<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 December 31, 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 (including 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 February 8, 2000
           (Title of Class)                         4,820,886













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

                                   INDEX



                                                                   Page No.

Part I.  Financial Information (Unaudited)

  Item 1.  Financial Statements

           Balance Sheets, December 31, 1999 and
             March 31, 1999 . . . . . . . . . . . . . . . . . . . .   3

           Statements of Operations, Three Months
             Ended December 31, 1999 and 1998 . . . . . . . . . . .   5

           Statements of Operations, Nine Months
             Ended December 31, 1999 and 1998 . . . . . . . . . . .   7

           Statements of Stockholders'
             Equity . . . . . . . . . . . . . . . . . . . . . . . .   9

           Statements of Cash Flows, Nine Months
             Ended December 31, 1999 and 1998 . . . . . . . . . . .  10

           Notes to Financial Statements. . . . . . . . . . . . . .  11

  Item 2.  Management's Discussion and Analysis of Financial
             Condition and Results of Operations. . . . . . . . . .  16

  Item 3.  Quantitative and Qualitative Disclosures
             About Market Risk. . . . . . . . . . . . . . . . . . .  19


Part II.  Other Information

  Item 1.  Legal Proceedings. . . . . . . . . . . . . . . . . . . .  19

  Item 6.  Exhibits and Reports on Form 8-K . . . . . . . . . . . .  19






                                       -2-










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

Item 1.  FINANCIAL STATEMENTS


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



                                                 December 31,
                                                    1999            March 31,
  ASSETS                                         (Unaudited)          1999
  ------                                        -------------      -----------

Current assets:
  Cash and cash equivalents                           $ 695         $   1,195
  Marketable securities                                  49                49
  Trade receivables,
    net of allowance for doubtful
      accounts of $1,349 at both
      December 31, and March 31, 1999                 4,518             3,451
  Inventories                                            62                94
  Deposits                                               73                73
  Other                                                 355               567
                                                    --------          --------
    Total current assets                              5,752             5,429
                                                    --------          --------

Property and equipment, at cost:
  Drilling equipment                                 49,601            48,868
  Oil and gas properties, based on
    successful efforts accounting                    20,225            18,742
  Other property and equipment                        3,660             3,569
                                                    --------          --------
                                                     73,486            71,179

Less accumulated depreciation,
  depletion and amortization                        (59,610)          (57,858)
                                                    --------          --------

    Net property and equipment                       13,876            13,321
                                                    --------          --------

Other assets                                            173               173
                                                    --------          --------
    Total assets                                   $ 19,801          $ 18,923
                                                    ========          ========

See accompanying notes to financial statements.



                                       -3-



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


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

Current liabilities:
  Trade payables                                  $   1,736          $  1,424
  Borrowings from bank                                  750                --
  Other                                               1,034               764
                                                    --------          --------
     Total current liabilities                        3,520             2,188
                                                    --------          --------


Contingencies

Stockholders' equity:
  Common stock, $0.10 par value
    Authorized, 50,000,000 shares;
    issued 6,089,625 and 5,979,625
    shares at December 31, and
    March 31, 1999, respectively                        609               598
  Additional paid-in capital                         69,543            69,429
  Accumulated deficit                               (53,683)          (53,104)
  Accumulated other comprehensive
    income (loss)                                       (38)              (38)
  Treasury stock-common, 1,268,739
    shares at December 31, and
    March 31, 1999, at cost                            (150)             (150)
                                                    --------          --------
     Total stockholders' equity                      16,281            16,735
                                                    --------          --------
     Total liabilities and
       stockholders' equity                        $ 19,801         $  18,923
                                                    ========          ========

See accompanying notes to financial statements.







