UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549
                                     
                                 FORM 10-Q

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

             For the quarterly period ended September 30, 1997
                                     
                                    OR
                                     
[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

                       Commission File Number 1-2499
                                     
                    CORNERSTONE PROPANE PARTNERS, L.P.
          (Exact name of registrant as specified in its charter)

       Delaware                          77-0439862
(State or other jurisdiction of    (I.R.S. Employer Identification
incorporation or organization)     Number)

432 Westridge Drive\Watsonville, California         95076
(Address of principal executive officers          (Zip Code)

    Registrant's telephone number, including area code:  (408) 724-1921
                                     
                                   NONE
(Former name, former address and former fiscal year, if changed since last
                                 report.)
                                     

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

Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of November 10, 1997:       10,761,157 - Common Units

                                     

                    CORNERSTONE PROPANE PARTNERS, L.P.
                                     
                             TABLE OF CONTENTS
                                     
                                   PAGES

                      Part I.  Financial Information

Item 1. Financial Statements

     Cornerstone Propane Partners, L.P.

     Consolidated Balance Sheets as of June 30, 1997
      and September 30, 1997

     Consolidated Statement of Operations for the
      Three Months Ended September 30, 1997

     Consolidated Statement of Cash Flows for the
      Three Months Ended September 30, 1997

     Consolidated Statement of Partners' Capital
      for the Three Months Ended September 30, 1997

     Notes to Consolidated Financial Statements

     Cornerstone Propane Partners, L.P. (Pro Forma)

     Consolidated Statement of Operations for the
      Three Months Ended September 30, 1996

     Notes to Pro Forma Consolidated Financial Information

     SYN, Inc. (Predecessor)

     Consolidated Statement of Operations for
      the Three Months Ended September 30, 1996

     Consolidated Statement of Stockholders' Equity
      for the Three Months Ended September 30, 1996

     Consolidated Statement of Cash Flows for Three Months
      Ended September 30, 1996

     Notes to Consolidated Financial Statements

                    CORNERSTONE PROPANE PARTNERS, L.P.
                                     
                       TABLE OF CONTENTS (Continued)
                                     
                                   PAGES
                      Part I.  Financial Information

     Empire Energy Corporation (Predecessor)

     Consolidated Statements of Operations for the One Month
      Ended July 31, 1996 and the Two Months Ended
      September 30, 1996

     Consolidated Statements of Stockholders' Equity for the
      One Month Ended July 31, 1996 and the Two Months
      Ended September 30, 1996

     Consolidated Statements of Cash Flows for the One Month
      Ended July 31, 1996, and the Two Months Ended
      September 30, 1996

     Notes to Consolidated Financial Statements

     CGI Holdings, Inc. (Predecessor)

     Consolidated Statement of Operations for the Three
      Months Ended October 31, 1996

     Consolidated Statement of Stockholders' Equity for the
      Three Months Ended October 31, 1996

     Consolidated Statement of Cash Flows for the Three
      Months Ended October 31, 1996

     Notes to Consolidated Financial Statements

Item 2.
Management's Discussion and Analysis of Financial Condition and
      Results of Operations of Cornerstone Propane Partners, L.P.
      for the Three Months Ended September 30, 1997  (Actual) and the
      Three Months Ended September 30, 1996 (Pro Forma)

                        Part II.  Other Information

Item 6                       Exhibits and Reports on Form 8-K

      Signature



             CORNERSTONE PROPANE PARTNERS, L.P. AND SUBSIDIARY
                                     
                        CONSOLIDATED BALANCE SHEETS
                 (Dollars in thousands, except unit data)
                                (Unaudited)
                                     
                                     
                                     
                                  ASSETS
                                     
                                   September 30,     June 30,
                                        1997           1997
                                   ------------   -------------
Current assets:
  Cash and cash equivalents        $      8,593   $      8,406
  Trade receivables, net                 46,391         41,924
  Inventories                            15,908         15,538
  Prepaid expenses and other
   current assets                         4,225          4,393
                                   ------------   -------------
     Total current assets                75,117         70,261

Property, plant and equipment, net      250,300        247,943
Goodwill and other intangible
   assets, net                          220,963        221,748
Other assets                              2,404          1,041
                                   ------------   -------------
          Total assets             $    548,784   $    540,993
                                   ============   =============

                     LIABILITIES AND PARTNERS' CAPITAL

Current liabilities:
  Current portion of long-term
   debt                            $      5,010   $      5,736
  Trade accounts payable                 42,351         42,334
  Accrued expenses                       16,827         12,672
                                   ------------   -------------
     Total current liabilities           64,188         60,742

Long-term debt                          251,155        231,532
Due to related party                        740            740
Other noncurrent liabilities              5,895          4,050
                                   ------------   -------------
          Total liabilities             321,978        297,064
                                   ------------   -------------

Commitments and contingencies

Partners' capital:
  Common unitholders (10,512,805
   units issued and outstanding)        136,542        146,851
  Subordinated unitholders
   (6,597,619 units issued and
   outstanding)                          85,636         92,106
  General partners                        4,628          4,972
                                   ------------   -------------
          Total partners' capital       226,806        243,929
                                   ------------   -------------
          Total liabilities and
           partners' capital       $    548,784   $    540,993
                                   ============   =============

 The accompanying notes are an integral part of these consolidated balance
                                  sheets.


             CORNERSTONE PROPANE PARTNERS, L.P. AND SUBSIDIARY
                                     
                   CONSOLIDATED STATEMENT OF OPERATIONS
               (Dollars in thousands, except per unit data)
                                (Unaudited)



                                                 Three Months
                                                    Ended
                                              September 30, 1997
                                              ------------------
Revenues                                           $ 152,157

Cost of sales                                        127,855
                                                   ----------
  Gross profit                                        24,302

Expenses:
  Operating, general and administrative               22,602
  Depreciation and amortization                        4,592
                                                   ----------
                                                      27,194
                                                   ----------

  Operating loss                                     (2,892)
   Interest expense                                  (4,782)
                                                   ----------
  Income before provision for income taxes           (7,674)
   Provision for income taxes                            20
                                                   ----------
  Net loss                                         $ (7,694)
                                                   ==========
  General partner's interest in net loss           $   (155)
                                                   ==========
  Limited partners' interest in net loss           $ (7,539)
                                                   ==========
  Net loss per unit                                $   (.46)
                                                   ==========
Weighted average number of units outstanding          16,712
                                                   ==========


The accompanying notes are an integral part of this consolidated financial
                                statement.



