20

                U.S. SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C. 20549
                   ________________________________
                                   
                              FORM 10-QSB
                                   
/X/   Quarterly  Report  under Section 13 or 15(d)  of  the  Securities
Exchange Act of 1934

For the Quarterly Period Ended September 30, 1998

                                  or

/  /   Transition  Report Under Section 13 or 15(d) of  the  Securities
Exchange Act of 1934

For the Transition Period From __________ to ___________
                                   
                        ______________________
                                   
                     Commission File Number 0-7406
                        ______________________
                                   
                        PrimeEnergy Corporation
        (Exact name of registrant as specified in its charter)
                                   
                               Delaware
    (State or other jurisdiction of incorporation or organization)
                                   
                              84-0637348
                  (IRS employer identification number)
                                   
           One Landmark Square, Stamford, Connecticut  06901
               (Address of principal executive offices)
                                   
                            (203) 358-5700
         (Registrant's telephone number, including area code)
                                   
                                   
 (Former name, former address and former fiscal year, if changed since
                             last report)
     
Check whether the issuer (1) filed all reports required to be filed  by
Section 13 or 15 (d) of the Securities Exchange Act of 1934 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  / /

The  number  of  shares outstanding of each class of  the  Registrant's
Common  Stock  as  of November 10, 1998 was: Common  Stock,  $0.10  par
value, 4,449,691 shares.
                        PrimeEnergy Corporation
                                   
                         Index to Form 10-QSB
                                   
                          September 30, 1998
                                   
                                   
                                   

Part I -  Financial Information

Consolidated Balance Sheets - September 30, 1998 and
December 31, 1997                                                   3-4

Consolidated Statements of Operations for the nine months
ended September 30, 1998 and 1997                                     5

Consolidated Statements of Operations for the three months
ended September 30, 1998 and 1997                                     6

Consolidated Statement of Stockholders' Equity for the
nine months ended September 30, 1998                                  7

Consolidated Statements of Cash Flows for the nine months
ended September 30, 1998 and 1997                                     8

Notes to Consolidated Financial Statements                         9-17

Management's Discussion and Analysis of Financial Condition
and Results of Operations                                         18-22


Part II - Other Matters                                              23

Signatures                                                           24


















                                   2
                        PrimeEnergy Corporation
                                   
                      Consolidated Balance Sheets
                                   
               September 30, 1998 and December 31, 1997
                                   
                                   

                                           September 30, December 31,
                                               1998          1997
                                            (Unaudited)   (Audited)
Current assets:
  Cash and cash equivalents                $ 3,619,000   $ 2,987,000
  Restricted cash and cash
    Equivalents (Note 2)                      1,097,000      885,000
  Accounts receivable (Note 3)                2,632,000    4,480,000
  Due from related parties (Note 8)           2,842,000    2,454,000
  Other current assets                          199,000      175,000
  Prepaid expenses                               98,000      107,000
  Deferred income taxes                         121,000      121,000
                                             ----------   ----------
      Total current assets                   10,608,000   11,209,000
                                             ----------   ----------

Property and equipment, at cost (Notes 1 and 4):
  Oil and gas properties (successful
    efforts method):
      Developed                              43,771,000   41,427,000
      Undeveloped                               513,000      231,000
  Furniture, fixtures and equipment
   including leasehold improvements           6,312,000    5,757,000
                                             ----------   ----------
                                             50,596,000   47,415,000
  Accumulated depreciation and depletion    (28,844,000) (24,885,000)
                                             ----------   ----------
    Net property and equipment               21,752,000   22,530,000
                                             ----------   ----------

Other assets                                    629,000      604,000
Due from affiliates                             325,000      325,000
                                             ----------   ----------
    Total assets                           $ 33,314,000  $34,668,000
                                             ==========   ==========








See accompanying notes to the consolidated financial statements.

                                   3
                        PrimeEnergy Corporation
                                   
                      Consolidated Balance Sheets
                                   
               September 30, 1998 and December 31, 1997
                                   
                                   

                                           September 30, December 31,
                                                1998         1997
                                            (Unaudited)   (Audited)

Current liabilities:
  Accounts payable                         $  6,121,000  $ 6,333,000
  Accrued liabilities:
    Payroll, benefits and related items       1,278,000      530,000
    Taxes (Note 1)                               --           27,000
    Interest and other                          604,000      646,000
  Due to related parties (Note 8)               965,000    1,389,000
                                             ----------   ----------
    Total current liabilities                 8,968,000    8,925,000
                                             ----------   ----------

Long-term bank debt (Note 5)                 18,400,000   18,865,000
Deferred income taxes (Note 1)                  262,000      262,000

Stockholders' equity:
  Preferred stock, $.10 par, authorized
    10,000 shares; none issued                   --           --
  Common stock, $.10 par value, authorized
    15,000,000 shares; issued 7,607,970
    in 1998 and 7,597,970 in 1997               761,000      760,000
  Paid in capital                            10,902,000   10,888,000
  Retained earnings                           1,315,000      971,000
                                             ----------   ----------
                                             12,978,000   12,619,000
  Treasury stock, at cost, 3,144,279
    common shares in 1998 and 2,989,161
    common shares in 1997                    (7,294,000)  (6,003,000)
                                             ----------   ----------
    Total stockholders' equity                5,684,000    6,616,000
                                             ----------   ----------
      Total liabilities and equity         $ 33,314,000  $34,668,000
                                             ==========   ==========






See accompanying notes to the consolidated financial statements.

