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

                                   FORM 10-QSB

          (Mark One)

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

                  For the quarterly period ended June 30, 2004

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

                 For the transition period from_____ to _______

                        Commission file number 000-27783

                          NATHANIEL ENERGY CORPORATION

                 (Name of Small Business Issuer in its Charter)



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


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

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

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

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

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

Applicable only to corporate issuers

State the number of shares  outstanding  of each of the issuer's class of common
equity, as of the latest  practicable date: July 31, 2004,  69,668,930 shares of
common stock, $.001 par value.

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


<PAGE>




                          NATHANIEL ENERGY CORPORATION




                                TABLE OF CONTENTS

PART I.  FINANCIAL INFORMATION                                          Page

Item 1.   Financial Statements (unaudited)

            Consolidated Balance Sheets as of June 30, 2004 and
            December 31, 2003                                              2

            Consolidated Statements of Operations for the Three
            And Six Months ended June 30, 2004 and 2003                    3

            Consolidated Statements of Cash Flows for the Six
            Months ended June 30, 2004 and 2003                            4

            Notes to Consolidated Financial Statements                     5

Item 2.  Management's Discussion and Analysis or Plan of Operation         9

Item 3.  Controls and Procedures                                          13


PART II. OTHER INFORMATION

Item 1.  Legal Proceedings                                                13

Item 2.  Changes in Securities and Small Business Issuer
         Purchases of Equity Securities                                   13

Item 3.  Defaults Upon Senior Securities                                  14

Item 4.  Submission of Matters to a Vote of Security Holders              14

Item 5.  Other Information                                                14

Item 6.  Exhibits                                                         14

           Signatures                                                     15




<PAGE>




                          Nathaniel Energy Corporation
                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                        June 30,           December 31,
                                                         2004                 2003
                                                      (unaudited)
                                                   ---------------      ---------------
Assets
Current assets:
<S>                                                    <C>                  <C>
  Cash                                                 $   874,367          $   504,782
  Accounts receivable                                    1,324,411              960,555
  Inventory                                              2,277,513              637,174
  Prepaid expenses                                         107,021              130,669
  Advances and other receivables                            18,780               30,718
                                                   ---------------      ---------------
Total current assets                                     4,602,092            2,263,898
Property, plant and equipment, net of accumulated
  depreciation                                          10,437,594           11,662,969
Intangible assets, net                                     343,567              339,473
Restricted cash                                            439,318              899,300
Related party receivables                                   11,438              345,959
Deposits                                                    60,127               50,000
Other assets                                                     -               42,794
                                                   ---------------      ---------------
Total Assets                                           $15,894,136          $15,604,393
                                                   ===============      ===============

Liabilities and Stockholders' Equity
Current liabilities:
  Accounts payable                                     $ 1,767,873          $ 1,689,072
  Accrued compensation and payroll liabilities              67,163              109,065
  Accrued interest                                         384,206              141,402
  Accrued property tax                                      93,708               38,331
  Accrued income taxes                                     258,683                  -
  Other accrued expenses                                   516,819               25,018
  Notes payable, current portion                           168,232              406,644
                                                   ---------------      ---------------
Total current liabilities                                3,256,684            2,409,532

Long-term debt                                             399,410              230,989
Long-term debt, stockholder                              8,892,151            6,892,151
                                                   ---------------      ---------------
Total liabilities                                       12,548,245            9,532,672
                                                   ---------------      ---------------
Minority interest                                          227,424               34,139
Stockholders' equity:
  Preferred stock, 2,000,000 shares of $.001 par value
    authorized, none issued or outstanding                      -                    -
  Common stock, 75,000,000 shares of $.001 par value
    authorized, 69,668,930 and 69,719,414 shares,
    respectively, issued and outstanding                    69,669               69,719
Common stock to be issued                                   20,814               20,285
Additional paid-in capital                              64,839,689           64,682,652
Accumulated deficit                                    (61,811,705)         (58,735,074)
                                                   ---------------      ---------------
Total stockholders' equity                               3,118,467            6,037,582
                                                   ---------------      ---------------
Total Liabilities and Stockholders' Equity             $15,894,136          $15,604,393
                                                   ===============      ===============
</TABLE>

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

                                        2


<PAGE>



       Nathaniel Energy Corporation Consolidated Statements of Operations
                                   (Unaudited)




<TABLE>
<CAPTION>
                                   For the Three Months Ended     For the Six Months Ended
                                      June 30,        June 30,       June 30,       June 30,
                                       2004            2003           2004           2003
                                   -----------    -----------    -----------    -----------
<S>                                <C>            <C>            <C>            <C>
Revenue                            $ 3,609,352    $ 2,803,633    $ 6,956,144    $ 2,908,548

Cost of revenue                      3,122,239      2,691,003      6,013,615      2,838,467
                                   -----------    -----------    -----------    -----------

