FORM 10-Q-SB

                       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, 2003
                                                 --------------

                                       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 Number 0-9494

                          ASPEN EXPLORATION CORPORATION
                 -----------------------------------------------
                (Exact Name of Aspen as Specified in its Charter)

              Delaware                                       84-0811316
              --------                                       ----------
     (State or other jurisdiction of                       (IRS Employer
     incorporation or organization)                     Identification No.)

          Suite 208, 2050 S. Oneida St.,
                Denver, Colorado                            80224-2426
                ----------------                            ----------
     (Address of Principal Executive Offices)               (Zip Code)

                    Issuer's telephone number: (303) 639-9860

Indicate by check mark whether Aspen (1) has filed all reports required to be
filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that Aspen 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.

              Class                               Outstanding at May 13, 2003
Common stock, $.005 par value                               5,863,828

Transitional small business disclosure format:           Yes        XX   No
                                                   -----           -----

<PAGE>

<TABLE>
<CAPTION>


Part One. FINANCIAL INFORMATION

     Item 1. Financial Statements

                               ASPEN EXPLORATION CORPORATION AND SUBSIDIARY
                                       CONSOLIDATED BALANCE SHEETS

                                                ASSETS
                                                                                March 31,             June 30,
                                                                                  2003                  2002
                                                                                  ----                  ----
                                                                              (Unaudited)             (Audited)
<S>                                                                            <C>                   <C>
Current Assets:

Cash and cash equivalents, including $1,200,736 and
$822,060 of invested cash at March 31, 2003 and June 30, 2002
respectively .........................................................        $ 1,200,786            $   916,001

Precious metals ......................................................             18,823                 18,823

Accounts receivable, trade ...........................................            294,703                365,705

Accounts receivable - related party ..................................              6,712                 12,872

Prepaid expenses .....................................................             14,892                 19,820
                                                                              -----------            -----------

     Total current assets ............................................          1,535,916              1,333,221
                                                                              -----------            -----------


Investment in oil and gas properties, at cost (full cost
method of accounting) ................................................          5,983,549              5,427,741

Less accumulated depletion and valuation allowance ...................         (2,541,436)            (2,262,649)
                                                                              -----------            -----------

                                                                                3,442,113              3,165,092
                                                                              -----------            -----------
Property and equipment, at cost:

Furniture, fixtures and vehicles .....................................            112,562                112,562

Less accumulated depreciation ........................................            (59,068)               (45,810)
                                                                              -----------            -----------

                                                                                   53,494                 66,752
                                                                              -----------            -----------
Cash surrender value, life insurance .................................            239,095                239,095
                                                                              -----------            -----------

     TOTAL ASSETS ....................................................        $ 5,270,618            $ 4,804,160
                                                                              ===========            ===========


                                               (Statement Continues)
                                  See notes to Consolidated Financial Statements

                                                        2


<PAGE>



                  ASPEN EXPLORATION CORPORATION AND SUBSIDIARY
                     CONSOLIDATED BALANCE SHEETS (Continued)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                               March 31,                   June 30,
                                                                                  2003                       2002
                                                                                  ----                       ----
                                                                              (Unaudited)                  (Audited)
Current liabilities:

Accounts payable and accrued expenses .................................       $   256,391                 $   236,587

Accounts payable - related party ......................................            42,192                      21,260

Advances from joint owners ............................................           684,272                     230,775
                                                                              -----------                 -----------
Total current liabilities .............................................           982,855                     488,622

Deferred income tax payable - long term ...............................            89,250                      89,250
                                                                              -----------                 -----------
Total liabilities .....................................................         1,072,105                     577,872
                                                                              -----------                 -----------

Stockholders' equity:

Common stock, $.005 par value:
    Authorized: 50,000,000 shares
    Issued: At March 31, 2003: 5,863,828
    and June 30, 2002: 5,863,828 ......................................            29,320                      29,320

Capital in excess of par value ........................................         6,025,797                   6,025,797


Accumulated deficit ...................................................        (1,845,827)                  (1,814,677)

Deferred compensation .................................................           (10,777)                    (14,152)
                                                                              -----------                 -----------

