UNIMAR COMPANY

                             TABLE OF CONTENTS



                                                       
               
PART I.  FINANCIAL INFORMATION
               
  Item 1.  Financial Statements

           Condensed Consolidated Statements of Earnings
             For the Three Months and Nine Months ended
             September 30, 1997 and September 30, 1996  . . 1
    
           Condensed Consolidated Balance Sheets as of
             September 30, 1997 and December 31, 1996 . . . 2

           Condensed Consolidated Statements of 
             Cash Flows for the Nine Months ended
             September 30, 1997 and September 30, 1996. . . 3

           Notes to Condensed Consolidated Financial 
             Statements as of September 30, 1997. . . . . . 4
           

  Item 2.  Management's Discussion and Analysis of 
             Financial Condition and Results of 
             Operations . . . . . . . . . . . . . . . . . . 6


PART II.  OTHER INFORMATION

  Item 5.  Other Information. . . . . . . . . . . . . . . . 10

  Item 6.  Exhibits and Reports on Form 8-K . . . . . . . . 10


SIGNATURES  . . . . . . . . . . . . . . . . . . . . . . . . 11
                                   <PAGE>
       PART I.   FINANCIAL INFORMATION

                    UNIMAR COMPANY AND SUBSIDIARIES

             Condensed Consolidated Statements of Earnings
                        (Thousands of dollars)
                              (Unaudited)


                                   Three Months Ended  Nine Months Ended
                                      September 30,    September 30,   
                                  1997      1996      1997      1996 
                                        
                                            
Oil and gas production revenues   $48,810   $62,693   $165,135  $188,904


Production costs                    6,932     5,762     19,332    17,644 

Depletion, depreciation and
 amortization                      10,521    12,180    32,034   35,884 
Exploration costs including dry 
holes                                 854     1,213     1,166    1,460


Operating profit                   30,503    43,538    112,603 133,916


General and administrative 
  expenses                            248       559      792     1,128
Other income                          (64)      (70)    (267)     (225)

Earnings before income taxes       30,319    43,049    112,078 133,013

Income tax expense
   Current                         23,232    32,806    80,074    96,874 
   Deferred                        (1,931)   (1,219)   (5,794)   (4,971)
                                   21,301    31,587    74,280    91,903 

Net earnings                      $ 9,018   $11,462   $ 37,798  $ 41,110


See accompanying Notes to Condensed Consolidated Financial Statements.
                                   
<PAGE>
                   UNIMAR COMPANY AND SUBSIDIARIES

                Condensed Consolidated Balance Sheets
                        (Thousands of dollars)


                                           September 30,  December 31,
                                                1997         1996  
                                            (Unaudited)
ASSETS
Current assets:
  Cash and cash equivalents              $   5,755         $   3,274
  Accounts receivable                        8,946            13,943
  Inventories                                7,830             8,177
  Other current assets                       4,222             2,951

    Total current assets                    26,753            28,345

Property, plant and equipment, at cost:
  Oil and gas properties
    (successful efforts method)          1,089,909         1,070,819
  Other                                      2,307             2,287

                                         1,092,216         1,073,106
  Less:  accumulated depreciation and
    depletion                              753,190           720,976
  Net property, plant and equipment        339,026           352,130

Other assets                                 2,418             3,002

                                        $ 368,197          $ 383,477


LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
  Accounts payable                      $     625          $   1,043
  Advances from joint venture partners      2,103              1,234
  Accrued liabilities                      13,954             17,892
  Income and other taxes                   12,481             19,924
    Total current liabilities              29,163             40,093

Deferred income taxes                     148,293            154,087
Other liabilities                          14,796             14,859

Partners' capital                         255,945            254,438
  Less:  demand notes receivable           80,000             80,000
                                          175,945            174,438

                                        $ 368,197          $ 383,477


See accompanying Notes to Condensed Consolidated Financial Statements.<PAGE>
  

                 UNIMAR COMPANY AND SUBSIDIARIES

           Condensed Consolidated Statements of Cash Flows
                        (Thousands of dollars)
                             (Unaudited)



                                                  Nine Months Ended
                                                    September 30,   
                                                   1997       1996  
                                                           

Net earnings                                     $ 37,798   $ 41,110
Adjustments to reconcile to net cash
 provided by operating activities:
   Depletion, depreciation and amortization        32,214     36,098
   Deferred income taxes                           (5,794)    (4,971)
   Exploratory dry hole costs                         383          -
   Changes in working capital and other            (7,096)       364

Net cash provided by operating activities          57,505     72,601 

Investment activities:
   Capital expenditures                           (19,493)   (14,488)

Net cash used in investing activities             (19,493)   (14,488)

Financing activities:
   Capital contributions                           17,600     17,400
   Capital distributions                          (54,000)   (72,100)

Net cash used in financing activities             (36,400)   (54,700)

Increase (decrease) in advances from joint 
 venture partners                                     869     (1,986) 


Net increase in cash and cash                       2,481      1,427
 equivalents

Cash and cash equivalents at beginning
 of period                                          3,274      4,882 

Cash and cash equivalents at end of period       $  5,755   $  6,309

IPU distributions paid                           $ 19,617   $ 17,354

Income taxes paid                                $ 87,516   $ 93,372




See accompanying Notes to Condensed Consolidated Financial Statements.

