UNITED STATES
                                                                              

                                  SECURITIES AND EXCHANGE COMMISSION
                                      Washington, D.C. 20549
                                                           
                           --------------------------------

                                      Form 10-Q


          MARK ONE
            X   QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 

                  For the Quarterly Period Ended September 30, 1995

              TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934 

                            Commission File Number 1-8921
                                                      
                                      -----------------------

                           HALLWOOD ENERGY PARTNERS, L. P.
                    (Exact name of registrant as specified in its charter)
                                                               
                                       ------------------------


             Delaware                                          84-0987088       
    (State or other jurisdiction of                         (I.R.S. Employer    
    incorporation or organization)                        Identification Number)

    4582 South Ulster Street Parkway
         Suite 1700
     Denver, Colorado                                        80237        
 (Address of principal executive                           (Zip Code)     
    offices)

         Registrant's telephone number, including area code:  (303) 850-7373

 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   
              
 The registrant  is  a  limited  partnership  and  issues  Units  (representing
 ownership of limited partner interests).

 Number of Units outstanding as of November 10, 1995                  9,977,254<PAGE>





Number of Class B Subordinated Units outstanding 
  as of November 10, 1995                                                143,773
<TABLE>
<CAPTION>
                                    HALLWOOD ENERGY PARTNERS, L. P.
                                      CONSOLIDATED BALANCE SHEETS
                                      (In thousands except Units)
         
                                                 September 30,      December 31,
                                                    1995             1994     
                                                 (Unaudited) 

 <S>                                                 <C>              <C>       
 CURRENT ASSETS
 Cash and cash equivalents                          $  4,826          $  2,409
 Accounts receivable:
    Oil and gas sales                                  5,727             6,220
    Trade                                              4,071             3,042
    Due from affiliates                                   56             1,647
 Prepaid expenses and other current
     assets                                             1,400             1,352
                                                      -------           -------
              Total                                    16,080            14,670
                                                      -------           -------

 PROPERTY, PLANT AND EQUIPMENT,  
   at cost
 Oil and gas properties (full cost
   method):
         Proved mineral interests                     598,757           588,758
         Unproved mineral interests -
           domestic                                       229               380
         Unproved mineral interests -
           foreign                                                        2,399
     Furniture, fixtures and other                      3,093             2,980
                                                      -------           -------
              Total                                   602,079           594,517
      Less accumulated depreciation,
        depletion, amortization and
       property impairment                           (506,378)         (487,103)
                                                       -------           -------

               Net Property, Plant and
                 Equipment                              95,701           107,414
                                                       -------           -------
 OTHER ASSETS
   Investment in common stock of HCRC                   12,715            13,764
   Deferred expenses and other assets                      281               433
                                                       -------          --------

               Total                                    12,996            14,197
                                                       -------           -------

 TOTAL ASSETS                                         $124,777          $136,281
                                                      =======           =======<PAGE>





</TABLE>
<TABLE>
<CAPTION>
                                    HALLWOOD ENERGY PARTNERS, L. P.
                                      CONSOLIDATED BALANCE SHEETS
                                      (In thousands except Units)
                                              (Continued)
         

                                               September 30,    December 31,
                                                   1995             1994     
                                                (Unaudited)            
<S>                                              <C>              <C>       
 CURRENT LIABILITIES
 Accounts payable and accrued
   liabilities                                    $ 15,105          $ 18,407
 Net working capital deficit of
   affiliates                                        4,498               103
 Current portion of contract
   settlement                                          850             1,425
 Current portion of long-term debt                      97             4,125
                                                    -------           -------
                    Total                            20,550            24,060
                                                    -------           -------
 NONCURRENT LIABILITIES
 Long-term debt                                      37,571            25,898
 Contract settlement                                  2,280             2,666
 Deferred liability                                   1,759             1,931
                                                    -------           -------

                    Total                             41,610            30,495
                                                     -------           -------
                    Total Liabilities                 62,160            54,555
                                                     -------           -------

 MINORITY INTEREST IN SUBSIDIARIES                      2,978             2,923
                                                      -------           -------
 PARTNERS' CAPITAL
    Units - 9,977,254 Units issued,
       9,193,159 outstanding in 1995 and
       9,659,504 outstanding in 1994                    61,638            77,342
    Class B Subordinated Units - 143,773
       Units outstanding                                 1,091             1,350
    General Partner                                      2,995             4,051
    Treasury Units - 784,095 Units in
       1995 and 317,750 Units in 1994                  (6,085)           (3,940)
                                                       -------           -------

                      Total Partners' Capital           59,639            78,803
                                                       -------           -------
             TOTAL LIABILITIES AND PARTNERS'
             CAPITAL                                  $124,777          $136,281
                                                       =======           =======




</TABLE>
<TABLE>
<CAPTION>
                                    HALLWOOD ENERGY PARTNERS, L. P.
                                 CONSOLIDATED STATEMENTS OF OPERATIONS
                                              (Unaudited)
                                      (In thousands except Units)


                                                       For the Three Months 
                                                        Ended September 30,  
                                                       1995              1994 

<S>                                         <C>              <C>       
REVENUES:
 Oil revenue                                       $  4,607          $  4,184
 Gas revenue                                          6,188             5,982
 Pipeline, facilities and other                         388               840
 Interest                                                71               157
                                                     -------           -------
                                                     11,254            11,163
                                                     -------           -------
EXPENSES:
 Production operating                                 3,119             2,697
 Facilities operating                                   213               213
 General and administrative                           1,089             1,258
 Depreciation, depletion and
    amortization                                      4,057             4,630
 Interest                                             1,056               919
                                                    -------           -------

                                                      9,534             9,717
                                                    -------           -------
OTHER INCOME (EXPENSES):
 Equity in income of HCRC                             1,304                63
 Minority interest in net income of
    subsidiaries                                       (349)             (374)
 Litigation settlement                                 (363)                 
                                                     -------           -------

                                                         592              (311)
                                                      -------           -------

NET INCOME                                          $  2,312          $  1,135
                                                      =======           =======
                                                 


ALLOCATION OF NET INCOME:

General partner                                     $    361          $    513
                                                     =======           =======
Limited partners                                    $  1,951          $    622
                                                     =======           =======

