<PAGE> 1





                          SECURITIES AND EXCHANGE COMMISSION
                               Washington, D. C.  20549

                                      Form 10-Q
                                 ____________________

     (Mark One)
     (X)           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                        OF THE SECURITIES EXCHANGE ACT OF 1934

                     For the quarterly period ended June 30, 1999

                                          OR

     ( )          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                        OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the transition period from        to

                            Commission file number 0-12757

                              TMBR/SHARP DRILLING, INC.
                (Exact name of registrant as specified in its charter)

                     TEXAS                                    75-1835108
         (State or other jurisdiction of                   (I.R.S. Employer
         incorporation or organization)                   Identification No.)

              4607 WEST INDUSTRIAL BLVD.
                    MIDLAND, TEXAS                                79703
         (Address of principal executive offices)               (Zip Code)

               Registrant's telephone number (area code) (915) 699-5050

          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  the number  of shares  outstanding of  each of  the issuer's
     classes of common stock, as of the latest practicable date.

          Common Stock, $.10 Par Value          Outstanding at August 9, 1999
                (Title of Class)                         4,710,886








<PAGE> 2
                              TMBR/SHARP DRILLING, INC.
                                   FORM 10-Q REPORT

                                        INDEX



                                                                        Page No.

     Part I.  Financial Information (Unaudited)

       Item 1.  Financial Statements

                Balance Sheets, June 30, 1999 and
                  March 31, 1999 . . . . . . . . . . . . . . . . . . . .   3

                Statements of Operations, Three Months
                  Ended June 30, 1999 and 1998 . . . . . . . . . . . . .   5

                Statements of Stockholders'
                  Equity   . . . . . . . . . . . . . . . . . . . . . . .   7

                Statements of Cash Flows, Three Months
                  Ended June 30, 1999 and 1998 . . . . . . . . . . . . .   8

                Notes to Financial Statements  . . . . . . . . . . . . .   9

       Item 2.  Management's Discussion and Analysis of Financial
                  Condition and Results of Operations  . . . . . . . . .  13


     Part II.  Other Information

       Item 1.  Legal Proceedings  . . . . . . . . . . . . . . . . . . .  16

       Item 6.  Exhibits and Reports on Form 8-K . . . . . . . . . . . .  16

















                                         -2-





<PAGE> 3
     PART ONE - FINANCIAL INFORMATION (UNAUDITED)

     Item 1.  FINANCIAL STATEMENTS


                              TMBR/SHARP DRILLING, INC.
                                    BALANCE SHEETS
                     June 30, 1999 (Unaudited) and March 31, 1999
                        (In thousands, except per share data)



                                                   June 30,
                                                     1999            March 31,
       ASSETS                                     (Unaudited)          1999
       ------                                    -------------      -----------

     Current assets:
       Cash and cash equivalents                   $    968         $   1,195
       Marketable securities                             49                49
       Trade receivables,
         net of allowance for doubtful
           accounts of $1,349 at both
           June 30, and March 31, 1999                3,107             3,451
       Inventories                                       55                94
       Deposits                                          73                73
       Other                                            510               567
                                                    --------          --------
         Total current assets                         4,762             5,429
                                                    --------          --------

     Property and equipment, at cost:
       Drilling equipment                            49,034            48,868
       Oil and gas properties, based on
         successful efforts accounting               19,152            18,742
       Other property and equipment                   3,569             3,569
                                                    --------          --------
                                                     71,755            71,179

     Less accumulated depreciation,
       depletion and amortization                   (58,412)          (57,858)
                                                    --------          --------

         Net property and equipment                  13,343            13,321
                                                    --------          --------

     Other assets                                       173               173
                                                    --------          --------
         Total assets                              $ 18,278          $ 18,923
                                                    ========          ========

     See accompanying notes to financial statements.

