United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 10-QSB

       (Mark One)
       [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2004

       [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                 For the transition period from_____ to _______

                        Commission file number 000-27783

                          NATHANIEL ENERGY CORPORATION
                 (Name of Small Business Issuer in its Charter)

       Delaware                                             84-1572525
       (State or other jurisdiction of                      (I.R.S.  Employer
       incorporation or organization)                       Identification No.)

       8001 South InterPort Blvd. Suite 260,  Englewood, Colorado      80112
       (Address of principal executive offices)                      (Zip Code)


                    Issuer's telephone number: (303) 690-8300

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

     Applicable only to issuers  involved in bankruptcy  proceedings  during the
     preceding five years

Check whether the  registrant  filed all  documents  and reports  required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court. Yes [ ] No [ ]

                      Applicable only to corporate issuers

State the number of shares  outstanding  of each of the issuer's class of common
equity, as of the latest practicable date: March 31, 2004,  69,719,414 shares of
common stock, $.001 par value.

Transitional Small Business Disclosure Format (Check One) Yes [ ] No [X]


<PAGE>



                          NATHANIEL ENERGY CORPORATION


                                TABLE OF CONTENTS

PART I.  FINANCIAL INFORMATION                                          Page

Item 1.   Financial Statements (unaudited)

            Consolidated Balance Sheet as of March 31, 2004 and
            December 31, 2003                                             2

            Consolidated Statements of Operations for the Three
            Months ended March 31, 2004 and 2003                          3

            Consolidated Statements of Cash Flows for the Three
            Months ended March 31, 2004 and 2003                          4

            Notes to Consolidated Financial Statements                    5

Item 2.  Management's Discussion and Analysis on Plan of Operation        8

Item 3.  Controls and Procedures                                          10


PART II. OTHER INFORMATION

Item 1.  Legal Proceedings                                                11

Item 2.  Changes in Securities and Small Business Issuer
         Purchases of Equity Securities                                   11

Item 3.  Defaults Upon Senior Securities                                  11

Item 4.  Submission of Matters to a Vote of Security Holders              11

Item 5.  Other Information                                                11

Item 6.  Exhibits                                                         11

           Signatures                                                     12

<PAGE>
                          Nathaniel Energy Corporation
                           Consolidated Balance Sheets
<TABLE>
<CAPTION>
<S>                                                             <C>                    <C>
                                                          March 31,           December 31,
                                                           2004                 2003
                                                        (unaudited)
                                                      ---------------      ---------------
Assets

Current assets:
  Cash                                                 $ 2,580,438            $ 504,782
  Accounts receivable                                      961,328              960,555
  Inventory                                              1,657,039              637,174
  Prepaid expenses                                          64,291              130,669
  Advances and other receivables                            19,680               30,718
                                                      ---------------      ---------------
Total current assets                                     5,282,776            2,263,898

Property, plant and equipment, net of accumulated
  depreciation                                          12,168,911           11,662,969

Intangible assets, net                                     316,249              339,473
Restricted cash                                            230,130              899,300
Related party receivable                                   326,508              345,959
Deposits                                                    50,000               50,000
Other assets                                                42,794               42,794
                                                      ---------------      ---------------

Total Assets                                          $ 18,417,368          $15,604,393
                                                      ===============      ===============

Liabilities and Stockholders' Equity

Current liabilities:
  Accounts payable                                     $ 2,590,361          $ 1,689,072
  Accrued compensation and payroll liabilities             113,375              109,065
  Accrued interest                                         277,971              141,402
  Accrued property tax                                      60,105               38,331
  Accrued income taxes                                     127,411                  -
  Other accrued expenses                                   156,351               25,018
  Notes payable, current portion                           405,409              406,644
                                                      ---------------      ---------------
Total current liabilities                                3,730,983            2,409,532

Long-term debt                                             208,097              230,989
Long-term debt, stockholder                              8,892,151            6,892,151
                                                      ---------------      ---------------

Total liabilities                                       12,831,231            9,532,672
                                                      ---------------      ---------------

Minority interest                                          127,786               34,139

Stockholders' equity:
  Preferred stock, 2,000,000 shares of $.001 par value
          authorized, none issued or outstanding               -                    -
     Common stock, 75,000,000 shares of $.001 par value
          authorized, 69,719,414 shares
          issued and outstanding                            69,719               69,719
Common stock to be issued                                   20,285               20,285
Additional paid-in capital                              64,682,652           64,682,652
Accumulated deficit                                    (59,314,305)         (58,735,074)
                                                      ---------------      ---------------

Total stockholders' equity                               5,458,351            6,037,582
                                                      ---------------      ---------------

Total Liabilities and Stockholders' Equity            $ 18,417,368          $15,604,393
                                                      ===============      ===============
</TABLE>

    The accompanying notes are an integral part of the financial statements.

