliminate  the income and  amortization  of each company
related  to its  ownership  in the other,  and the  increases  in  depreciation,
depletion  and  amortization  and income taxes  related to the merger.  Such pro
forma  information  is not intended to be  indicative  of the actual  results of
operations had the transaction occurred on the date indicated.



                                                      Nine            Three
                                                     Months           Months
                                                     Ended            Ended
                                                    Sept. 30,        Sept. 30,
                                                      1997             1997
                                                      ----             ----

Revenues:
  Oil and gas sales.............................. $  10,311,422 $     2,871,030
  Gain on sales of assets........................       222,149          22,733
  Other..........................................       443,317         140,992
                                                  -------------    ------------
                                                     10,976,888       3,034,755
Costs and expenses:
  Production.....................................     3,268,797       1,110,276
  Exploration....................................       894,558         167,511
  General and administrative.....................     1,666,174         589,401
  Depreciation, depletion and amortization.......     1,949,611         613,063
  Interest.......................................       232,878          50,874
  Property and other taxes.......................       208,297          49,897
                                                  -------------    ------------
                                                      8,220,315       2,581,022
                                                  -------------    ------------
Income before income tax.........................     2,756,573         453,733
Income tax expense...............................       955,331         157,248
                                                  -------------    ------------
Net income....................................... $   1,801,242    $    296,485
                                                  =============    ============

Weighted average number of shares outstanding....     4,517,363       4,517,363
                                                  =============    ============
Basic net income per share.......................         $ .40           $ .07
                                                          =====           =====

                                      - 9 -

<PAGE>



                          HOME-STAKE OIL & GAS COMPANY
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

Note 3 - Note payable

The note payable at September  30,  1998,  represents  the amounts due under the
Company's  financing agreement which is due May 1, 2000 and provides for monthly
maturities of $110,000, plus interest at bank prime less 1/2 %. In addition, the
Company has a line of credit in the amount of $5,000,000  available until May 1,
1999  which  provides  for  monthly  payments  of  interest  on the  outstanding
borrowings  at bank prime less 1%. In connection  with this line of credit,  the
Company  pays a  commitment  fee of one-half of one per cent (1/2%) per annum on
the unused portion of the line.

This note and the line of credit described above are  collateralized  by certain
of the Company's producing properties.

Note 4 - Stock options and net income per share

On February 12, 1998, the Board of Directors  granted qualified stock options in
varying amounts to all employees totaling 155,250 shares. Such options vest over
a 5-year period.  In addition,  there were  non-qualified  options issued to all
outside  directors in the aggregate  amount of 100,000 shares that are currently
exercisable.  The  options  have an  exercise  price of $4.50  per  share  which
approximated the fair value of the Company's stock at the date of grant.

In accordance with Statement of Financial Accounting Standards No. 128, "Earning
per  Share",  net income per common  share is computed  using two  calculations;
basic net income per share and  diluted  income per share.  Basic net income per
common share is  calculated  based on the weighted  average  shares  outstanding
during the period.  Diluted net income per common share is  calculated  based on
the weighted  average  shares  outstanding  including  stock  options  which are
dilutive.

Note 5 - Contingencies

The Company is involved in various legal actions arising in the normal course of
business. In the opinion of management,  the Company's  liabilities,  if any, in
these  matters  will not  have a  material  effect  on the  Company's  financial
position, results of operations or cash flows.



                                     - 10 -

<PAGE>



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

General

As further described in Note 2 to the unaudited condensed financial  statements,
on December 31, 1997, The  Home-Stake  Royalty  Corporation  ("HSRC") was merged
with and into the Company.  This  transaction  was accounted for by the purchase
method of accounting for business combinations,  with the merged entity adopting
the name of Home-Stake  Oil & Gas Company,  which was deemed to be the purchased
entity for accounting purposes.  Accordingly, the condensed statements of income
included  herein reflect the  historical  results of operations of HSRC for 1997
and the results of operations of the merged entities for 1998.

Results of  Operations  - First  nine  months of 1998  compared  with first nine
months of 1997

Net income for the nine months  ended  September 30  decreased  $1,463,189  from
$1,470,826 in 1997 to $7,637 in 1998.  The  principal  reasons for this decrease
are as follows:

Oil  sales  increased  $440,567  (14%) in 1998.  The  Company's  oil  production
increased from 167,067 barrels in 1997 to 286,651 barrels in 1998. This increase
is  partially  offset by a decrease  in the  average  oil price from  $19.06 per
barrel in 1997 to $12.65 per barrel in 1998. The increased  production volume is
primarily  attributable to the merger with HSRC, partially offset by the sale in
late 1997 of the Company's interest in the Countyline Unit.

