**United
      States**


**Securities
      and Exchange Commission**


**Washington,
      D.C. 20549**




**FORM
      10-QSB**




**(Mark
      One)**




**ý** **QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
      SECURITIES**


**EXCHANGE
      ACT OF 1934**




**For
      the quarterly period ended June 30 , 2007**




**o** **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.
                Employerincorporation
                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 ý No o




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 o No o




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: August 2, 2007  90,731,596
      shares of common stock, $0.001 par value.




**Transitional
      Small Business Disclosure Format (Check One)
      Yes** **o** **No** **ý**







**NATHANIEL
      ENERGY CORPORATION**







TABLE
                OF CONTENTSPART
                I.
            FINANCIAL
                INFORMATIONItem
                1
            Financial
                Statements (unaudited)Consolidated
                Balance Sheets as of June 30, 2007 and December 31,
                2006
            F-1Consolidated
                Statements of Operations for the Three and Six Months ended June
                30, 2007
                and 2006
            F-2Consolidated
                Statements of Cash Flows for the Six Months ended June 30, 2007 and
                2006
            F-3Notes
                to Consolidated Financial Statements
            F-4Item
                2.
            Management’s
                Discussion and Analysis or Plan of Operation
            1Item
                3.
            Controls
                and Procedures
            5PART
                II.
            OTHER
                INFORMATION
            6Item
                1.
            Legal
                Proceedings
            6Item
                2.
            Unregistered
                Sales of Equity Securities And Use of Proceeds
            6Item
                3.
            Defaults
                Upon Senior Securities
            6Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            6Item
                5.
            Other
                Information
            6Item
                6.
            Exhibits
            6Signatures
            7  i




**Nathaniel
      Energy Corporation**


**Consolidated
      Balance Sheets**





**June
                30, 2007**
            
            **December
                31, 2006****(unaudited)**ASSETSCurrent
                assetsCash
                and cash equivalents
            
            $
            63,295
            
            $
            257,868Accounts
                receivable, net of allowance for doubtful accounts of $8,078
            
            
            12,464
            
            
            121,276Prepaid
                expenses
            
            
            122,317
            
            
            40,277Total
                current assets
            
            
            198,076
            
            
            419,421Deposits
            
            
            42,894
            
            
            72,895Property
                and equipment, net of accumulated depreciation of $655,801
            
            
            1,036,423
            
            
            1,069,443Intangibles,
                net of accumulated amortization of  $365,374
            
            
            141,394
            
            
            193,423Total
                assets
            
            $
            1,418,787
            
            $
            1,755,182LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIT)Current
                liabilitiesAccounts
                payable and accrued liabilities
            
            $
            1,190,697
            
            $
            981,169Accrued
                compensation and payroll liabilities
            
            
            39,353
            
            
            39,917Accrued
                interest
            
            
            19,907
            
            
            12,035Notes
                payable and capital leases - current portion
            
            
            709,351
            
            
            162,814Total
                current liabilities
            
            
            1,959,308
            
            
            1,195,935Long-term
                portion of notes payable
            
            
            110,136
            
            
            41,923Total
                liabilities
            
            
            2,069,444
            
            
            1,237,858Commitments
                and contingencies
            
            
            -
            
            
            -Stockholders’
                Equity (Deficit):Preferred
                stock, $0.001 par value, 10,000,000 shares authorized, none issued
                or
                outstanding
            
            
            -
            
            
            -Common
                stock, $0.001 par value; 200,000,000 shares authorized;90,731,596
                shares issued and outstanding at June 30, 2007 and December 31,
                2006
            
            
            90,731
            
            
            90,731Additional
                paid-in capital
            
            
            60,702,446
            
            
            60,702,446Common
                stock to be issued
            
            
            285
            
            
            285Accumulated
                deficit
            
            
            (61,444,119
            )
            
            (60,276,138
            )Total
                Stockholders’ Equity (Deficit)
            
            
            (650,657
            )
            
            517,324Total
                Liabilities and Stockholders' Equity (Deficit)
            
            $
            1,418,787
            
            $
            1,755,182





The
      accompanying notes are an integral part of these condensed consolidated
      financial statements.




F-1




**Nathaniel
      Energy Corporation**


**Consolidated
      Statements of Operations**


**(Unaudited)**





**For
                the Three**
            
            **For
                the Three**
            
            **For
                the Six**
            
            **For
                the Six****Months
                Ended**
            
            **Months
                Ended**
            
            **Months
                Ended**
            
            **Months
                Ended****June
                30,**
            
            **June
                30,**
            
            **June
                30,**
            
            **June
                30,****2007**
            
            **2006**
            
            **2007**
            
            **2006**Revenue
            
            $
            96,118
            
            $
            310,732
            
            $
            304,315
            
            $
            550,259Cost
                of revenue
            
            
            383,798
            
            
            231,881
            
            
            723,025
            
            
            442,328Gross
                profit (loss)
            
            
            (287,680
            )
            
            78,851
            
            
            (418,710
            )
            
            107,931Operating
                expenses:Selling,
                general and administrative expenses
            
