UNITED  STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549


                                   FORM 10-Q



            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

               FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997




                             FORELAND CORPORATION
            (Exact name of registrant as specified in its charter)



               NEVADA                                  87-0422812
  (State or other jurisdiction of                     (I.R.S. Employer
   incorporation or organization)                     Identification No.)


  12596 W. BAYAUD AVE.,  SUITE 300
         LAKEWOOD, COLORADO                              80228
(Address of principal executive offices)               (Zip Code)



                                (303) 988-3122
             (Registrant's Telephone number, including area code)


                                NOT APPLICABLE
                (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 the latest practicable date.

      As of November 13, 1997, the Company had outstanding 8,470,068 shares of
its common stock, par value $0.001 per share.



<PAGE>
                                     PART I
                             FINANCIAL INFORMATION

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                         ITEM 1.  FINANCIAL STATEMENTS

------------------------------------------------------------------------------

      The consolidated condensed financial statements included herein have been
prepared by Foreland Corporation (the "Company"), without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission.  Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted.  However, in the opinion of management, all adjustments
(which include only normal recurring accruals) necessary to present fairly the
financial position and results of operations for the periods presented have been
made.  These consolidated condensed financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's annual report on Form 10-K for the year ended December 31, 1996.

      During the quarter ended June 30, 1996, the Company effected, as of June
15, 1996, a 3-for-1 reverse stock split of its common stock, par value $0.001
per share (the "Common Stock").  Unless otherwise indicated, all share and per
share amounts relating to the Common Stock have been adjusted to give effect to
the reverse stock split.
<PAGE>


                     FORELAND CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)

                                            SEPT. 30, 1997        DEC. 31, 1996
                                            --------------        -------------
   ASSETS

Current assets:
   Cash and cash equivalents...................   $ 680,505         2,325,079
   Accounts receivable - trade.................     232,487           775,039
   Inventory...................................      62,542            80,568
   Prepaid expenses and other..................      16,031            18,017
                                                  ---------         ---------

         Total current assets..................     991,565         3,198,703

Property and equipment, at cost:
   Oil and gas properties, under the successful
      efforts method...........................  11,674,777        10,575,655
   Other property and equipment................     358,272           340,476
                                                  ---------         ---------
                                                 12,033,049        10,916,131
   Less accumulated depreciation, depletion,
      and amortization.........................  (4,012,618)       (3,504,719)
                                                 -----------      -----------

             Total property and equipment .....   8,020,431         7,411,412

Other assets...................................     151,224           150,342
                                                  ---------         ---------

Total assets...................................$  9,163,220      $ 10,760,457
                                               ============       ===========

       See accompanying notes to these consolidated financial statements.


                     FORELAND CORPORATION AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)

                                                  SEPT. 30, 1997  DEC. 31, 1996
                                                  --------------   -------------

    LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable and accrued expenses.......   $ 215,113         $ 479,105
   Officers' salaries payable..................     307,878           285,721
   Oil and gas sales payable...................      43,448            88,175
   Current  portion of long-term debt..........       5,356             4,844
                                                  ---------         ---------
         Total current liabilities.............     571,795           857,845

Long-term debt.................................     664,169         1,018,247

Stockholders' Equity:
   Preferred Stock, $0.001 par value,
      5,000,000 shares authorized.
      1991 Convertible Preferred Stock, 40,000
         and 40,000 shares issued and
         outstanding, respectively,
         liquidation preference $1.25 per
         share.................................          40                40
      1994 Convertible Preferred Stock, 165,140
         and 165,140 shares issued and
         outstanding, respectively, liquidation
         preference $2.00 per share............         165               165
      1995 Convertible Preferred Stock, 613,334
         and 613,334 shares issued and
        outstanding, respectively, liquidation
        preference $1.50 per share ............         613               613
      1996 Convertible 6% Preferred Stock, -0-
        and 12.5 shares issued and outstanding,
        respectively, liquidation preference
        $1,000 per share plus accrued
        dividends  ............................         --                --
      1996-4 Convertible 8% Preferred Stock, -0-
        and 198 shares issued and outstanding,
        respectively, liquidation preference
        $10,000 per share plus accrued
        dividends .............................         --                --
   Common Stock, $0.001 par value, 50,000,000
        shares authorized; 8,470,068 and
        7,238,177 shares issued and outstanding,
        respectively ..........................       8,470             7,238
   Additional paid-in capital..................  32,869,232        32,629,313
   Less note and stock subscriptions
      receivable...............................  (1,149,926)       (1,094,237)
   Accumulated deficit......................... (23,801,338)      (22,658,767)
                                                ------------      -----------

         Total stockholders' equity............   7,927,256         8,884,365
                                                 ----------        ----------

Total liabilities and stockholders' equity..... $ 9,163,220      $ 10,760,457
                                                 ==========       ===========

       See accompanying notes to these consolidated financial statements.



