U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q


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


                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001


                           COMMISSION FILE NO. 0-20975
                                               -------


                         TENGASCO, INC. AND SUBSIDIARIES
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


            TENNESSEE                                    87B0267438
  -------------------------------        --------------------------------------
  State or other jurisdiction of            (IRS Employer Identification No.)
  incorporation or organization


                 603 MAIN AVENUE, SUITE 500, KNOXVILLE, TN 37902
                -------------------------------------------------
                    (Address of principal executive offices)


                                 (865-523-1124)
                ------------------------------------------------
                (Issuer's telephone number, including area code)


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

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:  9,960,326 common shares at September
30, 2001.


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



<PAGE>


                         TENGASCO, INC. AND SUBSIDIARIES

                                TABLE OF CONTENTS


                                                                      PAGE
PART I.   FINANCIAL INFORMATION

   ITEM 1.   FINANCIAL STATEMENTS

   *  Condensed Consolidated Balance Sheets as of September 30,
      2001 and December 31, 2000.....................................  3-4

   *  Condensed Consolidated Statements of Loss for the three
      and nine months ended September 30, 2001 and 2000..............    5

   *  Condensed Consolidated Statements of Stockholders'
      Equity for the nine months ended September 30, 2001............    6

   *  Condensed Consolidated Statements of Cash Flows for the
      nine months ended September 30, 2001 and 2000..................    7

   *  Notes to Condensed Consolidated Financial Statements........... 8-11

   ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS
             OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS........12-17

   ITEM 3.   QUANTITATIVE AND QUALITATIVE
             DISCLOSURE ABOUT MARKET RISK............................   17

PART II.  OTHER INFORMATION

   ITEM 1.   LEGAL PROCEEDINGS.......................................   18

   ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS...............   19

   ITEM 6.   EXHIBITS AND 8-K REPORTS................................   19

   *  Signature......................................................   20


                                        2


<PAGE>

                         TENGASCO, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                     ASSETS


<TABLE>
<CAPTION>
                                                                       September 30, 2001      December 31, 2000
                                                                      --------------------    -------------------
                                                                          (UNAUDITED)
    <S>                                                              <C>                      <C>
     Current Assets:
       Cash and cash equivalents                                     $          918,947       $       1,603,975
       Trade accounts receivable, net                                         1,046,527                 684,132
       Accounts receivable                                                      150,000                       0
       Well participants receivable                                              80,874                  65,254
       Other current assets                                                     301,345                 251,345
                                                                     ----------------------   --------------------

     Total current assets                                                     2,497,693               2,604,706

     Oil and gas properties, net (on the basis of full cost
       accounting)                                                           13,368,909               9,790,047

     Completed pipeline facilities, net                                      14,704,636               4,200,000

     Pipeline facilities, under construction, at cost                                 0               6,847,038

     Property and equipment, net                                              1,626,651               1,677,432

     Other                                                                       55,613                 105,501
                                                                     ----------------------   --------------------
                                                                     $       32,253,502       $      25,224,724
                                                                     ======================   ====================
</TABLE>

      See accompanying notes to condensed consolidated financial statements


                                        3


<PAGE>


                         TENGASCO, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                         September 30,   December 31,
                                                             2001            2000
                                                         -------------   ------------
                                                          (UNAUDITED)
<S>                                                      <C>             <C>
Current liabilities
  Current maturities of long-term debt-related party     $    500,000    $    500,000
  Current maturities of long-term debt                      2,514,648       1,608,486
  Accounts payable-trade                                      952,836       1,016,462
  Accrued interest payable                                    213,856          56,657
  Accrued dividends payable                                   112,458          78,778
  Accrued liabilities                                          60,588          52,640
                                                         ------------    ------------

Total current liabilities                                   4,354,386       3,313,023

Long-term debt-related parties,
  less current maturities                                   4,805,728       4,845,000

Long-term debt, less current maturities                     1,276,405       2,263,599
                                                         ------------    ------------

Total long-term debt                                        6,082,133       7,108,599
                                                         ------------    ------------

Total liabilities                                          10,436,519      10,421,622
                                                         ------------    ------------
Preferred Stock
  Convertible redeemable preferred; redemption value
    $5,622,900 and $3,938,900; 56,229 and 39,389
    shares outstanding; respectively                        5,622,900       3,938,900
                                                         ------------    ------------
Stockholders' Equity
  Common stock, $.001 par value, 50,000,000 shares
    authorized; 9,960,326 and 9,295,558
    shares outstanding; respectively                            9,962           9,296
  Common stock dividend distributable (498,016 shares)            498               0
  Additional paid-in capital                               38,445,159      25,941,709
  Accumulated deficit                                     (22,261,536)    (15,086,803)
                                                         ------------    ------------

Total stockholders' equity                                 16,194,083      10,864,202
                                                         ------------    ------------

                                                          $32,253,502     $25,224,724
                                                         ============    ============
</TABLE>

      See accompanying notes to condensed consolidated financial statements


                                        4


<PAGE>


                         TENGASCO, INC. AND SUBSIDIAIRES

               CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

                                   (Unaudited)

<TABLE>
<CAPTION>
                                       For the Three Months Ended         For the Nine Months Ended
                                             September 30,                      September 30,
                                       --------------------------       ------------------------------
                                          2001            2000               2001             2000
                                       ----------      -----------      -------------      -----------
    <S>                                <C>             <C>              <C>                <C>
    Oil and gas revenues             $   2,433,758    $   1,666,583     $   5,745,144     $   4,116,778
    Equipment sales                        150,000                0           150,000                 0
                                     -------------    -------------     -------------     -------------