            
            332,312
            
            
            463,309
            
            
            693,426
            
            
            972,243Research
                and development expense
            
            
            -
            
            
            11,041
            
            
            68,776
            
            
            39,242Total
                operating expenses
            
            
            332,312
            
            
            474,350
            
            
            762,202
            
            
            1,011,485Loss
                from operations
            
            
            (619,992
            )
            
            (395,499
            )
            
            (1,180,912
            )
            
            (903,554
            )Other
                income (expense):Gain
                on sale of fixed assets
            
            
            18,481
            
            
            -
            
            
            26,662
            
            
            -Interest
                income (expense)
            
            
            (10,350
            )
            
            19
            
            
            (13,732
            )
            
            (104,666
            )Loss
                from continuing operations
            
            
            (611,861
            )
            
            (395,480
            )
            
            (1,167,982
            )
            
            (1,008,220
            )Income
                (loss) from discontinued operations, net of tax
            
            
            -
            
            
            (1,533
            )
            
            -
            
            
            193,428Gain
                on sale of assets, net of tax
            
            
            -
            
            
            42,171
            
            
            -
            
            
            6,041,145Net
                income (loss)
            
            $
            (611,861
            )
            $
            (354,842
            )
            $
            (1,167,982
            )
            $
            5,226,353Loss
                per share from continuing operations, basic and diluted
            
            $
            (0.01
            )
            $
            (0.00
            )
            $
            (0.01
            )
            $
            (0.01
            )Income
                per share from discontinued operations, basic and diluted
            
            $
            0.00
            
            $
            (0.00
            )
            $
            0.00
            
            $
            0.00Income
                per share from gain on sale of assets, basic and diluted
            
            $
            0.00
            
            $
            0.00
            
            $
            0.00
            
            $
            0.07Net
                income (loss) per share, basic and diluted
            
            $
            (0.01
            )
            $
            (0.00
            )
            $
            (0.01
            )
            $
            0.06Weighted
                average common shares outstanding
            
            
            90,731,596
            
            
            90,717,310
            
            
            90,731,596
            
            
            90,707,787





The
      accompanying notes are an integral part of these condensed consolidated
      financial statements.




F-2




**Nathaniel
      Energy**


**Consolidated
      Statements of Cash Flows**


**(Unaudited)**





**For
                the Six**
            
            **For
                the Six****Months
                Ended**
            
            **Months
                Ended****June
                30,**
            
            **June
                30,****2007**
            
            **2006**Cash
                flows from operating activities:Net
                Income (loss)
            
            $
            (1,167,982
            )
            $
            5,226,353**Adjustments
                to reconcile net loss to net   cash used in operating
                activities:**Depreciation
                and amortization
            
            
            180,722
            
            
            214,110Reserve
                for bad debt
            
            
            8,078
            
            
            -Income
                tax expense
            
            
            -
            
            
            759,000Disposition
                of equipment
            
            
            (6,565
            )
            
            2,629Interest
                expense
            
            
            10,134
            
            
            -Gain
                on sale of assets
            
            
            -
            
            
            (6,041,145
            )Changes
                in operating assets and liabilities:(Increase)
                decrease in assets:Accounts
                receivable
            
            
            100,734
            
            
            (19,542
            )Prepaid
                expenses
            
            
            -
            
            
            (36,663
            )Other
                assets
            
            
            44,972
            
            
            (11,380
            )Increase
                (decrease) in liabilities:Accounts
                payable and accrued expenses
            
            
            198,270
            
            
            215,976Net
                effect on cash from discontinued operations
            
            
            -
            
            
            (1,277,958
            )**Net
                cash used in operating activities**
            
            
            (631,637
            )
            
            (968,620
            )Cash
                flows from investing activities:Acquisition
                of minority interest
            
            
            -
            
            
            (882,000
            )Proceeds
                from the sale of equipment
            
            
            5,963
            
            
            -Cash
                provided by discontinued operations
            
            
            -
            
            
            15,809,655Equipment
                and intangible asset purchases
            
            
            (1,501
            )
            
            (33,477
            )**Net
                cash provided by investing activities**
            
            
            4,462
            
            
            14,894,178Cash
                flows from financing activities:Payments
                on debt
            
            
            (67,398
            )
            
            (4,270,180
            )Proceeds
                from issuances of notes and loans
            
            
            500,000
            
            
            117,340Cash
                used in discontinued operations
            
            
            -
            
            
            (8,892,151
            )**Net
                cash provided by (used in) financing activities**
            
            
            432,602
            
            
            (13,044,991
            )Net
                increase (decrease) in cash and cash equivalents
            
            
            (194,573
            )
            
            880,567Cash
                and cash equivalents, at beginning of period
            
            
            257,868
            
            
            260,032Cash
                and cash equivalents, at end of period
            
            $
            63,295
            
            $
            1,140,599Supplemental
                disclosure of cash flow information:Cash paid during the period for:Interest
            
            $
            5,365
            
            $
            1,390,215Taxes
            
            $
            -
            
            $
            71,493Non
                cash financing activity:Issuance
                of stock to settle notes payable
            
            $
            -
            
            $
            33Issuance
                of note payable for equipment**
            
            $
            107,924
            
            $
            -








The
      accompanying notes are an integral part of these condensed consolidated
      financial statements.





