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: September 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 November 10, 1997, was 38,019,270 shares.

PART I

ITEM 1. FINANCIAL STATEMENTS

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

ASSETS

Current Assets
  Cash .......................................................            4,954
  Account receivable/prepaid expenses ........................           10,400
                                                                     ----------
     Total current assets ....................................           15,354

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

Oil and gas properties, using the successful
  efforts method (Note 3) ....................................        2,849,188
Less accumulated depreciation, depletion
  and amortization ...........................................          (14,779)
                                                                     ----------
Net oil and gas properties ...................................        2,834,409

Other assets
  Term deposit account - restricted ..........................           53,042
  Note receivable, officer ...................................          100,000
  Mineral Interest ...........................................           40,083
  Other Investments ..........................................           15,000
                                                                     ----------
    Total other assets .......................................          208,125
                                                                     ----------

                                                                      3,064,467
                                                                     ==========
LIABILITIES AND SHAREHOLDERS EQUITY


Current Liabilities
  Advances ...................................................           24,363
  Accounts Payable ...........................................           16,002
  Accrued liabilities ........................................           19,832
  Note Payable Officer .......................................           14,150
  Line of credit .............................................           35,000
  Due to affiliates ..........................................        2,706,851
                                                                     ----------
    Total Current Liabilities ................................        2,816,198

Shareholder's Equity
  Common Stock, $.001 par value, authorized:
    50,000,00 shares, issued 38,019,270 shares;
    outstanding 38,019,270 shares ............................           38,019
  Capital in excess of par value .............................        1,617,027
  Accumulated  deficit .......................................       (1,406,777)
                                                                     ----------
    Total Stockholders Equity ................................          248,269
                                                                     ----------

                                                                      3,064,467
                                                                     ==========

                 See accompanying notes to financial statements.



                       MOUNTAINS WEST EXPLORATION, INC.
                      CONDENSED STATEMENTS OF OPERATIONS
                                     UNAUDITED

                                                  Three Months    Three Months
                                                     Ended           Ended
                                                  September 30,   September 30,
                                                      1997            1996
                                                  ------------    ------------
REVENUES
 Oil and Gas Sales ............................   $      6,268    $      7,394
                                                  ------------    ------------
   Total income ...............................          6,268           7,394

EXPENSES
 Production costs .............................          1,038           1,351
 Depreciation and depletion ...................           --             1,276
 Consulting ...................................           --               438
 General and administrative ...................         32,618          27,055
                                                  ------------    ------------
   Total expenses .............................         33,656          30,120
                                                  ------------    ------------

   Loss from operations .......................        (27,388)        (22,726)

Other income
 Interest income ..............................          1,008           1,463
 Interest expense .............................         (2,053)           --
 Other ........................................         (1,551)           --   
                                                  ------------    ------------
   Total other income (loss) ..................         (2,596)          1,463
                                                  ------------    ------------

   Net earnings ...............................   $    (29,984)   $    (21,263)
                                                  ============    ============

Loss per common share .........................   $     (0.001)   $     (0.001)
                                                  ============    ============
Weighted Average Number of Shares
  Outstanding (Note 2) ........................     37,475,788      36,566,220
                                                  ============    ============

                 See accompanying notes to financial statements



                        MOUNTAINS WEST EXPLORATION, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                                    UNAUDITED

                                                Nine Months        Nine Months 
                                                   Ended              Ended 
                                                September 30,      September 30,
                                                    1997               1996
                                                ------------       ------------
 
REVENUES
 Oil and Gas Sales .......................      $     31,484       $     16,808
 Lease Income ............................            13,655               --   
 Other operating income ..................            33,897               --   
 Interest in sale of
   oil & gas property ....................              --              170,000
                                                ------------       ------------
                                                      79,036            186,808
EXPENSES
 Production costs ........................             7,048            108,647
 Depreciation and depletion ..............             1,366              3,828
 Consulting ..............................             1,414              6,438
 General and administrative ..............           118,490            121,394
                                                ------------       ------------
   Total expenses ........................           128,318            240,307
                                                ------------       ------------
   Loss from operations ..................           (49,282)           (53,499)

Other income
 Interest income .........................            40,462              5,412
 Interest expense ........................            (3,929)              --
 Other ...................................            (2,855)              --   
                                                ------------       ------------
   Total other income ....................            33,678              5,412
                                                ------------       ------------

   Net Loss ..............................      $    (15,604)      $    (48,087)
                                                ============       ============

Loss per common share ....................      $     (0.001)      $     (0.001)
                                                ============       ============
Weighted Average Number of Shares
  Outstanding (Note 2) ...................        37,182,807         36,589,387
                                                ============       ============

                 See accompanying notes to financial statements.



