UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 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
                               SEPTEMBER 30, 2003

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

      For the transition period from ________________to ___________________

                        Commission File Number: 33-58972

                          NATHANIEL ENERGY CORPORATION
        (Exact name of small business issuer as specified in its charter)



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


               8001 S. InterPort Blvd., Englewood, Colorado 80112
                    (Address of principal executive offices)

                                 (303) 690-8300
                (Issuer's telephone number, including area code)

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 __
                                                              --

There are  68,362,664  shares of  common  stock  issued  and  outstanding  as of
November 10, 2003.

Transitional Small Business Disclosure Format (check one) : Yes [ ] No [ X ]


<PAGE>


                          NATHANIEL ENERGY CORPORATION
                          CONSOLIDATED BALANCE SHEETS


                                TABLE OF CONTENTS
                                -----------------



PART 1.  FINANCIAL INFORMATION

Item 1.  Financial Statements (un-audited)

         Balance Sheet as of September 30, 2003 and December 30, 2002       2

         Statements of Operations for the Three and Nine Months ended       3
          September 30, 2003 and 2002

         Statements of Cash Flows for the Nine Months ended                 4
          September 30, 2003 and 2002

         Notes to Financial Statements                                      5-16

Item 2.  Managements Discussion and Analysis                                17

Item 3.  Controls and Procedures                                            22


PART II. OTHER INFORMATION                                                  23




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

                                        1
<PAGE>






                          NATHANIEL ENERGY CORPORATION
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                     September 30,         December 31,
                                                         2003                 2002
                                                   -------------------  --------------------
                                                       (Unaudited)
Assets

Current assets:
  Cash                                                  $ 1,020,557             $ 202,057
  Accounts receivable                                       756,415                 4,784
  Inventory                                                 249,400               248,040
  Prepaid expenses                                           87,640                 3,396
  Advances receivable                                        18,344                25,550
                                                   -------------------  --------------------

Total current assets                                      2,132,356               483,827

Property and equipment, net of accumulated
  depreciation                                           11,826,976             1,809,556

Intangible assets, net                                      135,500                     -
Cash restricted for property and equipment                  199,970                     -
Investment                                                        -             1,450,000
Related party receivables                                   285,795               226,833
Deposits                                                     60,127                22,500
Other assets                                                 35,417                16,367
                                                   -------------------  --------------------

Total Assets                                           $ 14,676,141           $ 4,009,083
                                                   ===================  ====================


Liabilities and Stockholders' Equity

Current liabilities:
  Accounts payable                                      $ 1,359,787             $ 524,498
  Accrued compensation                                    1,210,765             1,928,546
  Accrued interest                                        1,306,698               496,563
  Accrued property tax                                      105,057                     -
  Payroll liabilities                                         3,728                 1,464
  Notes payable, current portion                            329,101                     -
  Notes payable - stockholders, current portion             120,359             4,416,011
                                                   -------------------  --------------------

Total current liabilities                                 4,435,495             7,367,082

Long-term debt                                              253,360               292,331
Long-term debt, stockholder                              15,097,215                     -
                                                   -------------------  --------------------

Total liabilities                                        19,786,070             7,659,413
                                                   -------------------  --------------------

Minority interest                                                 -                26,358
                                                   -------------------  --------------------

Stockholders' equity:
Common stock                                                 38,363                36,913
APIC                                                      8,764,763             6,682,704
Subscription receivable                                    (175,500)             (175,500)
Accumulated deficit                                     (13,737,555)          (10,220,805)
                                                   -------------------  --------------------

Total stockholders' equity                               (5,109,929)           (3,676,688)
                                                   -------------------  --------------------

Total Liabilities and Stockholders' Equity             $ 14,676,141           $ 4,009,083
                                                   ===================  ====================


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

                                        2

</TABLE>

<PAGE>

                          NATHANIEL ENERGY CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS
          FOR THE THREE AND NINE MONTH PERIOD ENDED SEPTEMBER 20, 2003
                                  (UNAUDITED)

<TABLE>
<CAPTION>
<S>                                     <C>                     <C>             <C>             <C>    <C>    <C>


                                             Three Months Ended September 30,     Nine Months Ended September 30,
                                            ----------------------------------   ----------------------------------
                                                   2003                  2002              2003              2002
                                              --------------     ------------------  --------------  -----------------


Revenue                                        $ 2,716,970            $ 82,536        $ 5,625,518          $ 230,346

Cost of revenue                                  2,834,531             222,142          5,672,998            385,168
                                              --------------  ------------------     --------------  -----------------

Gross profit (loss)                                (117,561)           (139,606)          (47,480)          (154,822)

Selling, general and administrative expenses      1,126,838             271,569         2,647,341          3,145,290
                                              --------------  ------------------     --------------  -----------------

Loss from operations                             (1,244,399)           (411,175)       (2,694,821)        (3,300,112)

Other income (expense)
  Partnership income                                      -                   -            20,733                  -
  Loss on disposal of equipment                           -                   -           (13,207)                 -
  Interest expense                                 (320,597)           (211,928)         (882,021)          (345,856)
  Investment income                                      75                   -             1,119                  -
  Other income                                            -                   -            25,089                  -
                                              --------------  ------------------     --------------  -----------------

Loss before income taxes and minority interest   (1,564,921)           (623,103)       (3,543,108)        (3,645,968)

Income tax expense                                        -                   -                 -                  -
                                              --------------  ------------------     --------------  -----------------

Loss before minority interest                    (1,564,921)           (623,103)       (3,543,108)        (3,645,968)

Minority interest                                   146,578                   -            26,358                  -
                                              --------------  ------------------     --------------  -----------------

Net loss                                        $(1,418,343)         $ (623,103)    $  (3,516,750)      $ (3,645,968)
                                              ==============  ==================    ==============  =================

Loss per share, basic and diluted                   $ (0.04)            $ (0.02)          $ (0.09)           $ (0.13)
                                              ==============  ==================    ==============  =================

Weighted average shares outstanding              38,362,664          36,066,524        38,087,664         29,021,984





The accompanying notes are an integral part of these consolidated financial statements.
                                        3
</TABLE>

<PAGE>


                          NATHANIEL ENERGY CORPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 and 2002
                                  (UNAUDITED)


<TABLE>
<CAPTION>
<S>                                                                                     <C>                  <C>
                                                                                        2003                 2002
                                                                                 -------------------  -------------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                           $ (3,516,750)        $ (3,645,968)
Adjustments to reconcile net loss to net cash
  provided by operations:
    Depreciation and amortization                                                       479,557               85,133
    Minority interest                                                                   (26,358)                   -
    Stock issued for services                                                           845,000            2,511,200
Changes in operating assets and liabilities:
(Increase) decrease in:
  Accounts receivable                                                                  (207,119)              22,455
  Inventory                                                                             260,017              (95,000)
  Prepaid expenses                                                                      (18,926)                   -
  Advances receivable                                                                     7,206                    -
Increase (decrease) in:
  Accounts payable and accrued expenses                                               1,616,153              (52,007)
                                                                             -------------------  -------------------

Net cash flows from operating activities                                               (561,220)          (1,174,187)
                                                                             -------------------  -------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Deposits                                                                                (37,627)                   -
Other assets                                                                            (19,000)                   -
Cash restricted for property and equipment                                             (199,970)                   -
Related party receivable                                                                (58,962)             (53,480)
Acquisitions of assets, net of cash received                                         (9,396,414)          (2,331,177)
                                                                             -------------------  -------------------

Net cash flows from investing activities                                             (9,711,973)          (2,384,657)
                                                                             -------------------  -------------------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable                                                          11,147,215            4,860,000
Repayments of notes payable                                                             (55,522)            (729,152)
Stock issued for cash                                                                         -               34,750
                                                                             -------------------  -------------------

Net cash flows from financing activities                                             11,091,693            4,165,598
                                                                             -------------------  -------------------

Net increase in cash                                                                    818,500              606,754

Cash, beginning of period                                                               202,057                4,066
                                                                             -------------------  -------------------

Cash, end of period                                                                 $ 1,020,557            $ 610,820
                                                                             ===================  ===================

Cash paid for:
  Interest                                                                             $ 71,886             $ 68,884
  Income taxes                                                                                -                    -



The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

                                        4
<PAGE>


                          NATHANIEL ENERGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2003
                                  (UNAUDITED)

Note 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, 2002.