Total stockholders' equity ............................................         4,198,513                   4,226,288
                                                                              -----------                 -----------
Total liabilities and stockholders' equity ............................       $ 5,270,618                 $ 4,804,160
                                                                              ===========                 ===========


                               See Notes to Consolidated Financial Statements

                                                   3


<PAGE>


                                         ASPEN EXPLORATION CORPORATION AND SUBSIDIARY
                                           CONSOLIDATED STATEMENTS OF OPERATIONS
                                                         (Unaudited)


                                                                         Three Months Ended                 Nine Months Ended
                                                                              March 31,                           March 31,
                                                                              ---------                           ---------

                                                                      2003              2002              2003               2002
                                                                      ----              ----              ----               ----
Revenues:

  Oil and gas ..............................................      $   314,222       $   124,257       $   754,353       $   513,444
  Management fees ..........................................           22,323            23,632           119,118            91,269
  Interest and other, net ..................................              931            10,395             7,981            46,600
                                                                  -----------       -----------       -----------       -----------

Total Revenues .............................................          337,476           158,284           881,452           651,313
                                                                  -----------       -----------       -----------       -----------

Costs and expenses:
  Oil and gas production ...................................           64,700            34,415           141,225           102,688
  Depreciation, depletion and amortization .................          108,656           121,741           292,045           348,020
  Aspen Power Systems expense ..............................              -0-               -0-               -0-            25,500
  Selling, general and administrative ......................          135,372           164,246           478,853           471,725
  Interest expense .........................................              -0-               479               479               479
                                                                  -----------       -----------       -----------       -----------

Total Costs and Expenses ...................................          308,728           320,881           912,602           948,412
                                                                  -----------       -----------       -----------       -----------
Net income (loss) before taxes .............................      $    28,748       $  (162,597)      $   (31,150)      $  (297,099)
                                                                  -----------       -----------       -----------       -----------
Provision for (recovery of) income taxes ...................            (--)            (70,530)            (--)            (70,530)
                                                                  -----------       -----------       -----------       -----------
Net income (loss) ..........................................      $    28,748       $   (92,067)      $   (31,150)      $  (226,569)
                                                                  ===========       ===========       ===========       ===========
Basic earnings (loss) per common share .....................      $      --         $      (.02)      $      --         $      (.04)
                                                                  ===========       ===========       ===========       ===========
Diluted earnings (loss) per common
share ......................................................      $      --         $      (.02)      $      --         $      (.04)
                                                                  ===========       ===========       ===========       ===========
Basic weighted average number of common shares
outstanding ................................................        5,863,828         5,831,800         5,863,828         5,831,800
                                                                  ===========       ===========       ===========       ===========
Diluted weighted average number of common shares
outstanding ................................................        5,863,828         6,022,414         5,863,828         6,022,414
                                                                  ===========       ===========       ===========       ===========



                                          The accompanying notes are an integral
                                                  part of these statements.

                                                             4

<PAGE>


                                      ASPEN EXPLORATION CORPORATION AND SUBSIDIARY
                                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                      (UNAUDITED)



                                                                               Nine months ended March 31,
                                                                              2003                     2002
                                                                          ------------------------------------

Cash flows from operating activities:
-------------------------------------

Net (loss) ..................................................             $   (31,150)             $  (226,569)

Adjustments to reconcile net (loss)
  to net cash provided (used) by
  operating activities:

  Depreciation, depletion & amortization ....................                 292,045                  348,020
  Amortization of deferred compensation .....................                   3,375                   13,200

Changes in assets and liabilities:

  (Increase) decrease in accounts receivable ................                  77,162                  329,321
  (Increase) decrease in prepaid expense ....................                   4,928                  (36,103)
  Increase (decrease) in accounts payable and accrued
    expense .................................................                 494,233               (1,250,950)
                                                                          -----------              -----------
  Net cash provided (used) by operating activities ..........                 840,593                 (823,081)
                                                                          -----------              -----------

Cash flows from investing activities:
-------------------------------------

  Additions to oil & gas properties .........................                (626,385)                (628,244)
  Purchase of office equipment & vehicle ....................                     -0-                   (5,285)
  Sale of idle equipment at cost ............................                   1,155                      -0-
  Sale of oil and gas properties ............................                  69,422                   26,040
                                                                          -----------              -----------

