UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                   FORM 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the quarterly period ended         February 28, 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: 1-9872



                              COLUMBUS ENERGY CORP.
             (Exact name of registrant as specified in its charter)

           Colorado                                 84-0891713
(State or other jurisdiction of                  (I.R.S. Employer
 incorporation or organization)                 Identification No.)

     1660 Lincoln St., Denver, CO                         80264
(Address of principal executive offices)                (Zip Code)

                                 (303) 861-5252
              (Registrant's telephone number, including area code)

                                 Not Applicable
             (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 April 10, 1998
-----------------------------           -----------------------------
Common stock, $.20 par value                         4,242,185





                                       1
<PAGE>



                             COLUMBUS ENERGY CORP.

                                     INDEX


                                                                        PAGE

PART I.  FINANCIAL INFORMATION

     Item 1.  Financial Statements

              Consolidated Balance Sheets -
                February 28, 1998 and November 30, 1997                  3

              Consolidated Statements of Operations -
                Three Months Ended February 28, 1998 and 1997            5

              Consolidated Statement of Stockholders' Equity -
                Three Months Ended February 28, 1998                     6

              Consolidated Statements of Cash Flows -
                Three Months Ended February 28, 1998 and 1997            7

              Notes to the Financial Statements                          9

     Item 2.  Management's Discussion and Analysis
                of Financial Condition and Results of Operations        17

PART II.  OTHER INFORMATION

     Item 1.     Legal Proceedings                                      25

     Items 2-5.  Not Applicable

     Item 6.     Exhibits and Reports on Form 8-K                       25

     Signatures                                                         26












                                       2
<PAGE>



                        PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                             COLUMBUS ENERGY CORP.

                          CONSOLIDATED BALANCE SHEETS


                                    ASSETS

                                             February 28,    November 30,
                                                 1998            1997
                                             ------------    ------------
                                             (unaudited)
                                                    (in thousands)

Current assets:
  Cash and cash equivalents                    $  1,285        $  1,857
  Accounts receivable:
    Joint interest partners                       1,850           1,932
    Oil and gas sales                             1,526           2,054
    Allowance for doubtful accounts                (116)           (116)
  Inventory of oil field equipment,
    at lower of average cost or market               98             102
  Other                                              41              82
                                                -------         -------

        Total current assets                      4,684           5,911
                                                -------         -------

Deferred income taxes (Note 3)                      136               -

Property and equipment:
  Oil and gas assets, successful efforts
    method (Note 2)                              32,356          33,803
  Other property and equipment                    1,765           2,053
                                                -------         -------

                                                 34,121          35,856
  Less:  Accumulated depreciation,
     depletion and amortization
     and valuation allowance                    (16,380)        (15,632)
                                                -------         -------

        Net property and equipment               17,741          20,224
                                                -------         -------

                                               $ 22,561        $ 26,135
                                               ========        ========

                                                                 (continued)





                                       3
<PAGE>



                                COLUMBUS ENERGY CORP.

                      CONSOLIDATED BALANCE SHEETS - (continued)


                        LIABILITIES AND STOCKHOLDERS' EQUITY

                                               February 28,     November 30,
                                                   1998             1997
                                               ------------     ------------
                                                (unaudited)
                                                       (in thousands)
Current liabilities:
  Accounts payable                              $   1,749        $   3,023
  Undistributed oil and gas
   production receipts                                 52              393
  Accrued production and property taxes               297              551
  Prepayments from joint interest owners              332              565
  Accrued expenses                                    366              377
  Income taxes payable (Note 3)                        59               42
  Deferred income taxes (Note 3)                      197              201
  Other                                                15               37
                                                   ------           ------

        Total current liabilities                   3,067            5,189
                                                   ------           ------

Long-term bank debt (Note 2)                        3,300            2,200
Deferred income taxes (Note 3)                          -              788

Commitments and contingent liabilities (Notes 4 and 5)

