==============================================================================
               UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

                 For the quarterly period ended JUNE 30, 1998

                                       OR

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

                         Commission File Number 1-11450

                              SANTA FE ENERGY TRUST

            (Exact name of registrant as specified in its charter)

                     TEXAS                          76-6081498
             (State or other jurisdiction         (I.R.S. Employer
         of incorporation or organization)       Identification No.)
                                                  


                  CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
                              GLOBAL TRUST SERVICES
                             600 TRAVIS, SUITE 1150
                              HOUSTON, TEXAS 77002
               (Address of principal offices, including zip code)

      Registrant's telephone number, including area code (713) 216-5087


                                      NONE
          (Former name or former address, 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 |_|


                Depository Units outstanding at July 31, 1998
                                  6,300,000
==============================================================================

<PAGE>
PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                              SANTA FE ENERGY TRUST
          STATEMENT OF CASH PROCEEDS AND DISTRIBUTABLE CASH (unaudited)
                      (in thousands, except per unit data)
<TABLE>
<CAPTION>
                                                         Three Months Ended    Six Months Ended
                                                             June 30,              June 30,
                                                        ------------------    ------------------
                                                          1998       1997       1998       1997
                                                        -------    -------    -------    -------
<S>                                                     <C>        <C>        <C>        <C>    
Royalty income:
    ODC royalty .....................................   $   813    $ 1,284    $ 1,966    $ 2,597
    Willard royalty .................................       380        607        920      1,276
    Net profits royalty .............................     1,727      2,200      3,199      4,170
    Support payment (recoupment) ....................      --         (153)      --       (1,065)
                                                        -------    -------    -------    -------
Total royalties .....................................     2,920      3,938      6,085      6,978
Administrative fee to Santa Fe Energy Resources, Inc.       (59)       (57)      (116)      (112)
Cash withheld for trust expenses ....................      (100)       (50)      (150)      (200)
                                                        -------    -------    -------    -------
Distributable cash ..................................   $ 2,761    $ 3,831    $ 5,819    $ 6,666
                                                        =======    =======    =======    =======
Distributable cash per trust unit ...................  $0.43820   $0.60812   $0.92359   $1.05812
                                                        =======    =======    =======    =======
Trust units outstanding .............................     6,300      6,300      6,300      6,300
                                                        =======    =======    =======    =======
</TABLE>

    See accompanying notes

                STATEMENT OF ASSETS, LIABILITIES AND TRUST CORPUS
                                 (in thousands)
<TABLE>
<CAPTION>
                                                              June 30, December 31,
                                                               1998        1997
                                                             --------    --------
                                ASSETS                      (unaudited)
<S>                                                          <C>         <C>     
Current assets:
    Cash .................................................   $    106    $    177
                                                             --------    --------

Investment in royalty interests, at cost .................     87,276      87,276
Less: accumulated amortization ...........................    (51,309)    (47,402)
                                                             --------    --------
                                                               35,967      39,874
                                                             --------    --------
                                                             $ 36,073    $ 40,051
                                                             ========    ========
                             TRUST CORPUS
Trust corpus, 6,300,000 trust units issued and outstanding   $ 36,073    $ 40,051
                                                             ========    ========
</TABLE>
    See accompanying notes

                                       2
<PAGE>
                              SANTA FE ENERGY TRUST
                STATEMENT OF CHANGES IN TRUST CORPUS (unaudited)
                                 (in thousands)


Balance at December 31, 1996 ...............................           $ 48,420
   Cash proceeds ...........................................             12,654
   Cash distributions ......................................            (12,354)
   Trust expenses ..........................................               (269)
   Amortization of royalty interests .......................             (8,400)
                                                                       --------
Balance at December 31, 1997 ...............................             40,051
   Cash proceeds ...........................................              5,969
   Cash distributions ......................................             (5,819)
   Trust expenses ..........................................               (221)
   Amortization of royalty interests .......................             (3,907)
                                                                       --------
Balance at June 30, 1998 ...................................           $ 36,073
                                                                       ========

