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 June 30, 1997

                                        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: 0-9500

                        MOUNTAINS WEST EXPLORATION, INC.
              (Exact name of small business issuer in its charter)

         New Mexico                                              85-0280415 
 (State or other jurisdiction of                             (I.R.S. Employer
  incorporation or organization)                            Identification No.)


                         616 CENTRAL AVE. SE., SUITE 213
                          ALBUQUERQUE, NEW MEXICO 87102
               (Address of principal executive offices) (Zip Code)

                                 Not Applicable
              (Former names, former address and former fiscal year,
                          if changed since last report)
        
Indicate by check mark whether the issuer (1) has filed all reports  required to
be filed by section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during
the preceding 12 months (or for such shorter period that the issuer was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days. Yes [X] No [ ]

The number of shares  outstanding of the issuer's common stock,  par value $.001
per share, at July 14, 1997, was 37,018,970 shares.


                                     PART I

Item 1. FINANCIAL STATEMENTS

                        MOUNTAINS WEST EXPLORATION, INC.
                             CONDENSED BALANCE SHEET
                                  June 30, 1997
                                    Unaudited

ASSETS
 Current Assets
  Cash .....................................................        $    27,202
  Accounts receivable/prepaid expenses .....................             10,179
                                                                    ___________
     Total current assets ..................................             37,381

 Furniture and Equipment
  Office furniture and equipment, at cost ..................             17,120
   Less accumulated depreciation ...........................            (10,541)
                                                                    ___________
     Net furniture and equipment ...........................              6,579

 Oil and gas properties, using the successful
  efforts method (Note 3) ..................................          2,476,883
 Less accumulated depreciation, depletion and
  amortization .............................................            (14,779)
                                                                    ___________
      Net oil and gas properties ...........................          2,462,104

 Other Assets
  Term deposit account - restricted (Note 3) ...............             53,042
  Note receivable, officer .................................            100,000
  Mineral Interest .........................................             40,083
  Other Investments ........................................             15,000
                                                                    ___________
   Total other assets ......................................            208,125
                                                                    ___________
   Total assets ............................................        $ 2,714,189
                                                                    ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
 Advances ..................................................        $    24,363
 Advanced payroll ..........................................              6,675
 Accounts payable ..........................................             16,002
 Accrued liabilities .......................................              3,259
 Line of credit ............................................             34,500
 Note payable - officer ....................................              9,276
 Due to affiliates .........................................          2,351,891
                                                                    ___________
   Total current liabilities ...............................          2,445,966

Shareholder's Equity
 Common Stock, $.001 par value, authorized:
  50,000,00 shares, issued 37,018,970
  shares; outstanding 37,018,970 shares ....................             37,019
 Capital in excess of par value ............................          1,607,997
 Accumulated  deficit ......................................         (1,376,793)
                                                                    ___________
   Total stockholders' equity ..............................            268,223
                                                                    ___________
   Total liabilities and stockholders' equity ..............        $ 2,714,189
                                                                    ===========

                 See accompanying notes to financial statements.


                        MOUNTAINS WEST EXPLORATION, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                                    UNAUDITED

                                                Three Months       Three Months
                                                    Ended              Ended 
                                                June 30, 1997      June 30, 1996

REVENUES
 Oil and Gas Sales .......................      $     14,321       $      5,734
 Lease Income ............................              --                 --   
 Other operating income ..................            33,898               --   
                                                ____________       ____________
   Total income ..........................            48,219              5,734

EXPENSES
 Production costs ........................             1,805              1,200
 Depreciation and depletion ..............             1,000              1,276
 Consulting ..............................             1,150               --   
 General and administrative ..............            59,337             58,401
                                                ____________       ____________
   Total expenses ........................            63,292             60,877

   Loss from operations ..................           (15,073)           (55,143)

Other income
 Interest income .........................            38,364              1,899
 Interest expense ........................            (1,563)               (13)
 Other ...................................            (1,074)              --   
                                                ____________       ____________
   Total other income (loss) .............            35,727              1,886
                                                ____________       ____________
   Net earnings ..........................      $     20,654       $    (53,257)
                                                ============       ============

Earnings (loss) per common share: ........      $      0.001       $     (0.001)
                                                ============       ============
Weighted Average Number of Shares
  Outstanding (Note 2) ...................        37,026,620         36,635,720
                                                ============       ============

                 See accompanying notes to financial statements.

