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 0-16552

               ENEX OIL & GAS INCOME PROGRAM III - SERIES 4, L.P.
        (Exact name of small business issuer as specified in its charter)

              New Jersey                                76-0179822
    (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 4, L.P.
BALANCE SHEET
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                MARCH 31,
ASSETS                                                             1997
                                                          ---------------------
                                                               (Unaudited)
CURRENT ASSETS:
<S>                                                       <C>                 
  Cash                                                    $             24,877
  Accounts receivable - oil & gas sales                                 28,799
  Other current assets                                                   6,036
                                                          ---------------------

Total current assets                                                    59,712
                                                          ---------------------

OIL & GAS PROPERTIES
  (Successful efforts accounting method) - Proved
   mineral interests and related equipment & facilities              1,700,584
  Less  accumulated depreciation and depletion                       1,353,913
                                                          ---------------------

Property, net                                                          346,671
                                                          ---------------------

TOTAL                                                     $            406,383
                                                          =====================

LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
   Accounts payable                                       $             23,947
   Payable to general partner                                          131,431
                                                          ---------------------

Total current liabilities                                              155,378
                                                          ---------------------

PARTNERS' CAPITAL:
   Limited partners                                                    231,792
   General partner                                                      19,213
                                                          ---------------------

Total partners' capital                                                251,005
                                                          ---------------------

TOTAL                                                     $            406,383
                                                          =====================


Number of $500 Limited Partner units outstanding                         5,410
</TABLE>



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

                                       I-1

<PAGE>
ENEX OIL & GAS INCOME PROGRAM III - SERIES 4, 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              $           61,651         $       33,163    
                                 -------------------    -------------------

EXPENSES:
  Depreciation and depletion                  7,532                  3,737
  Impairment of property                          -                 88,363
  Lease operating expenses                   23,244                 22,454
  Production taxes                            3,199                  2,229
  General and administrative                  4,737                  7,068
                                 -------------------    -------------------

Total expenses                               38,712                123,851
                                 -------------------    -------------------

NET INCOME (LOSS)                $           22,939        $       (90,688)   
                                 ===================    ===================
</TABLE>



See accompanying notes to financial statements.
------------------------------------------------------------------------------
                                       I-2
<PAGE>

ENEX OIL & GAS INCOME PROGRAM III - SERIES 4, 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      $        287,919     $          11,336    $         276,583    $              51

NET INCOME                             (59,853)                4,830              (64,683)                 (12)
                              -----------------    ------------------   ------------------   ------------------

BALANCE, DECEMBER 31, 1996             228,066                16,166              211,900                   39

NET INCOME                              22,939                 3,047               19,892                    4
                              -----------------    ------------------   ------------------   ------------------

BALANCE, MARCH 31, 1997       $        251,005     $          19,213    $         231,792 (1)$              43
                              =================    ==================   ==================   ==================
</TABLE>


(1)  Includes 1,003 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 4, 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 (loss)                                          $           22,939         $        (90,688) 
                                                           -------------------      -------------------

Adjustments to reconcile net income (loss) to net cash
   provided by operating activities:
  Depreciation and depletion                                            7,532                    3,737
  Impairment of property                                                    -                   88,363
(Increase) decrease in:
  Accounts receivable - oil & gas sales                                   301                   (7,588)
  Other current assets                                                 (1,692)                      (4)
Increase (decrease) in:
   Accounts payable                                                     4,784                      214
   Payable to general partner                                         (16,797)                   6,301
                                                           -------------------      -------------------

Total adjustments                                                      (5,872)                  91,023
                                                           -------------------      -------------------

Net cash provided by operating activities                              17,067                      335
                                                           -------------------      -------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Property additions - development costs                               (345)                    (550)
                                                           -------------------      -------------------

NET  INCREASE (DECREASE) IN CASH                                       16,722                     (215)

CASH AT BEGINNING OF YEAR                                               8,155                      215
                                                           -------------------      -------------------

CASH AT END OF PERIOD                                      $           24,877         $              -  
                                                           ===================      ===================

</TABLE>


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

                                       I-4

<PAGE>



ENEX OIL & GAS INCOME PROGRAM III - SERIES 4, 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.   The Financial  Accounting Standards Board has issued Statement of Financial
     Accounting  Standard  ("SFAS") No. 121,  "Accounting  for the Impairment of
     Long-Lived  Assets  and for  Long-Lived  Assets to be  Disposed  Of," which
     requires  certain  to  be  reviewed  for  impairment   whenever  events  or
     circumstances indicate the carrying amount may not be recoverable. Prior to
     this pronouncement,  the Company assessed properties on an aggregate basis.
     Upon  adoption of SFAS 121, the Company  began  assessing  properties on an
     individual  basis,  wherein  total  capitalized  costs may not  exceed  the
     property's  fair market  value.  The fair market value of each property was
     determined by H. J. Gruy and  Associates,  ("Gruy").  To determine the fair
     market value, Gruy estimated each property's oil and gas reserves,  applied
     certain  assumptions  regarding price and cost  escalations,  applied a 10%
     discount factor for time and certain discount  factors for risk,  location,
     type   of   ownership   interest,   category   of   reserves,   operational
     characteristics,  and other  factors.  In the first  quarter  of 1996,  the
     Company recognized a non-cash  impairment  provision of $88,363 for certain
     oil and gas properties due to changes in the overall market for the sale of
     oil and gas and  significant  decreases in the  projected  production  from
     certain of the Company's oil and gas properties.

