<PAGE>
 
                                                                    EXHIBIT 25.1

                       SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON,  D. C.  20549
                           __________________________

                                   FORM  T-1

                            STATEMENT OF ELIGIBILITY
                    UNDER THE TRUST INDENTURE ACT OF 1939 OF
                   A CORPORATION DESIGNATED TO ACT AS TRUSTEE
                           __________________________

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                           SECTION  305(b)(2) _______
                           __________________________

                    UNITED STATES TRUST COMPANY OF NEW YORK
              (Exact name of trustee as specified in its charter)

          New York                                  13-3818954
(Jurisdiction of incorporation                  (I. R. S. Employer
 if not a U. S. national bank)                  Identification No.)

     114 West 47th Street                           10036-1532
      New York,  New York                           (Zip Code)
     (Address of principal
       executive offices)

                           __________________________
                          Kelley Oil & Gas Corporation
              (Exact name of OBLIGOR as specified in its charter)

          Delaware                                   76-0447267
(State or other jurisdiction of                  (I. R. S. Employer
 incorporation or organization)                  Identification No.)


                           __________________________
                             Kelley Oil Corporation
              (Exact name of OBLIGOR as specified in its charter)

         Delaware                                    76-0082502
(State or other jurisdiction of                  (I. R. S. Employer
 incorporation or organization)                  Identification No.)
<PAGE>
 
                                      -2-


                           __________________________
                         Kelley Operating Company, Ltd.
              (Exact name of OBLIGOR as specified in its charter)

             Delaware                                 76-0156485
 (State or other jurisdiction of                  (I. R. S. Employer
  incorporation or organization)                  Identification No.)

     601 Jefferson, Suite 1100                          77002
          Houston, Texas                             (Zip code)
(Address of principal executive offices)


                           __________________________
              10-3/8% Senior Subordinated Notes due 2006, Series B
                      (Title of the indenture securities)



=========================================================================

<PAGE>
 
                                      -3-


                                    GENERAL


1. GENERAL INFORMATION
   -------------------

   Furnish the following information as to the trustee:

   (a)  Name and address of each examining or supervising authority to which it
        is subject.

        Federal Reserve Bank of New York (2nd District), New York, New York
           (Board of Governors of the Federal Reserve System)
        Federal Deposit Insurance Corporation, Washington, D.C.
        New York State Banking Department, Albany, New York

   (b)  Whether it is authorized to exercise corporate trust powers.

        The trustee is authorized to exercise corporate trust powers.

2. AFFILIATIONS WITH THE OBLIGOR
   -----------------------------

   If the obligor is an affiliate of the trustee, describe each such
affiliation.

        None

3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15:

   Kelley Oil & Gas Corporation, Kelley Oil Corporation and Kelley Operating
   Company, Ltd. currently is not in default under any of its outstanding
   securities for which United States Trust Company of New York is Trustee.
   Accordingly, responses to Items 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and
   15 of Form T-1 are not required under General Instruction B.


16. LIST OF EXHIBITS
    ----------------

    T-1.1   --   Organization Certificate, as amended, issued by the State of 
                 New York Banking Department to transact business as a Trust
                 Company, is incorporated by reference to Exhibit T-1.1 to Form
                 T-1 filed on September 15, 1995 with the Commission pursuant to
                 the Trust Indenture Act of 1939, as amended by the Trust
                 Indenture Reform Act of 1990 (Registration No. 33-97056).

    T-1.2   --   Included in Exhibit T-1.1.

    T-1.3   --   Included in Exhibit T-1.1.
<PAGE>
 
                                      -4-


16. LIST OF EXHIBITS
    ----------------
    (cont'd)

    T-1.4   --   The By-Laws of United States Trust Company of New York, as
                 amended, is incorporated by reference to Exhibit T-1.4 to Form
                 T-1 filed on September 15, 1995 with the Commission pursuant to
                 the Trust Indenture Act of 1939, as amended by the Trust
                 Indenture Reform Act of 1990 (Registration No. 33-97056).

