**United
      States**


**Securities
      and Exchange Commission**


Washington,
      D.C. 20549





**FORM
      10-QSB**





(Mark
      One)





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


**EXCHANGE
      ACT OF 1934**





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





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


**EXCHANGE
      ACT OF 1934**





**For
      the transition period from_____ to _______**





**Commission
      file number 000-27783**





**NATHANIEL
      ENERGY CORPORATION**


(Name
      of
      Small Business Issuer in its Charter)





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





**8001
      South InterPort Blvd. Suite 260, Englewood, Colorado 80112**


(Address
      of principal executive offices) (Zip Code)





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





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





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes o No x




APPLICABLE
      ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS


DURING
      THE PRECEDING FIVE YEARS




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




APPLICABLE
      ONLY TO CORPORATE ISSUERS




State
      the
      number of shares outstanding of each of the issuer's class of common equity,
      as
      of the latest practicable date: November 6, 2007, 90,731,596 shares of common
      stock, $.001 par value.





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













**NATHANIEL
      ENERGY CORPORATION**





TABLE
                OF CONTENTSPART
                I.
            FINANCIAL
                INFORMATION
            PageItem
                1
            Financial
                Statements (unaudited)Consolidated
                Balance Sheets as of September 30, 2007 andDecember
                31, 2006
            2Consolidated
                Statements of Operations for the Three And Nine Monthsended
                September 30, 2007 and 2006
            3Consolidated
                Statements of Cash Flows for the Nine Months endedSeptember
                30, 2007 and 2006
            4Notes
                to Consolidated Financial Statements
            5Item
                2.
            Management’s
                Discussion and Analysis or Plan of Operation
            10Item
                3.
            Controls
                and Procedures
            16PART
                II.
            OTHER
                INFORMATIONItem
                1.
            Legal
                Proceedings
            17Item
                2.
            Unregistered
                Sales of Equity Securities And Use of Proceeds
            17Item
                3.
            Defaults
                Upon Senior Securities
            17Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            17Item
                5.
            Other
                Information
            17Item
                6.
            Exhibits
            17Signatures











i







**Nathaniel
      Energy Corporation**


**Consolidated
      Balance Sheets**


September
                  30,
                2007
                (unaudited)
              
              December
                  31,
                2006AssetsCurrent
                  assets:Cash
                  and cash equivalents
              
              $
              --
              
              $
              257,868Accounts
                  receivable
              
              
              6,715
              
              
              121,276Prepaid
                  expenses
              
              
              78,200
              
              
              40,277Total
                  current assets
              
              
              84,915
              
              
              419,421Property,
                  plant and equipment, net of accumulated depreciation
              
              
              745,784
              
              
              1,069,443Intangible
                  assets, net of accumulated amortization
              
              
              40,544
              
              
              193,423Deposits
              
              
              41,660
              
              
              72,895Total
                  assets
              
              $
              912,903
              
              $
              1,755,182Liabilities
                  and Stockholders' Equity (Deficit)Current
                  liabilities:Accounts
                  payable and accrued liabilities
              
              $
              1,132,134
              
              $
              981,169Accrued
                  compensation and payroll liabilities
              
              
              34,799
              
              
              39,917Accrued
                  interest
              
              
              31,249
              
              
              12,035Notes
                  payable, current portion
              
              
              647,742
              
              
              162,814Total
                  current liabilities
              
              
              1,845,924
              
              
              1,195,935Long-term
                  portion of notes payable
              
              
              124,143
              
              
              41,923Total
                  liabilities
              
              
              1,970,067
              
              
              1,237,858Stockholders'
                  Equity (Deficit):Preferred
                  stock, 10,000,000 shares of $.001 par value authorized, none issued
                  or
                  outstanding
              
              
              --
              
              
              --Common
                  stock, 200,000,000 shares of $0.001 par value authorized, 90,731,596
                  shares issued and outstanding at September 30, 2007 and December
                  31,
                  2006
              
              
              90,731
              
              
              90,731Common
                  stock to be issued
              
              
              2,735
              
              
              285Additional
                  paid-in capital
              
              
              60,944,996
              
              
              60,702,446Accumulated
                  deficit
              
              
              (62,095,626
              )
              
              (60,276,138
              )Total
                  Stockholders' Equity (Deficit)
              
              
              (1,057,164
              )
              
              517,324Total
                  Liabilities and Stockholders' Equity (Deficit)
              
              $
              912,903
              
              $
              1,755,182


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







2






**Nathaniel
      Energy Corporation**


**Consolidated
      Statements of Operations**


(Unaudited)




For
                  the Three Months Ended
              
              For
                  the Nine Months EndedSeptember
                  30,2007
              
              September
                  30,2006
              
              September
                  30,2007
              
              September
                  30,2006Revenue
              
              $
              23,345
              
              $
              350,716
              
              $
              327,660
              
              $
              900,975Cost
                  of revenue
              
              
              340,746
              
              
              362,671
              
              
              1,063,771
              
              
              804,999Gross
                  income (loss)
              
              
              (317,401
              )
              
              (11,955
              )
              
              (736,111
              )
              
              95,976Selling,
                  general and administrative expenses
              
              
              263,918
              
              
              391,338
              
              
              957,344
              
              
              1,363,581Research
                  and development expense
              
              
              2,000
              
              
              4,151
              
              
              70,776
              
              
              43,393Total
                  operating expenses
              
              
              265,918
              
              
              395,489
              
              
              1,028,120
              
              
              1,406,974Loss
                  from operations
              
              
              (583,319
              )
              
