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 September 30, 2003



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 Employer      
|of 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 /  /



There were 10,807,694 shares of the Registrant's $.01 par value common stock outstanding as of June 27, 2005.



Transitional Small Business Disclosure: Yes / /     No /X/



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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.



|COLORADO WYOMING RESERVE COMPANY
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
September 30, 2003


CURRENT ASSETS:
Cash and cash equivalents                                       $     4,877
Accounts receivable                                                      --
-----------
Total current assets                                                      4,877

PROPERTY AND EQUIPMENT:
Unproved oil and gas properties                                     103,179
Other property and equipment                                         14,914

Less accumulated depreciation, other property and equipment         (14,841)
-----------
Net property and equipment                                      103,252

Other                                                                 3,085
-----------
Total assets                                                        $   111,214
===========

CURRENT LIABILITIES:
Trade accounts payable                                          $   246,018
Other accrued liabilities                                            31,670
Related party payables:
On account                                                        211,336
Advances from Lightening Draw                                     122,000
Note payable to joint venture                                     305,000
-----------
Total current liabilities                                               916,024


EQUITY
Common Stock, $.01 par value: authorized-
75,000,000 shares; issued and outstanding-
10,607,694                                                     106,077
Additional paid-in capital                                        5,336,976
Warrants                                                            148,100
Accumulated deficit:
Before entering the development stage                       (4,441,242)
After entering the development stage                        (1,954,721)

Total Equity                                                           (804,810)

Total liabilities and equity                                        $   111,214
===========
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





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







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|COLORADO WYOMING RESERVE COMPANY
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
(UNAUDITED)



QUARTERS ENDED
SEPTEMBER 30,               PERIOD FROM
------------------------------      JANUARY 1, 1999 TO
2003             2002           SEPTEMBER 30, 2003
------------      ------------      ------------------
REVENUES                                                $         --      $         --       $              --

EXPENSES
Exploration cost                                            5,493             7,497                 648,717
Depreciation,
depletion and amortization                                                                         6,320
General and administrative                                 29,363            12,910               1,244,824
------------      ------------         ----------------
Total expenses                                                34,856            20,407               1,899,861
------------      ------------         ----------------

Operating loss                                               (34,856)          (20,407)             (1,899,861)

OTHER INCOME (EXPENSE)
Interest income (expense), net                             (3,349)             (156)                (53,629)
Loss on sale of assets                                         --                --                  (1,231)
------------      ------------        -----------------
Income (Loss) before income taxes                            (38,205)          (20,563)             (1,954,721)

Provision for income taxes                                        --                --                       --
------------      ------------        -----------------
Net loss                                             $    (38,205)     $    (20,563)        $    (1,954,721)
============      ============        =================

Basic and diluted loss per share                     $       (.00)     $      (0.00)
============      ============

Outstanding shares                                     10,607,694        10,607,694
============      ============
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





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







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|COLORADO WYOMING RESERVE COMPANY
(A DEVELOPMENT STAGE ENTERPRISE)
CASH FLOW STATEMENTS


QUARTERS ENDED
SEPTEMBER 30,                 PERIOD FROM
----------------------------      JANUARY 1, 1999 TO
2003             2002        SEPTEMBER 30, 2003
-----------      -----------      ------------------
Cash flows from operating activities:
Net loss                                                 $   (38,205)     $   (20,563)             (1,954,721)
Adjustments to reconcile net loss to net used in
operating activities:
Depletion, depreciation and amortization                    --               --                   6,320
Loss on asset sale                                          --               --                   1,231
Amortization of note payable discount                       --               --                  35,000
Loss from joint venture investment                          --                                  361,767
Equity issued as compensation                               --               --                  95,600

Changes in current assets and liabilities:
Receivables                                              --          (17,913)                  3,126
Payables                                             64,927            4,636                 569,268
Other                                                                     --                    (436)
-----------       ----------      ------------------
Net cash (used in) operating activities                       26,722          (33,840)               (882,845)

Cash flows from investing activities:
Additions to unproved properties                          (31,956)          31,396                 (87,153)
Unproved property cost recovery                               375            1,994                 190,342
Asset purchases                                                --               --                  (1,269)
Proceeds from asset sale                                       --               --                  (2,354)
-----------      -----------      -----------------
Net cash (used in) provided by investing activities          (31,581)          33,390                  99,566