Per Unit and Class B Unit                           $    .20          $    .06
                                                     =======           =======

Weighted average Units and Class B
  Units outstanding                                    9,793             9,808
                                                      =======           =======
</TABLE>
<TABLE>
<CAPTION>
        
                                    HALLWOOD ENERGY PARTNERS, L. P.
                                 CONSOLIDATED STATEMENTS OF OPERATIONS
                                              (Unaudited)
                                      (In thousands except Units)


                                                       For the Nine  Months  
                                                        Ended September 30,  

                                                     1995              1994  
<S>                                               <C>              <C>       
REVENUES:
 Oil revenue                                       $ 12,796          $ 11,551
 Gas revenue                                         16,899            20,043
 Pipeline, facilities and other                       1,806             2,204
 Interest                                               247               528
                                                    -------           -------

                                                     31,748            34,326
                                                    -------           -------

 EXPENSES:
 Production operating                                 8,208             8,991
 Facilities operating                                   591               626
 General and administrative                           3,736             3,776
 Depreciation, depletion and                                                 
    amortization                                     12,081            13,912
 Impairment of oil and gas properties                11,051
 Interest                                             3,103             2,948
                                                    -------           -------
                                                     38,770            30,253
                                                    -------           -------

 OTHER EXPENSES:
 Equity in loss of HCRC                               1,049               197
 Minority interest in net income of                                          
    subsidiaries                                        987             1,453
 Litigation settlement                                  393                  
                                                     -------           -------

                                                       2,429             1,650
                                                     -------           -------
 NET INCOME (LOSS)                                   $ (9,451)         $  2,423
                                                      =======           =======

 ALLOCATION OF NET INCOME (LOSS):

 General partner                                     $    840          $  1,508
                                                      =======           =======
 Limited partners                                    $(10,291)         $    915
                                                      =======           =======

  Per Unit and Class B Unit                          $  (1.05)          $    .09
                                                      =======            =======
  Weighted average Units and Class B
   Units outstanding                                    9,800             9,808
                                                      =======           =======
</TABLE>
<TABLE>
<CAPTION>
                                        HALLWOOD ENERGY PARTNERS, L. P.
                                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                  (Unaudited)
                                                 (In thousands)
         

                                                    For the Nine Months         
                                                    Ended September 30,         
                                               1995                   1994      
<S>                                        <C>                     <C>       
OPERATING ACTIVITIES:
 Net income (loss)                           $ (9,451)               $  2,423
 Adjustments to reconcile net income (loss) 
  to net cash flow provided by operating
  activities:
 Depreciation, depletion and impairment         22,980                  13,717
 Depreciation charged to affiliates                200                     261
 Amortization of deferred loan costs and other 
  assets                                           152                     195
 Noncash interest expense                          227                     305
 Equity in loss of HCRC                          1,049                     197
 Minority interest in net income                   987                   1,453
 Undistributed (earnings) loss of affiliates      (414)                    159
 Recoupment of take-or-pay liability              (422)                   (261)
                                                -------                 -------

Cash provided by operations before working
 capital changes                                 15,308                  18,449

Changes in operating assets and liabilities
   provided (used) cash net of noncash activity:
 Oil and gas sales receivable                       116                   3,65
 Trade receivable                                (1,029)                  2,642
 Due from affiliates                              1,591                    (537)
 Prepaid expenses and other current assets          (48)                  3,461
 Accounts payable and accrued liabilities        (3,302)                 (8,781)
                                                 -------                 -------
   Net cash provided by operating activities      12,636                  18,884
                                                 -------                 -------

INVESTING ACTIVITIES:
 Additions to property, plant and equipment      (1,715)                 (5,104)
 Exploration and development costs incurred      (6,842)                 (5,892)
 Proceeds from sales of property, plant
   and equipment                                     248                  2,051
 Other investing activities                          (15)                  (199)
                                                  -------                -------

   Net cash used in investing activities         (8,324)                 (9,144)
                                                 -------                 -------
FINANCING ACTIVITIES:
 Payments of long-term debt                      (7,355)                (12,352)
 Proceeds from long-term debt                    15,000                   4,300
 Distributions paid                              (7,515)                 (7,184)
 Distributions paid by consolidated
  subsidiaries to minority shareholders            (932)                 (1,964)
 Payments of contract settlement                 (1,015)                   (975)
 Syndication costs and capital contributions        (53)                    (34)
 Other financing activities                         (25)                    (25)
                                                 -------                 -------

   Net cash used in financing activities         (1,895)                (18,234)
                                                 -------                 -------
NET INCREASE (DECREASE) IN CASH AND 
 CASH EQUIVALENTS                                 2,417                  (8,494)

CASH AND CASH EQUIVALENTS:

 BEGINNING OF PERIOD                              2,409                  13,139
                                                 -------                 -------
 END OF PERIOD                                 $  4,826                $  4,645
                                                 =======                 =======

<F1>

                          The accompanying notes are an integral part 
                                  of the financial statements.
</TABLE>
                                    HALLWOOD ENERGY PARTNERS, L. P.
                              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                              (Unaudited)


 NOTE 1 - GENERAL

 Hallwood  Energy Partners, L. P. ("HEP") is a publicly traded Delaware limited
 partnership engaged in the development, production, sale and transportation of
 oil and gas and in the  acquisition, exploration, development and operation of
 oil and gas properties.  The principal  objectives of HEP are to maintain  and
 to expand its reserve base and to provide cash distributions to holders of its
 units representing limited  partner interests ("Units").   The general partner
 of HEP  is Hallwood Energy Corporation  ("HEC") which has been  engaged in oil
 and gas exploration and development since its incorporation in 1968.

 The  activities of HEP  are conducted  through HEP  Operating Partners,  L. P.
 ("HEPO") and  EDP Operating, Ltd. ("EDPO").   HEP is the  sole limited partner
 and HEC is the sole general partner of HEPO.  Hallwood G. P., Inc. ("HGPI"), a
 wholly-owned subsidiary  of HEC, is the  sole general partner, and  HEP is the
 sole  limited partner  of EDPO.   Solely  for purposes  of simplicity  herein,
 unless  otherwise  indicated, all  references to  HEP  in connection  with the
 ownership, exploration, development  or production of  oil and gas  properties
 include HEPO and EDPO.