  Net cash (used) by investing activities ...................                (555,808)                (607,489)
                                                                          -----------              -----------

  Net increase (decrease) in cash and cash equivalents ......                 284,785               (1,430,570)

  Cash and cash equivalents, beginning of year ..............                 916,001                2,695,583
                                                                          -----------              -----------

  Cash and cash equivalents, end of period ..................             $ 1,200,786              $ 1,265,013
                                                                          ===========              ===========

  Interest paid .............................................             $       479              $       479
                                                                          ===========              ===========

  Income taxes (refund) .....................................             $       -0-              $   (70,530)
                                                                          ===========              ===========

                                         The accompanying notes are an integral
                                                part of these statements.

</TABLE>
                                                          5
<PAGE>



                          ASPEN EXPLORATION CORPORATION

                   Notes to Consolidated Financial Statements
                                   (Unaudited)

                                 March 31, 2003


Note 1            BASIS OF PRESENTATION

     The accompanying financial statements are unaudited. However, in our
     opinion, the accompanying financial statements reflect all adjustments,
     consisting of only normal recurring adjustments, necessary for fair
     presentation. Interim results of operations are not necessarily indicative
     of results for the full year. These financial statements should be read in
     conjunction with our Annual Report on Form 10-KSB for the year ended June
     30, 2002.

     Except for the historical information contained in this Form 10-QSB, this
     Form contains forward-looking statements that involve risks and
     uncertainties. Our actual results could differ materially from those
     discussed in this Report. Factors that could cause or contribute to such
     differences include, but are not limited to, those discussed in this Report
     and any documents incorporated herein by reference, as well as the Annual
     Report on Form 10-KSB for the year ended June 30, 2002.

     On July 1, 2002 we adopted Financial Accounting Standards Board No. 143,
     "Accounting for Asset Retirement Obligations" ("SFAS No. 143"). SFAS No.
     143 addresses financial accounting and reporting for obligations associated
     with the retirement of tangible long-lived assets and the associated asset
     retirement costs. We are currently assessing the impact of this statement
     and, at this time, cannot reasonably estimate the effect of the adoption of
     SFAS No. 143 on our financial position, results of operations or cash
     flows.


Note 2            EARNINGS PER SHARE

     We have adopted SFAS No. 128, addressing earnings per share. SFAS No. 128
     established the methodology of calculating basic earnings per share and
     diluted earnings per share. The calculations differ by adding any
     instruments convertible to common stock (such as stock options, warrants,
     and convertible preferred stock) to weighted average shares outstanding
     when computing diluted earnings per share. We had a net loss of $31,150 and
     $226,569 for the nine months ending March 31, 2003 and 2002, respectively.
     Because of the net loss, the basis and diluted average outstanding shares
     are considered the same, since including the shares would have an
     antidilutive effect on the loss per share calculation.


Note 3            SEGMENT INFORMATION

     We operate in two industrial segments within the United States, oil and gas
     exploration and development and electrical generation construction.

                                       6

<PAGE>



Note 3            SEGMENT INFORMATION (CONTINUED)

     Identified assets by industry are those assets that are used in our
     operations in that industry. Corporate assets are principally cash, cash
     surrender value of life insurance, furniture, fixtures and vehicles.

     We have adopted SFAS No. 131, "Disclosures about Segments of an Enterprise
     and Related Information." SFAS No. 131 requires the presentation of
     descriptive information about reportable segments which is consistent with
     that made available to the management of the Company to assess performance.

     Our oil and gas segment derives its revenues from the sale of oil and gas
     and prospect generation and administrative overhead fees charged to
     participants in our oil and gas ventures. Corporate income is primarily
     derived from interest income on funds held in money market accounts.

     The electrical generation construction segment will receive its revenues
     from the sale, design, construction and/or operation of gas turbine or
     other electrical generation projects. As of December 31, 2002, we ceased
     operation of this segment and no further activities will be pursued.

     During the nine months ended March 31, 2003 and 2002 there were no
     intersegment revenues. The accounting policies applied by each segment are
     the same as those used by us in general.