              (407,444
              )
              
              (1,764,231
              )
              
              (1,310,998
              )Other
                  income (expense)Gain
                  on disposal of equipment
              
              
              20,892
              
              
              --
              
              
              47,554
              
              
              --Interest
                  income (expense), net
              
              
              18
              
              
              4,353
              
              
              (13,714
              )
              
              (100,313
              )Impairment
                  loss
              
              
              (89,097
              )
              
              --
              
              
              (89,097
              )
              
              --Loss
                  from continuing operations
              
              
              (651,506
              )
              
              (403,091
              )
              
              (1,819,488
              )
              
              (1,411,311
              )Income
                  from discontinued operations, net of tax
              
              
              --
              
              
              --
              
              
              --
              
              
              193,428Gain
                  on sale of assets, net of tax
              
              
              --
              
              
              78,528
              
              
              --
              
              
              6,119,673Net
                  income (loss)
              
              $
              (651,506
              )
              $
              (324,563
              )
              $
              (1,819,488
              )
              $
              4,901,790Loss
                  per share from continuing operations, basic and diluted
              
              $
              (0.01
              )
              $
              (0.00
              )
              $
              (0.02
              )
              $
              (0.02
              )Income
                  per share from discontinued operations, basic and diluted
              
              
              --
              
              
              (0.00
              )
              
              --
              
              
              0.00Income
                  per share from gain on sale of assets, basic and diluted
              
              
              --
              
              
              0.00
              
              
              --
              
              
              0.07Net
                  income (loss) per share, basic and diluted
              
              $
              (0.01
              )
              $
              (0.00
              )
              $
              (0.02
              )
              $
              0.05Weighted
                  average common shares outstanding
              
              
              90,731,596
              
              
              90,731,596
              
              
              90,731,596
              
              
              90,715,781


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






3




**Nathaniel
      Energy Corporation**


**Consolidated
      Statements of Cash Flows**


(Unaudited)


For
                  the Nine Months EndedSeptember
                  30,2007
              
              September
                  30,2006Cash
                  flows from operating activities:Net
                  income (loss)
              
              $
              (1,819,488
              )
              $
              4,901,790**Adjustments
                  to reconcile net income (loss) to net cash provided by (used in)
                  operating
                  activities:**Depreciation
                  and amortization
              
              
              277,091
              
              
              306,720Impairment
                  loss
              
              
              89,097
              
              
              --Reserve
                  for bad debt
              
              
              8,104
              
              
              --Gain
                  on sale of assets
              
              
              --
              
              
              (6,119,673
              )Income
                  tax expense
              
              
              --
              
              
              759,000Disposition
                  of equipment
              
              
              (33,668
              )
              
              2,629Interest
                  expense
              
              
              21,476
              
              
              --Other
                  income
              
              
              (13,981
              )
              
              --Changes
                  in operating assets and liabilities:(Increase)
                  decrease in:Accounts
                  receivable
              
              
              106,457
              
              
              (13,610
              )Prepaid
                  expenses
              
              
              60,815
              
              
              15,087Other
                  assets
              
              
              31,235
              
              
              (8,875
              )Accounts
                  payable and accrued expenses
              
              
              326,497
              
              
              108,279Net
                  effect on cash from discontinued operations
              
              
              --
              
              
              (1,277,956
              )**Net
                  cash used in operating activities**
              
              
              (946,365
              )
              
              (1,326,609
              )Cash
                  flows from investing activities:Acquisition
                  of minority interest
              
              
              --
              
              
              (882,000
              )Proceeds
                  from the sale of equipment
              
              
              66,963
              
              
              --Equipment
                  and intangible asset purchases
              
              
              (9,532
              )
              
              (38,974
              )Cash
                  provided by discontinued operations
              
              
              --
              
              
              15,888,183**Net
                  cash provided by investing activities**
              
              
              57,431
              
              
              14,967,209Cash
                  flows from financing activities:Payments
                  on debt
              
              
              (113,934
              )
              
              (4,330,557
              )Proceeds
                  from issuance of notes and loans
              
              
              500,000
              
              
              123,240Proceeds
                  from common stock to be issued
              
              
              245,000
              
              
              --Cash
                  used in discontinued operations
              
              
              --
              
              
              (8,892,151
              )**Net
                  cash provided by (used in) financing activities**
              
              
              631,066
              
              
              (13,099,468
              )Net
                  increase (decrease) in cash
              
              
              (257,868
              )
              
              541,132Cash
                  and cash equivalents, beginning of period
              
              
              257,868
              
              
              260,032Cash
                  and cash equivalents, end of period
              
              $
              --
              
              $
              801,164Cash
                  paid for interest
              
              $
              6,162
              
              $
              1,394,464Cash
                  paid for income taxes
              
              $
              --
              
              $
              121,493Non
                  cash financing activity:Issuance
                  of note payable for equipment
              
              $
              107,294
              
              $
              --Issuance
                  of stock to settle accrued expenses, accounts and notes
                  payable
              
              $
              --
              
              $
              33


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






4





**Nathaniel
      Energy Corporation**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


SEPTEMBER
      30, 2007 and 2006


(Unaudited)





1.
      Significant Accounting Policies and Nature of Operations:





***Unaudited
      Interim Financial Statements***





The
      accompanying unaudited interim financial statements, which include the Company's
      wholly owned 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, 2006. In the opinion of management, the interim financial
      statements reflect all adjustments, including normal recurring adjustments,
      necessary for fair presentation of the interim periods presented. The results
      of
      operations for the three and nine months ended September 30, 2007 are not
      necessarily indicative of results of operations to be expected for the full
      year.