                                2
<PAGE>

                          Nathaniel Energy Corporation
                      Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                            For the Three Months Ended
                                                       March 31,                  March 31,
                                                         2004                       2003
                                                    ----------------          ----------------
<S>                                                   <C>                   <C>
Revenue                                               $ 3,346,792             $    104,915

Cost of revenue                                         2,891,376                  147,464
                                                    ----------------          ----------------

Gross profit (loss)                                       455,416                  (42,549)

Selling, general and administrative expenses              675,007                1,096,342
                                                    ----------------          ----------------
Total operating expenses                                  675,007                1,096,342

Loss from operations                                     (219,591)              (1,138,891)

Other income (expense)
  Partnership income                                          -                     20,733
  (Loss) gain on disposal of equipment                        -                    (13,207)
  Interest expense                                       (144,582)                (182,062)
  Other income                                              6,000                      -
                                                    ----------------          ----------------

Loss before income taxes and minority interest           (358,173)              (1,313,427)

Income tax expense                                       (127,411)                     -
                                                    ----------------          ----------------

Loss before minority interest                            (485,584)              (1,313,427)

Minority interest                                         (93,647)                 (19,920)
                                                    ----------------          ----------------

Net loss                                               $ (579,231)            $ (1,333,347)
                                                    ================          ================

Loss per share, basic and diluted                      $    (0.01)            $      (0.03)
                                                    ================          ================

Weighted average common shares outstanding             69,719,414               38,262,664
                                                    ================          ================
</TABLE>

   The accompanying notes are an integral part of the financial statements.

                                3

<PAGE>
                          Nathaniel Energy Corporation
                      Consolidated Statements of Cash Flows
                                  (Unaudited)
<TABLE>
<CAPTION>
<S>                                                                  <C>                    <C>
                                                               March 31,              March 31,
                                                                 2004                   2003
                                                             --------------         --------------
Cash flows from operating activities:
Net loss                                                       $ (579,231)          $ (1,333,347)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
  Depreciation and amortization                                   236,316                 58,754
  Stock issued for services                                            --                800,000
  Minority interest                                                93,647                 19,920
  Loss on equipment                                                    --                 13,207
Changes in operating assets and liabilities:
  (Increase) decrease in:
    Inventory                                                  (1,019,865)                 1,360
    Restricted cash                                               669,170                     --
    Accounts receivable                                              (773)                61,917
    Prepaid expenses                                               66,378                     --
    Advances receivable                                            11,038                     --
    Related party receivable                                       19,451                 (5,443)
  Increase in:
    Accounts payable and accrued expenses                         672,686                164,077
                                                             --------------         --------------
Net cash provided by (used in) operating activities               168,817               (219,555)
                                                             --------------         --------------

Cash flows from investing activities:
  Equipment purchases                                             (69,034)               (48,216)
                                                             --------------         --------------
Net cash used in investing activities                             (69,034)               (48,216)
                                                             --------------         --------------

Cash flows from financing activities:
  Payments on debt                                                (24,127)               (44,523)
  Proceeds from issuance of notes and loans                     2,000,000                121,982
                                                             --------------         --------------
Net cash provided by financing activities                       1,975,873                 77,459
                                                             --------------         --------------

Net increase in cash                                            2,075,656               (190,312)
Cash and cash equivalents, beginning of year                      504,782                202,057
                                                             --------------         --------------

Cash and cash equivalents, end of year                         $ 2,580,438          $     11,745
                                                             ==============         ==============

Cash paid for interest                                         $     1,803          $    182,062
                                                             ==============         ==============
Cash paid for income taxes                                     $       -            $        -
                                                             ==============         ==============
Non cash financing activity
   Issuance of stock for services                                                   $    800,000
                                                             ==============         ==============
</TABLE>

   The accompanying notes are an integral part of the financial statements.

