FORM 10-QSB

                U.S. Securities And Exchange Commission
                       Washington, D.C. 20549

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

For the quarterly period ended March 31, 1998.

                                OR

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

For the transition period from ________________________________
to ___________________________________

Commission file no. 0-20760

         PETRO UNION, INC. d/b/a HORIZONTAL VENTURES, INC.
 (Exact name of small business issuer as specified in its
charter)

        COLORADO                             84-1091986
(State or other jurisdiction              (I.R.S. Employer
of incorporation of organization)        Identification No.)

575 Madison Avenue, Suite 1006
 New York, NY 10022                           10022
(Address of principal                        (Zip Code)
executive offices)

Issuer's telephone number, including area code: (212) 605-0470

                            Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)

    Check whether the issuer (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

              APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
              PROCEEDING DURING THE PRECEDING FIVE YEARS

     Check whether the registrant filed all documents and
reports required to be filed by Section 12, 13, or 15(d) of the
Exchange Act after the distribution of securities under a plan
confirmed by court.  Yes   X     No      

    State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest practicable
dates:

Title of Each Class                 Outstanding at May 15, 1998
Common Stock, no par value          1,558,843 shares

     Transitional Small Business Disclosure Format (check one):
Yes          No   X  


                TABLE OF CONTENTS

             PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements
                                                             
Consolidated Balance Sheet as of March 31, 1998
               (Unaudited)                                        
            

Consolidated Statements of Operations for the 
Three Months Ended March 31, 1998 and 1997 (Unaudited)            
                         

Consolidated Statements of Cash Flows for the Three
Months Ended March 31, 1998 and 1997 (Unaudited)         

Notes to Unaudited Consolidated Financial Statements,
March 31, 1998 and 1997 (Unaudited)       

Item 2.  Management's Discussion and Analysis.                

                    PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

Item 2.  Changes in Securities and Use of Proceeds

Item 3.  Defaults Upon Senior Securities

Item 4.  Submission of Matters to a Vote of Security Holders

Item 5.  Other Information

Item 6.  Exhibits and Reports on Form 8-K

SIGNATURE



                PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

           PETRO UNION, INC. D/B/A HORIZONTAL VENTURES, INC.
                       CONSOLIDATED BALANCE SHEETS
                    March 31, 1998 (UNAUDITED)

<TABLE>
<CAPTION>
                               ASSETS

                                                March 31, 1998   
                                                  (Unaudited)     
 

CURRENT ASSETS:
 <S>                                           <C>
  CASH AND CASH EQUIVALENTS                     $2,519,762    
  TIME DEPOSITS AND FUNDS 
    HELD IN ESCROW                                   -
  ACCOUNTS RECEIVABLE:
    TRADE NET OF ALLOWANCE FOR
    DOUBTFUL ACCOUNTS OF
    $74,092                                         19,307
 OTHER                                               -
                                               _______________ 
 TOTAL CURRENT ASSETS                            2,539,068
                                               _______________
PROPERTIES AND EQUIPMENT,
  AT COST, NET OF ACCUMULATED
  DEPRECIATION OF $636,794                       7,165,815
                                               _______________
  
  OTHER ASSETS                 
   DEPOSITS, PREPAYMENTS, AND
     DEFERRED CHARGES                               56,713
                                               _______________
   TOTAL OTHER ASSETS                               56,713
                                               _______________    
       TOTAL ASSETS                             $9,761,596
                                              ================

                   LIABILITIES AND OWNERS' EQUITY (DEFICIT)

LIABILITIES:

CURRENT LIABILITIES:
  SHORT TERM NOTES PAYABLE                     $     -
  CURRENT MATURITIES OF
    LONG TERM NOTES                                 21,782
  ACCOUNTS PAYABLE AND
    ACCRUED EXPENSES                                55,311
  OTHER CURRENT LIABILITIES                          -
 CUSTOMER PAYMENTS RECEIVED IN ADVANCE               -
                                              ________________
TOTAL CURRENT LIABILITIES                           77,093
                                              ________________

