**SECURITIES
      AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549





**FORM
      10-QSB**





**QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(D) OF**


**THE
      SECURITIES EXCHANGE ACT OF 1934**





**FOR
      THE QUARTERLY PERIOD ENDED March 31, 2006**





*COMMISSION
      FILE NO. 0-09482*





**COLORADO
      WYOMING RESERVE COMPANY**





(Exact
      Name of Small Business Issuer as Specified in its Charter)








Wyoming
            83-0246080(State
                or other jurisdiction
            (IRS
                Employerof
                incorporation)
            Identification
                No.)








751
                Horizon Court, Suite 205, Grand Junction,
                Colorado
            
            81506(Address
                of principal executive offices)
            
            (Zip
                Code)




Registrant’s
      telephone number, including area code: (970) 255-9995





Check
      whether the issuer (1) has 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 o





There
      were 12,137,694 shares of the Registrant's $.01 par value common stock
      outstanding as of May 12, 2006.





Transitional
      Small Business Disclosure: Yes o No x







**PART
      I - FINANCIAL INFORMATION**


**Item
      1. Financial Statements.******








COLORADO
      WYOMING RESERVE COMPANY


(A
      DEVELOPMENT STAGE ENTERPRISE)


CONSOLIDATED
      BALANCE SHEET


March
      31,
      2006








CURRENT
                ASSETS:Cash
                and cash equivalents
            
            $
            50,268Accounts
                receivable
            
            
            -Total
                current assets
            
            
            50,268PROPERTY
                AND EQUIPMENT:Unproved
                oil and gas properties
            
            
            62,570Other
                property and equipment
            
            
            14,914Less
                accumulated depreciation, other property and equipment
            
            
            (14,841
            )Net
                property and equipment
            
            
            62,643Other
            
            
            1,960Total
                assets
            
            $
            114,871CURRENT
                LIABILITIES:Trade
                accounts payable
            
            $
            67,928Other
                accrued liabilities
            
            
            256,811Related
                party payables:On
                account
            
            
            823,868Convertible
                Notes
            
            
            280,000Notes
                payable
            
            
            25,000Total
                current liabilities
            
            
            1,453,607EQUITYCommon
                Stock, $.01 par value: authorized-75,000,000
                shares; issued and outstanding-12,037,694
            
            
            120,377Additional
                paid-in capital
            
            
            5,687,676Warrants
            
            
            148,100Accumulated
                deficit:Before
                entering the development stage
            
            
            (4,441,242
            )After
                entering the development stage
            
            
            (2,853,647
            )Total
                Equity
            
            
            (1,338,736
            )Total
                liabilities and equity
            
            $
            114,871







The
      accompanying notes are an integral part of these financial statements.




2








COLORADO
      WYOMING RESERVE COMPANY


(A
      DEVELOPMENT STAGE ENTERPRISE)


STATEMENTS
      OF OPERATIONS


(UNAUDITED)





QUARTERS
                ENDED
            
            NINE
                MONTHS ENDED
            
            PERIOD
                FROMMARCH
                31,
            
            MARCH
                31,
            
            JANUARY
                1, 19992006
            
            2005
            
            2006
            
            2005
            
            TO
                MARCH 31, 2006REVENUES
            
            $
            --
            
            $
            --
            
            $
            --
            
            $
            --
            
            $
            --EXPENSESExploration
                cost
            
            
            35,972
            
            
            215
            
            
            35,972
            
            
            11,822
            
            
            747,308Depreciation,depletion
                and amortization
            
            
            --
            
            
            
            
            
            --
            
            
            --
            
            
            6,320General
                and administrative
            
            
            128,759
            
            
            106,085
            
            
            330,109
            
            
            263,574
            
            
            1,999,540Total
                expenses
            
            
            164,731
            
            
            106,300
            
            
            366,081
            
            
            275,396
            
            
            2,753,168Operating
                loss
            
            
            (164,731
            )
            
            (106,300
            )
            
            (366,081
            )
            
            (275,396
            )
            