                                       -4-








<PAGE> 5
                         TMBR/SHARP DRILLING, INC.
                         STATEMENTS OF OPERATIONS
         Three months ended December 31, 1999 and 1998 (Unaudited)
                   (In thousands, except per share data)




                                                      Three months ended
                                                         December 31,
                                                 -----------------------------
                                                    1999              1998
                                                 -----------       -----------
  Revenues:
     Contract drilling                          $     4,680       $     1,821
     Oil and gas                                        894               393
                                                 -----------       -----------
         Total revenues                               5,574             2,214
                                                 -----------       -----------

  Operating costs and expenses:
     Contract drilling                                3,730             1,700
     Oil and gas production                             248               227
     Dry holes and abandonments                          53               186
     Depreciation, depletion and
       amortization                                     729               531
     General and administrative                         426               457
                                                 -----------       -----------
         Total operating costs
           and expenses                               5,186             3,101
                                                 -----------       -----------
         Operating income (loss)                        388              (887)
                                                 -----------       -----------

  Other income (expense):
     Interest, net                                        4                36
     Gain on sales of assets                             31                11
     Other, net                                           1                15
                                                 -----------       -----------
     Total other income                                  36                62

                                                 -----------       -----------
  Net income (loss) before income
     tax benefit (provision)                            424              (825)
  Benefit (provision) for
     income taxes                                        --                 5
                                                 -----------       -----------

  Net income (loss)                              $      424       $      (820)
                                                 ===========       ===========

See accompanying notes to financial statements.



                                       -5-



<PAGE> 6
                         TMBR/SHARP DRILLING, INC.
                         STATEMENTS OF OPERATIONS
         Three months ended December 31, 1999 and 1998 (Unaudited)
                   (In thousands, except per share data)




                                                      Three months ended
                                                         December 31,
                                                 -----------------------------
                                                    1999              1998
                                                 -----------       -----------

Net income (loss) per common share:

  Basic                                       $        .09        $      (.17)
  Diluted                                              .08               (.17)
                                                 ===========       ===========

Weighted average number of
  common shares outstanding:

  Basic                                           4,871,795         4,710,886
  Diluted                                         5,252,675         4,710,886
                                                 ===========       ===========

See accompanying notes to financial statements.
























                                       -6-






<PAGE> 7
                         TMBR/SHARP DRILLING, INC.
                         STATEMENTS OF OPERATIONS
         Nine months ended December 31, 1999 and 1998 (Unaudited)
                   (In thousands, except per share data)




                                                       Nine months ended
                                                          December 31,
                                                 -----------------------------
                                                    1999              1998
                                                 -----------       -----------
  Revenues:
     Contract drilling                           $    9,849       $    11,384
     Oil and gas                                      2,143             1,397
                                                 -----------       -----------
         Total revenues                              11,992            12,781
                                                 -----------       -----------

  Operating costs and expenses:
     Contract drilling                                8,404             8,802
     Oil and gas production                             666               546
     Dry holes and abandonments                         405               773
     Depreciation, depletion and
       amortization                                   1,896             1,936
     General and administrative                       1,385             1,468
                                                 -----------       -----------
         Total operating costs
           and expenses                              12,756            13,525
                                                 -----------       -----------
         Operating (loss) income                       (764)             (744)
                                                 -----------       -----------

  Other income:
     Interest                                            30               130
     Gain on sales of assets                            137                31
     Other, net                                          18                15
                                                 -----------       -----------
     Total other income                                 185               176
                                                 -----------       -----------
  Net loss before income
     tax provision                                     (579)             (568)
  Provision for income taxes                             --                --
                                                 -----------       -----------

  Net loss                                       $     (579)      $      (568)
                                                 ===========       ===========

See accompanying notes to financial statements.





                                       -7-



<PAGE> 8
                         TMBR/SHARP DRILLING, INC.
                         STATEMENTS OF OPERATIONS
         Nine months ended December 31, 1999 and 1998 (Unaudited)
                   (In thousands, except per share data)




                                                       Nine months ended
                                                          December 31,
                                                 -----------------------------
                                                    1999              1998
                                                 -----------       -----------

Net loss per common share:

  Basic                                           $    (.12)      $      (.12)
  Diluted                                              (.12)             (.12)
                                                 ===========       ===========

Weighted average number of
  common shares outstanding:

  Basic                                           4,729,286         4,710,886
  Diluted                                         4,729,286         4,710,886
                                                 ===========       ===========

See accompanying notes to financial statements.

























