<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, 1998

                                          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 7, 1998
                (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, 1998 and 
                  March 31, 1998 . . . . . . . . . . . . . . . . . . . .   3

                Statements of Operations, Three Months
                  Ended June 30, 1998 and 1997 . . . . . . . . . . . . .   5

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

                Statements of Cash Flows, Three Months
                  Ended June 30, 1998 and 1997 . . . . . . . . . . . . .   8

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

       Item 2.  Management's Discussion and Analysis of Financial
                  Condition and Results of Operations  . . . . . . . . .  12


     Part II.  Other Information

       Item 1.  Legal Proceedings  . . . . . . . . . . . . . . . . . . .  14

       Item 6.  Exhibits and Reports on Form 8-K . . . . . . . . . . . .  15

















                                         -2-





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

     Item 1.  FINANCIAL STATEMENTS


                              TMBR/SHARP DRILLING, INC.
                                    BALANCE SHEETS
                     June 30, 1998 (Unaudited) and March 31, 1998
                          (In thousands, except share data)



                                                   June 30,
                                                     1998            March 31,  
       ASSETS                                     (Unaudited)          1998     
       ------                                    -------------      -----------

     Current assets:
       Cash and cash equivalents                   $  3,591         $   1,623 
       Marketable securities                             87                87 
       Trade receivables,
         net of allowance for doubtful
           accounts of $1,135 at both 
           June 30, and March 31, 1998                7,665             8,149 
       Inventories                                      104                82 
       Deposits                                         104                73 
       Other                                            582               664 
                                                    --------          --------
         Total current assets                        12,133            10,678 
                                                    --------          --------

     Property and equipment, at cost:
       Drilling equipment                            48,772            48,691 
       Oil and gas properties, based on
         successful efforts accounting               16,155            15,452 
       Other property and equipment                   3,786             3,786 
                                                    --------          --------
                                                     68,713            67,929 

     Less accumulated depreciation,
       depletion and amortization                   (54,847)          (54,132)
                                                    --------          --------

         Net property and equipment                  13,866            13,797 
                                                    --------          --------

     Other assets                                       173               173 
                                                    --------          --------
         Total assets                              $ 26,172          $ 24,648 
                                                    ========          ========

     See accompanying notes to financial statements.

                                         -3-





<PAGE> 4
                              TMBR/SHARP DRILLING, INC.
                                    BALANCE SHEETS
                     June 30, 1998 (Unaudited) and March 31, 1998
                          (In thousands, except share data)




                                                  June 30, 
                                                    1998            March 31, 
     LIABILITIES AND STOCKHOLDERS' EQUITY        (Unaudited)          1998    
     ------------------------------------       ------------       -----------

     Current liabilities:
       Trade payables                             $   4,224          $  2,622 
       Accrued workers' compensation                    370               411   
       Other                                            944             1,655  
                                                    --------          --------
          Total current liabilities                   5,538             4,688 
                                                    --------          --------


     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, 1998                    598               598 
       Additional paid-in capital                    69,429            69,429 
       Accumulated deficit                          (49,243)          (49,917)
       Treasury stock-common, 1,268,739
         shares at June 30, and 
         March 31, 1998, at cost                       (150)             (150)
                                                    --------          --------
          Total stockholders' equity                 20,634            19,960 
                                                    --------          --------
          Total liabilities and
            stockholders' equity                  $  26,172         $  24,648 
                                                    ========          ========

     See accompanying notes to financial statements.











                                         -4-





<PAGE> 5
                              TMBR/SHARP DRILLING, INC.
                               STATEMENTS OF OPERATIONS
                Three months ended June 30, 1998 and 1997 (Unaudited)
                          (In thousands, except share data)




                                                      Three months ended
                                                           June 30,  
                                                 -----------------------------
                                                    1998              1997    
                                                 -----------       -----------
       Revenues:
          Contract drilling                     $     6,270       $     9,201 
          Oil and gas                                   499               529 
                                                 -----------       -----------
              Total revenues                          6,769             9,730 
                                                 -----------       -----------

       Operating costs and expenses:
          Contract drilling                           4,587             5,954 
          Oil and gas production                        175               199 
          Dry holes and abandonments                    196                10 
          Depreciation, depletion and 
            amortization                                720               828 
          General and administrative                    449               433 
                                                 -----------       -----------
              Total operating costs
                and expenses                          6,127             7,424 
                                                 -----------       -----------
              Operating income                          642             2,306 
                                                 -----------       -----------

       Other income:
          Interest                                       42                31 
          Gain on sales of assets                         4                84 
          Other, net                                     --                14 
                                                 -----------       -----------
          Total other income, net                        46               129 
                                                 -----------       -----------
       Net income before income
          tax provision                                 688             2,435 
       Provision for income taxes                       (14)              (50)
                                                 -----------       -----------

       Net income                               $       674       $     2,385 
                                                 ===========       ===========

     See accompanying notes to financial statements.





