FORM 10-Q/A
                              AMENDMENT NO. 1

                    SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D. C.  20549

      [ 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.

                        Commission File No. 0-9976




                            ARCH PETROLEUM INC.
          (Exact name of registrant as specified in its charter)

                Delaware                             83-0248900
     (State or other jurisdiction of              (I.R.S. Employer
     incorporation or organization)             Identification No.)

   777 Taylor Street, Suite II, Fort Worth, Texas       76102
   (Address of principal executive offices)           (Zip Code)

    Registrant's telephone number, including area code  (817) 332-9209
   _____________________________________________________________________
      (Former name, former address and former fiscal year, if changed
                            since last report.)

   Indicate by  check mark  whether the  registrant  (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  registrant  was  required  to  file  such
   reports), and (2) has  been subject to  such filing requirements  for
   the past 90 days.

                 Yes   X                              No
                     -----                               -----

   Indicate the number  of shares outstanding  of each  of the  issuer's
   classes of common stock, as of the latest practicable date.


                  Class                  Outstanding at October 30, 1997
        Common Stock, $.01 Par Value                17,321,804
<PAGE>
                          
                            ARCH PETROLEUM INC.
                                   INDEX

                                                                  Page
   Part I.      FINANCIAL INFORMATION                            Number

   Item 1.

   CONSOLIDATED BALANCE SHEETS -
          September 30, 1997 and December 31, 1996 ..............   4

   CONSOLIDATED STATEMENTS OF OPERATIONS -
          Three months and nine months ended
          September 30, 1997 and 1996............................   6

   CONSOLIDATED STATEMENTS OF CASH FLOWS -
          Nine months ended September 30, 1997 and 1996 .........   7

   CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS..........   8


   Item 2.

   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS .............................   9

   Part II.     OTHER INFORMATION

   Item 1.
          Legal Proceedings .....................................  N/A

   Item 2.
          Changes in Securities .................................  N/A

   Item 3.
          Defaults upon Senior Securities .......................  N/A

   Item 4.
          Submission of Matters to a Vote of Security Holders ...  N/A

   Item 5.
          Other Information .....................................  N/A

   Item 6.
          Exhibits and Reports on Form 8-K
            a.  Exhibits ........................................ None
            b.  Reports on Form 8-K .............................  11

   SIGNATURES  ..................................................  12
<PAGE>
<TABLE>
                            ARCH PETROLEUM INC.
                        CONSOLIDATED BALANCE SHEETS


                                              (Unaudited)    (Audited)
   ASSETS                                    September 30,  December 31,
                                                  1997         1996
                                              -----------   ------------
   <S>                                        <C>           <C>
   Current Assets:
     Cash and cash equivalents                $ 1,270,000   $  3,192,000
     Accounts receivable - trade                3,534,000     15,948,000
     Accounts receivable - related parties           -           275,000
     Prepaid expenses and other                   919,000        968,000
                                              -----------   ------------
        Total current assets                    5,723,000     20,383,000

   Property and Equipment, at cost:
     Oil and gas properties accounted
      for by the successful efforts method     91,793,000     81,620,000
     Natural gas pipelines                      5,603,000     12,361,000
     Furniture, fixtures and other equipment    1,018,000      1,038,000
                                              -----------   ------------
                                               98,414,000     95,019,000
     Less accumulated depletion and
      depreciation                             23,612,000     19,617,000  
                                              -----------   ------------
         Net property and equipment            74,802,000     75,402,000

   Accounts receivable - related parties        1,978,000      1,551,000
   Notes receivable - related parties           1,845,000      1,759,000
   Deferred income taxes                        1,144,000        705,000
   Other                                          968,000      1,239,000
                                              -----------   ------------
                                              $86,460,000   $101,039,000
                                              ===========   ============

      The accompanying condensed notes are an integral part of these
                    consolidated financial statements.

</TABLE>
<PAGE>
<TABLE>
                            ARCH PETROLEUM INC.
                        CONSOLIDATED BALANCE SHEETS



                                              (Unaudited)     (Audited)
   LIABILITIES AND SHAREHOLDERS' EQUITY      September 30,  December 31,
                                                  1997         1996
                                              -----------   ------------
   <S>                                        <C>           <C>
   Current Liabilities:
    Accounts payable                          $ 4,616,000   $ 16,253,000
    Accounts payable - related parties               -         1,911,000
    Current maturities of long-term debt             -         1,119,000
    Preferred stock dividends payable             711,000        311,000
                                              -----------   ------------
     Total current liabilities                  5,327,000     19,594,000