                                       -8-





<PAGE> 9
                         TMBR/SHARP DRILLING, INC.

                     STATEMENTS OF STOCKHOLDERS EQUITY

            Nine Months Ended December 31, 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

Grant of
  Stock Options         --      --           97            --           --            --     --            97

Exercise of
 Stock Options         110      11           17            --           --            --     --            28

Net loss                --      --           --          (579)          --            --     --          (579)
                     -----    -----     --------      --------         ----       -------  -----       -------

Balance,
  December 31,
    1999             6,090   $ 609     $ 69,543      $(53,683)        $(38)        1,270  $(150)      $16,281
                     =====    =====     ========      ========         ====       =======  =====       =======
</TABLE>
See accompanying notes to financial statements.










                                       -9-









<PAGE> 10
                            TMBR/SHARP DRILLING, INC.
                            STATEMENTS OF CASH FLOWS
        For the nine months ended December 31, 1999 and 1998 (Unaudited)
                                 (In thousands)

                                                  Nine months ended December 31,
                                                  ------------------------------
                                                    1999                 1998
                                                  ---------            ---------
Cash flows from operating activities:
  Net loss                                        $   (579)            $   (568)
  Adjustments to reconcile net income
  to net cash provided by
      operating activities:
       Depreciation, depletion and
        amortization                                 1,896                1,936
       Dry holes and abandonments                      405                  773
       Gain on sales of assets                        (137)                 (31)
       Grant of stock options                           97                   --
       Changes in assets and liabilities:
        Trade receivables                           (1,067)               3,212
        Deposits                                        --                  (31)
        Inventories and other assets                   244                   31
        Trade payables                                 312                 (960)
        Accrued interest and other liabilities         270               (1,384)
                                                   --------             --------
         Total adjustments                           2,020                3,546
                                                   --------             --------
         Net cash provided by
          operating activities                       1,441                2,978

Cash flows from investing activities:
  Additions to property and equipment               (2,873)              (3,687)
  Proceeds from sales of property and
    equipment                                          154                  142
                                                   --------             --------
         Net cash required by
          investing activities                      (2,719)              (3,545)

Cash flows from financing activities:
  Borrowings from bank                                 750                   --
  Issuance of common stock                              28                   --
                                                   --------             --------
         Net cash provided by
          financing activities                         778                   --
                                                   --------             --------
         Net (decrease) increase in
          cash and cash equivalents                   (500)                (567)

Cash and cash equivalents at beginning
  of period                                          1,195                1,623
                                                   --------             --------
Cash and cash equivalents at end of
  period                                           $   695              $ 1,056
                                                   ========             ========

See accompanying notes to financial statements.

                                       -10-
<PAGE> 11
                         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
December 31, 1999 and March 31, 1999, the results of operations for the three
and nine months ended December 31, 1999 and 1998, and the cash flows for the
nine month periods ended December 31, 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 December 31,
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 depreciated using the straight-
line method of depreciation with estimated useful lives of three to seven
years.


                                       -11-
<PAGE> 12
     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


     The Company and Norwest Bank Texas, N.A., Midland, Texas, are parties to
a loan agreement which 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 line of credit bear interest
at the Norwest Bank base rate (8.5% at December 31, 1999) and interest is
payable monthly.  All outstanding principal and accrued interest is due and
payable on May 26, 2000.  At December 31, 1999, the Company had borrowed
$750,000 under this loan agreement.




                                       -12-



<PAGE> 13
(4)  Stockholders' Equity

     1984 Stock Option Plan

     In August 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 outstanding and exercisable 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 (including officers and directors who are
also key employees) 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.
