    Total revenues                       2,583,758        1,666,583        5,895,144          4,116,778
                                     -------------    -------------     ------------      -------------

    Costs and other deductions
      Production costs and taxes         1,112,471          664,526        2,463,401          1,920,087
      Depletion, depreciation
        and amortization                   217,551           63,000          486,008            189,000
      Interest expense                     248,328           95,686          577,342            299,844
      General and administrative
        costs                              763,569          679,479        2,567,876          1,794,501
      Legal and accounting                  58,436           78,983          321,916            278,124
                                     -------------    -------------     ------------      -------------

    Total costs and other deductions     2,400,355        1,581,674        6,416,543          4,481,556
                                     -------------    -------------     ------------      -------------

    Net income (loss)                      183,403           84,909         (521,399)          (364,778)
                                     -------------    -------------     ------------      -------------

    Dividends on preferred stock           112,458           66,845          278,725            178,778
                                     -------------    -------------     ------------      -------------

    Net income (loss) attributable
      to common shareholders         $      70,945    $      18,064     $   (800,124)     $    (543,556)
                                     -------------    -------------     ------------      -------------

    Net income (loss) attributable
      to common shareholders
      Per share basic and diluted    $        0.01    $        0.00     $      (0.08)     $       (0.06)
                                     -------------    -------------     ------------      -------------

    Weighted average shares
      outstanding                       10,393,140        9,318,097       10,303,126          9,153,935
                                     -------------    -------------     ------------      -------------
</TABLE>

      See accompanying notes to condensed consolidated financial statements


                                        5


<PAGE>

                         TENGASCO, INC. AND SUBSIDIARIES

            CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                                   (Unaudited)

<TABLE>
<CAPTION>
                                         Common Stock           Common Stock      Additional
                                         ------------             Dividend         Paid In       Accumulated
                                     Shares        Amount       Distributable      Capital         Deficit
                                   ----------    ---------     ---------------    -----------    -----------
<S>                                <C>           <C>           <C>                <C>            <C>
Balance December 31, 2000          9,295,558      $  9,296               0      $   25,941,709 $ (15,086,803)

Common stock issued
with 5% stock dividend                     0             0             498           6,374,111    (6,374,609)

Common stock issued in
private placements, net              358,733           359               0           3,640,840             0

Common stock issued on
conversion of debt                    33,872            34               0             221,967             0

Common stock issued as a
charitable donation                    1,159             1               0              14,776             0

Stock options exercised              258,657           259               0           2,180,768             0

Conversion of preferred stock
to common stock                       12,347            13               0              70,988             0

Dividends on convertible
redeemable preferred stock                 0             0               0                   0      (278,725)

Net loss for the nine months
ended September 30, 2001                   0             0               0                   0      (521,399)
                                   ---------      --------            ----      -------------- -------------
Balance, September 30, 2001        9,960,326      $  9,962            $498      $   38,445,159 $ (22,261,536)
                                   =========      ========            ====      ============== =============
</TABLE>

      See accompanying notes to condensed consolidated financial statements


                                        6


<PAGE>


                         TENGASCO, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                   For the Nine                 For the Nine
                                                                                   Months Ended                 Months Ended
                                                                                September 30, 2001           September 30, 2000
                                                                                    (UNAUDITED)                   (UNAUDITED)
                                                                                    -----------                   -----------
<S>                                                                                <C>                       <C>
Operating activities
    Net loss                                                                     $     (521,399)              $      (364,778)
    Adjustments to reconcile net loss to net cash
    Used in operating activities:
    Depletion, depreciation and amortization                                            486,008                       189,000
    Compensation paid in stock options                                                   55,200                             0
    Changes in assets and liabilities
       Accounts receivable                                                             (528,015)                     (156,101)
       Other current assets                                                             (50,000)                      (73,103)
       Accounts payable                                                                 (63,626)                     (232,661)
       Accrued liabilities                                                                7,948                      (133,617)
       Accrued Interest payable                                                         157,199                             0
                                                                                 --------------               ---------------

Net cash used in operating activities                                                  (370,667)                     (771,260)
                                                                                 --------------               ---------------

Investing activities
       Net additions to oil and gas properties                                       (3,871,362)                     (796,682)
       Net additions to pipeline facilities and other
         property and equipment                                                      (3,800,325)                   (3,060,741)
       Decrease in restricted cash                                                            0                       625,000
       Other assets                                                                      49,888                        23,000
                                                                                 --------------               ---------------

Net cash used in investing activities                                                (7,621,799)                   (3,209,423)
                                                                                 --------------               ---------------

Financing activities
       Proceeds from borrowings                                                       1,000,000                     3,945,595
       Repayments of borrowings                                                      (1,120,304)                   (2,081,434)
       Dividends paid on convertible redeemable preferred stock                        (245,045)                     (178,781)
       Proceeds from private placements of common stock ,net,
         and exercise of stock options                                                6,003,805                     2,696,700
       Proceeds from private placements of preferred stock                            1,755,000                     1,950,000
                                                                                 --------------               ---------------

Net cash provided by financing activities                                             7,393,456                     6,332,080
                                                                                 --------------               ---------------

Net change in cash and cash equivalents                                                (685,028)                    2,351,397

Cash and cash equivalents, beginning of period                                        1,603,975                       420,590
                                                                                 --------------               ---------------

Cash and cash equivalents, end of period                                         $      918,947               $     2,771,987
                                                                                 ==============               ===============
</TABLE>