             CORNERSTONE PROPANE PARTNERS, L.P. AND SUBSIDIARY
                                     
                   CONSOLIDATED STATEMENT OF CASH FLOWS
                          (Dollars in thousands)
                                (Unaudited)
                                                         Three Months
                                                            Ended
                                                       September 30, 1997
                                                       ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                             $    (7,694)
  Adjustments to reconcile net loss to net
   cash used in operating activities:
     Depreciation and amortization                           4,592
     Changes in assets and liabilities,
      net of effect of acquisitions:
       Trade receivables                                    (4,467)
       Inventories                                            (370)
       Prepaid expenses and other current assets               268
       Trade accounts payable and accrued liabilities        3,658
                                                       -------------
               Net cash used in operating activities        (4,013)
                                                       -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Expenditures for property, plant and equipment            (4,522)
  Acquisitions, net of cash received                        (1,472)
                                                       -------------
               Net cash used in investing activities        (5,994)
                                                       -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings on Working Capital Facility                    19,600
  Additional borrowings on purchase obligations                553
  Payments on purchase obligations                            (530)
  Partnership distributions                                 (9,429)
                                                       -------------
               Net cash provided by financing activities    10,194
                                                       -------------
INCREASE IN CASH AND CASH EQUIVALENTS                          187

CASH AND CASH EQUIVALENTS, Beginning of Period               8,406
                                                       -------------
CASH AND CASH EQUIVALENTS, End Of Period               $     8,593
                                                       =============
CASH PAID DURING THE PERIOD FOR:
  Interest                                             $       944
                                                       =============
The accompanying notes are an integral part of this consolidated financial
                                statement.



             CORNERSTONE PROPANE PARTNERS, L.P. AND SUBSIDIARY
                                     
                CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
                 (Dollars in thousands, except unit data)
                                (Unaudited)



            Number of Units                                      Total
          ---------------------                        General  Partners'
          Common    Subordinated Common  Subordinated  Partner   Capital
          --------- ------------ -------- -----------  ------- ---------
Balance,
 June 30,
   1997  10,512,805   6,597,619  $146,851   $92,106    $4,972   $243,929

Quarterly
 Distribution   -            -     (5,677)   (3,563)     (189)    (9,429)

Net loss        -            -     (4,632)   (2,907)     (155)    (7,694)
          --------- ------------ -------- -----------  ------- ---------
Balance,
 September 30,
 1997    10,512,805   6,597,619  $136,542   $85,636    $4,628   $226,806
         ========== ============ ========= ==========  ======= =========




The accompanying notes are an integral part of this consolidated financial
                                statement.



             CORNERSTONE PROPANE PARTNERS, L.P. AND SUBSIDIARY
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            SEPTEMBER 30, 1997
                 (Dollars in thousands, except unit data)
                                (Unaudited)


1.   BASIS OF PRESENTATION
------------------------
  The consolidated financial statements include the accounts of Cornerstone
Propane   Partners,  L.P.  ("Cornerstone  Partners")  and  its  subsidiary,
Cornerstone  Propane L.P. (the "Operating Partnership") and  the  Operating
Partnership's   corporate  subsidiary,  Cornerstone   Sales   and   Service
Corporation  ("Sales  and  Service"), after  elimination  of  all  material
intercompany   balances  and  transactions.   Cornerstone   Partners,   the
Operating Partnership and Sales and Service are collectively referred to as
the "Partnership."

   The  accompanying  interim  consolidated  financial  statements  of  the
Partnership  are  unaudited,  however, in the opinion  of  management,  all
adjustments   necessary  for  a  fair  presentation  of  such  consolidated
financial  statements have been reflected in the interim periods presented.
Such   adjustments   consisted  only  of  normal  recurring   items.    The
Partnership's business is seasonal and accordingly, interim results are not
indicative of results for a full year.  The significant accounting policies
and  certain  financial  information which are  normally  included  in  the
financial  statements  prepared  in  accordance  with  generally   accepted
accounting  principles, but which are not required  for  interim  reporting
purposes,  have  been condensed or omitted.  The accompanying  consolidated
financial statements of the Partnership should be read in conjunction  with
the  consolidated financial statements and related notes  included  in  the
Partnership's Annual Report on Form 10-K for the fiscal year ended June 30,
1997.

2.   DISTRIBUTIONS OF AVAILABLE CASH
----------------------------------
  The  Partnership will make distributions to its partners with respect  to
each fiscal quarter of the Partnership within 45 days after the end of each
fiscal  quarter  in  an aggregate amount equal to its  available  cash,  as
defined, for such quarter (the Minimum Quarterly Distribution).

  The  Partnership will distribute 100% of its Available Cash (98%  to  all
Unitholders  and  2% to the General Partners) until the  Minimum  Quarterly
Distribution  ($.54 per unit) for such quarter has been made.   During  the
Subordination Period, to the extent there is sufficient Available Cash, the
holders  of  Common  Units have the right to receive the Minimum  Quarterly
Distribution, plus any arrearages, prior to the distribution  of  Available
Cash  to holders of Subordinated Units.  The Minimum Quarterly Distribution
for  the period from April 1, 1997 to June 30, 1997, of $.54 per Common and
Subordinated Unit totaling $9,429 was paid on August 15, 1997.

  On October 23, 1997, the Minimum Quarterly Distribution in the amount  of
$9,429  for  the  period July 1, 1997 to September 30, 1997,  of  $.54  per
Common and Subordinated Unit was declared.  This distribution is to be paid
prior to November 14, 1997.