NONCURRENT LIABILITIES:
LONG TERM NOTES PAYABLE, NET
  OF CURRENT MATURITIES                             53,151
                                             ________________     
    

TOTAL NONCURRENT LIABILITIES                        53,151
                                             _________________    
          
TOTAL LIABILITIES                                  130,245
                                             _________________

COMMITMENTS AND CONTINGENCIES                         -

OWNERS' EQUITY (DEFICIT):
  COMMON STOCK, NO PAR VALUE,
  50,000,000 SHARES AUTHORIZED,
  1,558,843 SHARES ISSUED AND
  OUTSTANDING                                   11,672,519
 CAPITAL IN EXCESS OF PAR VALUE               
  ACCUMULATED DEFICIT                           (2,041,168)
                                            ________________

  TOTAL OWNERS'
    EQUITY (DEFICIT)                             9,631,352
                                            _________________
  TOTAL LIABILITIES AND
   STOCKHOLDERS' EQUITY                         $9,761,596
                                            ==================

</TABLE>

The accompanying notes are an integral part of these statements.


           PETRO UNION, INC. D/B/A HORIZONTAL VENTURES, INC.
              CONSOLIDATED STATEMENTS OF OPERATIONS
      FOR THE THREE MONTHS ENDED MARCH 31,1998 AND 1997
                         (UNAUDITED)
<TABLE>
<CAPTON>
                            THREE MONTHS       
                          ENDED MARCH 31      
                               1998                1997
<S>                           <C>                 <C>
REVENUE                        34,689             103,318

COST OF REVENUE                34,172              75,900

GROSS PROFIT                      516              27,418

GENERAL AND
 ADMINISTRATIVE
 EXPENSES                     393,415             113,089

INCOME (LOSS) FROM
 OPERATIONS                  (392,899)            (85,671)

OTHER INCOME 
(EXPENSES)                     34,594               7,844

INCOME (LOSS) 
 BEFORE TAXES ON
 INCOME                      (358,304)            (77,827)

PROVISION FOR INCOME
 TAXES                           -                    -

NET INCOME 
 (LOSS)                      (358,304)            (77,827)

NET EARNINGS 
 (LOSS) PER
 COMMON SHARE                  $(0.23)             $(0.10)    

AVERAGE SHARES
 OUTSTANDING USED
 FOR COMPUTATION OF 
 EARNINGS (LOSS)
 PER SHARE                   1,558,843            759,460

</TABLE>

The accompanying notes are an integral part of these statements.


           PETRO UNION, INC. D/B/A HORIZONTAL VENTURES, INC.
               CONSOLIDATED STATEMENTS OF CASH FLOWS
         FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                             (UNAUDITED)
<TABLE>
<CAPTION>
                                      THREE MONTHS ENDED
                                         MARCH 31,
                                           1998            1997

CASH FLOWS FROM OPERATING 
 ACTIVITIES:
 <S>                                <C>               <C>
  NET (LOSS)                         (358,304)        (77,827)

ADJUSTMENTS TO RECONCILE NET
  LOSS TO CASH PROVIDED (USED)
  BY OPERATIONS:
    DEPRECIATION, DEPLETION
      AND AMORTIZATION                 38,868          53,418
    CHANGE IN ACCOUNTS RECEIVABLE         377         (47,356)
    CHANGE IN INTERESTS
      RECEIVABLE                        3,271 
    CHANGE IN PAYMENT IN ADVANCE       (2,341)           -
    CHANGE IN ACCOUNTS PAYABLE       (218,233)         52,114
    CHANGE IN OTHER LIABILITIES      (525,000)         39,507
NET CASH (USED) BY
  OPERATING ACTIVITIES             (1,061,361)         19,856

CASH FLOWS FROM INVESTING ACTIVITIES:
 (INCREASE) IN PROPERTY AND
    EQUIPMENT                        (409,836)         81,249
  INCREASE IN DEPOSITS                 (2,200)           -