      See accompanying notes to condensed consolidated financial statements


                                        7


<PAGE>


                         Tengasco, Inc. And Subsidiaries
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

     (1)  The accompanying unaudited condensed consolidated financial statements
          have been prepared in accordance  with generally  accepted  accounting
          principles for interim financial information and with the instructions
          to Form 10-Q and Item 210 of Regulation S-X. Accordingly,  they do not
          include all of the  information  and  footnotes  required by generally
          accepted accounting principles for complete financial  statements.  In
          the opinion of management,  all adjustments (consisting of only normal
          recurring accruals)  considered necessary for a fair presentation have
          been included.  Operating  results for the nine months ended September
          30, 2001 are not  necessarily  indicative  of the results  that may be
          expected  for  the  year  ended   December   31,  2001.   For  further
          information,  refer to the Company's consolidated financial statements
          and footnotes  thereto for the year ended December 31, 2000,  included
          in the Company's annual report on Form 10-KSB.



     (2)  During  2000,  the Company  acquired  debt  financing in the amount of
          $3,850,000 from two members of the board of directors,  one affiliate,
          and two shareholders in order to complete construction of its pipeline
          from Swan Creek to  Kingsport.  The terms of the debt  provide for the
          directors to receive a throughput fee once production begins. This fee
          is to  continue  until the debt is repaid.  The  throughput  fee is 10
          cents per MMBtu  delivered  through the pipeline in  proportion to the
          director's  proportion of total debt.  The volume  delivered  shall be
          calculated on a monthly  basis.  The original  agreement  provided for
          quarterly  interest  payments  to begin June 2001.  The holders of the
          note agreed to extend the interest  repayment term to commence on July
          15, 2001. All other terms of the agreement remain in effect. Principle
          and interest  payments are being made monthly over the next fifty-four
          months. All payments are current.

          During  2000,  the  Company  acquired  debt  financing  from  a  major
          officer/stockholder  in the amount of  $995,000 in order to purchase a
          drilling rig.

          During 2000 the Company paid approximately $270,000 in consulting fees
          and  commissions  on equity  transactions  to a member of the Board of
          Directors.

          During the second  quarter 2001 the Company  acquired  debt  financing
          from a major  stockholder  in the  amount  of  $1,000,000.  This  note
          evidencing this indebtness  provides for monthly  interest payment due
          beginning July 1, 2001 at the annual stated rate of 15% with the total
          principle due April 26, 2002.

          See note 10 for subsequent payoff of debt

     (3)  During  the  third  quarter  of  2001,  the  Company  sold  two  fully
          depreciated  compressors to Miller Petroleum,  Inc. ("Miller") a joint
          venturer  with  the  Company,  for  $150,000.  In  exchange  for  this
          equipment,  the Company  agreed to accept  150,000  shares of Miller's
          stock  which  had an  approximate  stock  price of $1 per  share.  The
          Company recorded a receivable for $150,000 until the stock was legally
          transferred on October 16, 2001.

                                        8


<PAGE>


     (4)  In  accordance  with SFAS No. 128,  "Earnings  Per  Share",  basic and
          diluted loss per share are based on 10,393,140 weighted average shares
          outstanding  for the quarter  ended  September  30, 2001 and 9,318,097
          weighted  average shares  outstanding  for the quarter ended September
          30,  2000.  Weighted  average  shares  outstanding  for the nine month
          periods  ended  September  30,  2001 and  2000,  were  10,303,126  and
          9,153,935 respectively. These figures have been retroactively adjusted
          to reflect the 5% stock  dividend  declared on August 1, 2001 which is
          distributable  on October  1, 2001 (see Note 9).  During the three and
          nine month  periods  ended  September  30,  2001,  potential  weighted
          average common shares  outstanding  were  approximately  1,084,000 and
          1,230,000  shares,  respectively.  During  the  three  and nine  month
          periods ended September 30, 2000,  potential  weighted  average common
          shares  outstanding  were  approximately  900,000 and 920,000  shares,
          respectively.  These shares are not included in the computation of the
          diluted  loss per share  amount  because the Company was in a net loss
          position  and  their  effect  would  have  been  antidilutive  for the
          nine-month periods ended September 30, 2001 and 2000.

     (5)  SFAS No.  133,  "Accounting  for  Derivative  Instruments  and Hedging
          Activities,"  as amended,  is effective for all fiscal years beginning
          after June 15, 2000 (as amended by FAS 138).  This statement  requires
          recognition   of  all   derivative   contracts  as  either  assets  or
          liabilities  in the balance sheet and the  measurement of them at fair
          value. If certain conditions are met, a derivative may be specifically
          designated  as a hedge,  the objective of which is to match the timing
          of any gains or losses on the hedge  with the  recognition  of (i) the
          changes in the fair value of the hedged  asset or  liability  that are
          attributable  to the hedged  risk or (ii) the  earnings  effect of the
          hedged  forecasted  transaction.  For a derivative not designated as a
          hedging  instrument,  the gain or loss is  recognized in income in the
          period of change.  Historically,  the Company has not entered into any
          material  derivative  contracts  either to hedge existing risks or for
          speculative  purposes.  The adoption of the new standard on January 1,
          2001 did not affect the Company's financial statements.

          In December 1999, the SEC issued Staff Accounting Bulletin ("SAB") No.
          101 "Revenue  Recognition in Financial  Statements" which outlines the
          basic  criteria  that must be met to  recognize  revenue and  provided
          guidance for  presentation  of revenue and for  disclosure  related to
          revenue  recognition  policies in financial  statements filed with the
          SEC.  Adoption  of SAB No. 101 did not have a  material  impact on the
          Company's financial position or its results of operations.