3.   ACQUISITIONS
---------------
  The  Partnership  consummated one acquisition during  the  quarter  ended
September  30,  1997,  for the total consideration  of  approximately  $1.7
million  which  was  paid  primarily through  the  issuance  of  debt.   No
additional  common units were issued in the transaction.   The  acquisition
has  been accounted for using the purchase method of accounting and had  no
significant effect on operating results for the period ended September  30,
1997.

4.   NET LOSS PER UNIT
--------------------
  Net  loss per unit is computed by dividing net loss, after deducting  the
General   Partners'  2%  interest,  by  the  weighted  average  number   of
outstanding common and subordinated units.

5.   RECENTLY ISSUED ACCOUNTING STANDARDS
-----------------------------------------
  Financial  Accounting Standards Board Statement No.  128,  "Earnings  per
Share"  ("Statement No. 128"), issued in February 1997  and  effective  for
fiscal  years  ending after December 15, 1997, establishes  and  simplifies
standards  for computing and presenting earnings per share.  Implementation
of  Statement  No. 128 will not have a material impact on the Partnership's
computation  or  presentation of earnings per unit,  as  the  Partnership's
common  unit equivalents have had no material effect on earnings  per  unit
amounts.

  Financial  Accounting  Standards  Board  Statement  No.  130,  "Reporting
Comprehensive Income," issued in June 1997 and effective for  fiscal  years
beginning after December 15, 1997, established standards for reporting  and
display  of  the  total  of net income and all other  nonowner  changes  in
partners' capital, or comprehensive income, either below net income  (loss)
in  the  statement of operations, in a separate statement of  comprehensive
income   (loss)  or  within  the  statement  of  partners'  capital.    The
Partnership has had no significant items of other comprehensive income.

             CORNERSTONE PROPANE PARTNERS, L.P. AND SUBSIDIARY
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            SEPTEMBER 30, 1997
                 (Dollars in thousands, except unit data)
                                (Unaudited)


6.   SUBSEQUENT EVENT
-------------------
   Effective  October  31,  1997,  the  Partnership  registered   3,000,000
additional  units  which are available to be used for future  acquisitions.
On  November  1,  1997,  the  Partnership consummated  the  acquisition  of
substantially  all of the assets of Graves Butane Company of Arizona,  Inc.
The total consideration for this acquisition was approximately $9.0 million
of which $6.2 million was in the form of Common Units.
  


             CORNERSTONE PROPANE PARTNERS, L.P. AND SUBSIDIARY
                                 PRO FORMA
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                      THREE MONTHS ENDED SEPTEMBER 30
              (Dollars in thousands, except per Unit data)
                                (Unaudited)



                                               1996          1997
                                           (Pro Forma)     (Actual)
                                            -----------    ---------
Revenues                                     $141,756       $152,157
Cost of sales                                 117,519        127,855
                                            -----------    ---------
Gross profit                                   24,237         24,302
                                            -----------    ---------
Expenses:
  Operating, general and administrative        20,858         22,602
  Depreciation and amortization                 3,738          4,592
                                            -----------    ---------
                                               24,596         27,194

  Operating loss                                 (359)        (2,892)
     Interest expense                           4,467          4,782
  Loss before provision for income taxe        (4,826)        (7,674)
     Provision for income taxes                    25             20
                                            -----------    ---------
  Net loss                                   $ (4,851)      $ (7,694)
                                            ===========    =========
  General partners' interest in net loss     $    (97)      $   (155)
                                            ===========    =========
  Limited partners' interest in net loss     $ (4,754)      $ (7,539)
                                            ===========    =========
  Net loss per unit                          $   (.29)      $   (.46)
                                            ===========    =========
Weighted average number of units outstanding   16,419         16,712
                                            ===========    =========

The accompanying notes are an integral part of these consolidated financial
                                statements.



             CORNERSTONE PROPANE PARTNERS, L.P. AND SUBSIDIARY
                                     
                      NOTES TO PRO FORMA CONSOLIDATED
                           FINANCIAL STATEMENTS
                            SEPTEMBER 30, 1996
                          (Dollars in thousands)
                                (Unaudited)



1.   Basis of Presentation
-----------------------
  The  unaudited  pro  forma consolidated statement of operations  for  the
  three  months  ended September 30, 1996, was derived from the  historical
  statements  of  operations of Empire Energy Corporation  (Empire  Energy)
  for  the periods July 1 through September 30, 1996; of SYN Inc. (Synergy)
  for  the  period July 1 through September 30, 1996, and of CGI  Holdings,
  Inc.  (Coast)  for the period August 1 through October 31, 1996.   Empire
  Energy,   Synergy  and  Coast  are  collectively  referred  to   as   the
  "Predecessor  Companies."   The  pro  forma  consolidated  statement   of
  operations  was  prepared to reflect the effects of  the  Initial  Public
  Offering (IPO) as if it had been completed in its entirety as of July  1,
  1996.   However, this statement does not purport to present  the  results
  of  operations of the Partnership had the IPO actually been completed  as
  of  July  1, 1996.  In addition, the pro forma consolidated statement  of
  operations  is  not  necessarily indicative  of  the  results  of  future
  operations   of  the  Partnership  and  should  therefore  be   read   in
  conjunction with the historical consolidated financial statements of  the
  Predecessor  Companies and the Partnership appearing  elsewhere  in  this
  Quarterly Report on Form 10-Q.
  
2.   Pro Forma Adjustments
-----------------------
  Significant  pro  forma  adjustments for  the  three-month  period  ended
  September  30,  1996, reflected in the pro forma consolidated  statements
  of operations include the following:
  
  Adjustments  to  reflect  the  full period effect  of  operating  expense
  savings  resulting  from  the consolidation of  certain  operations  that
  occurred  subsequent  to  July 1, 1996, as well  as  the  elimination  of
  certain  operating, general and administrative expenses  associated  with
  the operation of the Partnership.
  
  General  and  administrative adjustments of $433  relating  to  corporate
  overhead  consolidation,  the consolidation of certain  retail  locations
  and, the elimination of bank and consulting fees.
  
