SECURITIES AND EXCHANGE COMMISSION

                          Washington, D.C.  20549

                                 FORM 10-K


             Annual Report Pursuant to Section 13 or 15(d) of
                  the Securities and Exchange Act of 1934


For the fiscal year ended December 31, 1997

Commission file number 2-70390


        SANCHEZ-O'BRIEN 1981-A DRILLING COMPANY
(Exact name of registrant as specified in its charter)


                 Texas                                      74-2216121
      (State or other jurisdiction of                    (I.R.S. Employer
       incorporation or organization)                   Identification No.)


5847 San Felipe  Suite 1900   Houston, Texas                       77057
  (Address of principal executive offices)                       (Zip Code)


    Registrant's telephone number, including area code: (713) 783-8000

        Securities registered pursuant to Section 12(b) of the Act:


                                                      Name of each exchange
      Title of each class                              on which registered
             None                                              None

        Securities registered pursuant to Section 12(g) of the Act:

                       Limited Partnership Interest
                             (Title of class)

    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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

    Aggregate market value of the shares held by non affiliates of the
registrant:  Non-Applicable
    Documents incorporated by reference:  None
<PAGE>





                  SANCHEZ-O'BRIEN 1981-A DRILLING COMPANY
               ANNUAL REPORT ON FORM 10-K DECEMBER 31, 1997


                                   INDEX

PART I

Item 1.   Business
Item 2.   Properties
Item 3.   Legal Proceedings
Item 4.   Submission of Matters to a Vote of Security Holders

PART II

Item 5.   Market for Registrant's Common Equity and Related
          Stockholder Matters
Item 6.   Selected Financial Data
Item 7.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations
Item 8.   Financial Statements and Supplementary Data
Item 9.   Disagreements on Accounting and Financial Disclosure

PART III

Item 10.  Directors and Executive Officers of the Registrant
Item 11.  Executive Compensation
Item 12.  Security Ownership of Certain Beneficial Owners
          and Management
Item 13.  Certain Relationships and Related Transactions

PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports
          on Form 8-K


SIGNATURES
<PAGE>
                                P A R T   I
Item 1.  Business

Purposes

    The registrant, Sanchez-O'Brien 1981-A Drilling Company (the "Drilling
Company"), is a limited partnership formed on December 18, 1980, pursuant to
the provisions of the Texas Uniform Limited Partnership Act.  On April 21,
1981, the effective date of the Securities Act of 1933 Registration covering
the offer and sale of the units (No. 2-70390), members of the National
Association of Securities Dealers, Inc. began the sale of limited partnership
interests.  The sales period was closed June 23, 1981 with the sale of 5,304
units for a sum of $26,520,000.  Sanchez-O'Brien Drilling Corporation (the
"General Partner"), the General Partner of the Drilling Company, contributed
$246,438 to the Drilling Company's capital.  Operations commenced on June 23,
1981.

Description of Business

    The Drilling Company was formed to become a general partner in
Sanchez-O'Brien 1981-A Drilling Partnership (the "Drilling Partnership") to
participate in oil and natural gas exploration, drilling, development,
production and marketing in the United States with Sanchez-O'Brien Oil & Gas
Corporation (the "Managing General Partner") as Managing General Partner.
All of these activities were conducted in the states of Texas, Louisiana,
Oklahoma, New Mexico, Colorado and Wyoming.  Substantially all of the
operations and activities of the Drilling Company relate to its interest in
the Drilling Partnership.

    As of December 31, 1997, forty-three wells have been drilled.  Of this
number, ten wells are commercially productive, twenty-four were dry holes
or have been depleted and abandoned, seven have been sold, and two are
shut-in.

Competitive Conditions

    The petroleum industry is comprised of a large number of entities, many
with greater financial resources than the Drilling Company, competing in the
exploration, development, production and marketing of oil and natural gas.

Employees

    The Drilling Company has no employees; however, the Managing General
Partner has a staff of geologists, petroleum engineers, landmen and
accounting personnel who administer all of the Drilling Company's operations.
The direct administrative and overhead expenses which are attributable to the
Drilling Company's operations are a cost of the Drilling Company.
<PAGE>
Major Purchasers

    Delhi Gas Marketing Corporation ("Delhi") purchased over 69% of the
Drilling Company's total oil and natural gas sales during the year ended
December 31, 1997 (See Note 3 to the Financial Statements).

Long-term Debt

    At December 31, 1997, The Drilling Company does not have any long term
debt.

Marketing Conditions

    For 1997, the average price of oil decreased to $15.27/BBL from $17.76/BBL
for 1996, while the average price for natural gas increased to $2.19/MCF for
1997 from $2.06/MCF in 1996.  Several factors contributed to the increase of
natural gas prices in 1997 compared to 1996.  1) New supply - despite an
increase in drilling activity in 1997, U.S. gas production was flat.  2)  Coal
deliveries - several utilities reported low coal inventories and natural gas
was used in its place.  3) Nuclear outages - Several outages have occurred in
Canada and the U.S.

    Wellhead prices per MCF during March 1998 are in the $2.10 to $2.20 range,
and we are optimistic that prices will average $2.00 per MCF in 1998.
During January and February 1998 gas products were sold for an estimated $1.90.
Despite natural gas storage being higher in the first quarter 1998 vs 1997,
prices should average about $2.00/MCF as new supply of natural gas, to meet
current and future demand, is mixed this year.

Regulation

    Various aspects of the Drilling Partnership's oil and natural gas
operations are regulated by administrative agencies under statutory
provisions of the states where such operations are conducted and by certain
agencies of the Federal government for operations on Federal leases.