<PAGE>
                     FORELAND CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                  THREE MONTHS ENDED SEPT. 30,     NINE MONTHS  ENDED SEPT. 30,
                                       1997           1996            1997             1996
<S>                                ------------------------------  --------------------------
   REVENUES:                       <C>            <C>             <C>            <C>
    Oil and gas sales...........   $ 484,558      $  531,981      $ 1,781,356    $ 1,196,732
    Operator and well
       service income...........      21,827          20,084           48,733         43,495
    Other income, net...........         730           3,474            3,985          7,880
                                    --------      ----------       ----------      ---------
           Total revenues.......     507,115         555,539        1,834,074      1,248,107

EXPENSES:
    Oil and gas production......     249,767         139,755          748,601        369,646
    Oil and gas exploration.....     278,086         194,643          695,670        517,624
    Well service costs..........         138           2,079            1,049          2,882
    Dry hole and abandonment
       costs....................       2,360             --            11,718        443,830
    General and administrative..     170,151         119,284          579,581        367,789
    Shareholder-investor
       services.................      32,536          52,741          162,183        361,190
    Compensation - below market
         options................       9,589           5,500           42,537          5,500
    Depreciation, depletion, and
       amortization.............     187,369         185,186          548,597        574,681
                                   ---------      ----------       ----------      ---------
           Total expenses.......     929,996         699,188        2,789,936      2,643,142
                                   ---------      ----------       ----------      ---------

OPERATING LOSS..................   $(422,881)     $ (143,649)      $ (955,862)  $ (1,395,035)

OTHER  INCOME (EXPENSE)
    Gain (Loss) on sale of asset         --              --            (7,474)           --
    Interest income.............      27,261          46,802           99,886        102,224
    Interest expense............     (54,236)        (11,242)        (115,097)      (133,733)
                                   ---------      ----------       -----------   -----------

NET  LOSS ......................   $(449,856)     $ (108,089)      $ (978,547)  $ (1,426,544)
                                   ----------     -----------      -----------  ------------
Preferred stock dividends:
    Declared....................    (137,174)        (61,137)        (164,029)       (61,137)
    Accrued ....................      78,921          24,136               --           (797)
    Imputed ....................     (16,823)        (69,196)        (215,611)    (1,168,432)
                                   ----------     -----------      -----------   ------------
    Total preferred stock
       dividend.................     (75,076)       (106,197)        (379,640)    (1,230,366)
                                   ----------     -----------      -----------  ------------

Net loss applicable to common
    shareholders................   $(524,932)     $ (214,286)    $ (1,358,187)   $(2,656,910)
                                   ==========     ===========     ============  ============

NET LOSS PER COMMON
    SHARE.......................   $    (0.07)    $    (0.04)     $    (0.18)    $     (0.50)
                                   ===========    ===========     ===========    ===========

WEIGHTED AVERAGE NUMBER
    OF COMMON SHARES
    OUTSTANDING.................   7,648,500       5,999,700        7,414,900     5,265,200
                                   =========      ==========      ===========     =========
</TABLE>

 

       See accompanying notes to these consolidated financial statements.

                     FORELAND CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)
                                                    NINE MONTHS ENDED SEPT. 30,
                                                    ---------------------------
                                                       1997            1996
                                                     ---------      -----------
Cash flow from operating activities:
   Net loss.......................................   $(978,547)  $ (1,426,544)
   Adjustments to reconcile net loss to net cash
      used in operatingactivities:
   Depreciation, depletion, and amortization......     548,598        574,681
   Dry hole, abandonment and impairment costs.....      11,718        443,830
   Issuance of stock for services.................       7,031            --
   Accrued note receivable interest income........     (58,011)       (76,847)
   Amortization of loan origination fee...........       2,937         24,583
   Compensation - Below market options............      42,537          5,500
   Loss on sale of other properties...............       7,474             --
      Changes in operating assets and liabilities:
      (Increase) decrease in:
         Accounts receivable......................     542,552        (87,799)
         Advances to officer......................       1,638          6,742
         Inventory................................      18,026         (9,439)
         Prepaids and other.......................      (3,470)        54,989
      Increase (decrease) in:
         Accounts payable.........................    (308,208)      (711,251)
         Salaries payable.........................      22,157         21,777
                                                     ---------      ---------
            Net cash used in operating activities.    (143,568)    (1,179,778)

Cash flows from investing activities:
   Proceeds from sale of marketable securities....          --        196,700
   Purchase of marketable securities .............          --     (2,020,000)
   Additions to oil and gas properties............  (1,083,282)    (1,415,433)
   Purchase of other property.....................     (68,019)       (19,960)
   Proceeds from the sale of other property.......       2,050             --
                                                      ---------     ----------
         Net cash (used in) provided by
            investing activities..................   (1,149,251)   (3,258,693)

Cash flows from financing activities:
   Proceeds from sale of stock, net...............          --      4,203,508
   Proceeds from exercise of warrants and options.          --      1,080,349
   Receipt of note receivable for stock...........       2,323          3,600
   Payment of long-term debt......................    (354,078)      (403,105)
                                                     ----------    ----------
            Net cash provided by financing
              activities..........................    (351,755)     4,884,352
                                                     ----------     ---------

Increase (decrease) in cash and
      cash equivalents............................  (1,644,574)       445,881
Cash and cash equivalents, beginning of year......   2,325,079         30,490
                                                     ---------      ---------
Cash and cash equivalents, end of period..........   $ 680,505      $ 476,371
                                                     =========      =========

Supplemental disclosures of cash flow information:
   Cash paid for interest.........................   $  57,086      $  42,766
                                                     =========      =========
   Non-cash investing and financing activities....   $  34,588      $  76,890
                                                     =========      =========

       See accompanying notes to these consolidated financial statements.