Stockholders' equity:
  Preferred stock authorized 5,000,000
    shares, no par value, none issued                   -                -
  Common stock authorized 20,000,000
    shares of $.20 par value; shares issued
    4,548,744 in 1998, and 4,492,068 in 1997
    (outstanding 4,248,715 in 1998 and
    3,883,557 in 1997)                                910              898
  Additional paid-in capital                       18,967           18,124
  Retained earnings (accumulated deficit)          (1,662)           2,887
                                                   ------           ------
                                                   18,215           21,909
  Less: Treasury stock at cost
          300,029 shares in 1998 and
          608,511 shares in 1997                   (2,021)          (3,951)
                                                   ------           ------
        Total stockholders' equity                 16,194           17,958
                                                   ------           ------
                                                $  22,561        $  26,135
                                                   ======           ======


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





                                       4
<PAGE>



                                COLUMBUS ENERGY CORP.

                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                     (Unaudited)

                                             Three Months Ended February 28,
                                            ---------------------------------
                                              1998                     1997
                                            --------                 --------
                                           (in thousands, except per share data)
Revenues:
  Oil and gas sales                         $  2,837                 $  3,765
  Operating and management
    services                                     308                      276
  Interest and other income                       42                       37
                                            --------                 --------
       Total revenues                          3,187                    4,078
                                            --------                 --------

Costs and expenses:
  Lease operating expenses                       560                      518
  Property and production taxes                  260                      321
  Operating and management
    services                                     271                      197
  General and administrative                     287                      338
  Depreciation, depletion and
    amortization                               1,005                      753
  Impairments                                  2,816                        -
  Exploration expense                            263                       62
  Litigation expense (Note 4)                      -                        7
                                            --------                 --------
      Total costs and expenses                 5,462                    2,196
                                            --------                 --------

      Operating income (loss)                 (2,275)                   1,882
                                            --------                 --------

Other (income) expenses:
  Interest                                        43                       35
  Other                                           32                        3
                                            --------                 --------
                                                  75                       38
                                            --------                 --------
      Earnings (loss) before
        income taxes                          (2,350)                   1,844

Provision (benefit) for income taxes
  taxes (Note 3)                                (893)                     701
                                            --------                 --------
      Net earnings (loss)                   $ (1,457)                $  1,143
                                            ========                 ========

Earnings (loss) per share (Note 7):
  Basic                                     $   (.34)                $    .26
                                            ========                 ========
  Diluted                                   $   (.34)                $    .26
                                            ========                 ========

Average number of common shares
 and common equivalent shares outstanding:
  Basic                                        4,258                    4,361
                                            ========                 ========
  Diluted                                      4,262                    4,463
                                            ========                 ========


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


                                       5
<PAGE>
<TABLE>
<CAPTION>

                                 COLUMBUS ENERGY CORP.
                    CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                     For the Three Months Ended February 28, 1998
                                      (Unaudited)


                                                                                Retained
                                    Common Stock               Additional       Earnings                    Treasury Stock
                            --------------------------          Paid-in       (Accumulated              -------------------------
                             Shares            Amount           Capital          deficit)               Shares            Amount
                            ---------         --------          --------         --------               -------          --------
                                                            (dollar amounts in thousands)
<S>                         <C>                <C>               <C>              <C>                   <C>              <C>

Balances,
  December 1, 1997          4,492,068          $   898           $18,124          $ 2,887               608,511          $(3,951)

Exercise of employee
  stock options                52,740               11               304                -                22,357             (193)
Purchase of shares                  -                -                 -                -                56,650             (482)
Shares issued for Stock
  Purchase Plan                 3,936                1                33                -                  (995)               7
10% stock dividend                  -                -               492           (3,092)             (386,494)           2,598
Tax benefit of disqualifying
  disposition of incentive
  stock options                     -                -                14                -                     -                -
Net loss                            -                -                 -           (1,457)                    -                -
                            ---------          -------           -------          -------              --------          -------
Balances,
  February 28, 1998         4,548,744          $   910           $18,967          $(1,662)              300,029          $(2,021)
                            =========          =======           =======          =======              ========          =======


            The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>


                                        6
<PAGE>

                              COLUMBUS ENERGY CORP.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                 Three Months Ended February 28,
                                                 -------------------------------
                                                    1998                  1997
                                                 ---------              --------
                                                          (in thousands)