Gross profit                           487,113        112,630        942,529         70,081

Selling, general and administrative
 expenses                              727,790        424,161      1,402,797      1,520,503

Write-down of inventory                274,000             -         274,000
Impairment of assets                 1,403,046             -       1,403,046              -
                                   -----------    -----------    -----------    -----------
Total operating expenses             2,404,836        424,161      3,079,843      1,520,503


Loss from operations                (1,917,723)      (311,531)    (2,137,314)    (1,450,422)

Other income (expense)
  Partnership income                         -              -              -         20,733
  Loss on disposal of equipment        (18,912)             -        (18,912)       (13,207)
  Write-off of related party
    receivable                        (264,587)             -       (264,587)             -
  Interest expense                    (131,068)      (379,362)      (275,650)      (561,424)
  Other income                          65,800         26,133         71,800         26,133
                                   -----------    -----------    -----------    -----------
Loss before income taxes and
  minority interest                 (2,266,490)      (664,760)    (2,624,663)    (1,978,187)

Income tax expense                    (131,272)            -        (258,683)             -
                                   -----------    ------------   -----------    -----------
Loss before minority interest       (2,397,762)      (664,760)    (2,883,346)    (1,978,187)

Minority interest                      (99,638)      (100,300)      (193,285)      (120,220)
                                   -----------    -----------    -----------    -----------
Net loss                           $(2,497,400)   $  (765,060)   $(3,076,631)   $(2,098,407)
                                   ===========    ===========    ===========    ===========

Loss per share, basic and diluted  $    (0.04)    $     (0.02)   $     (0.04)   $     (0.05)
                                   ===========    ===========    ===========    ===========

Weighted average common
 shares outstanding                 69,676,697      38,314,312     69,698,055     38,184,211
                                   ===========     ============   ===========    ===========
</TABLE>


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


                                        3



<PAGE>


       Nathaniel Energy Corporation Consolidated Statements of Cash Flows
                                   (Unaudited)



<TABLE>
<CAPTION>
                                                                  For the Six Months Ended
                                                               June 30,               June 30,
                                                                 2004                   2003
                                                             --------------         --------------
Cash flows from operating activities:
<S>                                                          <C>                    <C>
Net loss                                                     $ (3,076,631)          $ (2,098,407)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
  Depreciation and amortization                                   516,094                317,102
  Stock issued for services                                            --                845,050
  Minority interest                                               193,285                120,220
  Loss on equipment                                                18,912                     --
  Loss on related party receivables                               264,587                     --
  Write down of inventory                                         274,000                     --
  Impairment of assets                                          1,403,046                     --
  Non-cash settlement of debt                                     (65,800)                    --
Changes in operating assets and liabilities:
  (Increase) decrease in:
    Inventory                                                  (1,914,339)               260,017
    Restricted cash                                               459,982                     --
    Accounts receivable                                          (363,856)              (531,999)
    Prepaid expenses                                               23,648                   (107)
    Advances receivable                                            11,938                (12,030)
    Related party receivable                                       19,450                 68,908
    Other assets                                                  (10,127)               (63,130)
  Increase in:
    Accounts payable and accrued expenses                       1,326,114              1,222,070
                                                             --------------         --------------
Net cash provided by (used in) operating activities              (919,697)               127,694
                                                             --------------         --------------
Cash flows from investing activities:
  Equipment purchases                                            (673,977)            (9,387,320)
                                                             --------------         --------------
Net cash used in investing activities                            (673,977)            (9,387,320)
                                                             --------------         --------------
Cash flows from financing activities:
  Payments on debt                                                (36,741)               (72,301)
  Proceeds from issuance of notes and loans                     2,000,000             10,150,964
                                                             --------------         --------------
Net cash provided by financing activities                       1,963,259             10,078,663
                                                             --------------         --------------
Net increase in cash                                              369,585                819,037
Cash and cash equivalents, beginning of period                    504,782                202,057
                                                             --------------         --------------
Cash and cash equivalents, end of period                     $    874,367           $  1,021,094
                                                             ==============         ==============

Cash paid for interest                                       $     20,106           $     20,226
                                                             ==============         ==============
Cash paid for income taxes                                   $         --           $         --
                                                             ==============         ==============
Non cash financing activity:
   Issuance of stock for intangibles                         $         --           $    150,000
                                                             ==============         ==============
   The Company agreed to issue 529,333 shares of common
     stock to settle accounts and notes payable              $    218,800                     --
                                                             ==============         ==============
   The Company cancelled 50,484 shares of common stock
      to settle a receivable from an officer                 $     50,484                     --
                                                             ==============         ==============
</TABLE>

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

                                        4


<PAGE>



                          Nathaniel Energy Corporation
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2004 and 2003
                                   (Unaudited)