            (2,753,168
            )OTHER
                INCOME (EXPENSE)Interest
                income (expense), net
            
            
            (5,350
            )
            
            (3,322
            )
            
            (16,050
            )
            
            (9,966
            )
            
            (99,248
            )Loss
                on sale of assets
            
            
            --
            
            
            --
            
            
            --
            
            
            --
            
            
            (1,231
            )Income
                (Loss) before income taxes
            
            
            (170,081
            )
            
            (109,622
            )
            
            (382,131
            )
            
            (285,362
            )
            
            (2,853,647
            )Provision
                for income taxes
            
            
            --
            
            
            --
            
            
            --
            
            
            --
            
            
            --Net
                loss
            
            $
            (170,081
            )
            $
            (109,622
            )
            $
            (382,131
            )
            $
            (285,362
            )
            $
            (2,853,647
            )Basic
                and diluted loss per share
            
            $
            (0.01
            )
            $
            (0.01
            )
            $
            (0.03
            )
            $
            (0.03
            )Outstanding
                shares
            
            
            12,037,694
            
            
            10,807,694
            
            
            12,037,694
            
            
            10,807,694







The
      accompanying notes are an integral part of these financial statements.




3




COLORADO
      WYOMING RESERVE COMPANY


(A
      DEVELOPMENT STAGE ENTERPRISE)


CASH
      FLOW
      STATEMENTS





NINE
                MONTHS ENDED
            
            PERIOD
                FROMMARCH
                31,
            
            JANUARY
                1, 19992006
            
            2005
            
            TO
                MARCH 31, 2006Cash
                flows from operating activities:Net
                loss
            
            $
            (382,131
            )
            $
            (285,361
            )
            $
            (2,853,647
            )Adjustments
                to reconcile net loss to net used inoperating
                activities:Depletion,
                depreciation and amortization
            
            
            --
            
            
            
            
            
            6,300Loss
                on asset sale
            
            
            --
            
            
            --
            
            
            1,231Amortization
                of note payable discount
            
            
            --
            
            
            --
            
            
            35,000Loss
                from joint venture investment
            
            
            --
            
            
            --Exploration
                cost paid by joint venture -- 361,767Equity
                issued as compensation
            
            
            --
            
            
            --
            
            
            95,600Changes
                in current assets and liabilities:Receivables
            
            
            
            
            
            
            
            
            3,126Payables
            
            
            135,818
            
            
            221,920
            
            
            1,106,851Other
            
            
            
            
            
            
            
            
            (416
            )Net
                cash (used in) operating activities
            
            
            (246,313
            )
            
            (63,441
            )
            
            (1,244,188
            )Cash
                flows from investing activities:Additions
                to unproved properties
            
            
            (35,972
            )
            
            --
            
            
            (46,544
            )Unproved
                property cost recovery
            
            
            
            
            
            
            
            
            191,467Asset
                purchases
            
            
            --
            
            
            --
            
            
            (1,269
            )Proceeds
                from asset sale
            
            
            --
            
            
            --
            
            
            (2,354
            )Net
                cash (used in) provided by investing activities
            
            
            (35,972
            )
            
            --
            
            
            141,300Cash
                flows from financing activities:Sale
                of common stock
            
            
            315,000
            
            
            50,000
            
            
            1,149,456Advances
                from joint venture
            
            
            --
            
            
            --
            
            
            130,509Borrowings
                under credit agreement
            
            
            --
            
            
            --
            
            
            --Repayment
                of joint venture advances
            
            
            
            
            
            
            
            
            --Notes
                payable
            
            
            
            
            
            
            
            
            --Repayment
                of notes payable
            
            
            --
            
            
            --
            
            
            (130,000
            )Net
                cash provided by financing activities
            
            
            315,000
            
            
            50,000
            
            
            1,149,965Net
                increase (decrease) in cash and equivalents
            
            
            32,715
            
            
            (13,441
            )
            
            47,077Cash
                and equivalents at beginning of period
            
            
            17,553
            
            
            30,317
            
            
            3,191Cash
                and equivalents at end of period
            
            $
            50,268
            
            $
            16,876
            
            $
            50,268







The
      accompanying notes are an integral part of these financial statements.




