United States
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB


              [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 1997

                                       OR

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

         For the transition period from...............to...............

                         Commission file number 0-16551

               ENEX OIL & GAS INCOME PROGRAM III - SERIES 3, L.P.
        (Exact name of small business issuer as specified in its charter)

            New Jersey                                   76-0179823
  (State or other jurisdiction of                     (I.R.S. Employer
  incorporation or organization)                     Identification No.)

                         Suite 200, Three Kingwood Place
                              Kingwood, Texas 77339
                    (Address of principal executive offices)

                    Issuer's telephone number (713) 358-8401


         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act 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




<PAGE>
                              PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ENEX OIL & GAS INCOME PROGRAM III - SERIES 3, L.P.
BALANCE SHEET
---------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                 MARCH 31,
ASSETS                                                             1997
                                                             --------------
                                                               (Unaudited)
CURRENT ASSETS:
<S>                                                          <C>          
  Cash                                                       $      34,382
  Accounts receivable - oil & gas sales                             34,333
  Other current assets                                               1,566
                                                             --------------

Total current assets                                                70,281
                                                             --------------

OIL & GAS PROPERTIES
  (Successful efforts accounting method) - Proved
   mineral interests and related equipment & facilities          2,649,994
  Less  accumulated depreciation and depletion                   2,159,326
                                                             --------------

Property, net                                                      490,668
                                                             --------------

TOTAL                                                        $     560,949
                                                             ==============

LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
   Accounts payable                                          $      21,454
   Payable to general partner                                       79,456
                                                             --------------

Total current liabilities                                          100,910
                                                             --------------

PARTNERS' CAPITAL:
   Limited partners                                                416,929
   General partner                                                  43,110
                                                             --------------

Total partners' capital                                            460,039
                                                             --------------

TOTAL                                                        $     560,949
                                                             ==============

Number of $500 Limited Partner units outstanding                     6,410
</TABLE>


See accompanying notes to financial statements.
---------------------------------------------------------------------------

                                       I-1
<PAGE>
ENEX OIL & GAS INCOME PROGRAM III - SERIES 3, L.P.
STATEMENTS OF OPERATIONS
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
 
(UNAUDITED)                             THREE MONTHS ENDED
                                   ------------------------------
                                    MARCH 31,        MARCH 31,
                                     1997             1996
                                   ------------    -------------
REVENUES:
<S>                                <C>               <C>          
  Oil and gas sales                $    87,358       $   89,912   
                                   ------------    -------------

EXPENSES:
  Depreciation and depletion            18,324           25,500
  Lease operating expenses              26,262           18,420
  Production taxes                       4,595            4,820
  General and administrative             6,726           10,506
                                   ------------    -------------

Total expenses                          55,907           59,246
                                   ------------    -------------

NET INCOME                         $    31,451       $   30,666   
                                   ============    =============
</TABLE>


See accompanying notes to financial statements.
------------------------------------------------------------------------
                                       I-2

<PAGE>
ENEX OIL & GAS INCOME PROGRAM III - SERIES 3, L.P.

STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 1996 AND
FOR THE THREE MONTHS ENDED MARCH 31, 1997
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                                  PER $500
                                                                                                   LIMITED
                                                                                                   PARTNER
                                                         GENERAL              LIMITED             UNIT OUT-
                                     TOTAL               PARTNER             PARTNERS             STANDING
                              ------------------   ------------------   ------------------   ------------------

<S>              <C>          <C>                  <C>                  <C>                  <C>              
BALANCE, JANUARY 1, 1996      $         423,038    $          32,156    $         390,882    $              61

CASH DISTRIBUTIONS                     (111,533)             (13,586)             (97,947)                 (15)

NET INCOME                              148,687               22,722              125,965                   19
                              ------------------   ------------------   ------------------   ------------------

BALANCE, DECEMBER 31, 1996              460,192               41,292              418,900                   65

CASH DISTRIBUTIONS                      (31,604)              (3,159)             (28,445)                  (4)

NET INCOME                               31,451                4,977               26,474                    4
                              ------------------   ------------------   ------------------   ------------------

BALANCE, MARCH 31, 1997       $         460,039    $          43,110    $         416,929 (1)$              65
                              ==================   ==================   ==================   ==================
</TABLE>


(1)  Includes 1,315 units purchased by the general partner as a limited partner.


See accompanying notes to financial statements.
------------------------------------------------------------------------------

                                       I-3

<PAGE>
ENEX OIL AND GAS INCOME PROGRAM III - SERIES 3, L.P.
STATEMENTS OF CASH FLOWS
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
                                                            THREE MONTHS ENDED
                                                       ------------------------------------------

                                                          MARCH 31,                MARCH 31,
                                                             1997                    1996
                                                     -------------------      -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                  <C>                          <C>              
Net income                                           $           31,451           $       30,666   
                                                     -------------------      -------------------

Adjustments to reconcile net income to net cash
   provided by operating activities:
  Depreciation and depletion                                     18,324                   25,500
(Increase) decrease in:
  Accounts receivable - oil & gas sales                           6,563                  (13,798)
  Other current assets                                              (35)                   3,352
Increase (decrease) in:
   Accounts payable                                               2,901                  (10,588)
   Payable to general partner                                   (15,918)                  (7,744)
                                                     -------------------      -------------------

Total adjustments                                                11,835                   (3,278)
                                                     -------------------      -------------------

Net cash provided by operating activities                        43,286                   27,388
                                                     -------------------      -------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Property additions - development costs                       (2,821)                  (7,398)
                                                     -------------------      -------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Cash distributions                                           (31,604)                 (16,213)
                                                     -------------------      -------------------

NET INCREASE IN CASH                                              8,861                    3,777

CASH AT BEGINNING OF YEAR                                        25,521                   13,506
                                                     -------------------      -------------------

CASH AT END OF PERIOD                                $           34,382          $         17,283  
                                                     ===================      ===================

</TABLE>


See accompanying notes to financial statements.
-----------------------------------------------------------------------------
                                       I-4

<PAGE>


ENEX OIL & GAS INCOME PROGRAM III - SERIES 3, L.P.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

1.       The  interim  financial   information  included  herein  is  unaudited;
         however,  such information reflects all adjustments  (consisting solely
         of  normal  recurring   adjustments)  which  are,  in  the  opinion  of
         management,  necessary  for a fair  presentation  of  results  for  the
         interim periods.

