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

   
                                   FORM 10-KSB/A
    

     (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 I


Item 1.      Description of Business


General

     Enex Oil & Gas Income  Program  III - Series 7, L.P.  (the  "Company")  was
formed under the New Jersey Uniform  Limited  Partnership Law (1976) on February
13,  1987  and  commenced  operations  on  February  11,  1988,  with  aggregate
subscriptions of $2,263,383, $2,240,749 of which was received from 2,101 limited
partners,  including  investors whose  distributions  from earlier  partnerships
sponsored by the Company's general partner, Enex Resources Corporation ("Enex"),
were automatically invested in the Company.

   
     The Company is engaged in the oil and gas business through the ownership of
various  interests in producing oil and gas  properties,  as detailed in Item 2,
below. If warranted, the Company may further develop its oil and gas properties.
However,  the  Company  does  not  intend  to  engage  in  significant  drilling
activities. Such activities may be conducted,  however, as an incidental part of
the management of producing properties or with a view toward enhancing the value
of  producing  properties.  In no event will the Company  engage in  exploratory
drilling, or use any of the limited partners' net revenues to fund
exploratory  drilling  activities.  Any developmental  drilling will be financed
primarily  through third party borrowing or with funds provided from operations.
The expenses of drilling,  completing  and equipping  and operating  development
wells are allocated 90% to the limited  partners and 10% to the general partner.
See  Note  1 to  the  Financial  Statements  for  information  relating  to  the
allocation  of costs and revenues  between the limited  partners and the general
partner. The Company's operations are concentrated in a single industry segment.

     The Company owns working  interests  in certain oil and gas  properties.  A
"working  interest" is a portion of the operating  interest  which is subject to
most of the costs associated with a well.
    
 
     The principal  executive  office of the Company is maintained at Suite 200,
Three Kingwood Place, Kingwood, Texas 77339. The telephone number at this office
is (713) 358-8401. The Company has no regional offices.

     The Company has no employees.  On March 1, 1996, Enex and its  subsidiaries
employed 24 persons.

Marketing

     The  marketing  of oil and gas  produced  by the  Company is  affected by a
number of factors  which are beyond the Company's  control,  the exact nature of
which cannot be accurately  predicted.  These  factors  include the quantity and
price of crude oil imports,  fluctuating  supply and demand,  pipeline and other
transportation facilities, the marketing of competitive fuels, state and federal
regulation  of oil  and  gas  production  and  distribution  and  other  matters
affecting the availability of a ready market. All of these factors are extremely
volatile.

                                      I-2

<PAGE>

     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. Although the Company marketed a significant portion
of its sales to the above noted companies,  such a concentration does not pose a
significant risk due to the commodity nature of the Company's products.

   
     The  operators  of the  Company's  properties  are  noted  in Item 2 below.
Although a significant  portion of the Company's  properties  were operated by a
limited number of operators, this concentration does not pose a significant risk
since the Company's rights are secured by joint operating agreements.
    

Environmental and Conservation Regulation

     State  regulatory  authorities  in the  states  in which the  Company  owns
producing  properties  are empowered to make and enforce  regulations to prevent
waste of oil and gas and to  protect  correlative  rights and  opportunities  to
produce oil and gas for owners of a common  reservoir.  Each of such  regulatory
authorities  also  regulates  the amount of oil and gas  produced  by  assigning
allowable rates of production, which may be increased or decreased in accordance
with supply and demand.  Requirements  regarding the  prevention and clean-up of
pollution and similar environmental  matters are also generally applicable.  The
costs, if any, the Company may incur in this regard cannot be predicted.

     The existence of such  regulations  has had no material  adverse effects on
the Company's  operations to date,  and the cost of compliance  has not yet been
material.  There are no material  administrative or judicial proceedings arising
under such laws or  regulations  pending  against  the  Company.  The Company is
unable to assess or predict the impact that  compliance with  environmental  and
pollution  control  laws  and  regulations  may have on its  future  operations,
capital expenditures, earnings or competitive position.