Future Operations

    As of December 31, 1997 each Limited Partner has received $435 per each
$5,000 unit.  On October 10, 1997, a cash distribution was made for $80 per
each $5,000 unit.  Future distributions will be made after litigation on the
S.W. Escobas (Trevino leases) prospect is settled.
<PAGE>
Item 2.  Properties

    The following table summarizes the Drilling Company's well count (#
wells) and average net working interest (ANWI) in oil and natural gas wells
by state that are commercially productive as of December 31, 1997:

                                     Oil      Natural Gas            Total
                            # Wells ANWI    # Wells  ANWI     # Wells ANWI

    Texas............         -      -         7      .11        7     .11

    Louisiana........         -      -         1      .35        1     .35

    Oklahoma.........         -      -         -        -        -       -

    New Mexico.......         -      -         -        -        -       -

    Colorado.........         -      -         -        -        -       -

    Wyoming..........         2    .12         -        -        2     .12

                              2    .12         8      .14       10     .14

    See Note 8 to the Financial Statements for reserve information.

    No events during the first quarter of 1998 have substantially changed
these numbers.

Item 3.  Legal Proceedings

    The litigation against Pennzoil Exploration and Production Company
(Pennzoil) and Sanchez-O'Brien Gas Corporation (Sanchez-O'Brien) on the Trevino
leases in the S.W. Escobas Prospect is ongoing.  The interests in the Trevino
leases, which comprise part of the S.W. Escobas Prospect, were acquired from
Pennzoil.  There are currently four producing wells on the Trevino Leases,
in which the Drilling Partnership holds between 22.53%-23.177% gross working
interest.  The interest in dispute in this lawsuit is 7/96 or 7.29% of
Sanchez-O'Brien's and Pennzoil's interest.  The trial judge, on November 9,
1992, ruled in favor of the defendants, Pennzoil and Sanchez-O'Brien.
The plaintiffs appealed the trial court ruling to the Court of Appeals for
the Fourth District of Texas at San Antonio.  In May 1994, the San Antonio
Court of Appeals affirmed the trial court's judgement.The appellants
(plaintiffs) filed an application for writ of error to the Texas Supreme
Court after the Fourth Court Appeals rejected a motion for a rehearing.
On November 6, 1994, the Texas Supreme Court denied the writ of error.
On December 8, 1994, plaintiffs filed a motion for a rehearing in the
Texas Supreme Court.  The Texas Supreme Court granted a rehearing and heard
oral arguments during September 1995.  On October 18, 1996, the Texas Supreme
Court reversed the judgements of both lower courts.On November 20, 1996, a
motion for rehearing was filed.  The Texas Supreme Court granted the motion
for a rehearing, but on February 26, 1998, The Texas Supreme Court rendered
an opinion reversing the San Antonio Court of Appeals and the trial court
and rendering judgement for plaintiff.  A motion for a rehearing has been
filed in March 1998.

    An unfavorable ruling would force the Drilling Company to forfeit the
$238,511 currently being held in escrow.  In addition, the Drilling Company
would lose approximately 7.29% of its' interest in the Trevino properties,
which would reduce the Drilling Company valuation by $30,250.  The total
potential adverse effect would be $50.16 per each $5,000 limited partnership
unit.
<PAGE>
    Beginning June 1, 1992, Sanchez-O'Brien started escrowing the amounts in
dispute in order to mitigate the effect to the Drilling Partnership and the
Limited Partners.  The following is an estimate of the net financial effect
of this litigation.

    A.    Revenues received and applicable interest

          The Drilling Partnership would have to remit to the plantiffs 7.29%
    of revenues from the wells on the Trevino lease starting May 1, 1987
    less the applicable share of well costs and operating expenses.  The
    Drilling Partnership would also be responsible for any applicable
    interest. The amount payable from the Drilling Partnership for net
    revenues and applicable interest is estimated to be $260,570, with
    $130,285 due from the Drilling Company, or Limited Partners.  Because
    this amount has already been paid out and used by the Drilling Company,
    the amounts would have to come from current and future revenues. The net
    impact per each $5,000 limited partnership unit would be $24.32.

    B.    Value of oil and natural gas reserves

          The plaintiffs would be entitled to future revenues to be derived
    from existing oil and natural gas reserves.  The net effect of losing
    these reserves at January 1, 1998 to the Drilling Partnership is
    estimated to be $60,510, with $30,250 being the interest of the
    Drilling Company, or Limited Partners.  The net impact per each $5,000
    limited partnership unit would be $5.65.

    C.    Funds retained in escrow

          As mentioned, the Managing General Partner is currently escrowing
    the net revenues applicable to the disputed interest.  At January 1,
    1998, the total Drilling Partnership funds escrowed were $477,022,
    with $238,511 escrowed for the Drilling Company, or Limited Partners.
    The net impact per each $5,000 limited partnership unit would be
    $44.51.  The Managing General Partner will continue to escrow the
    amounts in dispute.  If the plaintiffs were to prevail, the funds
    would be paid to the plaintiffs.  However, if the defendants prevail,
    these additional amounts would be available to the Drilling Company
    for operations and/or distributions.

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

    No matters were submitted to the Security Holders during the fourth
quarter of 1997.

                                P A R T  II

Item 5.  Market for Registrant's Common Equity and Related Stockholder
Matters

    The Drilling Company has no outstanding common stock at December 31,
1997.  There is no market for the limited partnership interests of the
Drilling Company and transferability is subject to certain conditions,
including the consent of the Managing General Partner.  The Drilling Company
has 1,471 limited partners as of December 31, 1997.