                                        9


<PAGE>


          In  July  2001,  the  Financial   Accounting  Standards  Board  issued
          Statement of Financial  Accounting  Standard (SFAS) No. 141, "Business
          Combinations" and SFAS No 142. "Goodwill and Other Intangible Assets".
          SFAS No. 141  addresses the initial  recognition  and  measurement  of
          goodwill  and  other   intangible   assets   acquired  in  a  business
          combination  and SFAS No. 142 addresses this initial  recognition  and
          measurement  of  intangible  assets  acquired  outside  of a  business
          combination  whether  acquired  individually  or with a group of other
          assets. These standards require all future business combinations to be
          accounted for using the purchase  method of accounting.  Goodwill will
          no longer be amortized but instead will be subject to impairment tests
          at least  annually.  The  Company is required to adopt SFAS No 141 and
          142 on a  prospective  basis as of January 1, 2002,  however,  certain
          provisions of these new  Standards may also apply to any  acquisitions
          concluded subsequent to September 30, 2001. Presently, the adoption of
          these new standards has not affected the Company's financial condition
          or results of operations.

     (6)  During the nine months ended September 30, 2001, the Company converted
          $222,000  of debt  through  the  issuance  of 33,872  shares of common
          stock. Additionally,  the Company donated 1,159 shares of common stock
          to  a  charitable  organization  during  this  period.  The  donation,
          totaling  $14,777 was  recorded as a  charitable  contribution  and is
          included in general and  administrative  expenses in the  accompanying
          consolidated statement of loss for the nine months ended September 30,
          2001.  During the nine  months  ended  September  30, 2001 the Company
          converted  710  shares of  preferred  stock to common  stock  totaling
          $71,000.  During the nine months ended September 30, 2001, the Company
          sold  certain   equipment  in  exchange  for  150,000  shares  of  the
          purchaser's stock. The sale was recorded at $150,000.

     (7)  During the nine months  ended  September  30,  2001,  the Stock Option
          Committee had granted 75,000 options to purchase the Company's  common
          stock at  prevailing  market  prices.  The  options  were  granted  to
          employees  and  directors  of  the  Company  under  the  terms  of the
          Tengasco, Inc. Stock Incentive Plan.

          Additionally,   the  Company  extended  the  exercise  period  of  one
          employee's  stock  option  who  was  retiring  resulting  in  recorded
          compensation  of $55,200  during the nine months ended  September  30,
          2001.

     (8)  During the second  quarter of 2001,  the Company sold 17,550 shares of
          its  Series B 8%  Cumulative  Convertible  Preferred  stock  ($100 par
          value) pursuant to a private  placement  offering which  terminated on
          June 15, 2001. The funds raised through this offering, net of issuance
          cost will be used for the Company's drilling program in the Swan Creek
          field,  the  exploration  of new  geological  structures,  and working
          capital, as the Company deems appropriate.

     (9)  On August 1, 2001 Tengasco announced a 5% stock dividend distributable
          on October 1, 2001 to shareholders  of record of the Company's  common
          stock on  September  4,  2001.  Based on the  number of common  shares
          outstanding on the record date,  the Company  expects to issue 498,016
          new shares.


                                       10


<PAGE>


          The fair market value of the  additional  shares  issued,  aggregating
          $6,374,609,  was  charged to  accumulated  deficit,  and common  stock
          dividend  distributable and additional  paid-in-capital were increased
          by  $498  and   $6,374,111,   respectively.   All  references  in  the
          accompanying  financial  statements to the number of common shares and
          per share amounts are based on the  increased  number of shares giving
          retroactive effect to the stock dividend.

     (10) On November 8, 2001,  the Company  signed a credit  facility  with the
          Energy  Finance  Division of Bank One, N.A. in Houston,  Texas whereby
          Bank One has extended to the Company a revolving  line of credit of up
          to $35 million.  The initial  borrowing base under the facility is $10
          million and the borrowing  base will be adjusted upon periodic  review
          by Bank One of the Company's  oil and gas reserves.  The interest rate
          is the  Bank One  base  rate  plus  one-quarter  percent  which at the
          present  time is 5.25%.  On November  9, 2001,  funds from this credit
          line were used to (1) refinance existing indebtedness on the Company's
          Kansas properties ($1,427,309.25); (2) to repay the internal financing
          provided by  directors  and  shareholders  on the  Company's  recently
          completed    65-mile    Tennessee     intrastate    pipeline    system
          ($3,895,490.83);  (3) to prepay a note payable to  Spoonbill,  Inc. in
          the amount of  $1,080,833.34;  (4) to prepay a purchase money note due
          to M.E. Ratliff,  the Company's chief executive officer,  for purchase
          by the Company of a drilling  rig and related  equipment in the amount
          of $1,003,844.44; and (5) to prepay in full the remaining principal of
          the working  capital loan due  December  31, 2001 to Edward W.T.  Gray
          III, a director  of the  Company,  in the amount  $304,444.44.  All of
          these obligations  incurred interest at a rate  substantially  greater
          than the rate being  charged  by Bank One under the  credit  facility.
          Together with attorney  fees,  mortgage taxes in Kansas and Tennessee,
          and related fees,  the total drawn on November 9, 2001 from the credit
          facility was $7,901,776.65.

     (11) Certain  comparative  amounts have been reclassified to conform to the
          current period presentations.


