SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                     ANNUAL REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1998       Commission File Number 0-21609

                           CHASE PACKAGING CORPORATION
             (Exact name of registrant as specified in its charter)

             Texas                                       93-1216127
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

c/o Ann W. Green
26 Broadway,
8th Floor
New York, NY                                               10004
(Address of principal executive offices)                 (Zip Code)

     Registrant's telephone number, including area code: 212-510-0686
     Securities registered pursuant to Section 12 (b) of the Act: None
Securities  registered pursuant to Section 12(g) of the Act:  Common Stock, $.10
                                                              ------------------
par value  (Title of Class)
---------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  12  months  (or  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
                                            ---    ---

Indicate  by  check mark if disclosure of delinquent filers pursuant to Item 405
of  Regulation  S-B  is  not contained herein, and will not be contained, to the
best  of  registrants'  knowledge,  in definitive proxy or information statement
incorporated  by  reference  in Part III of this Form 10-KSB or any amendment to
this  Form  10-KSB.  [ ]

Issuers  revenues  for  the  most  recent  fiscal  year  -  $ N/A
                                                            ------
The  aggregate  market  value  of  voting  stock  held  by non-affiliates of the
registrant  as  of  December  31,  1998  was
$  N/A
------

Indicate  by  check  mark  whether  the  registrant  has filed all documents and
reports  required by Sections 12, 13, or 15(d) of the Securities Exchange Act of
1934  subsequent  to  the distribution of securities under a plan confirmed by a
court.  Yes  X   N
            ---    ---

As  of  December  31,  1998,  the registrant had outstanding 7,002,964 shares of
Common  Stock  ($.10 par value)


<PAGE>
                                     PART I


ITEM 1. BUSINESS.

Chase  Packaging  Corporation ("Chase" or the "Company"), is a Texas corporation
which  was  engaged in the specialty packaging business, primarily as a supplier
of  packaging  products  to the agricultural industry.  During 1997, the Company
commenced  an  orderly  liquidation  of  its  assets  as  described  below.

HISTORY

Chase Packaging Corporation (the "Company") was established in July of 1993 as a
wholly owned subsidiary of TGC Industries, Inc. ("TGC") of Plano, Texas. On July
30, 1993, the Company purchased certain assets of Union Camp Corporation's Chase
Packaging  division  ("Chase  Bag"), for a purchase price of approximately $6.14
million.  The  assets  purchased  included  substantially all of the business of
weaving  and  constructing Saxolin (R) paper mesh and polypropylene plastic mesh
bagging  material for agricultural and industrial applications and substantially
all  of  the  properties  related to Chase Bag. The properties acquired by Chase
consisted  of  Union  Camp's  plant  facilities located in Portland, Oregon, and
Idaho Falls, Idaho, and all machinery, equipment, and inventories connected with
these  facilities.

The Company has experienced losses for the past years, and the Company's secured
lender  decided  not  to  renew  the  Company's  operating  line of credit.  The
Company's  Board  of  Directors  therefore  determined  that  it was in the best
interest  of  the  Company  and  all of its creditors to liquidate in an orderly
fashion.

Effective  July 21, 1997, the Company sold its operations at Idaho Falls, Idaho,
to  Lockwood  Packing  Corporation ("Lockwood"), as a going concern.  The assets
sold included substantially all of the Company's equipment, furniture, fixtures,
and  other  assets  located  in  the  Idaho Falls, Idaho facility for a total of
$75,000.  In addition, the Company sold inventory from the Idaho Falls operation
to Lockwood for $255,000.  The total proceeds of $330,000.00 were deposited with
the  Company's  bank  to  pay  down  the  Company's  loan balance with the bank.

On  July  25,  1997, the Company notified its creditors by mail that the Company
would  begin  an orderly liquidation of all of its remaining assets outside of a
formal  bankruptcy  or  receivership proceeding in a manner intended to maximize
the  asset  values.  The  Company  retained the firm of Edward Hostmann, Inc. to
assist  the  Company  in  such  liquidation.


ITEM 2.  DESCRIPTION OF PROPERTY.

None.


ITEM 3.  LEGAL PROCEEDINGS.

The Company is a defendant in various legal actions that arose out of the normal
course  of  business.  In  the  opinion  of Management, none of the actions will
result  in  any  significant  loss  to  the  Company.


                                        2
<PAGE>
ITEM 4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS.

No matters were submitted by the Company during the fourth quarter of the fiscal
year  ended  December  31,  1998  to  a  vote of the Company's security holders,
through  the  solicitation  of  proxies  or  otherwise.


                                     PART II

ITEM 5.  MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER  MATTERS.

The  Company's  Common  Stock  was eligible to commence trading under the symbol
"CPKA" on March 10, 1997 and the first trade occurred on March 10, 1997, at $.04
per share.  The number of shareholders of record as of December 31, 1998 was not
known.  As  a  result  of  the  events  detailed above, trading in the Company's
equity  securities  is  extremely  limited.



ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS.

GENERAL

Chase  Packaging experienced cash losses for the past years in spite of numerous
infusions  of working capital and an aggressive program of inventory and expense
reduction.  The  Board  of  Directors  therefore  determined  that  an  orderly
liquidation  of  Chase  was  in  the best interest of the Company and all of its
creditors  and  retained the firm of Edward Hostmann, Inc. to assist the Company
in  such  liquidation.