Net earnings (loss)                               $(1,457)              $ 1,143

Adjustments to reconcile net earnings
  (loss)to net cash provided by
  operating activities:
    Depreciation, depletion, and
      amortization                                  1,005                   753
    Impairments                                     2,816                     -
    Deferred income tax provision
      (benefit)                                      (914)                  627
    Other                                              21                    14
Net change in operating assets and
  liabilities                                         (98)                 (366)
                                                 --------               -------
        Net cash provided by
          operating activities                      1,373                 2,171
                                                 --------               -------

Cash flows from investing activities:
  Additions to oil and gas properties              (2,749)               (1,163)
  Additions to other assets                            32                     -
                                                 --------               -------
        Net cash used in
          investing activities                     (2,717)               (1,163)
                                                 --------               -------

Cash flows from financing activities:
  Proceeds from long-term debt                      1,300                     -
  Reduction in long-term debt                        (200)                 (900)
  Proceeds from issuance of
    common stock                                      156                   235
  Purchase of treasury stock                         (482)                 (131)
  Other                                                (2)                    -
                                                 --------               -------
        Net cash provided by (used in)
          financing activities                        772                  (796)
                                                 --------               -------

Net increase (decrease) in cash and
  cash equivalents                                   (572)                  212
Cash and cash equivalents at
  beginning of period                               1,857                 1,396
                                                   ------               -------
Cash and cash equivalents at
  end of period                                   $ 1,285              $  1,608
                                                   ======               =======


                                                                     (continued)




                                       7
<PAGE>



                              COLUMBUS ENERGY CORP.

               CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)
                                   (Unaudited)



                                                 Three Months Ended February 28,
                                                 -------------------------------
                                                    1998                  1997
                                                  -------              ---------
                                                         (in thousands)

Supplemental disclosure of cash flow information:
    Cash paid during the period for:
      Interest                                    $    40              $     48
                                                   ======               =======
      Income taxes                                $     4              $      -
                                                   ======               =======

Supplemental disclosure of non-cash
  investing and financing activities                None                  None
   






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





                                       8
<PAGE>



                             COLUMBUS ENERGY CORP.

                       NOTES TO THE FINANCIAL STATEMENTS
                                  (Unaudited)


(1)  BASIS OF PRESENTATION

      The accompanying consolidated financial statements include the accounts of
Columbus Energy Corp. ("Columbus") and its wholly-owned subsidiary, Columbus Gas
Services,   Inc.("CGSI").   All  significant  intercompany  balances  have  been
eliminated in consolidation. The term "Company" as used herein includes Columbus
and its subsidiary.

      The consolidated financial statements of the Company have been prepared in
accordance with generally accepted accounting  principles and require the use of
managements'  estimates.   The  financial  statements  contain  all  adjustments
(consisting  only  of  normal  recurring  accruals)  which,  in the  opinion  of
management,  are  necessary  to present  fairly the  financial  position  of the
Company as of  February  28,  1998 and  November  30,  1997,  the results of its
operations and cash flows for the periods  presented.  The results of operations
for such  interim  periods  are not  necessarily  indicative  of  results  to be
expected for the full year.

      For purposes of the  statements of cash flows,  the Company  considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash  equivalents.  Hedging  activities  are  included  in cash  flow from
operations in the cash flow statements.

      When the  Company  uses crude oil and  natural  gas swaps to manage  price
exposure,  realized  gains and losses on the swaps are recognized in oil and gas
sales as settlement occurs.

     The Company adopted Financial  Accounting  Standards No. 128, "Earnings per
Share,"  ("SFAS No.  128")  effective  for the 1998 fiscal  year.  Prior  period
earnings  per  share  data  presented  has been  restated  to  conform  with the
provisions  of SFAS No.  128.  The  purpose of SFAS No. 128 is to  simplify  the
computation of earnings per share. The new standard  replaces the calculation of
"primary  earnings  per share" with a  calculation  called  "basic  earnings per
share" and redefines "diluted earnings per share".