NET CASH (USED) BY
 INVESTING ACTIVITIES                (412,036)         81,249 

CASH FLOWS FROM FINANCING ACTIVITIES:
  PROCEEDS FROM CAPITAL 
    STOCK COMMON                      84,446            -
  REPAYMENT OF NOTES PAYABLE         (23,934)        (79,107)

    NET CASH PROVIDED BY
      FINANCING ACTIVITIES            60,512         (79,107)

    NET INCREASE (DECREASE)
      IN CASH AND CASH
      EQUIVALENTS                 (1,412,886)         21,998

CASH AND CASH EQUIVALENTS:
  BEGINNING OF PERIOD              3,932,647           6,458
  END OF PERIOD                    2,519,761          28,456

NET INCREASE (DECREASE) IN CASH
 AND CASH EQUIVALENTS             (1,412,886)         21,998

</TABLE>

The accompanying notes are an integral part of these statements.


         PETRO UNION, INC. dba HORIZONTAL VENTURES, INC.
       Notes to Unaudited Consolidated Financial Statements
                   March 31, 1998 and 1997
                           (Unaudited)


NOTE 1 - THE COMPANY:
Petro Union, Inc., dba Horizontal Ventures, Inc., is engaged in
thedevelopment of oil and gas properties for its own account
and the contract drilling of oil and gas wells.  The Company
intends to officially change its name to Horizontal Ventures,
Inc. when approved by shareholders at its next shareholders
meeting.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:

Basis of presentation - The consolidated financial statements 
include the accounts of Petro Union, Inc., and its wholly owned 
subsidiaries, Horizontal Ventures, Inc. and Calox, Inc.  All 
significant intercompany accounts and transactions have been 
eliminated. 

The results for the interim periods are not indicative of the
results of operations that may be expected for the fiscal year. 
In the opinion of management, the information furnished reflects
all adjustments necessary (which are of a normal recurring
nature) for a fair presentation of the Company's financial
position as of March 31, 1998, and the results of 
its operations and cash flows for the periods ended March 31,
1998 and 1997.

The financial statements for the interim periods have been 
prepared 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 pursuant to such rules and regulations.
The financial statements presented herein should be read in
conjunction with the financial statements for the year ended
December 31, 1997 included in the Company's 1997 Form 10-KSB.

The Company, Petro Union, Inc. ("PUI") was a debtor in possession 
under Chapter 11 of the U.S. Bankruptcy Code until August 28, 
1997, at which time the Bankruptcy Court approved its plan of 
reorganization.  As a part of its plan of reorganization, PUI 
agreed to acquire all the outstanding stock of Horizontal
Ventures, Inc. ("HVI").  The acquisition of HVI was completed on
September 9, 1997, and after the acquisition, HVI shareholders
owned more than 50% of the outstanding shares of PUI.  Pursuant
to the rules of the Securities and Exchange Commission, the
transaction has been accounted for as a "reverse merger." 
Accordingly, the accompanying consolidated statements of
operations and consolidated statements of cash flows reflect the
historical operations and cash flows of HVI (including those of
PUI after September 9, 1997, the effective date of the merger),
whereas previous quarterly reports filed by the Company reflected
operations and cash flows of PUI.  

Certain reclassifications have been made to the 1997 amounts to 
conform to the 1998 presentation.  

Earnings per share - Earnings per share have been calculated
based on  1,558,843 Shares, the average number of shares
outstanding during the first quarter of 1998.

NOTE 3 - CONTINGENCIES: 

At September 30, 1997, the Company was the plaintiff in a lawsuit 
against David J. LaPrade, a shareholder, former officer and 
director, and an organizer of the Company, and Mr. LaPrade's 
current employer.  The Company seeks to recover losses from 
alleged breach of fiduciary duty, misappropriating confidential 
information and property of the Company, using it in unfair 
competition with the Company, interfering with the Company's 
existing and prospective relationships with its customers, 
interfering with the Company's relationships with its employees, 
and conversion of Company property.   Mr. LaPrade has made 
counterclaims against the Company for breach of his employment 
agreement, libel and slander, and intentional infliction of 
emotional distress; he seeks actual damages in excess of $10,000 
and punitive damages in an unspecified amount.  Management 
believes that its claims against Mr. LaPrade will be successful 
and that it will recover damages; moreover, management believes 
that Mr. LaPrade's counterclaim will not result in a material 
liability to the company.   The accompanying financial statements 
do not include provision for any loss which might result from Mr. 
LaPrade's counterclaim, nor do they include any asset that might 
result from the Company's claims against Mr. LaPrade. 