                                       11


<PAGE>


                      Management's Discussion and Analysis
                Of Financial Condition and Results of Operations


The Company is in the business of exploring for,  producing and transporting oil
and  natural  gas in  Tennessee  and  Kansas  and  marketing  gas for  others in
Tennessee.  The  Company  has 243 oil and gas wells in Kansas and has 34 natural
gas and 10 oil wells in Tennessee.

With the completion of its 65 mile  pipeline,  the Company is now delivering its
gas to Eastman  Chemical  Company  ("Eastman"),  BAE SYSTEMS at the Holston Army
Ammunition Plant and anticipates being eventually able to sell substantially all
of its natural gas production  from the Swan Creek Field.  Deliveries of natural
gas to BAE SYSTEMS at the Holston facility  commenced on April 4, 2001.  Initial
deliveries of gas to Eastman were made on May 21, 2001. The Company is presently
selling  an  average  of  approximately  5,000  MMBTU of gas per  day,  which is
slightly  lower than in the prior  quarter  and than what was  anticipated  as a
result  of a  temporary  reduction  in gas flow  caused  by  larger  amounts  of
condensate in the pipeline than anticipated.  The Company is currently reworking
the  configuration  of the  compressors  and installing  equipment to remove the
condensate  and  sell  it.  It is  anticipated  that  the  installation  will be
completed  by  November  30 and gas sales  should rise to a level of 6,000 MMBTU
within a short period and gradually to 10,000 MMBTU.  The  condensate,  which at
present is  produced at the rate of  approximately  20 barrels per day, is to be
sold at the same  price the  Company  receives  for its crude oil.  The  Company
anticipates  that purchases under the agreement with BAE SYSTEMS will ultimately
be  1,800  MMBTU  of gas  per  day as  that  company's  production  requirements
increase. The Company is currently supplying all of the natural gas requirements
of BAE SYSTEMS and cannot determine at this time what their ultimate  production
schedule and thus their natural gas requirements may be.

On  November  8, 2001,  the  Company  signed a credit  facility  with the Energy
Finance  Division  of Bank One,  N.A.  in Houston,  Texas  whereby  Bank One has
extended  to the Company a revolving  line of credit of up to $35  million.  The
initial  borrowing base under the facility is $10 million and the borrowing base
will be adjusted upon  periodic  review by Bank One of the Company's oil and gas
reserves.  The interest rate is the Bank One base rate plus one-quarter  percent
which at the present time is 5.25%. On November 9, 2001,  funds from this credit
line were used to (1) refinance  existing  indebtedness on the Company's  Kansas
properties  ($1,427,309.25);  (2) to prepay the internal  financing  provided by
directors and shareholders on the Company's recently completed 65-mile Tennessee
intrastate  pipeline  system  ($3,895,490.83);  (3) to prepay a note  payable to
Spoonbill,  Inc. in the amount of $1,080,833.34;  (4) to prepay a purchase money
note due to M.E. Ratliff, the Company's chief executive officer, for purchase by
the  Company  of  a  drilling  rig  and  related  equipment  in  the  amount  of
$1,003,844.44;  and (5) to prepay in full the remaining principal of the working
capital loan due  December  31, 2001 to Edward W.T.  Gray III, a director of the
Company,  in the  amount  of  $304,444.44.  All of  these  obligations  incurred
interest at a rate substantially greater than the rate being charged by Bank One
under the credit  facility.  Together with  attorney's  fees,  mortgage taxes in
Kansas and Tennessee, and related fees, the total drawn on November 9, 2001 from
the credit facility was $7,901,776.65.


                                       12


<PAGE>


The Company's plan of operations  for the period ending  December 31, 2002 calls
for the drilling of a minimum of 30 additional  wells in the Swan Creek Field at
a cost of approximately $250,000 per well. During the first nine months of 2001,
the  Company  drilled  12 wells  in the  Swan  Creek  Field,  all of which  were
successful  resulting in 9 additional gas wells and 3 additional oil wells.  The
Company anticipates that as a result of sales of natural gas from its Swan Creek
Field and the acquisition of the Bank One line of credit it will have sufficient
funds to complete the drilling program.

The Company's present plan of operations also includes  contracting for sales of
additional  volumes of natural  gas not only to Eastman and BAE Systems as their
needs increase,  but to other industrial  customers in the Kingsport,  Tennessee
area.   Negotiations  with  such  additional  potential  customers  are  in  the
preliminary  stages.  Other large  industrial  customers in Kingsport  presently
served by an interstate pipeline include Willamette Paper,  General Shale (brick
manufacturer) and AFG Glass.

The aggregate  requirement of these potential customers exceeds the requirements
of Eastman.  The Company has not entered into any  contracts for sales to any of
these  potential  customers,  and no assurances  can be made that such contracts
will  be  agreed  upon.  However,  the  Company  plans  to  fully  exploit  this
significant  market  potential in the  Kingsport  area for serving  large volume
industrial  customers  assuming  that  sufficient  volumes of natural gas can be
produced and  transported  through the  Company's  pipeline.  In  addition,  the
Company's  subsidiary,   Tengasco  Pipeline  Corporation,  has  entered  into  a
franchise  agreement  with the City of Kingsport  that grants it  authority  for
twenty years to construct  facilities and to sell and distribute  natural gas to
all classes of customers  listed herein.  The franchise  agreement is subject to
approval by the Tennessee Regulatory Authority.  The Company expects to file for
approval shortly and anticipates that such approval will be granted.