 The  interim financial  data are  unaudited; however,  in the  opinion  of the
 general  partner, the interim data include all adjustments, consisting only of
 normal recurring adjustments, necessary for a fair presentation of the results
 for  the  interim periods.    These financial  statements  should  be read  in
 conjunction with the financial  statements and accompanying footnotes included
 in HEP's December 31, 1994 Annual Report on Form 10-K.

 Accounting Policies

 Consolidation

 HEP  fully  consolidates  majority  owned  entities  and reflects  a  minority
 interest  in  the consolidated  financial statements.    HEP accounts  for its
 interest in 50% or less owned  affiliated oil and gas partnerships and limited
 liability  companies   using  the   proportionate   consolidation  method   of
 accounting.    HEP's  investment  in  approximately  40%,  including  Hallwood
 Spraberry  Drilling, L.L.C.  ("HSD"), of  the common  stock of  its affiliate,
 Hallwood Consolidated  Resources Corporation ("HCRC"), is  accounted for under
 the equity method.

 The accompanying  financial  statements include  the  activities of  HEP,  its
 subsidiaries Hallwood Petroleum, Inc.  ("HPI") and Hallwood Oil and  Gas, Inc.
 ("Hallwood Oil") and majority  owned affiliates, the May Limited  Partnerships
 1983-1, 1983-2, 1983-3, 1984-1, 1984-2, 1984-3 ("Mays").  

 Treasury Stock

 HEP  owns approximately  40% of  the outstanding  common stock of  HCRC, which
 owned approximately  19% and  9%  of HEP's  Units at  September  30, 1995  and
 December  31, 1994, respectively; consequently, HEP had an interest in 784,095
 and  317,750 of its  own Units  at September 30,  1995 and  December 31, 1994,
 respectively.  These  Units are treated as treasury units  in the accompanying
 financial statements.

 Reclassifications

 Certain  reclassifications have  been made  to the  prior period's  amounts to
 conform to the classifications used in the current period.

NOTE 2 - DEBT

 During  the first quarter  of 1995, HEP  and its lenders  amended and restated
 HEP's Amended and Restated Credit Agreement ("Credit Agreement") to extend the
 term date of  its line of credit to May 31,  1997.  Under the Credit Agreement
 and  an  Amended  and  Restated   Note  Purchase  Agreement  ("Note   Purchase
 Agreement")  (collectively referred to as  the "Credit Facilities")  HEP has a
 borrowing base of  $42,000,000.  HEP has amounts outstanding  at September 30,
 1995 of $24,700,000 under the Credit Agreement  and $12,857,000 under the Note
 Purchase Agreement.  HEP's borrowing base is further reduced by an outstanding
 contract settlement obligation of $3,130,000 and capital lease  obligations of
 $111,000; therefore, its unused borrowing base totaled $1,202,000 at September
 30, 1995.

 Borrowings under the Note Purchase  Agreement bear interest at an annual  rate
 of  11.85%,  which  is  payable  quarterly.    Annual  principal  payments  of
 $4,286,000 began April  30, 1992, and the debt is required  to be paid in full
 on April 30, 1998.   HEP intends to fund the payment due in April 1996 through
 additional  borrowings under the Credit  Agreement; thus, no  portion of HEP's
 Note Purchase Agreement is classified as current as of September 30, 1995.

 Borrowings against  the Credit  Agreement bear interest  at the  lower of  the
 Certificate of  Deposit rate plus 1.875%,  prime plus 1/2%  or the Euro-Dollar
 rate plus  1.75% (7.625% at September 30, 1995).  Interest is payable monthly,
 and  quarterly   principal  payments  of  $1,812,000,  as   adjusted  for  the
 anticipated borrowings during April 1996, commence May 31, 1997.

 The borrowing base for  the Credit Facilities is redetermined  semiannually in
 March  and September of  each year.   The Credit  Facilities are secured  by a
 first lien  on approximately 80%  in value  of HEP's oil  and gas  properties.
 Additionally, aggregate distributions paid  by HEP in any 12 month  period are
 limited to 50% of cash flow from operations before working capital changes and
 distributions received from affiliates.
             
 The  current  portion of  long-term debt  represents  a current  capital lease
 obligation of $97,000.

 Included in net  working capital deficit  of affiliates is $3,537,000,  net to
 HEP's  interest, which represents the current portion of the long-term debt of
 Hallwood Spraberry Drilling  Company, L.L.C. ("HSD").  HSD's line of credit of
 $4,000,000, net to HEP's interest, which is provided by a  third party lender,
 is secured by certain leases held by HSD and  is otherwise nonrecourse to HEP.
 Borrowings  under the line of  credit bear interest at the  prime rate plus 8%
 (17.25%  at September 30, 1995).  Interest  is payable monthly, and the entire
 outstanding principal is due on August 31, 1996, at which time  HSD intends to
 refinance the debt so as to extend the repayment term.

 HEP  has  entered  into  contracts  to hedge  its  interest  rate  payments on
 $5,000,000 of its debt through  the end of 1995, $10,000,000 for 1996 and 1997
 and $5,000,000  for the first three  quarters of 1998.   HEP does not  use the
 hedges for trading purposes, but rather for the purpose of providing a measure
 of predictability  for a  portion of HEP's  interest payments  under its  debt
 agreement which has a floating interest rate.  In general, it is HEP's goal to
 hedge 50% of the principal amount  of its debt for each year of  the remaining
 term  of the  debt.   HEP has  entered into  two hedges,  one  of which  is an
 interest  rate collar  pursuant to which  it pays a  floor rate of  5.8% and a
 ceiling rate of 8.1%, and the other is an interest rate swap with a fixed rate
 of 5.75%.   The amounts received or paid upon settlement of these transactions
 are recognized as interest expense at the time the interest payments are due.

NOTE 3 - STATEMENT OF CASH FLOWS

 Cash  paid for interest  during the nine  months ended September  30, 1995 and
 1994 was $2,495,000 and $2,448,000, respectively.