Cash flows from financing activities:
Sale of common stock                                           --               --                 784,456
Advances from joint venture                                    --                                  130,509
Repayment of joint venture advances                            --               --
Repayment of notes payable                                     --               --                (130,000)
-----------      -----------      -----------------
Net cash provided by financing activities                         --               --                 784,965
-----------      -----------      -----------------

Net increase (decrease) in cash and equivalents               (4,859)            (450)                  1,686
Cash and equivalents at beginning of period                    9,736              595                   3,191
-----------      -----------      -----------------

Cash and equivalents at end of period                    $     4,877     $        145      $            4,877
===========      ===========      =================
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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





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COLORADO WYOMING RESERVE COMPANY

("CWYR" or the "Company")



NOTES TO FINANCIAL STATEMENTS

(unaudited)



Periods Ended September 30, 2003 and 2002



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, 2003 Form 10-KSB.



2. DEVELOPMENT STAGE ENTERPRISE



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.



3. COMMITMENTS AND CONTINGENCIES



Effective January 1, 1998, the Company entered into an Agreement for Administrative Services (the "Trinity Agreement") with Trinity Petroleum Management LLC, a Colorado limited liability company ("Trinity"). Pursuant to the terms of the Trinity Agreement, Trinity performs certain management functions for the Company. Trinity bills for its services on an hourly basis, receives a flat fee of $1,100 per month and is reimbursed for third party expenses. The Trinity Agreement is on a month-to-month basis and may be terminated by either party upon written notice. J. Samuel Butler, who was a member of the Board of Directors of the Company until September 22, 2004, currently serves as President of Trinity and owns approximately 24 percent of Trinity through his ownership of Butler Resources, LLC. In connection with certain additional services provided to the Company by Trinity pursuant to the Company's merger with Shoreline Resource Company, on January 22, 1998 the Company issued to Trinity 25,000 restricted shares of Common Stock as well as an option to purchase up to 100,000 shares of the Company's Common Stock at an exercise price of $1.50 per share, subsequently repriced to $.10 per share in May 1999.



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.







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4. LOSS PER SHARE



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



5. FARMOUT AGREEMENT



The Company entered into a farmout agreement (the "Farmout Agreement") with ST Oil Company ("ST Oil"), FM Energy, LLC (whose rights and interest were subsequently assigned to Moore Energy LLC ("Moore Energy")) and The Shoreline Companies, LLC, ("Shoreline") (collectively, "the Farmees"), effective September 22, 2000, to finance exploration of the Paradox Basin Project. Certain directors and stockholders of the Company are directors, officers and controlling stockholders of ST Oil, Moore Energy and Shoreline. Under the Farmout Agreement, the Company assigned 50 percent of its mineral working interests in the Paradox Basin Project to the Farmees in exchange for the Seismic Survey. Prior to the commencement of the Seismic Survey, the Company sold an additional 7.5 percent of its mineral working interests to the Farmees in February 2001 for $150,000. The purchase price was determined using the same valuation of the Paradox Basin Project as was used in the Farmout Agreement. The cost of completing, processing and interpreting the Seismic Survey of approximately $1.1 million was borne by the Farmees.



The Farmout Agreement requires the Company to bear 42.5 percent of the cost of maintaining the Paradox Basin Project leasehold, which cost is estimated at approximately $33,000 per year. The Company currently has no funds available to meet this obligation, and its interest in the Project consequently could be reduced or eliminated.



The Farmout Agreement also establishes an area of mutual interest (the "AMI") for a term of ten years from the effective date of the Farmout Agreement. If during the ten-year term, any party to the Farmout Agreement acquires an oil or gas leasehold interest in the AMI, that party must give all other parties the opportunity to participate.



On September 25, 2002, Colorado Wyoming Reserve Company (the "Company") entered into a Farmout Agreement (the "2002 Farmout Agreement") with ST Oil Company, a Nevada corporation, and The Shoreline Companies, LLC, a Colorado limited liability company (collectively, the "Farmees"). The Company owns a 42.5% working interest and the Farmees collectively own a 34.5% working interest in certain oil and gas leases covering approximately 64,000 acres of land located in the Paradox Basin in San Juan County, Utah. J. Samuel Butler, a director of the Company till September 22, 2005, and a stockholder of the Company, is also a President and Chief Executive Officer and a stockholder of ST Oil Company. F. Robert Tiddens and John F. Greene, directors and stockholders of the Company, are also directors and 50% stockholders of The Shoreline Companies, LLC.