      Earnings  per share are  computed  using the  weighted  average  number of
common  shares   outstanding.   Stock  options  are  included  as  common  stock
equivalents,  when  dilutive,  using the  treasury  stock  method.  Common stock
equivalents  include  shares  issuable upon assumed  exercise of dilutive  stock
options using the average price for diluted shares. Historical average number of
shares   outstanding   and  earnings  per  share  have  been  adjusted  for  the
five-for-four stock split distributed June 16, 1997 to shareholders of record as
of May  27,  1997  and the 10%  stock  dividend  distributed  March  9,  1998 to
shareholders of record as of February 23, 1998.

                                       9
<PAGE>



                             COLUMBUS ENERGY CORP.

                NOTES TO THE FINANCIAL STATEMENTS - (continued)
                                  (Unaudited)


      Financial Instruments and Concentrations of Credit Risk

      The Company  maintains  demand  deposit  accounts with  separate  banks in
Denver,  Colorado. The Company also invests cash in the highest rated commercial
paper of large U.S.  companies,  with  maturities  not over 30 days,  which have
minimal risk of loss. At February 28, 1998 and November 30, 1997 the Company had
investments in commercial  paper of $1,400,000 and $900,000,  respectively.  The
carrying amount of long-term debt  approximates  fair value because the interest
rate on this instrument changes with market interest rates.

      Financial   instruments,   which   potentially   subject  the  Company  to
concentrations of credit risk, consist  principally of cash and cash equivalents
and  accounts  receivable.  Columbus as  operator  of jointly  owned oil and gas
properties,  sells oil and gas  production to relatively  large U.S. oil and gas
purchasers and pays vendors for oil and gas services. The risk of non-payment by
the purchasers, counter parties to the crude oil and natural gas swap agreements
or joint owners is considered  minimal.  The Company does not obtain  collateral
from its oil and gas  purchasers for sales to them.  Joint interest  receivables
are subject to collection under the terms of operating  agreements which provide
lien rights to the operator.

      Oil and Gas Properties

      The Company  follows the  successful  efforts method of account ing. Lease
acquisition  and development  costs  (tangible and intangible) for  expenditures
relating to proved oil and gas  properties  are  capitalized.  Delay and surface
rentals are charged to expense in the year incurred.  Dry hole costs incurred on
exploratory  operations are expensed.  Dry hole costs associated with developing
proved fields are  capitalized.  Expenditures  for  additions,  betterments  and
renewals are  capitalized.  Exploratory  geological  and  geophysical  costs are
expensed when incurred.

      Upon sale or  retirement  of proved  properties,  the cost thereof and the
accumulated depreciation or depletion are removed from the accounts and any gain
or  loss  is  credited  or  charged  to  income  if  significant.   Abandonment,
restoration, and dismantlement costs and salvage value are taken into account in
determining  depletion  rates.  These  costs are  generally  about  equal to the
proceeds  from  equipment  salvage upon  abandonment  of such  properties.  When
estimated abandonment costs exceed the salvage value, the excess cost is accrued
and expensed. Maintenance and repairs are charged to operating expenses.


                                       10
<PAGE>



                             COLUMBUS ENERGY CORP.

                NOTES TO THE FINANCIAL STATEMENTS - (continued)
                                  (Unaudited)


      Provision for  depreciation  and depletion of capitalized  exploration and
development costs are computed on the unit-of-production  method based on proved
developed  reserves of oil and gas, as estimated by  petroleum  engineers,  on a
property by property  basis.  Unproved  properties are assessed  periodically to
determine  whether  they  are  impaired.  When  impairment  occurs,  a  loss  is
recognized  by  providing  a  valuation  allowance.  When  leases  for  unproved
properties expire, any remaining cost is expensed.

      An impairment loss on oil and gas properties is reported as a component of
income from  continuing  operations.  The Company  recognizes an impairment loss
when the carrying value exceeds the expected  undiscounted future net cash flows
of each  property  pool at which time the  property  pool is written down to the
fair value. Fair value is estimated to be a discounted present value of expected
future net cash flows with appropriate risk consideration.

