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, 1998

                                       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 as specified 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)

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 receding 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 August 14, 1998, was 38,019,270 shares.



PART  I
                          ITEM 1. FINANCIAL STATEMENTS

                        MOUNTAINS WEST EXPLORATION, INC.
                             CONDENSED BALANCE SHEET
                                    UNAUDITED
                                  June 30, 1998

 ASSETS
  Current Assets
    Cash ....................................................       $     2,957
    Due from officer ........................................               899
    Accrued interest receivable .............................            12,024
                                                                    -----------
  Total current assets ......................................            15,880
                                                                    -----------

  Furniture and Equipment
     Office furniture and equipment, at cost ................            14,470
       Less accumulated depreciation ........................           (11,173)
                                                                    -----------
      Net furniture and equipment ...........................             3,297
                                                                    -----------

  Oil and gas properties, using the successful
  efforts method ............................................         4,366,645
    Less accumulated depreciation,
      depletion and amortization ............................           (14,779)
                                                                    -----------
   Net oil and gas properties ...............................         4,351,866
                                                                    -----------

  Term deposit account - restricted .........................            53,140
  Note receivable, officer ..................................           100,000
  Investment in partnership .................................            15,000
  Mineral interest ..........................................            50,683
  Total other assets ........................................           218,823
                                                                    -----------
  Total assets ..............................................       $ 4,589,866
                                                                    -----------

 LIABILITIES AND STOCKHOLDERS' EQUITY
  Current Liabilities
    Accounts payable ........................................            16,002
    Accrued payroll and related taxes .......................            29,876
    Due to affiliates .......................................         4,136,981
    Note payable ............................................            34,000
                                                                    -----------
  Total Current Liabilities .................................         4,216,859
                                                                    -----------

 Shareholder's Equity
  Common Stock, $.001 par value, authorized:
   50,000,00 shares, issued 38,103,770 shares;
   outstanding 38,019,270 shares ............................            38,020
  Capital in excess of par value ............................         1,617,757
  Accumulated  deficit ......................................        (1,282,770)
                                                                    -----------
  Total Stockholders Equity .................................           373,007
                                                                    -----------
Total Liabilities and Stockholders Equity ...................         4,589,866
                                                                    ===========



                        MOUNTAINS WEST EXPLORATION, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                                    UNAUDITED

                                                 Three Months      Three Months
                                                     Ended             Ended
                                                 June 30, 1998     June 30, 1997
                                                  -----------       -----------
REVENUES
 Oil and Gas Sales .........................           94,996            14,321
 Other operating income ....................             --              33,898
 Interest in sale of
    oil & gas property .....................             --                --
                                                  -----------       -----------
                                                       94,996            48,219
                                                  -----------       -----------
 EXPENSES
 Production costs ..........................            1,138             1,805
 Exploration costs .........................             --                --
 Depreciation and depletion ................              350             1,000
 Consulting ................................            6,517             1,150
 General and administrative ................           35,276            59,337
                                                  -----------       -----------
 Total expenses ............................           43,281            63,292
                                                  -----------       -----------

Loss from operations .......................           51,715           (15,073)

Other income
 Interest income ...........................            1,115            38,364
 Interest expense ..........................             (245)           (1,563)
 Other .....................................              (55)           (1,074)
                                                  -----------       -----------
Total other income (loss) ..................              815            35,727
                                                  -----------       -----------

Net earnings ...............................           52,530            20,654
                                                  ===========       ===========

Earnings (loss) per common share: ..........            0.001             0.001
                                                  ===========       ===========

Weighted Average Number of Shares
  Outstanding (Note 2) .....................       38,019,270        37,026,620
                                                  ===========       ===========


                        MOUNTAINS WEST EXPLORATION, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                                    UNAUDITED

                                                 Six Months         Six Months
                                                    Ended              Ended
                                                June 30, 1998      June 30, 1997
                                                ------------       ------------

REVENUES
 Oil and Gas Sales .......................      $     99,932       $     25,216
 Other operating income ..................              --               33,897
 Lease Income ............................              --               13,655
                                                ------------       ------------
                                                      99,932             72,768
                                                ------------       ------------
 EXPENSES
 Production costs ........................             2,182              6,010
 Exploration costs .......................              --                 --
 Depreciation and depletion ..............               737              1,366
 Consulting ..............................             7,231              1,414
 General and administrative ..............            68,018             85,872
                                                ------------       ------------
Total expenses ...........................            78,168             94,662
                                                ------------       ------------

Income (Loss) from operations ............            21,764            (21,894)

Other income
 Interest income .........................             2,415             39,454
 Interest expense ........................            (2,008)            (1,876)
 Other ...................................               (90)            (1,304)
                                                ------------       ------------
Total other income (loss) ................               317             36,274
                                                ------------       ------------

Net earnings .............................            22,081             14,380
                                                ============       ============

Earnings (loss) per common share: ........              0.00               0.00
                                                ============       ============
Weighted Average Number of Shares
    Outstanding (Note 2)
                                                  38,019,270         37,033,887
                                                ============       ============