Tax Laws

     The  operations of the Company are affected by the federal  income tax laws
contained in the Internal  Revenue Code of 1986, as amended (the "Code").  Under
the Code,  generally,  the Company  will report  income from the sale of oil and
gas,  against  which it may deduct its ordinary  business  expenses,  depletion,
depreciation and intangible drilling and development costs.

     It is anticipated that most of the Company's income, if any, will be from a
"passive  activity"  for  purposes of the Code. A passive  activity  includes an
activity in which the taxpayer does not  materially  participate,  including the
ownership of a limited partnership interest, such as an interest in the Company.
"Passive  Income," however,  does not include portfolio income (i.e.  dividends,
interest,  royalties,  etc.). Although taxpayers generally may not deduct losses
or use tax credits  derived from passive  activities  in an amount  greater than
their income derived from such activities, if and to the extent that the Company
generates  passive income,  it will be available to offset the limited partners'
passive losses from other sources.

     Partnerships  with  interests  that  are  "publicly  traded"  are  taxed as
corporations unless at least 90% of their income is "qualifying income." Because
the  Company's  income will be qualifying  income for this purpose,  the Company
will not be taxed as a corporation under this rule. Passive income or

                                      I-2
<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 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. Distributions decreased
from 1994 to 1995  primarily  due to the  decline  in oil and gas  sales,  noted
above.

     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
    

                                      II-2
<PAGE>

<TABLE>
<CAPTION>

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

BALANCE SHEET, DECEMBER 31, 1995
--------------------------------------------------------------------------

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                                                2,358,724
  Less  accumulated depletion                                       2,047,072
                                                               ---------------

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

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

LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
   Accounts payable                                            $       23,765
   Payable to general partner                                          35,314
                                                               ---------------

Total current liabilities                                              59,079
                                                               ---------------

NONCURRENT PAYABLE TO GENERAL PARTNER                                 105,942
                                                               ---------------

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

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

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


</TABLE>


   
Number of $500 Limited Partner units outstanding                        4,527
    


See accompanying notes to financial statements.
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                                      II-4
<PAGE>




<PAGE>

     Martin J. Freedman.  Mr. Freedman, age 71, was one of the General Partner's
founders  and a member of its Board of  Directors  as well as a board  member of
Enex Securities  Corporation until June of 1986. He was reappointed to the Board
on April 19,  1990 to fill a  vacancy.  He is a member of the  Compensation  and
Options  Committee.  He is  currently  President  of Freedman Oil & Gas Company,
engaged primarily in the management of its exploration and producing properties,
and the managing  partner  Martin J. Freedman & Company which has an interest in
approximately  one hundred  producing  oil and/or gas wells.  Mr.  Freedman is a
lifetime member of the Denver  Petroleum Club as well as being a lifetime member
of the Denver Association of Petroleum  Landmen.  He was an officer and Director
and/or  founder of several  former private and public  companies.  Mr.  Freedman
entered the oil and gas business in 1954 when he joined Mr.  Marvin Davis of the
Davis Oil Company.  In 1956, he became President of Central Oil  Corporation,  a
company engaged in oil and gas exploration.  From 1958 on, Mr. Freedman operated
as Martin J. Freedman Oil Properties and was President of Oil Properties,  Inc.,
a private corporation. Mr. Freedman attended Long Island University and New York
University.  He received a bachelor's degree in Psychology and also attended New
York University's graduate school.

     James  Thomas  Shorney.  Mr.  Shorney,  age 70, has been a Director  of the
General  Partner  since  April of 1990 and is a member of the  Compensation  and
Options Committee. He has been a petroleum consultant and Secretary/Treasurer of
the Shorney Company, a privately held oil and gas exploration company, from 1970
to date. From 1970 to 1976, he also served as a petroleum consultant in Land and
Lease Research Analysis Studies for the GHK Company. He was an oil and gas lease
broker  from  1962 to 1970  and  employed  by  Shell  Oil  Company  in the  Land
Department  from 1954 to 1962.  Before  joining Shell Oil Company,  he served as
Public  Information  Officer  in the  U.S.  Army  Air  Force  from  1950 to 1953
including attending  Georgetown  University Graduate School in 1952. Mr. Shorney
graduated  from the  University of Oklahoma with a B.A.  degree in Journalism in
1950.  From 1943 to 1945,  he  served in the U.S.  Army Air Force as an air crew
member  on a  B-24  Bomber.  Mr.  Shorney  is a  member  of  the  Oklahoma  City
Association  of  Petroleum  Landmen  on  which he has  served  as  Director  and
Secretary/Treasurer.  He is an active  member  of the  American  Association  of
Petroleum Landmen. In 1975, Mr. Shorney was first listed in the London Financial
Times' Who's Who in World Oil and Gas.