 
                        MOUNTAINS WEST EXPLORATION, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                                    UNAUDITED

                                                  Six Months        Six Months 
                                                     Ended             Ended 
                                                 June 30, 1997     June 30, 1996
REVENUES
 Oil and Gas Sales .........................     $     25,216      $      9,414
 Lease Income ..............................           13,655              --   
 Other operating income ....................           33,897              --   
 Interest in sale of oil & gas property ....             --             170,000
                                                 ____________      ____________
                                                       72,768           179,414
EXPENSES
 Production costs ..........................            6,010           107,296
 Depreciation and depletion ................            1,366             2,552
 Consulting ................................            1,414              --
 General and administrative ................           85,872           100,338
                                                 ____________      ____________
   Total expenses ..........................           94,662           210,186

   Loss from operations ....................          (21,894)          (30,772)

Other income
 Interest income ...........................           39,454             3,962
 Interest expense ..........................           (1,876)              (13)
 Other .....................................           (1,304)             --   
                                                 ____________      ____________
   Total other income ......................           36,274             3,949
                                                 ____________      ____________
   Net earnings (loss) .....................     $     14,380      $    (26,823)
                                                 ============      ============

Earnings (loss) per common share: ..........     $      0.001      $     (0.001)
                                                 ============      ============
Weighted Average Number of Shares
  Outstanding (Note 2) .....................       37,033,887        36,566,220
                                                 ============      ============

                 See accompanying notes to financial statements.


                        MOUNTAINS WEST EXPLORATION, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                                    UNAUDITED

                                                    Six Months      Six Months
                                                       Ended            Ended 
                                                   June 30, 1997   June 30, 1996
   
Cash flows from operating activities
 Cash received from customers ...................   $  97,514       $ 180,918
 Cash paid to suppliers & employees .............    (112,960)       (207,498)
 Interest received ..............................      38,454           3,962
 Interest paid ..................................      (1,876)            (13)
                                                    _________       _________
   Net cash provided (used) by
     operating activities .......................      21,132         (22,631)

Cash flows from investing activities
 Purchases related to oil and gas venture .......     (59,438)        (17,218)
                                                    _________       _________
   Net cash used by investing activities ........     (59,438)        (17,218)

Cash  Flows from Financing Activities
 Net draw on line of credit .....................      34,500            --
 Repayment of officer loan ......................      (7,092)           --
 Retirement of stock ............................        (776)         (2,040)
                                                    _________       _________
   Net cash provided (used) by
      financing activities ......................      26,632          (2,040)

Net decrease in cash ............................     (11,674)        (41,889)
Cash at beginning of period .....................      38,876         115,329
                                                    _________       _________
Cash at end of period ...........................   $  27,202       $  73,440
                                                    =========       =========

Reconciliation of net income (loss) to cash flows
    provided (used) by operating activities:

Net earnings (Loss) .............................   $  14,380       $ (26,823)
 Adjustments
  Depreciation, depletion and
   amortization .................................       1,366           2,552
  Increase in prepaid expenses
   and accounts receivable ......................      (3,756)           (551)
  Increase in advances, accounts payable
   and accrued liabilities ......................       9,142           2,191
                                                    _________       _________
Net Cash provided by operating activities .......   $  21,132       $ (22,631)
                                                    =========       =========

Noncash Investing or Financing Activities:

The Company was loaned  $482,284 & $573,563 for the six month periods ended June
30, 1997 and 1996, respectively.  These amounts were invested in its oil and gas
property in Papua, New Guinea.  In the second quarter of 1997, the government of
New Guinea acquired $707,123 of the Company's oil and gas interests. This amount
was credited to the Company's obligation to other GOBE affiliates.

                 See accompanying notes to financial statements


                        MOUNTAINS WEST EXPLORATION, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  June 30, 1997

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

The balance sheet at June 30, 1997,  statements of operations  and statements of
cash flows for the six months  ended June 30,  1997 and 1996 and  statements  of
operations  for the three  month  periods  then ended have been  prepared by the
company, without audit. In the opinion of management, all adjustments, including
normal recurring adjustments necessary to present fairly the financial position,
results of operations and cash flows,  have been made.  Certain  information and
footnote  disclosures  normally  included in  financial  statements  prepared in
accordance with generally accepted accounting  principles have been condensed or
omitted. It is suggested that these financial  statements be read in conjunction
with the Company's audited financial statements at December 31,1996. The results
of  operations  for the six  months  ended  June 30,  1997  are not  necessarily
indicative of operating results for the full year.