F-3




**Nathaniel
      Energy Corporation**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


JUNE
      30,
      2007 and 2006


(Unaudited)




**1.
      Significant Accounting Policies and Nature of Operations:**




*Unaudited
      Interim Financial Statements*




The
      accompanying unaudited interim financial statements, which include the Company’s
      wholly owned subsidiaries, 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, 2006. 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 and six months ended June 30, 2007 are not necessarily
      indicative of results of operations to be expected for the full
      year.




*Description
      of Business*




Nathaniel
      Energy Corporation is a renewable hydrocarbon-based waste-to-energy (WTE)
      company that provides municipalities and industries with solutions that divert
      waste from landfills while providing a clean alternative energy comparable
      to
      that of fossil fuels. Our proprietary patented technology, the Thermal
      GasifierTM, is a multi-stage gasification system designed to convert industrial,
      commercial and municipal solid waste, biomass, tires and any other solid,
      hydrocarbon-based materials into a synthesis gas for the production of
      economical clean thermal and electrical energy, while exceeding the most
      stringent EPA and European Union regulations.




We
      have
      been in the alternative fuel processing business, including waste tire recycling
      and collection services, since 1997. We have operated a 27 acre tire fuel
      processing facility in Hutchins, Texas since 1999. During the three and six
      months ended June 30, 2007, our tire fuel processing business has generated
      100%
      of our revenue.




We
      plan
      to focus our patented technology, the Thermal GasifierTM in three main areas;
      creating energy infrastructures; building, owning and operating
      hydrocarbon-based waste-to-energy plants and licensing. The Company’s mission is
      to become an environmental partner with municipalities and commercial and
      industrial businesses for the diversion of solid waste from landfills, while
      providing an economically cost effective, clean energy alternative to fossil
      fuels worldwide.




We
      plan
      to build energy infrastructures for certain industries that have a need to
      dispose of hydrocarbon-based materials and seek an independent source of energy
      in the form of heat, steam and/or electricity. These energy infrastructures
      would be built on a business’ premises (“inside the fence”) and can reduce the
      dependence a business has on fossil fuels and power from the local utility.
      In
      some cases, the energy infrastructures can become a business’ self sustaining
      utility. We plan to identify new and existing sites where we can build, own
      and
      operate hydrocarbon-based waste-to-energy plants through our own resources
      or in
      conjunction with joint venture partners. Eventually, we plan to license the
      Thermal GasifierTM technology to qualified companies and joint venture partners
      as we mature our commercialization activities.





Although
      we no longer provide technical assistance to the project owner of our two
      Thermal GasifiersTM in Cologna Veneta, Italy, which was built in 2004, we
      continue to utilize those units in our sales and marketing efforts during 2007
      and as commercial proof of process of our technology. We have recognized no
      revenue from the sale or delivery of our Thermal GasifiersTM through the period
      ended June 30, 2007.





*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. Certain prior period amounts have been reclassified
      to conform to the current period presentation with no effect on the net
      loss.




*Research
      and Development*




Research
      and development expenditures, all of which relate directly to the design and
      development of our Thermal GasifierTM technology, are expensed as incurred. For
      the three and six months ended June 30, 2007 and 2006, we incurred costs for
      third party engineering consulting and analysis and expensed $0 and $11,041;
      $68,776 and $39,242, respectively.




F-4


**Nathaniel
      Energy Corporation**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


JUNE
      30,
      2007 and 2006


(Unaudited)





*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 methods. Estimated useful lives of the assets
      used in the computation of depreciation are as follows:




Machinery
                and equipment
            5
                -
                15 yearsBuildings
            15
                yearsVehicles
            5
                years




*Long-Lived
      Assets*




In
      accordance with the Financial Accounting Standards Board’s (“FASB”) Statement of
      Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment
      or Disposal of Long-Lived Assets”, the Company reviews its long-lived assets,
      including intangible assets, for impairment whenever events or changes in
      circumstances indicate that the related carrying amount may not be recoverable.
      Recovery of assets to be held and used is measured by a comparison of the
      carrying amount of the assets to the future net cash flows expected to be
      generated by the asset. If such assets are considered to be impaired, the
      impairment to be recognized is measured by the amount by which the carrying
      amount of the assets exceeds the fair value of the assets. Assets to be disposed
      of are reported at the lower of the carrying amount or fair value less the
      cost
      to sell. Management uses significant judgments, assumptions and estimates to
      calculate future cash flows expected to be generated by the assets under
      impairment review.




*Revenue
      Recognition*




Our
      tire
      fuel processing facility recognizes revenue in two ways. First when waste tires
      are accepted at the facility we receive a disposal fee (“tipping fees”) and
      secondly from the sale of processed tire-derived-fuel. The revenues from tipping
      fees are fully earned when the waste tires are accepted at the facility and
      the
      processed tire-derived-fuel revenues are recognized when the TDF is delivered
      to
      the end user. Internal quality controls are in place to ensure that the
      tire-derived-fuel meets the standards required in the contracts for delivery
      to
      our customers. This quality control reduces the risk of significant returns
      and
      allowances of tire-derived-fuel sold. Sales returns are reprocessed and added
      back to the existing production of tire-derived-fuel. Sales returns are booked
      based on the Company’s historical experience.