1.   Significant Accounting Policies and Nature of Operations:

Condensed footnotes:

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

                     Unaudited Interim Financial Statements

The  accompanying  unaudited  interim  financial  statements,  which include the
Company's 51% owned subsidiary,  have been prepared by the Company in accordance
with generally accepted accounting  principles pursuant to Regulation S-B of the
Securities  and Exchange  Commission.  The  financial  information  has not been
audited  and  should not be relied on to the same  extent as  audited  financial
statements.  Certain information and footnote  disclosures  normally included in
audited  financial  statements  prepared in accordance  with generally  accepted
accounting principles have been condensed or omitted. Accordingly, these interim
financial  statements should be read in conjunction with the Company's financial
statements  and  related  notes as  contained  in Form 10-KSB for the year ended
December  31,  2003.  In  the  opinion  of  management,  the  interim  financial
statements  reflect all adjustments,  including  normal  recurring  adjustments,
necessary for fair presentation of the interim periods presented. The results of
operations for the three and six months ended June 30, 2004 are not  necessarily
indicative of results of operations to be expected for the full year.

                             Description of Business

Nathaniel  Energy  Corporation  is a  renewable  energy  company  that  provides
industry with an  alternative  energy  comparable  to that of fossil fuels.  Its
proprietary  patented  technology,  the  Thermal  Combustor(TM),  is  a  2-stage
gasification  system  designed to convert  waste,  biomass,  tires and any other
solid,  carbon-based  materials into inexpensive  electrical and thermal energy,
while  exceeding  the most  stringent  EPA and European  Union  regulations.  By
converting waste material into valuable process heat and electricity  using best
available  technology,  Nathaniel  Energy is able to provide a total solution to
select industrial and municipal customers.


Nathaniel Energy focuses its patented technology in two main areas:

- building, owning, operating and maintaining energy infrastructures, and
- building, owning, operating and maintaining mini power plants.

We plan to build,  own,  operate and maintain energy  infrastructures  that will
provide industries and municipalities with an efficient,  clean energy and waste
removal  solution.  Additionally,  the company plans to build,  own, operate and
maintain mini power plants for  businesses  that seek an  independent  source of
energy.  These mini power plants would be built on the businesses' premises ("in
the fence") and can reduce the  dependence  a business  has on fossil  fuels and
power from the local utility as well as provide a waste disposal solution.

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

                                        5


<PAGE>




                          Nathaniel Energy Corporation
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
                             JUNE 30, 2004 and 2003
                                   (Unaudited)

                          Critical Accounting Policies

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

Inventory

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

Components of inventory at June 30, 2004 are as follows:



Helium and natural gas liquids, valued using
last-in, first-out method                                       $  352,993
Tire shred inventory, valued using first-in, first-out method           --
Combustor construction in progress                               1,924,520
                                                                ----------
Total                                                           $2,277,513
                                                                ==========

Property, Plant and Equipment and Related Depreciation

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



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

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 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.

                                        6



<PAGE>
                          Nathaniel Energy Corporation
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
                             JUNE 30, 2004 and 2003
                                   (Unaudited)

Revenue Recognition

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

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

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

Use of Estimates

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

Reclassifications

Certain  amounts   reported  in  the  2003  financial   statements,   have  been
reclassified   to   conform   to  the   current   period   presentation.   These
reclassifications had no effect on net income or stockholders'  equity.  Certain
expenses  reported  in the  Company's  Quarterly  Report on Form  10-QSB for the
period ended June 30, 2003 have been reclassified and adjusted to conform to the
current  period  presentation  and to be  consistent  with  the  financial  data
presented in the March 31, 2003 and September 30, 2003 quarterly reports on Form
10QSB. These reclassification and adjustments reduced June 30, 2003 year to date
net income by $195,000.

2. Acquisition; Minority Interest

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

The following table represents  unaudited  proforma income statement for the six
months ended June 30, 2003,  including the operations of the 2003  acquisitions,
as if the acquisitions were owned for the entire period shown.
                         Six months ended June 30, 2003

                Revenue               $ 4,321,633
                Net (loss)            $(2,223,060)
                Loss per share        $     (0.06)

3. Notes Payable

On March 17, 2004 the Company borrowed $2,000,000 from Richard Strain,  bringing
the  total  indebtedness  to Mr.  Strain  to  $8,892,151.  The new  note  has an
effective interest rate of 4.3%. Installments of $540,000 are payable on October
1, 2005,  January 1, 2006,  April 1, 2006 and July 1, 2006.  Mr.  Strain has the
right,  at any  time,  to  convert  all,  or  any  portion  of  the  outstanding
indebtedness  of  $8,892,151  into shares of the  Company's  common  stock.  The
conversion  price  will be equal  to 103% of the  average  closing  price of the
Company's  common stock for the five trading days prior to March 17, 2004, which
is $0.78 per share.  The conversion price exceeded the market value of the stock
on March 17, 2004.

