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                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

   
                                   FORM 10-KSB/A
                                  AMENDMENT III
    

     (Mark One)
               [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

                   For the fiscal year ended December 31, 1995

             [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

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

                         Commission file number 0-17559

               ENEX OIL AND GAS INCOME PROGRAM III, Series 7, L.P.
                 (Name of small business issuer in its charter)

            New Jersey                                      76-0214444
  (State or other jurisdiction of                        (I.R.S. Employer
   incorporation or organization)                        Identification No.)

         800 Rockmead Drive
        Three Kingwood Place
          Kingwood, Texas                                      77339
  (Address of principal executive offices)                   (Zip Code)

              Issuer's telephone number, including: (713) 358-8401

       Securities registered under Section 12(b) of the Exchange Act: None

         Securities registered under Section 12(g) of the Exchange Act:

                          Limited Partnership Interest

                  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

                  Check  if there  is no  disclosure  of  delinquent  filers  in
response to Item 405 of  Regulation  S-B is not  contained in this form,  and no
disclosure  will be contained,  to the best of the  registrant's  knowledge,  in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-KSB or any amendment to this Form 10-KSB.[x]

        State issuer's revenues for its most recent fiscal year. $226,048

                  State the  aggregate  market value of the voting stock held by
non-affiliates  computed by  reference to the price at which the stock was sold,
or the average bid and asked prices of such stock as of a specified  date within
the past 60 days (See  definition  of  affiliate  in Rule 12b-2 of the  Exchange
Act):

                                 Not Applicable

                      Documents Incorporated By Reference:

                                      None

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<PAGE>

                                     PART II


Item 5.      Market for Common Equity and Related Security Holder Matters


Market Information

             There is no  established  public  trading  market for the Company's
outstanding limited partnership interests.



Number of Equity Security Holders

                                                     Number of Record Holders
                Title of Class                         (as of March 1, 1996)
                 ------------------                 -------------------------

          General Partner's Interests                            1

          Limited Partnership Interests                        1,379



Dividends

          The Company made cash distributions to partners of $6 and $13 per $500
investment in 1995 and 1994, respectively.  The Company suspended the payment of
distributions in the fourth quarter of 1995. The payment of future distributions
will depend on the Company's  earnings,  financial  condition,  working  capital
requirements and other factors.  It is anticipated  that periodic  distributions
will be made by the Company as cash becomes available.


                                      II-1


<PAGE>



Item 6.     Management's Discussion and Analysis or Plan of Operation

Results of Operations

            This  discussion  should be read in  conjunction  with the financial
statements of the Company and the notes thereto included in this Form 10-KSB.

            Oil and gas sales in 1995 were $226,048 as compared with $276,940 in
1994.  This  represents  a decrease of $50,892 or 18%.  Oil sales  decreased  by
$22,010 or 12%. A 21% decline in production caused sales to decrease by $40,087.
This  decrease was  partially  offset by a 12% increase in the average oil sales
price.  Gas sales  decreased by $28,882 or 32%. A 22% decrease in gas production
reduced sales by $19,689.  A 13% decrease in the average gas sales price reduced
sales by an additional $9,193. The lower oil production was primarily the result
of the shut-in of production in August 1995,  from the Corkscrew  acquisition in
Florida due to hurricane damage.  The decrease in gas production was primarily a
result of natural  production  declines which were especially  pronounced on the
RIC and Barnes  Estate  acquisitions.  The  changes in average oil and gas sales
prices  correspond  with  changes in the overall  market for the sale of oil and
gas.

            Lease  operating  expenses  increased  to  $128,752  in  1995,  from
$126,576 in 1994.  The  increase  of $2,176 or 2% was  primarily a result of the
workover costs incurred on the Corkscrew  acquisition to repair hurricane damage
to the wells in Florida in 1995.