                                         
                                         -5-


<PAGE> 6
                              TMBR/SHARP DRILLING, INC.
                               STATEMENTS OF OPERATIONS
                Three months ended June 30, 1998 and 1997 (Unaudited)
                          (In thousands, except share data)




                                                      Three months ended 
                                                           June 30,   
                                                 -----------------------------
                                                    1998              1997
                                                 -----------       -----------

     Net income per common share: 

          Basic                                 $       .14        $       .53
          Diluted                                       .13                .47
                                                 ===========       ===========

     Weighted average number of 
       common shares outstanding:

          Basic                                   4,710,886          4,467,204
          Diluted                                 5,083,957          5,032,724
                                                 ===========       ===========

     See accompanying notes to financial statements.























                                         



                                         -6-



<PAGE> 7

                              TMBR/SHARP DRILLING, INC.

                          STATEMENTS OF STOCKHOLDERS EQUITY

                  Three Months Ended June 30, 1998 (Unaudited) and

                              Year Ended March 31, 1998

                                   (In thousands)


<TABLE>
<CAPTION>
                                                                                   Treasury Stock
                                                                                   -------------- 
                                       Common Stock     Additional                  Common Stock        Total
                                      --------------     Paid-In     Accumulated   --------------    Stockholders'
                                      Shares  Amount     Capital       Deficit     Shares  Amount       Equity
                                      ------  ------     -------     -----------   ------  ------    ------------
                 <S>                  <C>     <C>       <C>          <C>           <C>     <C>       <C>
                 Balance, 
                   March 31, 1998     5,980   $ 598     $ 69,429      $(49,917)     1,270  $(150)      $19,960

                 Net income              --      --           --           674         --     --           674 
                                      -----    -----     --------      --------    -------  -----       -------

                 Balance, 
                   June 30,  
                     1998             5,980   $ 598     $ 69,429      $(49,243)     1,270  $(150)      $20,634
                                      =====    =====     ========      ========    =======  =====       =======

</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, 1998 and 1997 (Unaudited)
                                    (In thousands)


                                                   Three months ended June 30,
                                                  ------------------------------
                                                    1998                 1997
                                                  ---------            ---------
    Cash flows from operating activities:
      Net income                                  $    674             $  2,385 
      Adjustments to reconcile net income
      to net cash provided by
          operating activities:
           Depreciation, depletion and
            amortization                               720                  828 
           Dry holes and abandonments                  196                   10 
           Gain on sales of assets                      (4)                 (84)
           Changes in assets and liabilities:
            Trade receivables                          484               (1,106)
            Deposits                                   (31)                  -- 
            Inventories and other assets                60                   29 
            Trade payables                           1,602                  749 
            Accrued interest and other liabilities    (752)                (332)
                                                   --------             --------
             Total adjustments                       2,275                   94 
                                                   --------             --------
             Net cash provided by
              operating activities                   2,949                2,479 

    Cash flows from investing activities:
      Additions to property and equipment           (1,033)              (1,519)
      Proceeds from sales of property and
        equipment                                       52                  171 
                                                   --------             --------
             Net cash required by
              investing activities                    (981)              (1,348)

    Cash flows from financing activities:
      Issuance of common stock                          --                   90 
                                                   --------             --------
             Net cash provided by
              financing activities                      --                   90 
                                                   --------             --------
             Net increase in
              cash and cash equivalents              1,968                1,221 

    Cash and cash equivalents at beginning
      of period                                      1,623                1,048 
                                                   --------             --------
    Cash and cash equivalents at end of 
      period                                       $ 3,591              $ 2,269 
                                                   ========             ========

    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,  1998 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, 1998  and March 31, 1998, the results of  operations for the three
     months ended  June 30,  1998 and  1997, and  the cash  flows for the  three
     months ended June 30, 1998 and 1997.