<PAGE>
                 UNIMAR COMPANY AND SUBSIDIARIES

       Notes to Condensed Consolidated Financial Statements
                        September 30, 1997
                           (Unaudited)


(1)   Unimar Company (the Company) is a general partnership
      organized under the Texas Uniform Partnership Act, whose
      partners are Unistar, Inc., a Delaware corporation and a
      direct subsidiary of Union Texas Petroleum Holdings, Inc., a
      Delaware corporation, and LASMO (Ustar) Inc., a Delaware
      corporation and an indirect wholly-owned subsidiary of LASMO
      plc, a public limited company organized under the laws of
      England.  Each partner shares equally in the Company's net
      earnings, distributions and capital contributions.

(2)   These condensed consolidated financial statements should be
      read in the context of the consolidated financial statements
      and notes thereto included in the Company's 1996 annual report
      on Form 10-K.  In the opinion of management, the accompanying
      financial statements contain all adjustments of a normal
      recurring nature necessary for a fair presentation.  Interim
      results are not necessarily indicative of results on an
      annualized basis.

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

 Notes to Condensed Consolidated Financial Statements, Continued
                        September 30, 1997
                           (Unaudited)


(3)   The table below outlines the calculation of the Indonesian
      Participating Unit (IPU) participation payment for the third
      quarter of 1997.

                                                   1997
                                               Third Quarter  
                                         (Thousands of dollars)
     
     Positive cash flow:
     
         Gas receipts                       $ 42,398
     
   Oil and condensate receipts                 8,272
     
   Other non-revenue cash receipts
     from Joint Venture                        1,634
     
       Total positive cash flow               52,304
     
     Less negative cash flow:
     
       Expenditures to Joint Venture          16,705
     
       Indonesian income taxes                21,505
     
       Total negative cash flow               38,210
     
     Net positive cash flow from 
       23.125% interest in Joint Venture    $ 14,094
     
     Net cash flow for benefit of 
       IPU holders*                         $  3,449
     
     Participation Payment per IPU*         $    .32
     
     
     
     
     
        * Each IPU is entitled to 1/14,077,747 of 32% of net positive
          cash flow until September 25, 1999 at which time the Units
          will expire with no residual value.  As of September 30, 1997,
          there were 10,778,590 IPUs issued and outstanding.

<PAGE>
  
The following discussion should be read in conjunction with the
business section, consolidated financial statements, notes, and
management's discussion contained in the Company's 1996 annual
report on Form 10-K, and condensed consolidated financial
statements and notes contained in this report.


Liquidity and Capital Resources

     Cash flow from operations for the nine months ended September 30,
1997 amounted to $58 million, a decrease of $15 million as compared
to the same period in 1996.  The decrease resulted primarily from
lower sales volumes which were partially offset by higher LNG
prices.  Capital expenditures and net distributions to the partners
for the first nine months of 1997 were $19 million and $36 million,
respectively.  For the nine months ended September 30, 1996,
capital expenditures and net distributions to the partners were $14
million and $55 million, respectively.

     The Company's share of 1997 Indonesian Joint Venture (IJV)
expenditures is currently expected to approximate $55 million, a $3
million increase from the amount forecasted at year-end 1996.  The
increase includes a $6 million increase in operating expenditures
associated primarily with the Operator's business process
reengineering plan, offset by a $3 million decrease in exploration
expenditures as a result of reductions in planned exploratory
seismic and drilling activity for 1997.  During the first nine
months of 1997, $44 million was called by the IJV as compared to
$33 million for the nine months ended September 30, 1996.

     The Company's ability to generate cash is primarily dependent on
the prices it receives for the sale of liquefied natural gas (LNG),
and to a lesser extent, the sale of crude oil and liquefied
petroleum gas (LPG).  LNG and LPG are primarily sold under long
term contracts whose prices are derived from a basket of Indonesian
crudes.  In the event cash generated from operations is not
sufficient to meet capital investment and other requirements, any
shortfall will be funded through additional cash contributions by
the partners.  The Company cannot predict with any degree of
certainty the prices it will receive in future periods for its
crude oil, LNG and LPG.  The Company's financial condition,
operating results and liquidity will be materially affected by any
significant fluctuations in its sales prices.
<PAGE>

Results of Operations

                Quarter Ended September 30, 1997
          Compared to Quarter Ended September 30, 1996

     Net earnings for the third quarter of 1997 were $9 million, as
compared to $11 million in the prior year's quarter.  The decrease
in earnings was mainly due to lower revenues as discussed below.