Under the 2002 Farmout Agreement, the Farmees have agreed to drill a test well in the Remington Prospect, which covers approximately 1,440 acres in the Paradox Basin. The well must be drilled to a certain depth on or after November 15, 2002. The Company, as Farmor, will have the option to either participate in the drilling of the first test well for its proportionate share or to farmout its interest to the Farmees. If the Company wants to participate in the first test well, the Company must submit its proportionate share of the estimated drilling costs within 10 days of receipt of a notice to commence drilling. The Company's failure to submit drilling costs within such time will be deemed the Company's election not to participate and to farmout its interests to the Farmees.



If the Company elects not to participate, all costs and expenses incurred or arising out of the drilling, testing, completing and equipping or the plugging and abandoning the first test well would be borne by the Farmees.

If Farmees commence and drill the first test well to contract depth, the Farmees will earn all of the Company's right, title and interest in the 160-acre drillsite tract in the Remington Prospect as to all depths, and the right to designate within 90 days after reaching contract depth in the first test well, a second 160-acre drillsite tract for a second test well to be located within the Remington Prospect, within which Farmees shall earn at Farmor's option either (i) 60% of the Company's 42.5% interest in the second drillsite tract if the Company elects to participate for its remaining 40% interest in the second test well or (ii) all of the Company's interest in and to the



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5. FARMOUT AGREEMENT, Continued



second drillsite tract and second test well subject to a back-in (described below). The Farmees must make their designation within 90 days by giving notice to the Company, and the Company will have 10 days within receipt of the Farmees' designation to give notice of its election to participate or not. Interests shall be assigned to and from the Farmees with 66.67% of the interest going to ST Oil Company and 33.33% going to The Shoreline Companies, LLC.



For 30 days following receipt of written notice of payout (defined below) from Farmees, Farmor will have the option to back-in for 30% of the interest previously assigned from the Company to the Farmees in the first drillsite tract for the first test well and the second drillsite tract for the second test well. Within 10 days of receiving the Company's election to back-in at payout for the first test well or the second test well, Farmees shall re-assign 30% of the interest in the corresponding drillsite tract previously assigned by the Company to the Farmees.



Payout for the first test well means the day the Farmees have recovered from proceeds of production attributable to the first test well, less royalties, overriding royalties and other lease burdens, and production taxes (ie. ad valorem, severance, conservation and similar taxes assessed on production), 100% of all costs and expenses, tangible and intangible, incurred by Farmees in the drilling, testing, completing and equipping the first test well, together with all of the operating costs and expenses incurred during payout. Payout for the second test well means the day when Farmees have recovered from proceeds of production attributable to the second test well, less royalties, overriding royalties and other lease burdens, and production taxes, 300% of all costs and expenses, tangible and intangible, incurred by Farmees in the drilling, testing, completing and equipping the second test well, together with all of the operating costs and expenses incurred during payout.

Costs and expenses associated with drilling, testing, completing and equipping wells drilled subsequent to the drilling of the first test well and/or the second test well in the Remington Prospect will be borne by the Company and the Farmees in accordance to their proportionate ownership.



The leases in the Remington Prospect remain subject to the Tax Partnership Agreement, attached to the Farmout Agreement, dated effective September 22, 2000 (the "2000 Farmout Agreement"), among the Farmor, the Farmees and FM Energy LLC (whose rights and interests were subsequently transferred to Moore Energy LLC). Pursuant to the 2000 Farmout Agreement, the Company assigned 50% of its mineral working interests in and to certain oil and gas leases covering approximately 64,000 acres of land located in the Paradox Basin in San Juan County, Utah, to the Farmees and Moore Energy LLC upon completion by the Farmees and Moore Energy LLC of seismic testing. Prior to commencement of the seismic survey, the Company sold an additional 7.5% of its mineral working interests to the Farmees and Moore Energy LLC in February 2001 for $150,000.

The Company, the Farmees and Moore Energy executed an operating agreement, with ST Oil Company as the operator, to govern the rights and obligations of the parties to all lands covered by the leases in the Remington Prospect.