NOTE 4 - LITIGATION SETTLEMENT

 In September  1995, the  court order  approving the  settlement  in the  class
 action  lawsuit  styled  In  re  Hallwood  Energy  Partners,  L.P.  Securities
 Litigation became  final.  As part  of the settlement, on  September 28, 1995,
 HEP paid $2,870,000 in cash (which was recorded  as an expense in the December
 31,  1994 financial  statements  as the  estimated  cost associated  with  the
 litigation) and issued 1,158,696 HEP  Units with a market value  of $5,330,000
 to a nominee of the class.   These Units were subsequently purchased from  the
 nominee  by HCRC  for $5,330,000  in cash.   Other  defendants contributed  an
 additional  $900,000 in  cash to  the  settlement.   The net  proceeds of  the
 settlement will  be distributed  to  a class  consisting of  former owners  of
 limited partner interests  in Energy  Development Partners,  Ltd. ("EDP")  who
 exchanged their units in that entity  for Units of HEP pursuant to  the merger
 of EDP and HEP on May 9, 1990 (the "Transaction").

 Upon  issuance, these  Units were  treated, for  financial statement  purposes
 only, as additional Units issued in connection with the Transaction, which was
 accounted  for as  a reorganization  of entities  under  common control,  in a
 manner  similar  to  a  pooling  of  interest,  and  have  been  reflected  as
 outstanding  Units since  May 9,  1990, the  date of  the Transaction.    As a
 result, the number  of Units outstanding  and the net  income (loss) per  Unit
 have  been   retroactively  restated  for   all  periods  subsequent   to  the
 Transaction.

NOTE 5 - LEGAL PROCEEDINGS

 In October  1995, the parties agreed in principle to settle the lawsuit styled
 Stutes v.  Hallwood Petroleum,  Inc.  et al.   The  plaintiff  in the  lawsuit
 alleged that  as a  result  of exposure  to benzene  in the  petroleum he  was
 hauling  from various  wells owned and  operated by  HEP and  approximately 80
 other named defendants, he  contracted myelogenous leukemia.  The  majority of
 HEP's  share of  the  settlement  liability  is  covered  by  HEP's  liability
 insurance carriers.   HEP's share of  the amounts not covered  by insurance is
 not material.

 In June 1995, an additional lawsuit was filed against HEP in the 15th Judicial
 District  Court, Lafayette  Parish,  Louisiana, Docket  No. 952601-3B,  styled
 Lamson  Petroleum  Corporation  v.  Hallwood  Petroleum,  Inc.  et  al.    The
 plaintiffs in  the lawsuit  claim that  they have  an additional  valid leases
 covering streets and roads in the units of the  A. L. Boudreaux #1 well, G. S.
 Boudreaux #1 well, Mary Guilbeau #1 well and Duhon #1 well and are entitled to
 a portion  of the production from the  wells.  HEP has  not yet determined the
 amount of its interest in the properties which is at issue.  At this time, HEP
 believes that the difference between the  amount already in escrow as a result
 of the  litigation  and the  amount  of any  liability  that may  result  upon
 resolution of this matter will not be material.


 NOTE 6 - SUBSEQUENT EVENT

 In November 1995, the board  of directors of the general partner  approved the
 creation of a new class of limited partner units,  to be called Class C Units,
 and the  distribution of Class  C Units to  holders of HEP  Units and  Class B
 Units.   One  Class C Unit  will be received  for every fifteen  HEP Units and
 Class B Units held.  The Class  C Units have a distribution preference of $.25
 per quarter,  and distributions on  the new unit  will commence for  the first
 quarter  of  1996.    The  declaration  date  and  the  record  date  for  the
 distribution of Class C  Units have not been set,  but it is anticipated  that
 the declaration  and record  dates and  the distribution of  the Class  C Unit
 certificates will occur in December 1995.  Class C Units will trade separately
 from  HEP Units.    Class  C Units  have  been  created  to give  HEP  greater
 flexibility  in structuring  future acquisitions  by allowing  HEP to  issue a
 security with a set distribution rate.  The Class C Units will vote separately
 as  a class on  all matters that  come up for  a partnership vote.   Currently
 outstanding HEP Units will be redesignated  as Class A Units but will continue
 to be listed on the American Stock Exchange using the symbol "HEP."


ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS, LIQUIDITY AND
         CAPITAL RESOURCES

Liquidity and Capital Resources

 Cash Flow 

 HEP  generated $12,636,000 of cash  flow from operating  activities during the
   first nine months of 1995.

         The other primary cash inflows were:

          -  $15,000,000 in proceeds from long-term debt

          -  $248,000 in proceeds from the sale of property

         Cash was used primarily for:

          -  Payments of long-term debt of $7,355,000

          -  Additions to property and development costs incurred of $8,557,000

          -  Distributions to Unitholders of $7,515,000

          -  Payments of contract settlement of $1,015,000

 When  combined with miscellaneous other  cash activity during  the period, the
 result was an increase of $2,417,000 in HEP's cash from $2,409,000 at December
 31, 1994 to $4,826,000 at September 30, 1995.

Capital Projects

 For 1995, HEP  has a capital budget of $15,800,000  which includes $11,600,000
 for direct expenditures and $4,200,000  for indirect expenditures through  its
 investment in HSD.   Through  September 30, 1995,  HEP incurred  approximately
 $13,602,000  in capital  expenditures which  includes $8,557,000  directly and
 $5,045,000 indirectly through  HSD.  A description  of significant exploration
 and development projects to date in 1995 follows.

 HSD  has incurred  approximately $5,045,000,  net  to HEP's  interest, through
 September 30, 1995  for 31 drilled wells, 12  recompletions and acquisition of
 drilling leases on the Rocker "b" Ranch in Reagan  County, Texas.  HSD has its
 own line of credit of $4,000,000, net  to HEP's interest, provided by a  third
 party lender.  Based on the initial results of the drilling and recompletions,
 HEP spent approximately $815,000 on additional acreage in the Rocker "b" Ranch
 during  the second and  third quarters, HSD  has expanded its  project area to
 include certain sections of this acreage, and HEP has pursued  drilling on the
 remaining acreage.  The line  of credit is secured  only by certain leases  on
 the  Rocker "b"  Ranch and  is otherwise  nonrecourse  to HEP.   A  request to
 increase the size  of the facility  to $6,400,000, net  to HEP's interest,  is
 pending.  HSD has funded the drilling to date from the line of credit  as well
 as from cash flow generated from drilling activities.  HSD has had up to three
 drilling rigs under contract in this area in 1995, but plans  to scale back to
 one rig by the end of the year, in order to allow time to evaluate the results
 of  the drilling  to date  before moving  forward.   The 43  wells  drilled or
 recompleted since January 1, 1995, have increased HEP's share of production on
 the Rocker "b"  properties by 522 barrels of oil equivalent  per day.  HSD has
 drilled five locations and recompleted three wells subsequent to September 30.
 These wells,  together with  the 43 wells  drilled through September  30, have
 added a total of 1.1 million equivalent barrels of reserves,  of which 640,000
 were booked  as proved  undeveloped reserves  at December 31,  1994.   HSD has
 plans  to drill two additional locations and  recomplete twelve wells prior to
 year end.