                                        4
<PAGE>


                          Nathaniel Energy Corporation
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             MARCH 31, 2004 and 2003
                                   (Unaudited)

1. Significant Accounting Policies and Nature of Operations:

Condensed footnotes:

As contemplated by the Securities and Exchange  Commission  instructions to Form
10-QSB, the following footnotes have been condensed and therefore do not contain
all  disclosures  required  in  connection  with  annual  financial  statements.
Reference should be made to the notes to Nathaniel Energy  Corporation's  annual
financial  statements  set forth in Form 10-KSB for the year ended  December 31,
2003.

                     Unaudited Interim Financial Statements

The  accompanying  unaudited  interim  financial  statements,  which include the
Company's 51% owned subsidiary,  have been prepared by the Company in accordance
with generally accepted accounting  principles pursuant to Regulation S-B of the
Securities  and Exchange  Commission.  The  financial  information  has not been
audited  and  should not be relied on to the same  extent as  audited  financial
statements.  Certain information and footnote  disclosures  normally included in
audited  financial  statements  prepared in accordance  with generally  accepted
accounting principles have been condensed or omitted. Accordingly, these interim
financial  statements should be read in conjunction with the Company's financial
statements  and  related  notes as  contained  in Form 10-KSB for the year ended
December  31,  2003.  In  the  opinion  of  management,  the  interim  financial
statements  reflect all adjustments,  including  normal  recurring  adjustments,
necessary for fair presentation of the interim periods presented. The results of
operations  for the  three  months  ended  March  31,  2004 are not  necessarily
indicative of results of operations to be expected for the full year.

                             Description of Business

Nathaniel  Energy  Corporation  is a  renewable  energy  company  that  provides
industry with an  alternative  energy  comparable  to that of fossil fuels.  Its
proprietary  patented  technology,  the  Thermal  Combustor(TM),  is  a  2-stage
gasification  system  designed to convert  waste,  biomass,  tires and any other
solid,  carbon-based  materials into inexpensive  electrical and thermal energy,
while exceeding the most stringent EPA and European Union regulations.

Nathaniel Energy focuses its patented technology in three main areas:

- licensing,
- creating energy infrastructures, and
- building mini power plants.

We plan to license the Thermal Combustor(TM)  technology to qualified companies,
joint venture partners,  and  distributorships.  Nathaniel Energy plans to build
energy infrastructures that will produce specialty gases and byproducts that can
be sold to various markets.  Additionally, the company plans to build mini power
plants for  businesses  that seek an  independent  source of energy.  These mini
power plants would be built on the businesses' premises ("in the fence") and can
reduce the  dependence  a business  has on fossil fuels and power from the local
utility.  In some  cases,  the mini power  plants can  become a  business'  self
sustained utility.

Nathaniel Energy has also been in the fuel processing  business,  including used
tire recycling and collection  services,  since 1997. We have operated a 27 acre
fuel  processing  facility in  Hutchins,  Texas  since 1999 and have  operated a
helium and gas processing facility in Keyes, Oklahoma since April 2003.

Nathaniel  Energy's  short term  objective is to use the Hutchins  facility as a
fuel supply for its first energy  infrastructure  operation which is planned for
construction in Keyes, Oklahoma. At this site, Nathaniel Energy plans to build a
Thermal  Combustor(TM)  which  will  obtain  its  fuel  from the  Hutchins  fuel
processing  facility.  The Thermal  Combustor(TM)  will also produce  marketable
byproducts,  including  electricity that will be used to power the gas operation
at Keyes.

                                5


<PAGE>

                          Nathaniel Energy Corporation
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
                             MARCH 31, 2004 and 2003
                                   (Unaudited)

                          Critical Accounting Policies

The financial  statements  include the accounts of Nathaniel Energy  Corporation
and its subsidiaries.  All material inter-company accounts and transactions have
been eliminated in consolidation.

Inventory

Tire  shred  inventory  is valued  at its cost to  produce  using  the  first-in
first-out method,  but in an amount not to exceed  realizable value,  determined
with respect to existing  contractual  sales prices,  less costs to complete the
tire  processing.  The gas processing  facility has helium  inventory in process
stored in the BLM (Bureau of Land Management)  facility in Texas; this inventory
is based on the last-in-first-out method. There is a contract with the BLM which
encompasses  activity fees,  compression fees, storage fees and an annual fee to
the BLM. The Company is also building Thermal Combustors(TM) for resale.