          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, 1998.


     (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,
     1998  was not materially different from the historical cost, and therefore,
     no unrealized gains or losses have been recorded.

     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


                                         -9-

<PAGE> 10

     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 is 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 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, Midland, 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 the interest is payable monthly.
     The renewed and extended loan agreement matures on May 26, 2000.


     (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 outstanding under the
     Plan.  All  of these options are earned  and exercisable at June  30, 1998.
     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.

          On  September  3,  1996,   the  Company  granted  465,000   shares  of
     nonqualified stock options to  key employees under the 1994 Plan.   Options
     to  purchase 337,500 shares of common stock are exercisable and outstanding


                                         -11-

<PAGE> 12

     under the Plan at June 30, 1998.

          In  connection with a private placement, the Company has outstanding a
     warrant representing 36,250 common shares with an exercise price of $13.20.
     This  warrant becomes  exercisable  on February  17,  1998 and  expires  on
     February 17, 2002.


     (5)  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.


     (6)  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.


     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, 1998.  Actual results  could differ materially
     from those forward-looking statements.

     Results of Operations

          Total revenues were  $6,769,000 for  the three months  ended June  30,
     1998  which  represents  a  30%  decrease over  the  same  period  in 1997.
     Operating expenses  as percent of  revenues were  91% for the  three months
     ended June 30, 1998  versus 76% 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 48% for the three months ended June 30, 1998 compared to  81% in
     the same period in 1997.

          Oil and gas revenues  decreased by approximately 6% due  to a decrease
     in the price received for crude oil.    In fiscal 1998, the Company  sold a
     group  of fourteen  wells in  Ector County,  Texas.   These wells  had high
     lifting costs on an equivalent barrel of oil ("EBO") basis.  As a result of
     this sale, oil and gas  production expenses for the quarter ended  June 30,


                                         -12-

<PAGE> 13



     1998 decreased by approximately  12% when compared  to the same quarter  in
     the prior year.

          In  fiscal  1998,  the   Company  recognized  a  non-cash   charge  of
     approximately $3.1 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 13%  when
     compared to the same quarter of the prior year.

          Net working capital was $6.6 million at June 30, 1998 compared to $6.0
     million  at  March 31,  1998.    The increase  in  working  capital can  be
     attributed to an increase in cash and cash equivalents.

     Liquidity and Capital Resources

          In  January 1996, the  Company entered into a  loan agreement with its
     bank  lender  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  the bank  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.  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 the
     bank'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
     its bank lender.  This 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 the
     bank'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 its bank lender.  The amended and restated loan
     agreement provides for a  $5.0 million revolving line of credit  secured by
     the Company's drilling rigs and  related equipment, accounts receivable and
     inventory.   Borrowings  under this  line  of credit  bear interest  at the
     Norwest  Bank base rate and accrued interest  is payable monthly.  The loan
     facility matures  on May  26, 2000.    At June  30, 1998,  no amounts  were
     outstanding under the loan facility.

          The Company  anticipates that funds  for its  capital expenditures  in
     fiscal  1999 will be available from a combination of sources, including (i)
     borrowings under the line of credit, (ii) funds raised through issuances of

                                         -13-


<PAGE> 14


     equity  or debt  securities in  public or  private transactions,  and (iii)
     internally generated funds.

     Trends and Prices

          Although  the Company  achieved record  growth, profitability  and rig
     utilization in fiscal  1998, the  contract drilling  industry is  currently
     experiencing decreased  demand and  declining prices for  contract drilling
     services due to  the weakening of  oil and  gas prices.   The Company  will
     certainly 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  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 Company has reviewed  the effect of the year 2000  issues relating
     to its information systems.  The Company 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.  However,
     the Company  cannot determine  what effect,  if any,  the year 2000  issues
     affecting its vendors, customers and the numerous local, state, federal and
     other U. S. government entities with which it conducts business or which it
     is regulated  or governed or taxed  will have on its  business or financial
     position.


     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.











                                         
                                         -14-


<PAGE> 15



     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, 1998.










































                                         -15-



<PAGE> 16


                                      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, 1998                  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) 





























                                         -16-



<PAGE> 17

                                    Exhibit Index





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

       27           Financial Data Schedule 










































                                         -17-