          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,  2002.  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  nine  months  ended  September  30,  2003 are not
          necessarily indicative of results of operations to be expected for the
          full year.

          Description of Business:

          Nathaniel  Energy  Corporation  (the "Company") is a renewable  energy
          company that  provides  industry with an  alternative  energy equal to
          that of fossil fuels. Its proprietary patented technology, the Thermal
          Combustor(tm),  is a 2-stage  gasification  system designed to combust
          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.

          The Company's patented technology has three main global  applications:
          licensing,  creating  energy  infrastructures  and building mini power
          plants.  The  Company  intends to license  the  Thermal  Combustor(tm)
          technology  to  qualified  companies,   joint  venture  partners,  and
          distributorships.  The Company intends to build energy infrastructures
          that will produce special gases and byproducts. The Company intends to
          build mini power plants for businesses that seek an independent source
          of  energy.  These  mini  power  plants  are  built at the  businesses
          premises ("in the fence") that can reduce the businesses dependence on
          fossil fuels and power from the local utility. In some cases, the mini
          power plants can become a businesses self sustained utility.

          The Company has been in the business of developing energy  reclamation
          processes  and  recycling,   including  the  operation  of  used  tire
          recycling  and  collection  services,  since 1997.  Additionally,  the
          Company,  in April 2003,  completed the  acquisition  of a natural gas
          processing facility in Keyes,

                                        5

<PAGE>

                        NATHANIEL ENERGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2003
                                  (UNAUDITED)

          Oklahoma.  The  Company  operates  a  26  acre  tire  reclamation  and
          processing  facility in Hutchins,  Texas. In addition to operating the
          Hutchins  facility and the Keyes gas operations  plant, the Company is
          engaged in the development of alternative energy conversion  processes
          and related  technologies and has an exclusive license to the patented
          technology known as the Thermal Combustor(tm).

          On April 3, 2003 the Company completed the acquisition of Keyes Helium
          Company,  LLC ("Keyes  Helium") from Colorado  Interstate  Gas/El Paso
          ("CIG") (the Company purchased its initial interest in Keyes Helium on
          August 27, 2002). It also acquired the Keyes Gathering System, 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,  removing  liquid gases and helium and then
          sending the natural gas into a natural  gas  pipeline.  The  Company's
          interest in Keyes Helium is through a 51% owned subsidiary,  Nathaniel
          Energy Oklahoma Holding Corporation ("NEC OK") that owns 100% of Keyes
          Helium.

          Business Segments:

          The  Company's  operates two  separate  segments  which are  presently
          conducted in three separate  facilities:
               -    the tire reclamation and processing in Hutchins, Texas,
               -    the   natural  gas   processing,   gas  liquids  and  helium
                    production  in  Keyes,  Oklahoma  and the  alternate  energy
                    engineering and corporate offices in Englewood, Colorado.

          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.

          Revenue Recognition:

          The Company's  tire  reclamation  and processing  facility  recognizes
          revenue  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.

          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 contract  for the
          helium processed. The natural gas liquids processed are currently sold
          as produced.

                                        6

<PAGE>

                        NATHANIEL ENERGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2003
                                  (UNAUDITED)

          The Company's  alternate energy operation will recognize  revenue from
          the  sale of  Thermal  Combustors(tm)  based  upon  the  terms of each
          individual contract.

          Property and Equipment and Related Depreciation:

          Property and equipment are recorded at cost.  Depreciation is provided
          for using the  straight-line  method.  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

          Inventory:

          The tire  processing  facility  inventory  consists of  processed  and
          partially processed tire shreds, which are held for sale to end-users.
          Small portions of the partially shredded tire inventory are being used
          to  augment  incoming  tires to meet the  tonnage  demand for our tire
          shred sales. During the tire shredding process, additional higher wire
          content shreds are being added to the inventory on a daily basis. This
          results  in a small  drop in  inventory  that is being  offset  by the
          additional  volumes from ongoing  production.  Further  processing  of
          higher  wire  content  shreds  being  added into  inventory  cannot be
          realized until the Company has additional funds to purchase  machinery
          dedicated to this purpose.

          Tire  shred  inventory  is  valued at its cost to  produce,  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 stored in
          the  BLM   facility  in  Texas;   this   inventory  is  based  on  the
          last-in-first-out  method.  There was negligible  helium  inventory at
          September 30, 2003. There is a contract with the BLM which encompasses
          activity fees, compression fees, storage fees and an annual fee to the
          BLM.

          Reclassifications:

          Certain expenses reported in the second quarter 2003 10QSB filing have
          been reclassified to conform to the current period presentation.  This
          reclassification  involves  the  movement  of expenses  from  selling,
          general and administrative to cost of revenue. These reclassifications
          had no effect on net income or stockholders' equity.

          Recent Accounting Pronouncements:

          In January 2003, The FASB issued Interpretation No. 46, "Consolidation
          of  Variable  Interest  Entities",  an  interpretation  of  Accounting
          Research Bulletin ("ARB") No. 51, "Consolidated Financial Statements".
          Interpretation No. 46 addresses  consolidation by business enterprises
          of variable interest entities, which have one or both of the following
          characteristics:  (i) the equity  investment at risk is not sufficient
          to permit the  entity to finance  its  activities  without  additional
          subordinated  support from

                                        7
<PAGE>

                        NATHANIEL ENERGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2003
                                  (UNAUDITED)


          other  parties,  which is provided  through  other  interest that will
          absorb  some or all of the  expected  losses of the  entity;  (ii) the
          equity  investors  lack  one  or  more  of  the  following   essential
          characteristics  of a controlling  financial  interest:  the direct or
          indirect  ability  to make  decisions  about the  entities  activities
          through voting rights or similar  rights;  or the obligation to absorb
          the  expected  losses of the  entity  if they  occur,  which  makes it
          possible  for the  entity  to  finance  its  activities;  the right to
          receive  the  expected  residual  returns of the entity if they occur,
          which is the  compensation  for the  risk of  absorbing  the  expected
          losses.

          Interpretation  No.  46  also  requires  expanded  disclosures  by the
          primary  beneficiary (as defined) of a variable interest entity and by
          an enterprise that holds a significant variable interest in a variable
          interest entity but is not the primary beneficiary. Interpretation No.
          46 applies  immediately to variable  interest  entities  created after
          January  31,  2003,  and to  variable  interest  entities  in which an
          enterprise  obtains an  interest  after  that date.  It applies in the
          first fiscal year or interim period  beginning after June 15, 2003, to
          variable  interest  entities in which an  enterprise  holds a variable
          interest that it acquired before February 1, 2003.  Interpretation No.
          46 may be applied prospectively with a cumulative-effect adjustment as
          of the date on which it is first  applied or by  restating  previously
          issued   financial   statements   for  one  or  more   years   with  a
          cumulative-effect  adjustment  as of the  beginning  of the first year
          restated.  Management  does not expect the adoption of  Interpretation
          No.  46 to  have  a  material  impact  on the  Company's  consolidated
          financial position or results of operations.