Although  the  Company  attempted  to  reduce  its  operating costs in 1997, the
expense  reductions  could  not  offset  rapidly  declining  revenues.  The
continuation  in  operating  losses,  when  combined  with  the  decision of the
Company's  secured  lender  not to renew the Company's operating line of credit,
resulted  in the decision of Chase's Board of Directors to liquidate the Company
in  an  orderly  fashion.

As  part of the liquidation process, effective July 21, 1997, Chase sold most of
its  assets  in Idaho Falls, Idaho (excluding real estate) to Lockwood Packaging
Corporation  Idaho  for  $330,000.  The  Company  also sold the Idaho Falls real
estate  (land  and building).  During July and August of 1997 Chase sold most of
its  inventory  in  Portland,  Oregon to other packaging companies.  The Company
also  sold  its  band  label  extruder for $125,000 with remaining inventory and
machinery  and  equipment  sold  at  an  August 14 auction for gross proceeds of
approximately  $340,000.  As  a  result  of  the  orderly  liquidation, the loan
balance  with  the  Company's  secured lender was paid down from a June 30, 1997
balance  of  $1,517,551.

RESULTS  OF  OPERATION

As  a  result  of  the  decision to liquidate its assets, the Company ceased its
operations as of June 30, 1997.  Expenses incurred during 1998 related primarily
to Trustee expenses and minor other administrative costs.  The loss for the 1998
year amounted to $37,722 or $.01 per share.  For the operating period January 1,
1997  to  June  30, 1997, (a six month period), revenues were $4,403,023 and the
net  loss  aggregated  $846,006.


                                        3
<PAGE>
<TABLE>
<CAPTION>
ITEM 7.  FINANCIAL  STATEMENTS.

                           CHASE PACKAGING CORPORATION
                           ---------------------------
                 FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
                 ----------------------------------------------


                        - INDEX TO FINANCIAL STATEMENTS -


                                                                PAGE(S)
                                                                -------
<S>                                                             <C>
Independent Auditors' Report                                        F-2

Financial Statements:

  Balance sheets                                                    F-3

  Statements of Operations                                          F-4

  Statement of Changes in Net Assets in Liquidation                 F-5

  Statements of Shareholders' Equity                                F-6

  Statements of Cash Flows                                          F-7

Notes to Financial Statements.                                      F-8
</TABLE>


                                      F-1
<PAGE>
                          INDEPENDENT AUDITORS' REPORT



To The Shareholders
Chase Packaging Corporation



We have audited the balance sheets of Chase Packaging Corporation as of December
31,  1998  and 1997 and the related statement of operations for the periods then
ended  (see  Note  3).  In  addition,  we  have  audited  the  statements  of
shareholders'  equity  (deficit)  and  cash flows for the period from January 1,
1997 to December 31, 1998.  These financial statements are the responsibility of
the  Company's management.  Our responsibility is to express an opinion on these
financial  statements  based  on  our  audits.

We  conducted  our  audits  in  accordance  with  generally  accepted  auditing
standards.  Those  standards  require  that  we  plan  and perform the audits to
obtain  reasonable  assurance about whether the financial statements are free of
material  misstatement.  An  audit includes examining, on a test basis, evidence
supporting  the  amounts  and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant estimates
made  by  management,  as  well  as  evaluating  the overall financial statement
presentation.  We  believe  that  our  audits provide a reasonable basis for our
opinion.

As  described  in  Note 3 to the financial statements, the shareholders of Chase
Packaging  Corporation  approved  a plan of liquidation on June 30, 1997 and the
Company  commenced  liquidation  shortly  thereafter.

In  our  opinion,  the financial statements referred to above present fairly, in
all  material respects, the financial position of Chase Packaging Corporation as
of  December  31,  1998 and 1997, and the results of its operations and its cash
flows  for the years then ended in conformity with generally accepted accounting
principles.




                                              ------------------------
                                              LAZAR LEVINE & FELIX LLP


New York, New York
November 18, 1999


                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                          CHASE PACKAGING CORPORATION
                          ---------------------------
                                 BALANCE SHEETS
                                 --------------
                        AS OF DECEMBER 31, 1998 AND 1997
                        --------------------------------

                                     - ASSETS -

                                                                              1998          1997
                                                                          -----------  -------------
<S>                                                                       <C>           <C>
CURRENT ASSETS:
   Cash and cash equivalents                                              $    11,661   $   126,408
   Accounts receivable                                                              -        57,012
                                                                          ------------  ------------
TOTAL ASSETS                                                              $    11,661   $   183,420
                                                                          ============  ============


                     - LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) -


CURRENT LIABILITIES:
   Accounts payable                                                       $         -   $   134,037
   Accrued expenses                                                            23,279        23,279
                                                                          ------------  ------------
TOTAL CURRENT LIABILITIES                                                      23,279       157,316
                                                                          ------------  ------------
COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY (DEFICIT):
   Preferred stock $1.00 par value; 4,000,000 shares authorized                     -             -
   Common stock $.10 par value, 25,000,000 shares authorized, 7,002,964
      shares issued and outstanding                                           700,296       700,296
   Additional paid-in capital                                               2,914,207     2,914,207
   Accumulated deficit                                                     (3,626,121)   (3,588,399)
                                                                          ------------  ------------
                                                                              (11,618)       26,104
                                                                          ------------  ------------
                                                                          $    11,661   $   183,420
                                                                          ============  ============
</TABLE>


                       See notes to financial statements.