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

                                                   Nine Months     Nine Months
                                                      Ended           Ended 
                                                   September 30,   September 30,
                                                      1997            1996
                                                   ------------    ------------

Cash flows from operating activities
 Cash received from customers .................    $    103,782    $    207,312
 Cash paid to suppliers & employees ...........        (138,490)       (238,827)
 Interest received ............................          39,462           5,425
 Interest paid ................................          (3,929)            (13)
                                                   ------------    ------------
   Net cash provided (used) by
     operating activities .....................             825         (26,103)
 
Cash flows from investing activities
 Acquisition of fixed assets ..................            --            (1,520)
 Acquisition of oil, gas
   & mineral interests ........................         (76,783)        (14,080)
                                                   ------------    ------------

   Net cash used by investing activities ......         (76,783)        (15,600)

Cash  Flows from Financing Activities
 Net draw on line of credit ...................          35,000            --
 Repayment of officer loan ....................          (2,218)           --
 Sale of stock ................................          10,000            --
 Retirement of stock ..........................            (746)         (2,040)
                                                   ------------    ------------
   Net cash provided (used) by
      financing activities ....................          42,036          (2,040)
                                                   ------------    ------------

Net decrease in cash ..........................         (33,922)        (43,743)
Cash at beginning of period ...................          38,876         115,329
                                                   ------------    ------------

Cash at end of period .........................    $      4,954    $     71,586
                                                   ============    ============

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

Net loss ......................................     $    (15,604)  $    (48,087)
 Adjustments
  Depreciation, depletion and
   amortization ...............................            1,366          3,828
  Increase in prepaid expenses
   and accounts receivable ....................           (3,977)        (3,238)
  Increase in advances, accounts payable
   and accrued liabilities ....................           19,040         21,394
                                                    ------------   ------------
Net Cash provided (used) 
 by operating activities ......................     $        825   $    (26,103)
                                                    ============   ============

Noncash Investing or Financing Activities:

The  Company was loaned  $837,247 & $468,555  for the nine month  periods  ended
September  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
                               September 30, 1997

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

The balance sheet at September 30, 1997, statements of operations and statements
of cash  flows  for the  nine  months  ended  September  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 nine months ended September
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 September 30, 1997 are as follows:

   Proved developed properties (CO) ........                 $    14,779

   Proved shut - in property (PNG) .........                   2,849,188

   Accumulated depreciation, depletion,
    amortization and valuation allowances ..                     (14,779)
                                                             -----------
   Net capitalized costs ...................                   2,849,188
                                                             ===========


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

Plan of Operations

During the quarter  ended  September  30,  1997,  oil and gas sales were $6,268,
compared  to 7,394 for the same  period in the prior  year.  The  Company had no
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.  Management  anticipates  that production from the Southeast Gobe Oil
and Gas Field will begin during March or April of 1998.

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.

The lessee of these  properties is negotiating  with the offset owner to start a
drilling program on these properties during 1998.

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. Chevron, the operator, has announced its intention to
commence drilling three additional wells on the unit by the end of 1997 or early
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  220 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 220 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  Barikiwa  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 valuation will be made
to more precisely  define the true reserves of this field. A seismic  program is
to commence on the Barikiwa  anticline  before the end of 1997.  Results of this
program should help evaluate the potential reserves of the structure.  Mountains
West Exploration, Inc. Cost of the program will be approximately $50,000.

Plans to build at least one LNG plant,  probably on the north coast of Papua New
Guinea,  has been  announced  and  Chevron  has  announced  plans to build a gas
pipeline from the Papua New Guinea into Northern  Australia.  Final contracts on
this program are  scheduled to be finalized in mid 1998.  Either an LNG plant or
the proposed  pipeline should greatly  increase the value of the gas reserves at
Baroque.  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  has  reviewed  the costs of this  project  and
anticipates  that the  Company's  cost over the next year will be  approximately
$70,000.

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 Partners
intend  drilling an  exploratory  well on this license that will test the Wasuma
structure.  Management now  anticipates  that the test well will be started near
during the first quarter of 1998,  and that the Company's  anticipated  costs in
the well will be approximately $160,000.

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
have  surrendered PPL 165 and have applied for a new Prospecting  Permit License
covering the newly  defined  lands which  include  lands  originally  within the
boundaries of PPL 165. The Company has 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  parties  are now  waiting on final
approval by the government for the issuance of a new 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 six months away,
additional  wells  being  drilled  on the  Southeast  Gobe Oil Field 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

The Company has  experienced  a $22,248  decline in cash  through the first nine
months of the current fiscal year due to the ongoing  operating  expenses of the
Company.  The Company's  total debt increased  $370,232  during the quarter as a
result  of  additional  expenses  of  exploration  being  paid by the  Company's
partners.  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
$109,347. 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.

During the first nine 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-B
        (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.                                            November 10, 1997
--------------------------------------------------------  
Robert A. Doak, Jr.   President, Chief Executive Officer
                             and Chief Financial Officer