We
      recognize revenue from the sale of our Thermal GasifiersTM upon completion,
      delivery and customer acceptance, using the completed contract method of
      accounting. We have recognized no revenue from the sale of our Thermal
      GasifiersTM as of June 30, 2007.






*Net
      Income (Loss) Per Common Share*




SFAS
      No.
      128, “Earnings Per Share” requires presentation of basic (loss) or earnings per
      share (“Basic EPS”) and diluted (loss) or earnings per share (“Diluted
      EPS”).




The
      computation of basic loss per share is computed by dividing loss available
      to
      common stockholders by the weighted average number of outstanding common shares
      during the period. Diluted loss per share gives effect to all dilutive potential
      common shares outstanding during the period. The computation of diluted EPS
      does
      not assume conversion, exercise or contingent exercise of securities that would
      have an anti-dilutive effect on earnings. During the periods presented, we
      had
      no potentially dilutive securities outstanding.




*Use
      of Estimates*




The
      preparation of our financial statements in conformity with generally accepted
      accounting principles requires our 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.




F-5




**Nathaniel
      Energy Corporation**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


JUNE
      30,
      2007 and 2006


(Unaudited)








**2.** **Accounts
      Receivable**





We
      had
      trade accounts receivable, net of reserves, of $12,464 as of June 30, 2007.
      During the three months ended June 30, 2007, we provided a reserve for doubtful
      accounts of $8,078 which is included as bad debt expense in operating expenses.
      Our reserve for doubtful accounts is $8,078 as of June 30, 2007.








**3.
      Prepaid Expenses**





Prepaid
      expenses at June 30, 2007 of $122,317 consist primarily of prepaid insurance
      premiums.





**4.
      Furniture and Equipment**





Following
      is a summary of property, plant and equipment at June 30, 2007:





**June
                30, 2007**Machinery
                and equipment
            
            $
            1,267,830Buildings
            
            
            43,575Vehicles
            
            
            15,993Land
            
            
            51,084Furniture,
                fixtures, and equipment
            
            
            184,320Improvements
            
            
            129,4221,692,224Less:
                Accumulated depreciation
            
            
            (655,801
            )Net
                book value
            
            $
            1,036,423








Depreciation
      expense recorded in the financial statements for continuing operations was
      $128,693 and $175,595 for the six months ended June 30, 2007 and 2006,
      respectively.





**5.
      Intellectual Property**





Nathaniel
      Energy owns three U.S. patents, two pending U.S. patents and two pending
      European patent applications covering the Thermal GasifierTM technology. These
      patents and patent applications are for utility patents directed to devices
      and
      methods of uses. The three U.S. patents expire September 6, 2011,
      December 4, 2012, and February 4, 2022, respectively.




Patents
                and website design
            
            $
            207,429Blueprints
                and engineering design
            
            
            299,339Less
                Accumulated Amortization
            
            
            (365,374
            )Intangible
                assets, net
            
            $
            141,394







Amortization
      expense for the six months ended June 30, 2007 and 2006 was $52,029 and
      $38,515, respectively.




F-6




**Nathaniel
      Energy Corporation**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


JUNE
      30,
      2007 and 2006


(Unaudited)





**6.
      Notes Payable**





On
      April
      4, 2007 and April 16, 2007, we borrowed $100,000 and $200,000 respectively
      from
      our major shareholder, Mr. Richard Strain. On May 31, 2007, we borrowed an
      additional $200,000 from Mr. Strain. The loans bear interest at the annual
      rate
      of 9%, with interest payable quarterly. The April 4, 2007 and April 16, 2007
      notes are payable before September 30, 2007. The May 31, 2007 note is due before
      November 30, 2007. We may prepay the notes at any time without penalty. The
      loans are secured by a first priority security interest in our
      assets.





At
      June
      30, 2007, the Company had the following promissory notes
      outstanding:




**2007**15%
                promissory notes payable to individuals, due on demand
            
            $
            17,0009%
                promissory notes payable to individuals, due on demand before November
                30,
                2007
            
            
            200,0009%
                promissory note payable to individuals, due on demand
                beforeSeptember
                30, 2007
            
            
            300,000Non-interest
                bearing unsecured promissory note due upon receipt of payments from
                theCologna
                Veneta, Italy thermal Gasifier TM project owner at 20% of amount
                received
            
            
            70,0009.89%
                capital lease, secured by software, monthly payments of $1,595 principal
                andinterest
                through September 2008
            
            
            23,54815%
                installment notes for insurance premium financing
            
            
            74,8523.68%
                installment note, secured by equipment, monthly payments of
                $2,407principal
                and interest through May 2011
            
            
            105,2268.45%
                installment note, monthly payment of $714 principal and
                interestthrough
                December 2007
            
            
            6,4433.35%
                installment note, secured by equipment, monthly payments of $905
                principaland
                interest through September 2009
            
            
            22,418Total
                debt:
            
            
            819,487Current
                portion:
            
            
            (709,351
            )Long-term
                portion:
            
            $
            110,136




F-7




**Nathaniel
      Energy Corporation**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


JUNE
      30,
      2007 and 2006


(Unaudited)





**7.
      Related Party Transactions**





On
      April
      4, 2007 and April 16, 2007, we borrowed $100,000 and $200,000 respectively
      from
      our major shareholder, Mr. Richard Strain. On May 31, 2007, we borrowed an
      additional $200,000 from Mr. Strain. The loans bear interest at the annual
      rate
      of 9%, with interest payable quarterly. The April 4, 2007 and April 16, 2007
      notes are payable before September 30, 2007. The May 31, 2007 note is due before
      November 30, 2007. We may prepay the notes at any time without penalty. The
      loans are secured by a first priority security interest in our
      assets.