   See accompanying notes


                                       3
<PAGE>

                              SANTA FE ENERGY TRUST
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 1.     THE TRUST

      Santa Fe Energy Trust (the "Trust") was formed on October 22, 1992, with
Chase Bank of Texas, National Association, formerly Texas Commerce Bank National
Association, as trustee (the "Trustee"), to acquire and hold certain royalty
interests (the "Royalty Interests") in certain properties (the "Royalty
Properties") conveyed to the Trust by Santa Fe Energy Resources, Inc. ("Santa
Fe"). The Royalty Interests consist of two term royalty interests in two
production units in the Wasson field in west Texas (the "Wasson Royalties") and
a net profits royalty interest in certain royalty and working interests in a
diversified portfolio of properties located in twelve states (the "Net Profits
Royalties"). The Royalty Interests are passive in nature and the Trustee has no
control over or responsibility relating to the operation of the Royalty
Properties. The Trust will be liquidated on February 15, 2008 (the "Liquidation
Date").

      In November 1992, 5,725,000 Depository Units, each consisting of
beneficial ownership of one unit of undivided beneficial interest in the Trust
("Trust Units") and a $20 face amount beneficial ownership interest in a $1,000
face amount zero coupon United States Treasury obligation maturing on or about
February 15, 2008, were sold in a public offering for $20 per Depository Unit. A
total of $114.5 million was received from public investors, of which $38.7
million was used to purchase the Treasury obligations and $5.7 million was used
to pay underwriting commissions and discounts. Santa Fe received the remaining
$70.1 million and 575,000 Depository Units. In the first quarter of 1994 Santa
Fe sold in a public offering the 575,000 Depository Units which it held.

      The trust agreement under which the Trust was formed (the "Trust
Agreement") provides, among other things, that:

o  the Trustee shall not engage in any business or commercial activity or
   acquire any asset other than the Royalty Interests initially conveyed to the
   Trust;

o  the Trustee may not sell all or any portion of the Wasson Royalties or
   substantially all of the Net Profits Royalties without the prior consent of
   Santa Fe;

o  Santa Fe may sell the Royalty Properties, subject to and burdened by the
   Royalty Interests, without consent of the holders of the Trust Units;
   following any such transfer, the Royalty Properties will continue to be
   burdened by the Royalty Interests and after any such transfer the royalty
   payment attributable to the transferred property will be calculated
   separately and paid by the transferee;

o  the Trustee may establish a cash reserve for the payment of any liability
   which is contingent, uncertain in amount or that is not currently due and
   payable;

o  the Trustee is authorized to borrow funds required to pay liabilities of the
   Trust, provided that such borrowings are repaid in full prior to further
   distributions to the holders of the Trust Units;

o  the Trustee will make quarterly cash distributions to the holders of the
   Trust Units.


                                       4
<PAGE>
                              SANTA FE ENERGY TRUST
                  NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


NOTE 2.     BASIS OF ACCOUNTING

      The financial statements of the Trust are prepared on the cash basis of
accounting for revenues and expenses. Royalty income is recorded when received
(generally during the quarter following the end of the quarter in which the
income from the Royalty Properties is received by Santa Fe) and is net of any
cash basis exploration and development expenditures and amounts reserved for any
future exploration and development costs. Expenses of the Trust, which will
include accounting, engineering, legal, and other professional fees, Trustee
fees, an administrative fee paid to Santa Fe and out-of-pocket expenses, are
recognized when paid. Under generally accepted accounting principles, revenues
and expenses would be recognized on an accrual basis. Amortization of the
Trust's investment in Royalty Interests is recorded using the unit-of-production
method in the period in which the cash is received with respect to such
production.