  An   adjustment  of  $78  to  reflect  the  additional  depreciation  and
  amortization  expense  due  to the increase in property  and  intangibles
  that  result  from  applying the purchase method  of  accounting  to  the
  Empire Energy and Coast acquisitions.
  
  An  adjustment  to  reduce interest expense by $273 to  reflect  interest
  expense   applicable  to  the  Partnership.   These  adjustments  include
  interest  expense for the $220,000 senior notes at a rate  of  7.53%  per
  annum, expense attributable to the working capital facility based  on  an
  average  outstanding  principal balance of  $2,000  at  6.5%  per  annum,
  expense  attributable  to debt assumed based on  an  average  outstanding
  principal  balance  of  $9,500  at  8.5%  per  annum  and  debt   expense
  amortization based on $5,050 estimated debt issuance costs.
  
  Adjustments  to  reflect the elimination of income tax  related  accounts
  because  income  taxes will not be borne by the Partnership,  except  for
  income   taxes   applicable  to  operations  to  be  conducted   by   the
  Partnership's wholly-owned corporate subsidiary.
  


                         SYN INC. AND SUBSIDIARIES
                                     
                   CONSOLIDATED STATEMENT OF OPERATIONS
                              (In Thousands)
                                (Unaudited)


                                                         For the
                                                          Three
                                                          Months
                                                          Ended
                                                    September 30, 1996
                                                    ------------------
REVENUE                                                $    17,883

COST OF SALES                                                8,940
                                                    ------------------
GROSS PROFIT                                                 8,943
                                                    ------------------
OPERATING EXPENSES:
     Salaries and commissions                                3,865
     General and administrative                              3,083
     Depreciation and amortization                           1,000
     Related-party corporate administration and
      management fees                                          965
                                                    ------------------
          Total operating expenses                           8,913
                                                    ------------------
          Operating income                                      30

INTEREST EXPENSE, including $1,204 to related party          1,665
                                                    ------------------
LOSS BEFORE INCOME TAXES                                    (1,635)

INCOME TAX BENEFIT                                            (550)
                                                    ------------------
NET LOSS                                                    (1,085)

DIVIDENDS ON CUMULATIVE PREFERRED STOCK                     (2,073)
                                                    ------------------
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS             $    (3,158)
                                                    ==================
                                     
                                     
The accompanying notes are an integral part of this consolidated financial
                                statement.



                         SYN INC. AND SUBSIDIARIES
                                     
              CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                              (In Thousands)
                                (Unaudited)

                           Common Stock
                          ---------------
                                         Paid-in Accumulated  Stockholders
          Shares  Amount  Shares Amount  Capital    Deficit      Equity
          ------  ------  ------ ------  ------- -----------  ------------

Balance,
 July 1,
  1996    55,312 $55,312 100,000 $    1  $   99   $  (1,999)  $   53,413

 Dividends on
  preferred
      stock   -       -       -       -      -       (2,073)      (2,073)

 Net loss     -       -       -       -      -       (1,085)      (1,085)
          ------- ------ ------- ------  ------- -----------  ------------
Balance,
 September 30,
  1996    55,312 $55,312 100,000 $    1  $   99    $  (5,157) $   50,255
         ======= ======= ======= ======  ======= ===========  ============

The accompanying notes are an integral part of this consolidated financial
                                statement.






                         SYN INC. AND SUBSIDIARIES
                                     
                   CONSOLIDATED STATEMENT OF CASH FLOWS
                              (In Thousands)
                                (Unaudited)



                                                    Three Months
                                                       Ended
                                                 September 30, 1996
                                                  -----------------
OPERATING ACTIVITIES:
  Net loss                                        $    (1,085)
  Items not requiring (providing) cash:
   Depreciation and amortization                        1,000
   Deferred income taxes                                 (550)
  Changes in operating items:
   Trade receivables                                    1,270
   Inventories                                         (1,253)
   Prepaid expenses and other                            (311)
   Accounts payable                                     4,665
   Accrued expenses                                       206
                                                  -----------------
     Net cash provided by operating activities          3,942

INVESTING ACTIVITIES:
  Purchases of property and equipment                  (1,571)
  Proceeds from sale of assets                            973
                                                  -----------------
     Net cash used in investing activities               (598)
                                                  -----------------

FINANCING ACTIVITIES:
  Increase in credit facility                              90
  Borrowings from related party                            90
  Payment on long-term debt                               (21)
  Preferred stock dividends paid                       (2,073)
                                                  -----------------
     Net cash used in financing activities             (1,914)
                                                  -----------------

INCREASE IN CASH                                        1,430

CASH, BEGINNING OF PERIOD                                  14
                                                  -----------------
CASH, END OF PERIOD                               $     1,444
                                                  =================
CASH PAID DURING THE PERIOD FOR:
  Interest                                        $     1,665
                                                  =================
  Income taxes                                    $       119
                                                  =================

The accompanying notes are an integral part of this consolidated financial
                                statement.



                         SYN INC. AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            SEPTEMBER 30, 1996
                              (In thousands)
                                (Unaudited)



1.   Basis of Presentation
------------------------
  The  consolidated financial statements include the accounts of  SYN  Inc.
  and  its  subsidiaries  ("Synergy") after  elimination  of  all  material
  intercompany balances and transactions.
  
  The  accompanying  interim consolidated financial statements  of  Synergy
  are  unaudited;  however, in the opinion of management,  all  adjustments
  necessary   for  a  fair  presentation  of  such  consolidated  financial
  statements  have  been reflected in the interim periods presented.   Such
  adjustments   consisted  only  of  normal  recurring  items.    Synergy's
  business  is seasonal and accordingly, interim results are not indicative
  of  results  for  a full year.  The significant accounting  policies  and
  certain  financial information which are normally included  in  financial
  statements  prepared  in  accordance with generally  accepted  accounting
  principles,  but  which are not required for interim reporting  purposes,
  have  been condensed or omitted.  The accompanying consolidated financial
  statements   of   Synergy  should  be  read  in  conjunction   with   the
  consolidated  financial  statements and related  notes  included  in  the
  Annual  Report of Cornerstone Propane Partners L.P. on Form 10-K for  the
  fiscal year ended June 30, 1997.
  