                     FORELAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)


1.    OIL AND GAS PROPERTIES:

      With the Company's continuous leasing program since 1986, it has
established what management believes is one of the best property positions in
Nevada.  The Company's leasing program is coordinated with prospect generation
and explorations results.  As areas of interest are identified, the Company
attempts to acquire leases or other exploration rights on what preliminarily
appears to be the most promising prospect areas in order to establish a
preemptive lease position prior to generating a specific drilling prospect.  As
specific prospect evaluation advances, the Company may seek leases on additional
areas or relinquish leases on areas that appear less promising, thereby reducing
leasehold costs.  The Company currently has approximately 176,000 gross acres
under lease.


2.   ISSUANCE OF SECURITIES, COMMON STOCK OPTIONS, AND PURCHASE WARRANTS.

      During the first nine months of 1997, the Company issued 44,750 shares of
Common Stock to an unaffiliated individual for his fees in placing $4,475,000 of
the 1996 preferred stock offerings; 1,500 shares of Common Stock to an
unaffiliated company for services associated with a market research report; and
6,040 shares of Common Stock to two land lessors (3,020 shares each), together
with cash, as consideration for two oil and gas leases and surface access for
shooting 3D seismic.

      During the first nine months of 1997, the Company's 1996 and 1996-4
Preferred Stock were convertible into Common Stock pursuant to a formula that
provided a minimum discount of 10% to 25% of the market price of the Common
Stock.  In substance, such discount represents a dividend to the preferred
holders.  This dividend was recognized in the Company's statements of operations
over the period from the issuance date to the earliest date when each series of
Preferred Stock became convertible.  During the first nine months of 1997, the
Company recognized imputed dividends of $215,611 as 100% of the 1996-4 Preferred
Stock became convertible into Common Stock at a rate of 15% on March 20, 1997,
and 15% each; month thereafter.  During the first nine months of 1997, all 255
outstanding shares of the 1996-4 Preferred Stock, as detailed below, and the
last 12.5 outstanding shares of the 1996 Preferred Stock were converted into
6,771 shares of Common Stock.

      During the second quarter of 1997, holders of 57 shares of the 1996-4
Preferred Stock converted such stock into 206,273 shares of the Company's Common
Stock and the Company issued 9,570 shares of Common Stock, which represented
$26,855 as dividends on such converted 1996-4 Preferred Stock.  During the third
quarter of 1997, holders of 198 shares of the 1996-4 Preferred Stock converted
such stock into 895,509 shares of the Company's Common Stock and the Company
issued 60,802 shares of Common Stock, which represented $137,174 as dividends on
such converted 1996-4 Preferred Stock.

3.    NOTE PAYABLE:

      During the first nine months of 1997, the Company made payments totaling
$350,000 for repayment of its line of credit (credit agreement) at Colorado
National Bank (CNB), Denver, Colorado.  In November, 1996, the Company
established the line of credit for a total of $10,000,000, with the commitment
amount (the maximum amount that can be outstanding at any one time) determined
twice yearly by the bank based on its analysis of the Company's cash flows and
proved producing reserves.  CNB's  initial commitment amount was for $2,000,000,
of which $1,000,000 was borrowed in 1996.  Based on such outstanding loan
amount, the Company is required to make principal reduction payments of $100,000
per quarter, commencing July 1, 1999, through December 31, 1999, $75,000 per
quarter, commencing January 1, 2000, through December 31, 2000, and $50,000 per
quarter thereafter until maturity.  The Company has been repaying principal in
excess of the required payment amount so that as of September 30, 1997, the
outstanding principal balance was $650,000.  Requirements may vary depending on
whether additional amounts are drawn on the credit facility.  This credit
agreement is secured by the Company's oil producing properties.

4.    RELATED PARTY TRANSACTIONS:

      The Company owed $307,880 in salaries and interest to a current officer
and director, and a former officer and director at September 30, 1997.  The
Company also had outstanding loans from the same individuals in the amount of
$282,110 as of such date.

      During 1994, Grant Steele, N. Thomas Steele, and  Kenneth L. Ransom each
delivered a promissory note in the principal amount of $300,000 and Bruce C.
Decker and Dennis J. Gustafson each delivered a promissory note in the principal
amount of $56,250 to exercise outstanding options.  The terms of the promissory
notes required installment payments in September 1995, 1996, and 1997.  Prior to
the second installment payment due September 1996, Grant Steele, N. Thomas
Steele, Kenneth L. Ransom, and Bruce C. Decker entered into employment
agreements with the Company which provided for the deferral of the second and
third installments due under each promissory note delivered by such individuals
in September 1994 for one year to September 1997 and September 1998.  The
payment due September 1997 was deferred 90 days in view of issues then being
raised in ongoing discussions for third party financing (See Note 6.  Subsequent
Events, below).