      The conveyance of the Royalty Interests to the Trust was accounted for as
a purchase transaction. The $87,276,000 reflected in the Statement of Assets and
Trust Corpus as Investment in Royalty Interests represents 6,300,000 Trust Units
valued at $20 per unit less the $38,724,000 paid for the Treasury obligations.
The carrying value of the Trust's investment in the Royalty Interests is not
necessarily indicative of the fair value of such Royalty Interests.

      The Trust is a grantor trust and as such is not subject to income taxes
and accordingly no recognition has been given to income taxes in the Trust's
financial statements. The tax consequences of owning Trust Units are included in
the income tax returns of the individual Trust Unit holders.

      The preparation of the Trust's financial statements requires the use of
certain estimates. Actual results may differ from such estimates.

NOTE 3.     THE ROYALTY INTERESTS

      The Wasson Royalties consist of interests conveyed out of Santa Fe's
royalty interest in the Wasson ODC Unit (the "ODC Royalty") and the Wasson
Willard Unit (the "Willard Royalty"). The ODC Royalty entitles the Trust to
receive quarterly royalty payments with respect to 12.3934% of the actual gross
oil production from the Wasson ODC Unit, subject to certain quarterly
limitations set forth in the conveyance agreement, for the period from November
1, 1992 to December 31, 2007. The Willard Royalty entitles the Trust to receive
quarterly royalty payments with respect to 6.8355% of the actual gross oil
production from the Wasson Willard Unit, subject to certain quarterly
limitations set forth in the conveyance agreement, for the period from November
1, 1992 to December 31, 2003.

      The Net Profits Royalties entitle the Trust to receive, on a quarterly
basis, 90% of the net proceeds, as defined in the conveyance agreement, from the
sale of production from the properties subject to the conveyance agreement. The
Net Profits Royalties are not limited in term, although the Trustee is required
to sell such royalties prior to the Liquidation Date.

      For any calendar quarter ending on or prior to December 31, 2002, the
Trust will receive additional royalty payments ("Support Payments") to the
extent it needs such payments to distribute $0.40 per Trust Unit per quarter.
Such Support Payments are limited to Santa Fe's remaining royalty interest in
the Wasson ODC Unit. If such Support Payments are received, certain proceeds
otherwise payable to the Trust in subsequent quarters may be reduced to recoup
the amount of such Support Payments. The aggregate of the Support Payments, net
of any amounts recouped, is limited to $20,000,000 on a revolving basis. Through
the end of 1995, the Trust had received

                                       5
<PAGE>
                              SANTA FE ENERGY TRUST
                  NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


NOTE 3.     THE ROYALTY INTERESTS (CONTINUED)

Support Payments totalling $2,074,000. During 1996 and 1997 Santa Fe recouped
all of such payments.

NOTE 4.     DISTRIBUTION TO TRUST UNIT HOLDERS

      The Trust has received royalty payments and made distributions as follows:

                                                 
                                     Royalty              Distributions
                                     Payment       -----------------------------
                                     Received         Amount      Per Trust Unit
                                    ----------     -------------  --------------
                                        (in thousands, except per unit data)
1997
First quarter ..............        $ 2,985(a)        $ 2,835        $   0.45000
Second quarter .............          3,881(b)          3,831            0.60812
Third quarter ..............          2,870             2,820            0.44757
Fourth quarter .............          2,918             2,868            0.45527
                                    -------           -------        -----------
                                     12,654            12,354            1.96096
                                    -------           -------        -----------

1998
First quarter ..............        $ 3,108           $ 3,058        $   0.48539
Second quarter .............          2,861             2,761            0.43820
                                    =======           =======        ===========
                                      5,969             5,819            0.92359
                                    =======           =======        ===========
-----------
(a) Reduced by recoupment of Support Payment of $912,000, or $0.14473 per Trust
Unit.
(b) Reduced by recoupment of Support Payment of $153,000, or $0.02429 per Trust
Unit.