                                      F-3
<PAGE>
<TABLE>
<CAPTION>
                               CHASE PACKAGING CORPORATION
                               ---------------------------
                                 STATEMENTS OF OPERATIONS
                                 ------------------------


                                                        FOR THE YEAR     For the Period
                                                           ENDED        January 1, 1997
                                                        DECEMBER 31,    to June 30, 1997
                                                            1998          (see Note 3)
                                                       --------------  ------------------
<S>                                                    <C>             <C>
NET SALES                                              $           -   $       4,403,023
                                                       --------------  ------------------
COSTS AND EXPENSES:
   Cost of sales                                                   -           4,250,127
   Selling, general and administrative expense                37,722           1,058,629
   Interest expense                                                -             114,166
                                                       --------------  ------------------

TOTAL COSTS AND EXPENSES:                                     37,722           5,422,922
                                                       --------------  ------------------
LOSS BEFORE EXTRAORDINARY ITEM                               (37,722)         (1,019,899)

   Extraordinary item - gain from extinguishments
   of debt                                                         -             173,893
                                                       --------------  ------------------
LOSS BEFORE INCOME TAXES                                     (37,722)           (846,006)

Provision for income taxes                                         -                   -
                                                       --------------  ------------------

NET LOSS                                               $     (37,722)  $        (846,006)
                                                       ==============  ==================

LOSS PER SHARE:
   Loss per share before extraordinary item            $        (.01)  $            (.15)
   Extraordinary item                                              -                 .03
                                                       ==============  ==================
(LOSS) PER SHARE                                       $        (.01)  $            (.12)
                                                       ==============  ==================
</TABLE>


                       See notes to financial statements.


                                      F-4
<PAGE>
<TABLE>
<CAPTION>
                          CHASE PACKAGING CORPORATION
                          ---------------------------
                STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
                -------------------------------------------------
              FOR THE PERIOD FROM JULY 1, 1997 TO DECEMBER 31, 1997
              -----------------------------------------------------


<S>                                                             <C>
SALES                                                           $         -
COSTS AND EXPENSES:
   Cost of sales                                                   (230,023)
   Selling, general and administrative                              (93,116)
   Write-down of assets in liquidation                            1,962,534
                                                                ------------
                                                                  1,639,395
                                                                ------------
ACCUMULATED LOSS ON ASSETS IN LIQUIDATION                       $(1,639,395)
                                                                ============
</TABLE>


                                      F-5
<PAGE>
<TABLE>
<CAPTION>
                                         CHASE PACKAGING CORPORATION
                                         ---------------------------
                                      STATEMENT OF STOCKHOLDERS' EQUITY
                                      ---------------------------------


                                              COMMON STOCK
                                           -------------------    ADDITIONAL       ACCUMULATED
                                            SHARES     AMOUNT   PAID-IN CAPITAL      DEFICIT        TOTAL
                                           ---------  --------  ----------------  -------------  ------------
<S>                                        <C>        <C>       <C>               <C>            <C>
Balance at December 31, 1996               7,002,964  $700,296  $        629,833  $ (1,102,998)  $   227,131

  Cash contribution by former parent               -         -             9,318             -         9,318
  Contributed rent - Portland Facility             -         -            55,427             -        55,427
  Contribution by former parent                    -         -         2,219,629             -     2,219,629
  Net loss through June 30, 1997                   -         -                 -      (846,006)     (846,006)
  Deficit in assets in liquidation                 -         -                 -    (1,639,395)   (1,639,395)
                                           ---------  --------  ----------------  -------------  ------------

Balance at December 31, 1997               7,002,964   700,296         2,914,207    (3,588,399)       26,104

NET LOSS FOR YEAR ENDED DECEMBER 31, 1998          -         -                 -       (37,722)      (37,722)
                                           ---------  --------  ----------------  -------------  ------------
                                           7,002,964  $700,296  $      2,914,207  $ (3,626,121)  $   (11,618)
                                           =========  ========  ================  =============  ============
</TABLE>


                       See notes to financial statements.


                                      F-6
<PAGE>
<TABLE>
<CAPTION>
                          CHASE PACKAGING CORPORATION
                          ---------------------------
                            STATEMENTS OF CASH FLOWS
                            ------------------------


                                                                          FOR THE YEAR ENDED
                                                                          YEAR  DECEMBER 31,
                                                                       -------------------------
                                                                          1998         1997
                                                                       ----------  -------------
<S>                                                                    <C>         <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                             $ (37,722)  $   (846,006)
  Adjustments to reconcile net loss to net cash provided by (used in)
   operating activities:
     Depreciation and amortization                                             -        180,481
     Gain on disposal of property and equipment                                -        (20,808)
     Gain from extinguishment of debt                                          -       (173,893)
     Non-cash expenses                                                         -         62,428
  CHANGE IN ASSETS AND LIABILITIES:
     Accounts receivable                                                  57,012      1,577,373
     Inventories                                                               -        764,664
     Prepaid expenses                                                          -         79,320
     Accounts payable                                                   (134,037)      (553,184)
     Accrued liabilities                                                       -       (258,340)
     Advance billings                                                          -        (37,382)
                                                                       ----------  -------------
  NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES                   (114,747)       774,653
                                                                       ----------  -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures                                                         -       (113,360)
  Proceeds from sale of property and equipment                                 -      1,176,461
  Other assets                                                                 -         (1,650)
                                                                       ----------  -------------
  NET CASH PROVIDED BY INVESTING ACTIVITIES                                    -      1,061,451
                                                                       ----------  -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal payments of debt obligations                                       -       (350,000)
  Repayments on line of credit                                                 -     (1,390,392)
  Capital contributed by parent                                                -          9,318
                                                                       ----------  -------------
  NET CASH (USED IN) FINANCING ACTIVITIES                                      -     (1,731,074)
                                                                       ----------  -------------
NET (DECREASE) INCREASE IN CASH EQUIVALENTS                             (114,747)       105,030
  Cash and cash equivalents, at beginning of year                        126,408         21,378
                                                                       ----------  -------------
CASH AND CASH EQUIVALENTS, END OF YEAR                                 $  11,661   $    126,408
                                                                       ==========  =============