Effective September 2, 1997, the Company entered into new employment agreements
with its executive officers in order to provide to a prospective lender
assurances that key management personnel would have a strong incentive to remain
in their positions during the term of the loan.  N. Thomas Steele and Bruce C.
Decker are employed at salaries of $125,000 and $119,000, respectively, and were
issued 50,000 shares of Common Stock each, 25,000 shares of which are returnable
to the Company by such employee if he is not employed on the first anniversary
date of the agreement.  In addition, the Company granted to each of such
employees 10-year options to purchase 200,000 shares each at $2.50 per share,
50,000 of which became exercisable immediately and 50,000 of which become
exercisable on each of the next succeeding three anniversary dates of the
agreement.  The agreement with Grant Steele provides a monthly salary of $6,000,
$1,500 of which will be paid and $4,500 of which will accrue and will be paid
only for the purpose of paying the cash purchase price of shares on the exercise
of options.  In addition, the Company agreed to issue to Dr. Steele 50,000
shares, 25,000 shares of which are to be returned by him if he is not employed
by the Company on the first anniversary date of the agreement.  Finally, the
agreement with Fred Merian provides for an annual salary of $90,000, commencing
January 1, 1998, contingent on closing a proposed funding transaction, and
grants him 25,000 shares, 12,500 of which are returnable by him if he is not an
employee on the anniversary date of the agreement.  The Company has also granted
to Mr. Merian 10-year options to purchase 100,000 shares, 25,000 of which became
exercisable on the date of the agreement, and 25,000 of which become exercisable
on each of the next three successive anniversary dates of the agreement.  In
each instance, the Company has agreed to pay the employee a cash bonus equal to
the estimated tax liability resulting from the stock award.

5.    INCOME TAXES:

      The Company has had no taxable income under federal and state tax laws due
to operating losses since its inception; therefore, no provision for income
taxes has been made.  At December 31, 1996, the Company has unused net operating
loss carry-forwards of approximately $28,500,000.  This carryforward expires in
varying amounts from 1999 to 2011.


6.    SUBSEQUENT EVENTS--RELATED PARTY TRANSACTIONS

     The September 1997 principal and interest installment due on officer and
director notes delivered in September 1994 as payment for option exercises was
extended 90 days, due to issues raised by potential third party sources of
financing respecting the lack of management's adequate equity stake in the
Company. Subsequent to September 30, 1997, each of N. Thomas Steele and Kenneth
Ransom satisfied their obligation to pay $239,000, and Grant Steele satisfied
his obligation to pay $213,000, in principal and accrued interest on such notes
by the delivery of 41,692 shares of Common Stock at a value of $4.75 per share,
the approximate market price of such Common Stock on the date of delivery, and
canceling options to purchase 66,667 shares at $6.375. Similarly, Bruce C.
Decker satisfied an obligation for $43,600 in principal and interest due on a
note for the purchase of stock on the exercise of options by delivering 5,158
shares  of Common Stock and options to purchase 8,333 shares at $6.375.  In
connection with these transactions, the Company agreed to pay to each of Messrs.
T. Steele, G. Steele, and Ransom a cash bonus of $20,000 and to Mr. Decker
$9,200 to fund the related tax obligation.

     After September 30, 1997, the Company extended for five years the
expiration date of options with a current expiration date of December 1997 or
May 1998 as follows:  N. Thomas Steele, options to purchase 62,889 shares at
$4.50 and 11,111 shares at $3.93; Grant Steele, options to purchase 33,333
shares at $4.50; and Kenneth Ransom, options to purchase 21,778 shares at $4.50
and 11,556 shares at $3.93.

     Subsequent to September 30, 1997, the Company agreed with Bruce Decker, an
officer and director, to offset $157,000 for accrued but unpaid salary against
$135,000 in principal and interest payable by him under a note for the purchase
price of Common Stock on the exercise of options and to pay Mr. Decker a cash
bonus of $80,200 as reimbursement for his estimated income tax obligation
respecting the transaction.

     Effective October 23, 1997, Kenneth L. Ransom assumed the position of
senior geological advisor through December 31, 1998, at an annual salary of
$90,000 and resigned as an officer and director.



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

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OVERVIEW

      Foreland Corporation was organized in June 1985 to advance an exploration
project in the Great Basin and Range geologic province in Nevada that had been
initiated by Gulf Oil Corporation.  To date, the Company has funded its
exploration program principally from the sale of its equity securities.  The
Company's exploration efforts also benefit from capital provided by oil industry
participants for drilling and other exploration of certain oil prospects through
joint arrangements typical in the oil industry.