On December 9, 2002 results of the first test well on the Remington Prospect, which well covers approximately 160 acres of the 26 square mile (16,640 acres) portion of the Company's Paradox Basin leasehold position encompassed by the 3-D seismic survey acquired by the Company during fiscal 2001 (the "3-D Seismic Area"), were unsuccessful. The Company plans to review the 3-D seismic data and the sub surface data obtained by drilling the test well to determine whether future shallow zone exploration in the Remington Prospect and in the 3-D Seismic Area is warranted. In addition, the Company intends to study ways of developing the deeper horizon potential identified by the 3-D seismic survey.



On December 17, 2003, pursuant to the terms of a farmout agreement, Colorado Wyoming Reserve Company (the Company) elected to participate in the extension of an assignment of a lease regarding land located in San Juan County, Utah. The Company has a 42.5% working interest in the lease, and the lessor is the Department of the Interior.





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5. FARMOUT AGREEMENT, Continued



On January 5, 2004, pursuant to the terms of a farmout agreement, the Company elected to participate in the acquisition of an oil and gas lease with respect to two wells located in San Juan County, Utah. The lessor is the Bureau of Land Management, and the Company and the other participants intend to recomplete the two wells upon resolution of certain contractual obligations and other issues.



On March 3, 2005, the Company confirmed its proprietary 3-D 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 West 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, 3-D delineated, structures in the Paradox Basin Project. Additionally, the Company will have 42 1⁄2 % of two other, tentatively identified, structures in the area.



In the fall of 2005 the Company plans additional 3-D Seismic science work in the whole of the Paradox Basin Project area as well as a development drilling program in the West Lisbon structure.  Also in the summer of 2005 the two delineated structures are anticipated to be explored.



In September 2000, the Company entered into a Credit Agreement with the Farmees. The Credit Agreement established an unsecured revolving line of credit for the Company in an aggregate principal amount of $110,000. Amounts borrowed under the Credit Agreement bear interest at the rate of 8 percent per annum. At September 30, 2002, the Company had a balance owing the Farmees of $122,000. The note was due and payable in full on September 28, 2001, and remains unpaid as of June 27, 2005.



Effective September 22, 2004, J. Samuel Butler, F. Robert Tiddens, and John Green resigned from the board of directors of the Company. None of Messrs. Butler's, Tiddens', or Green's resignations were a result of any disagreement with the Company or any matter relating to the Company's operations, policies, or procedures.



6. RECENTLY ISSUED FINANCIAL ACCOUNTING STANDARDS:



In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001. SFAS No. 141 also specifies criteria intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart from goodwill, and establishes that any purchase price allocable to an assembled workforce may not be accounted for separately. SFAS No. 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS No. 142. SFAS No. 142 also requires that intangible assets with definite useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. The Company does not expect to be affected by either SFAS Nos. 141 or 142.











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6. RECENTLY ISSUED FINANCIAL ACCOUNTING STANDARDS, Continued:



In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations, which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The standard applies to legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or normal use of the asset.



SFAS No. 143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The fair value of the liability is added to the carrying amount of the associated asset and this additional carrying amount is depreciated over the life of the asset. The liability is accreted at the end of each period through charges to operating expense. If the obligation is settled for other than the carrying amount of the liability, the Company will recognize a gain or loss on settlement.



While the Company presently has no assets that would be affected by SFAS No. 143, should producing wells be drilled on the Paradox Basin acreage, the estimated abandonment cost of such wells could be subject to SFAS No. 143. However, the financial statement impact cannot be estimated at present.



In August 2001, the FASB also approved SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS 144 replaces SFAS 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. The new accounting model for long-lived assets to be disposed of by sale applies to all long-lived assets, including discontinued operations, and replaces the provisions of APB Opinion No. 30, Reporting Results of Operations Reporting the Effects of Disposal of a Segment of a Business, for the disposal of segments of a business. SFAS 144 requires that those long-lived assets be measured at the lower of carrying amount or fair value less cost to sell, whether reported in continuing operations or in discontinued operations. Therefore, discontinued operations will no longer be measured at net realizable value or include amounts for operating losses that have not yet occurred. SFAS 144 also broadens the reporting of discontinued operations to include all components of an entity with operations that can be distinguished from the rest of the entity and that will be eliminated from the ongoing operations of the entity in a disposal transaction. The provisions of SFAS 144 are effective for financial statements issued for fiscal years beginning after December 15, 2001 and, generally, are to be applied prospectively. At this time, the Company cannot estimate the effect of this statement on its financial position, results of operations, or cash flows.