***Description
      of Business***





Nathaniel
      Energy Corporation is a renewable hydrocarbon-based waste to energy (“WTE”)
      company providing municipalities and industries with solutions to divert waste
      from landfills and clean alternative energy preferable to that of fossil fuels.
      Our primary focus is on our proprietary patented technology, the Thermal
      GasifierTM, which is a multi-stage gasification system designed to convert
      industrial and commercial waste, biomass, waste tires and other solid,
      hydrocarbon-based materials into “producer gas” that can be used to produce
      clean economical thermal and electrical energy, while exceeding the most
      stringent EPA and European Union emission regulations. We expect that our
      solutions will reduce air born carbon emission, claimed to contribute to global
      warming, that would otherwise be generated by these landfills or other fossil
      fuel based energy production.






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




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





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






5





**Nathaniel
      Energy Corporation**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS - Continued**


SEPTEMBER
      30, 2007 and 2006


(Unaudited)





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





During
      September 2005, we entered into a Purchase and Sale Agreement with Midstream
      Energy Services, LLC pursuant to which we agreed to sell the assets which
      comprise our helium and gas processing facilities and operations to Midstream.
      On March 7, 2006, we closed the Purchase and Sale Agreement and sold those
      assets. The results of operations of our helium and gas processing facilities
      and operations through the date of the closing are shown as income from
      discontinued operations in our statement of operations. The gain on the sale
      of
      our helium and gas processing facilities and operations is shown as gain on
      sale
      of assets in our statement of operations.





**Critical
      Accounting Policies**





The
      financial statements include the accounts of Nathaniel Energy Corporation and
      its subsidiaries. All material inter-company accounts and transactions have
      been
      eliminated in consolidation. Certain prior period amounts have been reclassified
      to conform to the current period presentation with no effect on net income
      or
      loss.





***Inventory***





Tire-derived-fuel
      (TDF) inventory is valued at its cost to produce a salable product 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 waste tire processing. TDF inventory value at September 30, 2007
      is
      zero.





The
      Thermal GasifiersTM which are built, owned and operated are valued at cost.
      Thermal GasifiersTM built as part of a joint venture arrangement are valued at
      cost, reduced by any contractual exposure to penalties contained in a contract
      which could be incurred if our Thermal GasifiersTM do not perform in accordance
      with contractual specifications. The Thermal GasifierTM inventory value at
      September 30, 2007 is zero.





***Research
      and Development***





Research
      and development expenditures, all of which relate directly to the design and
      development of our Thermal GasifierTM technology, are expensed as incurred. For
      the three and nine months ended September 30, 2007 and 2006, we incurred costs
      for outside resources and expensed $2,000 and $4,151, and $70,776 and $43,393
      respectively.





***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 the straight-line method. Estimated useful lives of the
      assets used in the computation of depreciation are as follows:





Machinery
                and equipment
            5
                yearsBuildings
                and improvements
            5-15
                yearsVehicles
            5
                years






6





**Nathaniel
      Energy Corporation**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS - Continued**


SEPTEMBER
      30, 2007 and 2006


(Unaudited)


***Long-Lived
      Assets***





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




***Revenue
      Recognition***





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





We
      recognize revenue from the sale of our Thermal GasifiersTM upon completion,
      delivery and customer acceptance, using the completed contract method of
      accounting. We recognize revenue for consulting services during the period
      those
      services are provided. We have recognized no revenue from the sale of our
      Thermal GasifiersTM as of September 30, 2007.




***Net
      Income (Loss) Per Common Share***





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





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





***Use
      of Estimates***





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






7






**Nathaniel
      Energy Corporation**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS - Continued**


SEPTEMBER
      30, 2007 and 2006


(Unaudited)





**2.
      Notes Payable**





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





**3.
      Related Party Transactions**





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





**4.
      Economic Dependency - Major Customer**





One
      customer accounted for approximately 33% and 26%, and 37% and 32% of our total
      revenue for the three and nine months ended September 30, 2007 and 2006,
      respectively.





**5.
      Common Stock**




During
      the three months ended September 30, 2007 Vista International, Inc., a related
      party, contributed $245,000 to us for working capital in exchange for 2,450,000
      shares of our common stock or $0.10 per share. At September 30, 2007 we have
      reflected those shares as common stock to be issued at par value and as
      additional paid in capital on our balance sheet.






8





**Nathaniel
      Energy Corporation**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS - Continued**


SEPTEMBER
      30, 2007 and 2006


(Unaudited)





**6.
      Business Segments**





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





-
      the
      alternative energy engineering in Englewood, Colorado and


-
      the
      tire fuel processing operation in Hutchins, Texas and corporate offices in
      Englewood, Colorado.