          In June 2003,  the FASB issued an  Exposure  Draft for  proposed  SFAS
          entitled  "Qualifying  Special Purpose Entities ("QSPE") and Isolation
          of  transferred  Assets",  an amendment of SFAS No. 140 ("The Exposure
          Draft").  The Exposure  Draft is a proposal  that is subject to change
          and as such, is not yet  authoritative.  If the proposal is enacted in
          its current  form,  it will amend and clarify  SFAS 140.  The Exposure
          Draft would  prohibit an entity from being a QSPE if it enters into an
          agreement  that  obliged  a  transferor  of  financial   assets,   its
          affiliates,  or its agents to deliver  additional cash or other assets
          to fulfill the  special-purposes  entity's  obligation  to  beneficial
          interest holders.

          In April 2003,  the FASB issued SFAS No. 149,  "Amendment of Statement
          133 on Derivative  Instruments and Hedging  Activities".  SFAS No. 149
          amends and clarifies under what  circumstances a contract with initial
          investments  meets  the  characteristics  of a  derivative  and when a
          derivative contains a financing  component.  SFAS No. 149 is effective
          for  contracts  entered  into or  modified  after June 30,  2003.  The
          Company  does not expect that the adoption of SFAS No. 149 will have a
          significant effect on the Company's financial  statement  presentation
          or disclosures.

          In May 2003,  the FASB issued SFAS No.  150,  "Accounting  for Certain
          Financial  Instruments  with  Characteristics  of both Liabilities and
          Equity".  SFAS  No.  150  establishes  standards  for  how  an  issuer
          classifies and measures in its statement of financial position certain
          financial  instruments  with  characteristics  of both liabilities and
          equity.  SFAS No. 150  requires  that an issuer  classify a  financial
          instrument  that is within  its scope as a  liability  (or an asset in
          some  circumstances)  because that  financial  instrument  embodies an
          obligation  of the issuer.  SFAS No. 150 is  effective  for  financial
          instruments  entered into or modified after May 31, 2003 and otherwise
          is effective at the  beginning of the first interim  period  beginning
          after June 15, 2003.  SFAS No. 150 is to be  implemented  by reporting
          the  cumulative  effect  of  a  change  in  accounting  principle  for
          financial

                                        8

<PAGE>

                        NATHANIEL ENERGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2003
                                  (UNAUDITED)


          instruments created before the issuance date of SFAS No. 150 and still
          existing  at  the  beginning  of  the  interim   period  of  adoption.
          Restatement  is not  permitted.  The Company  does not expect that the
          adoption  of SFAS  No.  150  will  have a  significant  effect  on the
          Company's financial statement presentation or disclosures.

          Note 2-Basis of Presentation:

          The accompanying  consolidated financial statements have been prepared
          on a going concern basis, which contemplates the realization of assets
          and the settlement of liabilities and commitments in the normal course
          of business. As reflected in the accompanying  consolidated  financial
          statements the Company has  experienced  recurring  operating  losses,
          capital resources  presently available to meet and has a deficiency in
          working capital at September 30, 2003 of  approximately  $2.3 million,
          and  a  deficiency  in  stockholders'  equity  of  approximately  $5.1
          million.

          Management has undertake certain efforts to eliminate the deficiencies
          adn generate positive cash flow, as described below.

          In April 2003 the Company  purchased  Keyes  Helium,  Keyes  Gathering
          Systems and Sturgis Gas  Processing  Plant from CIG. It is anticipated
          that this  acquisition  and related  additions will generate  positive
          cash flow.  The funds  generated will be used to finance the Company's
          operations and to pay down debt.

          The Company, in October of 2003, significantly  restructured its debt,
          including  conversion of $10 million of debt to equity.  Additionally,
          $795,000  of  accrued  interest  has  been  incorporated  into  a new,
          long-term  note,  and an additional  $488,000 of accrued  interest has
          been forgiven.  This restructuring will significantly  reduce the cash
          needed for debt repayment until 2005 and beyond.

          The Company also has begun  negotiations  on new contracts to increase
          revenue and cash flow. These contracts are discussed below.

          Management's Plan Going Forward:

          Management  plans to  increase  revenues  in its Texas tire  recycling
          plant and in its Oklahoma helium plant,  gas gathering  system and gas
          processing plant by expanding current operations.  The Hutchins, Texas
          tire  reclamation  facility  has been  outfitted to 90% of its maximum
          manufacturing  capacity by means of new  equipment  purchased in 2002,
          innovative design and strategic placement of existing equipment. These
          developments will allow the facility to operate at maximum  production
          that will increase its revenue.

          On April 3, 2003 the Company completed the acquisition of 51% of Keyes
          Helium.  In addition the Company  purchased 51% of the Keyes Gathering
          System and 51% of the Sturgis Gas Processing  Plant and its associated
          compressors.   These   facilities  are  located  in  Keyes,  OK  on  a
          14.924-acre site. The Keyes Helium plant operates a three-stage helium
          extraction,   purification   and   liquification   process   that   is
          strategically  connected to the BLM helium reserve and pipeline system
          making it beneficial  for companies to utilize our services.  Based on
          the Keyes Helium Plant being connected on the BLM pipeline,  the Plant
          can  deliver  crude  helium to buyers and  receive  third  party crude
          helium for toll-

                                        9

<PAGE>

                        NATHANIEL ENERGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2003
                                  (UNAUDITED)

          processing. The strategic location of being second in line of a series
          of  plants  connected  to the BLM  pipeline  provides  a  higher  line
          pressure  at the  interconnect  to insure  reliable  delivery of crude
          helium to the Keyes Helium Plant. The pipeline  connection,  in and of
          itself,  provides the Company with a competitive advantage over others
          that would have to truck the crude helium versus  sending the gas flow
          through the  pipeline.  On April 3, 2003 the Company  executed a "Take
          and Pay"  Operating  Agreement  with CIG for a minimum three year term
          for the processing and sale of low Btu gas for their pipeline needs.

          The Company is negotiating  toll-processing agreements to add revenues
          to the helium  operation.  In  addition,  the Company has entered into
          negotiations with third party companies  (Producers) for the gathering
          and processing of new volumes  natural gas from  additional  wells and
          gathering fields. The Company  anticipates that these  toll-processing
          agreements  would generate an estimated  $760,000 of gross profit once
          completed.  The Company  believes that the new natural gas  agreements
          would  enable  the  Company  to double  the gas flow  through  the Gas
          Processing   Plant,   generating   new   combined   gross   profit  of
          approximately  $1.7  million per year,  if  completed in early 2004 as
          anticipated.  No assurance can be given that these  agreements will be
          reached or, if they are reached,  that these estimated results will be
          achieved.

          Note 3-Acquisitions:

          On August 27, 2002, the Company and an outside investor  acquired 100%
          of the  outstanding  common  shares of MICNIC  Rodeo  Gathering,  Inc.
          ("MICNIC"),  an 18.55% limited partner in Keyes Helium,  from Michigan
          Pipeline & Processing  Corp. The purchase price of the acquisition was
          $1,450,000, all paid by the Company. The investor was allocated 49% of
          the MICNIC  common stock,  and the Company  retained 51%. The investor
          provided  total cash of  $1,800,000  to the  Company  to  finance  the
          acquisition.  Including other loans related to this project, including
          the  subsequent  acquisition  of the remaining  Keyes Helium  interest
          described below,  this individual  holds  $15,097,215 of the Company's
          debt at September  30, 2003. An  additional  amount of $1,000,000  was
          loaned  to the  Company  in  October,  2003.  On  April 9,  2002  this
          individual converted $1,350,000 of debt to equity.