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

                                                       Six Months     Six Months
                                                         Ended          Ended
                                                        June 30,       June 30,
                                                         1998           1997
                                                       ---------      ---------
Cash Flows from Operating Activities
 Cash received from customers ....................     $ 278,234      $  97,514
 Cash paid to suppliers & employees ..............      (130,281)      (112,960)
 Interest received ...............................         1,415         38,454
 Interest paid ...................................        (2,009)        (1,876)
                                                       ---------      ---------
Net cash provided by operating activities ........       147,359         21,132
                                                       ---------      ---------
Cash Flows from Investing Activities
 Acquisition of office equipment .................        (2,000)          --
 Acquisition of oil, gas & mineral interests .....       (43,554)          --
                                                       ---------      ---------
Net cash used by investing activities ............       (45,554)          --
                                                       ---------      ---------
Cash Flows from Financing Activities
 Net draw on line of credit ......................        (1,000)        34,500
 Purchase of term deposits .......................           (98)          --
 Repayments to affiliates ........................       (89,062)          --
 Repayment of officer loans ......................       (11,431)        (7,092)
 Purchase of Treasury Stock ......................          --             (776)
                                                       ---------      ---------
Net cash used by financing activities ............      (101,591)        26,633
                                                       ---------      ---------

Net increase (decrease) in cash ..................           214        (11,674)
Cash at beginning of period ......................         2,743         38,876
                                                       ---------      ---------
Cash at end of period ............................     $   2,957      $  27,202
                                                       =========      =========
Reconciliation of Net income (loss)
   to Cash Provided by Operating Activities:
 Net earnings (Loss) .............................     $  22,082      $  14,380
 Adjustments
  Depreciation, depletion and amortization .......           681          1,366
  Decrease (increase) in prepaid expenses
     and accounts receivable .....................       175,976         (3,756)
  Increase (decrease) in advances, accounts
    payable and accrued liabilities ..............       (51,380)         9,142
                                                       ---------      ---------
 Net Cash provided by operating activities .......       147,359         21,132
                                                       =========      =========
Noncash Investing or Financing Activities:
Note issued in exchange for investment in
   oil and gas property in Papua,
   New Guinea: ...................................     $ 336,172      $ 482,284


                        MOUNTAINS WEST EXPLORATION, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  June 30, 1998


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

The balance sheet at June 30, 1998 and  statements of operations  and statements
of cash flows for the six and three month  periods  ended June 30, 1998 and 1997
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, 1997. The results of operations for the six and three
month  periods ended June 30, 1998 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, 1998 are as follows:

                  Proved developed properties .   $    14,779
                  Proved property .............     4,351,866
                  Accumulated depreciation,
                    depletion, amortization and
                    valuation allowances ......       (14,779)
                                                  -----------
                  Net capitalized costs .......   $ 4,351,866
                                                  ===========


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

Plan of Operations

During the three  months  ended June 30,  1998,  oil and gas sales were  $94,996
compared to $14,321  for the same  period in the prior year.  The Company had no
other operating  income during the quarter.  The increase in sales is due to the
commencement  of production  on oil and gas interests  that the Company holds in
Papua,  New Guinea (See "Papua New Guinea"  below).  Other  interest held by the
Company in the Denver  Basin of Colorado  have  almost  reached  their  economic
limit.  A  redetermination  of the interests in the coal bed methane unit in Las
Animas  County,  Colorado where the company has an interest in two gas wells has
caused a decline in monthly revenues to the Company.  Although the monthly sales
revenue has decreased,  the production lives of these wells will be extended and
should be beneficial  to the Company over the life of the wells (See  "Colorado"
below).

The long  awaited  production  from the SE Gobe oil  field in Papua  New  guinea
commenced in April, 1998. All of the Company's revenue from that license will be
devoted to repaying  the  Company's  debts to its  partners for its share of the
costs of establishing the production,  which at June 30, 1998 was  approximately
$4,137,000.  The debt  reduction  caused by this revenue  stream should  greatly
increase  the   stockholders'   equity  position  of  the  Company.   Management
anticipates  that the  production  from the  license  will  increase as will the
Company's  share of the  revenue  from the  production  (See  "Papua New Guinea"
below).

At the time production commenced from the property, the Company became obligated
to pay its share of all  capital  development  costs  incurred on any license in
which it  holds  an  interest.  The  Company  owns  interests  in the  following
properties:


Colorado

The Company owns over 2400 acres of minerals in Las Animas county, Colorado. The
two coal bed methane gas wells discussed above are located on 240 acres of these
minerals.  The Company is currently considering developing these minerals itself
as funds become available.