 HEP  expended  approximately $520,000  in late  August  and September  for the
 drilling of five exploratory wells  in Reagan County, Texas.  Two  of the five
 wells are currently producing at an average rate of 46 barrels of oil per day,
 one well was unsuccessful and is  scheduled for recompletion and the remaining
 two are presently being  evaluated. Two additional wells are being  drilled on
 this acreage  at the  present time.   The performance  of these  initial seven
 wells will determine future development plans in this area.

 HEP  spent approximately $790,000 on  six successful drilling  wells and seven
 successful recompletions in  the West Texas Kermit area where  HEP has working
 interests ranging  from 25% to 80%.   Gross production on  these properties is
 currently averaging 596  barrels of oil per  day and 870 mcf per  day.  Future
 projects  in the area  include secondary recovery  in the San  Andres and Holt
 Formations.   It is anticipated that  four more wells will  be recompleted and
 eight more  wells will be drilled in the fourth  quarter of 1995 and the first
 quarter of 1996.  Waterflood  potential for this area is being  considered for
 1996.

 A workover  in the second quarter  of 1995 on the G.S.  Boudreaux in Lafayette
 Parish,  Louisiana, increased gross production  rates from 17,500  mcf per day
 and 370 barrels of condensate  per day to current rates of 22,000  mcf per day
 and 450 barrels of  condensate per day.  HEP has a 24% working interest in the
 well.  Gross production from the A.L. Boudreaux in the same area has increased
 from 20,000 mcf per day to 26,000 mcf per  day.  HEP has a 26% interest in the
 A.L. Boudreaux.  HEP purchased  an additional interest in the G.  S. Boudreaux
 for $225,000 in the third quarter of 1995. 

 In  Richland County,  Montana,  the Lewis  #1  was recompleted  uphole to  the
 Interlake Formation  in the first quarter  of 1995, and the  well continues to
 flow 240  barrels of  oil per  day  and 135  mcf per  day.   HEP has  incurred
 approximately $100,000 for the drilling  of a Red River/Interlake  development
 well which  was spud in early September and is presently being completed.  HEP
 also has plans to reenter a temporarily abandoned wellbore in this area in the
 fourth quarter of 1995 and recomplete it to the Interlake formation.   HEP has
 a 22% working interest in the area.

 In  the  first nine  months of  1995, HEP  spent  approximately $335,000  on a
 program  started  in late  1994  in New  Mexico.   This  amount  includes nine
 successful and one unsuccessful non-operated  development wells in Lea County,
 New Mexico, and  four successful  operated recompletions in  Eddy County,  New
 Mexico, having gross combined  initial flowing potentials of 3,350  barrels of
 oil  per day and 4,200 mcf per day.   HEP has a 5% working interest in the Lea
 County field and 25% to 50% interests in the Eddy County wells.  

 In May 1995, HEP completed an  exploratory well in Hot Springs County, Wyoming
 for approximately $120,000.   The well is flowing 620 barrels  of oil per day.
 A delineation well was drilled in August and completed in September at  a cost
 of $70,000 and is currently flowing 650 barrels of  oil per day.  A third well
 on a  separate but  nearby structure  was spud October  10th and  is presently
 being completed.  It is  anticipated that up to nine additional  locations may
 be available.  HEP has a 15% working interest in this field.
             
 In  the  first nine  months of  1995, HEP  completed  two additional  coal bed
 methane development wells and acquired working interests in the San Juan Basin
 of New Mexico, for a total of approximately $215,000.  The two new  wells have
 increased gross production in this area by  700 mcf per day.  HEP has  working
 interests in these new wells of 18% and 25%.

 During the  first nine months of 1995, HEP also acquired additional acreage in
 Martin  County, Texas for approximately  $90,000 and has  acquired interest in
 two  three-D seismic  prospects in  Taylor and  Jones Counties,  Texas  and is
 pursuing  two other three-D  projects in this  area.  HEP  participated in the
 drilling of a nonoperated exploratory well in one of the  three-D prospects in
 this area in the  third quarter.  This well  is flowing 90 barrels of  oil per
 day and additional behind pipe reserves were recorded.  Additional development
 drilling  on this discovery is anticipated in 1996.  HEP has a 12% interest in
 this  area.   HEP  has also  spent approximately  $530,000  on two  successful
 development  wells  in Reagan  County, Texas  in which  it  has a  90% working
 interest.  Numerous other  projects, which are individually  less significant,
 are also underway in Montana, Colorado, North Dakota, Texas and Utah.

 Distributions 

 HEP paid  a $.20 per Unit distribution on August  15, 1995 and declared a $.20
 per  Unit  distribution payable  on  November 15,  1995.  Oil  and gas  prices
 continue  to be  low, and  the  resulting negative  effect on  cash flow  from
 operations will impact the amount  of distributions which HEP will be  able to
 make.    Future distributions  will be  determined  after taking  into account
 reduced cash flow and the limitation  in HEP's Credit Facilities on the amount
 of  distributions.    Although  HEP  hopes  to  be  able  to  declare  a  $.20
 distribution  for the fourth  quarter of 1995,  because of HEP's  inability to
 predict its  cash flow  from operations  and the limitation  on the  amount of
 distributions, it cannot currently be certain that it will distribute $.20 per
 HEP Unit for  the fourth quarter of 1995 or if a reduction of the distribution
 will be required.   