Components of inventory at March 31, 2004 are as follows:

Helium and natural gas liquids, valued using
last-in, first-out method                                        $ 376,660
Tire shred inventory, valued using first-in, first-out method      274,000
Combustor construction in progress                               1,006,379
                                                                ----------
Total                                                           $1,657,039
                                                                ==========


Property, Plant and Equipment and Related Depreciation

Property,  plant and  equipment  purchased or  constructed  is recorded at cost.
Direct costs, such as labor and materials,  and indirect costs, such as overhead
used during construction are capitalized.  Major units of property  replacements
or improvements  are  capitalized and minor items are expensed.  Gain or loss is
recorded in income for the  difference  between  the net book value  relative to
proceeds  received,  if any, when the asset is sold or retired.  Depreciation is
provided for using straight-line and accelerated methods. Estimated useful lives
of the assets used in the computation of depreciation are as follows:


                Machinery and equipment                  5 - 20 years
                Buildings                                    25 years
                Vehicles                                      5 years
                Gathering pipeline                           20 years

Revenue Recognition

The Company's fuel processing facility recognizes revenue in several ways. First
when tires are accepted at the facility  ("tipping  fees") and secondly from the
sale of processed  tire shreds.  The revenues from tipping fees are fully earned
when the tires  are  accepted  at the  facility  and the  processed  tire  shred
revenues are recognized when the shreds are delivered to the end user.  Internal
quality controls are in place to ensure that shreds meet the standards  required
in contracts for the delivery of shreds.  This quality  control reduces the risk
of  significant  returns and  allowances of tire shreds sold.  Sales returns are
reprocessed and added back to the existing tire shreds. Sales returns are booked
based on the Company's historical experience.


The Company's helium,  liquid gas and natural gas revenues are recognized in the
period  of  delivery.  The  revenues  are  fully  earned  when  recognized.  The
processing  plant has various  types of quality  control  equipment  in place to
ensure  that the  processed  gases meet the  requirements  of the Bureau of Land
Management  ("BLM"),  the natural gas pipeline  operators  and its wholesale gas
customers. The Company has a month-to-month contract in place with a natural gas
marketing  firm for the natural gas  delivered  to the  pipeline and a long-term
contract  for the helium  processed.  The  natural  gas  liquids  processed  are
currently sold as produced under a month-to-month agreement.

The Company will recognize  revenue from the sale of combustors upon completion,
delivery and acceptance by the purchaser.

                                6

<PAGE>



                          Nathaniel Energy Corporation
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
                             MARCH 31, 2004 and 2003
                                   (Unaudited)

Use of Estimates

The  preparation  of the  Company's  financial  statements  in  conformity  with
generally accepted accounting  principles  requires the Company's  management to
make estimates and assumptions that affect the amounts reported in the financial
statements  and  accompanying  notes.  Actual  results  could  differ from those
estimates.


2. Acquisition; Minority Interest

On April 3, 2003 the Company  completed the acquisition of the remaining  81.45%
of Keyes Helium Company,  LLC ("Keyes Helium") from Colorado  Interstate  Gas/El
Paso  ("CIG")  through  its  subsidiary   Nathaniel  Energy  Okalahoma   Holding
Corporation  ("NEC OK"). The Company  purchased its initial  18.55%  interest in
Keyes  Helium on August 26,  2002.  On April 3, 2003 we also  acquired the Keyes
gathering system and Sturgis gas processing plant and compressor station.  These
facilities are located on a 15 acre site in Keyes,  Oklahoma.  These  facilities
receive and process  natural gas,  remove  liquid gases and helium and then send
the natural gas into a natural gas pipeline.  The Company transferred 49% of the
ownership of NEC OK to a principal  investor in consideration of an aggregate of
$11,997,476 of debt financing to effectuate the  acquisition.  Accordingly,  the
Company's  interest in Keyes Helium and the helium  operations  is through a 51%
ownership of NEC OK that owns 100% of Keyes Helium.

The following table represents unaudited proforma income statement for the three
months ended March 31, 2003,  including the operations of the 2003 acquisitions,
as if the acquisitions were owned for the entire period shown.