                                   4
                        PrimeEnergy Corporation
                                   
                 Consolidated Statements of Operations
                                   
             Nine Months Ended September 30, 1998 and 1997
                              (Unaudited)
                                   
                                   
                                   
                                                 1998          1997
Revenue:
  Oil and gas sales                           $ 8,859,000 $ 11,136,000
  District operating income                     8,271,000    8,331,000
  Administrative revenue (Note 8)               1,291,000    1,290,000
  Reporting and management fees (Note 8)          226,000      247,000
  Interest and other income                       311,000      168,000
                                               ----------   ----------
    Total revenue                              18,958,000   21,172,000
                                               ----------   ----------

Costs and expenses:
  Lease operating expense                       4,922,000    5,132,000
  District operating expense                    6,324,000    6,115,000
  Depreciation and depletion of
    oil and gas properties                      3,841,000    3,989,000
  General and administrative expense            2,446,000    2,228,000
  Exploration costs                               113,000    2,257,000
  Interest expense (Note 5)                     1,062,000      840,000
                                               ----------   ----------
    Total costs and expenses                   18,708,000   20,561,000
                                               ----------   ----------
Income from operations                            250,000      611,000
Gain on sale and exchange of assets               132,000      240,000
                                               ----------   ----------
Net income before income taxes                    382,000      851,000

Provision for income taxes                         38,000       85,000
                                               ----------   ----------
Net income                                    $   344,000 $    766,000
                                               ==========   ==========

Basic income per common share (Note 9)              $0.08        $0.16    
                                                    =====        =====
                                                      
Diluted income per common share (Note 9)            $0.07        $0.14
                                                    =====        =====





See accompanying notes to the consolidated financial statements.

                                   5
                        PrimeEnergy Corporation
                                   
                 Consolidated Statements of Operations
                                   
            Three Months Ended September 30, 1998 and 1997
                              (Unaudited)
                                   
                                   
                                   
                                                 1998          1997
Revenue:
  Oil and gas sales                           $ 2,866,000  $ 3,455,000
  District operating income                     2,726,000    2,884,000
  Administrative revenue (Note 8)                 442,000      438,000
  Reporting and management fees (Note 8)           80,000       86,000
  Interest and other income                        94,000       63,000
                                               ----------   ----------
    Total revenue                               6,208,000    6,926,000
                                               ----------   ----------

Costs and expenses:
  Lease operating expense                       1,665,000    1,752,000
  District operating expense                    2,019,000    2,013,000
  Depreciation and depletion of
    oil and gas properties                      1,411,000    1,406,000
  General and administrative expense              800,000      612,000
  Exploration costs                                18,000      907,000
  Interest expense (Note 5)                       348,000      273,000
                                               ----------   ----------
    Total costs and expenses                    6,261,000    6,963,000
                                               ----------   ----------
Income (loss) from operations                     (53,000)     (37,000)
Gain on sale and exchange of assets                65,000       93,000
                                               ----------   ----------
Net income before income taxes                     12,000       56,000

Provision for income taxes                          1,000        6,000
                                               ----------   ----------
Net income                                    $    11,000 $     50,000
                                               ==========   ==========

Basic income per common share (Note 9)              $0.00        $0.01
                                                    =====        =====
Diluted income per common share (Note 9)            $0.00        $0.01
                                                    =====        =====






See accompanying notes to the consolidated financial statements.

                                   6
                             PrimeEnergy Corporation
                                        
                 Consolidated Statement of Stockholders' Equity
                                        
                      Nine Months Ended September 30, 1998
                                        
<TABLE>  
<CAPTION>  
                                                                                          
                                                      Additional                                   
                                  Common Stock         Paid In      Retained     Treasury          
                               Shares      Amount       Capital      Earnings       Stock         Total
<S>                            <C>         <C>        <C>             <C>          <C>             <C>                 
Balance at December 31, 1997   7,597,970    $760,000   $10,888,000       $971,000 ($6,003,000)    $6,616,000
                                                                                                 
Purchased 165,118 shares                                                           
 of common stock                                                                   (1,291,000)    (1,291,000)
                                                                                                
Stock options exercised           10,000       1,000        14,000                                    15,000
                                                                                                      
Net income                                                                344,000                    344,000
                               ---------    --------   -----------     ----------  ------------   ---------
Balance at September 30, 1998  7,607,970    $761,000   $10,902,000     $1,315,000  ($7,294,000)   $5,684,000
                               =========    ========   ===========     ==========  ============   ==========  
</TABLE>  
  
  
  
  
  
  
  
  
  
  
        See accompanying notes to the consolidated financial statements.
                                        
                                 
               Consolidated Statements of Cash Flows
                                 
           Nine Months Ended September 30, 1998 and 1997
                            (Unaudited)
                                 
                                 
                                 
                                                1998         1997

Net cash provided by operating activities  $ 6,020,000 $   9,137,000
                                             ----------   ----------

Cash flows from investing activities:
  Additions to property and equipment       (4,039,000)  (6,878,000)
  Proceeds from sale of property
    and equipment                               392,000      932,000
  Proceeds from payments on note receivable      --           26,000
                                             ----------   ----------
    Net cash (used in) investing
       activities                           (3,647,000)  (5,920,000)
                                             ----------   ----------

Cash flows from financing activities:
  Purchase of treasury stock                 (1,291,000)  (1,185,000)
  Increase in long-term bank debt and
    other long-term obligations              22,391,000   22,320,000
  Repayment of long-term bank debt and
    other long-term obligations             (22,856,000) (24,143,000)
  Proceeds from exercised stock options          15,000        --
                                             ----------   ----------
    Net cash (used in) financing
       activities                            (1,741,000)  (3,008,000)
                                             ----------   ----------

Net increase in cash and cash
  equivalents                                   632,000      209,000

Cash and cash equivalents at the
  beginning of the period                     2,987,000    3,316,000
                                             ----------   ----------
Cash and cash equivalents at the
  end of the period                       $   3,619,000 $  3,525,000
                                             ==========   ==========







 See accompanying notes to the consolidated financial statements.
                                 