 In November 1995, the board of directors  of the general partner approved the
 creation of a new class  of limited partner units, to be called Class C Units,
 and  the distribution of  Class C Units  to holders  of HEP Units  and Class B
 Units.   One Class C  Unit will be  received for every  fifteen HEP  Units and
 Class B Units  held.  The Class C Units have a distribution preference of $.25
 per  quarter, and distributions  on the new  unit will commence  for the first
 quarter  of  1996.    The  declaration  date  and  the  record  date  for  the
 distribution of Class C  Units have not been set,  but it is anticipated  that
 the declaration  and record dates  and the  distribution of the  Class C  Unit
 certificates will occur in December 1995.  Class C Units will trade separately
 from  HEP Units.    Class  C Units  have  been  created  to give  HEP  greater
 flexibility  in structuring  future acquisitions  by allowing  HEP to  issue a
 security with a set distribution rate.   Currently outstanding HEP Units  will
 be redesignated  as  Class A  Units  but will  continue to  be  listed on  the
 American Stock Exchange using the symbol "HEP."

 If there  are no adverse  changes in the factors  which effect HEP  cash flow,
 including  oil and  gas prices,  property and  partnership expenses  and other
 relevant information, and there is no change in the limitation in HEP's Credit
 Facilities  on the amount of distributions permitted, HEP believes that it can
 distribute  $.13 per  Class A  Unit and  $.25 per  Class C  Unit for  the four
 quarters  of 1996.   The combined  effect of the  issuance of the  new Class C
 Units and the decrease in distributions on  the Class A Units would result  in
 the $.80 annual distribution that has been paid since 1992 being reduced to an
 annual rate of $.58 on a Class A and associated Class C Unit.

Financing

 During the first  quarter of 1995,  HEP and its  lenders amended and  restated
 HEP's Amended and Restated Credit Agreement ("Credit Agreement") to extend the
 term date of its line of credit to  May 31, 1997.  Under the Credit  Agreement
 and  an   Amended  and  Restated  Note  Purchase   Agreement  ("Note  Purchase
 Agreement")  (collectively referred to as  the "Credit Facilities")  HEP has a
 borrowing base of $42,000,000.   HEP has amounts outstanding at  September 30,
 1995 of $24,700,000 under the Credit Agreement and $12,857,000  under the Note
 Purchase Agreement.  HEP's borrowing base is further reduced by an outstanding
 contract  settlement obligation of $3,130,000 and capital lease obligations of
 $111,000; therefore, its unused borrowing base totaled $1,202,000 at September
 30, 1995.

 Borrowings under  the Note Purchase Agreement bear  interest at an annual rate
 of  11.85%,  which  is  payable  quarterly.    Annual  principal  payments  of
 $4,286,000 began April 30, 1992, and the  debt is required to be paid in  full
 on April 30, 1998.  HEP intends to fund  the payment due in April 1996 through
 additional  borrowings under the Credit  Agreement; thus, no  portion of HEP's
 Note Purchase Agreement is classified as current as of September 30, 1995.

 Borrowings against  the Credit  Agreement bear  interest at the  lower of  the
 Certificate of Deposit rate  plus 1.875%, prime plus  1/2% or the  Euro-Dollar
 rate plus 1.75% (7.625% at September 30, 1995).  Interest  is payable monthly,
 and  quarterly  principal  payments   of  $1,812,000,  as  adjusted  for   the
 anticipated borrowings during April 1996, commence May 31, 1997.

 The borrowing base for  the Credit Facilities is redetermined  semiannually in
 March  and September of  each year.   The Credit  Facilities are  secured by a
 first  lien on  approximately 80% in  value of  HEP's oil  and gas properties.
 Additionally,  aggregate distributions paid by HEP  in any 12 month period are
 limited to 50% of cash flow from operations before working capital changes and
 distributions received from affiliates.
             
 The  current  portion of  long-term debt  represents  a current  capital lease
 obligation of $97,000.

 Included  in net working capital  deficit of affiliates  is $3,537,000, net to
 HEP's interest, which  represents the current portion of the long-term debt of
 HSD.   HSD's line  of credit of  $4,000,000, net  to HEP's interest,  which is
 provided by a third party lender, is secured by certain leases held by HSD and
 is  otherwise nonrecourse to  HEP.  Borrowings  under the line  of credit bear
 interest at the prime  rate plus 8% (17.25% at September  30, 1995).  Interest
 is payable monthly, and the entire  outstanding principal is due on August 31,
 1996 at  which time  HSD intends to  refinance the  debt so  as to extend  the
 repayment term.

 HEP  has  entered into  contracts  to  hedge  its  interest rate  payments  on
 $5,000,000 of its debt through the end of 1995, $10,000,000  for 1996 and 1997
 and $5,000,000 for  the first three  quarters of 1998.   HEP does not  use the
 hedges for trading purposes, but rather for the purpose of providing a measure
 of predictability  for a  portion of  HEP's interest payments  under its  debt
 agreement which has a floating interest rate.  In general, it is HEP's goal to
 hedge 50% of  the principal amount of its debt for  each year of the remaining
 term  of  the debt.   HEP  has entered  into two  hedges, one  of which  is an
 interest rate  collar pursuant to  which it  pays a floor  rate of 5.8%  and a
 ceiling rate of 8.1%, and the other is an interest rate swap with a fixed rate
 of 5.75%.  The amounts received or paid upon settlement  of these transactions
 are recognized as interest expense at the time the interest payments are due.