                                         -3-





<PAGE> 4
                              TMBR/SHARP DRILLING, INC.
                                    BALANCE SHEETS
                     June 30, 1999 (Unaudited) and March 31, 1999
                        (In thousands, except per share data)


                                                  June 30,
                                                    1999            March 31,
     LIABILITIES AND STOCKHOLDERS' EQUITY        (Unaudited)          1999
     ------------------------------------       ------------       -----------

     Current liabilities:
       Trade payables                             $   1,862          $  1,424
       Other                                            437               764
                                                    --------          --------
          Total current liabilities                   2,299             2,188
                                                    --------          --------


     Contingencies

     Stockholders' equity:
       Common stock, $0.10 par value
         Authorized, 50,000,000 shares;
         issued 5,979,625 shares at
         June 30, and March 31, 1999                    598               598
       Additional paid-in capital                    69,429            69,429
       Accumulated deficit                          (53,860)          (53,104)
       Accumulated other comprehensive
         income (loss)                                  (38)              (38)
       Treasury stock-common, 1,268,739
         shares at June 30, and
         March 31, 1999, at cost                       (150)             (150)
                                                    --------          --------
          Total stockholders' equity                 15,979            16,735
                                                    --------          --------
          Total liabilities and
            stockholders' equity                  $  18,278         $  18,923
                                                    ========          ========

     See accompanying notes to financial statements.












                                         -4-





<PAGE> 5
                              TMBR/SHARP DRILLING, INC.
                               STATEMENTS OF OPERATIONS
                Three months ended June 30, 1999 and 1998 (Unaudited)
                        (In thousands, except per share data)




                                                      Three months ended
                                                           June 30,
                                                 -----------------------------
                                                    1999              1998
                                                 -----------       -----------
       Revenues:
          Contract drilling                     $     1,723       $     6,270
          Oil and gas                                   481               499
                                                 -----------       -----------
              Total revenues                          2,204             6,769
                                                 -----------       -----------

       Operating costs and expenses:
          Contract drilling                           1,712             4,587
          Oil and gas production                        245               175
          Dry holes and abandonments                     81               196
          Depreciation, depletion and
            amortization                                554               720
          General and administrative                    402               449
                                                 -----------       -----------
              Total operating costs
                and expenses                          2,994             6,127
                                                 -----------       -----------
              Operating (loss) income                  (790)              642
                                                 -----------       -----------

       Other income:
          Interest                                       17                42
          Gain on sales of assets                        --                 4
          Other, net                                     17                --
                                                 -----------       -----------
          Total other income                             34                46
                                                 -----------       -----------
       Net (loss) income before income
          tax provision                                (756)              688
       Provision for income taxes                        --               (14)
                                                 -----------       -----------

       Net (loss) income                         $     (756)      $       674
                                                 ===========       ===========

     See accompanying notes to financial statements.





                                         -5-



<PAGE> 6
                              TMBR/SHARP DRILLING, INC.
                               STATEMENTS OF OPERATIONS
                Three months ended June 30, 1999 and 1998 (Unaudited)
                        (In thousands, except per share data)




                                                      Three months ended
                                                            June 30,
                                                 -----------------------------
                                                    1999              1998
                                                 -----------       -----------

     Net (loss) income per common share:

       Basic                                  $       (.16)       $       .14
       Diluted                                        (.16)               .13
                                                 ===========       ===========

     Weighted average number of
       common shares outstanding:

       Basic                                      4,710,886         4,710,886
       Diluted                                    4,710,886         5,083,957
                                                 ===========       ===========

     See accompanying notes to financial statements.


























                                         -6-




<PAGE> 7
                              TMBR/SHARP DRILLING, INC.