          Revenue                $ 1,518,000

          Net income (loss)      $(1,458,000)

          Loss per share         $     (0.04)


3. Notes Payable

On March 17, 2004 the Company  borrowed an  additional  $2,000,000  from Richard
Strain,  bringing the total  indebtedness  to Mr. Strain to $8,892,151.  The new
note has an  effective  interest  rate of 4.3%.  Installments  of  $540,000  are
payable on October 1, 2005, January 1, 2006, April 1, 2006 and July 1, 2006. Mr.
Strain  has the  right,  at any time,  to  convert  all,  or any  portion of the
outstanding  indebtedness  of  $8,892,151  into shares of the  Company's  common
stock.  The conversion  price will be equal to 103% of the average closing price
of the Company's common stock for the five trading days prior to March 17, 2004.
The conversion price exceeds the market value of the stock on March 17, 2004.

4. Economic Dependency - Major Customer

With the  acquisition of the Keyes Helium and the Sturgis gas  processing  plant
and compressor station and Keyes gathering system, the majority of the Company's
sales stem from helium and  processed  natural  gas sales,  while there are some
additional  sales of liquid  gases and monthly fees from a take and pay blending
contract with  Colorado  Interstate  Gas. The various  products have enabled the
Company to reduce its  dependency on any one customer,  however Air Products and
Chemicals,  Inc.  purchases all of the helium  produced under  contract  through
2021, subject to earlier termination in 2008 and 2015 if either party requests a
price determination that is not agreed to by the other party. If the contract is
not  terminated by either party in 2021, it will continue  unless  extended upon
two years'  advance  notice by either party.  Should this contract  terminate or
expire  there  are  other  major  companies  which  have a  stated  interest  in
purchasing the helium.

5. Related Party Transactions

See Note 3 - "Notes  Payable"  relating to a $2,000,000 loan from Richard Strain
to the Company.

                                7

<PAGE>


                          Nathaniel Energy Corporation
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
                             MARCH 31, 2004 and 2003
                                   (Unaudited)

Business Segments

The Company conducts business in three separate facilities  presently managed as
one energy operating segment.

-    a fuel  processing  operation  in  Hutchins,  Texas,  and the  natural  gas
     processing, gas liquids and helium production in Keyes, Oklahoma and
-    the  alternate  energy  engineering  and  corporate  offices in  Englewood,
     Colorado.


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

                           FORWARD LOOKING STATEMENTS

Certain  information  contained  in this  report  may  include  "forward-looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995,  and is subject to the safe harbor created by that act. The safe harbor
created  by the  Securities  Litigation  Reform  Act will not  apply to  certain
"forward  looking  statements"  because we issued  "penny  stock" (as defined in
Section  3(a)(51) of the  Securities  Exchange Act of 1934 and Rule 3a51-1 under
the Exchange  Act) during the three year period  preceding  the date(s) on which
those forward looking statements were first made, except to the extent otherwise
specifically  provided  by  rule,  regulation  or order  of the  Securities  and
Exchange  Commission.  We caution  readers  that certain  important  factors may
affect our actual results and could cause such results to differ materially from
any  forward-looking  statements  which  may be deemed to have been made in this
Report or which are otherwise made by or on behalf of us. For this purpose,  any
statements  contained in this report that are not statements of historical  fact
may be deemed to be forward-looking statements.  Without limiting the generality
of the foregoing, words such as "may", "will", "expect",  "believe",  "explore",
"consider",  "anticipate",  "intend", "could", "estimate", "plan", or "continue"
or the negative variations of those words or comparable terminology are intended
to  identify  forward-looking  statements.  Factors  that may affect our results
include, but are not limited to, the risks and uncertainties associated with:

-    Our ability to raise capital necessary to implement our business plan.
-    Our  ability  to finance  and  complete  planned  projects.
-    Our  ability to execute our  business  plan and  commercialize  the Thermal
     Combustor(TM)  technology,  including building Thermal  Combustors(TM) that
     meet customers' specifications and that meet local regulatory environmental
     and permit requirements.
-    Risks related to dependency on a small number of customers.
-    Our ability to satisfy our customers' expectations.
-    Our ability to employ and retain  qualified  management  and  employees.  -
-    Changes in government regulations which are applicable to our business.
-    The  availability  of a consistent,  economically  viable,  and sustainable
     waste stream supply to fuel the Thermal Combustor(TM) operations.
-    Changes in the demand for our products and  services,  including the impact
     from changes in governmental regulation and funding for alternative energy.
-    The degree and nature of our  competition,  including the  reliability  and
     pricing  of  traditional  energy  sources,   economic  viability  of  other
     alternative energy sources such as wind and solar power.
-    Our ability to generate sufficient cash to pay our creditors.
-    Disruption  in the economic and  financial  conditions  primarily  from the
     impact of terrorist  attacks in the United States and overseas,  threats of
     future  attacks,  police  and  military  activities  and  other  disruptive
     worldwide political events.