NON-CASH INVESTING AND FINANCING ACTIVITIES:
     During  the  1997 first quarter, Chase incurred rent expense of $55,427 for
     use  of  the  manufacturing  facility owned by TGC (its former parent). TGC
     converted  the  rent  receivable  to  equity  in  Chase.
</TABLE>


                       See notes to financial statements.


                                      F-7
<PAGE>
                           CHASE PACKAGING CORPORATION
                           ---------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                           DECEMBER 31, 1998 AND 1997
                           --------------------------


NOTE  1 - DESCRIPTION OF COMPANY:

          Chase  Packaging  Corporation  ("the  Company"),  a Texas Corporation,
          manufactured  woven  paper  mesh  for  industrial  applications,
          polypropylene  mesh  fabric  bags for agricultural use and distributed
          agricultural  packaging  manufactured  by other companies. The company
          was  a  wholly-owned  subsidiary of TGC Industries, Inc. (TGC) through
          July  31,  1996.

          In  July  1996,  TGC  liquidated  its  wholly-owned  subsidiary, Chase
          Packaging  Corporation  ("Old  Chase"),  with TGC receiving all of Old
          Chase's  properties  and  liabilities in cancellation of the Old Chase
          stock held by TGC. TGC then formed New Chase Corporation ("New Chase")
          as  a new wholly-owned subsidiary and transferred to New Chase certain
          of  the  properties and liabilities received in the liquidation of Old
          Chase  and  canceled  all  intercompany debt owed by Old Chase to TGC.

          Effective  July  31,  1996,  TGC  spun  off  New  Chase  by a dividend
          distribution to the stockholders of record of TGC common and preferred
          stock.  At  the  same  time,  the  name  was  changed  from  New Chase
          Corporation  to  Chase  Packaging  Corporation.

          On  June  25,  1997,  the Company announced to employees and creditors
          that it would begin an orderly liquidation of all its assets beginning
          at  the  close  of  business  on  June 30, 1997. On July 25, 1997, the
          Company  notified its creditors by mail that it would commence with an
          orderly  liquidation  of  all its remaining assets outside of a formal
          bankruptcy or receivership proceeding in a manner intended to maximize
          asset  values.

          The  Company  had  experienced losses for the past four years, and the
          Company's  secured lender decided not to renew the Company's operating
          line  of  credit.  As  a  result,  the  Company's  Board  of Directors
          determined  that it was in the best interest of the Company and all of
          its  creditors  to liquidate in an orderly fashion. As a result of the
          plan of liquidation, the 1997 financial statements reflect a change in
          the  basis of accounting used to determine the amounts at which assets
          and  liabilities  are  carried  from  a  going  concern  basis  to  a
          liquidation basis as of June 30, 1997. The statement of changes in net
          assets in liquidation contains only the write-down of assets as of the
          close  of  business  on  June  30,  1997.

NOTE  2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

          The  Company's  accounting  policies  are in accordance with generally
          accepted  accounting policies. Outlined below are those policies which
          are  considered  particularly  significant.

     (a)  LIQUIDATION  BASIS:

          On  June  27, 1997 the Company decided to liquidate effective with the
          close  of  business  on  June  30,  1997, and accordingly revalued its
          assets  and  liabilities  to  the amounts expected to be collected and
          paid  during  the  liquidation.  Up  through  that  date,  the Company
          recorded  its  results  of  operations  using  accounting  principles
          applicable  to  going  concern  entities.

     (b)  USE  OF  ESTIMATES:

          The  preparation  of financial statements in conformity with generally
          accepted  accounting  principles requires management to make estimates
          and  assumptions  that  affect  the  reported  amounts  of  assets and
          liabilities and disclosure of contingent assets and liabilities at the
          date  of the financial statements and the reported amounts of revenues
          and  expenses during the reporting period. Actual results could differ
          from  those  estimates.


                                      F-8
<PAGE>
                           CHASE PACKAGING CORPORATION
                           ---------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                           DECEMBER 31, 1998 AND 1997
                           --------------------------


NOTE  2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

     (c)  LOSS  PER  COMMON  SHARE:

          Loss  per  common  share  before  and  after  extraordinary  gain were
          calculated  by  dividing  the  net  loss  by  the  number  of  shares
          outstanding.

NOTE  3 - LIQUIDATION:

          As part of the Company's plan of liquidation, effective July 21, 1997,
          Chase  sold  to  Lockwood  Packaging  Corporation Idaho (Lockwood) the
          Company's  operation  at  Idaho  Falls,  Idaho,  as  a  going concern.