                          STATEMENTS OF STOCKHOLDERS EQUITY

                   Three Months Ended June 30, 1999 (Unaudited) and

                         Year Ended March 31, 1999 (Audited)

                                    (In thousands)

<TABLE>
<CAPTION>


                                                                                  Accumulated
                                       Common Stock     Additional                   Other       Treasury Stock     Total
                                      --------------     Paid-In     Accumulated  Comprehensive  --------------  Stockholders'
                                      Shares  Amount     Capital       Deficit    Income (Loss)  Shares  Amount     Equity
                                      ------  ------     -------     -----------  -------------  ------  ------  ------------
                 <S>                  <C>     <C>       <C>          <C>          <C>            <C>     <C>     <C>
                 Balance,
                   March 31, 1999     5,980   $ 598     $ 69,429      $(53,104)      $ (38)       1,270  $(150)    $16,735

                 Net loss                --      --           --          (756)         --           --     --        (756)
                                      -----    -----     --------      --------        ----      -------  -----     -------

                 Balance,
                   June 30, 1999      5,980   $ 598     $ 69,429      $(53,860)      $ (38)       1,270  $(150)    $15,979
                                      =====    =====     ========      ========        ====      =======  =====     =======
</TABLE>
          See accompanying notes to financial statements.






















                                         -7-





<PAGE> 8
                               TMBR/SHARP DRILLING, INC.
                               STATEMENTS OF CASH FLOWS
             For the three months ended June 30, 1999 and 1998 (Unaudited)
                                    (In thousands)


                                                    Three months ended June 30,
                                                  ------------------------------
                                                    1999                 1998
                                                  ---------            ---------
    Cash flows from operating activities:
      Net (loss) income                             $ (756)            $    674
      Adjustments to reconcile net (loss) income
      to net cash provided by
          operating activities:
           Depreciation, depletion and
            amortization                               554                  720
           Dry holes and abandonments                   81                  196
           Gain on sales of assets                      --                   (4)
           Changes in assets and liabilities:
            Trade receivables                          344                  484
            Deposits                                    --                  (31)
            Inventories and other assets                96                   60
            Trade payables                             438                1,602
            Accrued interest and other liabilities    (327)                (752)
                                                   --------             --------
             Total adjustments                       1,186                2,275
                                                   --------             --------
             Net cash provided by
              operating activities                     430                2,949

    Cash flows from investing activities:
      Additions to property and equipment             (657)              (1,033)
      Proceeds from sales of property and
        equipment                                       --                   52
                                                   --------             --------
             Net cash required by
              investing activities                    (657)                (981)

    Cash flows from financing activities:
      Issuance of common stock                          --                   --
                                                   --------             --------
             Net cash provided by
              financing activities                      --                   --
                                                   --------             --------
             Net (decrease) increase in
              cash and cash equivalents               (227)               1,968

    Cash and cash equivalents at beginning
      of period                                      1,195                1,623
                                                   --------             --------
    Cash and cash equivalents at end of
      period                                       $   968              $ 3,591
                                                   ========             ========

    See accompanying notes to financial statements.

                                          -8-

<PAGE> 9

                              TMBR/SHARP DRILLING, INC.
                            NOTES TO FINANCIAL STATEMENTS



          The amounts presented in the  balance sheet as of March 31,  1999 were
     derived from the  Company's audited  financial statements  included in  its
     Form  10-K Report  filed  for the  year  then  ended.   The  notes to  such
     statements are incorporated herein by reference.


     (1) Management's Representation

          In  the opinion  of management,  the accompanying  unaudited financial
     statements contain all adjustments (all of which are  of a normal recurring
     nature)  necessary to present fairly the Company's financial position as of
     June 30, 1999  and March 31, 1999, the results of  operations for the three
     months ended June 30, 1999 and 1998, and the cash flows for the three month
     periods ended June 30, 1999 and 1998.

          While the Company believes that the disclosures presented are adequate
     to  make the  information  not  misleading,  it  is  suggested  that  these
     condensed financial  statements be read  in conjunction with  the financial
     statements and the related notes in the Company's Annual Report on Form 10-
     K for the fiscal year ended March 31, 1999.