For
          the
          nine months ended September 30, 2007:
 Fuel
                  Processing
              
              Alternate
                  Energy
              
              Discontinued
                  Operations
              
              TotalRevenue
              
              $
              327,660
              
              
              --
              
              
              --
              
              $
              327,660Significant
                  non cash expenses- depreciation and amortization
              
              $
              202,255
              
              $
              74,836
              
              
              --
              
              $
              277,091Net
                  loss
              
              $
              (1,663,508
              )
              $
              (155,980
              )
              
              --
              
              $
              (1,819,488
              )Capital
                  expenditures
              
              $
              9,532
              
              
              --
              
              
              --
              
              $
              9,532Total
                  assets as of September 30, 2007
              
              $
              912,903
              
              
              --
              
              
              --
              
              $
              912,903
 
 For
        the
        nine months ended September 30, 2006:
 
 Fuel
                  Processing
              
              Alternate
                  Energy
              
              Discontinued
                  Operations
              
              TotalRevenue
              
              $
              900,975
              
              
              --
              
              
              --
              
              $
              900,975Significant
                  non cash expenses- depreciation and amortization
              
              $
              231,885
              
              $
              74,835
              
              
              --
              
              $
              306,720Net
                  income (loss)
              
              $
              5,275,254
              
              $
              (566,892
              )
              $
              193,428
              
              $
              4,901,790Capital
                  expenditures
              
              $
              38,974
              
              
              --
              
              
              --
              
              $
              38,974Total
                  assets as of September 30, 2006
              
              $
              2,186,012
              
              $
              200,414
              
              
              --
              
              $
              2,386,426


**7.
      Subsequent Events**





On
      October 4, 2007, we received an extension of time until November 30, 2007 from
      Mr. Strain within which to repay two promissory notes along with accrued
      interest which were due September 30, 2007. The two promissory notes are dated
      April 4, 2007 and April 16, 2007 in the amounts of $100,000 and $200,000,
      respectively.






9





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





**FORWARD
      LOOKING STATEMENTS**





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




·
            Our ability to raise capital necessary to implement
              our
              business plan. ·
            Our ability to finance and complete planned projects
              and
              facilities upgrades. ·
            Our
                ability to execute our business plan and commercialize the Thermal
                GasifierTM technology, including building Thermal GasifiersTM that meet
                customers' specifications and that meet local regulatory environmental
                and
                permit requirements.


·
            Risks
                related to dependency on a small number of customers.


·
            Our
                ability to satisfy our customers' expectations.


·
            Our
                ability to employ and retain qualified management and employees.


·
            Changes
                in government regulations which are applicable to our business including
                rules related to use of TDF under the Clean Air Act.


·
            The
                availability of a consistent, economically viable, and sustainable
                waste
                stream supply to fuel the Thermal GasifierTM operations.


·
            Changes
                in the demand for our products and services, including the impact
                from
                changes in governmental regulation and funding for alternative energy.


·
            Changes
                in domestic and global regulation related to greenhouse gas and carbon
                emissions.


·
            The
                degree and nature of our competition, including the reliability and
                pricing of traditional energy sources, economic viability of other
                alternative energy sources such as wind and solar power.


·
            Our
                ability to pay debt service on loans as they come due.


·
            Our
                ability to generate sufficient cash to pay our creditors.


·
            Disruption
                in the economic and financial conditions primarily from the impact
                of
                terrorist attacks in the United States and overseas, threats of future
                attacks, police and military activities and other disruptive worldwide
                political events.








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






10






**Company
      Overview**





We
      are
      committed to being a leader in the WTE and renewable energy industries. At
      a
      time when world-wide demand for electricity stretches both generating and
      transmission capacity and energy security threatens economic growth, we seek
      to
      provide clean, sustainable and profitable solutions to these problems. We are
      an
“Environmental Partner” developing and leveraging synergistic technologies,
      diverting readily available solid waste from landfills to the generation of
      clean and economical energy. We are also engaged in developing strategic
      collaborative partnerships for research, development and commercialization
      of
      technologies that provide clean high value carbon neutral fuels. The primary
      focus of these partnerships will be the commercialization of technologies that
      either eliminate or reduce carbon emission, claimed to contribute to global
      warming.





As
      we
      advance the “state-of-the-art” in WTE technology, our business model focuses on
      the development of qualified joint-venture partnerships and licensed partner
      companies to build, own and operate small distributed WTE plants. The
      characteristics of our ideal project are a combination of high energy demand
      and
      cost with on-site generation of large volumes of hydrocarbon based waste.
      Whether through joint-venture or licensed partner, we expect to develop
      efficient WTE infrastructures “inside the fence.” These projects reduce the
      environmental impact from waste disposal, and reduce dependence on fossil fuels
      while producing clean economical energy from that waste. The primary focus
      of
      our solutions is to reduce air born carbon emission that would otherwise be
      generated by disposing of waste in landfills or fossil fuel produced energy.
      We
      also expect to take advantage of carbon reduction credits to finance WTE
      projects that would not have been built without the benefit of those credits.





We
      seek
      to further expand our presence in the renewable energy and biofuels marketplace
      through strategic joint-venture partnerships. Through participation in
      commercially viable WTE projects co-located with biofuels/alcohol research
      and
      development we expect to utilize the “producer gas” generated by the Thermal
      Gasifier TM to produce other chemical by-products including alcohols.