            Depreciation and depletion expense decreased to $87,814 in 1995 from
$107,613 in 1994.  This  represents a decrease of $19,799 or 18%. The changes in
production,  noted above,  caused depreciation and depletion expense to decrease
by $23,248. This decrease was partially offset by a 4% increase in the depletion
rate.  The increase in the  depletion  rate was primarily a result of a downward
revision of the oil reserves during 1995, partially offset by an upward revision
of the gas reserves during 1995.

   
            Effective October 1, 1995, the Company sold its interest in the Kidd
#1 well in the Enexco  acquisition to Humphrey Oil Co. for $48,750.  A gain from
the sale of $43,383 was  recognized  by the Company.  The impact of this sale on
current and future  revenues is not expected to be material,  as such  interests
represented approximately 3% of historical and future net revenues.
    

            General and  administrative  expenses  decreased  to $51,756 in 1994
from  $54,892 in 1994.  The decrease of $3,136 or 6% was  primarily  due to less
staff time being  required to manage the Company's  operations in 1995 partially
offset by a $3,921  increase in direct  expenses  incurred by the  Company.  The
increase in direct  expenses was  primarily due to legal fees  resulting  from a
property interest dispute on the Barnes Estate acquisition. This case is set for
trial in the second  quarter of 1996. The Company does not expect the settlement
of the dispute to have a material impact on the financial statements.

Capital Resources and Liquidity

   
            The Company's  cash flows 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 flows from 1994 to 1995 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 flows
to the Company's  partners.  The Company's  "available cash flow" is essentially
equal to the net amount of cash provided by operating activities,  financing and
investing activities. Distributions decreased from 1994 to 1995 primarily due to
the decline in oil and gas sales, noted above.
    



                                      II-2

<PAGE>



            The Company will continue to recover its reserves and  distribute to
the partners the net proceeds  realized from the sale of oil and gas  production
after payment of debt obligations. The Company plans to repay the amount owed to
the general partner over a four year period.  The Company  suspended the payment
of  distributions  in  the  fourth  quarter  of  1995.  The  payment  of  future
distributions  will  depend  on the  Company's  earnings,  financial  condition,
working capital  requirements and other factors. It is anticipated that periodic
distributions will be made by the Company as cash becomes available.

            At December 31, 1995,  the Company had no material  commitments  for
capital  expenditures.  The Company does not intend to engage in any significant
developmental drilling activity.

                                      II-3

<PAGE>



Item 7.  Financial Statements and Supplementary Data


INDEPENDENT AUDITORS' REPORT

The Partners
Enex Oil & Gas Income
  Program III - Series 7, L.P.:


We have audited the accompanying  balance sheet of Enex Oil & Gas Income Program
III - Series 7, L.P. (a New Jersey limited  partnership) as of December 31, 1995
and the related statements of operations, changes in partners' capital, and cash
flows for each of the two years in the period ended  December  31,  1995.  These
financial statements are the responsibility of the general partner of Enex Oil &
Gas Income  Program  III - Series 7, L.P.  Our  responsibility  is to express an
opinion on the 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 audit 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.

In our  opinion,  such  financial  statements  present  fairly,  in all material
respects,  the financial  position of Enex Oil & Gas Income Program III - Series
7, L.P. at December  31,  1995 and the  results of its  operations  and its cash
flows  for each of the two  years  in the  period  ended  December  31,  1995 in
conformity with generally accepted accounting principles.


DELOITTE & TOUCHE  LLP




Houston, Texas
March 18, 1996


                                      II-4

<PAGE>
   
<TABLE>
<CAPTION>
ENEX OIL & GAS INCOME PROGRAM III - SERIES 7, L.P.