                                       6
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

GENERAL; LIQUIDITY AND CAPITAL RESOURCES

      Santa Fe Energy Trust (the "Trust") was formed on October 22, 1992 with
Chase Bank of Texas, National Association as trustee (the "Trustee"), to acquire
and hold certain royalty interests (the "Royalty Interests") in certain
properties (the "Royalty Properties") conveyed to the Trust by Santa Fe Energy
Resources, Inc. ("Santa Fe"). The Trust is a passive entity with the Trustee's
primary responsibility being the collection and distribution of proceeds from
the Royalty Interests and the payment of Trust liabilities and expenses (see
Note 1 to the financial statements of the Trust). The Royalty Interests consist
of two term royalty interests in two production units (the Wasson ODC Unit and
the Wasson Willard Unit) in the Wasson field in west Texas (the "Wasson
Royalties") and a net profits royalty interest (the "Net Profits Royalties") in
certain royalty and working interest properties in a diversified portfolio of
properties located predominantly in Texas, Louisiana and Oklahoma (the "Net
Profits Properties"). Under the terms of the Trust Agreement, the Trustee cannot
engage in any other business or commercial activity or acquire any asset other
than the Royalty Interests initially conveyed to the Trust. Therefore, the
Royalty Interests are the sole source of funds for the Trust from which to pay
expenses and liabilities and make distributions to the holders of the Trust
Units. The Trust will be liquidated on or before February 15, 2008 (the
"Liquidation Date").

      The Wasson Royalties are fixed percentage royalty interests in specified
levels of quarterly maximum production from the underlying properties in each
year during the term of the respective royalty. The Wasson ODC Royalty and the
Wasson Willard Royalty terminate on December 31, 2007 and December 31, 2003,
respectively. The Net Profits Royalties are life-of-property interests which
will be sold by the Trust prior to the Liquidation Date. The Net Profits
Royalties entitle the Trust to receive 90% of the net proceeds (after deducting,
among other things, the costs of production and marketing and capital
expenditures) from the sale of production from the Net Profits Properties. The
Net Profits Properties are generally mature producing oil and gas properties and
the production and reserves attributable to such properties are expected to
decline substantially over the life of the Trust. The Net Profits Royalties are
expected to have a relatively small liquidation value at the Liquidation Date.

      For any calendar quarter ending on or prior to December 31, 2002, the
Trust will receive additional royalty payments ("Support Payments") to the
extent it needs such payments to distribute $0.40 per Trust Unit per quarter.
Such Support Payments are limited to Santa Fe's remaining royalty interest in
the Wasson ODC Unit. If Support Payments are received, certain proceeds
otherwise payable to the Trust in subsequent quarters may be reduced to recoup
the amount of such Support Payments. The aggregate amount of Support Payments,
net of any amounts recouped, is limited to $20,000,000 on a revolving basis.
Through the end of 1995, Support Payments received by the Trust totaled
$2,074,000. In 1996 and 1997 Santa Fe recouped all such Support Payments and
future recoupments will be made only to the extent of future Support Payments.
Depending on factors such as sales prices and volumes and the level of operating
costs and capital expenditures, Support Payments may be required in subsequent
quarters to allow the Trust to make distributions of $0.40 per Trust Unit per
quarter.

      Trust expenses include accounting, engineering, legal and other
professional fees, Trustee fees, an administrative fee paid to Santa Fe and
other out-of-pocket expenses. From time to time Santa Fe may, at its sole
discretion and without any obligation to do so, advance funds to the Trust for
the timely payment of such expenses and receive reimbursement therefore in later
periods. In addition, the Trustee is authorized to borrow funds required to pay
liabilities of the Trust, provided that such borrowings are repaid in full prior
to making further distributions to the holders of the Trust Units. Currently
there are no such borrowings outstanding or contemplated other than the
above-described advances which Santa Fe has made or may continue to make.