2. NOTES TO FINANCIAL STATEMENTS.

Net  income or loss per common  share has been  computed  based on the  weighted
average number of shares outstanding during the period.

3.  OIL AND GAS PROPERTIES

Capitalized  costs using the successful  efforts method related to the Company's
oil and gas activities as of June 30, 1997 are as follows:

                 Proved developed properties ..   $    14,779
                 Proved shut - in property ....     2,476,883
                 Accumulated depreciation,
                    depletion, amortization and
                    valuation allowances ......       (14,779)
                                                  ___________
                 Net capitalized costs ........   $ 2,476,883
                                                  ===========


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

Plan of Operations

During the quarter ended June 30, 1997, oil and gas sales were $25,216, compared
to $9,414 for the same period in the prior year.  In  addition,  the Company had
$33,897 in other operating income during the quarter.  Significant  increases in
such revenues are not anticipated by management to occur during the remainder of
the current fiscal year or until there is production from the Southeast Gobe Oil
and Gas Field.

The status of the Company's properties is as follows:

Colorado

The Company  owns  approximately  2,400 acres of mineral  interest in Las Animas
County,  Colorado.  During  the  quarter  these  properties  were  leased  to  a
corporation  with  offices in Texas.  The  Company  received,  after  payment of
certain finders fees,  $13,900 for the leases and retained a royalty interest of
2.5% and mineral interest of 15% in the properties.

Following the leasing of the properties,  the Texas  corporation  questioned the
Company's title in portions of the acreage.  Thereupon,  the Company undertook a
quiet  title  action  and on June 24,  1997 the  District  Court for the  County
entered and order  finding  that the Company  owned all mineral  interest in the
properties.

Papua New Guinea

a.  Petroleum  Development  License  (PDL) 3. The  three  oil wells in which the
Company  has an  interest  are located on this  license.  This  license has been
unitized  with  Chevron  Oil  Company's  PDL 4 to the  north.  The two new  PDLs
encompass  the  Southeast  Gobe Oil and Main Gobe Fields.  Development  of these
fields is well under way with an anticipated  first production  scheduled during
the first quarter of 1998.  The Company's  interest in the unitized  production,
after  exercise by the  government of its right to acquire a 22 1/2% interest in
the fields,  will be a net 0.88%  interest  which will result in an  anticipated
initial production to the Company's interest of approximately 200 barrels of oil
per day. The  Company's  expenses in this unit is to be carried  until the first
production from PDL 3 is sold. Thereafter, the Company must pay its share of all
costs of PDL 3.  The  costs  of  getting  the oil from the unit to sale has been
estimated at more than $175,000,000,  none of which will be borne by the Company
until  after the first sale of  production.  After  that time,  all of the money
realized  from the sale of the oil will be devoted to  repayment  of the carried
cost of the project,  now  estimated  to be  approximately  $300,000,000,  which
Management  believes will pay out in approximately  three years if the Company's
share of production is at least 200 barrels over that period of time.

b. PPL 189.  This  license  contains  approximately  483,661  acres in which the
Company  owns a 5.051%  working  interest.  The  Barikewa  shut-in  gas field is
located on this license and has gas reserves estimated from a low of 163 billion
cubic feet to a high of 1590 billion cubic feet. Further evaluation will be made
to more  precisely  define the true  reserves of this  field.  Plans to build at
least one LNG  plant  near Port  Moresby  has been  announced  and  Chevron  has
announced  plans to build a gas  pipeline  from Papua New Guinea  into  Northern
Australia.  Either an LNG plant or the proposed pipeline should greatly increase
the value of the gas  reserves at  Barikewa.  The Company  will have to fund its
share of most of the work program of this license which calls for an expenditure
of approximately  $6,250,000 over a period of six years.  Management anticipates
that the Company's cost over the next year will be approximately $56,000.

c. PPL 190. This block of approximately  462,632 acres has many very prospective
surface structures located on it. One of these structures will be drilled during
the first two years of the  license.  The Company has a 3.763%  interest in this
license. During the previous quarter a new seismic program costing approximately
$1,000,000  was  undertaken on the property,  but has not yet been completed and
evaluated.  The work  program  for this  license  calls  for an  expenditure  of
$13,500,000  over the next six years and the Company will be required to pay its
percentage share of these costs. Of the total costs that must be incurred by the
Company on this new License, 2.5% are subject to the carried interest granted in
PPL 156,  therefore,  the Company is  obligated  to pay only 1.263% of the total
costs incurred prior to production from PDL 3 discussed  above.  The Company was
not  required  to nor did it make any  expenditures  in  relation to the seismic
program during the quarter.  The Partners intend drilling an exploratory well on
this license that will test the Wasuma structure.  The well will be started near
the end of  1997,  and the  Company's  anticipated  costs  in the  well  will be
approximately $150,000.