BALANCE SHEET, DECEMBER 31, 1995
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ASSETS
                                                                      1995
                                                                --------------
CURRENT ASSETS:
<S>                                                             <C>          
  Cash                                                          $       8,426
  Accounts receivable - oil & gas sales                                20,568
  Other current assets                                                  2,331
                                                                --------------

Total current assets                                                   31,325
                                                                --------------

OIL & GAS PROPERTIES
  (Successful efforts accounting method) - Proved
   mineral interests and related equipment & facilities             2,358,724
  Less  accumulated depreciation and depletion                      2,047,072
                                                                --------------

Property, net                                                         311,652
                                                                --------------

TOTAL                                                           $     342,977
                                                                ==============

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

CURRENT LIABILITIES:
   Accounts payable                                             $      23,765
   Payable to general partner                                         141,256
                                                                --------------

Total current liabilities                                             165,021
                                                                --------------

PARTNERS' CAPITAL (DEFICIT):
   Limited partners                                                   146,841
   General partner                                                     31,115
                                                                --------------

Total partners' capital                                               177,956
                                                                --------------

TOTAL                                                           $     342,977
                                                                ==============


Number of $500 Limited Partner units outstanding                        4,527
</TABLE>



See accompanying notes to financial statements.
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                                      II-5
    



<PAGE>

ENEX OIL & GAS INCOME PROGRAM III - SERIES 7, L.P.


NOTES TO FINANCIAL STATEMENTS
FOR THE TWO YEARS ENDED DECEMBER 31, 1995
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1.           PARTNERSHIP ORGANIZATION

             Enex Oil & Gas Income Program III - Series 7, L.P. (the "Company"),
             a New Jersey limited partnership,  commenced operations on February
             11,  1988  for  the  purpose  of  acquiring   proved  oil  and  gas
             properties. Total limited partner contributions were $2,263,383, of
             which  $22,634  was  contributed  by  Enex  Resources   Corporation
             ("Enex"), the general partner.

             In  accordance  with the  partnership  agreement,  the Company paid
             commissions  of  $213,826  for  solicited   subscriptions  to  Enex
             Securities  Corporation,  a subsidiary of Enex, and reimbursed Enex
             for organization expenses of approximately $68,000.

             Information  relating  to the  allocation  of  costs  and  revenues
             between Enex, as general  partner,  and the limited  partners is as
             follows:
                                                                    Limited
                                                         Enex       Partners

             Commissions and selling expenses                         100%
             Company reimbursement of organization
               expense                                                100%
             Company property acquisition                             100%
             General and administrative costs             10%          90%
             Costs of drilling and completing
               development wells                          10%          90%
             Revenues from temporary investment of
               partnership capital                                    100%
             Revenues from producing properties           10%          90%
             Operating costs (including general and
               administrative costs associated with
               operating producing properties)            10%          90%

             At the point in time  when the cash  distributions  to the  limited
             partners  equal  their  subscriptions  ("payout"),   the  costs  of
             drilling and completing  development wells, revenues from producing
             properties,  general and  administrative  costs and operating costs
             will be allocated 15% to the general partner and 85% to the limited
             partners.

2.           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

             Oil and Gas  Properties - The Company uses the  successful  efforts
             method of  accounting  for its oil and gas  operations.  Under this
             method,  the  costs  of  all  development  wells  are  capitalized.
             Capitalized costs are amortized on the  units-of-production  method
             based on estimated total proved reserves.  The acquisition costs of
             proved oil and gas  properties  are  capitalized  and  periodically
             assessed for impairment.

                                      II-8

<PAGE>



             The Financial  Accounting  Standards Board has issued  Statement of
             Financial   Accounting  Standards  No.  121,  "Accounting  for  the
             Impairment  of Long Lived  Assets and for  Long-Lived  Assets to Be
             Disposed Of." This statement  requires that  long-lived  assets and
             certain  identifiable  intangibles  held and used by the Company be
             reviewed for impairment whenever events or changes in circumstances
             indicate  that  the  carrying   amount  of  an  asset  may  not  be
             recoverable.

             The Company has not determined the effect, if any, on its financial
             position  or  results  of  operations  which  may  result  from the
             adoption of this statement in the first quarter of 1996.

