United States
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


   
                                   FORM 10-QSB/A
    

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

                  For the quarterly period ended June 30, 1996

                                       OR

             [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                          For the transition period from.....to.....

                         Commission file number 0-17559

               ENEX OIL & GAS INCOME PROGRAM III - SERIES 7, L.P.
        (Exact name of small business issuer as specified in its charter)

                   New Jersey                                76-0214444
         (State or other jurisdiction of                   (I.R.S. Employer
          incorporation or organization)                 Identification No.)

                         Suite 200, Three Kingwood Place
                              Kingwood, Texas 77339
                    (Address of principal executive offices)

                           Issuer's telephone number:
                                 (713) 358-8401

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.
                                  Yes x      No

Transitional Small Business Disclosure Format (Check one):

                                  Yes        No x


<PAGE>


                              PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

<TABLE>
<CAPTION>
ENEX OIL & GAS INCOME PROGRAM III - SERIES 7, L.P.
BALANCE SHEET
-------------------------------------------------------------------------------

                                                                 JUNE 30,
ASSETS                                                             1996
                                                          ---------------------
                                                               (Unaudited)
CURRENT ASSETS:
<S>                                                       <C>                 
  Cash                                                    $              5,456
  Accounts receivable - oil & gas sales                                 27,940
  Other current assets                                                  32,112
                                                          ---------------------

Total current assets                                                    65,508
                                                          ---------------------

OIL & GAS PROPERTIES
  (Successful efforts accounting method) - Proved
   mineral interests and related equipment & facilities              2,014,515
  Less  accumulated depreciation and depletion                       1,850,012
                                                          ---------------------

Property, net                                                          164,503
                                                          ---------------------


TOTAL                                                     $            230,011
                                                          =====================

LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
   Accounts payable                                       $             26,139
   Payable to general partner                                           29,024
                                                          ---------------------

Total current liabilities                                               55,163
                                                          ---------------------

NONCURRENT PAYABLE TO GENERAL PARTNER                                   87,071
                                                          ---------------------

PARTNERS' CAPITAL:
   Limited partners                                                     50,186
   General partner                                                      37,591
                                                          ---------------------

Total partners' capital                                                 87,777
                                                          ---------------------

TOTAL                                                     $            230,011
                                                          =====================


   
Number of $500 Limited Partner units outstanding                        4,527
    

</TABLE>




See accompanying notes to financial statements.
-------------------------------------------------------------------------------

                                       I-1


<PAGE>

ENEX OIL & GAS INCOME PROGRAM III - SERIES 7, L.P.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

1.       The  interim  financial   information  included  herein  is  unaudited;
         however,  such information reflects all adjustments  (consisting solely
         of  normal  recurring   adjustments)  which  are,  in  the  opinion  of
         management,  necessary  for a fair  presentation  of  results  for  the
         interim periods.

2.       Effective  February  1,  1996,  the Company sold its  interest  in the
         Credo acquisition  for  $6,300.  The Company recognized a gain of $393
         on the sale. Effective  April 1, 1996,  the Company sold its interest 
         in the Kidd well in the Enexco  acquisition for $16,000.  The Company
         recognized a $15,375 gain from the sale.  Effective  June 1, 1996, the
         Company sold its interest in the Harper well in the RIC  acquisition
         for $13,904.  The Company  recognized a gain of $10,948 from the sale.

3.      On August 9, 1996, the Company's General Partner submitted  preliminary
         proxy material to the Securities Exchange Commission with respect to a
         proposed consolidation of the Company with 33 other managed  limited 
         partnerships.  The terms and conditions of the proposed  consolidation
         are set forth in such preliminary proxy material.

   
4.   The Financial  Accounting Standards Board has issued Statement of Financial
     Accounting  Standard  ("SFAS") No. 121,  "Accounting  for the Impairment of
     Long-Lived  Assets  and for  Long-Lived  Assets to be  Disposed  Of," which
     requires  certain assets to be reviewed for impairment  whenever  events or
     circumstances indicate the carrying amount may not be recoverable. Prior to
     this pronouncement,  the Company assessed properties on an aggregate basis.
     Upon  adoption of SFAS 121, the Company  began  assessing  properties on an
     individual  basis,  wherein  total  capitalized  costs may not  exceed  the
     property's  fair market  value.  The fair market value of each property was
     determined by H. J. Gruy and  Associates,  ("Gruy").  To determine the fair
     market value, Gruy estimated each property's oil and gas reserves,  applied
     certain  assumptions  regarding price and cost  escalations,  applied a 10%
     discount factor for time and certain discount  factors for risk,  location,
     type   of   ownership   interest,   category   of   reserves,   operational
     characteristics,  and other  factors.  In the first  quarter  of 1996,  the
     Company recognized a non-cash impairment  provision of $128,116 for certain
     oil and gas properties due to market  indications that the carrying amounts
     were not fully recoverable.
    

