FORM 10-QSB

                       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 December 31, 2002

                                       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 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 February 12, 2003
Common stock, $.005 par value                              5,863,828

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Part One.  FINANCIAL INFORMATION

         Item 1.  Financial Statements

                  ASPEN EXPLORATION CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS
                                                                     December 31,     June 30,
                                                                        2002           2002
                                                                        ----           ----
                                                                     (Unaudited)     (Audited)
Current Assets:
<S>                                                                  <C>            <C>
Cash and cash equivalents, including $588,018 and
$822,060 of invested cash at December 31, 2002 and
June 30, 2002 respectively .......................................   $ 1,013,757    $   916,001


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

Accounts receivable, trade .......................................       284,040        365,705


Accounts receivable - related party ..............................         5,164         12,872

Prepaid expenses .................................................        14,794         19,820
                                                                     -----------    -----------

     Total current assets ........................................     1,336,578      1,333,221
                                                                     -----------    -----------


Investment in oil and gas properties, at cost (full cost method of
accounting) ......................................................     5,753,668      5,427,741

Less accumulated depletion and valuation allowance ...............    (2,437,200)    (2,262,649)
                                                                     -----------    -----------

                                                                       3,316,468      3,165,092
                                                                     -----------    -----------
Property and equipment, at cost:

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

Less accumulated depreciation ....................................       (54,649)       (45,810)
                                                                     -----------    -----------

                                                                          57,913         66,752
                                                                     -----------    -----------
Cash surrender value, life insurance .............................       239,095        239,095
                                                                     -----------    -----------

     TOTAL ASSETS ................................................   $ 4,950,054    $ 4,804,160
                                                                     ===========    ===========


                                      (Statement Continues)
                         See notes to Consolidated Financial Statements

                                               2
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<PAGE>


                  ASPEN EXPLORATION CORPORATION AND SUBSIDIARY
                     CONSOLIDATED BALANCE SHEETS (Continued)

                      LIABILITIES AND STOCKHOLDERS' EQUITY


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

Accounts payable and accrued expenses ..........    $   521,525     $   236,587

Accounts payable - related party ...............         13,185          21,260

Advances from joint owners .....................        159,704         230,775
                                                    -----------     -----------
Total current liabilities ......................        694,414         488,622
                                                    -----------     -----------
Deferred income tax payable ....................         89,250          89,250
                                                    -----------     -----------
Total liabilities ..............................        783,664         577,872
                                                    -----------     -----------

Stockholders' equity:

Common stock, $.005 par value:
    Authorized: 50,000,000 shares
    Issued: At December 31, 2002: 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 ............................     (1,874,575)     (1,814,677)

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

Total stockholders' equity .....................      4,166,390       4,226,288
                                                    -----------     -----------
Total liabilities and stockholders' equity .....    $ 4,950,054     $ 4,804,160
                                                    ===========     ===========


                 See Notes to Consolidated Financial Statements

                                       3

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



                                                        Three Months Ended             Six Months Ended
                                                           December 31,                  December 31,

                                                       2002           2001           2002           2001
                                                       ----           ----           ----           ----
Revenues:
  <S>                                              <C>            <C>            <C>            <C>
  Oil and gas ..................................   $   241,700    $   133,027    $   440,131    $   389,187

  Management fees ..............................        34,066         24,949         96,795         67,637

  Interest and other, net ......................         3,314         14,893          7,050         36,205
                                                   -----------    -----------    -----------    -----------
Total Revenues .................................       279,080        172,869        543,976        493,029
                                                   -----------    -----------    -----------    -----------

Costs and expenses:

  Oil and gas production .......................        38,611         42,401         76,525         68,273

  Depreciation, depletion and amortization .....        97,969        121,013        183,389        226,279

  Aspen Power Systems expense ..................          --            5,500           --           25,500

  Selling, general and administrative ..........       157,681        137,367        343,481        307,479

  Interest expense .............................           479            -0-            479            -0-
                                                   -----------    -----------    -----------    -----------
Total Costs and Expenses .......................       294,740        306,281        603,874        627,531
                                                   -----------    -----------    -----------    -----------
Net loss .......................................   $   (15,660)   $  (133,412)   $   (59,898)   $  (134,502)
                                                   -----------    -----------    -----------    -----------
Basic loss per common share ....................   $      ( - )   $      (.02)   $     (.01)    $      (.02)
                                                   ===========    ===========    ===========    ===========

Diluted loss per common share ..................   $      ( - )   $      (.02)   $     (.01)    $      (.02)
                                                   ===========    ===========    ===========    ===========
Basic weighted average number of common shares
outstanding ....................................     5,863,828      5,816,133      5,863,828      5,816,133
                                                   ===========    ===========    ===========    ===========
Diluted weighted average number of common shares
outstanding ....................................     5,863,828      5,816,133      5,863,828      5,816,133
                                                   ===========    ===========    ===========    ===========


                                    The accompanying notes are an integral
                                           part of these statements.