          The assets sold included substantially all of the Company's equipment,
          furniture,  fixtures,  and other assets located in the Company's Idaho
          Falls, Idaho facility for a total of $75,000. In addition, the Company
          sold  inventory  from  the  Idaho  Falls  operation  to  Lockwood  for
          $255,000.  The  total  proceeds  of  $330,000  were deposited with the
          Company's  bank to pay down the Company's loan balances with the bank.
          Lockwood  then entered into a lease with the Company for the Company's
          Idaho  Falls  facility.

          On  July 25, 1997, the Company notified its creditors by mail that the
          Company  would  commence  with  an  orderly  liquidation  of  all  its
          remaining  assets  outside  of  a  formal  bankruptcy or receivership,
          proceeding  in  a  manner intended to maximize asset values. Inventory
          and equipment were sold to other packaging concerns and an auction was
          held  on  August  14,  1997  to  liquidate  the  remaining  inventory,
          equipment and supplies at the Company's Portland, Oregon facility. The
          Company  received  net  proceeds  of  $305,562  from  this  auction.

          The  table  below  sets  forth  the assets of Chase on a going concern
          basis  as  of  June  30,  1997 and the corresponding write-down to the
          estimated  net  realizable  value  at  time  of  disposal:

<TABLE>
<CAPTION>
                                                                  Net realizable
                              Going concern basis   Liquidation     value as of
                              as of June 30, 1997    write-down    June 30, 1997
                              --------------------  ------------  ---------------
<S>                           <C>                   <C>           <C>
Cash                          $             10,975  $          -  $        10,975
Accounts receivable (net)                  830,511             -          830,511
Inventories                              1,875,919       870,995        1,004,924
Prepaid expenses                           292,068       266,389           25,679

Land and building (net book
  value)                                   405,209        80,209          325,000
Machinery & equipment (net
  book value)                            1,181,654       739,254          442,400
Other assets                                 9,181         5,687            3,494
                              --------------------  ------------  ---------------


TOTAL                         $          4,605,517  $  1,962,534  $     2,642,983
                              ====================  ============  ===============
</TABLE>


                                      F-9
<PAGE>
                           CHASE PACKAGING CORPORATION
                           ---------------------------
                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                           DECEMBER 31, 1998 AND 1997
                           --------------------------


NOTE  4 - EXTRAORDINARY  ITEM  -  GAIN  FROM  EXTINGUISHMENT  OF  DEBT:

          On  March  18,  1997,  TGC  sold  its  Portland,  Oregon  facility for
          $2,430,000  with  $1,780,000  of  the  proceeds  applied  against  the
          Company's  outstanding mortgage indebtedness to Union Camp Corporation
          with  respect  to such facility. The $1,780,000 payment to Union Camp,
          when  combined with a principal payment of $350,000 made to Union Camp
          on  January  7,  1997, from the sale proceeds of Chase's polypropylene
          weaving equipment, resulted in the Union Camp note being declared paid
          in  full  as  of  March  19,  1997. A gain from debt extinguishment of
          $173,893  was  recognized  as  a  result  of  these payments. The gain
          consisted  of  $4,383 in principal and $169,510 in interest carried on
          the  Company's financial statements and forgiven by Union Camp. Due to
          the  Company's  net  operating  loss  position  there is no income tax
          applicable  to  the  gain.

NOTE  5 - INCOME TAXES:

          The income tax provision reconciled to the tax computed at the
          statutory federal rate is as follows.

<TABLE>
<CAPTION>
                                                                   FOR THE YEAR ENDED
                                                                      DECEMBER 31,
                                                               --------------------------
                                                                   1998          1997
                                                               ------------  ------------
<S>                                                            <C>           <C>
Federal tax benefit at statutory rate                          $         -   $   950,000
State tax benefit net of Federal tax effect                              -       170,000

Change in valuation allowance                                            -    (1,120,000)
                                                               ------------  ------------
                                                               $         -   $         -
                                                               ============  ============

Deferred tax assets and liabilities consist of the following:

DEFERRED TAX ASSETS:
  Net operating loss carry forwards                            $ 1,120,000   $ 1,120,000

  Less valuation allowance                                      (1,120,000)   (1,120,000)
                                                               ------------  ------------
                                                               $         -   $         -
                                                               ============  ============
</TABLE>

          The  NOL's  accumulated through July 31, 1996, aggregating $5,260,000,
          remained  with  TGC  upon  completion  of the spin-off of New Chase as
          discussed  in  note  1  and are not available to offset future taxable
          income  of  Chase.  At  December  31,  1998,  Chase  had approximately
          $3,300,000  of  net  operating  loss  carry  forwards  available which
          expires  in  years  beginning  in  2011.


                                      F-10
<PAGE>
ITEM 8.   CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
FINANCIAL  DISCLOSURE.

NONE

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.

The  Board  of Directors of the Company consists of three persons who will serve
until  the  next  annual  meeting of shareholders of the Company.  The following
table  sets  forth  certain  information  concerning  the individuals serving as
Directors  of  the  Company:

<TABLE>
<CAPTION>
Name and Age          Date Since       Business Experience and Other Directorships
                      Which
                      Continuously a
                      Director of the
                      Company

<S>                   <C>              <C>
Allen T. McInnes, 60  1993             Chairman of the Board of TGC Industries,Inc. since 1993 and Chief
                                       Executive Officer from August, 1993 to March 31, 1996;Executive
                                       Vice President and Director of Tenneco, Inc. 1960-1992; Director
                                       of Tetra Technologies, President and CEO since April 1, 1996;
                                       Director of NationsBank Texas 1990-1993.