 
                       PART I (CONTINUED)

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS

Overview

The Company's final accounting of the bankruptcy case was
accepted and case closed by the Southern District Court of
Indiana on March 26th, 1998. This marked the end of almost a year
of re-structuring by the Company. Management spent considerable
amount of its time in this process and intends to now focus on
implementing its business strategy hereon. 

The results of the first quarter, as planned, relate to the
Company's internal drilling program in California and thus
reflect the investment phase. The Company drilled three
horizontal wells namely, UCB-09, UCB-38 and UCB-28. Each well was
drilled successfully utilizing the Company's Short radius
technology and resulted in a 47 ft radius with a 435 ft lateral
on UCB-09, a 60ft radius with a 414 ft lateral on UCB-38 and a
50ft radius with a 252ft lateral on UCB-28. In view of the
Company's long-term strategy and the known sand problem in the
Cat Canyon basin, the Company completed each well with a
different technique to establish the standard. UCB-09 was
completed with a standard Ace down-hole pump and a KD system;
UCB-38 with a KUDU pump while UCB-28 was completed with a Ace
Teflon-Luber Plunger down-hole pump. Each of the wells kick-off
point (KOP) was at a depth of 2940-3000 ft.

The variances in the completions proved to be extremely
successful as the Company attained direct experience on the
production capability from each of the techniques. UCB-09
production stabilized at 20 BOPD, UCB-38 got sanded up following
few weeks of production while UCB-28 produces a net of 65 BOPD.
Each of these wells were re-entries into an abandoned well bore
in the Sisquoc formation which is one of the two pay zones within
the Company's lease in the Cat Canyon basin. Following this
successful drilling operation and completion technique
definition, the Company will resume its drilling program early in
the fourth quarter to achieve its 500 BOPD objective by year-end. 

The sharp decline (40%) in the oil prices during the first quarter had a
negative effect on the revenues. As the Company's stabilized lifting costs are
under $4 per barrel the Cat Canyon operation continues to be profitable.

The Company re-organized its management team at the end of the quarter to
better poise itself in implementing its two-prong (exploitation and contract
drilling) business strategy. The Evansville offices were closed in late April
and all operations are now based in Tulsa in an effort to G&A and consolidate 
operations. A full-time marketing professional with extensive sales experience
within the oil service industry was added in April to focus on re-starting the
horizontal drilling contract services that had essentially been dormant during
the re-structuring phase. The Company is currently in discussions with three
majors, five independents and one major international company concerning
providing contract service work and expects to be drilling late second / early
third quarter. 

As per the Company's business strategy, management is actively pursuing 
acquisitions and currently is involved in the first phase due diligence on
one. Management expects to complete its first acquisition in the late
second/early third quarter. The acquisition, if completed, will add
production, drilling sites and cash flow to the Company is expected to
positively effect liquidity. 

In view of the vast differences between the Company's structure in the first
quarter of 1997 and that of this year, the operations results comparisons are
considered to be irrelevant by management. The liquidity comparisons reflect
the successful re-structuring process accomplished by the management over the
last nine months. The management does not foresee any additional capital
requirements to continue its on-going operations through next year.