                                                      4
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                    ASPEN EXPLORATION CORPORATION AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                     (UNAUDITED)



                                                       Six months ended December 31,
                                                             2002           2001
                                                         --------------------------

Cash flows from operating activities:
<S>                                                      <C>            <C>
Net loss .............................................   $   (59,898)   $  (134,502)

Adjustments to reconcile net income
  to net cash provided by
  operating activities:

  Depreciation, depletion & amortization .............       183,390        226,279
  Amortization of deferred compensation ..............           -0-          8,800

Changes in assets and liabilities:

  Decrease in accounts receivable ....................        89,373        237,894
  (Increase) decrease in prepaid expense .............         5,026        (35,894)
  Increase (decrease) in accounts payable and accrued
    expense ..........................................       205,792       (899,631)
                                                         -----------    -----------
  Net cash provided (used) by operating activities ...       423,683       (597,054)
                                                         -----------    -----------

Cash flows from investing activities:

  Additions to oil & gas properties ..................      (396,504)      (520,139)
  Purchase of office equipment .......................           -0-         (3,205)
  Sale of idle equipment at cost .....................         1,155            -0-
  Sale of oil and gas properties .....................        69,422            -0-
                                                         -----------    -----------


  Net cash used by investing activities ..............      (325,927)      (523,344)
                                                         -----------    -----------

  Net increase (decrease) in cash and cash equivalents        97,756     (1,120,398)

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

  Cash and cash equivalents, end of period ...........   $ 1,013,757    $ 1,575,185
                                                         -----------    -----------

  Interest paid ......................................   $       479    $       -0-
                                                         ===========    ===========


                       The accompanying notes are an integral
                              part of these statements.

                                         5
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                          ASPEN EXPLORATION CORPORATION

                   Notes to Consolidated Financial Statements
                                   (Unaudited)

                                December 31, 2002


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 Statement of Financial Accounting Standards No. 128
          ("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 $59,898 and $134,502 for the six months ending December 31,
          2002 and 2001, 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 three industrial segments within the United States, oil
          and gas exploration and development, mining 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 mining segment receives its revenue primarily from the sale of
          minerals and precious metals and from time to time from the sale of a
          mineral venture that it has originated. Currently, this segment is
          inactive.

          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 were winding up the affairs of this segment and no further
          activities will be pursued.

          During the six months ended December 31, 2002 and 2001 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 $396,504 for the development and acquisition
          of oil and gas properties, and sold $70,577 in producing properties
          for a net increase of $325,927.

                                       7

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Note 3        SEGMENT INFORMATION (CONTINUED)

          Segment information consists of the following for the six months ended
          December 31:

                                    Oil and Gas    Power Plant     Minerals       Corporate     Consolidated
        <S>                         <C>             <C>            <C>          <C>             <C>
         Revenues:

                    2002            $   536,926     $   -0-         $   -0-     $     7,050     $   543,976
                    2001                456,824         -0-             -0-          36,205         493,029

         Income (loss) from operations:

                    2002            $   285,850     $   -0-         $   -0-     $  (345,748)    $   (59,898)
                    2001                170,951     (25,500)            -0-        (279,953)       (134,502)

         Identifiable assets:

                    2002            $ 3,605,672     $   -0-         $18,823     $ 1,325,559     $ 4,950,054
                    2001              3,014,697         -0-          18,823       1,935,832       4,969,352

         Depreciation, depletion and valuation
         charged to identifiable assets:

                    2002            $  (174,551)    $   -0-         $   -0-     $   (8,838)     $  (183,389)
                    2001               (217,600)        -0-             -0-         (8,679)        (226,279)

         Capital expenditures:

                    2002            $   396,504     $   -0-         $   -0-     $      -0-      $    396,504
                    2001                520,139         -0-             -0-          3,205           523,344


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
                                            --                --
          Year ended:

           December 31, 2002                24%               53%
           December 31, 2001                27%               43%


                                       8
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<PAGE>





Note 5        COMMITMENTS AND CONTINGENCIES

          At December 31, 2002, we were committed to the following drilling and
          development projects in California:

          1.   Three Tehama County, California wells. Total costs for each well
               is estimated at $500,000 with our share of the net costs per well
               approximately $120,000.

          2.   One Solano County, California well that is estimated to cost
               $750,000 with our share of the net costs approximately $80,000.


Note 6        INCOME TAXES

          We made no provision for income taxes for the six month period ended
          December 31, 2002 since it utilizes net operating loss carryforwards.
          We had $583,321 of such carryforwards at June 30, 2002.


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.