      Between 1993 and 1995, the Company acquired certain leases and properties
in the Eagle Springs field in Nevada and thereafter returned certain of the
existing wells to production and continued an ongoing development drilling
program.  These efforts were funded in part between August 1994 and November
1996, by an industry partner which then held a 40% working interest in the
field. In November 1996, the Company utilized proceeds from the sale of
securities and its newly established bank credit facility to purchase the
industry partner's 40% working interest in the Eagle Springs field for $2.4
million, effective August 1, 1996.  The Eagle Springs field has been the
Company's principal producing property since 1994.  During 1996, the Company's
production and reserves increased substantially as a result of its discovery of
the Ghost Ranch field, in which it holds a 60% working interest.

      This discussion should be read in conjunction with Management's Discussion
and Analysis of Financial Conditions and Results of Operations in the Company's
annual report on Form 10-K for the year ended December 31, 1996, and the
quarterly reports on Form 10-Q for the three months ended March 31, 1997, and
the six months ended June 30, 1997.

     This report contains certain forward-looking statements and information
relating to the Company that are based on the beliefs of management as well as
assumptions made by and information currently available to management.  When
used in this document, the words "anticipate," "believe," "estimate," "expect,"
and "intend" and similar expressions, as they relate to the Company or its
management, are intended to identify forward-looking statements.  Such
statements reflect the current view of the Company respecting future events and
are subject to certain risks, uncertainties and assumptions, including the risks
and uncertainties noted.  Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those described herein as anticipated, believed,
estimated, expected or intended. The Company undertakes no obligation or
responsibility to update these forward-looking statements to reflect events or
circumstances after the date hereof or the occurrence of unanticipated events.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's operations during the first nine months of 1997 used cash of
$143,600 when the Company reported a net loss of $978,500, due in part to non-
cash charges against the Company's revenues, including $548,600 in depreciation,
depletion, and amortization and $42,500 in compensation charges resulting from
the grant of below market options.  Changes in operating assets and liabilities
also contributed a net amount of $272,700 in cash.  Operating activities used
approximately $1,036,200 less cash as a result of a reduction in operating
losses of $448,000 and changes in current assets and liabilities of $452,500,
when compared to the corresponding period in 1996.

     During the first nine months of 1997, investing activities used net cash of
$1,149,300, consisting of $1,083,300 used for additions to oil and gas
properties and $68,000 used for the purchase of other property.  The cash
required for investing activities was provided from existing cash.  During the
corresponding period in 1996, investing activities used net cash of $3,258,700,
consisting of cash used for additions to oil and gas properties of $1,415,400,
the purchase of other property of $20,000 and the purchase of short-term
marketable securities in the net amount of $1,823,300.

     Financing activities used $351,800 during the first nine months of 1997 for
repayment of long-term debt of $354,100 offset by the receipt of $2,300 on a
note receivable.  During the corresponding period in 1996, the Company received
$5,283,900 in cash from the sale of equity securities and used $403,100 for
repayment of long-term debt.

     The Company requires cash for general and administrative expenses, for
maintaining its properties, and for other items that are required in order for
the Company to continue, as distinguished from costs to advance its ongoing
exploration program in Nevada.  Based on October 1997 production levels and
prices, and the Company's current operating capital, the Company estimates that
it is able to meet cash requirements for fixed and recurring operating costs,
excluding any unusual expenditures.  However, there can be no assurance that
production levels will not decline or that current prices for oil will not
decline, in which case the Company would require funds from external sources for
operating deficiencies.  Any improved operating margins resulting from increased
production and reduced operating expenses or price increases would benefit the
Company.  Subject to the availability of required funding, the Company intends
to implement an enhanced oil recovery program in the Eagle Springs field at a
cost of approximately $2.5 to $3.5 million during the next two years.  The
Company is now seeking to complete third-party financing for this program as
well as for repayment of the outstanding balance on its credit facility,
possible acquisition of oil and gas producing properties, expanded exploration,
and other purposes.  There can be no assurance that  such additional funding can
be obtained on terms acceptable or favorable to the Company. Similarly, there
can be no assurance that development of the Company's Eagle Springs and Ghost
Ranch fields will result in material additional production or that the Company
will be able to obtain funds from other sources, in which case the Company would
be required to implement cost-cutting measures and curtail drilling and most
other exploration activity in order to continue.

     As of September 30, 1997, the Company had a working capital of $419,800, as
compared to working capital of $1,463,600 for the same period in 1996.

RESULTS OF OPERATIONS

     Three Months Ended September 30, 1997 and 1996

     For the third quarter ended September 30, 1997, revenue from oil sales
decreased 8.9% to $484,600 as compared to $532,000 in the same period in 1996,
attributable principally to decreased oil prices.  Although there was a 153.8%
increase in the number of barrels of oil sold by the Company in the third
quarter of 1997, as compared to the third quarter of 1996, resulting in large
part from the purchase of Plains Petroleum's interest in the Eagle Springs
field, this increase was offset by a 28.4% decrease in the prices received for
these sales.  Operator, well service and other income for the third quarter of
1997 was approximately equal to the same items during the corresponding period
in 1996.