4


**COLORADO
      WYOMING RESERVE COMPANY**


("CWYR"
      or the "Company")





**NOTES
      TO FINANCIAL STATEMENTS**


(unaudited)





**Periods
      Ended March 31, 2006 and 2005**





1.
      INTERIM FINANCIAL STATEMENTS





The
      accompanying financial statements are unaudited. However, in the opinion of
      management, the accompanying financial statements reflect all adjustments
      necessary for a fair presentation.





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 the Securities and Exchange Commission's rules
      and regulations. Management believes the disclosures made are adequate to make
      the information not misleading and suggests that these financial statements
      be
      read in conjunction with the Company's June 30, 2005 Form 10-KSB.





2.
      DEVELOPMENT STAGE ENTERPRISE; PLAN OF OPERATIONS; STRATEGY





The
      Company has no operating revenues as a result of its December 1998 sale of
      its
      producing properties. Accordingly, as of January 1, 1999, the Company has
      re-entered the development stage.





The
      Company is an oil and natural gas exploration company with a geographical focus
      in the Rocky Mountain region of the western United States. The Company's primary
      objective is the acquisition of interests in undeveloped oil and gas properties,
      and the location and development of economically attractive accumulations of
      hydrocarbons in such properties through the use of a highly-integrated,
      interpretive approach to the application of three-dimensional (3D) geophysical
      data (seismic data acquired and processed to yield a three-dimensional picture
      of the subsurface). The Company's acquisitions of undeveloped oil and gas
      properties are accomplished primarily by the acquisition of direct mineral
      leasehold interests from private, state and federal lands. The Company's
      Southwest Lisbon property is currently in production and once payout is achieved
      the Company will begin to have operating income.





The
      Company is a 3D Seismic exploration and production company focused on the
      Paradox Basin of Southeast Utah. CWYR has defined seven structures, after four
      years of seismic science and the expenditure of approximately $5 million on
      science, acreage and drilling, by it and its partners. After payout, the Company
      shall own 10.6% of structures one and two with structure one under development.
      Structure one is producing into a sales pipeline. Structures three through
      six,
      where the Company owns 42.5% working interest, remain to be drilled. Structure
      seven is in the acquisition phase and the Company would own 42.5% of these
      to be
      acquired structures. The Company anticipates additional 3D Seismic work around
      the identified structures. The Company would like to expand its current 16,640
      acre 3D Seismic shoot generated in the years 2000 to 2002 by an additional
      64,000 acres, in the future, in order to look for additional structures.
      Finally, it is worth noting that structures two through seven need to be
      drilled.





In
      years
      2000 to 2002 the Company acquired 68,000 acre leases and then shot, processed
      and interpreted 16,640 acres, state of the art 3D Seismic shoot. In 2003 the
      interpretation of the shoot was perfected. In 2004, the Partners and the Company
      drilled two, 3D Science confirming wells, in May and December respectively,
      on
      structure one. In 2005 the Company and Partners caused the Pipeline Contract
      and
      hook-up of two wells on structure one. The Company anticipates an aggressive
      posture in pursuit of this area.





The
      Company is currently focusing its exploratory efforts on its mineral interests
      in approximately 22,640 gross leased acres (approximately 9,622 net leased
      acres) in the central Paradox Basin of southeastern Utah (the "Paradox Basin
      Project" or the "Project").




5





On
      March
      3, 2005, the Company confirmed its proprietary 3D Seismic Science with two
      exploratory successes at its Paradox Basin Exploration Project in Southeast
      Utah. The science, four years under development, has been confirmed by the
      completion of the Federal 1-31 and the Evelyn Chambers wells on the Southwest
      Lisbon structure, 3 1⁄2 miles southwest of the 155 million barrel oil equivalent
      Lisbon Field in the same Mississippian formation. Both wells tested in the
      range
      of 2 MMCFD in the formation analogous to the productive formation at Lisbon.
      The
      wells are awaiting pipeline contract and hook-up.