     Third quarter 1997 revenues were $49 million, a decrease of $14
million as compared to the corresponding 1996 quarter.  The
decrease was mainly due to a 21 percent decrease in LNG sales
volumes and a 7 percent decrease in LNG sales prices.  Crude oil
sales volumes and prices decreased by 5 percent and 10 percent,
respectively.

     The IJV's share of LNG sold during the third quarter of 1997 was
83 trillion BTUs (28.3 net equivalent cargoes) as compared to 105
trillion BTUs (35.7 net equivalent cargoes) in the third quarter of
1996. The IJV's share of LNG shipments for 1997 is expected to
decline by approximately 15 percent as compared to 1996, due
primarily to the reduction in deliveries under the IJV's first
contract in which the IJV has a higher participation interest.  A
further decline in LNG shipments is expected in 1998.

     Crude oil volumes net to the Company decreased by 27 thousand
barrels to 473 thousand barrels, mainly due to the timing of crude
oil liftings.

     The average price received for LNG during the third quarter of
1997 was $2.87 per million BTUs, a $0.22 per million BTU decrease
as compared to the same period in 1996.  The average crude oil
price in the third quarter of 1997 was $18.24 per barrel, a $2.01
per barrel decrease as compared to the corresponding 1996 quarter.

     Production costs for the third quarter of 1997 increased $1
million as compared to the same quarter in 1996 due primarily to
recoverable costs associated with the Operator's ongoing business
process reengineering plan.
 
     Depletion, depreciation and amortization charges decreased $2
million to $11 million, due to the lower overall level of
production in the third quarter of 1997 as compared to the third
quarter of 1996.

     Income tax expense in the third quarter of 1997 decreased $11
million to $21 million, due primarily to lower third quarter
revenues.  The effective tax rates for the 1997 and 1996 third
quarters were 70 percent and 73 percent, respectively.  These rates
are the aggregate of Indonesian source income taxed at a 56 percent
rate, and certain expenses attributable to the Company which are
not deductible in the partnership.


              Nine Months Ended September 30, 1997
        Compared to Nine Months Ended September 30, 1996

     Net earnings for the first nine months of 1997 were $38 million, 
a decrease of $3 million as compared to the same period in 1996. 
The decrease in earnings was mainly the result of lower revenues as
discussed below.

     Revenues for the first nine months of 1997 were $165 million, or
$24 million lower than the first nine months of 1996.  The decrease
was mainly due to a 19 percent decrease in LNG sales volumes which
was partially offset by a 6 percent increase in LNG sales prices. 
Crude oil sales volumes decreased by 5 percent while crude oil
sales prices increased by 1 percent.

     The average price received for LNG was $3.18 per million BTUs,
a $0.17 per million BTU increase as compared to the first nine
months of 1996.  The price  received for crude oil sales averaged
$19.64 per barrel, an increase of $0.28 per barrel as compared to
the 1996 nine month average.

     The IJV's share of LNG sold during the first nine months of 1997
was 257 trillion BTUs (87.4 net equivalent cargoes) as compared to
318 trillion BTUs (108.1 net equivalent cargoes) in the first nine
months of 1996. The IJV's share of LNG shipments for 1997 is
expected to decline by approximately 15 percent as compared to
1996, due primarily to the reduction in deliveries under the IJV's
first contract in which the IJV has a higher participation
interest.  A further decline in LNG shipments is expected in 1998.

     Crude oil volumes net to the Company decreased by 75 thousand
barrels to 1.3 million barrels, mainly due to the timing of crude
oil liftings.

     Production costs for the first nine months of 1997 increased by 
$2 million as compared to the same period in 1996 due primarily to
recoverable costs associated with the Operator's ongoing business
process reengineering plan.

     Depletion, depreciation and amortization charges decreased $4 
million to $32 million, mainly due to the lower overall level of
production in the first nine months of 1997.

     Income taxes in the first nine months of 1997 decreased $18
million to $74 million.  The decrease in current tax expense during
the first nine months of 1997 was primarily due to lower revenues
and an increase in cost recoverable expenditures.  The effective
tax rates for the first nine months of 1997 and 1996 were 66
percent and 69 percent, respectively.  These rates are the
aggregate of Indonesian source income taxed at a 56 percent rate,
and certain expenses attributable to Unimar activities which are
not deductible in the partnership.<PAGE>
PART II.  OTHER INFORMATION


Item 5. Other Information

        None.

Item 6. Exhibits and Reports on Form 8-K

        (a)  Exhibits
                 

        (27)-1-  Financial Data Schedule for the nine months ended
                 September 30, 1997.

        (b)  Reports on Form 8-K

             None.
<PAGE>

                         UNIMAR COMPANY
                                
                           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.


                               UNIMAR COMPANY




                               By:   /S/ Linda A. Kubecka        
                                    Linda A. Kubecka
                                    (principal financial officer
                                    and the officer duly authorized
                                    to sign on behalf
                                    of the registrant.)


DATE: November 12, 1997