          On April 3, 2003 the Company  acquired the  remaining  81.45% of Keyes
          Helium from CIG for an amount of $8,658,855. Concurrently, the Company
          purchased the Keyes  Gathering  System and the Sturgis Gas  Processing
          Plant with the related compressors,  both subsidiaries of El Paso Gas,
          for an aggregate amount of $1,288,360.

          Subsequently,  also on April 3,  2003,  the  Company  transferred  its
          entire  interest in Keyes Helium,  the Sturgis Gas Plant and the Keyes
          Gathering System to NEC OK. The outside investor  described above also
          contributed  his ownership  interest in Keyes Helium to NEC OK. NEC OK
          therefore  owns 100% of Keyes  Helium.  The Company owns 51% of NEC OK
          and the outside investor owns the remaining 49 % of NEC OK.

                                        10

<PAGE>

                        NATHANIEL ENERGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2003
                                  (UNAUDITED)


          Pro Forma Income Statement

          The following table represents pro forma income statement  information
          for the nine months ended  September 30, 2003 and 2002,  including the
          operations  of  the  2003  acquisitions  as if  the  acquisitions  had
          occurred at the beginning of the periods presented.

                                           Nine Months Ended
                                             September 30,
                        ----------------------------------------------------
                                2003                             2002
                           ------------------------     ------------------------
           Revenue        $     7,038,737              $      5,181,503
           Net loss            (3,735,905)                   (2,644,243)
           Loss per sare           $(0.10)                       $(0.09)

          For the period ended September 30, 2002 the financial  information was
          obtained from the previous owner.

          Note 4-Property and Equipment:

          Following is a summary of property and equipment at September 30, 2003
          and December 31, 2002:

                                           September 30,       December 31,
                                               2003                2002
                                         ------------------ --------------------


          Machinery and equipment        $    8,539,055      $    1,405,109
          Pipeline                            2,830,750                   -
          Buildings                             400,000             100,000
          Vehicles                              215,399             212,835
          Land                                  290,000             290,000
          Furniture, fixtures and equipment     132,915              18,759
          Improvements                          179,733              79,672
                                        ----------------          --------------
                                             12,587,852           2,106,375
         Less accumulated depreciation         (760,876)           (296,819)
                                        ----------------          --------------
         Net book value                 $    11,826,976      $    1,809,556
                                        ================          ==============

          Depreciation expense recorded in the financial statements was $210,035
          and $69,146 for the three  months ended  September  30, 2003 and 2002,
          respectively  and  $465,057  and  $85,133  for the nine  months  ended
          September 30, 2003 and 2002, respectively.

                                        11

<PAGE>

                        NATHANIEL ENERGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2003
                                  (UNAUDITED)


          Note 5-Segment Information:

          The  Company  operates  in  two  separate  industry   segments,   tire
          reclamation  and processing and natural gas and helium  processing and
          production. Information regarding these segments are stated below.

<TABLE>
<CAPTION>
<S>                                             <C>    <C>              <C>      <C>    <C>    <C>


                                                                  Nine Months Ended
                                                                    September 30,
                                                ----------------------------------------------------
                                                         2003                    2002
                                                       ---------------         ---------------
         Revenue:
         Tire reclamation and corporate         $       445,591         $       230,346
         Helium and gas operations                    5,179,927                     -

         Loss before income taxes:
         Tire reclamation and corporate              (3,158,992)             (3,645,968)
         Helium and gas operations                   (  357,758)                    -

</TABLE>

          Note 6-Note Payable:

          On April 3, 2003 a single  investor and creditor loaned the Company an
          aggregate  of  $10,047,215  to  facilitate  the  acquisition  of Keyes
          Helium,  the Keyes  Gathering  System and the Sturgis  Gas  Processing
          Plant with the  related  compressors.  An  additional  $1 million  was
          loaned in September, 2003 and $1 million in October, 2003. These notes
          were to be repaid in  quarterly  installments  beginning  in September
          2003 in an amount not to exceed  $500,000  per  quarter,  which  would
          include  interest at 8% until they matured in 2010.  The assets of the
          Keyes  Helium  plant  collateralize  the  loan.  In  addition  to  the
          collateral  the  investor  received  49% of the  stock  in NEC  OK,  a
          subsidiary  of the  Company to which the entire  Keyes  Helium,  Keyes
          Gathering  System and  Sturgis Gas  Processing  Plant  interests  were
          transferred, while the Company owns the remaining 51%.

          Effective October 3, 2003, the Company and the investor entered into a
          Conversion  Agreement  pursuant to which the investor  would settle an
          aggregate of $10 million of debt  through the  issuance of  50,000,000
          shares of common stock to be issued by the Company to NEC Energy, LLC,
          a designee of the investor.

          The Company currently has 75,000,000 shares of common stock authorized
          for issuance.  Prior to the  conversion  transaction,  the Company had
          38,262,664 shares of common stock issued and outstanding. Accordingly,
          the Company did not have a sufficient number of shares of common stock
          authorized  for issuance to issue all of the shares of common stock in
          the conversion.  The Conversion  Agreement provided that to the extent
          that the  Company  did not have  sufficient  shares  of  common  stock
          authorized  to issue all of the shares in the  conversion,  NEC Energy
          had the irrevocable right to the shares that could not be issued.  The
          Company has issued  30,000,000  shares of common  stock to NEC Energy,
          and NEC Energy has the irrevocable  right to an additional  20,000,000
          shares of common

                                        12
<PAGE>

                        NATHANIEL ENERGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2003
                                  (UNAUDITED)


          stock.  In the  Conversion  Agreement,  the Company agreed to take all
          required  corporate  action  to seek  the  shareholders'  approval  to
          increase the number of authorized shares to a number which is at least
          sufficient  for the  Company  to  deliver  all of the shares of common
          stock issuable to NEC Energy pursuant to the Conversion Agreement.

          Giving  effect to the  issuance  of all of the shares of common  stock
          under  the  Conversion  Agreement,  NEC  Energy  will own 56.6% of the
          issued and outstanding  shares of common stock of Nathaniel  Energy. A
          change in control of the  Company  occurred as a result of the closing
          of the Conversion Agreement.

          In connection  with the  conversion,  NEC Energy received the right to
          demand  registration  of the  resale of the  shares at any time  after
          January  3, 2004.  Additionally,  NEC  Energy  was  granted  piggyback
          registration rights relating to certain registration  statements which
          Nathaniel Energy files after January 3, 2004, if any.

          In September and October of 2003, the investor  advanced an additional
          $2,000,000 to the Company.  This debt has been incorporated into a new
          note  bearing  interest  at the  rate  of  eight  percent  per  annum.
          Principal  plus  interest  are payable in four  quarterly  payments of
          $540,000  each on October 1, 2005 and January 1st,  April 1st and July
          1st 2006.

          The balance of the principal  amount due to the creditor of $4,097,215
          was incorporated into a second new note.  Accrued interest of $794,936
          will be included in the new note, for an aggregate  principal  balance
          of  $4,892,152.  The new note will bear  interest  at 8% per year.  No
          payments  will be due until March 31, 2007, at which time the note and
          accrued  interest  will be repaid in  quarterly  payments  of $572,876
          through December 31, 2009.