   Long-term debt, less current maturities     27,200,000     30,134,000
   Deferred revenue                            11,231,000     12,528,000
   Convertible subordinated notes               5,000,000      5,000,000
   Deferred federal income taxes                5,679,000      3,450,000
   Other liabilities                              259,000        186,000
   Minority interest in consolidated
       subsidiaries                                  -         1,082,000

   Exchangeable convertible preferred stock,
    $.01 par value, 727,273 shares
    authorized, issued and outstanding         20,000,000     20,000,000

   Shareholders' Equity:

    Preferred stock, $.01 par value,
     1,000,000 shares authorized, 727,273
     issued as exchangeable
     convertible preferred stock                     -              -

    Common stock, $.01 par value, 50,000,000
     shares authorized, 17,321,804 and
     17,271,804 shares issued and
     outstanding, respectively                    173,000        172,000

    Additional paid-in capital                  6,137,000      6,012,000

    Employee notes for stock purchases         (1,070,000)    (1,022,000)

    Treasury stock, 100,000 shares               (206,000)      (206,000)

    Cumulative translation adjustment             (17,000)        37,000

    Retained earnings                           6,747,000      4,072,000
                                              -----------   ------------
                                               11,764,000      9,065,000
                                              -----------   ------------
                                              $86,460,000   $101,039,000
                                              ===========   ============

      The accompanying condensed notes are an integral part of these
                    consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
                            ARCH PETROLEUM INC.
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                                (Unaudited)
                                      
                               Three Months Ended         Nine Months Ended
                                  September 30,              September 30,
                            ------------------------  ------------------------
                                1997        1996          1997         1996
                            -----------  -----------  -----------  -----------
<S>                         <C>          <C>          <C>          <C>
Revenues:
 Oil and gas sales          $ 5,599,000  $ 5,964,000  $17,063,000  $16,806,000
 Pipeline sales               1,451,000   16,941,000   49,598,000   47,607,000
 Gain on sale of assets       5,043,000         -       5,043,000    1,037,000
 Interest and other             268,000      166,000      651,000      642,000
                            -----------  -----------  -----------  -----------
                             12,361,000   23,071,000   72,355,000   66,092,000
Costs and Expenses:
 Lease operations             2,253,000    1,906,000    6,242,000    5,951,000
 Natural gas purchases and
  pipeline operations         1,335,000   16,160,000   47,542,000   45,183,000
 Exploration                    649,000      312,000      851,000      490,000
 Depletion, depreciation
  and amortization            1,843,000    1,829,000    5,278,000    5,094,000
 General and administrative   1,158,000    1,166,000    3,825,000    3,830,000
 Interest                       710,000      717,000    2,293,000    2,077,000
 Foreign currency
  transaction (gain) loss        45,000      (19,000)      87,000      (47,000)
 Minority interest in net
  income of consolidated
  subsidiaries                     -         149,000      448,000      560,000
                            -----------  -----------  -----------  -----------
                              7,993,000   22,220,000   66,566,000   63,138,000
                            -----------  -----------  -----------  -----------
Net income before income                   
 taxes and dividends          4,368,000      851,000    5,789,000    2,954,000

Deferred federal income
 tax expense                  1,449,000      256,000    1,914,000      886,000
                            -----------  -----------  -----------  -----------
Net income before dividends   2,919,000      595,000    3,875,000    2,068,000

Dividends on preferred stock    400,000      400,000    1,200,000    1,200,000
                            -----------  -----------  -----------  -----------
Net income                  $ 2,519,000  $   195,000  $ 2,675,000  $   868,000
                            ===========  ===========  ===========  ===========

Net income per common share $      0.14  $      0.01  $      0.15  $      0.05
                            ===========  ===========  ===========  ===========
Weighted average common
 and common equivalent
 shares outstanding          17,449,000   17,196,000   17,408,000   17,232,000
                             ==========   ==========   ==========   ==========


      The accompanying condensed notes are an integral part of these
                    consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
                            ARCH PETROLEUM INC.
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (Unaudited)