     There have been no differences from the last annual report in the basis of
     measuring segment profit or loss. There have been no material changes in
     the amount of assets for any operating segment since the last annual report
     except for the oil and gas segment which capitalized approximately $626,385
     for the development and acquisition of oil and gas properties, and sold
     $70,577 in equipment and producing properties for a net increase of
     $555,808.




                                       7
<PAGE>



Note 3            SEGMENT INFORMATION (CONTINUED)

     Segment information consists of the following for the nine months ended
     March 31:
<TABLE>
<CAPTION>


                                            Oil and Gas       Power Plant       Corporate        Consolidated
                                            -----------       -----------       ---------        ------------
         Revenues:

<S>                          <C>            <C>                  <C>             <C>              <C>
                             2003           $    873,471      $   -0-           $        7,981   $     881,452
                             2002                604,713          -0-                   46,600         651,313

         Income (loss) from operations:

                             2003           $    453,459      $   -0-           $   (484,609)    $     (31,150)
                             2002                167,025       (25,500)             (368,094)         (226,569)

         Identifiable assets:

                             2003           $  3,743,528      $   -0-           $  1,527,090     $   5,270,618
                             2002              2,887,935          -0-              1,642,431         4,530,366

         Depreciation, depletion and valuation charged to identifiable assets:

                             2003           $(2,541,436)      $   -0-           $    (59,068)    $  (2,600,504)
                             2002            (2,256,413)          -0-                (41,154)       (2,297,567)

         Capital expenditures:

                             2003           $    626,385      $   -0-           $        -0-     $     626,385
                             2002                628,244          -0-                  5,285           633,529


Note 4            MAJOR CUSTOMERS

     We derived in excess of 10% of our revenue from various sources (oil and
     gas sales) as follows:

                                   The Company
                                   -----------

                                      A             B             C           D
                                      -             -             --          -
         Year ended:

           March 31, 2003             -             22%           55%         -
           March 31, 2002             36%           -             32%         12%


                                       8

<PAGE>


Note 5            COMMITMENTS AND CONTINGENCIES

     At March 31, 2003 the Company was committed to the following drilling and
     development projects in California:

     On April 23, 2003 we commenced drilling operations on the Pope Bypass 1-5,
     a 7800 foot exploratory gas well in Yolo County, California. We have
     committed to drilling the following wells:

                                   Estimated                              Our Estimated
         Well                      Spud Date        Total Depth           Dry Hole Cost
         ------------------------------------------------------------------------------

         Pope Bypass 1-5            4-23-03          7800 feet               $103,500
         Quarre 30-2                5-2-03           5600 feet                 64,000
         Klingenberg 23-1           5-15-03          5900 feet                 64,000
         NL&F 26-1                  5-25-03          5500 feet                 64,000
                                                                             --------

                                                                             $295,500
                                                                             ========
</TABLE>


     Results of these proposed drilling operations will be disclosed in future
     reports.

     During the quarter ended March 31, 2003, we acquired two contiguous gas
     properties located in Colusa County, California. Aspen and our partners
     acquired a 100% working interest in approximately 2000 acres which included
     ten shut in gas wells. In late March these wells were tested for their
     productive capabilities. Nine wells were put on production and are
     currently producing 1100 MCFPD and one well was plugged and abandoned.

     A 3-D seismic program will be acquired late in 2003 on these properties and
     drilling targets for the 2004 drilling season will be identified. We
     estimate our share of the 3-D seismic program will cost approximately
     $170,000.


Note 6            INCOME TAXES

     The Company has made no provision for income taxes for the nine month
     period ended March 31, 2003 since it utilizes net operating loss
     carryforwards. The Company had $1,713,865 of such carryforwards at June 30,
     2002.

     On March 26, 2002 we received a refund of overpaid income taxes of $70,530
     from the State of California for our fiscal year ended June 30, 2001.



                                        9

<PAGE>


Note 7            SUBSEQUENT EVENTS

     On January 1, 2003 we entered into a new employment agreement with the
     president of our West Coast Division, Robert A. Cohan. Some of the
     pertinent provisions include an employment period ending December 31, 2005,
     salary increases from $125,000 per year to $135,000 per year effective
     April 15, 2003, and a further salary increase to $145,000 per year from
     April 15, 2004 through the end of the contract. Other benefits and duties
     will remain the same as the previous employment contract.