The
      Company owns 10.6% APO of this 700-acre structure and 10.6% of the surrounding
      8,960 acres.  Further additional seismic work in light of this successful
      discovery is anticipated on the structure.





The
      Company owns 42 1⁄2 % of two other, 3D delineated, structures in the Paradox Basin
      Project.  Additionally, the Company will have 42 1⁄2 % of two other,
      tentatively identified, structures in the area.





On
      July
      21, 2005 the Company announced that it had received BLM approval to drill a
      third well on its previously 3D seismic identified Southwest Lisbon structure
      in
      the Paradox Basin Exploration Project in Southeast Utah.




The
      initial two successful wells are currently being production tested.




The
      Company also stated that there is the possibility that up to a total of 12
      to 16
      wells from multiple  zones
      on
      the Southwest Lisbon structure can be drilled.





The
      Company anticipates an extensive 3D seismic shooting program and drilling on
      its
      currently identified structures.





The
      Company plans an extensive 3D seismic shooting and drilling program in other
      parts of the Paradox Basin.





CURRENT
      DEVELOPMENT:





Colorado
      Wyoming Reserve Company (OTC Bulletin Board: CWYR) announced today, May 25,
      2006
      that it has acquired a 42 1⁄2% interest in an additional 6,000 acres underneath
      and bordering its 3D Seismic Shoot in Southeast Utah.




CWYR
      is a
      3D Seismic driven exploration and production company focused in Southeast Utah.
      The Company’s 3D Seismic science was confirmed in 2004 with the successful
      discovery of the Southwest Lisbon Field that is currently under development.
      The
      Southwest Lisbon Field is 3 miles from the Lisbon Field.




The
      acquisition of the 6,000 acres raises the Company’s acreage position in the area
      to 22,640 acres. The acquired acreage borders the Company’s 16,640-acre 3D
      Seismic Shoot. The Shoot covering some of the acquired 6,000 acres shows a
      geological similarity to the Lisbon field, 8 miles away. The Lisbon field has
      produced over 150 million barrels of oil equivalent since its discovery in
      1960.




Additional
      3D Seismic Shooting is planned for later this year and the Company anticipates
      3
      test wells in the area in 2007.




Commenting
      on the strategic importance of the acreage acquisition, Kim M. Fuerst, the
      Company’s President and CEO stated simply, “We like the odds...”.




A
      29-page
      corporate overview slide presentation in MS Word format is available upon
      request.




Additional
      information may be found at: www.coloradowyomingreserve.com




6




3.
      COMMITMENTS AND CONTINGENCIES





The
      Company entered into an employment contract with Mr. Fuerst on October 1, 1996
      pursuant to which Mr. Fuerst received a salary of $10,000 per month and was
      granted incentive stock options to purchase up to 500,000 shares of the
      Company's Common Stock at an exercise price of $1.00 per share (repriced to
      $.25
      per share in May 1999). The contract had an initial term of three years
      commencing October 1, 1996 and is renewed automatically for succeeding periods
      of one year unless terminated. The Contract may be terminated by Mr. Fuerst
      upon
      90-days prior written notice to the Company and by the Company without prior
      notice to Mr. Fuerst for cause (as defined in the contract). In May 1999, Mr.
      Fuerst's salary was reduced to $5,000 per month pursuant to an amendment to
      his
      employment agreement.





At
      May
      12, 2006, the Company had no revenues. These factors raise substantial doubts
      about the Company's ability to continue as a going concern without raising
      significant additional capital.





4.
      LOSS
      PER SHARE





Basic
      and
      diluted earnings per share are the same, as the effect of warrants and options
      is antidilutive.