          In connection  with the new notes,  the investor  forgave  $488,294 of
          accrued interest.  This amount will be credited to additional  paid-in
          capital.

          Note 7-Stockholders' Equity:

          During the nine months ended  September 30, 2003,  the Company  issued
          1,400,000 shares of common stock, valued at $995,000, for services.

          As of  September  30,  2003,  the Company had agreed to issue  100,000
          shares of common stock, valued at $125,000, to an individual for legal
          services.  These  shares  have not yet been  issued and this amount is
          recorded in accounts payable at September 30, 2003.

          During the third quarter of 2003,  certain employees who are officers,
          directors and  shareholders  waived accrued  compensation  aggregating
          $1,088,459.   The  employees   agreed  that  the   remaining   accrued
          compensation  due them of $864,885  can be paid,  at the option of the
          Company,  either  out of profits  or in stock.  If paid in stock,  the
          deemed value of the stock shall be $1.00 per share.

                                        13
<PAGE>


                          NATHANIEL ENERGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2003
                                   (UNAUDITED)


          The  Company  subsequently  agreed that it would pay an  aggregate  of
          $340,000 in cash to two of the  employees.  The Company agreed that it
          would issue 289,365 shares of common stock in payment of the remaining
          accrual to these two employees. These shares have not yet been issued.
          Payment terms of the remaining  $235,520 due to a third  employee have
          not been finalized.

          The company and two other  employees have agreed to settle $314,213 of
          accrued wages through the issuance of 731,865  shares of common stock.
          These shares have not yet been issued.

          Note 8-Related Party Transactions:

          The Company paid certain  expenses  related to site clean up on behalf
          of Ripe Touch  Greenhouse,  LLC,  ("RTG") an entity  controlled by the
          Company's president.  The balance receivable at September 30, 2003 and
          2002  was  $260,475  and  $219,143,  respectively.  The  advances  are
          collateralized  by  an  assignment  of  the  assets  of  RTG  and  are
          non-interest  bearing.  The  majority  of the  receivable  relates  to
          payments made on behalf of RTG for the processing and removal of tires
          from RTG's property in Calhan, Colorado.

          Also,  see Notes 7 and 9 for a  discussion  of certain  related  party
          transactions  as  they  relate  to  accrued  compensation  and  patent
          licenses, respectively.

          Note 9-Intellectual Property:

          The Company  owns three U.S.  patents,  the latest  issued in February
          2003. Also pending are a U.S. application for a patent, and a European
          patent application each covering the Thermal Combustor(tm) technology.
          The combustor is used to produce  energy using  alternate fuel sources
          which  is  then  sold  by the  Company.  The  Company's  ownership  of
          technology is by  assignment  of the patents and pending  applications
          from Stanley Abrams, the Company's chief executive  officer,  pursuant
          to an  agreement  dated July 7, 1998 and  amended in  September  2003.
          These patents and patent applications are for utility patents directed
          to devices and methods of uses. Two U.S.  patents expire  September 6,
          2011 and December 4, 2012, respectively, while the third patent issued
          in February 2003 will expire in February  2020.  Under the  assignment
          agreement,  the Company is required,  upon written demand, to reassign
          the patents and patent  applications  to Mr.  Abrams in the event both
          Stanley  Abrams and Brett  Abrams are not  employed as officers of the
          Company  and  neither  of them is a  director,  except  as a result of
          termination  for  cause,   voluntary   resignation,   death  or  legal
          incompetence.  Furthermore,  the agreement provides for a reassignment
          of the  technology to Messrs.  Abrams in the event the Company  ceases
          business operations or becomes bankrupt.

          In April 2002 the  Company,  Alternate  Capital,  LLC ("ACL") and Stan
          Abrams, in connection with a consulting  agreement between the Company
          and ACL,  entered into an agreement  regarding the reassignment of the
          above mentioned  patents to Stan Abrams.  This agreement  provides for
          the  reassignment  of the  patents if either of the  following  events
          occurs: (i) ACL votes in favor of removing either Stan or Brett Abrams
          as an officer or director of the Company for any reason other than for
          cause, or (ii) either voluntary or involuntary  bankruptcy proceedings
          are filed by or against the Company and (a) prior to such filing,  ACL
          shall have  voted  against  (or  provided  the  Company  with

                                        14
<PAGE>

                          NATHANIEL ENERGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2003
                                   (UNAUDITED)

          written disapproval of) the Company's obtaining third-party financing,
          and (b) such  vote or  disapproval  was a  contributing  factor to the
          filing of the bankruptcy proceedings by or against the Company.

          Note 10-Economic Dependency - Major Customer:

          During 2002 the  Company's  primary  sales were made  through  several
          local  customers  and two major users of its tire  derived fuel (TDF).
          The two major  users each  represented  approximately  20% of its tire
          reclamation  sales  activities.  With  the  acquisition  of the  Keyes
          Helium,  Sturgis Plant and Gathering  system the majority of the sales
          will be from helium sales and processed natural gas sales, while there
          will be 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  one major  company  purchases  all of the
          helium  produced  under  contract  through 2007.  Should this contract
          expire there are other major companies which have a stated interest in
          purchasing the helium.

          Note 11-Intangible Assets:

          The Company has capitalized web site  development  costs,  pursuant to
          EITF 00-2. The total costs capitalized were $150,000,  which are being
          amortized  over three  years.  Amortization  expense for the three and
          nine  months  ended  September  30,  2003  is  $12,500.  There  was no
          comparative expense in 2002.

          Note 12-Subsequent Events:

          Subsequent to September 30, 2003:

               -    Effective  October 3, 2003,  the  Company  and the  investor
                    described  in Note 6  entered  into a  Conversion  Agreement
                    pursuant to which the investor  would settle an aggregate of
                    $10  million of debt  through  the  issuance  of  50,000,000
                    shares of common  stock to be issued by the  Company  to NEC
                    Energy, LLC, a designee of the investor.

                    In September and October of 2003,  the investor  advanced an
                    additional  $2,000,000  to the Company  ($1,000,000  in each
                    month).  This  debt  has been  incorporated  into a new note
                    bearing  interest  at the rate of eight  percent  per annum.
                    Principal  plus  interest are payable in four (4)  quarterly
                    payments  of  $540,000  each on October 1, 2005 and  January
                    1st, April 1st and July 1st 2006.

                    The balance of the  principal  amount due to the creditor of
                    $4,097,215 was incorporated into a second new note.  Accrued
                    interest of $794,936  will be included in the new note,  for
                    an aggregate  principal balance of $4,892,152.  The new note
                    will bear  interest at 8% per year.  No payments will be due
                    until  March 31,  2007,  at which time the note and  accrued
                    interest  will be repaid in  quarterly  payments of $572,876
                    through December 31, 2009.

                                        15
<PAGE>

                          NATHANIEL ENERGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2003
                                   (UNAUDITED)

                    In  connection  with the new  notes,  the  investor  forgave
                    $488,294 of accrued  interest.  This amount will be credited
                    to additional paid-in capital.

               -    The Company  paid  $340,000 of accrued  compensation  to two
                    officers.

               -    The Company  finalized  and  executed a contract to sell two
                    Thousand Combustors(tm) for $2,100,000.

                                        16
<PAGE>


          Item 2: Management's Discussion and Analysis of Results of Operations,
          Liquidity and Financial Condition.

          Forward-looking Statements:

          This report specifies forward-looking  statements of management of the
          Company ("forward-looking  statements") including, without limitation,
          forward-looking   statements  regarding  our  expectations,   beliefs,
          intentions and future strategies.