   
             The Company's  operating  interests in oil and gas  properties  are
             recorded  using  the pro  rata  consolidation  method  pursuant  to
             Interpretation 2 of Accounting Principles Board Opinion 18.
    

             Cash Flows - The  Company  has  presented  its cash flows using the
             indirect method and considers all highly liquid investments with an
             original maturity of three months or less to be cash equivalents.

             General and  Administrative  Expenses - The Company  reimburses the
             General Partner for direct costs and administrative  costs incurred
             on its behalf.  Administrative  costs  allocated to the Company are
             computed  on a cost  basis in  accordance  with  standard  industry
             practices  by  allocating  the time spent by the General  Partner's
             personnel  among  all  projects  and by  allocating  rent and other
             overhead on the basis of the relative direct time charges.

             Uses of Estimates - The preparation of the 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
             contigent  assets  and  liabilities  at the  date of the  financial
             statements and the reported  amounts of revenue and expenses during
             the  reporting  periods.  Actual  results  could  differ from these
             estimates.

3.           FEDERAL INCOME TAXES

             General - The Company is not a taxable  entity for  federal  income
             tax purposes. Such taxes are liabilities of the individual partners
             and the  amounts  thereof  will vary  depending  on the  individual
             situation of each partner.  Accordingly,  there is no provision for
             income taxes in the accompanying financial statements.




                                      II-9

<PAGE>



4.           PAYABLE TO GENERAL PARTNER

             The payable to general  partner  primarily  consists of general and
             administrative expenses allocated to the Company by Enex during the
             Company's  start-up  phase  and for  its  ongoing  operations.  The
             Company plans to repay the amounts owed to the general partner over
             a period of four years.

5.           REPURCHASE OF LIMITED PARTNER INTERESTS

             In accordance with the partnership  agreement,  the general partner
             is required to purchase limited partner interests (at the option of
             the  limited  partners)  at annual  intervals  beginning  after the
             second year  following the  formation of the Company.  The purchase
             price,  as  specified  in  the  partnership  agreement,   is  based
             primarily  on reserve  reports  prepared by  independent  petroleum
             engineers as reduced by a specified risk factor.

6.           SIGNIFICANT PURCHASERS

             American  Exploration  Company purchased 28% and Sunniland Pipeline
             Company  accounted  for 18% of the  Company's  total sales in 1995.
             American  Exploration  Company purchased 27% and Sunniland Pipeline
             Company  accounted for 18% of the Company's total sales in 1994. No
             other  purchaser  individually  accounted for more than 10% of such
             sales.

7.           SALE OF PROPERTY

             Effective  October 1, 1995,  the Company  sold its  interest in the
             Kidd #1 well in the  Enexco  acquisition  to  Humphrey  Oil Co. for
             $48,750.  A gain from the sale of  $43,383  was  recognized  by the
             Company.

                                      II-11

<PAGE>



Item 8.      Changes In and Disagreements With Accountants on Accounting and 
             Financial Disclosure


             Not Applicable





                                      II-13

<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.

                                     ENEX OIL AND GAS INCOME PROGRAM III-
                                       SERIES 7, L.P.

                                         By:   ENEX RESOURCES CORPORATION
                                               the General Partner



   
December 23, 1996                            By:   /s/  G. B. Eckley
                                             --------------------
                                                        G. B. Eckley, President


                  In  accordance  with the  Exchange  Act,  this report has been
signed below on December 23, 1996,  by the following  persons in the  capacities
indicated.     


ENEX RESOURCES CORPORATION              General Partner


By:  /s/      G. B. Eckley

             ------------------------
              G. B. Eckley, President


     /s/      G. B. Eckley
                                        President, Chief Executive
              ------------------        Officer and Director

              G. B. Eckley


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

              R. E. Densford


     /s/      James A. Klein            Controller and Chief Accounting Officer

             -----------------

              James A. Klein




                                       S-1