     (2) Summary of Significant Accounting Policies

     Marketable Securities

          Under  SFAS No. 115,  "Accounting  for Certain Investments in Debt and
     Equity  Securities",   marketable securities,  such as  those owned  by the
     Company,  are  classified as  available-for-sale securities  and are  to be
     reported  at market value, with unrealized gains  and losses, net of income
     taxes,  excluded  from earnings  and reported  as  a separate  component of
     stockholders'  equity.  The  market value of  these securities  at June 30,
     1999  was  approximately $49,000.    An  unrealized loss  of  approximately
     $38,000  was  deducted  from stockholders  equity  and  was  included as  a
     component of other comprehensive income.

     Inventories

          Inventories  consist primarily  of  casing and  tubing.   The  Company
     values its  inventories at the lower  of cost or  estimated net recoverable
     value using the specific identification method.

     Property and Equipment

          Drilling  equipment  is depreciated  on  a units-of-production  method
     based  on the  monthly utilization  of the  equipment.   Drilling equipment
     which  is not  utilized  during  a month  is  depreciated  using a  minimum
     utilization rate  of approximately  twenty-five percent.   Estimated useful
     lives range  from four to  eight years.   Other property  and equipment  is


                                         -9-

<PAGE> 10

     depreciated using  the straight-line method of  depreciation with estimated
     useful lives of three to seven years.

          Oil  and gas properties are accounted for using the successful efforts
     method.   Accordingly, the costs  incurred to acquire  property (proved and
     unproved),  all  development costs  and  successful  exploratory costs  are
     capitalized,  whereas  the  costs  of unsuccessful  exploratory  wells  are
     expensed.   Geological and geophysical costs,  including seismic costs, are
     charged to expense  when incurred.   In  cases where  the Company  provides
     contract drilling  services related to  oil and gas properties  in which it
     has  an ownership  interest,  the Company's  proportionate  share of  costs
     related to  these properties  is capitalized  as stated above,  net of  the
     Company's  working  interest share  of  profits from  the  related drilling
     contracts.   Capitalized costs  of undeveloped  properties,  which are  not
     depleted until proved reserves  can be associated with the  properties, are
     periodically reviewed for possible impairment.

          Depletion, depreciation  and amortization  of capitalized oil  and gas
     property  costs was provided using  the units-of-production method based on
     estimated proved or proved  developed oil and gas reserves,  as applicable,
     of the respective property units.

          Major  renewals and  betterments  are capitalized  in the  appropriate
     property  accounts while the cost of repairs  and maintenance is charged to
     operating expense  in the period  incurred.   For assets sold  or otherwise
     retired, the cost and related accumulated depreciation amounts  are removed
     from the accounts and any resulting gain or loss is recognized.

     Net Income (Loss) Per Common Share

          On  April  1,  1997,  the  Company  adopted  Statement  of   Financial
     Accounting  Standards  No.  128 ("SFAS  128")  "Earnings  Per  Share" which
     superseded Accounting Principles Board Opinion  No. 15 ("APB 15") "Earnings
     Per  Share". SFAS 128 simplifies earnings per share ("EPS") calculations by
     replacing  previously  reported  primary  EPS  with  basic  EPS   which  is
     calculated by  dividing reported earnings available  to common shareholders
     by  the weighted average shares  outstanding.  No  dilution for potentially
     dilutive  securities is included in  basic EPS.   Previously reported fully
     diluted EPS is called  diluted EPS which includes all  potentially dilutive
     securities.


     (3)  Debt

          Line of Credit

          On January  16, 1996, the Company  entered into a loan  agreement with
     Norwest  Bank  Texas,  N.A.  ("Norwest")  that  provided for  a  $3,000,000
     revolving line of credit secured by the Company's drilling rigs and related
     equipment, accounts receivable and inventory.  Borrowings under the line of
     credit bore  interest at the  Norwest Bank Minnesota,  National Association
     base rate and the interest was payable  monthly.  The loan agreement had an
     extended maturity date  of April 15, 1998,  at which time, the  outstanding
     principal and all of the accrued and unpaid interest were due and payable.