Effective July 1, 2000 FASB Interpretation No. 44 (the "Interpretation"), Accounting for Certain Transactions Involving Stock Compensation, became effective. Pursuant to the Interpretation provisions, the Company's stock option plan, which had previously been defined as a "fixed plan", became a "variable plan" as a result of certain option repricings which occurred between December 15, 1998 and June 30, 2000. Variable plans are subject to the recognition of "mark-to-market" expense. While the Company has not recognized any mark-to-market expense (since the quoted prices for the Company's shares at the end of the respective quarters have always been under $1.00 per share, the quoted price at July 1, 2000) should the share price be higher at the end of a future quarter than it was at July 1, 2000, the Company would recognize such expense.







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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 suffici8ent 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 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, 2003, 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.



PLAN OF OPERATIONS



In accordance with the terms of the Farmout Agreement, the Farmees have provided interpreted seismic data to the Company, and the Company has, in turn, made assignments of the respective leasehold ownership interests to the Farmees. Based on the results of the Seismic Survey, the Company believes that exploratory test wells are warranted on at least three prospects. As the Seismic Survey covered less than one-third of CWYR's acreage position, the Company also believes additional acreage should be surveyed. The Company and the Farmees plan to present the Paradox Basin Project to qualified industry companies for the purpose of determining the market value of the project and the terms on which an industry partner might be brought into the Project. The Company believes that the next phase of Project development is the drilling of an exploratory well on the Project and conducting a seismic shoot on prospects not included in the first shoot. No decision can be made regarding the next phase of development of the Paradox Basin Project without the approval of CWYR and the Farmees holding an aggregate 80 percent interest in the Paradox Basin Project. In addition to the implications of the Farmout Agreement on the decision, the Company's current lack of capital limits the options available to it.



The Company and the Farmees may elect to sell the Paradox Basin Project for cash and to retain an overriding royalty interest in the Project. This option would require the Company to raise capital sufficient to fund its share of the costs of maintaining and marketing the Project, to pay its existing creditors and to run day-to-day operations until the Project is sold. Alternatively, the Company and the Farmees could enter into a farmout agreement with an industry partner whereby the industry partner pays all the cost of one or more exploratory wells and possibly a second seismic shoot. The Company would need to raise additional capital sufficient to fund its share of the drilling of future exploratory and development wells. Finally, the Company and the Farmees could decide to participate in the drilling of the initial exploratory well and all future drilling and seismic shoots. This third option would require extensive capital.





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The Company plans to raise funds to meet its obligation to fund its 42.5 percent share of the costs of maintaining the Paradox Basin Project leasehold (estimated at $33,000 per year) and the costs of marketing the Project, to repay the $110,000 borrowed under the Credit Agreement and due and payable in full on September 28, 2001, and to pay existing accounts payable. If the Company is not successful in raising additional capital to fund its short term needs, the Company may have to liquidate and stockholders may suffer a complete loss of their investment.



If the Company and the Farmees elect to sell the property, the Company intends to use its share of the proceeds to pay outstanding obligations, including the $110,000 due under the Credit Agreement and existing accounts payable. Remaining proceeds, if any, may be used to purchase new oil and gas leases. If the joint venture elects to enter into a farmout agreement with an industry partner or to drill an exploratory well or wells, the Company would need significant additional financing. If an industry partner is brought in to drill or if the Company is not successful in raising additional capital, its interests in the Project would be further reduced. The failure to raise additional capital could also lead to forfeiture of the Company's interest in the Project.



On December 9, 2002 results of the first test well on the Remington Prospect, which well covers approximately 160 acres of the 26 square mile (16,640 acres) portion of the Company's Paradox Basin leasehold position encompassed by the 3-D seismic survey acquired by the Company during fiscal 2001 (the "3-D Seismic Area"), were unsuccessful. The Company plans to review the 3-D seismic data and the sub surface data obtained by drilling the test well to determine whether future shallow zone exploration in the Remington Prospect and in the 3-D Seismic Area is warranted. In addition, the Company intends to study ways of developing the deeper horizon potential identified by the 3-D seismic survey.