Lewis W. Lovell, 61  1996              President and Chief Operating Officer of Chase Packaging
                                       Corporation from October, 1995 to 1997; Divisional President of
                                       Williams Holdings, Inc. From 1988 to 1993; Senior Vice-President
                                       of Packaging Corporation of America from 1984 to 1988; Vice
                                       President and General Manager of Tenneco West from 1976 to
                                       1984.

Doug Kirkpatrick, 45  1996             Vice President, Chief Financial Officer, and Assistant Secretary of
                                       Chase Packaging Corporation from 1993 to 1997; Controller of
                                       Tidelands Geophysical Company from 1982 to 1993; Vice
                                       President of Finance and Treasurer of TGC Industries, Inc. from
                                       1986 to 1996.
</TABLE>

Unaffiliated  Directors of the Company are not paid fees, but will be reimbursed
for  expenses  in connection with meetings of the Board of Directors attended by
them.

EXECUTIVE  OFFICERS

The  following  table  sets forth certain information concerning the persons who
serve  as  executive officers of the Company, and will continue to serve in such
positions,  as  the  discretion  of  the  Board  of  Directors.

Name                Age     Position

Allen T. McInnes     60     Chief Operating Officer, President, Secretary,
                            Treasurer


                                        4
<PAGE>
COMPLIANCE  WITH  SECTION  16(A)  OF  THE  EXCHANGE  ACT.

To  the  best  of the Company's knowledge all directors, executive officers, and
beneficial  owners  have  complied with the requirements of Section 16(a) of the
Exchange  Act.


ITEM 10.     EXECUTIVE COMPENSATION.

The  table  below  sets  forth  on an accrual basis all cash and cash equivalent
remuneration  paid by the Company during the year ended December 31, 1996 to the
Chief Executive Officer and any other executives whose salary and bonus exceeded
$100,000,  if any.  No compensation was paid to any such officer during 1997 and
1998

<TABLE>
<CAPTION>
                                Summary Compensation Table

                                   Annual Compensation

Name and                                Year  Salary          Other Anuual Compensation
Principal Position

<S>                                     <C>   <C>             <C>
Lewis W. Lovell (1)                     1996  $80,973.99 (1)  $ 4,297,49 (2)
President and Chief Executive Officer
</TABLE>

<TABLE>
<CAPTION>
                                Long-Term Compensation

Name             Year  Restricted Stock Awards  Options  All Other SAR's Compensation
<S>              <C>   <C>                      <C>      <C>
Lewis W. Lovell  1996  -0-                      -0-      -0-
</TABLE>

(1)  Mr.  Lovell  became  Chief  Executive Officer of the Company in July, 1996.
Prior to July, 1996, Mr. Lovell was President and Chief Operating Officer of the
Company  from  October,  1995.

(2)  Represents  personal  use  of  company  vehicle.


1996  STOCK  OPTION  PLAN

On July 10, 1996, the Company's Board of Directors and sole shareholder approved
and  adopted  the  Company's  1996  Stock Option Plan.  The following paragraphs
summarize  certain provisions of the 1996 Stock Option Plan and are qualified in
their  entirety  by  reference  thereto.

The  1996 Stock Option Plan provides for the granting of Incentive Stock Options
(collectively,  the  "Options") to purchase shares of the Company's Common Stock
to  certain  key  employees  of  the  Company and non-statutory stock options to
certain  key  employees  of  the Company, affiliates of the Company, and certain
individuals  who  are  not employees of the Company or its affiliates.  The 1996
Stock  Option  Plan  authorizes the granting of options to acquire up to 600,000
shares  of  Common  Stock, subject to certain adjustments described below, to be
outstanding  at  any  time.  Subject  to the foregoing, there is no limit on the
absolute  number of awards that may be granted during the life of the 1996 Stock
Option  Plan.  At the present time, there are approximately 116 employees of the
Company,  including  2 officers of the Company (all of whom are also directors),
who,  in  management's  opinion,  would be considered eligible to receive grants
under  the 1996 Stock Option Plan, although fewer employees may actually receive
grants.


                                        5
<PAGE>
Authority  to  administer  the  1996  Stock  Option Plan has been delegated to a
committee  (the  "Committee")  of  the  Board of Directors.  Except as expressly
provided  by the 1996 Stock Option Plan, the Committee has the authority, in its
sole  discretion,  to  award  Options  and to determine the terms and conditions
(which  need  not  be identical) of such Options, including the persons to whom,
and  the  time or times at which, Options will be awarded, the number of Options
to  be  awarded to each such person, the exercise price of any such Options, and
the  form, terms, and provisions of any agreement pursuant to which such Options
are awarded.  The 1996 Stock Option Plan also provides that the Committee may be
authorized  by  the  Board  of Directors to make cash awards as specified by the
Board  of  Directors  to the holder of an Option in connection with the exercise
thereof.  Subject  to the limitations set forth below, the exercise price of the
shares  of stock covered by each 1996 Option will be determined by the Committee
on  the  date  of  award.