We are  also  subject  to  other  risks  detailed  from  time to  time in  other
Securities and Exchange Commission filings and elsewhere in this report. Any one
or more of these  uncertainties,  risks and other  influences  could  materially
affect our results of operations and whether forward-looking  statements made by
us  ultimately  prove  to be  accurate.  Our  actual  results,  performance  and
achievements  could differ  materially  from those expressed or implied in these
forward-looking  statements.  We undertake no obligation  to publicly  update or
revise any  forward-looking  statements,  whether from new  information,  future
events or otherwise.

                                8

<PAGE>


Company Overview

Nathaniel  Energy's mission is to provide a lower cost, clean energy alternative
to fossil fuels worldwide.  Our operational plan focuses on three major business
models:  licensing,  building  energy  infrastructures  and building  mini power
plants. Revenue is generated by two businesses integral to funding and operating
the energy  infrastructure  business.  The largest business,  the helium and gas
processing  plant,  generated 96% of revenue,  or $3.2 million  during the first
quarter of 2004. The second business, the fuel processing operation generated 4%
of the revenue, or $128,136 during the same period. Compared to the prior year's
first quarter,  revenue,  assets and liabilities all increased significantly due
to the  acquisition  of Keyes helium plant,  the Sturgis gas plant and the Keyes
gathering  system  from CIG on April 3,  2003.  Beginning  with the  March  2004
quarter  Nathaniel  Energy began managing the fuel processing and helium and gas
processing operations as one business segment.

Nathaniel  Energy's long term goal is to produce the majority of its revenue and
cash flow from  building  energy  infrastructures  and mini power  plants.  As a
result,  the  majority  of its  resources  are  focused  on  these  construction
businesses. In both of these developing businesses,  Nathaniel Energy expects to
market its  capabilities,  raise  capital for the  construction  of projects and
manage the projects from start to finish.

Historically,  the  company has not had  difficulty  finding  potential  project
opportunities.  Worldwide,  industries  and  municipalities  seek lower cost and
clean energy  alternatives to fossil fuels. Demand for these energy alternatives
is expected to grow.  A key to the  company's  success  will be wisely  choosing
among project opportunities and focusing resources on projects with the greatest
chance of success and returns for stockholders.

Nathaniel  Energy's 2004 mission is proving the  commercial  application  of its
Thermal  Combustor(TM).  At the same time,  the  company  is  seeking  funds for
numerous  projects  that use the Thermal  Combustor's(TM)  patented  technology.
Projects  currently  being explored  range in size from $6 to $24 million.  Once
financed, Nathaniel Energy anticipates these projects would take approximately 9
to 24 months to complete.

Results of Operations

For the quarterly period ended March 31, 2004 revenue  increased by $3.2 million
from $104,915 during the same period in 2003, to $3.3 million,  due to Nathaniel
Energy's  acquisition  of the Keyes helium plant,  the Sturgis gas plant and the
Keyes gathering  system.  The revenues and expenses of our 51% owned subsidiary,
Nathaniel Energy Oklahoma  Holdings,  which operates the Keyes Helium plant, the
Sturgis gas plant and the Keyes gathering system are  consolidated  within total
operations  beginning April 3, 2003. Revenues from the helium and gas processing
operations  were $3.2 million during the first quarter of 2004, with none during
the preceding  year.  Revenues  from fuel  processing  operations  were $128,136
during the period, up from $104,915 in the first quarter of the prior year.

Gross profit for the quarter  ended March 31, 2004 was 14% compared to a loss of
41% in the comparable  period of 2003. In the first quarter of 2004,  helium and
gas processing operation gross profit of 17% was offset by a negative 71% margin
at the fuel  processing  operation.  The helium and gas processing  facility has
steadily  improved  its gross  margin  during  2003 and plans to  improve  gross
margins even further  during the remainder of 2004. On January 9, 2004 Nathaniel
Energy completed a new contract with Nexus Energy Company to receive  additional
gas through its existing  pipeline for  processing at the company's  facilities.
According to the contract,  Nathaniel Energy will extract helium and natural gas
liquids from this new gas stream. The new contract and the $650,000 of equipment
upgrades  completed during the first quarter of 2004 have enabled the company to
increase gas volumes and  production at the  processing  plant  beginning in the
second quarter of 2004.