On December 17, 2003, pursuant to the terms of a farmout agreement, Colorado Wyoming Reserve Company (the Company) elected to participate in the extension of an assignment of a lease regarding land located in San Juan County, Utah. The Company has a 42.5% working interest in the lease, and the lessor is the Department of the Interior.



On January 5, 2004, pursuant to the terms of a farmout agreement, the Company elected to participate in the acquisition of an oil and gas lease with respect to two wells located in San Juan County, Utah. The lessor is the Bureau of Land Management, and the Company and the other participants intend to recomplete the two wells upon resolution of certain contractual obligations and other issues.



On March 3, 2005, the Company confirmed its proprietary "3-D" 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 West 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, 3-D delineated, structures in the Paradox Basin Project.  Additionally, the Company will have 42 1⁄2 % of two other, tentatively identified, structures in the area.



In the fall of 2005 the Company plans additional 3-D Seismic science work in the whole of the Paradox Basin Project area as well as a development drilling program in the West Lisbon structure.  Also in the summer of 2005 the two delineated structures are anticipated to be explored.



At June 27, 2005, the Company continues to have no cash, no operations and no revenues. These factors raise substantial doubts about the Company's ability to continue as a going concern without raising significant additional capital.





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PART II - OTHER INFORMATION



Item 1. Legal Proceedings.



None.



Item 2. Changes in Securities and Use of Proceeds.



On November 14, 2002, the Company closed a private placement of convertible notes to accredited investors for $280,000. The Convertible Notes are convertible into Common Stock at a conversion rate equal to the principal amount of each Convertible Note (plus accrued and unpaid interest) divided by the conversion price of $.30 per share of Common Stock. Repayment of the Convertible Notes is due on November 14, 2007, or on a sale of substantially all the assets of the Company, bankruptcy or liquidation of the Company occurring prior to November 14, 2007. The Convertible Notes are redeemable at the option of the Company for the principal amount of such Convertible Notes, plus accrued and unpaid interest any time after November 14, 2004. The use of proceeds from the private placement was as follows:

- $75,000 to repay indebtedness owed to Kim Fuerst, President and Chief Executive Officer and a stockholder of the Company, for expenses that Mr. Fuerst paid on behalf of the Company (including lease payments, rent payments, telephone bills, etc.), for four months of the 33 months of unpaid but accrued salary that the Company owes Mr. Fuerst and for a loan that Mr. Fuerst made to the Company so that the Company could make lease rental payments;

- an aggregate of approximately $68,000 to repay amounts due Trinity Petroleum Management, Butler Resources and ST Oil Company, each of which is an affiliate of J. Samuel Butler, a director and stockholder of the Company, for accounting services, reimbursement for payment of escrow fees for the private placement and reimbursement for payment of delay rentals and lease acquisitions;

- approximately $24,000 to the farmees under the Farmout Agreement, dated September 28, 2000, between the Company as farmor and the Shoreline Companies LLC, Moore Energy LLC and ST Oil Company as farmees (certain directors and stockholders of the Company are directors, officers and controlling stockholders of ST Oil Company, the Shoreline Companies LLC and Moore Energy LLC) for reimbursement for payment of delay rentals and lease acquisitions; and

- approximately $60,000 to repay existing indebtedness to the Company's accountants, auditors, legal counsel and other trade accounts.

The remaining $38,000 of the proceeds from the private placement will be used for general corporate purposes.



Item 3. Defaults Upon Senior Securities.



None.



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



None.



Item 5. Other Information.



Effective September 22, 2004, J. Samuel Butler, F. Robert Tiddens, and John Green resigned from the board of directors of the Company. None of Messrs. Butler's, Tiddens', or Green's resignations were a result of any disagreement with the Company or any matter relating to the Company's operations, policies, or procedures.





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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.



32.1

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







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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:  June 29, 2005

By:    /s/ KIM M. FUERST



Kim M. Fuerst



President, Chief Executive Officer and Treasurer



(Principal Executive Officer)





By:  /s/ Rafiq A. Sayed

Rafiq A. Sayed

Chief Financial Officer

(Principal Financial Officer)











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