      The  Company  follows  the  entitlements  method  of  accounting  for  gas
balancing of gas  production.  The Company's gas  imbalances  are  immaterial at
November 30, 1997 and February 28, 1998.

     Other Property and Equipment

     Other  property and  equipment  consists of office and computer  equipment.
Gains  and  losses  from  retirement  or  replacement  of other  properties  and
equipment  are included in income.  Betterments  and  renewals are  capitalized.
Maintenance and repairs are charged to operating expenses. Depreciation of other
assets is provided on the  straight  line  method  over their  estimated  useful
lives.

     Accounting for Stock-Based Compensation

     The  Financial   Accounting  Standards  Board  issued  Statement  No.  123,
"Accounting  for  Stock-Based  Compensation".   This  statement  prescribes  the
accounting and reporting standards for stock-based  employee  compensation plans
and was  effective  for the  Company's  1997 fiscal  year.  The Company uses the
alternative pro forma annual disclosures as permitted in the Standard.

     New Accounting Pronouncements

     The  Statement  of  Financial  Accounting  Standards  No.  130,  "Reporting
Comprehensive  Income," was issued in June 1997 and  establishes  standards  for
reporting  and display of  comprehensive  income and its  components  (revenues,
expenses, gains, and losses)




                                       11
<PAGE>



                             COLUMBUS ENERGY CORP.

                NOTES TO THE FINANCIAL STATEMENTS - (continued)
                                  (Unaudited)

in a  full  set of  general-purpose  financial  statements.  This  statement  is
effective for financial statements for periods beginning after December 15, 1997
and adoption of the statement is not  anticipated  to have a material  impact on
the Company's financial position and results of operations.

     In June 1997, the Financial  Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 131,  "Disclosures about Segments of
an Enterprise  and Related  Information,"  effective for fiscal years  beginning
after December 15, 1997. The Company must apply this statement no later than its
fiscal year ending November 30, 1999. SFAS No. 131 requires  disclosing  segment
information using the "management  approach" and replaces the "industry segment"
approach using Statement No. 14. The segment information previously presented is
not expected to materially change when SFAS No. 131 is adopted.

(2)  LONG-TERM DEBT

     The Company has a credit agreement with Norwest Bank Denver,  N.A. that was
amended and  restated on October 23,  1996.  The credit is  collateralized  by a
first lien on oil and gas proper ties.

     As requested by the Company, the borrowing base was increased to a limit of
$10,000,000  from  $7,000,000  effective  May 13,  1997,  without  regard to the
maximum  allowable  amount that would be set by the bank during its  semi-annual
redetermination.  A commitment  fee of .25% is payable for any unused portion of
the  credit  which  is  the  difference  between  the  borrowing  base  and  the
outstanding borrowings.

(3)  INCOME TAXES

      The  Company  files a  consolidated  income tax  return  with CGSI and has
executed a tax allocation agreement which provides for an allocation and payment
of income taxes based upon each  company's  separate tax liability  calculation.
Consolidated income taxes are payable only when taxable income exceeds available
net operating loss carryforwards and other credits.

      Pursuant  to  provisions  enacted  as part of the Tax  Reform Act of 1986,
utilization  of these  corporate  tax  carryforwards  in any one taxable year is
limited  if a  corporation  experiences  a 50%  change  of  ownership.  Columbus
experienced such a change of ownership in October 1987 effectively  limiting the
utilization  of  pre-change  ownership  net  operating  losses to  approximately
$900,000 in each subsequent year.

     The  Company  uses the asset and  liability  method to  account  for income
taxes.  Under this method,  deferred tax  liabilities  and assets are determined
based on the temporary  differences between financial statement and tax basis of
assets and  liabilities  using enacted rates in effect for the year in which the
differences are expected to reverse.  Tax assets (net of a valuation  allowance)
primarily result from net operating loss carryforwards, percentage depletion and
certain accrued but unpaid employee  benefits.  Deferred tax liabilities  result
from the recognition of deprecia tion,  depletion and  amortization in different
periods for financial reporting and tax purposes.

                                       12
<PAGE>



                             COLUMBUS ENERGY CORP.