                                       I-4
<PAGE>



Item 2.  Management's Discussion and Analysis or Plan of Operation.


Second Quarter 1995 Compared to Second Quarter 1996

Oil and gas sales for the  second  quarter  increased  to  $62,860  in 1996 from
$61,447 in 1995.  This represents a decrease of $1,413 (2%). Oil sales increased
by $2,692  (6%).  A 7% increase in the average oil sales price  caused  sales to
increase by $2,989.  This increase was partially  offset by a 1% decrease in oil
production. Gas sales decreased by $1,279 (8%). A 35% decrease in gas production
reduced sales by $5,497. This decrease was partially offset by a 42% increase in
the average gas sales price. The changes in the average sales prices  correspond
with changes in the overall  market for the sale of oil and gas. The decrease in
oil production was primarily a result of natural production declines,  partially
offset  by  higher  production  from the  Corkscrew  acquisition  which had been
shut-in during the second  quarter of 1995 for rod repairs.  The decrease in gas
production was primarily the result of the sale of the Credo  acquisition in the
first quarter of 1996 and the sale of the Kidd well in the Enexco acquisition in
the second quarter of 1996, coupled with natural production declines.

Lease operating expenses decreased to $29,299 in the second quarter of 1996 from
$35,053 in the second quarter of 1995. The decrease of $5,754 (16%) is primarily
due to rod repair  costs  incurred on the  Corkscrew  acquisition  in the second
quarter of 1995.

Depreciation and depletion expense decreased to $13,124 in the second quarter of
1996 from $22,343 in the second quarter of 1995.  This  represents a decrease of
$9,219 (41%). The changes in production,  noted above,  reduced depreciation and
depletion  expense by $3,067,  while a 32% decrease in the depletion rate caused
depreciation and depletion expense to decrease by an additional $6,152. The rate
decrease  is  primarily  due to the  lower  property  basis  resulting  from the
recognition  of an  impairment  of property for $128,116 in the first quarter of
1996.

Effective  April 1, 1996,  the Company sold its interest in the Kidd well in the
Enexco  acquisition for $16,000.  The Company recognized a $15,375 gain from the
sale.  Effective  June 1, 1996, the Company sold its interest in the Harper well
in the RIC  acquisition  for $13,904.  The Company  recognized a gain of $10,948
from the sale.

   
On April 2, 1996, the Company settled a property  interest dispute on the Barnes
Estate acquisition.  In the settlement,  the Company agreed to pay $1,250 to the
plaintiff and convey 0.051  overriding  royalty interest in the Barnes Estate #1
and #2 wells.  Such conveyance  should not have a material impact on the current
or future revenues of the Company.
    

General and administrative expenses decreased to $9,056 in the second quarter of
1996 from $11,612 in the second  quarter of 1996.  This decrease of $2,556 (22%)
is  primarily  due to less  staff time being  required  to manage the  Company's
operations.


First Six Months in 1995 Compared to First Six Months in 1996

Oil and gas sales for the first six months  decreased  to  $132,133 in 1996 from
$134,214 in 1995. This represents a decrease of $2,081 (2%). Oil sales decreased
by $5,628 (6%). A 12% decrease in oil production reduced sales by $11,697.  This
decrease was partially offset by a 7% increase

                                       I-5

<PAGE>



in the average oil sales  price.  Gas sales  increased  by $3,547  (11%).  A 31%
increase in the average gas sales price increased sales by $8,594. This increase
was  partially  offset by a 15% decrease in gas  production.  The changes in the
average sales prices  correspond with changes in the overall market for the sale
of oil and gas. The decrease in oil production was primarily a result of natural
production  declines,  partially offset by higher  production from the Corkscrew
acquisition  which had been  shut-in  during the second  quarter of 1995 for rod
repairs.  The decrease in gas production was primarily the result of the sale of
the Credo acquisition in the first quarter of 1996 and the sale of the Kidd well
in the Enex  acquisition  in the second  quarter of 1996,  coupled  with natural
production declines.

Lease  operating  expenses  decreased to $66,168 in the first six months of 1996
from  $67,610 in the first six months of 1995.  The  decrease  of $1,442 (2%) is
primarily due to the changes in production, noted above.