                                                       Nine Months Ended
                                                          September 30,
                                                    ------------------------
                                                        1997         1996
                                                    -----------  -----------
   <S>                                              <C>          <C>
   Cash flows from operating activities:
    Net income                                      $ 3,875,000  $ 2,068,000
    Adjustments to reconcile to net
    cash from operations:
     Depletion, depreciation and amortization         5,278,000    5,094,000
     Deferred revenue                                  (993,000)  (1,772,000)
     Deferred income taxes                            1,914,000      886,000
     Dry hole costs                                     558,000      375,000
     Interest on notes receivable and other            (134,000)    (144,000)
     Minority interest in net income of
      consolidated subsidiaries                         448,000      560,000
     Gain on sale of assets                          (5,043,000)  (1,037,000)
     Issue common shares as compensation                 57,000       42,000
     Foreign currency transaction (gain) loss            87,000      (47,000)
                                                    -----------  -----------
                                                      6,047,000    6,025,000
    Change in accounts receivable                     4,113,000   (1,237,000)
    Change in other current assets                      (20,000)    (217,000)
    Change in accounts receivable - related parties    (427,000)    (471,000)
    Change in accounts payable and other
     current liabilities                             (4,819,000)     318,000
    Production payment remedy adjustment               (308,000)  (1,084,000)
                                                    -----------  -----------
      Net operating cash flows                        4,586,000    3,334,000
   Cash flows from investing activities:
    Capital expenditures, net of retirements        (11,217,000)  (7,256,000)
    Proceeds from sale of properties                  7,820,000    1,585,000
    Notes receivable and other assets                  (243,000)     (45,000)
    Investment in subsidiary                               -      (7,645,000)
                                                    -----------  -----------
      Net investing cash flows                       (3,640,000) (13,361,000)
   Cash flows from financing activities:
    Proceeds from bank borrowing                      9,500,000   23,004,000
    Payments of bank debt                           (10,864,000) (13,589,000)
    Payment of preferred stock dividends               (800,000)    (800,000)
    Note payable - minority interest holder            (744,000)     694,000
    Proceeds from exercise of stock options              40,000         -     
                                                    -----------  -----------
      Net financing cash flows                       (2,868,000)   9,309,000
                                                    -----------  -----------
   Change in cash and cash equivalents               (1,922,000)    (718,000)
   Cash and cash equivalents at beginning of period   3,192,000    2,574,000
                                                    -----------  -----------
   Cash and cash equivalents at end of period       $ 1,270,000  $ 1,856,000
                                                    ===========  ===========

      The accompanying condensed notes are an integral part of these
                    consolidated financial statements.
</TABLE>
<PAGE>
                            ARCH PETROLEUM INC.
           CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                (Unaudited)

   
        Arch Petroleum Inc. (the "Company") is amending the Consolidated
   Balance Sheets, Consolidated  Statements of Operations,  Consolidated
   Statements  of  Cash  Flows  and  Condensed  Notes  to   Consolidated
   Financial Statements appearing in Item 1 and Management's  Discussion
   and  Analysis  of  Financial  Condition  and  Results  of  Operations
   appearing in Item 2 of its Form 10-Q for the quarter ended  September 
   30, 1997.   The Company has  revised the pre-tax  gain it  recognized
   during the third quarter from the sale of a pipeline subsidiary.  The
   revised information appears herein.
    
        In the  opinion of  the Company,  the accompanying  consolidated
   financial statements,  which have  not  been audited  by  independent
   public accountants,  contain  all adjustments  necessary  to  present
   fairly the Company's consolidated financial position, the results  of
   its operations and  its cash  flows for  the periods  reported.   The
   consolidated financial statements include the accounts of the Company
   and its  subsidiaries.  All  significant  intercompany  balances  and
   transactions  are  eliminated.    Certain  information  and  footnote
   disclosures normally  included in  financial statements  prepared  in
   accordance with generally  accepted accounting  principles have  been
   condensed or omitted.  Certain  prior amounts have been  reclassified
   to conform  with  1997 presentation.    It is  suggested  that  these
   consolidated financial  statements be  read in  conjunction with  the
   consolidated financial statements and  footnotes thereto included  in
   the Company's Annual  Report on Form  10-K as of  December 31,  1996.
   The results of operations for the three months and nine months  ended
   September 30, 1997  and 1996 are  not necessarily  indicative of  the
   results to be expected for a full year.
   
        On July 10, 1997, the Company entered into an agreement to  sell
   it's entire 50%  membership interest in  Onyx Pipeline Company,  L.C.
   and its affiliates (together "Onyx").  The transaction was closed  on
   July 31, 1997, and was effective June 30, 1997.  The proceeds consist
   of a $6.0 million  sales price plus a  $1.8 million repayment to  the
   Company for advances formerly made to Onyx for pipeline  construction
   and other costs.  The Company reduced its domestic long-term debt  by
   $7.8 million, concurrently,  and recognized  a pre-tax  book gain  of
   approximately $5.0 million  in the third  quarter.   The Company  had
   formerly reported  this gain  as approximately  $6.0 million  in  its
   original filing.  The inadvertent miscalculation of the gain resulted
   from mistreatment of the Company's investment in Onyx  The adjustment
   to the gain from sale of  Onyx, which increases retained earnings  by
   approximately $600,000, has no impact on cashflows or  cash  received
   in the sale transaction. 
    