                                 8
                                 
                      PrimeEnergy Corporation
                                 
            Notes to Consolidated Financial Statements
                                 
                        September 30, 1998

1)  Description of Operations and Significant Accounting Policies:

    Nature of Operations-

    PrimeEnergy  Corporation  ("PEC"),  a  Delaware  corporation,   was
    organized   in  March  1973.  PrimeEnergy  Management   Corporation
    ("PEMC"),  a wholly-owned subsidiary, acts as the managing  general
    partner,  providing administration, accounting and tax  preparation
    services for 53 private and publicly-held limited partnerships  and
    trusts  (the  "Partnerships"). PEC owns Eastern  Oil  Well  Service
    Company  ("EOWSC")  and  Southwest  Oilfield  Construction  Company
    ("SOCC"),  both of which perform oil and gas field servicing.   PEC
    also  owns Prime Operating Company ("POC") which serves as operator
    for  most  of  the producing oil and gas properties  owned  by  the
    Company  and affiliated entities.  PrimeEnergy Corporation and  its
    wholly-owned subsidiaries are herein referred to as the "Company."
    
    The Company is engaged in oil and gas exploration and drilling, and
    the  development, acquisition and production of oil and natural gas
    properties.  The  Company  owns  leasehold,  mineral  and   royalty
    interests  in  producing and non-producing oil and  gas  properties
    across the continental United States, primarily in Texas, Oklahoma,
    West  Virginia  and  Lousiana.  The Company operates  approximately
    1,650  wells and owns non-operating interests in approximately  900
    additional   wells.   Additionally,  the  Company  provides   well-
    servicing  support  operations, site preparation  and  construction
    services  for oil and gas drilling and rework operations,  both  in
    connection with the Company's activities and in providing  contract
    services  for  third  parties.  The Company is publicly  traded  on
    NASDAQ under the symbol "PNRG".

    The  markets for the Company's products are highly competitive,  as
    oil  and gas are commodity products and prices depend upon numerous
    factors  beyond  the  control  of the Company,  such  as  economic,
    political   and   regulatory  developments  and  competition   from
    alternative energy sources.
    
    Certain  items  on  the  prior  year income  statements  have  been
    reclassified to conform with current year classification.

    Principles of Consolidation-

    The  consolidated  financial statements  include  the  accounts  of
    PrimeEnergy  Corporation  and its wholly-owned  subsidiaries.   All
    material  inter-company  accounts and  transactions  between  these
    entities have been eliminated. Oil and gas properties include
    
                                 9
    ownership  interests in affiliated partnerships.  The statement  of
    operations  includes the Company's proportionate share  of  revenue
    and  expenses  related  to  oil and  gas  interests  owned  by  the
    partnerships.

    Use of Estimates-

    The   preparation  of  financial  statements  in  conformity   with
    generally  accepted  accounting principles requires  management  to
    make estimates and assumptions that affect the reported amounts  of
    assets  and  liabilities and disclosure of  contingent  assets  and
    liabilities  at  the  date  of  the financial  statements  and  the
    reported  amounts  of  revenues and expenses during  the  reporting
    period.  Actual results could differ from those estimates.
    
    Estimates  of  oil and gas reserves, as determined  by  independent
    petroleum engineers, are continually subject to revision  based  on
    price,  production  history and other factors.  Depletion  expense,
    which is computed based on the units of production method, could be
    significantly impacted by changes in such estimates.  Additionally,
    SFAS  No. 121 requires that, if the expected future cash flow  from
    an asset is less than its carrying cost, that asset must be written
    down  to  its  fair market value.  As the fair market  value  of  a
    property is generally substantially less than the total future cash
    flow expected from the asset, small changes in the estimated future
    net  revenue from an asset could lead to the necessity of recording
    a significant impairment.
    
    The  Company  has significant deferred tax assets which  have  been
    fully  reserved against based upon the assumption that  at  current
    and  expected future levels of taxable income, and considering  the
    Section   29   credits  the  Company  expects  to   generate,   the
    availability  of these carryforwards will not lead  to  significant
    reductions  in the Company's tax liability as compared to  what  it
    would  pay  if  such  carryforwards did not  exist.   Increases  in
    estimates  of  future  taxable income  could  lead  to  significant
    reductions  in  the  amount of this reserve,  which  could  have  a
    material effect on the net income of the Company.

    Property and Equipment-

    The  Company follows the "successful efforts" method of  accounting
    for  its  oil  and  gas properties.  Under the  successful  efforts
    method,  costs  of  acquiring undeveloped  oil  and  gas  leasehold
    acreage,  including lease bonuses, brokers' fees and other  related
    costs are capitalized. Provisions for impairment of undeveloped oil
    and  gas  leases  are based on periodic evaluations.  Annual  lease
    rentals   and   exploration  expenses,  including  geological   and
    geophysical  expenses and exploratory dry hole costs,  are  charged
    against income as incurred.
    
    All other property and equipment are carried at cost.  Depreciation
    and depletion of oil and gas production equipment and
    
                                10
    properties are determined under the unit-of-production method based
    on estimated proved recoverable oil and gas reserves.  Depreciation
    of all other equipment is determined under the straight-line method
    using various rates based on useful lives.  The cost of assets  and
    related accumulated depreciation is removed from the accounts  when
    such  assets are disposed of, and any related gains or  losses  are
    reflected in current earnings.
    