     The Company's production expenses for the third quarter of 1997 increased
$110,000, or 78.7%, to $249,800.  Eagle Springs field production expenses would
have decreased had it not been for the  purchase of Plains Petroleum's 40%
working interest, which added $52,200 to the Company's production expenses for
the field, aggregating an increase of $29,700 in Eagle Springs production
expenses compared to the same period in 1996.  The Ghost Ranch field and the
Company's remaining properties contributed $71,200 and $9,000, respectively,  in
increased production expenses during the third quarter of 1997 when compared to
the same period in 1996.

     Oil and gas exploration expenses increased $83,400, or 42.9%, to $278,100
for the third quarter of 1997 when compared to the same period in 1996.  This is
primarily due to increased personnel cost of approximately $46,900 and increased
lease rental cost of $35,800.  Dry hole, abandonment, and impairment cost were
$2,400, primarily due to late arriving invoices received in the third quarter of
1997 but associated with surface restoration at the Hay Ranch 1-17 well in the
second quarter.

     General and administrative expenses increased $50,900 to $170,200 for the
third quarter of 1997, when compared to the same period in 1996.  The primary
contributor was increased personnel cost of $56,300.  Shareholder and investor
services decreased $20,200 due to a decrease in financial public relations and
information dissemination within the investment community.  Depreciation,
depletion, and amortization increased for the three-month period ended September
30, 1997, by $2,200 to $187,400 primarily as a result of increased production.

     Interest income decreased $19,500 to $27,300 for the third quarter of 1997,
when compared to the same period in 1996, primarily as a result of less cash
being invested in short-term liquid assets.  Interest expense increased $43,000
to $54,200 primarily due to interest on the line of credit at Colorado National
Bank.

     During the quarter ended September 30, 1997, the Company, in its earnings
per shares calculations of the consolidated statement of operations, declared a
preferred stock dividend of $137,200, of which $78,900 had previously been
accrued, on preferred stock shares that were converted to Common Stock, and had
an imputed preferred stock dividend of $16,800 as a result of convertibility of
its outstanding preferred stock into Common Stock at below-market prices.  (See
Note 2 to NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.) The dividend amounts are
for earnings per share calculations, and the imputed stock dividends are not
recorded in the Company's financial statements.

     Nine Months Ended September 30, 1997 and 1996

     For the nine months ended September 30, 1997, oil sales increased 48.9% to
$1,781,400 as compared to $1,196,700 in the same period in 1996, attributable to
increased sales from the Ghost Ranch field (approximately $503,200) and Eagle
Springs field (approximately $104,700), while sales from the Company's remaining
properties decreased approximately $23,300.  This increase in the nine month
period ended September 30, 1997, was the result of an 83.1% increase in barrels
sold, offset by a 14.8% decrease in price as compared to the same nine-month
period in 1996.  Well service and well operator income increased $5,200 for the
first three quarters of 1997, when compared to the same period in 1996,
primarily due to an increase of $38,600 in well service revenue due to increased
water disposal fees offset by a decrease of $33,500 in operator income.

     The Company's production expenses for the first three quarters of 1997
increased $379,000, or 102.5%, to $748,600.  The Eagle Springs field production
expenses were increased by $205,500 related to the 40% interest purchased from
Plains Petroleum.  This increase was offset by certain decreases that resulted
in net production expense increases attributable to the Eagle Springs field of
$176,300.  Additionally the Ghost Ranch field contributed $138,600 in increased
production expenses, and production expenses related to the Company's remaining
properties increased $63,800 when compared to the same period in 1996, primarily
due to $27,900 in cost associated with the plugging of the Tomera Ranch 33-1
well.

     Oil and gas exploration expenses increased $178,000, or 34.4%, to $695,700
for the first three quarters of 1997 when compared to the same period in 1996.
This is primarily due to increased personnel cost of approximately $140,900,
increased lease rental cost of $64,100, increased vehicle cost of $24,000, and
decreased geological and geophysical cost of $71,700 attributable to a $75,000
payment received from Hugoton/Maxwell as a result of its election not to
complete a 3D seismic study. Dry hole, abandonment, and impairment cost were
$11,700, primarily due to late arriving invoices received in the first three
quarters of 1997 but associated with the Pine 1-7, Ghost Ranch 58-35, and Hay
Ranch 1-17 wells, which were plugged in a prior year.  This is a decrease of
$432,100 when compared to the same period in 1996.  The majority of the first
nine months' 1996 cost was associated with the impairment of the undepleted book
value of the North Willow 6-27 well as required by the Financial Accounting
Standards Board in its statement titled "Accounting for Long-lived Assets"
discussed below.

     General and administrative expenses increased $211,800 to $579,600 for the
nine-month period ended September 30, 1997, when compared to the same period in
1996.  The primary contributors are increases in professional fees of $49,000
associated with the audit, accounting and legal fees, which increased primarily
as a result of cost associated with the acquisition of the purchase of Plains
Petroleum's 40% interest in the Eagle Springs field and additional reporting
requirements of FAS 123 and increases of $144,300 in personnel cost and $7,800
in travel cost.  Shareholder and investor services decreased $199,000 due to a
decrease in financial public relations and information dissemination within the
investment community.    Depreciation, depletion, and amortization decreased
$26,100 for the nine-month period ended September 30, 1997, when compared to the
same period in 1996.