Some
      of
      our WTE plants may have a sustainable supply of waste fuels available from
      the
      host/customer with no additional fuel needed. Other facilities may require
      additional fuel to utilize installed generation capacity, or they may need
      supplemental fuel to raise the average fuel grade (heating value) or the volume
      of fuel needed to efficiently operate the technology. We expect to use our
      knowledge of tire fuel processing operations to furnish tire-derived-fuel,
      if
      available, to those WTE plants that need supplemental fuel for those facilities.
      The tire fuel processing division will continue to expand and grow with the
      addition of new tire processing facilities. We will take advantage of our
      existing expertise in fuel procurement to increase throughput at various tire
      fuel processing facilities as we expand, create new markets for our
      tire-derived-fuel (as environmental regulations tighten up on our current
      customers) and position us as a “turn key” provider of WTE
      solutions.




On
      March
      7, 2006 we sold substantially all of the assets that comprise our helium and
      gas
      processing facilities and operations to Midstream Energy Services, LLC pursuant
      to a Purchase and Sale Agreement signed in September 2005. Revenue generated
      from our discontinued operations, the helium and gas processing
      business, provided operating and capital funds for improving our current
      tire fuel processing operations, in addition to, furthering the
      commercialization of our Thermal GasifiersTM. By improving and advancing our fuel
      processing division and furthering the commercialization of our patented
      technology, we plan to secure hydrocarbon-based WTE projects through our
      subsidiary Cleanergy, Inc. During the first quarter 2005, we formed Cleanergy,
      Inc., a Delaware corporation, as a wholly owned subsidiary for the purpose
      of
      advancing our business plan to commercialize our Thermal GasifierTM technology.
      Cleanergy has had no activity to date.





The
      tire
      fuel processing facility improvements and expansion which began in 2005 provided
      the foundation to model the tire processing facility on a global basis. The
      facility is strategically located less than a mile from the third largest train
      intermodal station in the nation and is currently the only waste tire storage
      and processing facility licensed by the State of Texas to operate in the Dallas
      metro area. During 2006, subsequent to the completion of our equipment
      installation and site improvements we increased the production and the volume
      of
      waste tires we process. We realized higher tipping fee revenues during 2006. The
      improvements enabled us to continue to increase revenue and cash flow from
      this operation through the first quarter of 2007. During the second quarter
      of
      2007, the facility was closed for cleanup and site improvement. During July
      2007, the facility reopened and commenced accepting waste tires and producing
      TDF.






11





On
      August 1, 2007, we appointed new officers and management with no management
      transition. The previous chief executive officer terminated all our employees
      prior to vacating his position on July 31, 2007 thereby preempting any attempt
      to transition to a new management team. The actions take by the previous chief
      executive officer was a violation of our stated “limits of authority”
policy. New management successfully retained all terminated employees.





During
      August 2007, our tire processing equipment accidentally jammed, damaging one
      major piece of equipment and causing the processing line and the tire processing
      facility to shut down.





The
      equipment failure and resulting business interruption were believed to be
      covered by insurance; however, the equipment insurance policy had been
      cancelled. Management was advised by the issuer that the policy had been
      cancelled in July 2007 for nonpayment of premiums. As a result of the insurance
      cancellation, we could not claim an estimated $110,000 of repair and business
      interruption costs. We subsequently obtained adequate equipment insurance
      from another carrier during the period.





We
      operate the tire fuel processing facility under permit with the Texas Commission
      on Environmental Quality, which expires in December 2007. We prepared our
      application for renewal of that permit and submitted the application on October
      17, 2007.





We
      expect to continue to improve our tire handling and product delivery
      capabilities to increase the efficiency and capacity of the facility. We expect
      to place orders for new tire shredding equipment during the fourth quarter of 2007 with expected delivery in early 2008. As a result of the
      long lead time on this new equipment and additional time to install, we do
      not
      expect the tire processing facility to be fully operational until the first
      quarter of 2008.





As
      of September 30, 2007, we have accrued $139,000 of expense for scrap and
      unusable waste tire removal.





During
      the three and nine months ended September 30, 2007, we generated $23,345 and
      $327,660 or 100% of our revenue from our tire fuel processing division. We
      have
      recognized no revenue from our Thermal GasifierTM business segment during the
      three and nine months ended September 30, 2007.





Our
      long
      term goal is to produce the majority of our revenue and cash flow from the
      commercialization of our Thermal GasifierTM technology through hydrocarbon-based
      WTE projects. We plan to focus the majority of our resources on this business
      operation.





We
      are
      actively involved in ongoing business development activities and historically,
      we have not had difficulty finding potential project opportunities. Currently
      the company is in the process of evaluating certain project opportunities and
      providing detailed proposals for selected qualified projects. We are currently
      in the process of completing a feasibility study for a WTE project in China.
      We
      expect to build, own and operate that project. The total waste material handled
      daily is expected to be approximately 1,600 tons during the first phase of
      deployment.





Worldwide,
      industries and municipalities seek solutions for diverting solid waste from
      landfills, lower cost and clean energy alternatives to fossil fuels and
      solutions which reduce carbon emission. Demand for these solutions is growing.
      A
      key to our success will be qualifying and wisely choosing among project
      opportunities and focusing our resources on projects with the greatest chance
      of
      success and returns for stockholders.





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






12




**Results
      of Operations**





The
      following tables set forth certain unaudited quarterly results of operations
      of
      Nathaniel Energy for the first three quarters of 2007. The quarterly operating
      results are not necessarily indicative of future results of operations.