 Inflation and Changing Prices

 Prices 

 Prices obtained for  oil and gas production depend upon  numerous factors that
 are beyond  the control of HEP,  including the extent of  domestic and foreign
 production, imports  of foreign  oil,  market demand,  domestic and  worldwide
 economic and  political conditions, and  government regulations and  tax laws.
 Prices for both oil and gas fluctuated significantly throughout 1994 and 1995.
 The following table  presents the average prices received each  quarter by HEP
 and the effects of the hedging transactions discussed below.
<TABLE>
<CAPTION>
                                                    Oil               Oil
                                               (excluding the    (including the
                                                 effects of        effects of
                                                  hedging           hedging
                                                transactions)     transactions) 
                                                (bbl)             (bbl)

<S>                                           <C>               <C>      
Third quarter - 1994                           $17.08            $17.58 
Fourth quarter - 1994                           16.05             16.89
First quarter - 1995                            16.79             17.22
Second quarter - 1995                           18.00             18.14
Third quarter - 1995                            16.15             16.63
</TABLE>
<TABLE>
<CAPTION>
                                               Gas               Gas
                                          (excluding the    (including the
                                             effects of        effects of
                                             hedging           hedging
                                            transactions)     transactions) 
                                                (mcf)             (mcf)

<S>                                          <C>               <C>       
Third quarter - 1994                            $1.81              $1.95
Fourth quarter - 1994                            1.65              1.84
First quarter - 1995                             1.51              1.81
Second quarter - 1995                            1.39              1.64
Third quarter - 1995                             1.54              1.84
</TABLE>
        
HEP has  entered into numerous financial  contracts to hedge the  price of its
oil  and natural  gas.   The purpose  of the hedges  is to  provide protection
against  price drops  and to provide  a measure  of stability  in the volatile
environment of oil and natural gas  spot pricing.  The revenue associated with
these contracts  is recognized as oil  or gas revenue  at the time  the hedged
volumes are sold.

The  following  table  provides  a  summary  of  HEP's  outstanding  financial
contracts:

<TABLE>
<CAPTION>
                                     Oil                    
                                   Percent of
                                   Production         Contract
           Period                    Hedged         Floor Price
                                                     (per bbl)
<S>                                   <C>              <C>      
 Last three months of 1995               43%             $17.17
 1996                                    22%             $15.25
 1997                                    18%             $15.08
 1998                                    14%             $15.14
 1999                                     3%             $15.38
</TABLE>
Between 20% and  100% of the oil volumes hedged in  each year are subject to a
participating hedge whereby HEP will receive  the contract price if the posted
futures price is lower than the contract price, and will  receive the contract
price plus  between 25% and 75%  of the difference between  the contract price
and the posted futures price if  the posted futures price is greater than  the
contract  price.  Between 27% and 100% of  the volumes hedged in each year are
subject to a  collar agreement whereby HEP will receive  the contract price if
the spot price is  lower than the  contract price, the cap  price if the  spot
price  is higher  than the  cap price,  and the  spot price  if that  price is
between  the contract  price and  the cap  price.  The  cap prices  range from
$16.50 to $18.85.
<TABLE>
<CAPTION>

                                           Gas                      
                                        Percent of
                                        Production         Contract
                Period                   Hedged          Floor Price 
                                                          (per mcf)
 <S>                                   <C>               <C>   
    Last three months of 1995              55%              $2.04
    1996                                   46%               1.95
    1997                                   41%               1.97
    1998                                   45%               2.01
    1999                                   19%               1.92

Between 28% and 50%  of the gas volumes hedged  in each year are subject  to a
collar agreement whereby HEP will receive the contract price if the spot price
is lower than the  contract price, the cap price  if the spot price  is higher
than the cap price, and the spot  price if that price is between the  contract
price and the cap price.  The cap prices range from $2.50 to $2.81.

During the fourth quarter through November 6, 1995, the oil price (for barrels
not  hedged) averaged  between $15.75  and $16.50  per barrel.    The weighted
average  price of natural gas (for mcf not hedged) was between $1.50 and $1.65
per mcf.

Inflation

Inflation did not have a material impact on HEP in 1994 and is not anticipated
to have a material impact in 1995.

Results of Operations

The following table is presented to  contrast HEP's average oil and gas prices
and  production.  Significant  fluctuations are discussed  in the accompanying
narrative.

</TABLE>
<TABLE>
<CAPTION>

                                  Oil and Gas Prices and Production
                                   (In thousands except for price)

                       For the Three Months Ended    For the Nine Months Ended
                             September 30,                 September 30,
                          1995           1994           1995           1994 

                       Oil    Gas     Oil    Gas     Oil    Gas     Oil    Gas 
                      (bbl)  (mcf)   (bbl)  (mcf)   (bbl)  (mcf)   (bbl)  (mcf)
        <S>        <C>      <C>    <C>     <C>    <C>      <C>   <C>     <C>
        Average      $16.63   $1.84 $17.58   $1.95 $17.29   $1.76 $16.34  $2.01
          price



         Production     277    3,368   238    3,069   740    9,587   707   9,965

</TABLE>
Third Quarter 1995 Compared to Third Quarter 1994

Oil Revenue

Oil revenue  increased by $423,000  during the  third quarter  of 1995 as 
compared with the third quarter of 1994.  The increase is the result of an 
increase in oil production from 238,000 barrels in 1994 to 277,000 barrels in 
1995 partially offset by a decrease in the average oil price from $17.58 per 
barrel in 1994 to $16.63 per barrel in  1995.  The  increase in oil  production 
is due  to increased production from developmental drilling projects in West
Texas which more than offset normal production declines.

The  effect of  HEP's  hedging transactions,  as described  under "Inflation and
Changing Prices,"  was to increase  HEP's average oil price  from  $16.15 per 
barrel  to  $16.63 per barrel, representing $133,000 in additional  revenue 
from  hedging transactions.

Gas Revenue

Gas revenue increased  by $206,000  during the  third quarter  of 1995 as
compared with the third quarter of 1994.  The increase is the result of  an
increase in production from  3,069,000 mcf in 1994 to 3,368,000 mcf in 1995,
partially offset by a decrease in price from $1.95 per  mcf in 1994 to $1.84 per
mcf  in 1995.  The increase  in production is  due to increased  production from
the San Juan Basin which more than offset normal production declines.

The effect  of HEP's hedging  transactions was to  increase HEP's average gas 
price  from  $1.54  per  mcf  to  $1.84  per  mcf, representing  $1,010,000  in
additional  revenue  from  hedging transactions.

Pipeline, Facilities and Other

Pipeline, facilities  and  other revenue  consists  primarily  of facilities  
income  from two  gathering  systems  located in  New Mexico, revenues derived 
from  salt water disposal, and incentive payments  related to certain wells in 
San Juan County.  Pipeline, facilities  and other income decreased by  $452,000
during  the third quarter of 1995 as compared with the third quarter of 1994,
primarily as  a result of  a pay-out adjustment  on one of  HEP's properties.