                                       -13-










<PAGE> 14
     On September 3, 1996, the Company granted 465,000 shares of nonqualified
stock options to key employees under the 1994 Plan.  All of the nonqualified
stock options granted on September 3, 1996 are outstanding 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, options to purchase 140,000 shares were exercisable.
The remaining 100,000 shares will become exercisable over a three year
period.  The following table sets forth certain information concerning these
options.


                                    Number
                                      of                Option
                                    Shares           Exercise Price
                                  Underlying       -------------------
                                   Options         Per Share     Total
                                  ----------       -------------------

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

Forfeited                           (5,000)         4.125          (20,625)
                                   -------      ------------     ---------

Outstanding December 31,
  1999                             567,500     $4.125-4.5375   $ 2,400,338
                                   =======      ============     =========

     1998 Stock Option Plan

     In September 1998, the Company adopted, subject to stockholder 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 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 on September 1, 1998, subject to
stockholder approval, at $4.125 per share and became exercisable on August
31, 1999, the date on which the stockholders of the Company approved and
adopted the 1998 Plan.  The fair market value of the Company's common stock
on August 31, 1999 was $6.063 per share.  As a result, the Company recognized
approximately $97,000 in compensation expense related to these nonqualified
options.

     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.





                                       -14-




<PAGE> 15
     In addition to the aforementioned options, during fiscal year 1989, an
additional 500,000 shares of nonqualified stock options were granted to
another director who is also an officer.  These options were granted at an
exercise price of $0.25 per share (estimated fair market value at date of
grant).  On April 4, 1990, the Board of Directors also approved an additional
500,000 shares of nonqualified stock options granted to another director at
an exercise price of $0.25 per share (estimated fair market value at date of
grant).

     The following sets forth certain information concerning these
nonqualified options:

                                                      Option Price
                                     Number           ------------
                                    Of Shares     Per Share     Total
                                    ---------     ---------     -----
   Outstanding March 31, 1999        219,500       $0.25      $ 54,875

        Exercised                   (110,000)       0.25       (27,500)
                                     -------                    ------
   Outstanding December 31, 1999     109,500       $0.25      $ 27,375
                                     =======                    ======


     All nonqualified options outstanding were earned and exercisable as of
December 31, 1999.

(6)  Employee Benefits

     Effective May 1, 1995, the Company established the TMBR/Sharp Drilling,
Inc. Employee Retirement Plan which was a 401(K) profit sharing plan.
Company contributions were discretionary and were 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 terminated the 401(K) plan
effective May 5, 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.






                                       -15-










<PAGE> 16
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 $5,574,000 and $11,992,000 for the three and nine
months ended December 31, 1999 which represents a 152% increase for the three
months ended December 31, 1999 and a 6% decrease for the nine months ended
December 31, 1999 when compared to the same periods in 1998.  Operating
expenses as a percent of revenues were 93% and 106% for the three and nine
months ended December 31, 1999 versus 140% and 106% for the same periods of
the prior year.  Although the Company has seen an increase in demand during
the six months ended December 31, 1999, the nine month operating results were
negatively affected by dismal first quarter results.  Rig utilization rates
were 16% in the first quarter.  Rig utilization rates were 43% and 30% for
the three and nine months ended December 31, 1999 compared to 17% and 31% in
the same periods in 1998.

     Oil and gas revenues increased by approximately 127% and 53% for the
three and nine months ended December 31, 1999, respectively when compared to
the same periods in 1998.  This increase is primarily due to the increase in
the prices received for crude oil and natural gas in addition to an increase
in the number of producing properties.  Oil and gas production expenses
increased by 9% and 22% for the three and nine months ended December 31, 1999
compared to the three and nine months ended December 31, 1998.  This increase
is attributable to major workovers of two wells and an increase in the number
of producing properties.

     Depreciation, depletion and amortization expense for the three months
ended December 31, 1999 increased by approximately 37% as a result of the
increase in the rig utilization rates as depletion, depreciation and
amortization is calculated based on the units-of-production method.