    
    Income Taxes-

    The  Company  records income taxes in accordance with Statement  of
    Financial  Accounting Standards ("SFAS") No. 109,  "Accounting  for
    Income Taxes".  SFAS No. 109 is an asset and liability approach  to
    accounting  for  income taxes, which requires  the  recognition  of
    deferred  tax  assets  and  liabilities  for  the  expected  future
    consequences  of events that have been recognized in the  Company's
    financial statements or tax returns.
   
     Deferred  tax liabilities or assets are established for  temporary
     differences  between  financial and tax reporting  bases  and  are
     subsequently adjusted to reflect changes in the rates expected  to
     be  in effect when the temporary differences reverse.  A valuation
     allowance  is  established for any deferred tax  asset  for  which
     realization is not likely.

    General and Administrative Expenses-
    
    General  and  administrative expenses represent costs and  expenses
    associated   with   the   operation  of   the   Company.    Certain
    partnerships,  trusts and joint ventures sponsored by  the  Company
    reimburse  general  and administrative expenses incurred  on  their
    behalf.
    
    Income per share-
    
    Income  per  share of common stock has been computed based  on  the
    weighted   average  number  of  common  shares  and  common   stock
    equivalents outstanding during the respective periods in accordance
    with  SFAS  No.  128,  "Earnings per  Share,"  described  below  in
    Recently Issued Accounting Standards.
    
    Statements of cash flows-
    
    For  purposes  of  the consolidated statements of cash  flows,  the
    Company  considers  short-term,  highly  liquid  investments   with
    original   maturities  of  less  than  ninety  days  to   be   cash
    equivalents.
    
    Concentration of Credit Risk-
    
    The   Company  maintains  significant  banking  relationships  with
    financial institutions in the State of Texas.  The Company limits
    
                                11
    its risk by periodically evaluating the relative credit standing
    of  these  financial  institutions.   The  Company's  oil  and  gas
    production  purchasers  consist primarily of independent  marketers
    and major gas pipeline companies.
    
    Hedging-
    
    From time to time, the Company may enter into futures contracts  in
    order  to  reduce its exposure related to changes in  oil  and  gas
    prices.   In  accordance  with Statement  of  Financial  Accounting
    Standards No. 80, any gain or loss on such contracts is treated  as
    an  adjustment  to oil and gas revenue.  Cash activity  related  to
    hedging  transactions  is  treated as  operating  activity  on  the
    Statements of Cash Flows.
    
    Recently Issued Accounting Standards-
    
    In   September  1997,  the  Financial  Accounting  Standards  Board
    released  Statement No. 130, "Reporting Comprehensive  Income"  and
    Statement No. 131, "Disclosures about Segments of an Enterprise and
    Related  Information."   These  statements  require  disclosure  of
    certain  components  of changes in equity and  certain  information
    about  operating segments and geographic areas of operation.   Both
    of  these  statements were adopted by the Company  as  of  January,
    1998.   These statements had no effect on the results of operations
    or financial position.
   
    In  February 1997, the Financial Accounting Standards Board  issued
    Statement  of  Financial  Accounting Standards  ("SFAS")  No.  128,
    "Earnings  per  Share" (EPS).  SFAS No. 128 replaces the  standards
    for  computing earnings per share previously established by APB No.
    15,  "Earnings  per  Share" by replacing the  primary  EPS  with  a
    presentation  of  "basic EPS" and requiring  dual  presentation  of
    basic  and  diluted EPS on the face of the income statement.   SFAS
    No. 128 requires companies to adopt its provisions for fiscal years
    ending  after  December 15, 1997 and requires  restatement  of  all
    prior   period  EPS  data,  if  necessary.   Earnings   per   share
    information has been presented on the financial statements and  its
    computations  disclosed in footnote 9 in accordance with  SFAS  No.
    128.

(2)  Restricted Cash and Cash Equivalents:

    Restricted  cash  and  cash  equivalents  includes  $1,096,000  and
    $885,000 at September 30, 1998 and December 31, 1997, respectively,
    of  cash primarily pertaining to unclaimed royalty payments.  There
    were  corresponding accounts payable recorded at September 30, 1998
    and December 31, 1997 for these liabilities.
    
(3)  Accounts Receivable

    Accounts  receivable at September 30, 1998 and  December  31,  1997
    consisted of the following:

                                12
                                     September 30,    December 31,
                                          1998               1997

      Joint Interest Billing          $   881,000       $ 1,601,000
      Trade Receivables                   248,000           213,000
      Oil and Gas Sales                 1,446,000         2,630,000
      Other                                83,000            62,000
                                        ---------         ---------
                                        2,658,000         4,506,000

      Less, Allowance for doubtful
       accounts                           (26,000)         (26,000)
                                        ---------         ---------
                                      $ 2,632,000       $ 4,480,000
                                        =========         =========
                                 

(4)  Property and equipment

    Property and equipment at September 30, 1998 and December 31,  1997
    consisted of the following:

                                       September 30,     December 31,
                                         1998               1997

      Developed oil and gas
        properties at cost            $43,771,000       $41,427,000
      Undeveloped oil and gas
        properties at cost                513,000           231,000
      Less, accumulated depletion
        and depreciation              (24,770,000)      (21,397,000)
                                      ------------      ------------
                                       19,514,000        20,261,000
                                      ------------      ------------

      Furniture, fixtures and
        equipment                       6,312,000         5,757,000
      Less, accumulated depreciation   (4,074,000)       (3,488,000)
                                       ----------        ----------
                                        2,238,000         2,269,000
                                       ----------        ----------
      Total net property and
        equipment                     $21,752,000       $22,530,000
                                       ==========        ==========

5)  Long-Term Bank Debt

    At  December  31, 1996, the Company was party to a line  of  credit
    agreement  with a bank with a non-reducing borrowing  base  of  $19
    million.  Twenty-five percent of the borrowing is syndicated  to  a
    second bank.  At the beginning of 1997, the agreement provided  for
    interest at 1/2% over the bank's base rate as defined, or 2 3/4%  over
    the London Inter-Bank Offered Rate (LIBOR) for the interest period
    
                                13
    in question, payable at the end of the interest period.
    