     Robert D. Carl,  III.  Mr.  Carl,  age 42, was  appointed a Director of the
General Partner on July 30, 1991 and is a member of the Audit  Committee.  He is
President,  Chief Executive  Officer and Chairman of the Board of Health Images,
Inc., a public company whose securities are traded on NYSE, which provides fixed
site magnetic  resonance imaging ("MRI")  services.  From 1978 to 1981, Mr. Carl
also  served as  President  of Carl  Investment  Associates,  Inc. a  registered
investment  advisor.  In 1981,  Mr. Carl joined  Cardio-Tech,  Inc.,  as general
counsel  and as an officer and  Director.  Upon the sale and  reorganization  of
Cardio-Tech,  Inc.  into  Cardiopul  Technologies  in  1982,  he  served  as its
Executive  Vice  President  and as a  Director.  In March,  1985 he was  elected
President,  Chief Executive Officer and Chairman of Cardiopul Technologies which
spun off its  non-imaging  medical  services  business  and  changed its name to
Health  Images,  Inc.  Mr. Carl  received a B.A. in History  from  Franklin  and
Marshall  College,  Lancaster,  Pennsylvania  in  1975  and a  J.D.  from  Emory
University  School of Law,  Atlanta,  Georgia in 1978.  Mr. Carl is a trustee of
Franklin & Marshall College and is a member of the State Bar of Georgia.

   
     On January 4, 1996, the SEC filed a complaint in the United States District
Court for the  District of Columbia  against  Mr.  Carl  alleging  that Mr. Carl
violated Section 16(a) of the Securities  Exchange Act of 1934 ("Exchange Act"),
and Rule 16a-2 and 16a-3  (and  former  Rule  16a-1)  thereunder,  by failing to
timely file  reports  concerning  thirty-eight  securities  transactions  in his
mother's brokerage  accounts involving shares of Health Images,  Inc. stock. The
SEC took the position that because Mr. Carl (1) provided  substantial  financial
    

                                     III-2

<PAGE>

support to his mother,  (2)  commingled  his  mother's  assets with his own, (3)
provided  a  substantial  portion of the funds  used to  purchase  the shares in
question,  and (4) received from his mother a  substantial  portion of the sales
proceeds, he, therefore, had a pecuniary interest in, and was a beneficial owner
of, the shares in question.

     In response to the SEC's action, Mr. Carl disgorged to Health Images,  Inc.
approximately  $92,400 in  short-swing  profits from the trading in his mother's
account,  plus  interest  thereon  of  approximately  $52,600.  The SEC  further
requested the court to impose a $10,000 civil penalty  against Mr. Carl pursuant
to Section  21(d)(3)  of the  Exchange  Act.  Without  admitting  or denying the
allegations  in the  complaint,  Mr.  Carl  consented  to the  entry  of a final
judgement  imposing the $10,000  penalty.  On January 12, 1996, a federal  judge
entered the final judgement in this matter, and Mr. Carl has since filed amended
reports on Forms 4 and 5 reflecting these transactions in his mother's accounts.

     In relation to the same matter, the SEC has issued an administrative  Order
pursuant to Section 21C of the Exchange  Act against Mr.  Carl,  finding that he
violated  Section 16(a) and the rules  thereunder and requiring him to cease and
desist from  committing  or causing any  violation or future  violation of those
provisions. Without admitting or denying allegations in the SEC's Order, Mr.
Carl consented to the entry of the Order.