        On September 18, 1997,  the Company filed  Form 8-K pursuant  to
   changing its independent accountants.
<PAGE>
                            ARCH PETROLEUM INC.
                   MANAGEMENT'S DISCUSSION AND ANALYSIS
             OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        With  the  exception  of  historical  information,  the  matters
   discussed herein are  forward-looking statements  that involve  risks
   and uncertainties including, but  not limited to,  oil and gas  price
   fluctuations, economic  conditions, interest  rate fluctuations,  the
   regulatory and political  environments and other  risks indicated  in
   filings with the Securities and Exchange Commission.

   Liquidity and Capital Resources
   -------------------------------

        In 1997  the  Company's principal  sources  of funds  were  $4.6
   million from net operations after changes in working capital and $7.8
   million from sale of subsidiary. These funds were primarily  consumed
   by funding $9.7 million of  development in existing U.S.  properties,
   primarily in New  Mexico and North  Texas, and $1.5  million for  the
   drilling of  wells in  Canada, including  construction of  supporting
   facilities and pipelines.  The Company also reduced its Revolver debt
   by $1.4 million, net of borrowings.
   
        On July 31, 1997, the Company closed the sale of its interest in
   Onyx and  realized approximately  $7.8 million  in  cash.   The  $7.8
   million proceeds were used  to pay down the  Domestic Revolver as  of
   July 31, 1997.
    
        The Company's Revolvers are in place  for use by the Company  at
   its discretion including drilling, development and acquisition of oil
   and gas properties.  The Company has borrowed $15.2 million and $12.0
   million against the Domestic and Canadian Revolvers at September  30,
   1997, respectively.  The Revolvers' borrowing base is the amount that
   the Lenders commit  to loan to  the Company based  on the  designated
   loan value established by  the Lenders at  their sole discretion  and
   assigned to certain  of the Company's  oil and  gas properties  which
   serve as collateral for any loan  which may be outstanding under  the
   Revolvers.  The Revolver  facility is $50.0  million.  The  borrowing
   base was redetermined and amended effective  August 1, 1997, and  the
   borrowing base is currently Domestic $23.0 million and Canadian $14.0
   million.  The Revolvers' borrowing  base is reviewed semiannually  by
   the Lenders at their discretion.  A commitment fee of one half of one
   percent  of  the  unused  borrowing  base  accrues  and  is   payable
   quarterly.  The Revolvers mature on May 1, 1998; however, the Company
   expects the  maturity date  to be  advanced for  another year  as  is
   customary  in  the   first  redetermination   amendment  each   year.
   Borrowings under the  Revolvers will, at  the Company's option,  bear
   interest either at  the Lenders'  Base Rate or  a rate  based on  the
   London Interbank Offered Rate (LIBOR).   The effective interest  rate
   was 7.91% at September 30, 1997.

        The Revolvers contain  normal and  standard covenants  generally
   found in lending  agreements.   Among other  things, these  covenants
   prohibit the  declaration  and  payment  of  cash  dividends  on  the
   Company's common stock.   In  addition, the  covenants stipulate  the
   maintenance of financial criteria including:  a minimum level of  net
   worth, a certain current ratio, a  certain debt to worth ratio and  a
   defined net  income in  excess of  scheduled interest  and  principal
   payments.  The  Company is  currently not  in default  with the  loan
   agreements.  The Company has no other unused lines of credit.

        The Company believes it has sufficient cash and unused borrowing
   base in the Revolvers to  fund its anticipated drilling,  development
   and acquisition programs  for 1997 as  well as its  debt service  and
   preferred stock  dividend requirements.   Additionally,  the  Company
   expects to meet  its current  operating cash  requirements from  cash
   flows provided by current operations.   Management believes that  the
   Company  can   continue  to   generate,  or   obtain  through   other
   alternatives, resources  sufficient  to meet  cash  requirements  for
   future  acquisition  opportunities.    The  Company  operates  in  an
   industry that is subject to volatile  prices for its products.   Cash
   flow from  operations may  be affected  to  a significant  degree  by
   fluctuations in  prices that  are brought  on by  factors beyond  the
   Company's control.