Papua New Guinea

a. The three oil wells in which the Company has an interest  have been  included
in Petroleum  Development  License  (PDL) 3. As stated  earlier  these oil wells
commenced  production  on the 17th of April,  1998.  The three  wells  initially
produced  about 12,000  barrels per day and generated  revenue to the Company of
approximately  $89,000  between April 17, 1998 and June 30, 1998.  Production is
increasing  daily and plans are to have the SE Gobe oil field  producing  25,000
barrels per day by mid July 1998.  These wells and certain other lands  included
within PDL#3 have been unitized  with Chevron Oil  Company's  existing PDL #4 to
the north.  These two partial PDLs are being developed as the Southeast Gobe Oil
Field. 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,  is a net
0.8718% which will result in an anticipated  initial production to the Company's
interest of approximately 220 barrels of oil per day. The Company's  expenses in
this unit were  carried  until the  first  production  from PDL 3 was sold.  The
operator of the field,  Chevron,  was able to put the Gobe Main field and the SE
Gobe  field  on  production  approximately  two  months  ahead of  schedule  and
approximately  $50,000,000  under budget.  The costs of getting the oil from the
unit to sale has been  estimated  at more than  $175,000,000,  none of which was
payable by the Company until after the first sale of  production.  At 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.  Management estimates at the production rate
of 200  barrels per day at a price of $20 per barrel to the  Company's  interest
will take  approximately  thirty six months to pay out after production  begins.
Because  of the  recent  depressed  world  price for oil the  payout may well be
substantially longer than anticipated.


b. PPL 189 contains  approximately  480,000  acres  (24,245 net to the Company's
interest).  As a result of reallocation of interests,  the Company's interest in
this License is 5.051%.  This license has the Barikiwa shut-in gas field located
on it. The Barikiwa  field 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 in Papua,  New Guinea  have 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  Barikiwa.  The Company  will have to fund its
5.051% share of the work program of this license which calls for an  expenditure
of  approximately  $6,250,000  over a period of six  years,  with  approximately
$56,000 of that amount to be paid during the current year. The operator, Santos,
has  recently  completed a seismic  program  over the  Barikiwa  Gas field.  The
seismic records are now being processed and the Company is awaiting the results.
As production  has commenced on the SE Gobe field,  the Company will now have to
pay its full share in future development of the license.

c. PPL 190 contains  approximately  460,000  acres  (17,309 net to the Company's
interest) has many very prospective  surface structures located on it. A seismic
line was run over the Masaka structure during 1997 with positive results.  It is
anticipated that the Masaka structures will be drilled during 1998,  however,  a
landowner  dispute has slowed progress and a definite date for the  commencement
of drilling is not known at this time. A reallocation of interests has increased
the Company's interest in this license to 3.763%. As production has commenced on
the SE Gobe  field,  the company  must fund its share of a new  seismic  program
which is estimated to cost  approximately  $1,000,000.  The manager of the joint
venture will issue cash calls to each partner, who will each then pay the amount
of the stated cash call. The Iehi shut in gas field lies on this license but the
reserves are  insignificant  at this time. The Company will have to fund most of
the work program of the license which calls for an  expenditure  of  $13,500,000
over the next five years.  Management  estimates that the Company's cost in this
new concession over the next year will be approximately $200,000.

d. PPL 203  (previously  PPL 165) - Oil Search Ltd, is the operator  with an 85%
ownership interest in the license.  Gedd, Inc. owns 10% while the Company owns a
5%  carried  interest  until a well is  commenced  on the  property.  A new work
program of seismic and surface mapping is to commence during the current year. A
part of the reorganization of the license, the Company received from Oil Search,
Ltd.(the  operator),  a payment of $177,500 in early April, 1998 as a refund for
previous  work done on the  license.  Under the terms of the  contract  with the
Operator,  the Company has a carried  interest in the two year work  program and
will not have to pay any of the costs  until  commencement  of the first well of
production at which time the Company will pay its 5% share.

As stated,  the Company faces cash calls on each of the licenses in which it has
interests, while the bulk of its revenue will be devoted to paying debt incurred
over the past two decades while  production was being  established on PDL#3. The
Company  must find the funds to meet the cash calls  through  the sale of stock,
borrowings  or sale of interests in its  properties.  No specific  source of the
required  funds  is known  at the  time of this  report.  As of the date of this
report the  Company  was in default in regard to  approximately  $78,000 of cash
calls related to these interests.

The Company does not presently  have the liquidity that is necessary to meet the
aforementioned  calls for  payment of  expenses  and the  Company has no present
assurance of the availability of any of the funds that may be needed to cure its
current default or meet future cash requirements.  The failure of the Company to
cure the  default  and meet any future 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  continued  to  experience  a decline in cash
position due to the ongoing operating expenses of the Company. On April 1, 1998,
the Company received $177,500 from Oil Search Pty, Ltd. (See PPL 203 above). The
Company's  total debt decreased by $42,464 during the quarter as a result of the
influx of working capital provided by the $177,500 Oil Search cash receipt.  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  $227,256.  It is
Management's belief that the Company will be able to secure financing sufficient
to cure its default on the cash calls  discussed above and will continue to meet
its financial commitments during the remainder of the fiscal year.


PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

 Other than the judgment described in the Company's annual report on form 10KSB,
 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 14, 1998
--------------------------------------------------------
Robert A. Doak, Jr.   President, Chief Executive Officer
                           and Chief Financial Officer