The Company's wholly owned subsidiary, Tengasco Pipeline Corporation,  installed
and operates a new natural gas utility  service to  residential,  commercial and
industrial  users in Hancock  County,  Tennessee for the Powell  Valley  Utility
District.  The Powell Valley District  previously had no natural gas facilities.
The system was installed in the year 2000 and  deliveries of gas to customers in
Sneedville  began in the first  quarter of 2001.  Revenues to date from sales of
gas have been limited due to the small number of initial residential  customers.
The system will be  gradually  expanded  over time to serve as many of the 6,900
residential  and  commercial  customers  in the  county  as may be  economically
possible.  The system is currently  being  extended  approximately  two miles in
order to serve a new industrial customer in the Sneedville industrial park.

The Company plans to drill five new wells in Ellis and Rush Counties,  Kansas on
its  existing  Kansas  leases  during the  remainder  of this  calendar  year in
response to drilling  activity in the area establishing new areas of production.
During this  quarter,  the Company  successfully  drilled the Dick No. 7 well in
Kansas and completed the well as an oil well. The Company is also engaged, for a
fee, to gather the gas  produced  from wells  owned by others  located in Kansas
adjacent to the Company's wells and near the Company's gathering lines.


                                       13


<PAGE>


The Company's plans for its Kansas  properties  include  maintaining the current
productive   capacity  of  its  existing  wells  through  normal  workovers  and
maintenance  of the wells,  performing  gathering or sales services for adjacent
producers,   and  expanding  the  Company's  own  productions  through  drilling
additional wells. In addition,  there are several capital  development  projects
that the Company is  considering  with  respect to the Kansas  Properties  which
include   recompletion  of  wells  and  major  workovers  to  increase   current
production. These projects when completed are expected to increase production in
Kansas.

The  Company's  plan  of  operation  also  includes  exploration  in six or more
additional  major  geological  structures  in the East  Tennessee  area that are
similar  to the Swan  Creek  structure  and which the  Company's  geology  staff
indicate have a high probability of producing hydrocarbons.

The Company has either  acquired  seismic  data on these  structures  from third
party sources,  or is conducting its own seismic studies with its own trucks and
equipment. The seismic data is being analyzed at facilities of the University of
Tennessee  as  part  of the  strategic  alliance  between  the  Company  and the
University of Tennessee.  The seismic analysis is continuing and related leasing
activities have begun based on initial analysis of seismic results. The analysis
should be  completed  in  approximately  six months,  and the  Company  plans to
conduct exploration activities in these new areas.

On August 10,  2001,  the Company and Penn  Virginia  Oil & Gas  Corporation,  a
subsidiary of Penn Virginia Corporation entered into a joint operating agreement
to  explore,  drill,  and  develop a certain  area of  mutual  interest  in East
Tennessee and southern  Virginia.  The area of mutual interest is in addition to
the six  areas  described  above  identified  as  potentially  productive.  Both
companies will share equally all lease acquisition  costs,  seismic  exploration
and analysis costs,  drilling and operating  costs, as well as the proceeds from
production.  Penn  Virginia  is named as the  initial  operator  under the joint
operating  agreement.  Penn Virginia has begun the seismic  program and drilling
operations will be based on the results of seismic  analysis.  While the Company
anticipates  the  possibility  of  significant  production  as a result  of this
venture,  no assurances  can be made at this time of the amount of reserves that
may be discovered or produced in the course of this venture.

The Company has no plans,  at present,  to increase the number of its  employees
significantly.

This plan of operations is based upon many variables and estimates, all of which
may change or prove to be other than or different from information relied upon.

The information contained in this Report, in certain instances, includes certain
forward-looking  statements.  When  used in this  document,  the  words  budget,
budgeted,  anticipate,  expects,  estimates,  believes,  goals or  projects  and
similar expressions are intended to identify forward-looking  statements.  It is
important to note that the Company's actual results could differ materially from
those projected by such forward-looking statements.


                                       14


<PAGE>


Important  factors that could cause  actual  results to differ  materially  from
those projected in the forward-looking  statements include,  but are not limited
to, the following: production variances from expectations, volatility of oil and
gas prices,  the need to develop and replace reserves,  the substantial  capital
expenditures  required  for the  drilling of wells and the related  need to fund
such capital  requirements  through  commercial  banks and/or public  securities
markets,  environmental  risks,  drilling and operating risks,  risks related to
exploration and  development  drilling,  the uncertainty  inherent in estimating
future oil and gas production or reserves,  uncertainty  inherent in litigation,
competition,  government regulation, and the ability of the Company to implement
its business  strategy,  including  risks  inherent in  integrating  acquisition
operations into the Company's operations.

Results of Operations and Financial Condition

Comparison of the Quarters Ending September 30, 2001 and 2000

The  Company  recognized  $2,433,758  in oil and gas  revenues  from its  Kansas
Properties and the Swan Creek Field during the third quarter of 2001 compared to
$1,666,583  in the third  quarter of 2000.  This  increase in  revenues  was due
primarily to gas production from the Swan Creek Field in the third quarter.  The
Swan Creek Field  produced  434,557 MCF of gas,  resulting in  $1,090,000 of net
revenues.  Although  production was  approximately  the same during the quarters
ending September 30, 2001 and 2000, Kansas oil revenues were down  approximately
$87,000 and gas revenues were down  approximately  $123,000 in the third quarter
of 2001 due to a decrease  in oil  prices  from the third  quarter of 2000.  Oil
prices in the third  quarter of 2000 were  approximately  $29.50 per BBL and gas
prices were approximately  $4.10 per MCF whereas the prices in the third quarter
of 2001 were  approximately  $24.25  per BBL and gas prices  were  approximately
$2.70 per MCF.  Additionally,  during the three months ended September 30, 2001,
the Company sold two fully depreciated compressors, resulting in other income of
$150,000.