    On  February 6, 1997, the bank extended the borrowing base  to  $21
    million.   The  credit agreement was also amended  to  provide  for
    interest  on  outstanding borrowings at the bank's  base  rate,  as
    defined,  or 2 1/4% over the LIBO rate.  Effective in May, 1997,  the
    bank revised the borrowing base to $20.5 million due to the sale of
    properties by the Company.  In September, 1997, the borrowing  base
    was again revised to $20 million.
    
    Effective  January  2, 1998, the credit agreement  was  amended  to
    implement  an  interest  rate  schedule  that  is  based  upon  the
    aggregate principal amount of loans outstanding as a percentage  of
    the  borrowing  base.   The  amendment  provides  for  interest  on
    outstanding borrowings at the bank's base rate, as defined, or from
    1  1/2%  to  2%  over  the LIBOR rate depending  upon  the  Company's
    utilization of the available line of credit. During the first  nine
    months  of 1998, the Company's level of borrowings has resulted  in
    interest charged at 2% over the LIBOR rate.
    
    Advances  pursuant to the agreement are limited  to  the  borrowing
    base  as  defined in the agreement.  Most of the Company's oil  and
    gas  properties  as well as certain receivables and equipment  were
    pledged  as  security  under this agreement.  Under  the  Company's
    credit  agreement, the Company is required to maintain, as defined,
    a  minimum  current ratio, tangible net worth, debt coverage  ratio
    and interest coverage ratio.

(6)  Contingent Liabilities:

    PEMC,  as  managing general partner of the affiliated  partnerships
    and trusts (the "Partnerships"), is responsible for all Partnership
    activities,  including  the review and  analysis  of  oil  and  gas
    properties for acquisition, the drilling of development  wells  and
    the production and sale of oil and gas from productive wells.  PEMC
    also  provides  the administration, accounting and tax  preparation
    work  for  the  Partnerships.  PEMC is liable  for  all  debts  and
    liabilities of the affiliated Partnerships, to the extent that  the
    assets of a given limited Partnership are not sufficient to satisfy
    its obligations.
    
    As  a  general partner, PEMC is committed to offer to purchase  the
    limited  partners' interests in certain of its managed Partnerships
    at  various  annual intervals.  Under the terms  of  a  partnership
    agreement, PEMC is not obligated to purchase an amount greater than
    10%  of  the total partnership interest outstanding.  In  addition,
    PEMC  will  be  obligated  to purchase interests  tendered  by  the
    limited  partners  only to the extent of one  hundred  fifty  (150)
    percent of the revenues received by it from such partnership in the
    previous  year.   Purchase  prices are based  upon  annual  reserve
    reports of independent petroleum engineering firms discounted by  a
    risk  factor.  Based upon historical production rates  and  prices,
    management estimates that if all such offers were to be accepted,
    
                                14
    the   maximum   annual   future  purchase   commitment   would   be
    approximately $500,000.  In recent years, the Company has chosen to
    repurchase   limited  partnership  interests  in  excess   of   its
    commitment.

(7)  Stock Options and Other Compensation:

    In  May  1989,  non-statutory stock options  were  granted  by  the
    Company  to four key executive officers for the purchase of  shares
    of  common  stock.  Such options are exercisable, on  a  cumulative
    basis, as to twenty percent of the shares subject to option in each
    year,  beginning  one year after the granting of  the  option.   At
    September  30,  1998  and  1997, options  on  802,500  shares  were
    outstanding and exercisable at prices ranging from $1.00 to  $1.25.
    On  January 27, 1983, the Company adopted the 1983 Incentive  Stock
    Option  Plan.  At September 30, 1998 and 1997, options  on  111,000
    and   124,000   shares  were  exercisable  at  $1.50   per   share,
    respectively, and no additional shares were available for granting.
    
    PEMC  has  a  marketing  agreement with its  current  President  to
    provide  assistance  and  advice to PEMC  in  connection  with  the
    organization  and marketing of oil and gas partnerships  and  joint
    ventures and other investment vehicles of which PEMC is to serve as
    general  or managing partner.  The Company had a similar  agreement
    with its former Chairman.  Although that agreement has expired, the
    former  Chairman  is  still  entitled to receive  certain  payments
    relating  to partnerships formed during the time the agreement  was
    in  effect.   The  President is entitled to  a  percentage  of  the
    Company's  carried interest depending on total capital  raised  and
    annual performance of the Partnerships and joint ventures.
    
 (8) Related Party Transactions:

    PEMC  is  a general partner in several oil and gas Partnerships  in
    which  certain  directors  have  limited  and  general  partnership
    interests.   A  substantial portion of the assets and  revenues  of
    PEMC  are  derived from its interests in the oil and gas properties
    owned by the Partnerships. As the managing general partner in  each
    of  the Partnerships, PEMC receives approximately 5% to 12% of  the
    net  revenues  of  each Partnership as a carried  interest  in  the
    Partnerships' properties.
    