Three
                  Months Ended (unaudited)March
                  31, 2007
              
              June
                  30, 2007
              
              September
                  30, 2007
              
              September
                  30, 2006
              
              September
                  2007 vs. 2006 Increase (decrease)$
              
              %Revenue
              
              $
              208,197
              
              $
              96,118
              
              $
              23,345
              
              $
              350,716
              
              $
              (327,371
              )
              
              (93
              )%Cost
                  of revenue
              
              
              339,227
              
              
              383,798
              
              
              340,746
              
              
              362,671
              
              
              (21,925
              )
              
              (6
              )%Gross
                  loss
              
              
              (131,030
              )
              
              (287,680
              )
              
              (317,401
              )
              
              (11,955
              )
              
              (305,446
              )
              
              (2,555
              )%Selling,
                  general and administrative expense
              
              
              361,114
              
              
              332,312
              
              
              263,918
              
              
              391,338
              
              
              (127,420
              )
              
              (33
              )%Research
                  and development
              
              
              68,776
              
              
              --
              
              
              2,000
              
              
              4,151
              
              
              (2,151
              )
              
              (52
              )%Total
                  operating expenses
              
              
              429,890
              
              
              332,312
              
              
              265,918
              
              
              395,489Operating
                  loss
              
              
              (560,920
              )
              
              (619,992
              )
              
              (583,319
              )
              
              (407,444
              )Interest
                  income (expense), net
              
              
              (3,382
              )
              
              (10,350
              )
              
              18
              
              
              4,353Impairment
                  loss
              
              
              --
              
              
              --
              
              
              (89,097
              )
              
              --Gain
                  on disposal of equipment
              
              
              8,181
              
              
              18,481
              
              
              20,892
              
              
              --Loss
                  from continuing operations before income taxes
              
              
              (556,121
              )
              
              (611,861
              )
              
              (651,506
              )
              
              (403,091
              )Gain
                  on sale of assets, net of tax
              
              
              --
              
              
              --
              
              
              --
              
              
              78,528Net
                  loss
              
              $
              (556,121
              )
              $
              (611,861
              )
              $
              (651,506
              )
              $
              (324,563
              )Net
                  loss per common share, basic and diluted
              
              $
              (0.01
              )
              $
              (0.00
              )
              $
              (0.01
              )
              $
              (0.00
              )Weighted-average
                  common shares outstanding-diluted
              
              
              90,731,596
              
              
              90,731,596
              
              
              90,731,596
              
              
              90,731,596Shares
                  outstanding at end of period
              
              
              90,731,596
              
              
              90,731,596
              
              
              90,731,596
              
              
              90,731,596


For
      the
      three months ended September 30, 2007 our revenue decreased by $327,371 or
      93%
      to $23,345 from $350,716 during the three months ended September 30, 2006.
      This
      decrease is due primarily to two reasons. During the third quarter 2006, our
      tire fuel processing operation significantly increased production and delivery
      of tire derived fuel to our customer and increased its acceptance of waste
      tires
      and resulting tipping fee revenue. During the third quarter 2007, we used our
      workforce to clean up the facility and prepare for the re-permitting process
      with the State of Texas. In addition, during August 2007, we had accidental
      damage to our tire shredding equipment. The cost to repair the damage is
      approximately the cost of new equipment. Management decided that new equipment
      should be purchased instead of repairing the existing equipment. Delivery lead
      time on new equipment is approximately three months. We do not expect to have
      the tire fuel processing facility in full operation until the first quarter
      of
      2008. We have operated a portion of the equipment to produce partial shred
      tires. We could not accept additional waste tires during the quarter due to
      clean up operations and limitation on the quantity of partial tire shreds we
      could store. These shreds do not constitute tire-derived fuel and could not
      be
      sold to our customer. As a result, both tipping fee and TDF revenue decreased
      by
      $244,371 during the third quarter 2007 from the same quarter in 2006. In
      addition, during the third quarter 2006, we recognized revenue of approximately
      $83,000 on a waste tire reclamation project awarded us by the State of Texas.
      We
      had no tire reclamation project revenue during the third quarter 2007. The
      tire
      fuel processing division generated all of our revenue during the third quarter
      of 2007 and 2006.




13


During
      the nine months ended September 30, 2007 revenue decreased $573,315 or 64%
      from
      $900,975 to $327,660. The decrease is primarily due to clean up operations
      on
      our tire fuel processing facility during the second and third quarter of 2007
      and accidental damage to our tire shredding equipment in August 2007, which
      halted the acceptance of waste tires on which we realize tipping fee revenue
      and
      production of TDF which we sell as fuel to our customer. Revenues from tipping
      fees and sale of TDF decreased by $490,315 from $817,975 for the nine months
      ended September 30, 2006 to $327,660 for the nine months ended September 30,
      2007. In addition, during the nine months ended September 30, 2006, we
      recognized revenue of approximately $83,000 on a waste tire reclamation project
      awarded us by the State of Texas. We had no tire reclamation project revenue
      during the third quarter 2007 resulting in a decrease in revenue of
      $83,000.




During
      the three months ended September 30, 2007, cost of revenue decreased by $21,925
      or 6% to $340,746 from $362,671 for the three months ended September 30, 2006.
      This decrease is primarily due to a reduction in payroll and payroll
      related costs due to a reduction in workforce and overtime cost incurred at
      the
      tire processing facility, a
      decrease in non-reoccurring outside service expense incurred during 2006 on
      a
      waste tire reclamation project, offset
      by
      an increase in reserves for scrap and site clean up.