     Interest income decreased $2,300 to $99,900 for the first three quarters
1997, when compared to the same period in 1996, primarily as a result of less
cash being available to be invested in short-term liquid assets. Interest
expense decreased $18,600 to $115,100 primarily due to reduced interest on
salaries payable, and interest charges on vendor invoices.

     During the nine months ended September 30, 1997, the Company, in its
earnings per shares calculations of the consolidated statement of operations,
declared and accrued a preferred stock dividend of $164,000 on preferred stock
shares that were converted to Common Stock and had an imputed stock dividend of
$215,600 as a result of convertibility of its outstanding preferred stock into
Common Stock at below-market prices. (See Note 2 to NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS.) The dividend amounts are for earnings per share
calculations, and the imputed stock dividends are not recorded in the Company's
financial statements.

     Accounting Treatment of Certain Capitalized Costs

     The Company follows the "successful efforts" method of accounting for oil
and gas producing activities.  Costs to acquire mineral interest in oil and gas
properties and to drill and equip exploratory and development wells that find
proved reserved are capitalized.  Cost to drill wells that do not find proved
reserves, geological and geophysical costs, and costs of carrying and retaining
unproved properties are expensed.

     Included in oil and gas properties on the Company's balance sheets are
costs of wells in progress.  Such costs are capitalized until a decision is made
to plug and abandon or, if the well is still being evaluated, until one year
after reaching total depth, at which time such costs are charged to expense,
even though the well may subsequently be placed into production.

     During 1996 the Company was required to adopt a new accounting policy that
requires it to assess the carrying cost of long-lived assets whenever events or
changes of circumstances indicated the carrying value of long-lived assets may
not be recoverable.  When the assessment for impairment of oil and gas
properties is performed, the Company is required to compare the net carrying
value of proved oil and gas properties on a lease-by-lease basis (the lowest
level at which cash flows can be determined on a consistent basis) to the
related estimates of undiscounted future net cash flows for such properties.  If
the carrying value exceeds the net cash flows, then impairment is recognized to
reduce the carrying value to the estimated fair value. As a result of the
foregoing policies, the Company expects that from time to time capitalized costs
will be charged to expense based on management's evaluation of specific wells or
properties or the disposition, through sales or conveyances of fractional
interests in connection with industry sharing arrangements, of property
interests.

     As a part of the Company's evaluation of its oil and gas reserves in
connection with the preparation of its annual financial statements, the Company
completes an engineering evaluation of its properties based on current
engineering information, oil and gas prices, and production costs, which may
result in material changes in the total undiscounted net present value of the
Company's oil and gas reserves and may, therefore, result in an impairment
allowance as discussed above.

     Operating Costs

     Overall operating costs are a combination of costs associated with each
well and costs associated with operation of the entire field.  As additional
wells are added to the production system, the field operating costs are spread
among additional wells, lowering the impact of such costs on each well and per
barrel produced.  Because of the foregoing, the Company expects that production
costs per barrel will continue to be higher than industry standards, unless and
until the amount of production increases sufficiently to obtain economies of
scale and dilute the impact of high fixed operating costs.  In addition,
operating costs may continue to vary materially due to the costs of ongoing
treatment or reworking of existing wells and other factors.


                           PART II. OTHER INFORMATION
-------------------------------------------------------------------------------

                         ITEM 2.  CHANGES IN SECURITIES
-------------------------------------------------------------------------------

      At the annual meeting of stockholders held August 12, 1997, the
stockholders approved amendments to the articles of incorporation to adopt
certain modernizing changes to remove provisions no longer required, permitted,
or customary in articles of incorporation and to limit the personal liability of
the directors in certain circumstances.

      On May 12, 1997, the board of directors adopted a Rights Agreement under
which preferred stock purchase rights were distributed, as a dividend, to common
stockholders of record as of July 1, 1997, at a rate of one right for each
shares of the Company's Common Stock held on such record date.  For a complete
description of the Rights Agreement, see the Company's current report on Form 8-
K dated May 12, 1997.

     During the third quarter of 1997, all 12.5 outstanding shares of 1996
Preferred Stock were converted into 6,202 shares of Common Stock; the Company
issued 711 shares of Common Stock as dividends on such converted 1996 Preferred
Stock; holders of 198 shares of 1996-4 Preferred Stock converted such stock into
895,509 shares of Common Stock; and the Company issued 660,802 shares of Common
Stock as dividends on such converted 1996-Preferred Stock.

     Pursuant to employment agreements with executive officers entered into
effective September 2, 1997, the Company issued to each of N. Thomas Steele and
Bruce C. Decker 50,000 shares of Common Stock, 25,000 shares of which are
returnable to the Company by such employee if he is not employed on the first
anniversary date of the agreement.  In addition, pursuant to the employment
agreements, the Company granted to each of N. Thomas Steele and Bruce C. Decker
10-year options to purchase 200,000 shares each at $2.50 per share, 50,000 of
which became exercisable immediately and 50,000 of which become exercisable on
each of the next succeeding three anniversary dates of the agreement.  Pursuant
to his employment agreement, the Company issued Grant Steele 50,000 shares,
25,000 shares of which are to be returned by him if he is not employed by the
Company on the first anniversary date of the agreement.  Pursuant to an
employment agreement commencing January 1, 1998, the Company issued Fred Merian
25,000 shares, 12,500 of which are returnable by him if he is not an employee on
the anniversary date of the agreement.  The Company has also granted to Mr.
Merian 10-year options to purchase 100,000 shares, 25,000 of which became
exercisable on the date of the agreement, and 25,000 of which become exercisable
on each of the next three successive anniversary dates of the agreement.