          Forward-looking  statements are statements that estimate the happening
          of   future   events   and  are  not   based  on   historical   facts.
          Forward-looking   statements   may  be   identified   by  the  use  of
          forward-looking terminology, such as "could", "may", "will", "expect",
          "shall", "estimate",  "anticipate",  "probable", "possible", "should",
          "continue",  "intend" or similar  terms,  variations of those terms or
          the negative of those terms. The forward-looking  statements specified
          in this report have been  compiled by management of the Company on the
          basis of  assumptions  made by management and considered by management
          to be reasonable.  Future operating  results of the Company,  however,
          are impossible to predict and no representation, guaranty, or warranty
          is to be inferred from those forward-looking statements.

          The assumptions  used for purposes of the  forward-looking  statements
          specified in the following  information  represent estimates of future
          events  and are  subject  to  uncertainty  as to  possible  changes in
          economic, legislative, industry, and other circumstances. Such factors
          include,   but  are  not  limited  to,   changes  in  the   regulatory
          environment,  general  conditions in the environmental  industry,  the
          Company's competitive position, and economic conditions in the market.
          As a result,  the  identification and interpretation of data and other
          information and their use in developing and selecting assumptions from
          and among reasonable alternatives require the exercise of judgment. To
          the extent that the assumed events do not occur,  the outcome may vary
          substantially from anticipated or projected results, and, accordingly,
          no opinion is expressed on the achievability of those  forward-looking
          statements. We cannot guaranty that any of the assumptions relating to
          the forward-looking  statements specified in the following information
          are  accurate,  and  we  assume  no  obligation  to  update  any  such
          forward-looking statements.

          Description of Business:

          Nathaniel  Energy  Corporation  (the "Company") is a renewable  energy
          company that  provides  industry with an  alternative  energy equal to
          that of fossil fuels. Its proprietary patented technology, the Thermal
          Combustor(tm),  is a 2-stage  gasification  system designed to combust
          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.

          The Company's patented technology has three main global  applications:
          licensing,  creating  energy  infrastructures  and building mini power
          plants.  The  Company  intends to license  the  Thermal  Combustor(tm)
          technology  to  qualified  companies,   joint  venture  partners,  and
          distributorships.  The Company intends to build energy infrastructures
          that will produce special gases and byproducts. The Company intends to
          build mini power plants for businesses that seek an independent source
          of  energy.  These  mini  power  plants  are  built at the  businesses
          premises ("in the fence") that can reduce the

                                        17
<PAGE>

          businesses  dependence  on  fossil  fuels  and  power  from the  local
          utility.  In some cases, the mini power plants can become a businesses
          self sustained utility.

          The Company has been in the business of developing energy  reclamation
          processes  and  recycling,   including  the  operation  of  used  tire
          recycling  and  collection  services,  since 1997.  Additionally,  the
          Company,  in April 2003,  completed the  acquisition  of a natural gas
          processing facility in Keyes,  Oklahoma.  The Company operates 26 acre
          tire  reclamation  and  processing  facility in  Hutchins,  Texas.  In
          addition  to  operating  the  Hutchins  facility  and  the  Keyes  gas
          operations  plant,  the  Company  is  engaged  in the  development  of
          alternative energy conversion  processes and related  technologies and
          has an exclusive license to a patented technology known as the Thermal
          Combustor(tm).

          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.

          Revenue Recognition:

          The Company's  tire  reclamation  and processing  facility  recognizes
          revenue  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.

          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 contract  for the
          helium processed. The natural gas liquids processed are currently sold
          as produced.

          The Company's  alternate energy operation will recognize  revenue from
          the  sale of  Thermal  Combustors(tm)  based  upon  the  terms of each
          individual contract.


          Results of  Operations  for the three months ended  September  30,2003
          ----------------------------------------------------------------------
          compared to the three months ended September 30, 2002
          -----------------------------------------------------

          For the three months ended  September 30, 2003 revenue  increased from
          $82,536 in 2002 to  $2,716,970  in 2003 an increase of  $2,634,434  or
          3,192%.  This  increase  in  revenue  is  primarily  due to  Nathaniel
          Energy's  acquisition  of the Keyes  Helium and  Sturgis Gas Plant and
          Gathering System from CIG. The Company purchased the facility on April
          3, 2003.  Revenues from the gas and helium processing  operations were
          $2,522,691  during the quarter,  with none during the preceding  year.

                                        18
<PAGE>

          Revenues from tire  operations  were $194,279  during the quarter,  an
          increase of $111,743, or 135%, from $82,536 in the preceding year.

          Cost of sales increased from $222,142 in 2002 to $2,834,531 in 2003 an
          increase of $2,612,389 or 1,176%. The increase is primarily due to the
          acquisition  of the Keyes  Helium and Sturgis Gas Plant and  Gathering
          System  from CIG.  Cost of revenue  for the gas and helium  processing
          operations  was  $2,646,889,  with none in the preceding  year.  Major
          components  include cost of products of  $1,839,165,  payroll costs of
          $151,487,  utilities and taxes of $238,074,  depreciation  of $139,363
          and other costs of $278,800.  Cost of revenue from tire operations was
          $187,642  during the  quarter,  a decrease  of $34,500,  or 16%,  from
          $222,142 in the preceding year.

          Total selling general and  administrative  expenses increased $855,269
          or 315% from  $271,569  for the period  ended  September  30,  2002 to
          $1,126,838  in 2003.  This  increase in expenses is  primarily  due to
          adding   personnel   resources  and  support  services  based  on  the
          acquisition  of the Keyes  Helium and Sturgis Gas Plant and  Gathering
          System from CIG. The major components of the current period expense of
          $1,126,838 are:  payroll costs $358,781,  travel and  entertainment of
          $30,938 and investor  relations and  promotional  expenses of $505,191
          and professional  fees of $125,000.  The professional fees of $125,000
          have been accrued and will be paid in shares of common stock.

          Interest  expense   increased  from  $211,928  for  the  period  ended
          September 30, 2002 to $320,597 in the  comparable  period of 2003; the
          increase is due to additional debt financing.

          Results of  Operations  for the nine months ended  September  30, 2003
          ----------------------------------------------------------------------
          compared to the nine months ended September 30, 2002
          ----------------------------------------------------

          For the nine months ended  September 30, 2003 revenue  increased  from
          $230,346 in 2002,  to $5,625,518 in 2003, an increase of $5,395,172 or
          2,342%.  This  increase  in  revenue  is  primarily  due to  Nathaniel
          Energy's  acquisition  of the Keyes  Helium and  Sturgis Gas Plant and
          Gathering System from CIG. The Company purchased the facility on April
          3, 2003.  Revenues from the gas and helium processing  operations were
          $5,179,927  during the period,  with none during the  preceding  year.
          Revenues  from tire  operations  were $445,591  during the period,  an
          increase of $215,245, or 93%, from $230,346 in the preceding year.

          Cost of sales  increased  from $385,168 in 2002 to $5,672,998 in 2003,
          an increase of $5,287,830, or 1,373%. The increase is primarily due to
          an increase in the  operations of the Company with the  acquisition of
          the Keyes Helium and Sturgis Gas Plant  facility.  Cost of revenue for
          the gas and helium processing operations was $5,059,282,  with none in
          the  preceding  year.  Major  components  include  cost of products of
          $3,406,432,  payroll  costs of  $314,575,  storage  costs of $415,815,
          utilities  and taxes of $332,598,  depreciation  of $276,877 and other
          costs of $312,985.  Cost of revenue from tire  operations was $613,716
          during the period,  an increase of $228,548,  or 59%, from $385,168 in
          the preceding year.