Total selling,  general and  administrative  expenses  decreased $421,335 or 38%
from  $1,096,342  in the first quarter of 2003 to $675,007 for the first quarter
of 2004.  A decline of $800,000 in non cash  marketing,  legal and  professional
expense  was  offset  by an  increase  in cash  costs of  $378,665,  principally
research and  development and  administrative  costs. In 2003 the company issued
1.5 million shares of common stock valued at $975,000 for  marketing,  legal and
professional  services with no comparable non-cash expenses incurred in 2004. Of
the total $975,000  expense,  $800,000 was recorded in the first quarter of 2003
and $175,000 was recorded in the fourth quarter of 2003.  Significant cash costs
that increased from the prior year include  research and development  expense of
$164,570,  gas and  helium  operations  general  and  administrative  expense of
$135,724 and insurance expense of approximately $60,000.

Interest  expense  decreased  to  $144,582  from  $182,062  last year  resulting
primarily from a $10 million  conversion of  indebtedness to Richard Strain into
equity.

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<PAGE>


Liquidity and Capital Resources

As of March 31, 2004  Nathaniel  Energy owed $523,256 to financial  institutions
under installment notes with an average interest rate of 11%, which were secured
by equipment.

Additionally,  the company has $8,892,151 in secured loans from Richard  Strain.
$2.0  million of this total was  loaned to  Nathaniel  Energy in March 2004 with
principal and interest  payable due in four quarterly  payments of $540,000 each
on October  1, 2005,  and  January  1, April 1, and July 1, 2006.  Another  $2.0
million  was loaned in 2003 with  principal  and  interest  payable  due in four
quarterly  payments of $540,000 each on October 1, 2005, and January 1, April 1,
and July 1, 2006. The remaining  amount due Mr. Strain of $4.9 million is due in
quarterly  principal  and interest  payments of $582,876 from March 2007 through
December 31, 2009.  All loan amounts from Mr. Strain to Nathaniel  Energy may be
converted,  at Mr.  Strain's  option,  into shares of Nathaniel  Energy's common
stock at a  conversion  rate equal to 103% of the average  closing  price on the
five trading days prior to March 17, 2004.  Additionally,  Nathaniel  Energy has
agreed to register the shares of common stock issuable upon  conversion of these
loans by September 18, 2004.

The remaining indebtedness consists of miscellaneous notes to unaffiliated third
parties of $90,250.

Included in accounts payable is $650,000 for equipment upgrades and services due
to Air Products,  a significant  customer,  with no stated  interest  rate.  The
payable  will be repaid over the next 12 months with monthly  installments  that
vary with revenue levels.

The following is a summary of Nathaniel  Energy's cash flows sources (uses) from
operating, investing, and financing activities during the periods indicated:

                                        Period ended March 31,
                                         2004         2003
                                        -----         -----
              Operating activities    $ 168,817  $(219,555)
              Investing activities      (69,034)   (48,216)
              Financing activities    1,975,873     77,459
                                   ------------  -----------
              Net effect on cash     $2,075,656  $(190,312)
                                     ==========  =========

For the period ended March 31, 2004,  the net cash used in operating  activities
is due to a net loss for the quarter of $579,231 and an increase in inventory of
$1.0 million offset by an increase in accounts  payable and accrued  expenses of
$672,686 and a reduction  in  restricted  cash of  $669,170.  During the quarter
$669,170  of the  restricted  cash  balance  was used to  construct  two Thermal
Combustors  (TM)  which  also  significantly  increased  inventory  compared  to
December  31,  2003.  Nathaniel  Energy  has a  contract  to supply two 1800 BHP
Thermal  Combustors(TM)  for $2.1  million for a Refuse  Derived Fuel project in
Cologna Venetta Italy. Under this agreement,  Nathaniel Energy has until July 1,
2004 to  construct,  deliver and  successfully  test the  combustors.  We cannot
predict we will complete this contract within the time frame allotted, and if we
do not complete this contract we cannot predict if we will become  involved in a
legal action relating to non-completion of the contract  including,  among other
things, a payment dispute and indemnification  liability,  and if so, if we will
prevail  in such an  action.  If we do not  complete  this  project,  management
believes a  substantial  portion of the  Thermal  Combustors(TM)  built for this
contract can be used in another project.