Unless  a Holder's option agreement provides otherwise, the following provisions
will  apply  to exercises by the Holder of his or her option:  No options may be
exercised  during  the  first  twelve months following grant.  During the second
year following the date of grant, options covering up to one-third of the shares
covered  thereby may be exercised, and during the third year options covering up
to  two-thirds  of  such  shares  may  be  exercised.  Thereafter, and until the
options  expire,  the  optionee may exercise options covering all of the shares.
Persons over sixty-five on the date of grant may exercise options covering up to
one-half  of  the  shares  during the first year and thereafter may exercise all
optioned  shares.  Subject  to  the  limitations  just described, options may be
exercised  as  to  all  or any part of the shares covered thereby on one or more
occasions,  but,  as a general rule, options cannot be exercised as to less than
one  hundred  shares  at  any  one  time.

The exercise price of the shares of stock covered by each incentive stock option
("ISO"), within the meaning of Sec. 422 of the Internal Revenue Code of 1986, as
amended  (the  "Code"),  will not be less than the greater of: (a) the par value
per  share  of  the  stock; or (b) one hundred percent (100%) of the fair market
value  per share of the Company's stock on the date of award of such ISO, except
that  an  ISO  may  not  be  awarded to any person who is not an employee of the
Company  and/or  affiliate  of  the  Company  or  to  any  person who owns stock
possessing more than ten percent (10%) of the total combined voting power of all
classes  of  stock  of  the  Company  or an affiliate of the Company, unless the
exercise  price  is  at  least one hundred ten percent (110%) of the fair market
value of the stock at the time the ISO is awarded and the ISO is not exercisable
after  the  expiration  of five years from the date it is awarded.  The exercise
price  of  the  shares of Common Stock covered by each Option that is not an ISO
(NSO)  will not be less than fifty percent (50%) of the fair market value of the
stock  on  the  date  of  award.

Payment  for  Common  Stock issued upon the exercise of an Option may be made in
cash  or,  with  the  consent  of the Committee, in whole shares of Common Stock
owned  by  the holder of the Option for at least six months prior to the date of
exercise  or,  with  the  consent of the Committee, partly in cash and partly in
such  shares  of  Common  Stock.  If  payment is made, in whole or in part, with
previously  owned shares of Common Stock, the Committee may issue to such holder
a  new  Option for a number of shares equal to the number of shares delivered by
such  holder to pay the exercise price of the previous Option having an exercise
price equal to not less than one hundred percent (100%) of the fair market value
of  the Common Stock on the date of such exercise.  An Option so issued will not
be  exercisable  until  the  later of the date specified in an individual option
agreement  or  six  months  after  the  date  of  grant.

The  duration of each Option will be for such period as the Committee determines
at  the time of award, but not for more than ten years from the date of award in
the  case  of an ISO, and in either case may be exercised in whole or in part at
any time or only after a period of time or in installments, as determined by the
Committee  at  the  time  of  award,  except  that  after the date of award, the
Committee  may accelerate the time or times at which an Option may be exercised.
In  the  event of any change in the number of outstanding shares of Common Stock
effected  without receipt of consideration therefore by the Company by reason of
a  stock  dividend,  or  split,  combination,  exchange  of  shares  or  other
recapitalization,  merger,  or  otherwise, in which the Company is the surviving
Corporation,  the  aggregate number and class of reserved shares, the number and
class  of  shares  subject to each outstanding Option, and the exercise price of
each  outstanding  Option  will  be automatically adjusted to reflect the effect
thereon of such change.  Unless a holder's option agreement, provides otherwise,
a  dissolution  or  liquidation  of  the  Company,  certain  sales  of  all  or
substantially  all  of  the  assets  of  the  Company,  or  certain  mergers  or
consolidations  in which the Company is not the surviving corporation will cause
such  holder's  Options  then  outstanding  to  terminate,  but such holder may,
immediately  prior  to such transaction, exercise such Options without regard to
the  period  and  installments  of  exercise ability applicable pursuant to such
holder's  option  agreement.


                                        6
<PAGE>
The  1996  Stock Option Plan will terminate on July 10, 2006, or on such earlier
date  as  the Board of Directors may determine.  Any stock option outstanding at
the  termination  date  will  remain  outstanding  until  it has been exercised,
terminated,  or  has  expired.

The  1996 Stock Option Plan may be terminated, modified, or amended by the Board
of  Directors  at  any  time  without  further shareholder approval, except that
shareholder  approval  is  required  for  any  amendment which:  (a) changes the
number  of  shares  of  Common Stock subject to the 1996 Stock Option Plan other
than  by  adjustment provisions provided therein, (b) changes the designation of
the  class  of employees eligible to receive Options, (c) decreases the price at
which  ISO's  may  be  granted, (d) removes the administration of the 1996 Stock
Option  Plan  from  the  Committee,  or  (e) without the consent of the affected
holder,  causes  the  ISO's  granted  under  the  1996  Stock  Option  Plan  and
outstanding at such time that satisfied the requirements of Sec. 422 of the Code
no  longer  to  satisfy  such  requirements.


401(K)  PLAN

On  August  1,  1996  the Company implemented a 401(k) salary deferral plan (the
"Plan") which covers all non-union employees who have reached the age of 20- 1/2
years  and  have  been  employed by the Company for at least one year.  Years of
service  with  TGC Industries (the former parent) are recognized for the purpose
of  this  plan.  The covered employees may elect to have an amount deducted from
their wages for investment in a retirement plan.  The Company has the option, at
its  discretion,  to  make  contributions  to  the  Plan.  Effective  with
implementation  of  the  Plan,  the Company makes a matching contribution to the
Plan equal to the sum of seventy-five percent (75%) of each Participant's salary
reduction  contributions  to the Plan for such Plan year which are not in excess
of  three percent (3%) of the Participant's compensation for such Plan year, and
fifty  percent (50%) of each Participant's salary reduction contributions to the
Plan  for  such  Plan  year  which  are  in  excess of three percent (3%) of the
Participant's  compensation  but  not  in  excess  of  eight percent (8%) of the
Participant's  compensation  for  such  Plan  year.