The  Iehi  shut-in  gas  field  lies  on  this  license  but  the  reserves  are
insignificant at this time.

d. PPL No. 165.  Oil Search,  Gedd PNG and the Company have reached an agreement
looking toward the exploration,  and if warranted,  the development of the lands
covered by this license. Under the agreement, the Company will recapture certain
of its costs in acquiring  and  maintaining  the license,  and the three parties
will surrender PPL 165 and apply for a new Prospecting  Permit License  covering
the newly defined lands that will include lands originally within the boundaries
of PPL 165.  The Company has will have a 5% working  interest in the new license
and its costs will be carried up to the drilling of the first  exploration  well
that will be drilled on the license.

The Company is continuing to seek funds to carry forward the programs  which are
currently under way. With oil production only a little over nine months away and
the gas  reserves  in  Papua  New  Guinea  currently  being  studied  for  early
development,  the Company should be able to acquire the necessary funds,  either
through  borrowing  or through sale of equity,  to meet its payment  obligations
under each of the licenses.  However,  the Company does not  presently  have the
liquidity that may be necessary to meet any call for payment of expenses and the
Company has no present  assurance of the  availability  of any of the funds that
may be needed at the time  needed.  The  failure of the Company to meet any cash
call made on it for its share of the expenses  incurred on any concession  could
result it its losing its interest in the concession.

Changes in Financial Condition

During the  quarter  the  Company  has  experienced  a decline in cash and total
assets  through  the first  six  months of the  current  fiscal  year due to the
aquisition of  approximately  $700,000 of the Company's  interest in oil and gas
interests  in Papua,  New Guinea by the  government.  The  Company's  total debt
decreased  proportionately.  The  Company's  primary  liability is a continually
developing  carried  interest  in certain  New Guinea  oil and gas  rights.  The
Company's total  liabilities  other than those created by this carried  interest
are approximately  $95,000.  It is Management's  belief that the Company will be
able to continue to meet its financial  commitments  during the remainder of the
fiscal year.

As noted above, during the first six months of the year, the Company experienced
a decrease in total  assets  because of the  exercise by Papua New Guinea of its
option  to  acquire  an  interest  in the  PDLs.  Due to this  acquisition,  the
Company's debt was reduced by approximately $700,000,  while its interest in the
production from the properties was reduced to approximately  .88%. The Company's
interest in the PDL remains  carried until the first  production from the PDL is
sold.

It is management's  belief expenditures for the rest of the year will be minimal
and will,  in addition to the ordinary  day-to-day  costs of  operations  of the
Company's offices in Albuquerque, consist of the costs of the President's travel
to New Guinea to meet with other owners of interests in which the Company has an
interest,  including  the owners of the PDL and all of the PPLs.  Because of the
effort being  devoted to  completing  pipe-line  and bringing  this  property on
production  Management  cannot  predict  how many such  trips may be  necessary.
Because  Oil Search has agreed to bear the costs of  developing  an  exploration
program for PPL 165,  Management  does not anticipate  any  additional  costs or
expenses  related to that license until the time that a well on the license must
be drilled, which Management believes will not be until 1998, at the earliest.

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

Other than the judgment described in the Company's annual report on form 10-KSB,
incorporated  herein by reference,  Management knows of no legal  proceedings or
unsatisfied judgments which have not been provided for in any court or agency to
which the Company or any of its officers or directors are or may be a party.


ITEM  2. CHANGES IN SECURITIES

        NONE

ITEM  3. DEFAULTS IN SENIOR SECURITIES

        NONE

ITEM  4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDER

        NONE

ITEM  5.  OTHER INFORMATION

        NONE

ITEM  6. EXHIBITS AND REPORTS ON FORM 8-K

        (a)     There are no exhibits required by Item 601 of regulation S-K
        (b)     Reports on Form 8-K. 

                NONE


SIGNATURES

In accordance with section 13 to 15 (d) of the Exchange Act, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.




Robert A. Doak, Jr.                                           August 18, 1997
--------------------------------------------------------  
Robert A. Doak, Jr.   President, Chief Executive Officer
                             and Chief Financial Officer