The net change in financing  activities is due to a $2.0 million debt  issuance,
offset by debt repayments of $24,127.

For the period ended March 31, 2003, the operating  activities net change is due
primarily  to a loss for the  quarter of $1.3  million  offset by an increase in
accounts  payable and accrued expenses of $164,077 and stock issued for services
of $800,000.  Stock issued for services of $800,000 includes $600,000 classified
as a financing source of cash in our Quarterly Report for the period ended March
31,  2003.  Cash used for  investing  activities  was  capital  expenditures  of
$48,216.  The net change in financing activities is due to proceeds from debt of
$121,982 offset by debt repayments of $44,523.

Nathaniel Energy had cash of approximately  $2.6 million at March 31, 2004 which
will be used to fund the Company's  operations,  pay current debts and partially
fund current Thermal Combustor(TM) projects.

Item 3. Controls and Procedures

Our Chief  Executive  Officer and  Principal  Accounting  Officer  conducted  an
evaluation of the effectiveness of our disclosure

                                10

<PAGE>


controls and procedures.  Based on this evaluation,  our Chief Executive Officer
and Principal  Accounting  Officer  concluded that our  disclosure  controls and
procedures  were  effective  as of March 31,  2004 in  alerting  him in a timely
manner to material  information  required to be included in our SEC reports.  In
addition,  no change in our internal control over financial  reporting  occurred
during the fiscal quarter ended March 31, 2004 that has materially affected,  or
is reasonably likely to materially  affect,  our internal control over financial
reporting.

PART 2: OTHER INFORMATION

Item 1. Legal Proceedings.

The Company is subject to a variety of  litigation  and claims  relating to past
due  payments  for  goods  and  services.  The  Company  is in  the  process  of
negotiating   settlement   arrangements  for  these  items,  and  the  estimated
settlement amounts are recorded on the books in accounts payable.

Item 2. Changes in  Securities  and Small  Business  Issuer  Purchases of Equity
Securities.

Not Applicable

Item 3. Defaults Upon Senior Securities.

Not Applicable

Item 4. Submission of Matters to a Vote of Security Holders.

Not Applicable

Item 5. Other Information.

Not Applicable

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

(a)  Exhibits.

3(i).1    Certificate of Incorporation*
3(i).2    Articles of Amendment to Articles of Incorporation, as amended on
          August 6, 1999*
3(i).3    Certificate of Amendment of Certificate of Incorporation, as amended
          on April 24, 2002*
3(ii).1   Amended and Restated By-Laws**
10.1      Loan  Agreement  II,  dated  March 17,  2004  between  Richard  Strain
          and Nathaniel Energy Corporation.
10.2      Promissory Note II, dated March 17, 2004 between Nathaniel Energy
          Corporation and Richard Strain.
10.3      Compression Facility Agreement, dated January 9, 2004 between
          Nathaniel Energy Corporation and Nexus Energy Company
31        Certification  of Chief Executive  Officer and Principal  Accounting
          Officer pursuant to Rule 13a-14(a)or Rule 15d-14(a)as adopted pursuant
          to Section 302 of the Sarbanes-Oxley Act of 2002
32        Certification  of Chief Executive  Officer and Principal  Accounting
          Officer pursuant to 18 U.S.C.  Section 1350,  as adopted  Pursuant to
          Section 906 of the Sarbanes-Oxley Act of 2002

(b) Reports on Form 8-K:

Two Current  Reports  (one  Amended)  on Form 8-K were filed  during the quarter
ended March 31, 2004 as follows:

          Date of Report: January 12, 2004
          Items Reported: 4 and 7

          Date of Report: April 3, 2003 (Amendment)
          Items Reported: 7

*Denotes  document  filed as an exhibit to our Current Report on Form 8-K for an
event dated December 31, 2002 and incorporated herein by reference.

**Denotes  document  filed as an exhibit to our Annual Report on Form 10-KSB for
the year ended December 31, 2003 and incorporated herein by reference.

                                11


<PAGE>

                                              SIGNATURES

In accordance with the  requirements of the Exchange Act, the Registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

                          NATHANIEL ENERGY CORPORATION
                                  (Registrant)

Date: May 14, 2004





                        By:  /s/  Stan Abrams
                             ----------------------------
                             Stan Abrams, CEO
                             Nathaniel Energy Corporation







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