        Since December 31,  1996 through the  date of  this report,  the
   Company successfully completed forty-eight wells in Texas, New Mexico
   and Alberta as  part of  its 1997 drilling  program.   In the  United
   States, forty-two  new wells  have been  drilled and  completed.   In
   Canada, six wells have been completed successfully.  The Company also
   drilled two wells  (one each in  the U.S. and  Canada) which did  not
   find economic quantities of hydrocarbons.
<PAGE>
   Results of Operations
   ---------------------

             Nine months ended September 30, 1997 compared to
             ------------------------------------------------
                   nine months ended September 30, 1996
                   ------------------------------------
   
        The Company recorded net  income before dividends of  $3,875,000
   in 1997 as compared to net  income of $2,068,000 before dividends  in
   1996.  Net  income was  increased primarily by  the gain  on sale  of
   subsidiary.
    
        Revenues from oil and  gas sales increased  $257,000 in 1997  as
   compared to 1996.   Oil production  increased to  482,000 barrels  in
   1997  as  compared  to  432,000  barrels  in  1996,  resulting  in  a
   $1,007,000 increase  in  sales.   The  Company  has  begun  realizing
   production from the new wells drilled during 1997.  The average price
   received for oil was  $19.71 in 1997 as  compared to $20.03 in  1996,
   resulting in a $154,000  decrease in sales.   Gas production in  1997
   decreased to  3,992,000 Mcf  as compared  to 5,072,000  Mcf in  1996,
   resulting in a  $1,736,000 decrease in  sales.  The  decrease in  gas
   production  is  attributable  primarily  to  the  reduced   allowable
   production from  the Keystone  Ellenburger field  ("Keystone").   The
   average price received for gas increased to $1.90 in 1997 as compared
   to $1.61 in 1996, resulting in  a $1,146,000 increase in sales.   The
   average price received for  gas excluding certain production  payment
   volumes was $2.04 in 1997 as compared to $2.13 in 1996.

        Lease  operating  expenses  ("LOE")  related  to  oil  and   gas
   properties remained level in  1997 compared to  1996.  Lifting  costs
   per equivalent barrel increased in 1997 to $5.44 from $4.76 in  1996,
   primarily as a result of decreased gas production from Keystone.  The
   Company drilled two uneconomic  exploratory wells during 1997,  which
   increased exploration expense.
<PAGE>
             Three months ended September 30, 1997 compared to
             -------------------------------------------------
                   three months ended September 30, 1996
                   -------------------------------------
   
        The Company recorded net  income before dividends of  $2,919,000
   in 1997 as  compared to net  income of $595,000  before dividends  in
   1996.  Total revenues and expenses decreased as a result of the  sale
   of Onyx effective June 30, 1997.  Net income was increased  primarily
   by the gain on sale of subsidiary.
    
        Pipeline sales and expenses decreased in 1997 as a result of the
   sale of Onyx.

        Revenues from oil and  gas sales decreased  $365,000 in 1997  as
   compared to 1996.   Oil production  increased to  175,000 barrels  in
   1997 as compared to 150,000 barrels in 1996, resulting in a  $531,000
   increase in sales.  The Company  has begun realizing production  from
   the new wells drilled  during 1997.  The  average price received  for
   oil was $18.18 in 1997 as compared to $21.67 in 1996, resulting in  a
   $609,000 decrease  in sales.   Gas  production in  1997 decreased  to
   1,308,000 Mcf as compared  to 1,653,000 Mcf in  1996, resulting in  a
   $565,000 decrease  in  sales.   The  decrease in  gas  production  is
   attributable primarily  to  the  reduced  allowable  production  from
   Keystone.  The average price received  for gas increased to $1.85  in
   1997 as compared to $1.64 in  1996, resulting in a $276,000  increase
   in sales.   The  average price  received  for gas  excluding  certain
   production payment volumes was $2.28 in 1997 as compared to $2.15  in
   1996.

        LOE related to oil  and gas properties  increased $347,000 as  a
   result of the new wells drilled during 1997 and general increases  in
   the cost of services.  Lifting costs per equivalent barrel  increased
   in 1997  to  $5.73 from  $4.61  in 1996,  primarily  as a  result  of
   decreased gas  production from  Keystone.   The Company  drilled  two
   uneconomic exploratory wells during 1997, which increased exploration
   expense.
<PAGE>
                                  PART II


   ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

        On September 18, 1997,  the Company filed  Form 8-K pursuant  to
   changing its independent accountants.
<PAGE>

                                SIGNATURES



        Pursuant to the requirements of the Securities and Exchange  Act
   of 1934, the Registrant has duly  caused this report to be signed  on
   its behalf by the undersigned thereunto duly authorized.



                                             ARCH PETROLEUM INC.
                                             -------------------
                                                (Registrant)


   Date: February 4, 1998                    /s/ Fred Cantu
                                             -----------------------
                                             Fred Cantu
                                             Treasurer and
                                             Chief Financial Officer