                                        7


<PAGE>



                          Nathaniel Energy Corporation
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
                             JUNE 30, 2004 and 2003
                                   (Unaudited)

4. Economic Dependency - Major Customer

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

5. Related Party Transactions

See Note 3 - "Notes  Payable"  relating  to loans  from  Richard  Strain  to the
Company.

On June 25, 2004, Stan Abrams retired from employment with Nathaniel  Energy and
resigned as a director and the Chief Executive Officer.  Under the terms of Stan
Abrams' retirement:

     -His employment agreement terminated;
     -Mr.  Abrams agreed not to compete with  Nathaniel  Energy in the combustor
     and  gasification,  helium and natural gas,  renewable  energy  and/or tire
     recycling businesses for two years.
     -Mr.  Abrams  waived  any  rights to the  return of the  company's  patents
     pursuant to the Amended and Restated Patent Reassignment
     -Agreement between him, Brett Abrams and Nathaniel Energy.  That agreement,
     by its terms terminated.

On June 25,2004,  Brett Abrams  resigned as Vice  President,  Fuel Processing of
Nathaniel Energy on terms similar to Stan Abrams' retirement.

Mr. Abrams  agreed to limit the public  resale of Nathaniel  Energy common stock
which he and his son Brett Abrams owns to a total of 50,000,  75,000 and 100,000
shares for three  consecutive  90 day  periods  respectively.  Stan  Abrams also
agreed to limit public resale of the  remaining  shares he owns in amounts equal
to Securities Act Rule 144 volume limitations for two years after that.

During the June 2004  quarter the  Company  wrote off a $264,587  related  party
receivable from Ripetouch  Greenhouse LLC, an entity controlled by the Company's
former  chief  executive  officer,  Stan Abrams since debt  collection  has been
determined to be uncertain.  In prior years,  the company paid certain  expenses
related to site clean-up on behalf of Ripetouch Greenhouse LLC.

The Board of Directors of Nathaniel  Energy  adopted a policy in February,  2004
that all  related  party  transactions  must be  approved  by a majority  of the
disinterested   directors  and  those   transactions  will  be  on  commercially
reasonable  terms which are no less favorable to Nathaniel Energy than Nathaniel
Energy could obtain in arms-length transactions with unaffiliated third parties.

6. Asset Impairment

During the quarter ended June 30, 2004, management changes prompted a review and
update of the expected  cash flows on long lived  assets.  Based on this review,
operating costs were higher than previously estimated, and an impairment of $1.4
million  was  recognized  on the  assets  at the  fuel  processing  facility  in
Hutchins,  Texas.  The  Company  discounted  the cash  flows  expected  from the
impaired long lived assets to determine  their current value and the  impairment
amount.  The  Company is  working  to add new  contracts  to  increase  the fuel
processing facility revenue,  but any new contracts cannot be assured,  and have
not been considered in the most recent cash flow expectations.

7. Inventory

During  the  quarter  ended June 30,  2004,  tire  shred  inventory  at the fuel
processing  facility was written down to a net realizable value of zero. The net
realizable  value was calculated  using  estimated  selling prices less costs to
process the inventory into a salable form.

                                        8


<PAGE>



Business Segments

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

- a fuel processing operation 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.


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

                           FORWARD LOOKING STATEMENTS

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

- Our ability to raise capital necessary to implement our business plan.
- Our ability to finance and complete planned projects.
- Our  ability  to execute  our  business  plan and  commercialize  the  Thermal
Combustor(TM)  technology,  including building Thermal  Combustors(TM) that meet
customers'  specifications  and that meet  local  regulatory  environmental  and
permit requirements.
- Risks related to dependency on a small number of customers.
- Risks  related  to  dependency  on project  partners  and  vendors  for timely
completion of project milestones.
- Our ability to satisfy our customers' expectations.
- Our ability to employ and retain qualified management and employees.
- Changes in government regulations which are applicable to our business.
- The availability of a consistent,  economically  viable, and sustainable waste
stream supply to fuel the Thermal Combustor(TM) operations.
- Changes in the demand for our products and services, including the impact from
changes in governmental regulation and funding for alternative energy.
- The  degree and  nature of our  competition,  including  the  reliability  and
pricing of  traditional  energy  sources  and the  economic  viability  of other
alternative energy sources such as wind and solar power.
- Operating hazards related to our Thermal Combustor(TM) business.
- Potential mechanical failure of our plants or products.
- 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.

                                        9


<PAGE>




Company Overview

Nathaniel  Energy's mission is to provide a lower cost, clean energy alternative
to fossil fuels  worldwide.  Our operational  plan focuses on two major business
models: build, own and operate energy infrastructures and build, own and operate
mini power plants. Revenue is generated by two businesses. The largest business,
the helium and gas processing plant,  generated 96% of revenue,  or $6.7 million
during  the  first  half of 2004.  The  second  business,  the  fuel  processing
operation generated 4% of the revenue, or $297,117 during the same period.