<PAGE>
    As of December 31, 1997, each Limited Partner has received $435 per each
$5,000 unit.  Future cash distributions will be made after litigation on
the S.W. Escobas (Trevino leases) has been settled.

    According to the terms of the Drilling Company's Partnership Agreement,
the General Partner is obligated to repurchase, if requested, the interests
of limited partners in the Drilling Company.  The maximum repurchase
obligation is 10% of the Aggregate Limited Partners Contributions.  The
repurchase price will be based primarily on the discounted value of the
Drilling Company's share of the oil and natural gas properties.  The
Managing General Partner repurchased 10 units during 1997.  As of December
31, 1997, the Managing General Partner has repurchased 2,822 units, or
53.20%, of the total 5,304 units.  A repurchase offer for each outstanding
$5,000 unit at December 31, 1997 has not been made.

Item 6.  Selected Financial Data

    The financial results of operations of the Drilling Company as of and for
the years ended December 31, 1997, 1996 and 1995 are as follows:
[CAPTION]
                                1997         1996         1995
[S]                          [C]         [C]         [C]
 Revenues. . . . . . . . . .$   763,517    729,269     794,046
 Expenses. . . . . . . . . .    373,281    350,923     718,122

 Net income. . . . . . . . .    390,236    378,346      75,924

 LP's net income (99%) . . .    386,334    374,563      75,165

 LP's net income per unit. .         73         71          14

 Total assets. . . . . . . .  1,380,407  1,339,406   1,437,217
 Working capital increase ..$    34,688     92,081     292,421

 Partners' equity (deficit)
    Limited partners . . . .$ 1,131,434  1,165,181   1,184,440
    General partner. . . . .$    11,429     11,766      11,961

    See Notes 1, 2 and 3 to the Financial Statements for a discussion of the
Drilling Company's significant accounting policies, allocations of revenues,
costs and expenses and oil and gas producing activities.


Item 7.  Management's Discussion and Analysis of Financial Condition and
Results of Operations

General

    The Drilling Company commenced operations on June 23, 1981. Substantially
all of the Drilling Company's revenues are comprised of its proportionate
share of the oil and natural gas sales of the Drilling Partnership.

<PAGE>


Liquidity and Capital Resources

    The principal sources of the Drilling Company's working capital have been
the capital contributions of the limited partners, bank borrowings (see Note
4 to the Financial Statements), advances from the Managing General Partner
and working capital provided from operations.

    During 1997, the price of oil decreased and the price of natural gas
increased over 1996.  The Drilling Company repaid the full amount of the note
payable to the Managing General Partner on July 1, 1993.

Results of Operations

    The Drilling Company had net income of $390,236 in 1997, $378,346 in 1996,
and $75,924 in 1995.

    Oil and natural gas sales totaled $742,030 in 1997, $716,938 in 1996, and
$784,339 in 1995.

    Operating expenses as a percentage of oil and natural gas sales were
22.33% in 1997, 25.49% in 1996, and 42.77% in 1995.

    Interest income was $21,487 in 1997, $12,331 in 1996, and $9,707 in 1995.

    General and administrative expenses consist primarily of the Drilling
Company's proportionate share of such expenses allocated to the Drilling
Partnership from Sanchez-O'Brien Oil & Gas Corporation.

    The current year depletion amounted to $154,000.  Depletion per net
equivalent barrel of production was $2.73 in 1997, $2.48 in 1996, $3.73 in 1995.

<PAGE>

Item 8.  Financial Statements and Supplementary Data


                Sanchez-O'Brien 1981-A Drilling Company
                        (a limited partnership)

                     Index to Financial Statements

Balance Sheets - December 31, 1997 and 1996

Statements of Operations - Years ended December 31, 1997, 1996
and 1995

Statements of Partners' Equity (Deficit) - Years ended December
31, 1997, 1996 and 1995

Cash Flows Statement of - Years ended December 31, 1997, 1996
and 1995.

Notes to Financial Statements

Schedule V - Property and Equipment - Years ended December 31, 1997,
1996 and 1995

Schedule VI - Accumulated Depreciation, Depletion and Amortization of
Property and Equipment - Years ended December 31, 1997, 1996 and 1995

All other schedules are omitted as the required information is
unapplicable or the information is included in the financial statements
or related notes.
<PAGE>
<TABLE>

                SANCHEZ-O'BRIEN 1981-A DRILLING COMPANY
                        (a limited partnership)

                            Balance Sheets

                      December 31, 1997 and 1996
                              (Unaudited)

<CAPTION>
        ASSETS                                 1997            1996
<S>                                     <C>               <C>
Current assets:
  Cash                                  $   665,680         501,298
  Accounts receivable                        48,333         103,217

        Total current assets                714,013         604,515

Oil and natural gas properties (full
  cost method), at cost, pledged
  (notes 3 and 4)                        31,043,318      30,957,815
Less accumulated depreciation,
  depletion and amortization (note 3)    30,376,924      30,222,924

        Net oil and natural gas
        properties                          666,394         734,891

Organization costs, less applicable
  amortization                                 -               -

        TOTAL ASSETS                      1,380,407       1,339,406
<CAPTION>
LIABILITIES AND PARTNERS' EQUITY
<S>                                      <C>              <C>
Current liabilities:
  Accounts payable                           53,074           7,834
  Suspense payable-investors                184,470         154,625

        Total current liabilities           237,544         162,459

Partners' equity:
  Limited partners                        1,131,439       1,165,181
  General partner                            11,424          11,766