2.       A cash  distribution was made to the limited partners of the Company in
         the amount of $28,445,  representing  net revenues from the sale of oil
         and  gas  produced  from   properties   owned  by  the  Company.   This
         distribution was made on January 31, 1997.

3.       On April 7, 1997, the Company's  General  Partner mailed proxy material
         to the limited partners with respect to a proposed consolidation of the
         Company  with 33 other  managed  limited  partnerships.  The  terms and
         conditions  of the proposed  consolidation  are set forth in such proxy
         material.



                                       I-5

<PAGE>



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

First Quarter 1997 Compared to First Quarter 1996

Oil and gas  sales for the  first  quarter  decreased  from  $89,912  in 1996 to
$87,358 in 1997.  This represents a decrease of $2,554 (3%). Oil sales decreased
$548 or 1%. A 14%  decline in oil  production  reduced  sales by  $10,454.  This
decrease was partially  offset by a 15% increase in the average oil sales price.
Gas sales  decreased by $2,006 or 15%. A 38% decline in gas  production  reduced
sales by $5,053.  This  decrease was  partially  offset by a 37% increase in the
average gas sales price. The decrease in oil production was primarily the result
of natural production declines. The decrease in gas production was primarily the
result of the  shut-in of  production  from the Concord  acquisition  to perform
workovers in the first quarter of 1997. The changes in average prices correspond
with changes in the overall market for the sale of oil and gas.

Lease operating  expenses increased from $18,420 in the first quarter of 1996 to
$26,262 in the first quarter of 1997.  The increase of $7,842 (43%) is primarily
due to workover costs incurred on the Concord acquisition in 1997.

Depreciation and depletion  expense  decreased from $25,500 in the first quarter
of 1996 to $18,324 in the first quarter of 1997.  This  represents a decrease of
$7,176 (28%).  An 11% decrease in the depletion  rate reduced  depreciation  and
depletion  expense by $2,368.  The changes in production,  noted above,  reduced
depreciation and depletion expense by an additional  $4,808. The decrease in the
depletion  rate was primarily the result of upward  revisions of the oil and gas
reserves during December 1996.

General and administrative  expenses decreased from $10,506 in 1996 to $6,726 in
1997.  This  decrease of $3,780 (36%) is primarily  due to less staff time being
required to manage the Company's operations.

On April 7, 1997,  the Company's  General  Partner  mailed proxy material to the
limited partners with respect to a proposed consolidation of the Company with 33
other managed  limited  partnerships.  The terms and  conditions of the proposed
consolidation are set forth in such proxy material.

CAPITAL RESOURCES AND LIQUIDITY

The Company's cash flow from  operations is a direct result of the amount of net
proceeds  realized  from the sale of oil and gas  production.  Accordingly,  the
changes in cash flow from 1996 to 1997 are  primarily  due to the changes in oil
and  gas  sales  described  above.  It is the  general  partner's  intention  to
distribute  substantially  all of  the  Company's  available  cash  flow  to the
Company's partners.  The Company's "available cash flow" is essentially equal to
the net amount of cash provided by operating  provided by  operating,  financing
and investing activities.


                                       I-6

<PAGE>



The Company will continue to recover its reserves and  distribute to the limited
partners the net proceeds realized from the sale of oil and gas production after
the payment of its debt obligations.  Distribution amounts are subject to change
if net  revenues  are greater or less than  expected.  Nonetheless,  the general
partner  believes the Company will continue to have sufficient cash flow to fund
operations and to maintain a regular pattern of distributions.

As of March 31,  1997,  the  Company  had no  material  commitments  for capital
expenditures.  The  Company  does  not  intend  to  engage  in  any  significant
developmental drilling activity.

                                       I-7

<PAGE>




                           PART II. OTHER INFORMATION

         Item 1.   Legal proceedings.

                   None

         Item 2.   Changes in Securities.

                   None

         Item 3.   Defaults upon Senior Securities.

                   Not Applicable

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

                   Not Applicable

         Item 5.   Other Information.

                   Not Applicable

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

                   (a)  There are no exhibits to this report.

                   (b)  The  Company  filed no  reports  on Form 8-K  during the
                        quarter ended March 31, 1997.


                                      II-1

<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 hereunto duly authorized.


                                                    ENEX OIL & GAS INCOME
                                                     PROGRAM III - 3, L.P.
                                                     ----------------------
                                                          (Registrant)



                                                  By:ENEX RESOURCES CORPORATION
                                                     --------------------------
                                                         General Partner



                                                  By: /s/ R. E. Densford
                                                      ------------------
                                                          R. E. Densford
                                                    Vice President, Secretary
                                                  Treasurer and Chief Financial
                                                             Officer




May 11, 1997                                      By: /s/ James A. Klein
                                                     -------------------
                                                          James A. Klein
                                                       Controller and Chief
                                                        Accounting Officer