Compared to the first six months of 2003, revenue increased significantly due to
the  acquisition  of Keyes  helium  plant,  the  Sturgis gas plant and the Keyes
gathering  system  from CIG on April 3,  2003.  Beginning  with the  March  2004
quarter, Nathaniel  Energy began managing the fuel processing and helium and gas
processing operations as one business segment.

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

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

Nathaniel  Energy's 2004 mission is proving the  commercial  application  of its
Thermal  Combustor(TM).  At the same time, the company is seeking  opportunities
for numerous projects that use the Thermal Combustor's(TM) patented technology.

Executive Management

Effective June 25, 2004,  Stan Abrams and Brett Abrams retired and resigned from
Nathaniel  Energy.  The company is currently  conducting a search for a seasoned
CEO. We believe current  management has sufficient skills and experience to lead
and manage the existing operations and projects currently in process.

Intellectual Property

Nathaniel Energy owns three U.S.  patents,  the latest issued in March 2003, and
has a patent application  pending.  A European patent  application  covering the
Thermal  Combustor(TM)  technology is also pending. The Thermal Combustor(TM) is
used to produce energy using  alternate fuel sources,  which is then sold by the
Company.

On June 25,  2004,  as a result of Stan  Abrams's and Brett  Abrams's  voluntary
retirement and resignation from Nathaniel Energy,  all rights they had in, or to
the return of, any  Nathaniel  Energy  patents,  under the Amended and  Restated
Patent Reassignment  Agreement made as of September 30, 2003 but effective as of
July 7, 1998  between  Stan Abrams,  Brett  Abrams,  and  Nathaniel  Energy,  or
otherwise, expired and were waived.

                                       10


<PAGE>


Results of Operations

The following tables set forth certain unaudited quarterly results of operations
of Nathaniel Energy for the first two quarters of 2004. The quarterly  operating
results are not necessarily indicative of future results of operations.

<TABLE>
                                                                     Three Months Ended (unaudited)

<CAPTION>
                                                  March 31        June 30        June 30     June 2004 vs. 2003
                                                    2004            2004          2003       increase (decrease)
                                                                                                 $            %
                                                -----------    ------------    -----------   --------      ----
-----
<S>                                             <C>             <C>            <C>           <C>            <C>
Revenue                                         $3,346,792      $3,609,352     $2,803,633    $805,719       29%
Cost of revenue                                  2,891,376       3,122,239      2,691,003     431,236       16
                                                -----------    ------------    -----------   --------
 Gross profit                                      455,416         487,113        112,630     374,483      332

Selling general and
  administrative                                   675,007         727,790        424,161     303,629       72
Inventory write down                                               274,000
Asset impairment                                                 1,403,046
                                                -----------    ------------    -----------
 Operating loss                                   (219,591)     (1,917,723)      (311,531)

  Interest expense, net                           (144,582)       (131,068)      (379,362)
  Other non-operating
      income (expense)                               6,000        (217,699)        26,133
                                                -----------    ------------    -----------
  Loss before income taxes and
      minority interest                           (358,173)     (2,266,490)      (664,760)
  Income tax expense                              (127,411)       (131,272)            --
  Minority interest                                (93,647)        (99,638)      (100,300)
                                                -----------    ------------    -----------
  Net loss                                      $ (579,231)    $(2,497,400)     $(765,060)
                                                -----------    ------------    -----------

Significant non cash charges and expenses:
Depreciation and amortization                   $  236,316     $   279,778      $ 258,348
Asset impairment                                $       --       1,403,046             --
Related party receivable
  write off                                     $       --         264,587             --
Inventory write down                            $       --         274,000             --
</TABLE>


For the quarterly  period ended June 30, 2004 revenue  increased by 29% compared
to same period in 2003 due to  Nathaniel  Energy's  new  contracts  finalized in
January 2004 and $599,086 in equipment upgrades completed in March 2004. Revenue
from the helium and gas processing operations was $3.5 million during the second
quarter of 2004,  compared to $2.7 million  during the preceding  year.  Revenue
from the fuel  processing  operation  was  $168,981  during the period,  up from
$146,397 in the second quarter of the prior year.

For the six months  ended June 30, 2004  revenue  increased by $4.1 million from
$2.9 million  during the same period in 2003, to $7.0 million,  due to Nathaniel
Energy's  acquisition  of the Keyes helium plant,  the Sturgis gas plant and the
Keyes gathering  system.  The revenues and expenses of our 51% owned subsidiary,
Nathaniel Energy Oklahoma Holdings Corporation,  which operates the Keyes Helium
plant,  the Sturgis gas plant and the Keyes  gathering  system are  consolidated
within total operations beginning April 3, 2003. Revenue from the helium and gas
processing  operations  was $6.7  million for the six months  ended June 30 2004
compared  to $2.7  million  during the same  period in 2003.  Revenue  from fuel
processing operations were $297,117 during the six months ended June 30 2004, up
from $251,312 in the same period in 2003.