The Company realized net income  attributable to common  shareholders of $70,945
($.01 per share of common stock) during this period  compared to a net income in
the third quarter of 2000 to common  shareholders  of $18,064 ($.00 per share of
common stock).

Production  costs and  taxes in the third  quarter  of 2001 of  $1,112,471  were
higher when compared to $664,526 in the third  quarter of 2000.  The increase is
primarily due to production  cost,  severance taxes and gas royalties  resulting
from the increased production from the Swan Creek Field.

Depreciation,  Depletion and Amortization  expense for the third quarter of 2001
was $217,551,  compared to $63,000 in the third  quarter of 2000.  This increase
was primarily due to depreciation being taken on the Company's completed 65-mile
pipeline for the first time in the year 2001. Other increases  include increases
in depletion and an increase in depreciation on additional  equipment  purchased
in late 2000.

Interest  expense  for the third  quarter of 2001 was  $248,328  as  compared to
$95,686  in the third  quarter  of 2000.  This  increase  was due to  additional
interest cost associated with necessary financing for the completion of Phase II
of the Company's 65-mile pipeline.


                                       15


<PAGE>


General and  Administrative  Expenses  for the third  quarter of 2001  increased
$84,090 from $679,479 in the third  quarter of 2000.  Most of this cost increase
was to expand insurance coverage including blowout insurance for the Company and
also for the Company's medical insurance plan.

Legal and accounting  fees  decreased  $20,547 from the third quarter of 2000 as
several legal matters were settled late in the year 2000.

During the three months ended September 30, 2001, the Company incurred  $398,479
of additional capitalized costs associated with the completion of the Swan Creek
Pipeline.

Comparison of the Nine Month Periods Ending September 30, 2001 and 2000.

The Company  recognized  $5,745,144  in oil and gas revenues from the Kansas and
Swan Creek oil and gas fields  during the nine months ended  September  30, 2001
compared to  $4,116,778  for the nine months  ended  September  30,  2000.  This
$1,778,366  increase in revenues was due  primarily to gas  production  from the
Swan Creek Field in the second and third  quarters  of 2001.  In the nine months
ended  September  30, 2001,  the Swan Creek Field  produced  646,958 MCF of gas,
resulting in $1,800,491 of net revenues. Kansas gas revenues for the nine months
ended September 30, 2001 were  approximately  $276,000 higher than those for the
nine-month  period ended  September 30, 2000. This change was due to an increase
in price per MCF from the nine  months  ended  September  30,  2000;  all of the
increase was in the first  quarter of 2001 as prices were down in the second and
third quarters of 2001.  Although  production was  approximately the same during
the nine months ending  September  30, 2001 and 2000,  Kansas oil and Swan Creek
oil revenues were down approximately $300,000 in the nine months ended September
30,  2001  compared  to  the  same  period  in  2000  due  to  price  decreases.
Additionally, during the three months ended September 30, 2001, the Company sold
two fully depreciated compressors, resulting in other income of $150,000.

Although the Company's nine month revenues  increased from the nine months ended
September  30,  2000,  the Company  incurred a net loss  available to holders of
common stock of $800,124 (0.08 per share of common stock) compared to a net loss
available  to holders  of common  stock of  $543,556  ($0.06 per share of common
stock) for the nine months ended September 30, 2000.

The increase in the loss was due to the following factors:

     Production costs and taxes for the first  nine-months of 2001 of $2,463,401
     were higher  compared to $1,920,087  in the first nine months of 2000.  The
     increase is primarily due to production  costs,  severance  taxes,  and gas
     royalties  resulting  from the  increased  production  from the Swan  Creek
     Field.  Also,  during the first nine  months of 2001 the  Company  incurred
     additional   maintenance  costs  in  Swan  Creek  in  connection  with  the
     preparation of production beginning in April of 2001.


                                       16


<PAGE>


     Depreciation, Depletion and Amortization expenses for the nine months ended
     2001 were $486,008, compared to $189,000 for the first nine months of 2000.
     Approximately $147,000 of this increase was due to depreciation being taken
     on the  pipeline  for the first time in the second  and third  quarters  of
     2001.  Other increases  include an increase in depletion and an increase in
     depreciation on additional equipment purchased in late 2000.

     Interest  expense  for the  nine  months  ending  September  30,  2001  was
     $577,342,  as  compared  to  $299,844  in  2000.  This  increase  is due to
     additional  interest cost  associated  with financing for the completion of
     Phase II of the Company's  65-mile  pipeline.  This increase was reduced by
     interest cost of approximately  $148,000 which was capitalized in the first
     three months of 2001 during construction of the pipeline.

     General  and  Administrative  Expenses  for the first  nine  months of 2001
     increased  $773,375  from  $1,794,501  in the  first  nine  months of 2000.
     Approximately $320,000 of this increase was due to an increase in insurance
     to  expand  coverage  including  blowout  insurance  for  the  Company  and
     approximately   $196,000  was   attributable  to  public   relations  costs
     associated with producing the annual report,  the proxy statement and press
     releases.  The  Company  also  incurred a $55,200  compensation  adjustment
     resulting from the extension of the exercise  period for options granted to
     an  employee.   Engineering   service  and   professional   fees  increased
     approximately $100,000 for reserve analysis.