**8.
      Economic Dependency - Major Customer**





One
      customer accounted for approximately 36% and 33%, and 37 %
      and 19%
      of our total revenue for the three and six months ended June 30, 2007 and 2006,
      respectively.





**9.
      Business Segments**




The
      Company conducts business in two separate facilities presently managed as two
      energy operating business segments, tire fuel processing and alternative energy.
      The location and use of our facilities are shown as follows:




• the tire
      fuel processing operation in Hutchins, Texas, and


• the
      alternative energy engineering and corporate offices in Englewood,
      Colorado.




For
      the
      six months ended June 30, 2007:





Fuel
            
            Alternate
            
            DiscontinuedProcessing
            
            Energy
            
            Operations
            
            TotalRevenue
            
            $
            304,315
            
            $
            -
            
            $
            -
            
            $
            304,315Significant
                non-cash expenditures:depreciation
                and amortization
            
            $
            130,831
            
            $
            49,891
            
            $
            -
            
            $
            180,722Net
                income (loss)
            
            $
            (1,111,781
            )
            $
            (56,201
            )
            
            
            
            $
            (1,167,982
            )Capital
                expenditures
            
            $
            1,501
            
            $
            -
            
            $
            -
            
            $
            1,501Total
                assets as of June 30, 2007
            
            $
            1,334,083
            
            $
            84,705
            
            $
            -
            
            $
            1,418,787





For
      the six months ended June 30, 2006:





Fuel
            
            Alternate
            
            DiscontinuedProcessing
            
            Energy
            
            Operations
            
            TotalRevenue
            
            $
            550,259
            
            $
            -
            
            $
            -
            
            $
            550,259Significant
                non-cash expenditures:depreciation
                and amortization
            
            $
            164,220
            
            $
            49,890
            
            
            -
            
            $
            214,110Net
                income (loss)
            
            $
            5,428,142
            
            $
            (395,217
            )
            $
            193,428
            
            $
            5,226,353Capital
                expenditures
            
            $
            -
            
            $
            33,477
            
            $
            -
            
            $
            33,477Total
                assets as of June 30, 2006
            
            $
            2,647,803
            
            $
            225,359
            
            $
            -
            
            $
            2,873,162








**10** **.
      Subsequent Events**





The
      Board
      of Directors of Nathaniel Energy Corporation was advised on July 27, 2007,
      Richard C. Strain sold 46,000,000 shares of common stock of Nathaniel,
      representing approximately 50.7% of Nathaniel’s issued and outstanding shares of
      common stock, to Vista International, Inc. The Board was also advised that
      the
      sale was effectuated under a Stock Purchase Agreement dated July 13, 2007
      between Richard Strain and Vista and that Vista has pledged shares of
      Nathaniel’s common stock it purchased to Mr. Strain as collateral to secure
      Vista’s payment obligations under the promissory note.




F-8





**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 “hope” 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 and facilities
      upgrades.




•  Our
      ability to execute our business plan and commercialize the Thermal GasifierTM
technology, including building Thermal GasifiersTM that meet customers’
specifications and that meet local regulatory environmental and permit
      requirements.




•  Our
      ability to enter into agreements or relationships with municipalities and
      commercial and industrial businesses in connection with the commercialization
      of
      our Thermal GasifierTM.




•  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 GasifierTM 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 pay debt service on loans as they come due.




•  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.




1




**Company
      Overview**




We
      are
      committed to being a leader in the WTE (Waste to Energy) and renewable energy
      industries. At a time when world-wide demand for electricity stretches both
      generating and transmission capacity, the use of fossil based fuels to generate
      electric power is not an efficient use of those resources, and energy security
      threatens economic growth, we seek to provide clean, sustainable and profitable
      solutions to these problems. We are an “Environmental Partner” developing and
      leveraging synergistic technologies, diverting solid waste from landfills to
      the
      generation of clean and economical energy. We are also engaged in developing
      strategic collaborative partnerships for the development of clean and profitable
      carbon neutral fuels from waste.




As
      we
      advance the “state-of-the-art” in WTE technology, our business model focuses on
      the development of qualified joint-venture partnerships and licensed partner
      companies, while we move ahead to build, own and operate other distributed
      WTE
      plants.  Our ideal project characteristically develops when high energy
      demand and cost combine with on-site generation of large volumes of hydrocarbon
      based waste.  Whether through joint-venture, licensed partner or sole
      ownership, we develop efficient WTE energy infrastructures “inside the
      fence.”  These projects reduce the environmental footprint of the parent
      facility through reduced dependence on fossil fuels, reduced generation of
      waste
      and clean economical energy production.  The parent facility derives
      additional benefit if there is on-site process use for surplus heat and/or
      steam.