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  increased  from  $33,163  in 1996 to
$61,651  in 1997.  This  represents  an  increase  of $28,488  (86%).  Oil sales
increased  $16,198 or 69%. A 77% increase in average oil prices  increased sales
by  $17,325.  This  increase  was  partially  offset  by a  5%  decline  in  oil
production.  Gas sales  increased  by $12,290 or 129%.  A 461%  increase  in gas
production  increased sales by $44,114.  This increase was partially offset by a
59% decrease in average gas sales  prices.  The decrease in oil  production  was
primarily  the result of natural  production  declines.  The higher  average oil
price was a result of a relatively  higher  production  of oil from wells with a
relatively  higher sales price coupled with higher prices in the overall  market
for the sale of oil. The higher gas  production  was primarily the result of the
shut-in of wells in the Pecan Island  acquisition  in the first quarter of 1996.
The lower  average  gas price was a result of a  relatively  higher net  profits
payout on the Shana acquisition coupled with higher prices in the overall market
for the sale of gas.

Lease operating  expenses increased from $22,454 in 1996 to $23,244 in 1997. The
increase  of $790 (4%) is  primarily  due to the  changes in  production,  noted
above,  partially  offset  by lower  operating  expenses  incurred  on the Shana
acquisition in 1997.

Depreciation and depletion expense increased from $3,737 in the first quarter of
1996 to $7,532 in the first  quarter of 1997.  This  represents  an  increase of
$3,795.  The  changes  in  production,  noted  above,  caused  depreciation  and
depreciation expense to increase by $1,584. A 42% increase in the depletion rate
increased  depreciation  and  depletion  expense by an  additional  $2,211.  The
increase  in the  depletion  rate was  primarily  due to the  relatively  higher
production  from the Pecan  Island  acquisition  which has a  relatively  higher
depletion  rate,  partially  offset  by an  upward  revision  of the oil and gas
reserves during December 1996.

The  Financial  Accounting  Standards  Board has issued  Statement  of Financial
Accounting  Standard  ("SFAS")  No.  121,  "Accounting  for  the  Impairment  of
Long-Lived  Assets and for Long-Lived  Assets to be Disposed Of," which requires
certain to be reviewed for impairment whenever events or circumstances  indicate
the carrying amount may not be  recoverable.  Prior to this  pronouncement,  the
Company assessed  properties on an aggregate  basis.  Upon adoption of SFAS 121,
the Company began  assessing  properties on an individual  basis,  wherein total
capitalized  costs may not exceed the  property's  fair market  value.  The fair
market  value of each  property  was  determined  by H. J. Gruy and  Associates,
("Gruy"). To determine the fair market value, Gruy estimated each property's oil
and  gas  reserves,   applied  certain  assumptions  regarding  price  and  cost
escalations, applied a 10% discount factor for time and certain discount factors
for  risk,  location,   type  of  ownership  interest,   category  of  reserves,
operational  characteristics,  and other factors.  In the first quarter of 1996,
the Company  recognized a non-cash  impairment  provision of $88,363 for certain
oil and gas  properties due to changes in the overall market for the sale of oil
and gas and  significant  decreases in the projected  production from certain of
the Company's oil and gas properties.

General and  administrative  expenses decreased from $7,068 in 1996 to $4,737 in
1997.  This  decrease of $2,331 (33%) 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.



                                       I-6

<PAGE>



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  discontinued  the payment of  distributions  during  1995.  Future
distributions  are dependent  upon,  among other  things,  an increase in prices
received for oil and gas. The Company will  continue to recover its reserves and
distribute  to the limited  partners the net proceeds  realized form the sale of
oil and gas  production.  Distribution  amounts  are  subject  to  change if net
revenues  are  greater or less than  expected.  Based on the  December  31, 1995
reserve  report  prepared by Gruy,  there  appears to be  sufficient  future net
revenues to pay all  obligations  and  expenses.  The Company does not intend to
purchase additional properties or fund extensive development of existing oil and
gas properties,  and as such; has no long-term  liquidity  needs.  The Company's
projected cash flows from operations will provide  sufficient funding to pay its
operating expenses and debt obligations.  The general partner does not intend to
accelerate the repayment of the debt beyond the cash flow provided by operating,
financing and investing activities. Based upon current projected cash flows from
its property,  it does not appear that the Company will have  sufficient cash to
pay distributions and pay its operating expenses, and meet its debt obligations.
Future  periodic  distributions  will be made once  sufficient  net revenues are
accumulated.

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 - 4, 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