     This Quarterly Report on Form 10-QSB includes certain statements that may
be deemed to be "forward-looking statements" within the meaning of Section 27A 
of the Securities Act of 1933, as amended, and Section 21E of the Securities 
Exchange Act of 1934, as amended. All statements, other than statements of 
historical facts, included in this Form 10-QSB that address activities, events 
or developments that the Company expects, believes or anticipates will or may 
occur in the future, including such matters as future capital, development, and
exploration expenditures (including the amount and nature thereof), drilling of 
wells, reserve estimates(including estimates of future net revenues associated 
with such reserves and the present value of such future net revenues), future 
production of oil and gas, repayment of debt, business strategies, expansion 
and growth of the Company's operations and other such matters are 
forward-looking statements. These statements are based on certain assumptions
and analyses made by the Company in light of its experience and its perception 
of historical trends, current conditions, expected future developments and 
other factors it believes are appropriate in the circumstances. Such statements
are subject to e number of assumptions, risks and uncertainties, general 
economic and business conditions, the business opportunities (or lack thereof)
that may be presented to and pursued by the Company, changes in laws or 
regulations and other factors, many of which are beyond the control of the
Company. Readers are cautioned that any such statements are not guarantees of 
future performance and that actual results or developments may differ materially
from those projected in the forward-looking statements. 
      

Results of Operations

Revenues decreased from $103,318 in first quarter of 1997 to $34,689 in the
first quarter of 1998. All 1998 revenues were from oil production at the
recently acquired field in California. Oil prices drop of 40% coupled with the
El Nino storms that essentially shut the field down during February caused the
revenues to be lower than initially projected. Furthermore, two of the three
horizontal wells drilled by the Company attributed to 20% of the total
production as they were put on production late in the quarter. The Company is
to commence its contract drilling activities in the second quarter following
over a year of not promoting its services during the corporate restructuring
process.   

The Cost of Sales decreased from $75,900 in the first quarter of 1997 to
$34,172 in first quarter of 1998. Planned drilling operations in California
account for all of the expenses and are not proportional to the revenues, as
the three horizontal wells drilled were not in production during the entire
quarter. Additionally, there was considerable El Nino created remedial repair
expenses incurred during the month of February.

The General and Administration expenses increased from $113,089 in the first
quarter 1997 to $393,415 in the first quarter of 1998. 43% of the expenses
were related to payroll. 20% of the expenses were related to legal, accounting
and consultant fees primarily involved with year-end reporting and filing
requirements. General and Administration expenses are expected to remain
relatively consistent with the start-up of the contract drilling operations in
the upcoming quarters.


Liquidity and Capital Resources

At the end of the first quarter, the Company's liquid assets consisting of 
cash and cash equivalents were $2,519,761 while the current liabilities were
$77,093.  The $1,412,886 decrease in working capital from the Company's three
well drilling program in its Cat Canyon field in California and the final
payment on the Cat Canyon field. Additionally, the Company settled its lawsuit
with Mr. Gwartney for $25,000. Long term liabilities were at $53,151.

The Company expects the current liquidity to be sufficient to support the on-
going operations through next year without any additional funding
requirements.

Inflation 

The Company does not believe that inflation will have a material impact on the
Company's future operations.


                  PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

At September 30, 1997, the Company was the plaintiff in a lawsuit 
against David J. LaPrade, a shareholder, former officer and 
director, and an organizer of the Company, and Mr. LaPrade's 
current employer. 

Item 2.  Changes in Securities and Use of Proceeds

         None

Item 3.  Defaults upon Senior Securities

         None

Item 4.  Submission of Matters to a Vote of Security Holders

         None

Item 5.  Other Information

         None


Item 6.  Exhibits and Reports on Form 8-K

            (a)    Exhibits

            Exhibit No.      Description

            
              10.6           Richard D. Wedel Termination Agreement

            (b)     Reports on Form 8-K

          During the quarter for which this report is filed,
          the Company filed the following reports on Form 8-K:

          
          Current Report on Form 8-K dated January 15,1998 filed on January    
          20, 1998 which reported events under Item 9, Sale of                 
          Equity Securities Pursuant to Regulation S.

                            SIGNATURE

    Pursuant to the requirements of Section 13 or 15(d) 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.

                          PETRO UNION, INC. D/B/A HORIZONTAL VENTURES, INC.

Date: May 15, 1998          /S/ RANDEEP S. GREWAL
                            Randeep S. Grewal, Chief Executive Officer