We
      seek
      to further expand our presence in the renewable energy and biofuels marketplace
      through strategic joint-venture partnerships.  Through participation in
      commercially viable WTE projects co-located with biofuels/alcohol development
      we
      intend to leverage the beneficial byproducts of our technology in conjunction
      with emerging biofuels/alcohol technologies for transportation
      fuels.




Some
      of
      our WTE plants may have a sustainable supply of waste fuels available from
      the
      host/customer with no additional fuel needed. Other facilities may require
      additional fuel to fully utilize installed generation capacity, or they may
      need
      supplemental fuel to raise the average fuel grade or the volume of fuel needed
      to efficiently operate the technology. Our wholly owned subsidiary, Cleanergy,
      Inc. will use our knowledge of tire fuel processing operations which currently
      resides in our Hutchins, Texas facility, to furnish tire-derived-fuel (TDF)
      to
      those WTE plants that need supplemental fuel for those facilities. The tire
      fuel
      processing division will continue to expand and eventually grow toward a full
      fuel procurement agent for all other fuels at plants where the Thermal GasifierTM
capacity exceeds the local waste fuel supply. This will take advantage of our
      existing expertise and allow us to increase throughput at various tire fuel
      processing facilities as we expand, create a new market for our
      tire-derived-fuel (as environmental regulations tighten up on our current
      customers) and position us as a “turn key” provider of WTE
      solutions.




On
      March
      7, 2006 we sold substantially all of the assets that comprised our helium and
      gas processing facilities and operations to Midstream Energy Services, LLC
      pursuant to a Purchase and Sale Agreement signed in September 2005. Revenue
      generated from our discontinued operations, the helium and gas processing
      business, had provided operating and capital funds for improving our current
      tire fuel processing operations and further advancing it toward a full service
      fuel procurement operation, in addition to, furthering the commercialization
      of
      our Thermal GasifiersTM. By improving and advancing our fuel processing division
      and furthering the commercialization of our patented technology, we plan to
      secure hydrocarbon-based WTE projects through our subsidiary Cleanergy, Inc.
      Cleanergy has had no activity to date.




The
      ongoing tire fuel processing facility improvements and expansion which began
      in
      2005 provide the foundation to diversify this business segment toward
      alternative fuel procurement. The facility is strategically located less than
      a
      mile from the third largest train intermodal station in the nation and is
      currently the only waste tire storage and processing facility licensed by the
      State of Texas to operate in the Dallas metro area. With the installation of
      new
      equipment and site improvements we have been able to increase the production
      and
      the volume of waste tires we process. We have seen an increase in the volume
      of
      waste tires we can accept at the facility resulting in higher tipping fee
      revenues.  The improvements have enabled us to continue to increase revenue
      and cash flow from this operation through the first quarter of 2007. During
      the
      three months ended June 30, 2007, the facility was closed for cleanup and site
      improvement. As of June 30, 2007, we have accrued $285,000 of expense for scrap
      and unusable waste tire removal.




We
      operate the tire fuel processing facility under permit with the Texas Commission
      on Environmental Quality, which expires in December 2007. We are in the process
      of preparing our application for renewal of that permit.




We
      expect
      that we will purchase new operating equipment and overhaul our existing
      equipment through the end of the fiscal year and will see the improvement in
      revenue and operating efficiencies during the fourth quarter of fiscal 2007.
      During the three and six months ended June 30, 2007, we generated $96,118 and
      $304,315, respectively, or 100%, of our revenue, from our tire fuel processing
      division.  We have recognized no revenue from our Thermal GasifierTM
business segment during the three and six months ended June 30,
      2007.




Our
      long
      term goal is to produce the majority of our revenue and cash flow from the
      commercialization of our Thermal GasifierTM technology through hydrocarbon-based
      WTE projects. During the first quarter 2005, we formed Cleanergy, Inc., a
      Delaware corporation, as a wholly owned subsidiary of the Company for the
      purpose of advancing our business plan to commercialize our Thermal
      GasifierTM technology. We plan to focus the majority of our resources on this
      business operation, which will be supported through the advancement of our
      tire
      fuel processing division’s expansion for fuel procurement for the
      hydrocarbon-based WTE projects.




2




We
      are
      actively involved in ongoing business development activities and have identified
      a number of potential project opportunities which are under
      consideration.   Currently the company is in the process of evaluating
      certain project opportunities and providing detailed proposals for selected
      qualified projects. Worldwide, industries and municipalities seek solutions
      for
      diverting solid waste from landfills and lower cost and clean energy
      alternatives to fossil fuels. Demand for these solutions is expected to grow.
      A
      key to our success will be qualifying and wisely choosing among project
      opportunities and focusing our resources on projects with the greatest chance
      of
      success and returns for stockholders.




In
      the
      preceding three months there has been no technical support provided to the
      WTE
      facility in Cologna Veneta, Italy which was built in 2004 as we believed that
      the best use of our time and resources was to pursue the development of other
      project opportunities. New projects are expected to provide additional
      marketing, research and business development benefits that the Italian facility
      had provided. We may reinitiate discussions with the owner of the Italian
      facility at a future date for purposes of sales and marketing efforts in Europe.
      Our mission for the remainder of 2007 is to expand on our sales pipeline of
      qualified hydrocarbon-based WTE projects and begin the development of several
      of
      these projects. However we can not assure that any of these opportunities will
      result in a project that generates revenue within the next twelve
      months.