    T-1.6   --   The consent of the trustee required by Section 321(b) of the
                 Trust Indenture Act of 1939, as amended by the Trust Indenture
                 Reform Act of 1990.

    T-1.7   --   A copy of the latest report of condition of the trustee
                 pursuant to law or the requirements of its supervising or
                 examining authority.

NOTE
====

As of December 16, 1996, the trustee had 2,999,020 shares of Common Stock
outstanding, all of which are owned by its parent company, U.S. Trust
Corporation.  The term "trustee" in Item 2, refers to each of United States
Trust Company of New York and its parent company, U. S. Trust Corporation.

In answering Item 2 in this statement of eligibility as to matters peculiarly
within the knowledge of the obligor or its directors, the trustee has relied
upon information furnished to it by the obligor and will rely on information to
be furnished by the obligor and the trustee disclaims responsibility for the
accuracy or completeness of such information.

                               __________________

Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee,
United States Trust Company of New York, a corporation organized and existing
under the laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of New York, and State of New York, on the 17th day
of December, 1996.

UNITED STATES TRUST COMPANY
  OF NEW YORK, Trustee

By:  /s/ JAMES E. LOGAN
   -----------------------
  James E. Logan
  Vice President
<PAGE>
 
                                                                   EXHIBIT T-1.6
                                                                   -------------

       The consent of the trustee required by Section 321(b) of the Act.

                    United States Trust Company of New York
                              114 West 47th Street
                              New York, NY  10036


September 1, 1995



Securities and Exchange Commission
450 5th Street, N.W.
Washington, DC  20549

Gentlemen:

Pursuant to the provisions of Section 321(b) of the Trust Indenture Act of 1939,
as amended by the Trust Indenture Reform Act of 1990, and subject to the
limitations set forth therein, United States Trust Company of New York ("U.S.
Trust") hereby consents that reports of examinations of U.S. Trust by Federal,
State, Territorial or District authorities may be furnished by such authorities
to the Securities and Exchange Commission upon request therefor.



Very truly yours,


UNITED STATES TRUST COMPANY
  OF NEW YORK


 
By: /s/ GERARD F. GANEY
   -----------------------
   Gerard F. Ganey
   Senior Vice President
<PAGE>
 
                                                                   EXHIBIT T-1.7

                    UNITED STATES TRUST COMPANY OF NEW YORK
                      CONSOLIDATED STATEMENT OF CONDITION
                               SEPTEMBER 30, 1996
                               ------------------
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
 
ASSETS
------
<S>                                         <C>
Cash and Due from Banks                      $   38,257
 
Short-Term Investments                           82,377
 
Securities, Available for Sale                  861,975
 
Loans                                         1,404,930
Less:  Allowance for Credit Losses               13,048
                                             ----------
     Net Loans                                1,391,882
Premises and Equipment                           60,012
Other Assets                                    133,673
                                             ----------
     TOTAL ASSETS                            $2,568,176
                                             ==========
 
LIABILITIES
-----------
Deposits:
     Non-Interest Bearing                    $  466,849
     Interest Bearing                         1,433,894
                                             ----------
         Total Deposits                       1,900,743
 
Short-Term Credit Facilities                    369,045
Accounts Payable and Accrued Liabilities        143,604
                                             ----------
     TOTAL LIABILITIES                       $2,413,392
                                             ==========
 
STOCKHOLDER'S EQUITY
--------------------
Common Stock                                     14,995
Capital Surplus                                  42,394
Retained Earnings                                98,402
Unrealized Gains (Losses) on Securities
     Available for Sale, Net of Taxes            (1,007)
                                             ----------
TOTAL STOCKHOLDER'S EQUITY                      154,784
                                             ----------
    TOTAL LIABILITIES AND
     STOCKHOLDER'S EQUITY                    $2,568,176
                                             ==========
</TABLE>

I, Richard E. Brinkmann, Senior Vice President & Comptroller of the named bank
do hereby declare that this Statement of Condition has been prepared in
conformance with the instructions issued by the appropriate regulatory authority
and is true to the best of my knowledge and belief.

Richard E. Brinkman, SVP & Controller

October 24, 1996