    The  Partnership  agreements allow PEMC to receive management  fees
    for  various  services  provided to the  Partnerships  as  well  as
    reimbursement  for  property  acquisition  and  development   costs
    incurred   on   behalf  of  the  Partnerships   and   general   and
    administrative  overhead, which is reported in  the  statements  of
    operations as administrative revenue.
    
    In  1991, the Company loaned approximately $325,000 at 12% interest
    to  a  real estate limited partnership of which a Company  Director
    is  a  general partner.  This loan is secured by a mortgage on  the
    underlying real estate in the partnership and the Company  received
    a  23% equity participation in the partnership.  The loan agreement
    provides  for  interest payments on a quarterly basis provided  the
    cash flow from operations of the limited partnership are sufficient
    to  pay interest for the quarter. If cash flows are not sufficient,
    the  accrued  interest  is  added to the principal.  This  loan  is
    included in other non-current assets on the balance sheet.
    
    Due  to related parties at September 30, 1998 and December 31, 1997
    primarily  represent receipts collected by the Company,  as  agent,
    from oil and gas sales net of expenses. Receivables from affiliates
    consist  of  reimbursable general and administrative  costs,  lease
    operating  expenses  and reimbursements for property  acquisitions,
    development and related costs.
    
 (9) Income per share:

     Basic  earnings  per  share  are  computed  by  dividing  earnings
     available to common stockholders by the weighted average number of
     common shares outstanding during the period.  Diluted earnings per
     share  reflect  per  share amounts that  would  have  resulted  if
     dilutive  potential  common stock had  been  converted  to  common
     stock.  The following reconciles amounts reported in the financial
     statements:
     
                                 
                       Nine Months Ended        Nine Months Ended
                       September 30, 1998       September 30, 1997
     
                        Net  Number of  Per Share       Net  Number of Per Share
                     Income     Shares     Amount    Income     Shares   Amount
Net income  per
   common share    $344,000  4,478,235     $0.08   $766,000  4,678,913    $0.16

Effect of dilutive 
securities: Options      --    774,698     (0.01)        --    772,351    (0.02)
                   --------  ---------     ------  --------  ---------   ------
Diluted  net income
 per common share  $344,000  5,252,933     $0.07   $766,000  5,451,264    $0.14
                    =======  =========     =====  =========  =========   =======
     
                       Three Months Ended       Three Months Ended
                       September 30, 1998       September 30, 1997
     
                       Net   Number of Per Share        Net  Number of Per Share
                     Income     Shares    Amount     Income     Shares    Amount
Net income  per
   common share     $11,000  4,459,165      $ --    $50,000  4,658,565    $0.01
     
Effect of dilutive 
securities:Options       --    764,774      $ --         --    810,619       --
                    -------  ---------    ------   --------  ---------    ------

Diluted  net income
per common share    $11,000  5,223,939      $ --    $50,000  5,469,184     $0.01
                    =======  =========    ======    =======  =========     =====
     
                                 



                                16
(10) Subsequent Events

     In  October 1998, the Company logged a successful exploratory  well
     in  the  West  Ridge  Field in Lafayette  Parish,  Louisiana.   The
     Francis  Martin  #1  was  drilled to a depth  of  13,200  feet  and
     encountered  approximately 135 feet of gross pay in the  Marg.  tex
     sand.  The  well,  in  which the Company will  own  a  19%  working
     interest,  tested 14,400 Mcf per day and 240 barrels of  condensate
     per  day  (8/8ths) with 8,580 psi flowing pressure.  It is expected
     to begin production in January 1999.
                                 
     In  November 1998, the Company sold one-half of its interest in its
     Ramrod  Property located in Matagorda County, Texas for $2,075,000.
     As  part  of  this  agreement,  the purchaser  agreed  to  pay  the
     Company's share of costs on a deep exploratory test.
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
                                17
     
Item   2.     MANAGEMENT'S   DISCUSSION  AND   ANALYSIS   OF   FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

This  discussion  should  be  read  in conjunction  with  the  financial
statements of the Company and notes thereto.  The Company's subsidiaries
are defined in Note 1 of the financial statements.  PEMC is the managing
general partner or managing trustee in several Limited Partnerships  and
Trusts (collectively, the "Partnerships").


LIQUIDITY AND CAPITAL RESOURCES

The Company feels that it has the ability to generate sufficient amounts
of cash to meet long-term liquidity needs, as well as debt service.  The
Company's  goal  is to generate increased cash flows by  increasing  its
reserve base through continued acquisition, exploration and development.
By  increasing  its  reserve base, the Company's  borrowing  ability  is
increased due to additional properties available as collateral.  Capital
expenditures  during  1998  were financed by borrowings  and  internally
generated funds coupled with cash balances available at the prior  year-
end.

On  April  26, 1995, the Company entered into a revised credit agreement
with  Bank One, Texas, NA providing for $12.5 million revolving line  of
credit  on  a  $50 million master promissory note.  This  new  agreement
introduced Den Norske Bank, AS as a 25% syndication partner in the line.
The  agreement  also  provides for a lower  floating  rate  compared  to
previous  agreements  as well as the ability to borrow  based  upon  the
London  Inter-Bank Offered Rate (LIBOR).  The borrowing base is  revised
every six months by the bank.

As  of  September 30, 1998, the borrowing base under the  agreement  was
$20,000,000 and the Company had $1,600,000 available under this line  of
credit.   During most of 1997, the interest rate on this line of  credit
was  the  banks  base rate, as defined, monthly, or 2  1/4  %  over  the
published  LIBOR  rate,  payable at the end of the  applicable  interest
period.  Effective February 2, 1998, this agreement was amended so  that
the  interest rate on the LIBOR Rate Loan will vary from 1  1/2%  to  2%
above the published LIBOR rate depending on the portion of the Company's
credit line being utilized.