        Total partners' equity            1,142,863       1,176,947

        TOTAL LIABILITES AND
         PARTNERS' EQUITY               $ 1,380,407       1,339,406


See accompanying notes to financial statements.
<PAGE>

</TABLE>
<TABLE>
                SANCHEZ-O'BRIEN 1981-A DRILLING COMPANY
                        (a limited partnership)

                       Statements of Operations

             Years Ended December 31, 1997, 1996 and 1995
                              (Unaudited)

<CAPTION>

                                   1997            1996          1995
<S>
Revenues:                     <C>              <C>           <C>
  Oil and natural gas sales   $  742,030        716,938         784,339
  Interest income                 21,487         12,331           9,707
  Other income                      -               -              -

                                 763,517        729,269         794,046

Expenses:
  Operating expenses             168,710        182,750         335,523
  General and administrative
    expenses (note 7)             50,571         30,173          47,599
  Depreciation, depletion and
    amortization (note 3)        154,000        138,000         335,000
  Interest expense                  -               -             -

                                 373,281        350,923         718,122

      Net income              $  390,236        378,346          75,924

      Net income applicable
        to limited partners   $  386,334        374,563          75,165

      Net income of limited
        partners per unit
        of limited partnership
        interest              $       73             71              14

      Number of units of limited
        partnership interests
        outstanding                5,304          5,304           5,304

See accompanying notes to financial statements.
<PAGE>

</TABLE>
<TABLE>
                   SANCHEZ-O'BRIEN 1981-A DRILLING COMPANY
                           (a limited partnership)

                  Statements of Partners' Equity (Deficit)

                Years Ended December 31, 1997, 1996, and 1995
                                 (Unaudited)



                                   Limited Partners
                                                                   Partners'
                                                        General     Equity
                                  Units      Amount     Partner    (Deficit)

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

Balances at December 31, 1994       5,304  1,109,275      11,202   1,120,477

  Cash distribution                  -          -           -           -

  Net income                         -        75,165         759      75,924


Balances at December 31, 1995       5,304  1,184,440      11,961   1,196,401

  Cash distribution                         (393,822)     (3,978)   (397,800)

  Net income                                 374,563       3,783     378,346

Balances at December 31, 1996       5,304 $1,165,181  $   11,766  $1,176,947

  Cash distribution                   -     (420,076)    (54,244)   (424,320)

  Net income                                 386,334       3,902     390,236

Balnaces at December 31, 1997       5,304  1,131,439      11,424   1,142,863


See accompanying notes to financial statements.
<PAGE>

</TABLE>
<TABLE>
                     SANCHEZ-O'BRIEN 1981-A DRILLING COMPANY
                             (a limited partnership)

                            Statements of Cash Flows

                        December 31, 1997, 1996 and 1995
                                   (Unaudited)

                                                  1997      1996       1995
<CAPTION>
<S>                                          <C>          <C>        <C>
Cash flows from operating activities:
  Net income                                 $  390,236    378,346      75,924
  Adjustments to reconcile net earnings
    to net cash provided by operating
      activities: Depreciation, depletion
      and amortization                          154,000    138,000     335,000
      Change in assets and liabilities:
        Accounts receivable                      54,884    (33,760)      1,222
        Accounts payable                         45,240   (111,622)     23,883
        Suspense payable                         29,845     33,265        (240)
         Total adjustments                      283,969     25,883     359,865

         Net cash provided by operating
            activities                          674,205    404,229     435,789

Cash flows from investing activities:
  Cash distributions                           (424,320)  (397,800)       -
  Additions to property and equipment           (85,503)   (26,465)   (118,503)

     Net cash used in investing activities     (509,823)  (424,265)   (118,503)

Cash flows from financing activities:
  Payments of long-term debt                       -          -           -
  Proceeds fom long-term debt                      -          -           -

         Net cash provided by financing
         activities                                -          -           -

Net increase (decrease) in cash and cash
  equivalents                                   164,382    (20,036)   (317,226)

Cash and cash equivalents at beginning of year  501,298    521,334     204,048

Cash and cash equivalents at end of year    $   665,680    501,298     521,334
</TABLE>

<PAGE>

             SANCHEZ-O'BRIEN 1981-A DRILLING COMPANY
                     (a limited partnership)

                  Notes to Financial Statements

                   December 31, 1997 and 1996



(1) Organization and Summary of Significant Accounting Policies

    Organization - Sanchez-O'Brien 1981-A Drilling Company

    Sanchez-O'Brien 1981-A Drilling Company (the Drilling
    Company), a Texas limited partnership, was formed on December
    18, 1980 with Sanchez-O'Brien Drilling Corporation (a
    wholly-owned subsidiary of Sanchez-O'Brien Oil & Gas
    Corporation) as general partner and an organizational limited
    partner.  On June 23, 1981, Sanchez-O'Brien Drilling
    Corporation, as general partner, and investors, representing
    5,304 units of limited partnership interests ($5,000 per
    unit), entered into an Agreement of Limited Partnership for
    the Sanchez-O'Brien 1981-A Drilling Company.  The Drilling
    Company is to remain in existence until December 31, 2011,
    unless dissolved prior to that date according to provisions of
    the Drilling Company Partnership Agreement.  Sanchez-O'Brien
    Drilling Corporation and the individual limited partners are
    not required to make additional capital contributions to the
    Drilling Company.

    The Drilling Company Partnership Agreement provides for
    quarterly distributions from available cash.