Gross  profit for the quarter  ended June 30, 2004 was 13% compared to 4% in the
comparable  period  of 2003.  In the  second  quarter  of 2004,  helium  and gas
processing  operation gross profit of 16% was offset by a negative 47% margin at
the fuel  processing  operation.  Total  Company gross profit for the six months
ended June 30, 2004 was 14% compared to 2% in the comparable period of 2003. The
gross  profit  improvements  compared  to the prior year  quarter  and first six
months stem from steady  improvements at the helium and gas processing  facility
due to equipment upgrades and new contracts with gas customers and suppliers.

                                       11


<PAGE>
On January 9, 2004 Nathaniel  Energy  completed a new contract with Nexus Energy
Company to receive  additional gas through its existing  pipeline for processing
at the company's  facilities.  According to the contract,  Nathaniel Energy will
extract helium and natural gas liquids from this new gas stream.  New gas supply
processing  began  at  Nathaniel  Energy's  Keyes  plant  after  the  successful
completion  of the helium  equipment  upgrades  performed  by Air  Products  and
Chemicals,  Inc. in March 2004. The work performed by Air Products and the local
plant team  enabled  the  equipment  upgrade to be  completed  on time and under
budget,  for a total cost of $599,086.  The Nexus agreement brings an additional
4,000 mcf (thousand cubic feet) of gas daily to the facility.  Incremental gross
profit from the new contract and upgrades is expected to be  approximately  $1.3
million per year.

On June 4, 2004 there was a mechanical  failure at Nathaniel Energy's helium and
gas  processing  facility.  A portion of the damages  were  repaired  within two
weeks,  which brought the plant up to approximately  60% to 75% of its operating
capacity.  Remaining repairs to the affected  compressors were completed July 7,
2004,  which enabled the plant to operate at normal  capacity,  bringing the gas
flow and  associated  revenue back to normal.  The total gross  revenue loss for
June quarter at the plant was approximately  $260,000. The company filed a claim
with its  insurance  carrier to recover the  estimated  $365,000 in repair costs
less its deductible of $100,000.

Total selling,  general and  administrative  expenses  increased $303,629 or 72%
from $424,161 in the second quarter of 2003 to $727,790 in the second quarter of
2004 due to increased research and development and wages.

For the first six months,  total selling,  general and  administrative  expenses
decreased  $117,706 from the comparable period in 2003. A decline of $845,000 in
non cash  marketing,  legal and  professional  expense  was offset by other cost
increases of approximately  $700,000.  Significant cost increases from the prior
year include Thermal Combustor(TM) research and development expense of $290,996,
gas and helium operations  general and  administrative  expense of approximately
$150,000  for a full six months in 2004  compared  to three  months in 2003.  In
addition,  insurance,  rent and amortization  rose for a total increase of about
$175,000.

Interest expense during the first six months decreased to $275,650 from $561,424
last year resulting  primarily from a $10 million  conversion of indebtedness to
Richard Strain into equity.

Liquidity and Capital Resources

As of June 30, 2004  Nathaniel  Energy owed  $510,642 to financial  institutions
with an average interest rate of 6.8%.  $273,642 of the amount due is secured by
equipment.

Additionally,  the company has $8,892,151 in secured loans from Richard  Strain.
$2.0  million of this total was  loaned to  Nathaniel  Energy in March 2004 with
principal and interest  payable due in four quarterly  payments of $540,000 each
on October  1, 2005,  and  January  1, April 1, and July 1, 2006.  Another  $2.0
million  was loaned in 2003 with  principal  and  interest  payable  due in four
quarterly  payments of $540,000 each on October 1, 2005, and January 1, April 1,
and July 1, 2006. The remaining  amount due Mr. Strain of $4.9 million is due in
quarterly  principal  and interest  payments of $582,876 from March 2007 through
December 31, 2009.  All loan amounts from Mr. Strain to Nathaniel  Energy may be
converted,  at Mr.  Strain's  option,  into shares of Nathaniel  Energy's common
stock at a  conversion  rate equal to 103% of the average  closing  price on the
five  trading days prior to March 17,  2004,  or $0.78 per share.  Additionally,
Nathaniel Energy has agreed to register the shares of common stock issuable upon
conversion of these loans by September 18, 2004.

The remaining indebtedness consists of miscellaneous notes to unaffiliated third
parties of $57,000.  During the quarter  ended June 30,  2004,  two note holders
converted debt with a face amount of $33,250,  plus accrued interest of $12,750,
into a total of 79,333 common shares.