     Effective May 1, 2003 we entered into a new employment agreement with
     Chairman of the Board, R. V. Bailey. Some of the pertinent provisions
     include an employment period ending May 1, 2009, the title of Vice
     President subject to the general direction of the President, Robert A.
     Cohan, and the Board of Directors of Aspen. Mr. Bailey's salary will be
     $45,000 per year from May 1, 2003 to December 31, 2006 and $60,000 per year
     from January 1, 2007, ending May 1, 2009. Mr. Bailey will also participate
     in Aspen's stock options and royalty interest programs. During the term of
     the agreement, we have agreed to pay Mr. Bailey a monthly $1,700 allowance
     to cover such items as prescriptions, medical and dental coverage for
     himself and his dependents and other expenses not covered in the agreement.

     Mr. Bailey's keyman life insurance policy will terminate this year which
     will result in an annual savings of approximately $6,500. Mr. Bailey will
     continue to use the Company vehicle and may trade the current vehicle for a
     similar vehicle of his choice prior to June 30, 2006. During 2007 or
     thereafter, Mr. Bailey may purchase the vehicle for $500.

     We may terminate this agreement upon Mr. Bailey's death by paying his
     estate all compensation that had or will accrue to the end of the year of
     his death plus $75,000. Should Mr. Bailey become totally and permanently
     disabled, we will pay Mr. Bailey one half of the salary and benefits set
     forth in our agreement with him for the remainder of the term of the
     agreement.

     Effective May 1, 2003 our Board of Directors appointed Mr. Robert A. Cohan
     President of Aspen Exploration Corporation, replacing Mr. Bailey.


                                       10


<PAGE>



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

     This should be read in conjunction with the management's discussion and
analysis of financial condition and results of operations contained in our
Annual Report on Form 10-KSB for the year ended June 30, 2002, which has been
filed with the Securities and Exchange Commission. This management's discussion
and analysis and other portions of this report contain forward-looking
statements (as such term is defined in Section 21E of the Securities Exchange
Act of 1934, as amended). These statements reflect our current expectations
regarding our possible future results of operations, performance, and
achievements. These forward-looking statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.

     Wherever possible, we have tried to identify these forward-looking
statements by using words such as "anticipate," "believe," "estimate," "expect,"
"plan," "intend," and similar expressions. These statements reflect our current
beliefs and are based on information currently available to us. Accordingly,
these statements are subject to certain risks, uncertainties, and contingencies,
which could cause our actual results, performance, or achievements to differ
materially from those expressed in, or implied by, such statements. These risks,
uncertainties and contingencies include, without limitation, the factors set
forth in our Form 10-KSB under "Item 6. Management's Discussion and Analysis of
Financial Conditions or Plan of Operation - Factors that may affect future
operating results." We have no obligation to update or revise any such
forward-looking statements that may be made to reflect events or circumstances
after the date of this Form 10-QSB.

Liquidity and Capital Resources
-------------------------------


March 31, 2003 as compared to June 30, 2002
-------------------------------------------

At March 31, 2003 current assets were $1,535,916 and current liabilities were
$982,855 and we had positive working capital of $553,061 compared to current
assets of $1,333,221 at June 30, 2002 and current liabilities of $488,622 at the
same date, resulting in working capital at June 30, 2002 of $844,599. Our
current assets increased by 15%, while current liabilities increased by 101%
from June 30, 2002 to March 31, 2003 for several reasons.

         Our current assets increased primarily because cash and cash
         equivalents increased from approximately $916,000 to approximately $1.2
         million. Accounts receivable - trade decreased by about 20% because of
         the reduced drilling activity during the quarter ended March 31, 2003.

         Our current liabilities increased to approximately $983,000 at March
         31, 2003, from approximately $489,000 at June 30, 2002. This increase
         was due primarily to an increase of $480,000 in advance payments
         received from joint owners prior to project start-ups at March 31,
         2003.