      The Trust's results of operations are dependent upon the sales prices and
quantities of oil and gas produced from the Royalty Properties, the costs of
producing such resources and the amount of capital expenditures made with
respect to such properties. Royalty income is recorded by the Trust when
received, generally during the quarter following the end of the quarter in which
revenues are received and costs and expenses are paid by Santa 

                                       7
<PAGE>
Fe. Cash proceeds from the Royalty Properties may fluctuate from quarter to
quarter due to the timing of receipts and payments of revenues and expenses as
well as changes in prices and production volumes. In addition, amounts for
future exploration and development costs may be reserved from time to time.

      Since, on an equivalent basis, the majority of the Trust's proved reserves
are crude oil, even relatively modest changes in crude oil prices may
significantly affect the Trust's revenues and results of operations. Crude oil
prices are subject to significant changes in response to fluctuations in the
domestic and world supply and demand and other market conditions as well as the
world political situation as it affects OPEC, the Middle East and other
producing countries. In addition, a substantial portion of the Trust's revenues
come from properties which produce sour (i.e., high sulfur content) crude oil
which sells at prices lower than sweeter (i.e., low sulfur content) crude oils.
The Trust's average crude oil sales price (excluding the effect of Support
Payments and recoupments) for the second quarter of 1998 was 34% lower than for
the same period in 1997 (see Results of Operations). Crude oil prices with
respect to the Trust's results in the third quarter of 1998 fell to $12.19 per
barrel on the Royalty Properties. Crude oil prices received by Santa Fe on the
Royalty Properties in July 1998 averaged $11.20 per barrel.

Natural gas prices fluctuate due to weather conditions, the level of natural gas
in storage, the relative balance between supply and demand and other economic
factors. The Trust's average price for natural gas in the second quarter of 1998
was $2.64 per Mcf, approximately 15% lower than the $3.12 per Mcf received in
the second quarter of 1997. Natural gas prices with respect to the Trust's
results in the third quarter of 1998 fell to $2.18 per Mcf on the Royalty
Properties. Natural gas prices received by Santa Fe on the Royalty Properties in
July 1998 averaged $2.13 per barrel.


                                       8
<PAGE>
RESULTS OF OPERATIONS

      Royalty income is recorded by the Trust when received, generally during
the quarter following the end of the quarter in which revenues are received and
costs and expenses are paid by Santa Fe. Cash proceeds from the Royalty
Properties may fluctuate from quarter to quarter due to the timing of receipts
and payment of revenues and costs and expenses as well as changes in prices and
production volumes. The following table reflects pertinent information with
respect to the cash proceeds from the Royalty Properties and the net
distributable cash of the Trust. The information presented with respect to the
third quarter of 1998 reflects revenues received and costs and expenses paid by
Santa Fe in the second quarter of 1998. In the third quarter of 1998 the Trust
received a payment of $2,520,548 and on August 31, 1998 the Trust will make a
cash distribution of $2,520,548, or $0.40009 per Trust Unit, to unitholders of
record on August 14, 1998.

<TABLE>
<CAPTION>
                                                           Three Months Ended               Six Months Ended          
                                                                June 30,                         June 30,                   Third   
                                                      ---------------------------     -------------------------------      Quarter
                                                          1998            1997             1998              1997            1998
                                                      ------------    -----------     -------------     -------------   ------------
<S>                                                      <C>             <C>              <C>               <C>              <C>   
VOLUMES AND PRICES
   Oil volumes (Bbls):
     Wasson ODC royalty ........................         65,900          66,800           132,700           131,400          65,900
     Wasson Willard royalty ....................         29,900          31,100            61,000            63,500          29,900
     Net profits royalty .......................         65,754          72,362           133,449           153,484          65,169
   Gas volumes (Mcf):
     Net profits royalty .......................        727,654         636,141         1,541,421         1,270,425         676,643
   Oil average prices ($/Bbl):
     Wasson ODC royalty ........................      $   13.77       $   21.29       $     16.00       $     21.88       $   12.14
     Wasson Willard royalty ....................          13.82           21.30             16.09             21.91           12.09
     Net profits royalty .......................          14.37           21.13             15.82             20.67           12.30
   Gas average prices ($/Mcf):
     Net profits royalty .......................           2.64            3.12              2.54              2.53            2.18