                         EMPIRE ENERGY CORPORATION
                                     
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                              (In thousands)
                                (Unaudited)



                                             One Month      Two Months
                                               Ended           Ended
                                              July 31,      September 30,
                                                1996            1996
                                             -----------    --------------
                                                            (New Basis)

OPERATING REVENUE                             $    2,596     $   12,439
COST OF SALES                                      1,439          6,471
                                             -----------    --------------
GROSS PROFIT                                       1,157          5,968
                                             -----------    --------------
OPERATING COSTS AND EXPENSES:
  General and administrative                       2,480          4,528
  Depreciation and amortization                      499          1,087
                                             -----------    --------------
OPERATING INCOME (LOSS)                           (1,822)           353

INTEREST EXPENSE                                     217          1,487
                                             -----------    --------------
LOSS BEFORE INCOME TAXES                          (2,039)        (1,134)

INCOME TAX BENEFIT                                  (765)          (400)
                                             -----------    --------------
NET LOSS                                      $   (1,274)    $     (734)
                                             ===========    ==============

The accompanying notes are an integral part of these consolidated financial
                                statements.




                         EMPIRE ENERGY CORPORATION
                                     
              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                     
                     ONE MONTH ENDED JULY 31, 1996 AND
                    TWO MONTHS ENDED SEPTEMBER 30, 1996
                              (In thousands)
                                (Unaudited)
                                     


                          Additional Retained               Total
                 Common    Paid-in   Earnings  Treasury  Stockholders'
                  Stock    Stock     (Deficit)  Stock       Equity
                 -------  ---------  --------  --------  -------------

BALANCE,
 JULY 1, 1996    $   12   $ 46,099   $  4,143  $   (21)   $  50,233

NET LOSS             -          -      (1,274)      -        (1,274)
                 -------  ---------  --------  --------  -------------
BALANCE,
 JULY 31, 1996       12     46,099      2,869      (21)      48,959

PURCHASE OF
 COMPANY STOCK      (11)   (70,744)        -        -        (70,755)

EFFECT OF PURCHASE
     ACCOUNTING      -      26,966     (2,869)      21        24,118

NET LOSS             -          -        (734)      -           (734)
                 -------  ---------  --------  --------  -------------
BALANCE,
 SEPTEMBER 30,
 1996            $    1   $  2,321   $   (734) $    -     $   1,588
                 =======  =========  ========  ========  =============
The accompanying notes are an integral part of these consolidated financial
                                statements.



                         EMPIRE ENERGY CORPORATION
                                     
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (In thousands)
                                (Unaudited)

                                       One Month          Two Months
                                         Ended              Ended
                                        July 31,         September 30,
                                          1996               1996
                                       -----------      -------------
                                                         (New Basis)
CASH FLOWS FROM OPERATING ACTIVITIES
 Net loss                              $  (1,274)          $     (734)
 Items not requiring (providing) cash:
    Depreciation                             474                1,002
    Amortization                              25                   85
    Loss (gain) on sale of assets              8                   (4)
 Changes in:
    Trade receivables                        222               (2,485)
    Inventories                             (340)              (3,896)
    Accounts payable and accrued
     expenses                                330                1,447
    Prepaid expenses and other              (100)                (536)
    Income taxes payable                         (768)            209
                                       -----------      -------------
      Net cash used in operating
       activities                         (1,423)              (4,912)
                                       -----------      -------------
CASH FLOWS FROM INVESTING ACTIVITIES
 Proceeds from sale of assets                 14                   18
 Purchases of property and equipment        (487)                (861)
                                       -----------      -------------
      Net cash used in investing
       activities                           (473)                (843)
                                       -----------      -------------
CASH FLOWS FROM FINANCING ACTIVITIES
 Decrease in credit facilities                -                 4,800
 Principal payments on purchase
  obligations                                (15)                 (35)
 Checks in process of collection              -                    37
 Proceeds from management buyout loan         -                94,000
 Repayment of acquisition
               credit facility                -               (31,100)
 Purchase of company stock in
  management buyout                           -               (59,000)
 Payment of debt acquisition costs            -                (3,100)
                                       -----------      -------------
      Net cash provided by (used in)
       financing activities                  (15)               5,602
                                       -----------      -------------
DECREASE IN CASH                          (1,911)                (153)

CASH:
 Beginning of period                       2,064                  153
                                       -----------      -------------
 End of period                         $     153           $        0
                                       ===========      =============
CASH PAID DURING THE PERIOD FOR:
 Interest                              $     106           $      804
                                       ===========      =============
 Income taxes                          $       0           $     (609)
                                       ===========      =============

The accompanying notes are an integral part of these consolidated financial
                                statements.




                         EMPIRE ENERGY CORPORATION
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   JULY 31, 1996 AND SEPTEMBER 30, 1996
                              (In thousands)
                                (Unaudited)



1.   Basis of Presentation

  The  consolidated  financial statements include the  accounts  of  Empire
  Energy   Corporation  and  its  subsidiaries  ("Empire   Energy")   after
  elimination of all material intercompany balances and transactions.
  
  The  accompanying  interim consolidated financial  statements  of  Empire
  Energy  are  unaudited;  however,  in  the  opinion  of  management,  all
  adjustments  necessary  for  a  fair presentation  of  such  consolidated
  financial   statements  have  been  reflected  in  the  interim   periods
  presented.   Such  adjustments consisted only of normal recurring  items.
  Empire  Energy's  business is seasonal and accordingly,  interim  results
  are  not  indicative  of  results  for  a  full  year.   The  significant
  accounting policies and certain financial information which are  normally
  included  in  financial statements prepared in accordance with  generally
  accepted  accounting principles, but which are not required  for  interim
  reporting  purposes,  have been condensed or omitted.   The  accompanying
  consolidated  financial statements of Empire Energy  should  be  read  in
  conjunction with the consolidated financial statements and related  notes
  included  in  the Annual Report of Cornerstone Propane Partners  L.P.  on
  Form 10-K for the fiscal year ended June 30, 1997.