We anticipate that our current assets will be sufficient to pay our current
liabilities as long as our oil and gas production continues to provide us with
sufficient cash flow. During the nine months ended March 31, 2003, our
operations provided approximately $841,000 of positive cash flow as compared to
a negative cash flow of approximately $823,000 for the same period of the
previous year. As discussed below, our ability to maintain a positive cash flow
from operations is dependent, in part, on maintaining or increasing our level of
production and the national and world market maintaining its current prices for
our oil and gas production.

                                       11

<PAGE>


We achieved the positive cash flow from operations during the nine month period
ending March 31, 2003 described in the preceding paragraph because we
experienced an increase in production and prices received for the natural gas we
produced during that period. At June 30, 2002, we received an average of $2.51
per MMBTU. At March 31, 2003 our price per MMBTU had been increased to
approximately $6.30 per MMBTU, a 151% increase.

In conjunction with the increase in prices we have also experienced an increase
in production volumes for the period. For the nine months ended March 31, 2003
we produced approximately 187,000 MMBTU of gas compared to approximately 176,000
MMBTU for the nine months ended March 31, 2002, a 6% increase. This increase in
production is primarily due to the addition of five new gas wells between May
and November 2002.

Our capital requirements can fluctuate over a twelve month period because our
drilling program is usually carried out in California's dry season, from late
April until November, after which wet weather either precludes further activity
or makes it cost prohibitive.

Although our drilling and development plans have not been finalized for the
coming year, at March 31, 2003 we have spudded one well and are committed to
drill 3 additional wells at an estimated cost to us of approximately $296,000,
with the balance (approximately $1,258,000) to be paid by joint owners in the
properties, including certain affiliated investors. For the nine months ended
March 31, 2003 we invested approximately $626,000 in our oil and gas properties
compared to approximately $628,000 for the nine month period in the preceding
fiscal year. We anticipate additional drilling will occur in fiscal 2003.

We believe that internally generated funds will be sufficient to finance our
drilling and operating expenses for the next twelve months.



                                       12
<PAGE>


Results of Operations
---------------------


March 31, 2003 Compared to March 31, 2002
-----------------------------------------

For the nine months ended March 31, 2003 our operations continued to be focused
on the production of oil and gas, and the investigation for possible acquisition
of producing oil and gas properties in California.

Oil and gas revenues, which includes income from management fees, for the nine
months ended March 31, 2003 increased approximately $268,500 from $605,000 to
$873,500, a 44% increase. This increase reflects an improvement in prices and
increased production volumes in California. Our share of sales of oil and gas
for the nine month period ended March 31, 2003 was 650 barrels of oil and
approximately 187,000 MMBTU of gas with the price received for oil at $25.89 per
barrel and $3.93 per MMBTU for gas. This is a decrease in total oil production
compared to the 2,410 barrels of oil produced in the first nine months of fiscal
2002 due to the sale of our producing oil properties in late 2002, and an
increase in natural gas production of 11,000 MMBTU when compared to the
approximately 176,000 MMBTU of gas production achieved during the first nine
months of 2002. As discussed in Liquidity and Capital Revenues, a significant
factor resulting in the increase in revenues during the last nine months of
fiscal 2003 was an increase in the prices received for our production when
compared to prices of $19.33 and $2.68 received for oil and gas respectively
during the first nine months of 2002.

Oil and gas production costs increased $38,537 when compared to the comparable
nine month period of the previous year, from $102,688 to $141,225. Production
costs decreased due to the elimination of non-recurring workover costs for
recompleting wells in upper producing zones and the sale of our Arco and Brandt
oil wells in January 2002 and September 2002, respectively. These decreases were
offset by increased compression costs on our mature gas wells.

Depletion, depreciation and amortization decreased $55,975 or 16% for the nine
month period, which is our best estimate of what the full year cost will be.

Selling, general and administrative expense increased approximately $7,128 or 2%
from $471,725 to $478,853 for the nine months ended March 31, 2003. This
increase is primarily due to salary and office rental and consulting increases.

