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 March 31, 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 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 May 12, 1997, was 37,034,270 shares.

                                    PART I

ITEM 1. FINANCIAL STATEMENTS

                         MOUNTAINS WEST EXPLORATION, INC.
                             CONDENSED BALANCE SHEET
                                    UNAUDITED
                                  March 31, 1997

ASSETS
 Current Assets
  Cash ......................................................       $    35,507
  Account receivable/prepaid expenses .......................             7,424
                                                                    ___________
     Total current assets ...................................            42,931

 Furniture and Equipment

  Office furniture and equipment, at cost ...................            17,119
  Less accumulated depreciation .............................            (9,541)
                                                                    ___________
     Net furniture and equipment ............................             7,578

 Oil and gas properties, using the successful
   efforts method (Note 3) ..................................         2,758,907
 Less accumulated depreciation, depletion and
   amortization .............................................           (14,778)
                                                                    ___________
     Net oil and gas properties .............................         2,744,129

 Other assets
   Term deposit account - restricted (Note 3) ...............            53,042
   Note receivable, officer .................................           100,000
   Investment in partnership ................................            15,000
   Mineral Interest .........................................            40,083
                                                                    ___________
     Total other assets .....................................           208,125
                                                                    ___________
     Total assets ...........................................       $ 3,002,763
                                                                    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities
   Advances .................................................       $    24,363
   Accounts payable .........................................            16,002
   Accrued liabilities ......................................             4,331
   Note payable officer .....................................            16,370
   Due to affiliates ........................................         2,693,352
                                                                    ___________
     Total current liabilities ..............................         2,754,418

 Stockholders' equity
   Common Stock, $.001 par value, authorized:
    50,000,00 shares, issued and outstanding
    37,034,270 shares .......................................            37,035
   Capital in excess of par value ...........................         1,608,757
   Accumulated  deficit .....................................        (1,397,447)
                                                                    ___________
     Total Stockholders Equity ..............................           248,345
                                                                    ___________
     Total liabilities and stockholders equity ..............       $ 3,002,763
                                                                    ===========


                         MOUNTAINS WEST EXPLORATION, INC.
                        CONDENSED STATEMENTS OF OPERATIONS
                                    UNAUDITED

                                                 Three Months      Three Months
                                                    Ended             Ended 
                                                March 31, 1997    March 31, 1996

REVENUES
 Oil and Gas Sales ........................      $     10,895       $      3,680
 Lease Income .............................            13,655               -- 
 Interest in sale of
    oil & gas property ....................              --              170,000
                                                 ____________       ____________
                                                       24,550            173,680
EXPENSES
 Production costs .........................             4,205            106,096
 Depreciation and depletion ...............               366              1,276
 Consulting ...............................               264               --
 General and administrative ...............            26,536             41,937
                                                 ____________       ____________
    Total expenses ........................            31,371            149,309

(Loss) Gain from operations ...............            (6,821)            24,371

OTHER INCOME
 Interest income ..........................             1,090              2,063
 Interest expense .........................              (313)              -- 
 Other expense ............................              (230)              -- 
                                                 ____________       ____________
    Total other income (loss) .............               547              2,063
                                                 ____________       ____________
Net earnings ..............................      $     (6,274)      $     26,434
                                                 ============       ============


Earnings (loss) per common share: .........      $       0.00       $       0.00
                                                 ============       ============

Weighted Average Number of Shares
  Outstanding (Note 2) ....................        37,034,270         36,635,720
                                                 ============       ============



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

                                                       Three Months Three Months
                                                          Ended        Ended 
                                                         March 31,    March 31,
                                                           1997        1996 

 Cash flows from operating activities

  Cash received from customers .......................   $  49,295    $ 173,680
  Cash paid to suppliers & employees .................     (52,441)    (146,752)
  Interest received ..................................          90        2,063
  Interest paid ......................................        (313)        --   
                                                         _________    _________
   Net cash (used) provided
      by operating activities ........................      (3,369)      28,991


 Cash flows from investing activities

  Proceeds from advances .............................        --         10,000
  Purchases related to oil and gas venture ...........        --         (8,496)
                                                         _________    _________
   Net cash provided by investing activities .........        --          1,504


 Cash flows from financing activities
  Purchase of Treasury Stock .........................        --         (2,040)
                                                         _________    _________
   Net cash used by financing activities .............        --         (2,040)

                                                         _________    _________
 Net (decrease) increase in cash .....................      (3,369)      28,455
 Cash at beginning of period .........................      38,876      115,329
                                                         _________    _________
 Cash at end of period ...............................   $  35,507    $ 143,784
                                                         =========    =========


Reconciliation of net (loss) earnings to cash flows
 from operating activities:

 Net (loss) earnings .................................   $  (6,274)   $  26,434
  Adjustments
  Depreciation, depletion and
   amortization ......................................         366        1,276
 (Increase) decrease in prepaid
   expenses and accounts receivable ..................      (1,000)         875
  Increase in advances, accounts payable
   and accrued liabilities ...........................       3,539          406
                                                         _________    _________
    Net cash (used) provided by
      operating activities ...........................      (3,369)      28,991
                                                         =========    =========

Noncash Investing or Financing Activities:

MWEX was  loaned  $116,623  and  $315,043  in the first  quarter  1997 and 1996,
respectively,  which was  invested  in its oil and gas  property  in Papua,  New
Guinea.