     Net working capital was $2.2 million at December 31, 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



                                       -16-



<PAGE> 17
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 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 its
facilities with Norwest Bank Texas, N.A..  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 December 31, 1999, the borrowing base was $22.2 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 (8.5% at December 31, 1999) and interest
is payable monthly.  At December 31, 1999, the Company had borrowed $750,000
under this loan agreement.  All amounts outstanding under the loan facility
mature on May 26, 2000.  See Note 3.

     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

     Although the Company's nine month results are negatively affected by the
disappointing results of the first three months of the current fiscal year,
during the six months ended December 31, 1999 the Company experienced an
increase in demand and an increase in the prices received for contract
drilling services.  This increase is attributable to the recent rise 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.




                                       -17-



<PAGE> 18
     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.


Year 2000 Issues

     The Year 2000 (Y2K) issue created a risk that computer systems, products
and equipment utilizing date-sensitive software of computer chips with two-
digit date fields would 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 have resulted in
interruptions of the Company's business which could have had a material
adverse impact on the Company.  Significant uncertainty existed concerning
the potential effects associated with such compliance as systems that
improperly recognized such information would 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.

     The Company had completed updating and testing its information systems
for Year 2000 compliance and believed that its internal information systems
would be able to properly process and perform Year 2000 functions.  The cost
of planning, implementing and testing the Company's internal information
systems was not material to the Company's operations as a whole.

     The Company believed that its greatest risk for Year 2000 issues that
might have adversely effected the Company's operations was in the area of
third party computer systems that were not Year 2000 compliant and which, as
a result, could have caused interruptions in the Company's normal business
operations.  The Year 2000 committee prepared a 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 received written
assurances from approximately 50% of its purchasers, suppliers and customers
who responded as being Year 2000 compliant.

     If any of the Company's significant vendors, customers, purchasers and
local, state, federal and other U. S. government entities had not
successfully and timely achieved Year 2000 compliance, the Company's
business, operations or financial position could have been materially and
adversely affected.  In addition, there could 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.




                                       -18-


<PAGE> 19
     The Company is not currently aware of any Year 2000 compliance problems
relating to its own operations or that of its significant vendors, customers,
purchasers and local, state, federal and other U.S. government entities, but
intends to monitor and assess Year 2000 issues.

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     The primary sources of market risk for the Company include fluctuations
in commodity prices and interest rate fluctuations.  At December 31, 1999,
the Company had not entered into any hedge arrangements, commodity swap
agreements, commodity futures, options or other similar agreements relating
to crude oil and natural gas.

     At December 31, 1999, the Company had $750,000 borrowed under its $5.0
million revolving line of credit which bears interest at the lender's base
rate in effect from time to time.  As borrowings under this line of credit
bear interest at a variable rate, the Company is subject to interest rate
risk since the line of credit has been utilized.


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:

               3.1  - Articles of Incorporation of the Company, as amended.
               (Incorporated by reference to exhibit 3.1 in Registrant's
               Annual Report on Form 10-K dated June 28, 1991)

               3.2  - Bylaws of the Registrant, as amended.  (Incorporated by
               reference to Exhibit 3.2 in Registrant's Annual Report on Form
               10-K dated June 27, 1994)

               27 - Financial Data Schedule

     (b)  Reports on Form 8-K:

               No reports on Form 8-K were filed during the quarter ended
               December 31, 1999.






                                       -19-




<PAGE> 20
                                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.




February 11, 2000                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)



















                                       -20-















<PAGE> 21
                               Exhibit Index





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

  3.1          Articles of Incorporation of the Company, as amended.
               (Incorporated by reference to Exhibit 3.1 in Registrant's
               Annual Report on Form 10-K dated June 28, 1991)

  3.2          Bylaws of the Registrant, as amended.  (Incorporated by
               reference to Exhibit 3.2 in Registrant's Annual Report on Form
               10-K dated June 27, 1994)

  27*          Financial Data Schedule

--------------------------
*Filed herewith.


















                                       -21-