As a result of our operations for the nine months ended March 31, 2003, we ended
the period with a net loss of $31,150 compared to net loss of $226,569 for the
nine months ended March 31,2002. This reduction in the loss from operations was
due to an improvement in prices we received for our production and increased
volumes produced, but was offset by an increase of approximately $38,600 in
production costs and $7,100 in G&A costs. Effective September 1, 2002 we sold
the remaining interest in producing oil wells located in Kern County, California
for approximately $70,000 net to our interest. As of September 1, 2002, we were
producing and selling only natural gas.

Interest and other income decreased approximately $38,600 to $8,000 and were due
to a decline in interest rates.


                                       13
<PAGE>



CONTRACTUAL OBLIGATIONS

     We had five contractual obligations as of March 31, 2003. The following
table lists our significant liabilities at March 31, 2003:
<TABLE>
<CAPTION>

                                                                 Payments Due by Period
                           Less than
Contractual Obligations    1 year           2-3 years         4-5 years         After 5 years        Total
-----------------------    ---------        ---------         ---------         -------------      -------

<S>                         <C>               <C>               <C>               <C>               <C>
Employment Obligations      $189,325          $409,130          $179,550          $142,100          $920,105

Lease Obligations             20,109            18,000             8,470               -0-            46,579
                            --------          --------          --------          --------          --------

Total contractual
   cash obligations         $209,434          $427,130          $188,020          $142,100          $966,684
                            ========          ========          ========          ========          ========
</TABLE>

     We lease our corporate offices in Denver, Colorado under the terms of an
operating lease, which expires on December 31, 2003. Yearly payments under the
lease are approximately $15,312. Our Bakersfield, California office lease was
renewed for a three year period and expires February 28, 2006. The yearly
payments are approximately $8,760 per year. We also lease storage space in
Bakersfield, California. The lease expires December 31, 2003 and we pay
approximately $390 per year for the space. See Note 7 for a description of our
employment obligations to Mr. R. V. Bailey and Mr. Robert A. Cohan.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES:

We believe the following critical accounting policies affect our most
significant judgments and estimates used in the preparation of our Consolidated
Financial Statements.

Reserve Estimates:
------------------

Our estimates of oil and natural gas reserves, by necessity, are projections
based on geologic and engineering data, and there are uncertainties inherent in
the interpretation of such data as well as the projection of future rates of
production and the timing of development expenditures. Reserve engineering is a
subjective process of estimating underground accumulations of oil and natural
gas that are difficult to measure. The accuracy of any reserve estimate is a
function of the quality of available data, engineering and geological
interpretation and judgment. Estimates of economically recoverable oil and
natural gas reserves and future net cash flows necessarily depend upon a number
of variable factors and assumptions, such as historical production from the area
compared with production from other producing areas, the assumed effects of
regulations by governmental agencies and assumptions governing future oil and
natural gas prices, future operating costs, severance and excise taxes,
development costs and workover and remedial costs, all of which may in fact vary
considerably from actual results. For these reasons, estimates of the
economically recoverable quantities of oil and natural gas attributable to any
particular group of properties, classifications of such reserves based on risk
of recovery, and estimates of the future net cash flows expected therefrom may
vary substantially. Any significant variance in the assumptions could materially
affect the estimated quantity and value of the reserves, which could affect the
carrying value of our oil and gas properties and/or the rate of depletion of the
oil and gas properties. Actual production, revenues and expenditures with
respect to our reserves will likely vary from estimates, and such variances may
be material.

                                       14

<PAGE>


Many factors will affect actual future net cash flows, including:

-    The amount and timing of actual production;
-    Supply and demand for natural gas;
-    Curtailments or increases in consumption by natural gas purchasers; and
-    Changes in governmental regulations or taxation.

Property, Equipment and Depreciation:
-------------------------------------

We follow the full-cost method of accounting for oil and gas properties. Under
this method, all productive and nonproductive costs incurred in connection with
the exploration for and development of oil and gas reserves are capitalized.
Such capitalized costs include lease acquisition, geological and geophysical
work, delay rentals, drilling, completing and equipping oil and gas wells,
including salaries, benefits and other internal salary related costs directly
attributable to these activities. Costs associated with production and general
corporate activities are expensed in the period incurred. Interest costs related
to unproved properties and properties under development are also capitalized to
oil and gas properties. If the net investment in oil and gas properties exceeds
an amount equal to the sum of (1) the standardized measure of discounted future
net cash flows from proved reserves, and (2) the lower of cost or fair market
value of properties in process of development and unexplored acreage, the excess
is charged to expense as additional depletion. Normal dispositions of oil and
gas properties are accounted for as adjustments of capitalized costs, with no
gain or loss recognized.