CASH PROCEEDS AND DISTRIBUTABLE CASH
  (IN THOUSANDS, EXCEPT PER UNIT DATA)
   Wasson ODC royalty:
     Sales .....................................      $     908       $   1,423       $     2,123       $     2,876       $     800
     Operating expenses ........................            (95)           (139)             (157)             (279)            (79)
                                                      ---------       ---------       -----------       -----------       ---------
                                                            813           1,284             1,966             2,597             721
                                                      ---------       ---------       -----------       -----------       ---------
   Wasson Willard royalty:
     Sales .....................................            413             662               981             1,391             361
     Operating expenses ........................            (33)            (55)              (61)             (115)            (23)
                                                      ---------       ---------       -----------       -----------       ---------
                                                            380             607               920             1,276             338
                                                      ---------       ---------       -----------       -----------       ---------
   Net profits royalty:
     Sales .....................................          2,867           3,521             6,036             6,414           2,279
     Operating expenses ........................           (833)           (981)           (1,564)           (1,783)           (745)
     Capital expenditures ......................           (307)           (340)           (1,273)             (461)            (14)
                                                      ---------       ---------       -----------       -----------       ---------
                                                          1,727           2,200             3,199             4,170           1,520
                                                      ---------       ---------       -----------       -----------       ---------

   Support payment (recoupment) ................           --              (153)             --              (1,065)           --
                                                      ---------       ---------       -----------       -----------       ---------
   Total royalties .............................          2,920           3,938             6,085             6,978           2,579
   Administrative fee to Santa Fe ..............            (59)            (57)             (116)             (112)            (59)
                                                      ---------       ---------       -----------       -----------       ---------
   Payment received ............................          2,861           3,881             5,969             6,866           2,520
   Cash withheld for trust expenses ............           (100)            (50)             (150)             (200)           --
                                                      ---------       ---------       -----------       -----------       ---------
   Distributable cash ..........................      $   2,761       $   3,831       $     5,819       $     6,666       $   2,520
                                                      =========       =========       ===========       ===========       =========

   Distributable cash per unit .................      $ 0.43820       $ 0.60812       $   0.92359       $   1.05812       $ 0.40009
                                                      =========       =========       ===========       ===========       =========

</TABLE>
                                       9
<PAGE>
      The Trust's crude oil sales price averaged $13.79 per barrel for the
Wasson Royalties and $14.37 per barrel for the Net Profits Royalties in the
second quarter of 1998 compared with $21.29 per barrel and $21.13 per barrel,
respectively, in the second quarter of 1997. Crude oil prices for the first six
months of 1998 averaged $16.03 per barrel for the Wasson Royalties and $15.82
per barrel for the Net Profit Royalties compared with $21.89 per barrel and
$20.67 per barrel, respectively, for the same period in 1997. Oil prices
continued to fall in the third quarter of 1998 averaging $12.12 per barrel for
the Wasson Royalties and $12.30 per barrel for the Net Profits Royalties. Crude
oil prices received by Santa Fe on the Royalty Properties in July 1998 averaged
$11.20 per barrel.

      Natural gas prices in the second quarter of 1998 averaged $2.64 per Mcf
compared with $3.12 per Mcf in the second quarter of 1997. Natural gas prices
averaged $2.54 per Mcf in the first six months of 1998 compared with $2.53 per
Mcf for the same period in 1997. Natural gas sales prices averaged $2.18 per Mcf
in the third quarter of 1998. Natural gas volumes increased in the second
quarter and first six months of 1998 compared with the same periods in 1997
primarily due to the addition of new production from ongoing development
activities on the Net Profit Properties.