Included in accounts payable is $599,086 for equipment upgrades and services due
to Air Products,  a significant  customer,  with no stated  interest  rate.  The
payable will be repaid over the next nine months with monthly  installments that
vary with revenue levels.

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

                                       Six months period ended June 30,
                                            2004            2003
                                            ----            ----
              Operating activities       $ (919,697)   $   127,694
              Investing activities         (673,977)    (9,387,320)
              Financing activities        1,963,259     10,078,663
                                         -----------   ------------
              Net effect on cash         $  369,585    $   819,037
                                         ===========   ============

                                       12
<PAGE>

For the six month  period  ended June 30,  2004,  the net cash used in operating
activities  of $919,697  is due to a net cash  operating  loss of  approximately
$400,000 and an increase in inventory of $1.9 million,  offset by an increase in
accounts  payable and accrued  expenses of $1.3 million.  The net cash operating
income  includes the GAAP net loss of $3.1 million offset by $2.7 million in non
cash charges  including  depreciation,  minority  interest and the write down of
inventory,  fixed  assets and related  party  receivables.  During the first six
months of 2004 $459,982 of the restricted cash balance was used to construct two
Thermal Combustors (TM) which also significantly increased inventory compared to
December 31, 2003.

During July 2004  Nathaniel  Energy  terminated  the  October 28, 2003  Gasifier
Supply and Start-Up Agreement with L & R Energy,  LLC, relating to the supply of
two MCF 1800 BHP Thermal  Combustors(TM)  for a Refuse  Derived  Fuel project in
Cologna Veneta,  Italy. Then on July 16, 2004 Nathaniel Energy entered into a $3
million contract with EcoIdea, L&R Energy and others for its work on the Cologna
Veneta  project.  Under the new agreement,  Nathaniel  Energy placed one Thermal
Combustor(TM)  in  service  with  natural  gas by July 29,  2004  and the  plant
produced at least one kilowatt of electricity at that time,  meeting the initial
milestone  toward  the  completion  of the  project in  accordance  with the new
agreement. Under the terms of the new agreement, Nathaniel Energy is required to
have two Thermal  Combustors  operating  on refuse  derived  fuel and  producing
57,600,000  BTU per hour,  capable of  producing  19,240  Kilograms of steam per
hour, by September 30, 2004. Nathaniel Energy's  responsibilities to perform its
obligations under the new agreement are subject to other parties involved in the
project  fulfilling  their  respective  obligations,  which need to be completed
before  Nathaniel  Energy can perform  certain  aspects of its  obligations.  We
cannot assure that the other parties involved will perform their  obligations on
a timely  basis or at all, or that if they do  perform,  that we will be able to
meet our obligations to timely perform under the new agreement.  At the time the
new agreement  with EcoIdea,  L&R Energy and others was entered into,  Nathaniel
Energy  rescinded its termination of the Gasifier  Start-Up and Supply Agreement
with L&R Energy,  and amended it consistent with the new agreement with EcoIdea,
L&R Energy and others. If we do not complete this contract by September 30, 2004
we are subject to liquidated  damages at a rate of 3% of the contract  price per
month.

The net change in financing  activities is due to a $2.0 million debt  issuance,
offset by debt repayments of $36,741.

For the six month period  ended June 30,  2003,  the  operating  activities  net
change is due  primarily  to a loss of $2.1  million and an increase in accounts
receivable  of $531,999  offset by an  increase in accounts  payable and accrued
expenses of $1.2 million and stock issued for services of $845,050. Stock issued
for services of $845,050  was  classified  as a financing  source of cash in our
Quarterly  Report for the period  ended June 30, 2003.  Cash used for  investing
activities  resulted  from  capital  expenditures  of $9.4  million,  nearly all
related to the  acquisition of the helium and gas facility in Keyes,  OK April 3
2003.  The net change in financing  activities  is due to proceeds  from debt of
$10.2 million offset by debt repayments of $72,301.

Nathaniel  Energy  had cash of  approximately  $1.3  million  at June 30,  2004,
including  $439,318 of restricted cash, which will be used to fund the Company's
operations, pay current debts and fund current Thermal Combustor(TM) projects.


Item 3. Controls and Procedures

Our Chief  Operating  Officer,  who is our Principal  Executive  Officer and our
Principal  Accounting  Officer,  conducted an evaluation of the effectiveness of
our disclosure  controls and  procedures.  Based on this  evaluation,  our Chief
Operating Officer and Principal Accounting Officer concluded that our disclosure
controls and procedures  were effective as of June 30, 2004 in alerting him in a
timely  manner  to  material  information  required  to be  included  in our SEC
reports. In addition, no change in our internal control over financial reporting
occurred  during the fiscal  quarter  ended  June 30,  2004 that has  materially
affected,  or is reasonably  likely to materially  affect,  our internal control
over financial reporting.