We apply SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of." Under SFAS No. 121, long-lived assets
and certain intangibles are reported at the lower of the carrying amount or
their estimated recoverable amounts. Long-lived assets subject to the
requirements of SFAS No. 121 are evaluated for possible impairment through
review of undiscounted expected future cash flows. If the sum of undiscounted
expected future cash flows is less than the carrying amount of the asset or if
changes in facts and circumstances indicate, an impairment loss is recognized.

Item 3.           CONTROLS AND PROCEDURES

     As required by Rule 13a-15 under the Securities Exchange Act of 1934,
within the 90 days prior to the filing date of this report, the company carried
out an evaluation of the effectiveness of the design and operation of the
company's disclosure controls and procedures. This evaluation was carried out
under the supervision and with the participation of Aspen Exploration
Corporation's management, the person serving as its Chairman/Chief Executive
Officer/Principal Financial and Accounting Officer, who concluded that Aspen
Exploration Corporation's disclosure controls and procedures are effective.
There have been no significant changes in Aspen Exploration Corporation's
internal controls or in other factors, which could significantly affect internal
controls subsequent to the date Aspen Exploration Corporation carried out its
evaluation.

     Disclosure controls and procedures are controls and other procedures that
are designed to ensure that information required to be disclosed in Aspen
Exploration Corporation's reports filed or submitted under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the Securities and Exchange Commission's rules and forms. Disclosure controls
and procedures include, without limitation, controls and procedures designed to

                                       15

<PAGE>


ensure that information required to be disclosed in Aspen Exploration
Corporation's reports filed under the Exchange Act is accumulated and
communicated to management, including its Chief Executive Officer/Principal
Financial Officer as appropriate, to allow timely decisions regarding required
disclosure.

PART II - OTHER INFORMATION

Item 1.           Legal Proceedings.
                  ------------------

     There are no material pending legal or regulatory proceedings against Aspen
Exploration Corporation, and it is not aware of any that are known to be
contemplated.

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.
                  ----------------------------------------------------

     No matter was submitted during the first quarter of the fiscal year covered
by this report to a vote of security holders, through the solicitation of
proxies or otherwise.

Item 5.           Other Information.
                  ------------------
     None.

Item 6.           Exhibits and Reports on Form 8-K
                  --------------------------------

     (a) Exhibits:

         None.

     (b) Reports on Form 8-K:

         None.

                                       16


<PAGE>



In accordance with the requirements of the Securities Exchange Act of 1934, we
have duly caused this report to be signed on our behalf by the undersigned,
thereunto duly authorized.


                                    ASPEN EXPLORATION CORPORATION




                                         /s/ Robert A. Cohan
                                         ---------------------------------------
                                    By:  Robert A. Cohan,
May 13, 2003                             President, Principal Executive Officer,
                                         Principal Financial Officer



                                       17
<PAGE>



CERTIFICATIONS - principal executive and financial officers
-----------------------------------------------------------

I, Robert A. Cohan, Chief Executive Officer and Chief Financial Officer of Aspen
Exploration Corporation, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Aspen Exploration
Corporation;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:


     a) designed such disclosure controls and procedures to ensure that material
     information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this annual report is being
     prepared;

     b) evaluated the effectiveness of the registrant's disclosure controls and
     procedures as of a date within 90 days prior to the filing date of this
     annual report (the "Evaluation Date"); and

     c) presented in this annual report our conclusions about the effectiveness
     of the disclosure controls and procedures based on our evaluation as of the
     Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

     a) all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to record,
     process, summarize and report financial data and have identified for the
     registrant's auditors any material weaknesses in internal controls; and

     b) any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal
     controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date: May 13, 2003              /s/ Robert A. Cohan
                                ------------------------------------------------
                                Robert A. Cohan,  Chief  Executive  Officer and
                                Chief Financial Officer (principal
                                executive and financial officer)



                                       18