2.   Management Buy Out

  On  August 1, 1996, members of management of Empire Energy purchased  the
  ownership  (92.7% of the Common Stock) of Empire Energy from the  primary
  stockholder  and certain other stockholders.  Because of  the  change  in
  control  of  Empire Energy, the balance sheet accounts were  adjusted  at
  the   acquisition  date  to  reflect  new  basis  determined  using   the
  principles of purchase accounting.





                            CGI HOLDINGS, INC.
                                     
                   CONSOLIDATED STATEMENT OF OPERATIONS
                              (In thousands)
                                (Unaudited)



                                                         Three
                                                         Months
                                                         Ended
                                                       October 31,
                                                          1996
                                                       -----------

Sales and other revenue                                $108,175

Costs and expenses:
  Cost of sales, except for depreciation
   and amortization                                     100,266
  Operating, general and administrative                   6,292
  Depreciation and amortization                           1,067
  Interest expense                                        1,294
  Loss on sale of partnership interest                      660
                                                       -----------
                                                        109,579
                                                       -----------
  Loss before income taxes                               (1,404)
  Income tax benefit                                       (491)
                                                       -----------
  Net loss                                             $   (913)
                                                       ===========

The accompanying notes are an integral part of this consolidated financial
                                statement.




                            CGI HOLDINGS, INC.
                                     
              CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                              (In thousands)
                                (Unaudited)
                                     


                                           Additional
                          Common             Paid-In     Accumulated
                           Stock Warrants    Capital       Deficit
                          ------ --------  ----------    -----------

BALANCE, AUGUST 1, 1996   $   42 $  2,134  $   8,945     $   (5,023)

NET LOSS                      -        -          -            (913)

ACCRUED DIVIDENDS ON
  REDEEMABLE AND
  EXCHANGEABLE
  PREFERRED STOCK             -        -          -            (116)
                          ------ --------  ----------    -----------

BALANCE, OCTOBER 31, 1996 $   42 $  2,134  $   8,945     $   (6,052)
                          ====== ========  ==========    ===========

The accompanying notes are an integral part of this consolidated financial
                                statement.




                            CGI HOLDINGS, INC.
                                     
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (In thousands)
                                (Unaudited)

                                                      Three Months
                                                         Ended
                                                      October 31,
                                                         1996
                                                      ------------
CASH FLOWS FROM (USED FOR)
 OPERATING ACTIVITIES:
    Net loss                                           $     (913)
    Adjustments to reconcile net loss to net cash
      from operating activities
    Depreciation and amortization                           1,067
    Sale of partnership interest                              202
    Deferred income taxes                                    (472)
    Changes in assets and liabilities net of acquisitions:
      Accounts and notes receivable                         2,198
      Inventories                                             565
      Prepaid expenses and deposits                           472
      Other assets                                            (91)
      Accounts payable                                     (3,460)
      Accrued liabilities                                     676
                                                      ------------
                                                              244
                                                      ------------

CASH FLOWS FROM (USED FOR) INVESTING ACTIVITIES:
 Proceeds from sale of property and equipment                  20
 Purchases of and investments in property and equipment      (594)
                                                      ------------
                                                             (574)
                                                      ------------
CASH FLOWS FROM (USED FOR) FINANCING ACTIVITIES:
 Repayments of long-term debt                                (562)
 Repayment of other notes payable                            (104)
 Principal payments under capital lease obligations          (345)
 Borrowings under acquisition line                          4,575
                                                      ------------
                                                            3,564
                                                      ------------
NET INCREASE IN CASH                                        3,234

CASH AND CASH EQUIVALENTS,
 BEGINNING OF PERIOD                                        1,519
                                                      ------------
CASH AND CASH EQUIVALENTS,
 END OF PERIOD                                         $    4,753
                                                      ------------
CASH PAID DURING THE PERIOD FOR:
 Interest                                              $      936
                                                      ============
 Income taxes                                          $       10
                                                      ============

The accompanying notes are an integral part of this consolidated financial
                                statement.




                            CGI HOLDINGS, INC.
                                     
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             OCTOBER 31, 1996
                                (Unaudited)



1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     The  consolidated  financial statements include the  accounts  of  CGI
  Holdings, Inc. ("Coast") and its wholly-owned subsidiary, Coast Gas, Inc.,
  and its wholly-owned subsidiary Coast Energy Group, Inc. ("CEG").  In 1989,
  the  Coast  formed CEG, headquartered in Houston, Texas, to  conduct  its
  wholesale  procurement  and  distribution  operations.   All  significant
  intercompany transactions have been eliminated in consolidation.
  
        The accompanying interim consolidated financial statements of Coast
  are  unaudited;  however, in the opinion of management,  all  adjustments
  necessary   for  a  fair  presentation  of  such  consolidated  financial
  statements  have  been reflected in the interim periods presented.   Such
  adjustments  consisted only of normal recurring items.  Coast's  business
  is  seasonal  and  accordingly, interim results  are  not  indicative  of
  results  for  a  full  year.   The significant  accounting  policies  and
  certain  financial information which are normally included  in  financial
  statements  prepared  in  accordance with generally  accepted  accounting
  principles,  but  which are not required for interim reporting  purposes,
  have  been condensed or omitted.  The accompanying consolidated financial
  statements  of Coast should be read in conjunction with the  consolidated
  financial  statements and related notes included in the Annual Report  of
  Cornerstone Propane Partners L.P. on Form 10-K for the fiscal year  ended
  June 30, 1997.