Interest Income

The  decrease in  interest  income of  $86,000  during the third quarter of 1995
as  compared with  the  third quarter  of  1994 resulted  from a  lower  average
cash balance during the third quarter of 1995 as compared with the same period 
during 1994.

Production Operating Expense

Production  operating expense increased  $422,000, or  16% during the third 
quarter of 1995 as  compared with the third quarter  of 1994, primarily as a
result of increased production taxes due to the  6% increase  in  oil and  gas 
revenue and  increased  lease operating  expenses caused  by the  12% increase 
in oil  and gas production. 

General and Administrative Expense

General and  administrative expense includes  costs incurred  for direct 
administrative  services such as legal,  audit and reserve reports, as well as 
allocated  internal overhead incurred by  the operating  company on  behalf of 
HEP.   These  expenses decreased $169,000  during the third quarter  of 1995 as
compared with the third quarter of 1994 primarily due to reductions in personnel
during the first quarter of 1995.

Depreciation, Depletion and Amortization Expense

Depreciation, depletion and amortization expense decreased $573,000  during the 
third quarter of 1995 as compared with the third quarter  of 1994.  The decrease
is primarily the result of lower capitalized costs in 1995 as compared with 
1994, due to the property impairment  recorded during  second quarter of  1995 
and the fourth quarter of 1994. 

Interest Expense

Interest expense  increased by $137,000 during  the third quarter of 1995 as 
compared  with the third quarter of 1994, primarily as the result of a higher 
interest rates.

Equity in Income of HCRC

Equity  in income  of  affiliate represents  HEP's  share of  its equity  
investment in  HCRC.   HEP's  equity  in income  of HCRC increased $1,241,000
during the third quarter of 1995 as compared with the third quarter of 1994. 
The increase is the result of an increase in HCRC's oil and gas revenue.

Litigation Settlement

Litigation settlement  expense during  the third quarter  of 1995 consists
primarily  of expenses incurred to settle various individually insignificant 
claims against HEP.

First Nine Months 1995 Compared to the First Nine Months 1994

The  comparisons for the first nine months  of 1995 and the first nine months of
1994 are  consistent with those  discussed in the third  quarter 1995 compared
to the third quarter 1994 except for the following:

Oil Revenue

Oil revenue increased $1,245,000 during the first nine months  of 1995 as 
compared with the same period during 1994.   The increase is comprised of an
increase in average oil prices from $16.34 per barrel in  1994 to  $17.29 per
barrel in 1995  combined with  an increase in  production from 707,000  barrels
in 1994 to 740,000 barrels in 1995.  The production increase is due to increased
production from developmental drilling projects in West Texas.

The  effect of HEP's  hedging transactions was  to increase HEP's average oil
price from $16.93 per barrel to $17.29 per barrel, representing a $266,000
increase in revenues.

Gas Revenue

Gas  revenue decreased $3,144,000 during the first nine months of 1995  as  
compared  with the  first  nine  months of  1994.   The decrease is comprised
of a decrease in price from  $2.01 per mcf in 1994  to $1.76 per  mcf in 1995
combined with  a decrease  in production from 9,965,000 mcf in 1994 to 9,587,000
mcf  in 1995.  The production decrease is due to allowable production limits and
normal production declines.

The effect  of HEP's hedging  transactions was to  increase HEP's average gas
price  from  $1.48  per  mcf  to  $1.76  per  mcf, representing   $2,684,000  in
additional  revenue  from  hedging transactions.

Production Operating Expense

Production  operating expense decreased $783,000 during the first nine months
of 1995 as compared with the same period during 1994.  The  decrease is due to
lower production taxes resulting from the decrease  in oil  and gas  revenue
during  1995 and  general cost reductions in West Texas.

Facilities Operating Expense

Facilities operating expense represents the costs of operating and maintaining
two  gathering  systems located  in New  Mexico.  Costs  decreased by $35,000 
during 1995 as compared with 1994 due to decreased maintenance activity.

Impairment of Oil and Gas Properties

Impairment of oil and gas properties during the first nine months of 1995 
includes the write-off of HEP's Indonesian operations as well as a property 
impairment recorded at June 30,  1995 because capitalized  costs  on  that  date
exceeded  the  present  value (discounted at 10%) of estimated future net 
revenues  from proved oil and gas reserves based on prices received at June 30, 
1995 of $16.50 per barrel of oil and $1.50 per mcf of gas.

Equity in Loss of HCRC

Equity in loss of  HCRC increased $852,000 during the  first nine months of 1995
as  compared with the  first nine months of  1994.  The increase is primarily  
due to  HCRC's  impairment  expense resulting from the write-off  of its
Indonesian operations during the   first  quarter  of  1995  and  a  second
quarter  property impairment recorded by HCRC.

Minority Interest in Net Income of Subsidiaries

Minority  interest  in  net  income  of  subsidiaries  represents unaffiliated 
partners' interest  in the  net income  of the  May Partnerships.  The decrease 
is due to a decline in the net income of the  May Partnerships  resulting from 
decreased  production on their properties.

PART II  -  OTHER INFORMATION

 ITEM 1  -  LEGAL PROCEEDINGS

            Reference is made to  Item 8 - Note 14 of Form 10-K for the year
            ended December 31, 1994,  Item 1 - Note  4 of Form  10-Q for  the  
            quarter ended  March 31,  1995 and Item  1 -  Note 4  of Form  10-Q 
            for  the quarter ended June 30, 1995 and Item  1 - Notes 4 and  5 of
            this Form 10-Q.


 ITEM 2  -  CHANGES IN SECURITIES

             None.


 ITEM 3  -  DEFAULTS UPON SENIOR SECURITIES

             None.


 ITEM 4  -  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

             None.



 ITEM 5  -  OTHER INFORMATION

              None.


 ITEM 6  -  EXHIBITS AND REPORTS ON FORM 8-K

              None.




          SIGNATURE

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


                                      HALLWOOD ENERGY PARTNERS, L. P.

                                      By:  HALLWOOD ENERGY CORPORATION
                                          General Partner



           Date: November 13, 1995    By:/s/Robert S. Pfeiffer           
                                          Robert S. Pfeiffer, 
                                          Vice President
                                          (Chief Financial Officer)