During
      the nine months ended September 30, 2007, cost of revenue increased by $258,772
      or 32% to $1,063,771 from $804,999 for the nine months ended September 30,
      2006.
      The increase in cost of revenue is primarily due to increased costs of equipment
      repair and maintenance of approximately $103,000 and reserves for scrap and
      site
      clean up of approximately $178,000. These cost increases were partially offset
      by a reduction in payroll and payroll related expenses of approximately $33,000
      due to a reduction in workforce and overtime costs.





Gross
      loss for the three months ended September 30, 2007 was $317,401, an increase
      in
      gross loss of $305,446 or 2555% compared to gross loss of $11,955 for the three
      months ended September 30, 2006. The increase in gross loss is due primarily
      to
      our decrease in revenue which contributed $327,371 to our increase in gross
      loss, offset by a decrease in cost of revenue of $21,925.





Gross
      loss for the nine months ended September 30, 2007 was $736,111, an increase
      of
      $832,087 or 867% compared to gross income of $95,976 for the nine months ended
      September 30, 2006. The increase is gross loss for the three months ended
      September 30, 2007 is due to a reduction in revenue from our tire fuel
      processing operation of $573,315 and an increase in cost of revenue of
      $258,772.





Total
      selling, general and administrative expenses decreased by $127,420 or 33% from
      $391,338 for the three months ended September 30, 2006 to $263,918 for the
      three
      months ended September 30, 2007. The decrease in selling, general and
      administrative expenses for the three months ended September 30, 2007 is due
      primarily to a decrease in headcount and payroll and payroll related expenses
      of
      approximately $131,000.





For
      the
      nine months ended September 30, 2007, selling, general and administrative
      expenses decreased by $406,237, a 30% decrease from $1,363,581 for the nine
      months ended September 30, 2006 to $957,344. The decrease is primarily due
      to a
      decrease in payroll and related employee expenses of approximately $259,000
      due
      to reduction in headcount and payroll and payroll related expenses and a
      reduction of bonus expense. In addition, legal and accounting expenses decreased
      by approximately $137,000 from the nine months ended September 30, 2006, which
      had been incurred during the prior year for transaction related expenses from
      the sale of our helium and gas processing assets.





Net
      interest income decreased by $4,335 from $4,353 for the three months ended
      September 30, 2006 to $18 for the three months ended September 30, 2007 due
      primarily to the reduction of our investment of excess cash in temporary
      interest bearing deposit accounts. Net interest expense decreased by $86,599
      from $100,313 for the nine months ended September 30, 2006 to $13,714 for the
      nine months ended September 30, 2007 due primarily to payment of the majority
      of
      our interest bearing debt from the proceeds on the sale of our discontinued
      operations during the first quarter of 2006.





Impairment
      loss of $89,097 for the three and nine months ended September 30, 2007
      represents the write off of intangible assets consisting of the cost of
      engineering drawings and blueprints related to the Thermal Gasifiers TM installed
      in Italy. We are in the process of engineering changes to and improvements
      in
      the configuration and design of our Thermal Gasifier TM. These costs are expensed
      as incurred. In management’s opinion, the value of these intangible assets given
      the current engineering effort, is nominal.




14


Income
      from discontinued operations decreased from $193,428 for the nine months ended
      September 30, 2006 to $-0-
      for
      the nine months ended September 30, 2007 due primarily to the sale of the helium
      and gas facilities and operations to Midstream Energy Services, LLC on March
      7,
      2006. As a result of the sale, we recognized no income or expense from
      discontinued operations during the nine months ended September 30, 2007.





Gain
      on
      sale of assets, net of tax represents a gain of $78,528 and $6,119,673 for
      the
      three and nine months ended September 30, 2006, respectively, from the sale
      of
      our helium and gas processing facilities and operations to Midstream Energy
      Services, LLC on March 7, 2006. The gain is net of $759,000 of income tax
      expense. We recorded a deferred tax benefit of $759,000 during the fourth
      quarter of 2005 due to our expected use of approximately $2,000,000 of our
      net
      operating loss carry forward from 2005 and prior fiscal years along with losses
      we expected to incur during 2006 to offset the estimated 2006 gain resulting
      from the sale of the helium and gas processing operations’ assets. The reversal
      of the deferred tax benefit was included in gain on sale of assets, net of
      tax,
      during the first quarter of 2006.




Net
      loss
      increased by $326,943 to $651,506 for the three months ended September 30,
      2007
      from a net loss of $324,563 for the three months ended September 30, 2006 due
      primarily to an increase in our loss from continuing operations of $248,415
      and a reduction in gain on sale of assets of $78,528.




Net
      loss
      increased by $6,721,278 to $1,819,488 for the nine months ended September 30,
      2007 from net income of $4,901,790 for the nine months ended September 30,
      2006
      due primarily to the reduction on gain on sale of the helium and gas processing
      facilities and operations of $6,119,673, reduction of income from discontinued
      operations of $193,428 and an increase in our loss from continuing operations
      of
      $408,177.




**Liquidity
      and Capital Resources**





As
      of
      September 30, 2007 we owed $138,125 to financial institutions under installment
      notes with an average interest rate of 4.3%, all of which is secured by
      equipment or software. In addition, we have $500,000 of notes payable with
      an
      interest rate of 9% which is secured by our assets.