2.   SALE OF PARTNERSHIP INTEREST

  Effective  October  1,  1996,  Coast  terminated  its  participation  and
  interest  in  Coast  Energy Investments, Inc., a limited  partnership  in
  which  CEG was a 50% limited partner.  The original partnership agreement
  provided  for  a  minimum  investment term through  December  1997.   The
  termination resulted in the sale of Coast's partnership interest  to  its
  50%  partner and an employee of the limited partnership.  Coast  recorded
  a  net  loss on the disposition of the partnership interest of  $660,000.
  This  amount  consisted of a $202,000 loss on the partnership  investment
  and  $458,000 of termination costs consisting of salary, consulting, non-
  compete agreements and other related expenses.




                    CORNERSTONE PROPANE PARTNERS, L.P.
                                     
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
               FINANCIAL CONDITION AND RESULTS OF OPERATIONS



The  following discussion of the historical financial condition and results
of  operations for the Partnership should be read in conjunction  with  the
historical  and  pro forma financial statements and notes thereto  included
elsewhere in this Quarterly Report on Form 10-Q.

General

The  Partnership is a Delaware limited partnership initially formed to  own
and  operate the propane business and assets of Synergy, Empire Energy  and
Coast.   The Partnership's management believes that it is the fifth largest
retail  marketer of propane in the United States, serving more than 380,000
residential,  commercial, industrial and agricultural  customers  from  296
customer service centers in 26 states.

Because a substantial portion of the Partnership's propane is sold for  use
in  the  weather-sensitive residential markets, the heating degree days  in
the  Partnership's  area of operations, particularly during  the  six-month
peak heating season, have a significant effect on the financial performance
of the Partnership.

Although  the  Partnership believes that comparing temperature  information
for  a  given  period of time to "normal" temperatures is  helpful  for  an
understanding  of the Partnership's results of operations,  when  comparing
variations  in  weather to changes in total revenues or  operating  profit,
attention  is  drawn to the fact that a portion of the Partnership's  total
revenues  is  not  weather-sensitive, and  other  factors  such  as  price,
competition, product supply costs and customer mix also affect the  results
of operations.  Furthermore, actual weather conditions in the Partnership's
regions can vary substantially from historical experience.

Gross profit margins are not only affected by weather patterns but also  by
changes  in  the  composition  of  the Partnership's  customer  base.   For
example, sales to residential customers ordinarily generate higher  margins
than  sales  to  other customer groups, such as commercial or  agricultural
customers.   In  addition, gross profit margins vary by geographic  region.
Accordingly, profit margins could vary significantly from year to year in a
period of identical sales volumes.

The  average heating degree days, in the markets served by the Partnership,
for  the  first fiscal quarter of 1998 were approximately 36%  warmer  than
normal  and  approximately 25% warmer than last year, respectively.   These
milder temperatures, while not in the peak of the heating season, adversely
affected  the  Partnership's residential sales volume.   The  first  fiscal
quarter  historically  accounts  for  approximately  17%  and  7%  of   the
Partnership's retail sales volume and EBITDA, respectively.




                    CORNERSTONE PROPANE PARTNERS, L.P.
                                     
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
               FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Partnership generally purchases its propane pursuant to agreements with
terms  of less than one year at market prices.  The balance of its  propane
needs  for  the  year  are satisfied in the spot market.   The  Partnership
generally  does not enter into supply contracts containing  "take  or  pay"
provisions.

The  Partnership  engages  in hedging of product cost  and  supply  through
common hedging practices.  These practices are monitored and maintained  by
management  for the Partnership on a daily basis.  Hedging of product  cost
and  supply does not always result in increased margins and the Partnership
does  not  consider  it to be material to operations or liquidity  for  the
three-month period ended September 30, 1997.

Analysis of Historical Results of Operations

The  following discussion compares the results of operations and other data
of  the Partnership for the three-month period ended September 30, 1997, to
the pro forma three-month period ended September 30, 1996.

Volume.   During the three months ended September 30, 1997, the Partnership
sold  41.3  million  retail propane gallons, an  increase  of  2.8  million
gallons  or  7.3% from the 38.5 million retail propane gallons sold  during
the pro forma three months ended September 30, 1996. Wholesale volumes were
140.9  million  gallons  and 109.1 million gallons, respectively,  for  the
quarters ended September 30, 1997 and 1996, which represents an increase of
31.8 million gallons or 29.2%.  A majority of the increase in retail volume-
approximately 79%, or 2.2 million gallons- is attributable to the  addition
of  retail customer service centers obtained through the acquisition of new
propane businesses since December 17, 1996.

Revenues.   Revenues increased by $10.4 million or 7.3% to  $152.2  million
for  the  three  months  ended September 30, 1997, as  compared  to  $141.8
million  for  the pro forma three months ended September  30,  1996.   This
increase  was  attributable to an increase in wholesale revenues  of  $10.5
million or 7.4% to $110.3 million for the three months ended September  30,
1997,  as  compared to $99.8 million for the pro forma three  months  ended
September  30,  1996.  This increase was due primarily to the  increase  in
wholesale  volume  mentioned above.  The revenues for the  retail  business
also increased by $.4 million or 9.6% to $41.7 million for the three months
ended  September 30, 1997, as compared to $41.3 million for the  pro  forma
three  months ended September 30, 1996.  This increase was a result of  the
increase  in  volume described above offset by a decrease  in  the  average
sales price per gallon of propane.




                    CORNERSTONE PROPANE PARTNERS, L.P.
                                     
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
               FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Cost  of Product Sold.  Cost of product sold increased by $10.4 million  or
8.9%  to  $127.9 million for the three months ended September 30, 1997,  as
compared  to $117.5 million for the pro forma three months ended  September
30,  1996.  The increase in cost of product sold was primarily due  to  the
increased sales volume described above.  As a percentage of revenues,  cost
of product sold increased to 84.0% for the three months ended September 30,
1997,  as  compared to 82.9% for the pro forma three months ended September
30, 1996.