-------------------------------------------------------------------------------

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


     On August 12, 1997, at the annual meeting of the Company's shareholders,
the shareholders voted on the following matters submitted to them for
consideration:

(1)  Elected N. Thomas Steele, Bruce C. Decker, Grant Steele, and Kenneth L.
     Ransom  as directors of the Company as follows:

     N. Thomas Steele    For: 5,436,572
     Bruce C. Decker     For: 5,447,395
     Grant Steele        For: 5,445,218
     Kenneth L. Ransom   For: 5,447,438

(2)  Approved the Company's 1997 Stock Option and Award Plan as follows:

        For  2,732,853    Against    741,739    Abstain    124,707

(2)  Approved the grant of options to directors as follows:

        For  2,631,796    Against    830,519    Abstain    136,818

(2)  Considered amendments of the Company's Articles of Incorporation to:

     (a)Make general modernizing changes;
        For  5,005,119    Against    481,167    Abstain    121,044
                       
     (b)Classify the board of directors into three classes, with each class
        serving staggered three-year terms;
        For  2,849,529    Against    604,436    Abstain    144,334

     (c)Change the Company's authorized capitalization to include 50,000,000
        shares of Common Stock and 10,000,000 shares of Preferred Stock;
        For  2,772,901    Against    696,912    Abstain    129,486

     (d)Eliminate the personal liability of directors in certain circumstances;
        For  4,933,016    Against    540,297    Abstain
                                                           133,747
     (e)Cause the Company to specifically opt out of certain anti-takeover
        statutes in Nevada;
        For  3,005,663    Against    465,522    Abstain
                                                           128,114
     (f)Provide that a special meeting of the shareholders may be called only
        by the Board of Directors;
        For  2,653,244    Against    771,218    Abstain    186,137

     (g)Require advance notice of nominees for election to the Board of
        Directors;
        For  2,994,110    Against    474,135    Abstain    131,054

     (h)Grant cumulative voting on the election of Directors if a person or
        group of related persons owning in excess of 30% of the Company's
        voting stock opposes management of the Company in a separate proxy
        solicitation or in an election contest;
        For  2,855,812    Against    567,395    Abstain    176,092

     (i)Require advance notice regarding business to be conducted at
        shareholders' meetings;
        For  2,974,405    Against    508,050    Abstain    116,844

     (j)Deny action by the written consent of the holders of a majority of the
        voting shares;
        For  2,771,443    Against    675,231    Abstain    152,625

     (k)Prohibit the Company from paying a premium upon the redemption of stock
        in excess of the fair market value of such stock from a stockholder
        that has acquired 10% or more of the Company's Common Stock;
        For  3,100,678    Against    366,652    Abstain    131,969
                                                           
     (l)Require an affirmative vote of shareholders holding at least two-thirds
        of the Company's voting stock to approve a business combination with a
        person or group of related persons owning in excess of 10% of the
        Company's voting stock, unless such business combination requires the
        payment of a fair price for the Company's stock;
        For  2,943,406    Against    524,662    Abstain    131,231

     Of the foregoing amendments considered by the shareholders, only (a) and
(d) were approved.


------------------------------------------------------------------------------

                   ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

------------------------------------------------------------------------------

(a)  EXHIBITS

     The following exhibits are included as part of this report:

           SEC
EXHIBIT REFERENCE
 NUMBER   NUMBER              TITLE OF DOCUMENT                LOCATION
------- ---------  -------------------------------          ---------------
Item 3             Articles of Incorporation

3.01        3       Articles of Restatement of the Articles   Incorporated by
                     of Incorporation                         Reference(1)

Item 27           Financial Data Schedule

27.01       27     Financial Data Schedule                    This Filing

     (1) Incorporated by reference from the Company's registration statement on
       Form S-3, SEC File No. 333-37793.

(b)       Reports on Form 8-K.

      During the quarter ended on September 30, 1997 the Company filed the
following reports on form 8-K.

        DATE EVENT REPORTED                     ITEM REPORTED
      ---------------------            ---------------------------------------
      September 3, 1997                Item 5.   Other Events

      October 21, 1997                 Item 5.    Other Events



------------------------------------------------------------------------------

                                   SIGNATURES

------------------------------------------------------------------------------

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


                                       FORELAND CORPORATION




Dated:  November 14, 1997              By:     /s/ N. Thomas Steele
                                               President

Dated:  November 14, 1997              By:      /s/ Don W. Treece
                                               Controller  (Chief
                                               Financial  Officer)