The
      remaining indebtedness consists of miscellaneous unsecured notes to unaffiliated
      third parties of $133,760.





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






Period
                ended September 30,2007
            
            2006Operating
                activities
            
            $
            (946,365
            )
            $
            (1,326,609
            )Investing
                activities
            
            
            57,431
            
            
            14,967,209Financing
                activities
            
            
            631,066
            
            
            (13,099,468
            )Net
                effect on cash
            
            $
            (257,868
            )
            $
            541,132








For
      the
      period ended September 30, 2007, the net change in cash used in operating
      activities of $946,365 is due primarily to net loss of $1,819,488 which is
      offset by non-cash depreciation and amortization expense of $277,091 and
      non-cash impairment loss of $89,097; a decrease in accounts receivable of
      $106,457; and an increase in accounts payable and accrued expenses of
      $326,497.





For
      the
      period ended September 30, 2007, the net change in cash provided by investing
      activities of $57,431 is primarily due to proceeds of $66,963 from the sale
      of
      unused equipment and vehicles.




15




For
      the
      period ended September 30, 2007, the net change in cash provided by financing
      activities of $631,066 is due to principal repayments of debt of $113,934 offset
      by issuance of notes of $500,000 and $245,000 received for common stock to
      be
      issued.





For
      the
      period ended September 30, 2006, the net change in cash used in operating
      activities of $1,326,609 is due primarily to a net income of $4,901,790,
      non-cash income tax expense of $759,000, depreciation and amortization expense
      of $306,720 and an increase in accounts payable and accrued expenses of $108,279
      offset by gain on sale of assets included in net income of $6,119,673 and the
      negative net effect on cash from discontinued operations of
      $1,277,956.





The
      net
      change in cash provided by investing activities of $14,967,209 is due to cash
      flows from discontinued operations of $15,888,183 offset by cash used for the
      acquisition of minority interest of $882,000 and asset additions of $38,974
      at
      our tire fuel processing operations during the nine months ended September
      30,
      2006.





The
      net
      change in cash used in financing activities of $13,099,468 is due to principal
      repayments of debt of $4,330,557, cash flows from discontinued operations
      related to repayment of debt of $8,892,151 offset by issuance of notes of
      $123,240 during the nine months ended September 30, 2006.





As
      of September 30, 2007, we have negative working capital of $1,761,009. The
      company’s negative working capital balance is due primarily to reduced revenues
      following the sale of the helium and gas processing facilities and assets
      combined with a loss of revenue from our tire fuel processing operations.
      Included in the calculation of our working capital deficit is an unsecured
      promissory note of $70,000, payable upon our receipt of payment for the Thermal
      GasifiersTM delivered for our customer in Italy during 2005. The obligation is
      expected to be extinguished out of future cash flows resulting from collection,
      if any, due us.





Nathaniel
      Energy had a cash balance of $-0- at September 30, 2007. The
      current cash on hand and revenue is insufficient to sustain our current
      operations during the fourth quarter 2007. Vista International, Inc., our new
      majority shareholder, has provided working capital for our ongoing operations
      during the current quarter. We expect to secure additional equity capital from
      Vista International, Inc. during the remainder of 2007 for engineering and
      market development of our Thermal GasifierTM , capital improvements and to fund
      ongoing operations. We cannot assure that we will be able to obtain any capital
      investment we seek, and if we do, we cannot predict the terms and conditions
      upon which that capital will be available to us.





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




**Item
      3. Controls and Procedures**





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





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


During
        the third quarter, the number of directors on the company’s board of directors
        was increased from two members to four members. During October 2007, two
        members
        of the board of directors were discharged and replaced by a new board member,
        bringing the number of members on our board to three members. There was no
        other
        change in the company's internal control over financial reporting during
        the
        company's most recently completed fiscal quarter that has materially affected,
        or is reasonably likely to materially affect, the company's internal control
        over financial reporting.






16






**PART
      2: OTHER INFORMATION**





**Item
      1. Legal Proceedings.**





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




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





None.





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





None.





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





None.





**Item
      5. Other Information.**





On
      September 24, 2007, Nathaniel Energy Corporation, received confirmation of
      a new
      contract to deliver Tire Derived Fuel (“TDF”) from its Hutchins, Texas tire
      recycling facility to Energis LLC. Energis LLC provides the fuel to its parent
      company, Holcim (US), Inc., which owns and operates cement producing facilities
      internationally. The TDF will be used by a Holcim facility in Midlothian, Texas.
      The effective date of the contract is September 1, 2007. The contract is
      renewable on an annual basis and provides for periodic increases in the price
      of
      TDF we deliver.





**Item
      6. Exhibits.**


(a)
      Exhibits.


3.1
      Change in Board of Directors*


31.1
      Certification of the Principal Executive Officer pursuant to Rule 13a-14(a)
      or
      Rule 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
      of
      2002


31.2
      Certification of the Principal Financial Officer pursuant to Rule 13a-14(a)
      or
      Rule 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
      of
      2002


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


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





*
      Denotes
      documents filed as an exhibit to our Current Report on Form 8-K dated July
      30,
      2007, September 31, 2007 and October 16, 2007 and incorporated herein by
      reference.






17





**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: November
              14, 2007By:
            */s/
                Barry J. Kemble*Barry
              J. KembleChief
              Executive OfficerNathaniel
              Energy Corporation