                                         -10-

<PAGE> 11

          In August, 1996, the Company entered into a second loan agreement with
     Norwest.  The  second loan  agreement provided for  a $2,000,000  revolving
     line of credit secured by substantially  all of the Company's producing oil
     and  gas properties.  Borrowings under the  line of credit bore interest at
     the  Norwest base rate and  the interest was payable  monthly.  The line of
     credit had an extended maturity date of April 15, 1998,  at which time, the
     principal  amount outstanding  was due  and payable,  plus any  accrued and
     unpaid interest.   The borrowings under  both loan agreements were  paid in
     full in February, 1997.

          On May  26, 1998,   the  Company renewed and  extended the  prior loan
     agreements with Norwest Bank Texas,  N. A..  The amended and  restated loan
     agreement provides for a $5,000,000 revolving line of credit secured by the
     Company's  drilling rigs  and  related equipment,  accounts receivable  and
     inventory.  Borrowings under the  renewed and extended line of credit  bear
     interest at the  Norwest Bank base  rate and interest  is payable  monthly.
     The  renewed and  extended loan  agreement  matures on  May 26,  2000.   No
     amounts were outstanding under the line of credit on June 30, 1999.


     (4)  Stockholders' Equity

          1984 Stock Option Plan

          In August of 1984, the Company adopted the 1984 Stock Option Plan (the
     "Plan")  which initially authorized 375,000 shares  of the Company's common
     stock to be issued as either incentive stock options or  nonqualified stock
     options.   This Plan was amended in  August 1986 to increase the authorized
     shares to 475,000  shares of the Company's common stock.   In January 1988,
     the Plan was amended to  reduce the option price on certain  options issued
     prior to  March 31, 1986, to reflect the  then current fair market value of
     the Company's common stock.  The  Plan provides that options may be granted
     to key  employees or directors for  various terms at a price  not less than
     the fair market value of  the shares on the date of the grant.   Options to
     purchase  100,000 shares  of  common stock  are  currently exercisable  and
     outstanding under the  Plan.  No additional shares are  available for grant
     as the Plan expired by its own terms in August 1994.  The options that were
     granted prior to  the expiration of  the Plan, and  which are  outstanding,
     remain subject to the terms of the Plan.

          1994 Stock Option Plan

          In July  1994, the Company  adopted its  1994 Stock  Option Plan  (the
     "1994 Plan")  which  authorized the  grant  of options  to  purchase up  to
     750,000 shares  of the Company's common stock.  These options may be issued
     as either incentive or  nonqualified stock options.  The 1994 Plan provides
     that options may be granted to key employees or directors for various terms
     at a price not less than the fair market value of the shares on the date of
     grant.  The 1994  Plan was ratified and approved by the stockholders at the
     Company's annual  meeting of  stockholders held  on  August 30,  1994.   In
     September 1998, options outstanding  under the plan were amended  to reduce
     the option price to $4.125 per share.

          On  September  3,   1996,  the  Company  granted  465,000   shares  of


                                         -11-

<PAGE> 12

     nonqualified stock  options to key employees  under the 1994 Plan.   All of
     the nonqualified stock options  granted on September 3, 1996 are earned and
     exercisable as of May 1,  1997.  On September 1, 1998,  the Company granted
     240,000  shares of  incentive stock  options at  a price  of $4.125  to key
     employees under  the 1994 Plan.   On March  9, 1999, 140,000  shares became
     earned  and exercisable.  The  remaining 100,000 shares  will become earned
     and exercisable over a three year period.  The following sets forth certain
     information concerning these options.