    Organization - Sanchez-O'Brien 1981-A Drilling Partnership

    Sanchez-O'Brien 1981-A Drilling Partnership (the Drilling
    Partnership), a Texas general partnership, was organized on
    June 23, 1981 with Sanchez-O'Brien Oil & Gas Corporation as
    managing general partner and Sanchez-O'Brien 1981-A Drilling
    Company as general partner.  The Drilling Partnership was
    formed to engage in oil and natural gas exploration, drilling,
    development, production and marketing in the United States.
    The Drilling Partnership is to remain in existence until
    December 31, 2011, unless dissolved prior to that date
    according to provisions of the Drilling Partnership Agreement.

    Sanchez-O'Brien Oil & Gas Corporation, as managing general
    partner, is required to make capital contributions to the
    Drilling Partnership on a current basis sufficient to pay the
    costs allocated to the managing general partner under the
    terms of the Drilling Partnership Agreement. The managing
    general partner was required to make capital contributions in
    an amount equal to 20 percent of the capital contributions of
    the limited partners to the Drilling Company, reduced by any
    organization or other costs incurred by the managing general
    partner which were reimbursed by the Drilling Company or the
    Drilling Partnership, by June 23, 1983. This capital
    contribution requirement was met, and cumulative capital
    contributions by the managing general partner total $5,331,953
    as of December 31, 1997.
    <PAGE>

    The Drilling Partnership Agreement provides that funds in
    excess of amounts necessary to pay the partners' share of
    existing and anticipated expenditures, including the repayment
    of borrowings, shall be distributed quarterly to the partners
    of the Drilling Partnership.

    Basis of Financial Statement Presentation

    The financial statements of the Drilling Company include its
    proportionate share in specific assets, liabilities, revenues
    and expenses of the Drilling Partnership.  All significant
    intercompany balances and transactions have been eliminated.

    Oil and Gas Properties

    The Drilling Company follows the full cost method of
    accounting for its proportionate interest in the oil and
    natural gas operations of the Drilling Partnership.  Under
    this method, all costs incurred in the acquisition,
    exploration and development of properties, including costs of
    surrendered and abandoned leaseholds, delay lease rentals and
    dry holes, are capitalized.  Dispositions of oil and natural
    gas properties are accounted for as adjustments to capitalized
    costs, with no gain or loss recognized.  Depreciation,
    depletion and amortization of oil and natural gas properties
    is provided by the units-of-production method based on proved
    oil and natural gas reserves.

    Under the full cost method of accounting for oil and natural
    gas operations, capitalized costs of oil and natural gas
    properties are not to exceed the present value of future net
    revenues from estimated production of proved oil and natural
    gas properties plus the lower of cost or estimated fair market
    value of unproved properties.  If capitalized costs exceed
    this limitation, an additional provision is to be made to
    depreciation, depletion and amortization.

    Federal Income Taxes

    For Federal income tax purposes, the partners' respective
    interests in the revenues, expenses and other deductions and
    credits of the Drilling Company are reportable in their
    individual tax returns. Accordingly, no provision or liability
    for Federal income taxes has been shown on the accompanying
    financial statements.

    Organization Costs

    Organization costs were capitalized and amortized over five
    years using the straight-line method.
<PAGE>

    Syndication Costs

    Syndication costs (sales commissions to brokers for their
    sales of limited partnership interests) have been deducted
    directly from the capital accounts in the Drilling Company.

(2) Allocations of Revenues, Costs and Expenses

    Drilling Company

    All revenues, costs and expenses of the Drilling Company are
    allocated 1 percent to the general partner, Sanchez-O'Brien
    Drilling Corporation, and 99 percent to the limited partners.
    All revenues, costs and expenses are allocated to the
    individual limited partners in proportion to their capital
    accounts.

    Drilling Partnership

    Revenues and expenses of the Drilling Partnership which relate
    to capital wells (wells which are funded principally by
    capital contributions of the Drilling Company) are allocated
    30 percent to the managing general partner, Sanchez-O'Brien
    Oil & Gas Corporation, and 70 percent to the general partner,
    the Drilling Company, until partnership payout is reached, and
    50 percent to each partner thereafter.  All costs of capital
    wells which are non-capitalized costs for Federal income tax
    purposes are charged to the Drilling Company.  All capitalized
    costs of capital wells and leasehold costs relating to
    producing capital wells are charged to Sanchez-O'Brien Oil &
    Gas Corporation.

    All revenues, expenses, well costs and leasehold costs
    relating to subsequent wells (all wells other than the capital
    wells) are allocated 50 percent to Sanchez-O'Brien Oil & Gas
    Corporation and 50 percent to the Drilling Company.

    All interest earned as a result of the temporary investment of
    the Drilling Company's capital contribution to the Drilling
    Partnership was allocated 100 percent to the Drilling Company.


(3) Oil and Natural Gas Producing Activities

    The aggregate amount of capitalized costs of the Drilling
    Company's proportionate share of the oil and natural gas
    properties of the Drilling Partnership for the years ended
    December 31, 1997 and 1996 were as follows:
<PAGE>
[CAPTION]
                                         1997            1996
[S]                                  [C]              [C]
       Costs related to proved
         properties                  $31,043,318      30,957,815
       Costs related to unproved
         properties                        -               -

                                      31,043,318      30,957,815

       Less accumulated depletion     30,376,924      30,222,924

                                     $   666,394         734,891

    The following schedule presents the results of operations of
    the Drilling Company's proportionate share of the oil and
    natural gas producing activities of the Drilling Partnership
    for the years ended December 31, 1997, 1996 and 1995:

[CAPTION]
                                      1997       1996       1995
[S]                                 [C]       [C]       [C]
       Oil and natural gas revenues $ 742,030   716,938   784,339
       Operating expenses             166,191   182,750   335,523
       Depreciation, depletion and
         amortization                 154,000   138,000   335,000

       Results of operations from
         producing activities
         (excluding overhead and
         interest costs)
         Net income                 $ 421,839   396,188   113,816


    Operating expenses include production taxes of $2,520, $ 3,119,
    and $23,617 in 1997, 1996 and 1995, respectively.