Gas sales  increased  76%  ($1,627,596),  primarily due to the increase in sales
volumes.  Gas production  increased from 913,979 mcf in 1997 to 1,812,713 mcf in
1998, primarily as a result of the merger and the additional production provided
by the Bass  Properties  which were  purchased  March 31,  1998.  This  increase
however,  was partially  offset by lower average gas prices which decreased from
$2.33 in 1997 to $2.07 in 1998.

Income from  equity  affiliates  decreased  $333,541.  As  described  above,  on
December 31, 1997, HSRC was merged with and into HSOG. Consequently, there is no
comparable 1998 amount.

Production expenses increased  $832,190,  due primarily to the $702,747 increase
in  lease  operating  expenses  resulting  from  the  merger.  Production  taxes
increased $129,443 as a result of the higher product sales described above.

Exploration  costs increased $59,806 in 1998. Dry hole costs decreased $5,775 in
1998 due to a lower  incidence  of dry  holes.  This  decrease  was offset by an
increase  in  condemned  and  abandoned  property  expenses  of  $65,581 in 1998
resulting from the impairment of certain non-producing leases.

General and administrative expenses increased $945,382, from $833,264 in 1997 to
$1,778,646  in 1998.  The  primary  reason for this  increase  is the merger and
higher personnel costs.

Depreciation,  depletion and amortization increased $1,496,111. This increase is
directly  attributable  to the increase in property and equipment  following the
merger and the acquisition of the Bass Properties on March 31, 1998.

Interest  expense  increased  $219,143 in 1998. 1997 expense  included  interest
attributable to certain  outstanding  bank debt retired during the first quarter
of 1997. 1998 expense includes  interest on the March 31, 1998 bank loan wherein
the  Company  borrowed  $6.6  million  to  finance  the  purchase  of  the  Bass
Properties.

Results of Operations - Third quarter 1998 compared with third quarter 1997

Net income for the third quarter  decreased  $715,755 from $379,688 in 1997 to a
loss of  $336,067  in 1998.  The  principal  reasons  for this  decrease  are as
follows:

Oil sales increased $110,860 (12%). The Company's oil production  increased from
52,719  barrels in 1997 to 93,630  barrels in 1998.  This increase was partially
offset by a decrease  in the average oil price from $16.89 per barrel in 1997 to
$10.70  per  barrel  in 1998.  The  increased  production  volume  is  primarily
attributable to the merger with HSRC,  partially offset by the sale in late 1997
of the Company's interest in the Countyline Unit.

                                     - 11 -

<PAGE>



Gas sales  increased  117%  ($712,620),  primarily  due to the increase in sales
volumes.  Gas  production  increased  from 289,284 mcf in 1997 to 704,240 mcf in
1998, primarily as a result of the merger and the additional production provided
by the Bass  Properties  which were purchased  March 31, 1998. This increase was
partially  offset by lower average gas prices which decreased from $2.10 in 1997
to $1.87 in 1998.

Income from equity affiliates decreased $62,402. As described above, on December
31,  1997,  HSRC  was  merged  with  and into  HSOG.  Consequently,  there is no
comparable 1998 amount.

Production expenses increased  $245,166,  due primarily to the $183,396 increase
in  lease  operating  expenses  resulting  from  the  merger.  Production  taxes
increased $61,770 as a result of the higher product sales described above.

Exploration costs increased  $323,782 in 1998. Dry hole costs increased $264,107
in 1998 due to a higher  incidence  of dry holes.  In  addition,  condemned  and
abandoned  property expenses  increased $59,675 as a result of the impairment of
certain non-producing leases.

General and administrative expenses increased $191,585, from $289,331 in 1997 to
$484,916 in 1998.  The  primary  reason for this  increase  is the merger.  1998
expense also includes higher personnel costs.

Depreciation,  depletion and amortization  increased $748,477.  This increase is
directly  attributable  to the increase in property and equipment  following the
merger and the acquisition of the Bass Properties on March 31, 1998.

Interest expense  increased  $123,268 in 1998. In 1997 there were no outstanding
bank loans during the third quarter. 1998 expense includes interest on the March
31,  1998 bank loan  wherein the Company  borrowed  $6.6  million to finance the
purchase of the Bass Properties.

Financial Condition and Liquidity

The Company's operating activities have traditionally been self-financed through
internally  generated cash flows.  The principal use of cash flows has generally
been to fund the Company's  exploration  and  production  activities and for the
payment of dividends to  stockholders.  The use of borrowed  funds has generally
been limited to the acquisition of producing oil and gas properties where future
revenues from such purchases are expected to fund the debt.

The Company's capital budget for 1998,  excluding  acquisitions,  is $2 million.
During the first nine months of the year the Company had capital expenditures of
approximately  $8.7 million,  which  includes $6.5 million  associated  with the
acquisition  of the Bass  Properties.  In  addition,  the  Company  has  current
drilling  commitments for 1998 of approximately $.6 million and 1999 commitments
of  approximately  $250,000.  The Company is continuing to actively pursue other
opportunities for the acquisition of producing properties whenever possible.