                                          Number          Option Price
                                            of         ---------------------
                                          Shares       Per Share       Total
                                          ------       ---------------------

          Outstanding March 31, 1999     572,500    $4.125-4.5375   $ 2,420,963

          Forfeited                       (5,000)       4.125           (20,625)
                                         -------     ------------     ---------
          Outstanding June 30, 1999      567,500    $4.125-4.5375    $2,400,338
                                         =======     ============     =========

          1998 Stock Option Plan

          In  September  1998,  the  Company  adopted,  subject  to  shareholder
     approval, its 1998 Stock Option Plan (the "1998 Plan") which authorizes the
     grant of options  to purchase up to 750,000 shares  of the Company's common
     stock.  These  options may be  issued as either  incentive or  nonqualified
     stock options.  The 1998 Plan  provides that options may be granted to  key
     employees or directors from various terms at a price not less than the fair
     market  value of  the shares  on the date  of grant.   The  Company granted
     options to purchase 50,000 shares of common  stock to two outside directors
     under the 1998 Plan.  These nonqualified options were granted at $4.125 per
     share and  are exercisable on  the date  on which the  shareholders of  the
     Company approve and adopt the 1998 Plan.

          In connection with a private placement completed in February 1997, the
     Company issued and currently  has outstanding a warrant to  purchase 36,250
     common shares  with an exercise  price of $13.20  per share.   This warrant
     became exercisable on February 17, 1998 and expires on February 17, 2002.

     (6)  Employee Benefits

          Effective  May  1,  1995,   the  Company  established  the  TMBR/Sharp
     Drilling,  Inc. Employee Retirement Plan  which is a  401(K) profit sharing
     plan.   Company contributions are discretionary and have been currently set
     at  25% for  each dollar  contributed by  each eligible  employee, limited,
     however, to  a maximum of 5%  of the employee's compensation.   The Company
     has decided to terminate the 401(K) plan effective March 31, 1999.

     (7)  Contingencies

          The Company is a defendant in various lawsuits generally incidental to
     its business.  The Company does not believe that the ultimate resolution of
     such litigation will have  a significant effect on the  Company's financial
     position or results of operations.

                                         -12-

<PAGE> 13

     Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
              RESULTS OF OPERATIONS

          In  addition  to  historical  information,  this  discussion  contains
     certain  forward-looking statements  that  involve risks  and uncertainties
     about the business, long-term  strategy, financial condition and  future of
     the Company.   Factors that may  affect future results are  included in the
     discussion  below and in Part I,  Items 1 and 2 of  the Company's Form 10-K
     for the year ended  March 31, 1999.  Although the Company believes that the
     expectations  reflected in such  forward-looking statements are reasonable,
     it  can give no  assurance that such  expectations will prove  to have been
     correct,  and actual  results could differ  materially from  those forward-
     looking statements.

     Results of Operations

          Total revenues were  $2,204,000 for  the three months  ended June  30,
     1999  which  represents a  67%  decrease  from  the  same period  in  1998.
     Operating expenses as a percent of  revenues were 136% for the three months
     ended June 30, 1999  versus 91% for the same period of the prior year.  The
     operating results were negatively affected by a decrease in demand for  the
     Company's  contract drilling services which  resulted in a  decrease in rig
     utilization rates.   The  Company has  also experienced  a decrease in  the
     average price received for its contract drilling services.  Rig utilization
     rates were 16% for the three months ended June 30, 1999 compared to  48% in
     the same period in 1998.

          Oil  and  gas revenues  decreased by  approximately  4% for  the three
     months ended  June 30,  1999.   Oil and  gas production  expenses increased
     approximately 40% due to major workovers of two wells.

          In  fiscal  1999,   the  Company  recognized  a   non-cash  charge  of
     approximately $1.3 million due to a writedown of the carrying  value of its
     oil  and gas  properties.   As a  result of  this  writedown, depreciation,
     depletion  and amortization  expense  decreased by  approximately 23%  when
     compared to the three months ended June 30, 1998.