      Cash proceeds in the first and second quarters of 1997 were reduced by
Support Payment recoupments of $912,000 and $153,000, respectively; all Support
Payments have been recouped. Future recoupments will be made only to the extent
of future Support Payments. (see -- General; Liquidity and Capital Resources).

      Proceeds from the Net Profits Royalties are net of capital expenditures
with respect to the development of the Net Profits Properties. Capital
expenditures in the Trust's first six months of 1998 totalled $1,273,000.
Capital expenditures in the first six months of 1998 include reserves of
$449,000, of which $91,000 was expended in the third quarter of 1998. The
remaining reserves are expected to be expended in the fourth quarter of 1998,
with no additional amounts expected to be expended through year end. Operating
expenses for the Net Profits Royalties averaged $4.45 per barrel of oil
equivalent ("BOE") in the second quarter of 1998 compared with $5.50 per BOE in
the second quarter of 1997. Operating expenses for the third quarter of 1998
averaged $4.19 per BOE. Operating expenses may fluctuate from quarter to quarter
due to the timing of payments.

FORWARD LOOKING STATEMENTS

      Management's Discussion and Analysis of Financial Condition and Results of
Operations includes certain statements (other than statements of historical
fact) that constitute forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. When used herein, the words "anticipates," "expects," "believes,"
"intends" or "projects" and similar expressions are intended to identify
forward-looking statements. It is important to note that actual results could
differ materially from those projected by such forward-looking statements.
Although it is believed that the expectations reflected in such forward-looking
statements are reasonable and such forward-looking statements are based upon the
best data available at the time this report is filed with the Securities and
Exchange Commission, no assurance can be given that such expectations will prove
correct. Factors that could cause results to differ materially from the results
discussed in such forward-looking statements include, but are not limited to,
the following: production variances from expectations, volatility of oil and gas
prices, the need to develop and replace reserves, the capital expenditures
required to fund operations, environmental risks, uncertainties about estimates
of reserves, competition and government regulation and political and litigation
risks. All such forward-looking statements in this document are expressly
qualified in their entirety by the cautionary statements in this paragraph.


                                       10
<PAGE>
PART II.    OTHER INFORMATION

ITEMS 1, 2, 3, 4 & 5 ARE NOT APPLICABLE AND HAVE BEEN OMITTED.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits
                                                     SEC FILE OR
                                                     REGISTRATION     EXHIBIT
                                                       NUMBER         NUMBER
                                                     ------------    ----------
    3(a)* Form of Trust Agreement of Santa Fe 
          Energy Trust                                 33-51760       3.1
    4(a)* Form of Custodial Deposit Agreement          33-51760       4.2
    4(b)* Form of Secure  Principal  Energy  Receipt
          (included as Exhibit A to Exhibit 4(a))      33-51760       4.1
    10(a) Form of Net Profits Conveyance
          *(Multi-State)                               33-51760       10.1
    10(b)*Form of Wasson Conveyance                    33-51760       10.2
    10(c)*Form of Louisiana Mortgage                   33-51760       10.3

    27    Financial Data Schedules
          (*) Indicates  exhibit filed  incorporated herein by reference

(b)  Reports on Form 8-K
          None


                                       11
<PAGE>
                                    SIGNATURE

   
Pursuant to the requirements Section 13 or 15 (d) of the Securities Exchange Act
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized, on the 14th day of August, 1998.
    


                                             SANTA FE ENERGY TRUST
                                                  (Registrant)

                                    By:  CHASE BANK OF TEXAS, NATIONAL
                                               ASSOCIATION, TRUSTEE


Date:  AUGUST 14, 1998                           /s/ PETE FOSTER
     -------------------                   -------------------------------------
                                                     Pete Foster
                                           Senior Vice President & Trust Officer



      The Registrant, Santa Fe Energy Trust, has no principal executive officer,
principal financial officer, controller or principal accounting officer, board
of directors or persons performing similar functions. Accordingly, no additional
signatures are available and none have been provided.


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