                                       9

<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
-------------------------------

December 31, 2002 as compared to December 31, 2001
--------------------------------------------------

At December 31, 2002 current assets were $1,336,578 and current liabilities were
$694,414 and we had positive working capital of $642,164 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, a $202,435
or 24% reduction. While current assets remained constant, our current
liabilities increased by approximately $206,000 primarily due to increased
revenue payable to other royalty and working interest owners.

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 six months ended December 31, 2002, our
operations provided $424,000 of positive operating cash flow as compared to a
negative operating cash flow of nearly $600,000 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.

During the six month period ending December 31, 2002, 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 December
31, 2002 our price per MMBTU had increased to approximately $4.15 per MMBTU, a
65% increase.

                                       10

<PAGE>


In conjunction with the increase in prices we have also experienced an increase
in production volumes for the period. For the six months ended December 31, 2001
we produced approximately 108,000 MMBTU of gas compared to approximately 138,600
MMBTU for the six months ended December 31, 2002, a 28% 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 December 31, 2002 we are committed to drill 4 additional wells
at an estimated cost to us of approximately $440,000, with the balance
(approximately $1,810,000) to be paid by joint owners in the properties,
including certain affiliated investors. For the six months ended December 31,
2002 we invested $396,000 in our oil and gas properties compared to
approximately $520,000 for the six 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.

                                       11

<PAGE>


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

December 31, 2002 Compared to December 31, 2001
-----------------------------------------------

For the six months ended December 31, 2002 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 six
months ended December 31, 2002 increased approximately $80,000 from $457,000 to
$537,000, a 17.5% increase. This increase reflects an improvement in prices and
increased production volumes in California. Our share of sales of oil and gas
for the six month period ended December 31, 2002 were 704 barrels of oil and
approximately 138,600 MMBTU of gas with the price received for oil at $25.48 per
barrel and $4.15 per MMBTU for gas. This is a decrease in total oil production
compared to the 1795 barrels of oil produced in the first half of fiscal 2002,
and an increase in natural gas production of 15,600 MMBTU when compared to the
approximately 123,000 MMBTU of gas production achieved during the first half of
2002. As discussed in Liquidity and Capital Revenues, a significant factor
resulting in the increase in revenues during the last six months of 2002 was an
increase in the prices received for our production when compared to prices of
$19.77 and $2.51 received for oil and gas respectively during the first half of
2002.

Oil and gas production costs increased $8,252 when compared to the last six
month period, from $68,273 to $76,525. Production costs increased due to the
addition of three producing wells and costs for installing compressors and
dehydrator units on several of our producing gas wells.

Depletion, depreciation and amortization decreased $42,890 or 19% for the six
month period, which is our best estimate of what the full year cost will be.

Selling, general and administrative expense increased approximately $36,000 or
12% from $307,479 to $343,481 for the six months ended December 31, 2002. This
increase is primarily due to salary, office rental and consulting increases.

As a result of our operations for the six months ended December 31, 2002, we
ended the period with a net loss of $59,900 compared to a net loss of $134,500
for the year earlier. This reduction in the loss from operations from $134,500
to $59,900 was due to an improvement in prices we received for our production
and increased volumes produced, but was offset by an increase of approximately
$36,000 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 $29,000 to $7,050 and were
primarily due to a decline in interest rates.

                                       12

<PAGE>


CONTRACTUAL OBLIGATIONS

     We had three contractual obligations as of December 31, 2002. The following
table lists our significant liabilities at December 31, 2002:

                                          Payments Due by Period

                          Less than      2-3        4-5       After
Contractual Obligations    1 year       years      years     5 years     Total
-----------------------   -------      -------    -------    -------    -------
                          $30,300      $ 8,784    $  -0-     $  -0-     $39,084
                          -------      -------    -------    -------    -------
Total contractual
   cash obligations       $30,300      $ 8,784    $  -0-     $  -0-     $39,084
                          =======      =======    =======    =======    =======

     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 $8,784 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. We also sublease from R. V. Bailey,
our president, a portion of an office building owned by Mr. Bailey in Castle
Rock, Colorado on a month to month basis for $500 per month.

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 there from 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.

                                       13

<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

                                       14

<PAGE>


and procedures include, without limitation, controls and procedures designed to
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.

                                       15

<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/  R. V. Bailey
                                            -------------------------------
                                                 R. V. Bailey,
February 12, 2003                                President,
                                                 Principal Executive Officer,
                                                 Principal Financial Officer

                                       16
<PAGE>


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

I, R.V. Bailey, Chief Executive Officer and Chief Financial Officer of Aspen
Exploration Corporation, certify that:

1.   I have reviewed this quartery 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: February 12, 2003                      /s/  R. V. Bailey
     ------------------                      ---------------------------------
                                                  R. V. Bailey,
                                                  Chief Executive Officer and
                                                  Chief Financial Officer
                                                  (principal executive and
                                                  financial officer)

                                       17