          Net working capital was $2.5 million at June 30, 1999 compared to $3.2
     million at March 31, 1999.

     Liquidity and Capital Resources

          In  January 1996,  the  Company entered  into  a loan  agreement  with
     Norwest providing for  a revolving credit facility (the  "Credit Facility")
     originally maturing on January 15, 1998.  The aggregate principal amount of
     the  Company's borrowings outstanding at  any one time  under the revolving
     facility was  limited to the  lesser of  $3.0 million or  one-third of  the
     borrowing  base  amount then  in  effect.   The  borrowing base  amount was
     redetermined  by Norwest monthly.   The Credit Facility  was established to
     finance the Company's purchases of drill  pipe and oil and gas  exploration
     activities.  Interest  only was  payable monthly and  the entire  principal
     amount was due and payable on January 15, 1998, which was extended to April
     15, 1998.  The Credit Facility bore interest at Norwest's base rate and was


                                         -13-


<PAGE> 14


     secured by substantially all of the Company's accounts receivable, drilling
     rigs and related equipment.

          In August 1996, the Company entered  into a second loan agreement with
     Norwest.  This second loan agreement provided for  a $2.0 million revolving
     line of credit (the "Line  of Credit") secured by substantially all  of the
     Company's producing  oil  and  gas properties.    The Line  of  Credit  was
     established to finance the Company's oil and gas exploration activities and
     for  general corporate  purposes.   The  Line of  Credit  bore interest  at
     Norwest's  base rate, with interest only to  be paid monthly.  The original
     maturity date of February  15, 1998, was  extended to April  15, 1998.   At
     that time the  principal amount then outstanding was  due and payable, plus
     any accrued and unpaid interest.

          On  May 26, 1998, the  Company renewed, extended  and consolidated the
     prior  loan facilities  with  Norwest.    The  amended  and  restated  loan
     agreement provides  for a revolving line  of credit equal to  the lesser of
     $5.0  million or one-third of  the "borrowing base  amount".  The borrowing
     base is redetermined by Norwest within 45 days after the end of each fiscal
     quarter of the  Company.  At  June 30, 1999, the  borrowing base was  $19.3
     million.   Borrowings under the line of credit are secured by the Company's
     drilling  rigs and  related equipment,  accounts receivable  and inventory.
     Borrowings bear interest  at Norwest's  base rate and  interest is  payable
     monthly.  The Company did  not have any borrowings outstanding at  June 30,
     1999.   All amounts outstanding under  the loan facility mature  on May 26,
     2000.

          The  Company anticipates  that funds for  its capital  expenditures in
     fiscal  2000 will be available from a combination of sources, including (i)
     borrowings under the line of credit, (ii) funds raised through issuances of
     equity  or debt  securities in  public or  private transactions,  and (iii)
     internally generated funds.

     Trends and Prices

          The  contract  drilling  industry continues  to  experience  decreased
     demand  and  declining prices  for contract  drilling  services due  to the
     declines in oil  and gas prices.   The Company has and will  continue to be
     affected by  oil and gas industry conditions  but cannot predict either the
     future  level  of  demand for  its  contract  drilling  services or  future
     conditions in the  contract drilling industry.  In late  1998 and the first
     quarter of 1999, oil and gas  prices decreased significantly.  Although oil
     and gas prices  have rebounded, there has  been no substantial increase  in
     the demand for contract drilling services.

          In  recent years,  oil and  gas prices  have been  extremely volatile.
     Prices  are affected  by market  supply and  demand factors  as well  as by
     actions of state  and local agencies, the U.S. and  foreign governments and
     international cartels.  The Company has no way of accurately predicting the
     supply of  and demand for oil and  gas, domestic or international political
     events or  the effects of  any such factors on  the prices received  by the
     Company for its oil and gas.