     Robert E. Densford.  Mr. Densford,  age 38, was appointed a Director of the
General  Partner  on  September  11,  1991.  He joined  the  General  Partner as
Controller  on May 1, 1985 and  became  Vice  President-Finance,  Secretary  and
Treasurer  on March 1, 1989.  From  January  1983 to April  1985,  he was Senior
Accountant for Deloitte Haskins & Sells in Houston, Texas, auditing both closely
held and publicly owned oil and gas  companies.  From September 1981 to December
1982, he was a staff  accountant for Coopers & Lybrand in Houston.  Mr. Densford
is a C.P.A.  and holds a B.B.A.  degree in Accounting and an M.S.  degree in Oil
and Gas  Accounting  from Texas Tech  University and is a member of the American
Institute of Certified  Public  Accountants  and the Texas  Society of Certified
Public Accountants.

     James A. Klein. Mr. Klein, age 32, joined the General Partner as Controller
in February 1991. In June 1993, he was appointed President and Principal of Enex
Securities  Corporation.  From June 1988 to February  1991,  he was  employed by
Positron Corporation in Houston.  From July 1987 to May 1988, he was employed by
Transworld  Oil Company in Houston and from  September  1985 until July 1987, he
was an accountant with Deloitte Haskins & Sells in Houston,  Texas, auditing oil
and gas and oil service  companies.  Mr. Klein is a Certified Public  Accountant
and holds a B.A. in  Accounting  (1985)  from the  University  of Iowa.  He is a
member of the American  Institute of Certified  Public  Accountants and the Iowa
Society of Certified Public Accountants.

Item 10.                 Executive Compensation

     The Company has no Directors or executive officers.

     The Company does not pay a proportional or fixed share of the  compensation
paid to the officers of the General Partner.

   
     See  Item  Number  2 -  "Description  of  Property"  in this  report  for a
description of the properties  operated by Enex. Enex operates susch  properties
under the terms of a Joint Operating Agreement ("JOA"). Overhead charges allowed
to third  parties  under the JOA in  accordance  with the  Council of  Petroleum
Accountants  Societies are not charged to the Company. Such costs are considered
to be within the general and  administrative  overhead charges  allocated to the
Company.     


                                      III-3

<PAGE>

Item 11.    Security Ownership of Certain Beneficial Owners and Management


                                                     $500 Limited
                                     Name of         Partner Units      Percent
           Title of Class       Beneficial Owner    Owned Directly     of Class

           Limited Partner       Enex Resources           718          15.8676%


Item 12.         Certain Relationships and Related Transactions


                 See the  Statements  of  Operations  included in the  Financial
Statements  in Item 7 of this  report for  information  concerning  general  and
administrative  costs incurred by Enex and allocated to the Company,  and Note 1
to  such  Financial  Statements  for  information  concerning  payments  to Enex
Securities  Corporation,  a  wholly  owned  subsidiary  of Enex  and to Enex for
certain offering and organization expenses incurred by the Company.

   
     See  Item  Number  2 -  "Description  of  Property"  in this  report  for a
description of the properties  operated by Enex. Enex operates susch  properties
under the terms of a Joint Operating Agreement ("JOA"). Overhead charges allowed
to third  parties  under the JOA in  accordance  with the  Council of  Petroleum
Accountants  Societies are not charged to the Company. Such costs are considered
to be within the general and  administrative  overhead charges  allocated to the
Company.
    



Item 13.    Exhibits and Reports on Form 8-K

                                                             Sequential
                                                               Page No.
                                                        ------------------


            (a) Exhibits

                (3)   a.    Certificate of Limited Partnership, as amended.
                            Incorporated by reference to Exhibit 3(a) to the
                            Company's Annual Report on Form 10-K for the
                            year ended December 31, 1987.

                      b.    Amended Agreement of Limited Partnership.
                            Incorporated by reference to Exhibit 3(a) to
                            Post-Effective Amendment No. 1 to the
                            Registration Statement on Form S-1 (No. 33-
                            4755) of Enex Oil and Gas Income Program III
                            filed with the Securities and Exchange
                            Commission on April 9, 1987.

                (4)          Not Applicable

                (10)         Not Applicable

                (11)         Not Applicable

                (12)         Not Applicable

             
                                      III-4


<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



   
November 7, 1996                            By:   /s/  G. B. Eckley
                                             --------------------
                                                    G. B. Eckley, President


                  In  accordance  with the  Exchange  Act,  this report has been
signed below on November 7, 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