                         MOUNTAINS WEST EXPLORATION, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  March 31, 1997


I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

The balance sheet at March 31, 1997 and  statements of operations and statements
of cash  flows  for the three  months  ended  March 31,  1997 and 1996 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 three months ended March
31, 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 March 31, 1997 are as follows:

    Proved developed properties                       $    14,779
    Proved shut - in property                           2,744,129
    Accumulated depreciation, depletion,
      amortization and valuation allowances               (14,779)
                                                      ___________
    Net capitalized costs                             $ 2,744,129
                                                      ===========

4.   CONTINGENCIES

MWEX has $53,042 of cash in a term deposit  account that is  restricted  for the
purpose of guaranteeing a performance  bond related to PPL#165.  The performance
bond was  acquired in 1995 to guarantee  that  exploratory  procedures  would be
performed  on the  property.  The  ownership of this cash remains with MWEX even
though PPL#165 was sold to Gedd, Inc.

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

Plan of Operations

During the  quarter  ended  March 31,  1997,  oil and gas sales were  $10,895 as
compared to $3,680 for the same period in the prior year.  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.

As previously reported,  certain transactions  involving the Company's Papua New
Guinea  operations  occurred that will have a material  effect on the Company in
future quarters and years. Those are:
        
a. The three oil wells in which the Company has an interest  have been  included
in  Petroleum  Development  License  (PDL) has been  unitized  with  Chevron Oil
Company's existing PDL to the north. The two new PDLs will be developed into the
Southeast  Gobe and Gobe Main oil and gas Fields.  Development  of this field is
well under way with an anticipated first production scheduled for early 1998. As
a result of the  government's  exercising its option to acquire a 22.5% interest
in the unitized PDLs,  the Company's  interest in the unitized PDL will be a net
0.88%.  Management  anticipates  that  this  interest  will  result  in  initial
production to the  Company's  interest of  approximately  200 barrels of oil per
day. The Company's expenses in this unit are to be carried until production from
the wells located in the Southeast Gobe field is first sold.

b. The costs of the  gathering  system that will be required to get 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  Company's  carried cost in the project.  Management  estimates
that the Company's total carried cost will be approximately  $3,000,000,  which,
at the  production  rate of 200 barrels per day to the  Company's  interest will
take approximately 36 months to pay out after production begins.

c. During the quarter ended March 31, 1997, the government notified the partners
of its  election  to  exercise  its  option  to  acquire  22.5%  of  the  PDL's.
Finalization  of the  acquisition  occurred on April 29, 1997.  As a part of the
acquisition  the government paid each partner 22.5% of its costs in the project.
At the date of this  Report,  the  Company  is not able to state what the effect
this  transaction  will have on its  financial  statements  other that its anti-
cipated  reduction of debt and carrying  cost of the assets to the extent of the
payment.

d. The effect of the exercise of the government's option has been a reduction in
all of the  partners'  interest  in the  Southeast  Gobe  field.  The  Company's
interest in the Southeast  Gobe Field was reduced from 2.5% to 1.93% which is an
interest of approximately 0.88 of the unitized field.

e. The northern part of PPL 56 is now PPL 190-Fold  Belt License.  This block of
approximately 462,632 acres (17,409 net to the Company's interest) has many very
prospective  surface  structures  located on it. One of these structures will be
drilled during the first two years of the license.  A reallocation  of interests
has increased the Company's interest in this license from 2.5% to 3.763%. During
the first few months of the new License  existence the Company will have to fund
its share of a new seismic  program which it is estimated will be  approximately
$37,630.  The Iehi  shut-in gas field lies on this  license but the reserves are
insignificant at this time. The Company will have to fund its percentage of most
of the work  program  of the  license  which  calls for a total  expenditure  of
$13,500,000 over the next six years. 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 56, therefore, the Company is obligated to pay only 1.263% of the
total costs incurred prior to production  from any of the properties  originally
encompassed by PPL 56. Management  estimates that the Company's cost in this new
concession over the next year will be approximately $200,000.

f.  The  southern  part  of  PPL  56 has  been  reissued  as  Foreland  PPL  189
Application, which contains approximately 483,661 acres (24,429 net acres to the
Company's  interest.) As a result of a reallocation of interests,  the Company's
interest in this License has been  increased  from 2.5% to 5.051%.  This license
has the  Barikewa  shut-in  gas field  located  on it,  which  has gas  reserves
estimated  from 163 billion  cubic feet to as high as 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  which, it plans to have in operation within
four years. 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 most of
its 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
to be paid by the Company over the next year.

g. Petroleum  Prospecting  License No. 165, owned by the Company and Gedd PNG is
being evaluated at this time. An aeromagnetic  survey has been completed and the
Company is awaiting the results of the survey  which will  determine if there is
one or more  drillable  structures  on the  license.  Gedd is  funding  the work
program of this license.

With the increased  activity and development in Papua New Guinea, the Company is
now seeking funds to carry forward the programs  which are currently  under way.
With oil production only a little over a year away and the gas reserves in Papua
New Guinea currently being studied for early  development,  the Company believes
that it will 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

The Company has  experienced  a decline in cash but has  increased  total assets
through the first three months of the current fiscal year. The Company's primary
liability is a continually developing carried interest in certain New Guinea oil
and gas rights.  Total  liabilities aside from this obligation are approximately
$60,000.  It is Management's belief that the Company will be able to continue to
meet its financial commitments during the coming 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.  States  whether  any reports on Form 8-K have
        been filed  during the quarter  for which this report is filed,  listing
        the items reported,  any financial statement filed, and the dates of any
        such reports.

        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.                                             May 12, 1997
________________________________________________________       
Robert A. Doak, Jr.   President, Chief Executive Officer
                       and Chief Financial Officer