                                         -14-



<PAGE> 15

     Year 2000 Issues

          The  Year 2000  (Y2K) issue  is the  risk that  systems,  products and
     equipment  utilizing data-sensitive  software or  computer chips  with two-
     digit date  fields will  fail to  properly recognize the  Year 2000.   Such
     failures  by  the Company's  software and  hardware  or that  of government
     entities,  service  providers,  suppliers  and customers  could  result  in
     interruptions of the Company's business which could have a material adverse
     impact on  the  Company.   Significant  uncertainty exists  concerning  the
     potential  effects associated with such  compliance as systems  that do not
     properly recognize  such information could generate erroneous data or cause
     a system to fail.

          In  order  to address  the Year  2000  issue, the  Board  of Directors
     appointed  a committee consisting of the President, Chief Financial Officer
     and Legal Counsel to assist the Company in its Year 2000 efforts.

          At June 30, 1999,  the Company had completed updating  and testing its
     information  systems for Year 2000  compliance and has  determined that the
     Year 2000 issues directly related to  its information systems will not have
     a material impact on  its business, operations nor its  financial position.
     The cost of  planning, implementing and  testing the Company's  information
     systems was minimal and immaterial to its operations as a whole.

          The Company believes that  its greatest risk for Year 2000 issues that
     may adversely effect the Company's operations is in the area of third party
     computer systems that are not  Year 2000 compliant and which, as  a result,
     may cause interruptions in  the Company's normal business operations.   The
     Year 2000 committee prepared  a formal questionnaire which was  sent to all
     significant customers, suppliers, purchasers  and vendors, to determine the
     extent to which the Company was  vulnerable to those third parties' failure
     to  remediate  the Year  2000 problem.   The  Company has  received written
     assurances  from  approximately  50%   of  its  purchasers,  suppliers  and
     customers who  responded as  being Year 2000  compliant.   The third  party
     confirmation process is still ongoing.

          Currently, the Company does not have a remediation or contingency plan
     in effect but  will continue to monitor  and assess Year 2000  issues and a
     contingency plan will be developed before December 31, 1999.

          In the event that any of the Company's significant vendors, customers,
     purchasers and local, state, federal and other U. S. government entities do
     not successfully  and timely  achieve Year  2000 compliance, the  Company's
     business, operations or financial position could be adversely affected.  In
     addition,  there can be no  assurance that unexpected  Year 2000 compliance
     problems  of either the Company  or its vendors,  customers, purchasers and
     local,  state,  federal  and other  U.  S.  government  entities would  not
     materially and adversely affect the Company's business, financial condition
     or operating results.




                                         -15-




<PAGE> 16

     PART TWO - OTHER INFORMATION

     Item 1.  Legal Proceedings

          The Company is a defendant in various lawsuits generally incidental to
     its business.  The Company does not believe that the ultimate resolution of
     such litigation will have  a significant effect on the  Company's financial
     position or results of operations.

     Item 6.  Exhibits and reports on Form 8-K.

          (a)  Exhibits:
               27 - Financial Data Schedule

          (b)  Reports on Form 8-K:

               No reports on Form  8-K were filed during the  quarter ended June
               30, 1999.


































                                         -16-





<PAGE> 17
                                      SIGNATURES




          Pursuant to the requirements  of the Securities Exchange Act  of 1934,
     the Registrant has duly  caused this report to be  signed on its behalf  by
     the undersigned thereunto duly authorized.



                                           TMBR/SHARP DRILLING, INC.




     August 13, 1999                  By:  /s/  Patricia R. Elledge
     ---------------                       --------------------------
          Date                                  Patricia R. Elledge
                                                Controller/Treasurer

                                           (Ms. Elledge is the Chief Financial
                                           Officer and has been duly authorized
                                           to sign on behalf of the Registrant)





























                                         -17-





<PAGE> 18
                                    Exhibit Index





     Exhibit
     Number              Description
     -------             -----------

       27           Financial Data Schedule










































                                         -18-