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





**UNCERTAINTY
      OF FORWARD-LOOKING INFORMATION**





This
      quarterly report on Form 10-QSB includes statements that are not purely
      historical and are "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. Forward-looking statements involve risks
      and
      uncertainties that could cause actual results to differ from projected results.
      Such statements address activities, events or developments that the Company
      expects, believes, projects, intends or anticipates will or may occur, including
      such matters as its ability to raise capital sufficient enough to repay
      outstanding indebtedness, to fund its share of maintaining and marketing the
      Project and to participate in future Paradox Basin activities, the Company's
      use
      of proceeds from any financing or sale of its interest, the Company's beliefs
      regarding results of the Seismic survey and the next phase of development,
      volatility of common Stock prices, anticipated lack of revenues, anticipated
      losses, plans to market the Project to third parties and the effect of the
      application of certain accounting rules. Factors that could cause actual results
      to differ materially ("Cautionary Disclosures") include, among others: general
      economic conditions, the market price of oil and natural gas, concentration
      of
      the Company's properties in a small area in the Paradox Basin, the timing and
      results of the seismic shoot to be conducted under the farmout agreement, the
      success or failure in finding commercial quantities of oil and gas, the strength
      and financial resources of the Company's competitors, climatic conditions,
      environmental risks, the results of financing efforts and regulatory
      developments and the factors identified in the Company's Annual Report on Form
      10-KSB for the fiscal year ended June 30, 2005, under the caption "Business-Risk
      Factors.". Many of such factors are beyond the Company's ability to control
      or
      predict. All forward-looking statements included in this Form 10-QSB are based
      on information available to the Company on the date hereof. Although the Company
      believes that the assumptions and expectations reflected in such forward-looking
      statements are reasonable, it can give no assurance that such expectations
      will
      prove to have been correct or that the Company will take any actions that may
      presently be planned. All forward-looking statements attributable to the Company
      or persons acting on its behalf are expressly qualified in their entirety by
      the
      Cautionary Disclosures.




7





**PART
      II - OTHER INFORMATION**





**Item
      1. Legal Proceedings.**





None.





**Item
      2. Changes in Securities and Use of Proceeds.**





A
      total
      of 100,000 shares were issued at $0.50 per share for a total of $50,000 to
      an
      accredited private investor. The investor was also granted 50,000 warrants
      valid
      for a period of three years to purchase stock at $1.00 per share. The Board
      authorized the issuance of 1,000,000 shares in lieu of amounts owed for services
      rendered resulting in a cancellation of $250,000 of liabilities. An additional
      30,000 shares were issued for a $15,000 short term loan. The Board also extended
      for another period of five years the 500,000 options previously granted to
      Mr.
      Kim Fuerst at $0.25 which are set to expire on October 18, 2006. The new expiry
      date for these 500,000 options shall be October 18, 2011. The Board authorized
      the issuance of 150,000 shares consequent to the exercise by a consultant of
      150,000 options granted her previously at $0.25 for services rendered.





Whereas
      the Company is now ready to embark on its fund-raising efforts, the Board felt
      the need to provide the President and CEO additional help and it was decided
      that Mr. Rafiq Sayed be appointed the Chief Operating Officer and be made
      responsible for co-ordinating and executing the day to day
      operations.





The
      Board
      also approved the granting to Janfra Partners a total of 400,000 options to
      acquire stock at $1.00 per share valid for three years.





In
      recognition of the work performed to date the Board authorized the issuance
      of
      three million shares to Messrs. Kim Fuerst, Rafiq Sayed and Waseem Sayed to
      be
      vested over three years.





**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**





(a)
      Exhibits





31.1 Certification
      of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act
      of
      2002.





31.2 Certification
      of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act
      of
      2002.





32.1 Certification
      of Chief Executive Officer Pursuant to U.S.C. 18, Section 1350.





32.2 Certification
      Chief Financial Officer Pursuant to U.S.C. 18, Section 1350.




8





**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.





**COLORADO
      WYOMING RESERVE COMPANY**








Dated:
              May 12, 2006
            
            By:
              /s/ KIM M. FUERSTKim M. FuerstPresident, Chief Executive Officer
              and
              Treasurer(Principal Executive Officer)By: /s/
              Rafiq A. SayedRafiq A. SayedChief Financial Officer(Principal Financial
              Officer)






9