Most  of  the  Company's  oil  and gas properties  as  well  as  certain
receivables  and equipment are pledged as security under the  agreement.
The  Company is required to maintain, as defined, a minimum tangible net
worth,  and  certain  debt, interest coverage and  current  ratios,  and
restrictions  are placed on the Company's ability to pay  dividends  and
purchase treasury stock.

The   Company   spent  approximately  $3,321,000  on  the   acquisition,
exploration and development of oil and gas properties in the first  nine
months  of 1998, including $719,000 spent to repurchase limited partners
interests from investors in the oil and gas partnerships.

                                18
The Company also spent approximately $587,000 on field service equipment
and  $131,000 on computer hardware and software in the First nine months
of 1998.

In  January, 1998, the Company purchased 53,334 shares of its stock  for
treasury  from Stanford University and 53,334 shares from the University
of  California.   The  total combined cost of these  two  purchases  was
$853,000.   The Company spent an additional $438,000 in the  first  nine
months of 1998 to acquire treasury stock in open market transactions.

During  the first quarter of 1998, the Company sold its interests  in  a
group  of  wells located in Southeast New Mexico for $157,000,  and  its
interest in the Guerra Field located in Webb County Texas, for $105,000.
In  November  1998, the Company sold one-half of its  interest  in  it's
Ramrod property located in Matagorda County, Texas for $2,075,000.   The
purchaser also agreed to pay the Company's share of costs of drilling  a
deep well on the property.

Most of the Company's capital spending is discretionary and the ultimate
level  of spending will be dependent on the Company's assessment of  the
oil  and gas business, the number of oil and gas prospects, and oil  and
gas business opportunities in general.

RESULTS OF OPERATIONS

Net income decreased to $344,000 for the nine months ended September 30,
1998 as compared to $766,000 for the first nine months of 1997, and   to
$11,000  for the quarter ended September 30, 1998 as compared to $50,000
for  the comparable period in 1997. Sharply lower oil and gas prices  in
1998  as  compared to 1997 had a strong negative impact  on  both  third
quarter 1998 and year to date earnings. This impact was partially offset
in  both  cases by much lower exploration costs, and by revenue received
from  the  Company's Saint George # 1 well, which came on  line  in  the
middle of March 1998.

The  Company,  along with several joint venture partners,  is  currently
involved  in a 1998 Drilling program in which a total of six exploratory
wells  are currently expected to be drilled.  The first of these  wells,
the  Francis Martin #1 located in Lafayette Parish, Louisiana  has  been
successfully  completed in the upper Marg tex sand, and is  expected  to
begin production in January 1999.  The results of the remaining wells in
the  program are expected to be known in the fourth quarter of 1998  and
first  quarter  of 1999. If any of these wells are dry  holes,  drilling
costs  will  be expensed as exploration costs, which would significantly
impact earnings.

Oil  and  gas  sales  of $8,859,000 for the first nine  months  of  1998
represented a 20% decrease over sales in the first nine months of  1997.
Third  quarter  1998 sales of $2,866,000 represent a 17%  decrease  over
1997  third quarter sales. For the first nine months of 1998 as compared
to the first nine months of 1997, the average oil price received dropped
from $19.61 per barrel to $12.75, and average gas prices

                                19
decreased from $2.48 per Mcf to $2.27. For the third quarter of 1998  as
compared  to  the third quarter of 1997, the average oil price  received
dropped  from  $17.85  per  barrel to $11.89,  and  average  gas  prices
decreased from $2.40 per Mcf to $2.25.

The  company's production totaled 72,000 barrels of oil and 894,000  Mcf
of  gas  in the third quarter of 1998, as compared to 68,000 barrels  of
oil  and  932,000 Mcf of gas during the comparable period in  1997.  The
increase  in  oil production is attributable to workovers,  improvements
and   development   drilling  on  several  of  the  Company's   existing
properties.  The  decline  in  gas  production  is  due  to  the  normal
production  declines  coupled with a reduced  working  interest  in  the
Company's  South  Powderhorn field, partially offset by production  from
the Saint George # 1 well, which was completed this year.

The  purchase  of  the Company's South Powderhorn property,  located  in
Calhoun  County,  Texas was subject to a provision  wherein  the  seller
obtains  a  25%  working interest in the property at such  time  as  the
Company and its joint venture partners have received net cash flow  from
the property equal to 200% of their costs (Payout). This Payout occurred
in  January  of  1998,  and  production attributable  to  the  Company's
interest, which reverted to the seller, was approximately 158,000 Mcf in
the first nine months of 1998.

First sales from the St. George #1 well occurred on March 12, 1998.  The
Company's  share of production from this well was approximately  400,000
Mcf through September 30, 1998.  In November 1998, the Company sold one-
half of its interest in the Ramrod property, of which the St. George  #1
well is a part, for $2,075,000.

District operating income decreased by $60,000, or 1%, between the first
nine months of 1998 and the first nine months of 1997.

Administrative revenue for the first nine months of 1998 was  consistent
with  the first nine months of 1997. Amounts received in both years from
certain  Partnerships are substantially less than the amounts  allocable
to  those  Partnerships  under the Partnership  agreements.   The  lower
amounts  reflect PEMC's efforts to limit costs incurred and the  amounts
allocated to the Partnerships.

Other  income for the third quarter of 1998 includes a $65,000  contract
settlement  with a gas purchaser relating to production cost  deductions
and tax reimbursements prior to 1989.