                NOTES TO THE FINANCIAL STATEMENTS - (Continued)
                                  (Unaudited)


      Because of the Company's previous 1987  quasi-reorganization,  the Company
is required to report the effect of its net deferred tax asset  arising prior to
December  1, 1987 as an  increase  in  stockholders'  equity  rather  than as an
increase to net earnings.

      The  provision  (benefit)  for income taxes  consists of the following (in
thousands):

                                             Three Months Ended February 28,
                                             -------------------------------
                                               1998                  1997
                                             --------             ----------
Current:
      Federal                                $    1                $   18
      State                                      20                    56
                                              -----                 -----
                                                 21                    74
                                              -----                 -----

Deferred:
      Federal                                  (878)                  452
      Use of loss carryforwards                   1                   156
      State                                     (37)                   19
                                              -----                 -----
                                               (914)                  627
                                              -----                 -----

  Total income tax (benefit) expense         $ (893)               $  701
                                             ======                ======


     The total tax  provision  has resulted in effective  tax rates which differ
from the statutory  Federal income tax rates. The reasons for these  differences
are:

                                       Percent of Pretax Earnings
                                    Three Months Ended February 28,
                                    -------------------------------
                                      1998                  1997
                                      ----                  ----

U.S. Statutory rate                   (34)%                  34 %
State income taxes                     (1)                    3
Other                                  (3)                    1
                                      ----                  ---
                                      (38)%                  38 %
                                      ====                 ====












                                       13
<PAGE>



                                 COLUMBUS ENERGY CORP.

                    NOTES TO THE FINANCIAL STATEMENTS - (continued)
                                      (Unaudited)


      During the three months of fiscal 1998,  certain tax assets  (shown in the
table below) were utilized.  The tax effect of significant temporary differences
representing  deferred tax assets and  liabilities and changes were estimated as
follows (in thousands):
                                                            Current Year
                                             Stock-         ------------
                                    Dec. 1,  holders'               February 28,
                                     1997    Equity     Operations      1998
                                    -------  --------   ----------  ------------
Deferred tax assets:
    Pre-1987 loss carryforwards     $1,053    $   -      $     -       $1,053
    Post-1987 loss carryforwards       540        -            -          540
    Percentage depletion
      carryforwards                  1,304        -            -        1,304
    State income tax loss
      carryforwards                    105        -           (1)         104
    Other                              327        -            6          333
                                    ------     ----       ------       ------
         Total                       3,329        -            5        3,334
       Valuation allowance
         (long-term)                (1,443)       -            -       (1,443)
                                  --------     ----       ------       ------
Deferred tax assets                  1,886        -            5        1,891
                                  --------     ----       ------       ------

Tax benefit of disqualifying
   disposition of incentive
   stock options                         -       14(a)       (14)           -
                                   -------     ----       ------       ------

Deferred tax liabilities-
    Depreciation, depletion and
      amortization and other        (2,875)       -          923       (1,952)
                                   -------     ----       ------       ------
      Net tax asset (liability)   $   (989)    $ 14      $   914       $  (61)
                                  ========     ====      =======       ======

(a)Credited to additional paid-in capital.

      The Company has net operating loss carryforwards (in thousands)  available
at November 30, 1997 as follows:

                                         Net
            Expiration Year         Operating Loss
            ---------------         --------------
                  1999                $ 1,808
                  2000                    903
                  2001                    387
                  2010                  1,589
                                      -------
                                      $ 4,687
                                      =======

      For  Alternative  Minimum Tax purposes the Company had net operating  loss
carryforwards of  approximately  $5,848,000 as of November 30, 1997. The Company
also has percentage  depletion  carryforwards of $3,432,000 which do not expire.
State income tax operating loss  carryforwards  of $1,730,000  were available at
November 30, 1997.

                                       14
<PAGE>



                             COLUMBUS ENERGY CORP.

                NOTES TO THE FINANCIAL STATEMENTS - (continued)
                                  (Unaudited)


(4)         LITIGATION

      Management is unaware of any asserted or unasserted  claims or assessments
against the Company which would materially affect the Company's future financial
position or results of operations.