    The 1997 full cost ceiling test did not warrant an additional
    charge to depreciation, depletion and amortization. The
    calculation of the limitation on capitalized costs as of
    December 31, 1997 was based on $1.83 per MCF.

    The regular provision for depreciation, depletion and
    amortization per unit of production (net equivalent barrel)
    for the years ended December 31, 1997, 1996 and 1995 was
    $2.73, $2.48 and $3.73 respectively.  These rates are
    exclusive of the amounts attributable to the limitation on
    capitalized costs.

    Over sixty nine percent of oil and natural gas sales from seven
    S. W. Escobas producing wells were sold to Delhi during 1997.
<PAGE>

(4) Notes Payable

    As of December 31, 1997, the Drilling Company does not have
    any debt.

(5) Federal Income Taxes

    Under the method of accounting followed by the Drilling
    Company for Federal income tax reporting purposes:  (a)
    expenditures incurred in acquiring undeveloped properties and
    equipping productive oil and natural gas properties are
    capitalized, whereas such expenditures relating to dry holes
    are charged against earnings;  (b) both productive and
    nonproductive intangible drilling and development costs are
    expensed currently;  (c) revenues, expenses, capital
    contributions and distributions are generally recognized as
    cash received or paid;  (d) tentative depletion expense is
    computed using the greater of cost or percentage depletion for
    each property;  and (e) depreciation of lease and well
    equipment is computed using the accelerated cost recovery
    system over a five year period.

    The following is a reconciliation of the net income of the
    Drilling Company as reported herein, to its earnings reported
    for Federal income tax purposes for the years ended December 31,
    1997, 1996 and 1995.

[CAPTION]
                                      1997      1996       1995
[S]                            [C]           [C]      [C]
Net income as reported
  herein                       $  390,236    378,346     75,924

Less costs capitalized for
  financial reporting purposes
  which are expenses for tax
  purposes (primarily intangible
  drilling and dry hole costs)     83,524     13,475     83,633

Add depreciation, depletion and
  amortization for financial
  reporting purposes              154,000    138,000    335,000

Less depreciation and cost
  depletion for tax purposes       53,755     63,476     62,324

Differences in accrual method
  of accounting for financial
  reporting purposes and cash
  basis for tax purposes           31,397     18,063     11,513

Income for Federal income tax
  purposes                    $   438,354    457,458    276,480
<PAGE>

(6) Repurchase Obligations

    In accordance with the terms of the Drilling Company's
    Partnership Agreement, Sanchez-O'Brien Drilling Corporation is
    obligated to purchase, if requested, the interests of limited
    partners in the Drilling Company.  The purchase price is to be
    based primarily on annual determinations of the discounted
    value of the Drilling Company's share of the oil and natural
    gas properties of the Drilling Partnership.  The maximum
    repurchase obligation is 10% of the Aggregate Limited
    Partners' Capital Contributions.  Sanchez-O'Brien Oil & Gas
    Corporation purchased 10 units during 1997.

(7) Related Party Transactions

    Sanchez-O'Brien Oil & Gas Corporation functions as operator
    for the Drilling Partnership's wells.  In this capacity,
    Sanchez-O'Brien Oil & Gas Corporation receives monthly fees as
    operator on drilling and producing wells, and under the terms
    of the Drilling Company and Drilling Partnership Agreements,
    Sanchez-O'Brien Oil & Gas Corporation is reimbursed for direct
    costs of performing services for the Drilling Company and the
    Drilling Partnership and for that part of its administrative
    overhead that reasonably pertains to the Drilling Company and
    the Drilling Partnership.  These reimbursements amounted to
    $83,720 in 1997 for both the Drilling Partnership and Drilling
    Company.  Of these amounts, $30,000 was paid for overhead
    reimbursements and $53,720 for direct administrative charges.

    The Drilling Company's share of the above reimbursements
    included $12,692 of administrative charges, both overhead and
    direct charges, for the year 1997.

    Accounts payable on the accompanying balance sheets are due
    the Managing General Partner.

    Substantially all of the Drilling Partnership's oil and
    natural gas leases were acquired from the Managing General
    Partner at cost, plus carrying and administrative charges.

    A staff overriding royalty pool, consisting of a maximum of 7%
    of the Drilling Partnership's net revenue interest in all oil
    and natural gas leases, is shared by certain geological,
    engineering and other key employees of Sanchez-O'Brien Oil &
    Gas Corporation.
<PAGE>

(8) Oil and Natural Gas Reserves (Unaudited)

    The following is a summary of the Drilling Company's
    proportionate share of the proved oil and natural gas reserve
    quantities of the Drilling Partnership as estimated by Lone
    Cypress Engineering, Inc. of Houston, Texas.
[CAPTION]
                                       Oil and          Natural
                                      Condensate          Gas
                                      (Barrels)          (MCF)
       Proved developed and
         undeveloped reserves:
[S]                                    [C]           [C]
         Balance at December 31, 1996    43,481       1,511,612

           1997 adjustments               1,535          15,397

           Production                    (3,595)       (316,514)

         Balance at December 31, 1997    41,421       1,210,495

       Proved developed and
         undeveloped reserves:

         December 31, 1995               44,636       1,671,220

         December 31, 1996               43,481       1,511,612

         December 31, 1997               41,421       1,210,495

    All the reserves of the Drilling Company are attributable to
    its interest in the Drilling Partnership, and all the reserves
    are located within the United States.
<PAGE>
                                                                   Schedule V

                   SANCHEZ-O'BRIEN 1981-A DRILLING COMPANY
                           (a limited partnership)

                           Property and Equipment

                Years Ended December 31, 1997, 1996 and 1995
[CAPTION]

                             Balance at                          Balance at
                            Beginning of                           End of
Classification                 Period     Additions   Retirements  Period
1995
[S]                            [C]          [C]             [C]   [C]
Oil and natural gas properties $30,812,847  124,923        6,420  30,931,350

1996

Oil and natural gas properties $30,931,350   26,465            0  30,957,815

1997

Oil and natural gas properties $30,957,815   85,503            0  31,043,318

<PAGE>

                                                                  Schedule VI


                   SANCHEZ-O'BRIEN 1981-A DRILLING COMPANY
                           (a limited partnership)

Accumulated Depreciation, Depletion
and Amortization

                Years Ended December 31, 1997, 1996 and 1995
[CAPTION]

                              Balance at                          Balance at
                             Beginning of                           End of
Classification                  Period     Additions   Retirements  Period

1995
[S]                            [C]          [C]            [C]    [C]
Oil and natural gas properties $29,749,924  225,000            0  30,084,924

1996

Oil and natural gas properties $30,084,924  138,000            0  30,222,924

1997

Oil and natural gas properties $30,222,924  154,000            0  30,376,924
<PAGE>

Item 9.  Disagreements on Accounting and Financial Disclosure

    There have been no disagreements by the Drilling Company with
its accountants on accounting or financial disclosures which would
warrant disclosure pursuant to this item.

                            PART III

Item 10.  Directors and Executive Officers of the Registrant

    The Drilling Company has no directors or executive officers.
The General Partner, Sanchez-O'Brien Drilling Corporation, is a
wholly owned subsidiary of Sanchez-O'Brien Oil & Gas Corporation.
The names, ages (as of March 1, 1997) and positions of the
directors and executive officers of Sanchez-O'Brien Drilling
Corporation are as follows:

    NAME                   AGE             POSITION

Antonio R. Sanchez, Jr.     55     Chairman of the Board and
                                   Chief Executive Officer

Brian E. O'Brien            64     Vice Chairman of the Board and
                                   President

Minita M. Freeman           77     Senior Vice President,
                                   Secretary, Treasurer and
                                   Director

Frank A. Guerra             49     Vice President - Finance

Olivero F. Garza, III       51     Assistant Secretary -
                                   Controller


    Antonio R. Sanchez, Jr., age 55, is Chairman of the Board and
Chief Executive Officer.  He holds a Bachelor of Business
Administration degree and a Doctor of Jurisprudence degree from St.
Mary's University of San Antonio, Texas.  Prior to 1973, Mr.
Sanchez, Jr., practiced law in both San Antonio and Laredo, Texas,
and served as an administrative assistant to the Lieutenant
Governor of Texas.  In addition to his oil and natural gas
investments, Mr. Sanchez, Jr. has other substantial investments.

    Brian E. O'Brien, age 64, is Vice Chairman of the Board and President.
Mr. O'Brien received a Bachelor of Science degree in geology from the
University of Oklahoma in 1958 and a Master of Science degree in geology from
the same university in 1963.  From 1961 to 1969, Mr. O'Brien was employed by
the Atlantic Refining Company where his principal responsibilities included
geological evaluation and exploration of oil and natural gas prospects situated
primarily along the Gulf Coast of Louisiana and Texas, and from 1969 to 1973,
he was employed by Mesa Petroleum Company as that Company's geologist for the
Gulf Coast area of Texas.  In addition to his oil and natural gas investments,
Mr. O'Brien has other substantial investments.
<PAGE>
     Minita M. Freeman, age 77, is Senior Vice President, Secretary, Treasurer
and a Director.  Mrs. Freeman holds a Bachelor of Business Administration
degree from the University of Texas at Austin with a major in accounting.
Prior to joining affiliates of the Managing General Partner in 1975,
Mrs. Freeman practiced accounting primarily in Laredo, Texas.

     Frank A. Guerra, age 49, Vice President-Finance, was employed by the
Managing General Partner in early 1979.  He is in charge of accounting for the
Managing General Partner and all affiliates.  Mr. Guerra was previously
employed by Exxon Corporation as an accounting supervisor in the Exploration
and Production Department from 1977 to 1979 and as a senior auditor on various
staffs from 1972 to 1977.  Mr. Guerra received a Bachelor of Business
Administration degree in accounting from Texas A & M Universiry in 1971 and
is a Certified Public Accountant.

     Olivero F. Garza, III, age 51, is Assistant Secretary and Controller for
the Managing General Partner.  He was employed in March 1980 as Manager of
Corporate Accounting.  Mr. Garza has been employed in the oil and natural gas
industry since 1968 with companies such as Exxon Corporation, Coastal
Corporation and TransOcean Oil Company. Mr. Garza received a Bachelor of
Business Administration degree in accounting from Pan American College in
Edinburg, Texas in 1968.

     The terms of each officer and director named above expire at the Company's
annual meeting of directors or such other time as his successor is duly elected
and qualified.

Item 11.  Executive Compensation

     Inasmuch as the Drilling Company has no directors, officers or employees,
it paid no remuneration during 1997.  In accordance with the Agreement of
Limited Partnership, the Drilling Company reimbursed the Managing General
Partner for direct expenses and administrative and overhead expenses
attributable to the operations of the Drilling Company (see Note 7 to the
Financial Statements).