          Total selling,  general and administrative expenses decreased $497,949
          or 16% from  $3,145,290  for the period  ended  September  30, 2002 to
          $2,647,341 in 2003.  This is primarily due to recording  $2,346,000 in
          non-cash  compensation  and  expense in 2002 and  $845,000 in non-cash
          compensation and expense

                                        19
<PAGE>

          in 2003.  An  additional  amount of  $125,000  for  professional  fees
          accrued at September 30, 2003 will be paid in common stock.

          Other selling, general and administrative  expenses,  exclusive of the
          non-cash  amounts,  increased  from  $799,290 in 2002 to $1,677,341 in
          2003,  an increase of $878,051 or 110%.  This  increase in expenses is
          primarily due to adding personnel resources and support services based
          on the  acquisition  of the Keyes  Helium  and  Sturgis  Gas Plant and
          Gathering  System  from  CIG.  The  major  components  making  up  the
          $1,677,341  are payroll  costs  $651,987;  outside  services  $55,679;
          professional   fees   $134,875;    insurance   $40,088;   travel   and
          entertainment   $100,639;   office   rent   $47,569;   marketing   and
          communications, encompassing brand awareness, positioning, aggregation
          of  content,   research  analysis,   design,  investor  relations  and
          functionality of website and collateral material $509,368.

          Interest expense increased from $345,856 in the period ended September
          30,2002 to $882,021 in the comparable  period of 2003, which is due to
          additional debt financing added during 2003.

          Liquidity and Capital Resources

          As of  September  30,  2003  Nathaniel  Energy had  outstanding  notes
          payable of  $15,546,675,  including  installment  notes with financial
          institutions, secured by equipment, totaling $582,461, with an average
          interest rate of 11.1%. The remaining $15,217,574 in outstanding notes
          consists of secured and unsecured term loans from  individuals with an
          average  interest  rate  of  9.6%.  Of  this  amount,  $90,250  is due
          immediately since the notes are past their scheduled due dates. Of the
          amounts due to  individuals,  $15,097,215  is payable to one investor.
          This  investor  made an  additional  advance of $1,000,000 in October,
          2003.

          Effective October 3, 2003, the Company and the investor entered into a
          Conversion  Agreement  pursuant to which the investor  would settle an
          aggregate of $10 million of debt  through the  issuance of  50,000,000
          shares of common stock to be issued by the Company to NEC Energy, LLC,
          a designee of the investor.

          The Company currently has 75,000,000 shares of common stock authorized
          for issuance.  Prior to the  conversion  transaction,  the Company had
          38,262,664 shares of common stock issued and outstanding. Accordingly,
          the Company did not have a sufficient number of shares of common stock
          authorized  for issuance to issue all of the shares of common stock in
          the conversion.  The Conversion  Agreement provided that to the extent
          that the  Company  did not have  sufficient  shares  of  common  stock
          authorized  to issue all of the shares in the  conversion,  NEC Energy
          had the irrevocable right to the shares that could not be issued.  The
          Company has issued  30,000,000  shares of common  stock to NEC Energy,
          and NEC Energy has the irrevocable  right to an additional  20,000,000
          shares of common  stock.  In the  Conversion  Agreement,  the  Company
          agreed to take all required corporate action to seek the shareholders'
          approval to increase the number of authorized shares to a number which
          is at least sufficient for the Company to deliver all of the shares of
          common  stock  issuable  to NEC  Energy  pursuant  to  the  Conversion
          Agreement.

          Giving  effect to the  issuance  of all of the shares of common  stock
          under  the  Conversion  Agreement,  NEC  Energy  will own 56.6% of the
          issued and outstanding  shares of common stock of Nathaniel

                                        20
<PAGE>

          Energy. A change in control of the Company occurred as a result of the
          closing of the Conversion Agreement.

          In connection  with the  conversion,  NEC Energy received the right to
          demand  registration  of the  resale of the  shares at any time  after
          January  3, 2004.  Additionally,  NEC  Energy  was  granted  piggyback
          registration rights relating to certain registration  statements which
          Nathaniel Energy files after January 3, 2004, if any.

          In September and October of 2003, the investor  advanced an additional
          $2,000,000 to the Company.  This debt has been incorporated into a new
          note  bearing  interest  at the  rate  of  eight  percent  per  annum.
          Principal  plus  interest  are payable in four  quarterly  payments of
          $540,000  each on October 1, 2005 and January 1st,  April 1st and July
          1st 2006.

          The balance of the principal  amount due to the creditor of $4,097,215
          was incorporated into a second new note.  Accrued interest of $794,936
          will be included in the new note, for an aggregate  principal  balance
          of  $4,892,152.  The new note will bear  interest  at 8% per year.  No
          payments  will be due until March 31, 2007, at which time the note and
          accrued  interest  will be repaid in  quarterly  payments  of $572,876
          through December 31, 2009.

          In connection  with the new notes,  the investor  forgave  $488,294 of
          accrued interest.  This amount will be credited to additional  paid-in
          capital.

          Nathaniel  Energy has cash of $1,220,527 at September 30, 2003.  These
          funds will be used to fund the  Company's  operations  and to pay down
          the existing  debt. It will also be used for capital  expansion of the
          Keyes project.

          On July 15, 2003 the Company  received a contract and letter of credit
          for the sale of two 1800 hp Thermal  Combustors(tm).  The  contract is
          between L & R Energy Co.,  LLC,  European  Waste  Solutions,  Inc. and
          Electronic Solar of Italy for a RDF project in Cologna Veneta,  Italy.
          The letter of credit is with Banca  Monte Dei Pashi Di Siena which has
          a  representative  in New York and the letter may be  presented to any
          U.S. bank. The Company has 277 days from the date of formal acceptance
          to construct,  deliver and test the  combustors in order to collect on
          the  letter  of  credit.  The  test  will  be to  determine  that  the
          combustors  will generate a minimum of 42,495 pounds of steam per hour
          for each unit.  The  pricing for the  Thermal  Combustors(tm)  will be
          finalized  shortly upon completion of a detailed bill of materials but
          has yet to be determined at this filing.

          The Company is negotiating  toll-processing agreements to add revenues
          to the helium  operation.  In  addition,  the Company has entered into
          negotiations with third party companies  (Producers) for the gathering
          and processing of new volumes  natural gas from  additional  wells and
          gathering fields. The Company  anticipates that these  toll-processing
          agreements  would generate an estimated  $760,000 of gross profit once
          completed.  The Company  believes that the new natural gas  agreements
          would  enable  the  Company  to double  the gas flow  through  the Gas
          Processing   Plant,   generating   new   combined   gross   profit  of
          approximately  $1.7 million per year,  if completed in early 2004,  as
          anticipated.  No assurance can be given that these  agreements will be
          reached or, if they are reached,  that these estimated results will be
          achieved.

                                        21
<PAGE>


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

          Period ended September 30,
                                           2003                      2002
                                        --------------           ----------
          Operating activities           $   (561,220)            $ (1,174,187)
          Investing activities             (9,512,003)              (2,384,657)
          Financing activities             11,091,693                4,165,598

          Net effect on cash            $  1,018,470              $    606,754
                                       --------------           --------------
                                       --------------           --------------

          For the period ended September 30, 2003, the operating  activities net
          change is due primarily to a loss for the nine months of $3.5 million,
          partially offset by non-cash items of depreciation and amortization of
          $479,000  and  non-cash  expenses  of  $845,000,  and an  increase  in
          accounts payable and accrued expenses of $1.6 million.  The net change
          in investing  activities is primarily the result of the acquisition of
          the Keyes Helium and Sturgis Gas Plant and Gathering  System assets of
          $9.4 million.  The net change in financing activities is primarily the
          issuance of debt in the amount of $11.1 million, as described above in
          this liquidity and capital resources section.