**Results
      of Operations For the Three Months Ended June 30, 2007 and
      2006**




*Revenue*





For
      the
      three months ended June 30, 2007, revenue was $96,118 compared to $310,732
      during the three months ended June 30, 2006, a decrease of $214,614 or
      approximately 69%. Tipping fee revenue decreased during the six months ended
      June 30, 2007 due to a facility wide clean up during which we ceased accepting
      waste tires at the tire processing facility in Hutchins, Texas. Completion
      of
      these activities are part of planned improvements at the facility which include
      refurbishing of existing equipment and purchase and installation of new
      equipment which are expected to increase our capacity to accept and process
      whole tires and process those tires into tire derived fuel (TDF) for sale to
      end
      users. We expect that site improvements and new equipment purchased and
      installed will improve revenues during the fourth quarter of 2007.





*Cost
      of Goods Sold*





Cost
      of
      goods sold was $383,798 for the three months ended June 30, 2007, compared
      to
      $231,881 during the three months ended June 30, 2006, an increase of $151,917
      or
      66%. The increase was primarily due to an increase in repair and maintenance
      expense on our operating equipment and the increased cost of disposal of scrap
      from production of TDF. The operating equipment at the facility still requires
      additional maintenance and repair and as a result scrap and related disposal
      costs have increased during the three months ended June 30, 2007 over the three
      months ended June 30, 2006.





*Sales,
      General, and Administrative Expenses*





Sales,
      general, and administrative expenses were $332,312 for the three months ended
      June 30, 2007, compared to $463,309 for the three months ended June 30, 2006,
      a
      decrease of $130,997 or approximately 28%. The decrease is due primarily from
      a
      decrease of $66,328 in legal and accounting fees incurred for the three months
      ended June 30, 2006 related to shareholder matters on the sale of our helium
      and
      gas processing assets to Midstream Energy Services, LLC of $66,328 and a
      decrease in payroll and related expenses of $44,069 due primarily to a decrease
      in our headcount. The primary components of sales, general, and administrative
      expenses during the current year were payroll and related expenses of $158,192;
      facilities and related expenses of $36,343; depreciation expenses of $29,364;
      insurance expense of $29,443; outside service expenses of $24,981; and legal
      and
      accounting fees of $28,881.





*Interest
      income ( expense)*





Interest
      expense, net of interest income, was $10,350 during the three months ended
      June
      30, 2007, compared to interest income of $19 during the three months ended
      June
      30, 2006. The increase in interest expense is due to an increase in
      our borrowing from and related debt due our majority shareholder,
      Richard Strain. During the three months ended June 30, 2006, we had eliminated
      the majority of our debt obligations utilizing the proceeds from the sale of
      our
      helium and gas processing assets while investing excess funds in interest
      bearing investments resulting in nominal net interest expense during the
      period.





*Net
      Loss*





For
      the
      reasons stated above, net loss for the three months ended June 30, 2007 was
      ($611,861), an increase of $257,019 or 72 % compared with the net loss of
      ($354,842), for the three months ended June 30, 2006.





3




**Results
      of Operations For the Six Months Ended June 30, 2007 and
      2006**




*Revenue*





For
      the
      six months ended June 30, 2007, revenue from continuing operations decreased
      to
      $304,315 compared to $550,259 during the six months ended June 30, 2006, a
      decrease of $245,944 or approximately 45%. Tipping fee revenue decreased during
      the six months ended June 30, 2007 due to a facility wide clean up during which
      we ceased accepting waste tires at the tire processing facility in Hutchins,
      TX





*Cost
      of Goods Sold*





Cost
      of
      goods sold was $723,025 for the six months ended June 30, 2007, compared to
      $442,328 during the six months ended June 30, 2006, an increase of $280,697
      or
      64%. The increase was primarily due to repairs, maintenance and clean up
      expenses related to the tire processing facility in Hutchins, TX.





*Sales,
      General, and Administrative Expenses*





Sales,
      general, and administrative expenses were $693,426 for the six months ended
      June
      30, 2007, compared to $972,243 for the six months ended June 30, 2006, a
      decrease of $278,817 or approximately 29%. This decrease was due
      to headcount reductions and reduction of  travel and legal
      expenses. The primary components of sales, general, and administrative expenses
      during the current year were payroll and related expenses of $294,395; legal
      and
      accounting fees of $133,176; facilities and related expenses of $67,020;
      depreciation expenses of $59,245; insurance expense of $50,769; outside service
      expenses of $46,141; travel expenses of $8,502; printing and postage expenses
      of
      $5,401, and equipment expenses of $5,251.





*Interest
      income ( expense)*





Interest
      expense, net of interest income, was $13,732 during the six months ended June
      30, 2007, compared to interest expense of $104,666 during the six months ended
      June 30, 2006. This decrease was due to a reduction in the balance of
      outstanding notes and loans from 2006, resulting in a decrease in interest
      expense for the six months ended June 30, 2007.