                            PART 2: OTHER INFORMATION

Item 1. Legal Proceedings.

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

Nathaniel  Energy has agreed to issue 529,333  shares of common stock in payment
of accounts and notes payable. The following represents shares to be issued:

                  Issuance      Common Stock      Total            Type of
Holder Name         Date           Shares         Price         Consideration
------------------------------------------------------------------------------
Sol Adler       to be issued       27,250       $  27,250       Debt Conversion
Alvin Mordoh    to be issued      450,000       $ 162,000       Debt Conversion
Isaac Nedd      to be issued       52,083       $  18,750       Debt Conversion

                                       13
<PAGE>
Each of the above issuances were exempt from registration  under Section 4(2) of
the Securities Act of 1933. We did not use any underwriter or placement agent in
these  transactions,  and did not pay any  compensation  to anyone in connection
with these issuances.

All of these  issuances are to be made  directly by Nathaniel  Energy to persons
who were  creditors  of  Nathaniel  Energy with whom its  management  had direct
contact and personal  relationships,  or who were introduced to Nathaniel Energy
by members of Nathaniel Energy's management.


Item 3. Defaults Upon Senior Securities.

Not Applicable


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

Not Applicable


Item 5. Other Information.

On June 25, 2004, Stan Abrams retired from employment with Nathaniel  Energy and
resigned as a director and the Chief Executive Officer.  Under the terms of Stan
Abrams' retirement:

     -His employment agreement terminated;
     -Mr.  Abrams agreed not to compete with  Nathaniel  Energy in the combustor
     and  gasification,  helium and natural gas,  renewable  energy  and/or tire
     recycling businesses for two years.
     -Mr.  Abrams  waived  any  rights to the  return of the  company's  patents
     pursuant to the Amended and Restated Patent Reassignment  Agreement between
     him,  Brett  Abrams and  Nathaniel  Energy.  That  agreement,  by its terms
     terminated.
     -Mr.  Abrams agreed to limit the public  resale of Nathaniel  Energy common
     stock which he and his son Brett  Abrams owns to a total of 50,000,  75,000
     and 100,000 shares for three consecutive 90 day periods respectively.  Stan
     Abrams also agreed to limit public resale of the  remaining  shares he owns
     in amounts  equal to  Securities  Act Rule 144 volume  limitations  for two
     years after that.


On June 25, 2004,  Brett Abrams resigned as Vice  President,  Fuel Processing of
Nathaniel Energy on terms similar to Stan Abrams' retirement.


Item 6. Exhibits and Reports on Form 8-K.
     (a)  Exhibits.

          3(i).1  Certificate of Incorporation*
          3(i).2  Articles of Amendment to Articles of Incorporation, as amended
                  on August 6, 1999*
          3(i).3  Certificate of Amendment of Certificate  of  Incorporation, as
                  amended on April 24, 2002*
          3(ii).1 Amended and Restated By-Laws**
          10.1    Agreement dated as of June 25, 2004 between  Stan  Abrams  and
                  Nathaniel Energy
          10.2    Agreement dated July 16, 2004 among EcoIdea S.r.l., Electronic
                  Solar   S.r.l,  European   Waste  Solutions, Ltd.,  L&R Energy
                  Company, LLC and Nathaniel Energy Corporation.
          10.3    Agreement dated as of July 16th, 2004 between Nathaniel Energy
                  Corporation and L&R Energy Company, LLC.
          31      Certification of the Principal Executive Officer and Principal
                  Accounting Officer pursuant to Rule 13a-14(a)or Rule 15d-14(a)
                  as  adopted pursuant  to Section 302 of the Sarbanes-Oxley Act
                  of 2002
          32      Certification of the Principal Executive Officer and Principal
                  Accounting  Officer  pursuant  to  18 U.S.C.  Section 1350, as
                  adopted  Pursuant to  Section 906 of the Sarbanes-Oxley Act of
                  2002

(b) Reports on Form 8-K:

One Current Report (one Amended) on Form 8-K were filed during the quarter ended
June 30, 2004 as follows:

Date of Report: June 8, 2004 Items Reported: 5

*Denotes  document  filed as an exhibit to our Current Report on Form 8-K for an
event dated December 31, 2002 and  incorporated  herein by reference.
**Denotes  document  filed as an exhibit to our Annual Report on Form 10-KSB for
the year ended December 31, 2003 and incorporated herein by reference.

                                       14


<PAGE>




                                   SIGNATURES

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

                          NATHANIEL ENERGY CORPORATION
                                  (Registrant)

Date: August 13, 2004





                          By:  /s/  George A. Cretecos
                             ----------------------------
                             George A. Cretecos
                             Chief Operating Officer
                             Nathaniel Energy Corporation



                                       15