ITEM 11.   SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS AND MANAGEMENT.

The following table sets forth the names of those persons known to Management to
be  beneficial  owners of more than five percent of the Company's $.10 par value
Common  Stock  as of March 12, 1997.  The table also sets forth information with
respect  to  the  Company's  Common  Stock  which  is beneficially owned by each
director and executive officer of the Company, and by all directors and officers
of  the  Company as a group, as of March 12, 1997 (including shares beneficially
owned  by  such  persons,  pursuant  to  the rules of beneficial ownership, as a
result  of  the  ownership  of  certain  warrants  or options) according to data
furnished  by  the persons named.  Persons having direct beneficial ownership of
the  Company's  Common  Stock  possess  the sole voting and dispositive power in
regard  to  such  stock.

<TABLE>
<CAPTION>
Name and address                      Title of Class  Amount and Nature of   Approximate Percentage
                                                        Beneficial Owner          of Class (1)
<S>                                   <C>             <C>                    <C>
Lewis W. Lovell                       Common          90,482 (2)             1.29%

Doug Kirkpatrick                      Common          31,148 (2)             *

Allen T. McInnes                      Common          816,143 (2)            11.17%

Herbert J. Gardner                    Common          400,645 (2)(3)         5.57%

William J. Barrett                    Common          536,455 (2)(4)         7.42%

Gerlach & Co. (5)                     Common          466,666                6.66%
111 Wall Street, 8th Fl.
New York, NY  10005


                                        7
<PAGE>
Special Situations(6)                 Common          499,999                7.14%
Fund III L.P.
153 E. 53rd Street, 51st Fl.
New York, NY 10022

All directors & officers as a group   Common          937,773 (2)            24.12%
(3 persons)
</TABLE>

*  Represents  less  than  1%  of  Class

(1)  The  percentage  calculations  have  been made in accordance with Rule 13d-
3(d)  (1) promulgated under the Securities Exchange Act of 1934. In making these
calculations,  shares beneficially owned by a person as a result of ownership of
certain options and warrants of TGC, which upon exercise will entitle the holder
to  distribution  of  Chase Common Stock escrowed in the event of such exercise,
were  deemed  to  be  currently  outstanding with respect to the holders of such
options  and  warrants  at  TGC.

(2)  Includes  the  number  of  shares  of  Common  Stock set forth opposite the
person's  name  in the following table, which shares are beneficially owned as a
result of the ownership of options and warrants of TGC, which upon exercise will
entitle  the  holder to distribution of Chase Common Stock escrowed in the event
of  such  exercise.

<TABLE>
<CAPTION>
      NAMES                                              STOCK OPTIONS  WARRANTS
      -----                                              -------------  --------
<S>                                                      <C>            <C>
      Lewis W. Lovell                                           52,083        0
      Doug Kirkpatrick                                          12,500        0
      Allen T. McInnes                                               0   84,337
      Herbert M. Gardner                                             0   55,925
      William J. Barrett                                             0   55,925*
      All Directors and Officers as a group (3 persons)         64,583   84,337
</TABLE>

     * Excludes 3,750 shares of Common Stock distributable to Mr. Barrett's wife
upon  the  exercise  of 7,500 Warrants of TGC owned by Ms. Barrett.  Mr. Barrett
disclaims  beneficial  ownership  of  such  Warrants.

(3)  Excludes  48,590 shares of Common Stock owned by Herbert M. Gardner's wife.
Mr.  Gardner  has  disclaimed  beneficial  ownership  of  these  shares.

(4)  Excludes  62,970 shares of Common Stock owned by William J. Barrett's wife.
Mr.  Barrett  has  disclaimed  beneficial  ownership  of  these  shares.

(5)  Gerlach  &  Co. is the record owner as nominee for the Redemptorist Fathers
of  N.Y.  #100.

(6)  MGP  Advisors Limited Partnership ("MGP") is the general partner of Special
Situations  Fund III, L.P. ("Special Situations").  AWM Investment Company, Inc.
("AWM")  is  the  sole general partner of MGP.  Austin W. Marxe is the principal
limited  partner of MGP and is the President and Chief Executive Officer of AWM.



ITEM 12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS.

To  the  best  of  the  Company's knowledge there have been no transactions with
management  or  other  related  parties  to  which the Company has been a party.


                                        8
<PAGE>
                                     PART IV

ITEM 13.  EXHIBITS,  FINANCIAL  STATEMENTS  AND  REPORTS
          ON  FORM  8-K

     (a)  1.   FINANCIAL  STATEMENTS

               Financial Statements of the Registrant (Included in Part II, Item
               7)

          2.   EXHIBITS

               None

     (b)  REPORTS  ON  FORM  8-K
               None


                                        9
<PAGE>
                                   SIGNATURES

In  accordance  with  Section  13  or  15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                           CHASE PACKAGING CORPORATION


Date:  May 6, 2002                            By:
                                                 -------------------------------
                                              Ann W. Green
                                              Assistant Secretary
                                              Principal Financial and Accounting
                                              Officer


                                       10
<PAGE>