Gross  Profit.   Gross profit of $24.3 million for the three  months  ended
September  30,  1997, is consistent with the gross profit of $24.2  million
for the pro forma three months ended September 30, 1996.  Retail per gallon
margins  for the three months ended September 30, 1997 were slightly  lower
than  for the pro forma period.  This is partially attributable to the fact
that  the  pro  forma three months ended September 30, 1996,  includes  the
results  of operations for Coast from August 1, 1996 to October  31,  1996.
More  heating degree days were recorded for October 1996 than for July 1997
in the markets served by Coast, causing the pro forma per gallon margins to
be  higher.  As a percentage of revenues, gross profit decreased  to  16.0%
for the three months ended September 30, 1997, as compared to 17.1% for the
pro forma three months ended September 30, 1996.  Gross profit from propane
businesses acquired since December 17, 1996 was $.8 million for  the  three
months ended September 30, 1997.

Operating,  General  and Administrative Expenses.  Operating,  general  and
administrative expenses increased by $1.7 million or 8.1% to $22.6  million
for the three months ended September 30, 1997, as compared to the pro forma
three months ended September 30, 1996.  Approximately $1.2 million, or 71%,
of  this  increase  was  attributable to increases in  salaries  and  other
operating  expenses resulting from the acquisitions of new  businesses  and
the  correspondingly  increased  sales  volumes  discussed  above.   As   a
percentage  of  revenues,  operating, general and  administrative  expenses
remained consistent at 14.8% for the three months ended September 30, 1997,
as  compared  to 14.7% for the pro forma three months ended  September  30,
1996.

The  Partnership utilizes software and related technologies throughout  its
businesses that will be affected by the date change in the year  2000.   An
internal  study  is  currently under way to determine the  full  scope  and
related costs to insure that the Partnership's systems continue to meet its
internal  needs and those of its customers.  The Partnership will begin  to
incur  expenses in 1998 to resolve this issue.  These expenses may continue
through the year 1999.

Recently Issued Accounting Standards.  Financial Accounting Standards Board
Statement  No. 128, "Earnings per Share" ("Statement No. 128"),  issued  in
February  1997  and  effective for fiscal years ending after  December  15,
1997,  establishes  and simplifies standards for computing  and  presenting
earnings  per share.  Implementation of Statement No. 128 will not  have  a
material  impact  on  the  Partnership's  computation  or  presentation  of
earnings  per unit, as the Partnership's common stock equivalents have  had
no material effect on earnings per unit amounts.




                    CORNERSTONE PROPANE PARTNERS, L.P.
                                     
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
               FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                     
                                     
Financial   Accounting  Standards  Board  Statement  No.  130,   "Reporting
Comprehensive Income", issued in June 1997 and effective for  fiscal  years
beginning after December 15, 1997, establishes standards for reporting  and
display of the total of net income and the components of all other nonowner
changes  in  partners' capital, or comprehensive income, either  below  net
income   (loss)  or  within  the  statement  of  partners'  capital.    The
Partnership has had no significant items of other comprehensive income.

Liquidity and Capital Resources

Cash Flows

Cash  used  in  operating  activities during the three-month  period  ended
September 30, 1997 was $4.0 million.  Cash flow from operations included  a
net  loss  of  $7.7  million  and non-cash  charges  of  $4.6  million  for
depreciation  and  amortization expense.  The  impact  of  working  capital
changes decreased cash flow by approximately $.9 million.

Cash  used  in  investment  activities for  the  three-month  period  ended
September  30,  1997 totaled $6.0 million, which was principally  used  for
purchases of property and equipment.  Cash provided by financing activities
was  $10.2  million for the three months ended September  30,  1997,  which
principally reflects additional borrowings on the working capital facility,
net of a distribution to Unitholders of $9.4 million.

Financing and Sources of Liquidity

  The  Operating  Partnership's obligations under the Note Agreement  under
which  its  Senior  Notes  were issued and its Bank  Credit  Agreement  are
secured  by  a security interest in the Operating Partnership's  inventory,
accounts receivable and certain customer storage tanks.  The Note and  Bank
Credit  Agreements contain various terms and covenants including  financial
ratio covenants with respect to debt and interest coverage and limitations,
among  others,  on  the  ability  of  the  Operating  Partnership  and  its
subsidiary to incur additional indebtedness, create liens, make investments
and  loans,  enter  into  mergers,  consolidations  or  sales  of  all   or
substantially all assets and make asset sales.  Generally, so  long  as  no
default  exists  or  would result, the Partnership  is  permitted  to  make
distributions  during each fiscal quarter in an amount  not  in  excess  of
Available  Cash  with  respect to the immediately preceding  quarter.   The
Operating  Partnership was in compliance with all terms  and  covenants  at
September 30, 1997.




                    CORNERSTONE PROPANE PARTNERS, L.P.
                                     
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
               FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Forward-Looking Statements

Forward-looking  statements herein are made pursuant  to  the  safe  harbor
provisions of the Private Securities Litigation Reform Act of 1995.   There
are  certain important factors discussed below that could cause results  to
differ  materially  from those anticipated by some of the  statements  made
herein.   Investors  are  cautioned  that  all  forward-looking  statements
involve  risks and uncertainty.  Among the factors that could cause  actual
results  to  differ  materially are the following:  pricing  strategies  of
competitors,  the  Partnership's ability to continue  to  receive  adequate
product  from  its  vendors  on  acceptable  credit  terms  and  to  obtain
sufficient  financing to meet its liquidity needs, effects of  weather  and
overall  economic  conditions,  including inflation,  consumer  confidence,
spending habits and disposable income.



                    CORNERSTONE PROPANE PARTNERS, L.P.
                                     



                        PART II.  OTHER INFORMATION

Item 6 Exhibits and Reports on Form 8-K

     a)   Exhibits:
     
            (27) Financial Data Schedule
       
     b)   Reports on Form 8-K:
       
       None





                                 SIGNATURE

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


                                   Cornerstone Propane Partners, L.P.
                                   ----------------------------------
                                              (Registrant)


                                   By:  Cornerstone Propane GP, Inc.
                                        as Managing General Partner


Date:  November 14, 1997           By:     /s/ Ronald J. Goedde
                                   ----------------------------------
                                   Name:  Ronald J. Goedde
                                   Title: Executive Vice President
                                          and Chief Financial Officer