*Net
      Income (Loss)*





For
      the
      reasons stated above, net income (loss) for the six months ended June 30, 2007
      was ($1,167,982), a decrease of $6,394,335 or 122% compared with the net income
      (loss) of $5,226,353 for the six months ended June 30, 2006.





**Liquidity
      and Capital Resources**




As
      of
      June 30, 2007, we have a negative working capital of $1,761,232. The company’s
      negative working capital balance is due primarily to reduced revenues following
      the sale of the helium and gas processing facilities and assets combined with
      increases in Thermal GasifierTM engineering design and business development
      activity expenses.





For
      the
      period ended June 30, 2007, net cash used in operating activities of $631,637
      consists primarily of our net loss of ($1,167,982), offset by changes in the
      components of working capital in the amount of $343,976 and depreciation and
      amortization expense of $180,722. Net cash provided by investing activities
      of
      $4,462 consisted of proceeds from the sale of assets of $5,963 offset by capital
      expenditures of $1,501. Net cash provided by financing activities of $432,602
      consists primarily of $500,000 proceeds from the issuance of notes and loans
      offset by $67,398 principal payments on notes and loans.





For
      the
      period ended June 30, 2006, the net cash used in operating activities of
      $968,620 is due primarily to a net income of $5,226,353, increased by non-cash
      income tax expense of $759,000, an increase in accounts payable and accrued
      expenses of $215,976, and depreciation and amortization expense of $214,110
      offset by gain on sale of assets of $6,041,145 included in net income and net
      cash used in discontinued operations of $1,277,958. The change in net cash
      provided by investing activities of $14,894,178 is due to primarily to the
      receipt of the net proceeds from the sale of our helium and gas processing
      facilities and operations. The change in net cash used in financing activities
      of $13,044,991 is due to principal repayments of debt of $3,408,772 primarily
      related to a promissory note used to purchase the minority interest in NEOHC
      from our major shareholder, Richard Strain and repayment of $8,892,151 secured
      loans, also due Richard Strain.





We
      had a
      cash balance of $63,295 at June 30, 2007. The current cash on hand and revenue
      will be insufficient to sustain our current operations during the third quarter
      2007. Vista International, Inc., our new majority shareholder, has provided
      working capital for our ongoing operations. We expect to secure equity capital
      from Vista International, Inc. during the remainder of 2007 for engineering
      development and market development of our Thermal GasifierTM and to fund ongoing
      operations.





The
      independent auditors report on our December 31, 2006 financial statements states
      that our recurring losses raise substantial doubts about our ability to continue
      as a going concern.





4




**Item
      3. Controls and Procedures**




As
      of the
      end of the period covered by this report, the company conducted an evaluation,
      under the supervision and with the participation of the Chief Executive Officer
      and Chief Financial Officer, of the company’s disclosure controls and procedures
      (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange
      Act
      of 1934). Based on this evaluation, the Chief Executive Officer and Chief
      Financial Officer concluded that the company’s disclosure controls and
      procedures are effective to ensure that information required to be disclosed
      by
      the company in reports that it files or submits under the Exchange Act is
      recorded, processed, summarized and reported within the time periods specified
      in Securities and Exchange Commission rules and forms.




The
      company’s disclosure controls and procedures include, among other things,
      controls and procedures designed to ensure that information required to be
      disclosed by the company in the reports that it files or submits under the
      Exchange Act is accumulated and communicated to the company’s management,
      including its Chief Executive Officer and Chief Financial Officer, to allow
      timely decisions regarding required disclosure.




There
      was
      no change in the company’s internal control over financial reporting during the
      company’s most recently completed fiscal quarter that has materially affected,
      or is reasonably likely to materially affect, the company’s internal control
      over financial reporting.


5




**PART
      2: OTHER INFORMATION**





**Item
      1. Legal Proceedings.**




Nathaniel
      Energy is involved in litigation in the normal course of its business, none
      of
      which is anticipated to have a material adverse effect on its financial
      condition, operations or prospects.





**Item
      2. Unregistered Sales of Equity Securities and Use of
      Proceeds.**




None.





**Item
      3. Defaults Upon Senior Securities.**




Not
      Applicable





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




None.





**Item
      5. Other Information.**





None.





**Item
      6. Exhibits.**




(a)
      Exhibits.




3.1  Certificate of Incorporation*




3.2  Articles
      of Amendment to Articles of Incorporation, filed on August 6, 1999*




3.3  Certificate of Amendment of Certificate of Incorporation, filed on April 24,
      2002*




3.4  Certificate of Amendment to Certificate of Incorporation, filed on October
      12,
      2005*




3.5  Amended
      and Restated By-Laws**




31.1
      Certification of the Principal Executive 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




31.2
      Certification of the Principal Financial 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




32.1
      Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section
      1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002




32.2
      Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section
      1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002




*Denotes
      document filed as an exhibit to our Quarterly Report on Form 10 QSB for the
      period ended September 30, 2005 and incorporated herein by
      reference.




**Denotes
      document filed as an exhibit to our Current Report on Form 8-K dated June 6,
      2005 and incorporated herein by reference.


6




**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:
        August 20, 2007


By:
            */s/ Barry
                J. Kemble*Barry
                  J. Kemble
                Chief
                  Executive Officer
                (Principal
                  financial officer)
                Nathaniel
                  Energy Corporation


7