Lease  operating expense for the first nine months of 1998  declined  by
4%,  or  $210,000,  compared to the first nine  months  of  1997.  Third
quarter  1998  lease  operating  expense  of  $1,665,000  represented  a
decrease of $87,000, or 5%, over the third quarter 1997 amount.

The  Company  receives reimbursement for costs incurred related  to  the
evaluation, acquisition and development of properties in which interests
are  owned  by  its  joint venture partners, related  partnerships,  and
trusts. To the extent that these costs are expended

                                20
at   the  district  level,  the  reimbursements  reduce  total  district
operating  expenses. To the extent such expenses are incurred  by  PEMC,
such  reimbursements  reduce total general and administrative  expenses.
Such  reimbursement totaled approximately $1,100,000 in the  first  nine
months of 1998 as compared to $1,200,000 for the same period in 1997.

District operating expense increased 3% in the first nine months of 1998
as compared to the same period in 1997.

General  and  administrative expenses increased 10% in  the  first  nine
months  of 1998 as compared to the same period in 1997, and 31%  in  the
third quarter of 1998 as compared to the third quarter of 1997. In  both
cases  the increases were due to an increase in the Company's  share  of
general and administrative expenses incurred by the partnerships due  to
substantial  additional  interests in  those  partnerships  having  been
purchased and lower property acquisition cost reimbursement.

Depreciation and depletion of oil and gas properties decreased $148,000,
or  4%,  in the first nine months of 1998 as compared to the first  nine
months  of 1997, primarily due to lower production, but remained  fairly
constant  in the third quarter of 1998 as compared to the third  quarter
of 1997 due to expense relating to production from the Saint George #  1
well.

Exploration  costs  were $113,000 in the first nine months  of  1998  as
compared  to $2,257,000 during the same period in 1997.  The 1997  costs
consisted  primarily of $1,243,000 in 3D seismic and related  costs  and
$789,000  in  dry  hole costs.  The Company has plans to  drill  several
exploratory wells during the remainder of 1998, which would  be  charged
to  exploration expense if they were dry holes, and is also  considering
participating in 3D seismic shoots in an attempt to identify  additional
locations  for  exploratory  drilling. It  is  therefore  possible  that
exploration costs during the remainder of 1998 will be significantly  in
excess of the amount for the first nine months of 1998.

Gain  on  sale  of assets of $132,000 in the first nine months  of  1998
consists of net gains of $28,000 on the sale of producing properties and
$104,000  in  receipts from the sale of equipment,  primarily  on  fully
depleted  wells where proceeds were in excess of the plugging  costs  of
those wells.

Interest  expense  during  the  first  nine  months  of  1998  increased
approximately  26%  to  $1,062,000 as  average  debt  levels  increased,
primarily  due to the amounts borrowed to fund drilling and  exploration
activities in the latter part of 1997 and the beginning of 1998.

Many  existing computer applications use two digits rather than four  to
define  the  applicable year, raising the possibility that software  may
erroneously assume that a date using "00" as the year refers to the year
1900 rather than the year 2000.

The Company's existing software will properly handle all dates including
dates beyond December 31, 1999 and the Company does not

                                21
expect  any  significant operational difficulties or  unusual  costs  to
result from the year 2000 issue.  While it is not possible at this  time
to determine what effect the year 2000 issue might have on the Company's
customers,  suppliers, or joint venture partners, the Company  does  not
believe the potential problems associated with the year 2000 issue  will
have a material effect on it financial position.

This  Report  contains  forward-looking statements  that  are  based  on
management's  current  expectations, estimates and  projections.   Words
such   as  "expects,"  "anticipates,"  "intends,"  "plans,"  "believes,"
"projects"  and  "estimates," and variations of such words  and  similar
expressions  are  intended to identify such forward-looking  statements.
These  statements  constitute "forward-looking  statements"  within  the
meaning of Section 27A of the Securities Act of 1933, and are subject to
the  safe  harbors created thereby.  These statements are not guarantees
of  future performance and involve risks and uncertainties and are based
on  a  number of assumptions that could ultimately prove inaccurate and,
therefore,  there  can  be  no assurance that  they  will  prove  to  be
accurate.  Actual results and outcomes may vary materially from what  is
expressed  or  forecast  in such statements due  to  various  risks  and
uncertainties.   These  risks  and uncertainties  include,  among  other
things,   the  possibility  of  drilling  cost  overruns  and  technical
difficulties,  volatility  of  oil and gas  prices,  competition,  risks
inherent in the Company's oil and gas operations, the inexact nature  of
interpretation  of  seismic and other geological and  geophysical  data,
imprecision of reserve estimates, and the Company's ability  to  replace
and expand oil and gas reserves. Accordingly, stockholders and potential
investors are cautioned that certain events or circumstances could cause
actual results to differ materially from those projected.

























                                22


                      PART II - OTHER MATTERS

Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to a vote of security holders during
the period covered by this report.
                                 
Item 5.   OTHER INFORMATION

Exhibit  27 - Financial Data Schedule is attached to the electronic
filing of this report only.


Item 6. EXHIBITS AND REPORTS ON FORM 8K

No  reports  on form 8K were filed by the Company during  the  nine
months ended September 30, 1998.



































                                23
                            SIGNATURES



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






                                        PrimeEnergy Corporation
                                        (Registrant)





November 10, 1998                       /s/ Charles E. Drimal,Jr.
   (Date)                               --------------------------
                                        Charles E. Drimal, Jr.
                                        President
                                        Principal Executive Officer






November 10, 1998                       /s/ Beverly A. Cummings
   (Date)                               --------------------------
                                        Beverly A. Cummings
                                        Executive Vice President
                                        Principal Financial and
Accounting Officer





                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                24