Depreciation and depletion  expense decreased to $26,850 in the first six months
of 1996 from $50,289 in the first six months of 1995. This represents a decrease
of $23,439 (47%). The changes in production,  noted above,  caused  depreciation
and  depletion  expense to  decrease  by  $15,139,  while a 39%  decrease in the
depletion  rate reduced  depreciation  and  depletion  expense by an  additional
$17,003.  The  rate  decrease  is  primarily  due to the  lower  property  basis
resulting from the  recognition of an impairment of property for $128,116 in the
first quarter of 1996.

Effective  February  1,  1996,  the  Company  sold  its  interest  in the  Credo
acquisition  for  $6,300.  The  Company  recognized  a gain of $393 on the sale.
Effective  April 1, 1996,  the Company sold its interest in the Kidd well in the
Enexco  acquisition for $16,000.  The Company recognized a $15,375 gain from the
sale.  Effective  June 1, 1996, the Company sold its interest in the Harper well
in the RIC  acquisition  for $13,904.  The Company  recognized a gain of $10,948
from the sale.


   
The  Financial  Accounting  Standards  Board has issued  Statement  of Financial
Accounting  Standard  ("SFAS")  No.  121,  "Accounting  for  the  Impairment  of
Long-Lived  Assets and for Long- Lived Assets to be Disposed Of," which requires
certain assets to be reviewed for impairment  whenever  events or  circumstances
indicate  the   carrying   amount  may  not  be   recoverable.   Prior  to  this
pronouncement,  the Company  assessed  properties  on an aggregate  basis.  Upon
adoption of SFAS 121, the Company  began  assessing  properties on an individual
basis, wherein total capitalized costs may not exceed the property's fair market
value.  The fair market value of each property was  determined by H. J. Gruy and
Associates,  ("Gruy").  To determine the fair market value,  Gruy estimated each
property's oil and gas reserves, applied certain assumptions regarding price and
cost  escalations,  applied a 10% discount factor for time and certain  discount
factors for risk,  location,  type of ownership interest,  category of reserves,
operational characteristics, and
    

                                       I-6
<PAGE>


   
other factors.  In the first quarter of 1996, the Company  recognized a non-cash
impairment  provision  of $128,116  for certain  oil and gas  properties  due to
market indications that the carrying amounts were not fully recoverable.
    

   
On April 2, 1996, the Company settled a property  interest dispute on the Barnes
Estate acquisition.  In the settlement,  the Company agreed to pay $1,250 to the
plaintiff and convey 0.051  overriding  royalty interest in the Barnes Estate #1
and #2 wells.  Such conveyance  should not have a material impact on the current
or future revenues of the Company.
    


CAPITAL RESOURCES AND LIQUIDITY

   
The  Company's  cash  flow is a direct  result  of the  amount  of net  proceeds
realized from the sale of oil and gas  production  after the payment of its debt
obligations.  Accordingly,  the  changes  in cash  flow  from  1995 to 1996  are
primarily  due to the changes in oil and gas sales  described  above.  It is the
general  partner's  intention to distribute  substantially  all of the Company's
remaining  available  cash  flow  to  the  Company's  partners.   The  Company's
"available cash flow" is essentially equal to the net amount of cash provided by
operating activities.
    

The Company will continue to recover its reserves and  distribute to the limited
partners the net proceeds realized from the sale of oil and gas production after
the payment of its debt obligations.  Distribution amounts are subject to change
if net  revenues  are greater or less than  expected.  Nonetheless,  the general
partner  believes the Company will continue to have sufficient cash flow to fund
operations and to maintain a regular pattern of distributions.

On August 9, 1996, the Company's  General Partner  submitted  preliminary  proxy
material  to the  Securities  Exchange  Commission  with  respect  to a proposed
consolidation  of the Company with 33 other managed  limited  partnerships.  The
terms  and  conditions  of the  proposed  consolidation  are set  forth  in such
preliminary proxy material.

As of June 30,  1996,  the  Company  had no  material  commitments  for  capital
expenditures.  The  Company  does  not  intend  to  engage  in  any  significant
developmental drilling activity.


                                       I-7

<PAGE>
                                   SIGNATURES


         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned  thereunto duly
authorized.


                                             ENEX OIL & GAS INCOME
                                        PROGRAM III - SERIES 7, L.P.
                                        ---------------------------- 
                                                 (Registrant)



                                         By:ENEX RESOURCES CORPORATION
                                            --------------------------
                                                General Partner



                                         By: /s/ R. E. Densford
                                             -------------------
                                                 R. E. Densford
                                           Vice President, Secretary
                                         Treasurer and Chief Financial
                                                    Officer




   
November 7, 1996                         By: /s/ James A. Klein
                                            -------------------
                                                  James A. Klein
                                              Controller and Chief
                                               Accounting Officer