     Legal and accounting  fees  increased  $43,792 for the first nine months of
     2001.  The increase was for  additional  services  provided by our auditors
     associated  with  year-end  filings,  the proxy  statement  and the  annual
     reports.

During the nine months ended September 30, 2001, the Company incurred $3,724,479
of additional capitalized costs associated with the Swan Creek Pipeline.

On March 8, 2001,  the  pipeline was ready for its  intended  use;  accordingly,
pipeline  facilities under  construction were reclassified to completed pipeline
facilities on the accompanying condensed consolidated balance sheet at September
30, 2001.

ITEM 3    QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK:

The Company has risk  exposure for  interest  rates on its  outstanding  debt. A
significant  portion of the  Company's  long-term  debt is based upon  published
prime rates.  Interest rates have recently been somewhat volatile,  and although
it is difficult to predict future  fluctuations of interest rates  volatility is
expected to continue.

The  Company's  major market risk  exposure is in the pricing  applicable to its
natural gas and crude oil  production.  Historically,  prices  received  for gas
production have been volatile and unpredictable.  For example,  gas prices as of
December  31,  2000 was  $9.77  per MCF  compared  to $2.70 per MCF in the third
quarter of 2001. Pricing volatility is expected to continue.


                                       17


<PAGE>


ITEM 2    CHANGES IN SECURITIES AND USE OF PROCEEDS

During the nine months ended  September 30, 2001,  358,733  shares of restricted
common  stock were sold in a private  placement  (of which  111,111  shares were
issued  during the third  quarter),  33,872  shares were issued  pursuant to the
conversion of  convertible  notes (of which 11,804 shares were issued during the
third  quarter),  258,657  shares of common  stock were  issued  pursuant to the
exercise of options (of which 46,300 was in the third quarter),  the majority of
which were granted  under the Tengasco,  Inc.  Stock  Incentive  Plan and 12,347
shares were issued  pursuant to the conversion of 710 shares of preferred  stock
to common stock in the second quarter.

During the second  quarter of 2001, the Company sold 17,550 shares of its Series
B 8%  Cumulative  Convertible  Preferred  stock  ($100 par value)  pursuant to a
private  placement  offering which terminated on June 15, 2001. The funds raised
through  this  offering,  net of  issuance  cost will be used for the  Company's
drilling  program in the Swan Creek fields,  the  exploration  of new geological
structures, and working capital, as the Company deems appropriate.

ITEM 6    EXHIBITS AND 8-K REPORTS.

     During the quarter  ending  September 30, 2001 the Company did not file any
Reports on Form 8-K.

     The following exhibits are filed herewith:

EXHIBITS  10.21  Credit  Agreement  -  Reducing  Revolving  Line of Credit Up to
$35,000,000  from Bank One,  N.A. to Tengasco,  Inc.,  Tennessee  Land & Mineral
Corporation and Tengasco Pipeline Corporation dated November 8, 2001.


                                       18


<PAGE>

PART II. OTHER INFORMATION

ITEM 1    LEGAL PROCEEDINGS

On October 10, 2001 an arbitration hearing was held by the American  Arbitration
Association  between the Company's wholly owned  subsidiary,  Tengasco  Pipeline
Corporation  ("TPC"),  and  King  Pipeline  &  Utility  Company  ("King"),   the
contractor  for the  construction  of Phase II of the  Company's  pipeline.  The
arbitration was held to resolve  disputes  concerning final billings by King for
the pipeline construction.  King made four claims, seeking (1) payment for straw
matting done by King on slopes calculated at two dollars per square foot; (2) to
retain  payment it had  received for  clearing  and  grubbing  charges;  (3) the
release of a  currently  retained  sum of  $46,585,  to which TPC made no claim,
presently  being held in escrow pending  outcome of ongoing  litigation  between
King and King's boring subcontractor;  and (4) payment of $94,000 billed by King
for alleged  extra work it  performed in trenching at a depth deeper than called
for by the contract.

On  October  31,  2001 the  arbitrator  issued his award  finding  that King was
entitled to recover the sum of  $266,390.66  for straw matting work performed by
King, calculated at $2 per square foot as sought by King; that King was entitled
to retain the $72,500  payment made to it by TPC for clearing and grubbing work,
and that the retained sum be released  from escrow.  The  arbitrator  denied all
relief  sought by King for extra  charges in the  amount of  $94,000  for deeper
trenching,  and awarded King its attorney's fees of approximately  $14,000.  The
Company is examining the  possibility of appeal of the award,  since the Company
believes that the arbitrator's  ruling is not supported by the record presented.
However,  available  grounds  for  appeal  appear  extremely  limited  and it is
therefore  unlikely  that an  appeal  will  occur.  In the  event an  appeal  is
unavailable and payment is made to satisfy the award, then based on the evidence
presented  at the  arbitration  hearing,  the  Company  and TPC  intend  to seek
recovery of the payments made to King as an additional  element of damages being
sought from Caddum, Inc., the project engineer,  in an action now pending in the
United States District Court for the Eastern District of Tennessee entitled C.H.
FENSTERMAKER & ASSOCIATES, INC. V. TENGASCO, INC. No. 3:01-CV-2.

Any  settlements  paid  to King  would  be an  addition  to  completed  pipeline
facilities.


                                       19


<PAGE>


SIGNATURES


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


Dated:  November 14, 2001           TENGASCO, INC.


                                    By: /s/ Harold G. Morris
                                       ----------------------------
                                       Harold G. Morris, President


                                    By: /s/ Mark A. Ruth
                                       ----------------------------
                                       Mark A. Ruth,
                                       Chief Financial Officer



                                       20