     All of the oil and natural gas properties of the Drilling Partnership were
acquired at cost (including carrying costs) or were obtained on its behalf by
the Managing General Partner from third parties.  The Managing General Partner
acts as operator for certain drilling or producing wells of the Drilling
Partnership.

Item 12.  Security Owenership of Certain Benefical Owners and Management

(a) Principal Security Holders

    At December 31, 1997, Sanchez-O'Brien Oil & Gas Corporation, owned a 53.20
percent interest (2,822 units) in the Drilling Company.  No other limited
partner owned, of record or beneficially, more than one percent of the
Drilling Company (See Note 6 to the Financial Statements).

    As provided under the terms of the Agreement of Limited Partnership, the
General Partner has a one percent interest in all of the Drilling Company's
revenues, expenses, profits or losses, and upon liquidation, a one percent
interest in the Drilling Company's properties.

    As provided under the terms of the Articles of Partnership of the
Drilling Partnership, Sanchez-O'Brien Oil & Gas Corporation, the Managing
General Partner of the Drilling Partnership, has a revenue interest which
varies from 30 percent to 50 percent in the Drilling Partnership's revenues.

(b)  Amount of Sanchez-O'Brien Oil & Gas Corporation Securities Owned by
     Officers and Directors of Sanchez-O'Brien Oil & Gas Corporation

    At March 1, 1998, the Estate of Antonio R. Sanchez, Antonio R. Sanchez, Jr.
and Brian E. O' Brien own one hundred percent of the outstanding common stock
of Sanchez-O'Brien Oil & Gas Corporation.

(c)  Changes in control

    There have been no changes in control of the Drilling Company during the
period ended December 31, 1997.

Item 13.  Certain Relationships and Related Transactions

    During 1981, the Drilling Company paid Sanchez-O'Brien Drilling Corporation
$300,000 for costs related to organizing the Drilling Company and offering the
limited partnership interests therein.  As operator of the Drilling
Partnership's wells, Sanchez-O'Brien Oil & Gas Corporation receives monthly
fees on drilling and producing wells.  The Drilling Partnership also paid
Sanchez-O'Brien Oil & Gas Corporation a management fee of $1,193,400 in 1981.
In addition, the Drilling Company and Drilling Partnership.  Substantially
all of the Drilling Partnership's oil and natural gas leases were acquired
from Sanchez-O'Brien Oil & Gas Corporation at cost plus administrative and
carrying charges.  Certain key employees of Sanchez-O'Brien Oil & Gas
Corporation participate in a staff overriding royalty pool consisting of a
maximum of 7% of the Drilling Partnership's net revenue interest in all oil
and natural gas leases.  (See Note 7 to the Financial Statements).
<PAGE>
                                  PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

Financial Statements and Schedules

(a)  The following documents are filed as part of this annual report on
     Form 10-K:

          1.  Financial Statements
                (See Index to Financial Statements in Item 8)

          2.  Financial Statement Schedules
                The financial statement schedules are filed as part
                of this report as listed in the Index to Financial Statements
                in Item 8.

          3.  Exhibits:

              *3.1-Articles of Limited Partnership, as amended,
                   filed as exhibit 4.1 to the Registrant's Registration
                   Statement on Form S-1 (Reg. No. 2-70390).

              *3.2-Articles of Partnership, as amended, filed as exhibit
                   4.2 to the Registrant's Registration Statement on
                   Form S-1 (Reg. No. 2-70390).

              *Incorporated by reference, as indicated.

(b)  Reports on Form 8-K

     There were no reports on Form 8-K for the twelve months ended
     December 31, 1997.
<PAGE>

                                    SIGNATURES


    Pursuant to the requirements of Section13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly aythorized on March 27, 1997.


                                     SANCHEZ-O'BRIEN OIL & GAS CORPORATION

                                     By  Sanchez-O'Brien Drilling Corporation



                                     By             Antonio R. Sanchez, Jr.
                                            Chairman of the Board of Directors
                                                  and Chief Executive Officer
                                                 (Principal Executive Officer)


    Pursuant to the requirements iof the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on March 27, 1997.


          Brian E. O'Brien                          Minita M. Freeman
Vice Chairman of the Board and President          Senior Vice President,
    (Principal Operating Officer)           Secretary, Treasurer and Director
                                       (Principal Financial Officer and Director


          Frank A. Guerra                           Olivero F. Garza, III
    Vice President - Finance                 Assistant Secretary - Controller
 (Principal Accounting Officer)
<PAGE>

    Pursuant to the requirements of Section 13 of 15(d) of the Securities
Exchange Act of 1934, the registrant hasduly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized on March 27, 1997.




                                     SANCHEZ-O'BRIEN OIL & GAS CORPORATION

                                     By Sanchez-O'Brien Drilling Corporation


                                     By            s/Antonio R. Sanchez, Jr.
                                                     Antonio R. Sanchez, Jr.
                                           Chairman of the Board of Directors
                                                and Chief Executive Officer
                                               (Principal Executive Officer)



        s/Brian E. O'Brien                        s/Minita M. Freeman
          Brian E. O'Brien                          Minita M. Freeman
Vice Chairman of the Board and President         Senior Vice President,
    (Principal Operating Officer)           Secretary, Treasurer and Director
                                       (Principal Financial Officer and Director


        s/Frank A. Guerra                         s/Olivero F. Garza, III
          Frank A. Guerra                           Olivero F. Garza, III
      Vice President - Finance             Assistant Secretary - Controller
   (Principal Accounting Officer)