          For the period ended September 30, 2002, the operating  activities net
          change is due primarily to a loss for the nine months of $3.6 million,
          partially offset by non-cash items of depreciation and amortization of
          $85,000  and  non-cash  expenses  of $2.5  million.The  net  change in
          investing  activities  is primarily the result of the  acquisition  of
          assets of $2.3  million.  The net change in  financing  activities  is
          primarily the issuance of debt in the amount of $4.9  million,  offset
          by repayments of debt of $729,000.


          Item 3: Controls and Procedures

          Our Chief Executive Officer and Principal Accounting Officer conducted
          an  evaluation of the  effectiveness  of our  disclosure  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 September 30, 2003 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 September
          30, 2003 that has  materially  affected,  or is  reasonably  likely to
          materially affect, our internal control over financial reporting.

                                        22

<PAGE>


   PART II. OTHER INFORMATION

   Item 1: LEGAL PROCEEDINGS

          None

   Item 2: CHANGE IN SECURITIES AND USE OF PROCEEDS

          None

   Item 3: DEFAULT UPON SENIOR SECURITIES

          None

   Item 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

          None

   Item 5: OTHER INFORMATION

          Change in Control

          Effective  as of October 3, 2003,  a change in control of the  Company
          occurred as a result of the closing of a Conversion  Agreement between
          the Company and Richard Strain.  Pursuant to the Conversion Agreement,
          $10  million  dollars of  indebtedness  of the  Company to Mr.  Strain
          converted  into an aggregate  of  50,000,000  shares of the  Company's
          common  stock to be issued  to NEC  Energy,  LLC,  a  designee  of Mr.
          Strain.

          The Company currently has 75,000,000 shares of common stock authorized
          for issuance.  Prior to the  conversion  transaction,  the Company had
          38,262,664 shares of common stock issued and outstanding. Accordingly,
          the Company did not have a sufficient number of shares of common stock
          authorized  for issuance to issue all of the shares of common stock in
          the conversion.  The Conversion  Agreement provided that to the extent
          that the  Company  did not have  sufficient  shares  of  common  stock
          authorized  to issue all of the shares in the  conversion,  NEC Energy
          had the irrevocable right to the shares that could not be issued.  The
          Company has issued  30,000,000  shares of common  stock to NEC Energy,
          and NEC Energy has the irrevocable  right to an additional  20,000,000
          shares of common  stock.  In the  Conversion  Agreement,  the  Company
          agreed to take all required corporate action to seek the shareholders'
          approval to increase the number of authorized shares to a number which
          is at least sufficient for the Company to deliver all of the shares of
          common  stock  issuable  to NEC  Energy  pursuant  to  the  Conversion
          Agreement.

          Giving  effect to the  issuance  of all of the shares of common  stock
          under the  Conversion  Agreement,  NEC Energy owns 56.6% of the issued
          and outstanding shares of common stock of the Company.

                                        23
<PAGE>


          In connection  with the  conversion,  NEC Energy received the right to
          demand  registration  of the  resale of the  shares at any time  after
          January 3, 2004. Additionally,  NEC was granted piggyback registration
          rights relating to certain  registration  statements which the Company
          files after January 3, 2004, if any.

          Debt Financing

          During  September and October,  2003, Mr. Strain loaned to the Company
          an additional $2,000,000 dollars bearing interest at the rate of eight
          percent per annum.  Principal  plus  interest  are payable in four (4)
          quarterly  payments  of  $540,000  each on October 1, 2005 and January
          1st, April 1st and July 1st 2006.

          Security Ownership of certain Beneficial Owners and Management

          The following table sets forth, to the knowledge of the Company, based
          solely  upon  records  available  to  it,  certain  information  as of
          November 10, 2003 regarding the beneficial  ownership of the Company's
          shares  of  common  stock  by each  person  who we  believe  to be the
          beneficial owner of more than five percent (5%) of outstanding  shares
          of  common  stock  by each  current  director,  each  named  executive
          officer,  and by all current  executive  officers and directors of the
          group:

          Name and Addres
          of Beneficial Owner         Number of Shares       Percent of Class(1)
          -------------------         ----------------       -----------------

          NEC Energy,  LLC(2)
          73 Deer Park Avenue,
          Suite 4 Babylon  Village,
          New York 11702                    50,000,000(3)            56.6%

          Richard Strain                     6,585,000(4)             7.5%
          329 Manchester Road
          Poughkeepsie, New York 12603

          Stanley Abrams(5)                  2,596,000                2.9%

          Russell "Gene" Bailey(5)             411,764(6)             *

          George Cretecos(5)                      None

          All Directors and Executive
          Officers as a group(3 persons)(5)  3,007,764(6)             3.4%



* Less than one percent

     (1) Percentages give effect to the issuance of all 50,000,000 shares to NEC
     Energy in conversion of $10,000,000  indebtedness of the Company to Richard
     Strain, effective as of October 3, 2003.

                                        24
<PAGE>


     (2) NEC  Energy,  LLC is 50% owned by Richard  Strain and 50% owned by Como
     Group, LLC, which is an affiliate of Corey Morrison.

     (3) Excludes 6,585,000 shares owned by Richard Strain.  Includes 30,000,000
     shares,  and the irrevocable right to receive 20,000,000 shares at the time
     that number of shares is authorized and available for issuance.

     (4)  Excludes  30,000,000  shares owned by NEC Energy,  LLC and  20,000,000
     shares for which NEC has the  irrevocable  right,  which shall be issued at
     the time that number of shares is authorized and available for issuance.

     (5) The  address  of this  person is 8001 S.  InterPort  Blvd.,  Englewood,
     Colorado 80112.

     (6)  Includes  205,882  shares and 205,882  shares  underlying  unexercised
     warrants which are  exercisable  at a price of $.17 per share,  held by Mr.
     Bailey's wife.



Item 6:   Exhibits and Reports
          Exhibits:
           3.1 Certificate of Incorporation*
           3.2 First Amendment to Certificate of Incorporation*
           3.3 Second Amendment to Certificate of Incorporation*
           3.4 Amended and Restated Bylaws

          31.1 Certificate  of  the  Chief   Executive   Officer  and  Principal
               Accounting  Officer of Nathaniel Energy  Corporation  pursuant to
               Section 302 of the Sarbanes-Oxley Act of 2002

          32.1 Certificate  of  the  Chief   Executive   Officer  and  Principal
               Accounting  Officer of Nathaniel Energy  Corporation  pursuant to
               Section 906 of the Sarbanes-Oxley Act of 2002.


          Reports on Form 8-K
               Form 8-K was issued July 2, 2003  reflecting  the  acquisition of
               Keyes Helium, Sturgis Gas Processing Plant and Gathering System.




               *  Incorporated  herein by reference to exhibits  included in the
               Company's  Current Report on Form 8-K for an event dated December
               31, 2002,  filed with the Securities  and Exchange  Commission on
               January 17, 2003.

                                        25
<PAGE>


                                   SIGNATURES


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
     Registrant  has duly  caused  this report to be signed on its behalf by the
     undersigned, thereunto duly authorized.


                                  Nathaniel Energy Corporation
                                  (Registrant)


                                  By: /s/ Stanley Abrams
                                  ----------------------
                                  Stanley Abrams, Chief Executive
                                  Officer and Principal Accounting
                                  Officer



                                        26