At its August 1998 meeting,  the Company's  Board of Directors  approved a stock
repurchase  plan and authorized  the  acquisition of up to 300,000 shares of the
Company's  common  stock at  prevailing  market  prices in the open market or in
privately  negotiated  transactions.  During  the  third  quarter,  the  Company
acquired  112,140  shares of its common stock at a cost of $651,076 and in early
October  acquired an  additional  109,985  shares at a cost of  $549,925.  These
purchases  were funded from  available  cash and an advance  under the Company's
line-of-credit in the amount of $625,000, which was completed in early October.

Product  prices  have  remained  depressed  throughout  the year.  Despite  this
situation,  the Company  expects to finance its remaining  1998  operations  and
drilling through internally generated cash flows. In addition, the Company has a
$5 million line of credit  available until May 1, 1999. In October,  the Company
borrowed $625,000 under this line as described above.

If product prices remain at their current levels through the end of the year, it
is likely that the Company will be reducing the estimated  recoverable  reserves
on many of its properties since such estimates are based on economic  conditions
in existence in the period of assessment.  If such revisions occur, it will have
the effect of increasing the rates of amortization  on the affected  properties,
thereby  decreasing   earnings  through  higher   depreciation,   depletion  and

                                     - 12 -

<PAGE>



amortization expenses. In addition, they may be sufficient to trigger impairment
losses  on  certain  properties.  The  Company  will make  such  assessments  at
year-end, based on economic conditions at that time.

The Company has  substantially  completed  the internal  assessment of its "Year
2000"  problem.  There was no disruption  of  operations or business  activities
while  addressing  the situation  and the Company did not incur any  significant
expenses in this regard.  The Company is now  confirming  the  compliance of its
significant  third-parties  that affect the Company's  business and expects this
process to be completed in the first quarter of 1999. In  conjunction  with this
third-party  assessment,  the Company will  determine the need for a contingency
plan to deal with significant  non-compliance by such third-parties.  Due to the
nature of the Year 2000  problem,  however,  no assurance  can be given that all
issues have been or will be identified  and that all  third-parties  that affect
the Company's business will be Year 2000 compliant.

Forward-Looking Statements

Certain  statements  included in this report which are not historical  facts are
"forward-looking  statements",  including statements with respect to oil and gas
reserves,  the  number  and  anticipated  costs of wells to be  drilled,  future
capital expenditures (including the amount and nature thereof), anticipated date
of  repayment  of bank  debt  and  other  such  matters.  These  forward-looking
statements are based on current expectations, estimates, assumptions and beliefs
of  management;  and  words  such  as  "expects",   "believes",   "anticipates",
"intends",  "plans"  and similar  expressions  are  intended  to  identify  such
forward-looking  statements.  These forward-looking statements involve risks and
uncertainties, including, but not limited to: dependence upon the prices for oil
and natural gas which prices are subject to significant fluctuations in response
to  relatively  minor  changes in supply and  demand for such  products,  market
uncertainty, political conditions in oil producing regions, domestic and foreign
government  regulations,  the price and availability of alternative  fuels and a
variety  of  other  factors;  competition  in the  acquisition  of oil  and  gas
properties and the development, production and marketing of oil and natural gas;
operating  hazards  typically  associated  with  the  exploration,  development,
production and  transportation of oil and natural gas; federal,  state and local
laws relating to the exploration,  development,  production and marketing of oil
and natural gas, including environmental and safety matters; changes in laws and
regulations;  and other  factors,  most of which are beyond  the  control of the
Company. Accordingly, actual results and developments may differ materially from
those  expressed  in the  forward-looking  statements.  The  Company  assumes no
obligation  to update  publicly  any  forward-looking  statements,  whether as a
result of new information, future events or otherwise.


                                     - 13 -

<PAGE>



                           Part II. Other Information

Item 1.    Legal Proceedings.

           None.

Item 2.    Changes in Securities and Use of Proceeds.

           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.

           (a)  Exhibits.

           The following documents are included as exhibits to this Form 10-QSB.

           Exhibit
           Number    Description

               27    Financial Data Schedule.

           (b) Reports on Form 8-K.

                 None.

                                     - 14 -

<PAGE>


                                   Signatures



In accordance with the requirements of the Exchange Act , the Registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                                            Home-Stake Oil & Gas Company
                                                (Registrant)


Date:  November 16, 1998                    By:    /s/  Robert C. Simpson
                                                 ------------------------------
                                                 Robert C. Simpson
                                                 Chairman of the Board, C.E.O.
                                                 and President


Date:  November 16, 1998                    By:    /s/  Chris K. Corcoran
                                                 ------------------------------
                                                 Chris K. Corcoran
                                                 Executive Vice President,
                                                 Chief Financial Officer and
                                                 Corporate Secretary

                                     - 15 -

<PAGE>