(5)         COMMITMENTS AND CONTINGENT LIABILITIES

      When the Company uses natural gas and crude oil swaps they are  considered
financial instruments with off-balance sheet risk which are in the normal course
of business to  partially  reduce its exposure to  fluctuations  in the price of
crude oil and natural  gas.  Those  instruments  involved,  to varying  degrees,
elements  of market and credit  risk in excess of the amount  recognized  in the
balance sheets. The Company had no natural gas or crude oil swaps outstanding as
of February 28, 1998.

      The Company is not aware of any events of  noncompliance in its operations
with  any  environmental  laws and  regulations  nor of any  material  potential
contingencies related to environmental issues. The exact nature of environmental
control  problems,  if any, which the Company may encounter in the future cannot
be  predicted,  primarily  because of the changing  character  of  environmental
requirements that may be enacted with applicable jurisdictions.

(6)         RELATED PARTY TRANSACTIONS

      CEC Resources Ltd. ("Resources") was a wholly-owned subsidiary of Columbus
prior  to its  divestiture  on  February  24,  1995.  Reimbursement  is  made by
Resources to Columbus for services  provided by Columbus  officers and employees
for managing  Resources and reduces  general and  administrative  expense.  This
reimbursement totaled $60,000 and $67,000 for the three months of 1998 and 1997,
respectively.















                                       15
<PAGE>



                             COLUMBUS ENERGY CORP.

                NOTES TO THE FINANCIAL STATEMENTS - (continued)
                                  (Unaudited)


(7)         EARNINGS PER SHARE

      The  following  table  provides  a  reconciliation  of basic  and  diluted
earnings per share (EPS):

                                        Three Months Ended February 28,
                                       ---------------------------------
                                         1998                      1997
                                       --------                  -------
                                                 (in thousands,
                                             except per share data)

Reconciliation of basic and diluted
  EPS share computations:
  Income (loss) available to common
    shareholders - basic and
    diluted ESP (numerator)            $(1,457)                   $1,143
                                        ======                     =====

Shares (denominator):
  Basic EPS                              4,258                     4,361
  Effect of dilutive option shares           4                       102
                                        ------                     -----
  Diluted EPS                            4,262                     4,463
                                        ======                     =====

Per share amount:
  Basic EPS                            $  (.34)                   $  .26
                                        ======                     =====
  Diluted EPS                          $  (.34)                   $  .26
                                        ======                     =====

Number of shares (in  thousands) not 
  included in basic EPS that would 
  have been antidilutive because 
  exercise price of options was 
  greater than the average
  market price of the common shares         75                        69
                                         =====                     =====


     Historical average number of shares outstanding and earnings per share have
been adjusted for the  five-for-four  stock split  distributed  June 16, 1997 to
shareholders of record as of May 27, 1997 and the 10% stock dividend distributed
March 9, 1998 to shareholders of record as of February 23, 1998.















                                       16
<PAGE>



Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

      The following  summarizes the Company's financial condition and results of
operations and should be read in  conjunction  with the  consolidated  financial
statements and related notes.

Liquidity and Capital Resources

      First quarter  results  suffered from the lowest  average crude oil prices
since 1994 and at one point actually  dipped to the lowest levels since the Arab
oil glut of 1986.  Average  natural  gas prices  were not much below  normal but
appear weak when compared to 1997 prices which were extraordinarily  high. These
price  weaknesses  overshadowed  the fact  that both  natural  gas and crude oil
production  improved over last year's quarter.  First quarter cash flow suffered
significantly  from the same feeble  prices  which were mostly  responsible  for
impairment  charges of  $2,816,000  ($1,746,000  after income taxes or $0.41 per
share). The latter, coupled with increased exploratory charges,  generated a net
loss of $1,457,000,  or $0.34 per share,  compared with last year's net earnings
of $1,143,000, or $0.26 per share when product prices were significantly higher.

      As a result,  at the end of the first quarter 1998,  sharehold ers' equity
actually  decreased  to  $16,194,000  from  $17,958,000  at November  30,  1997.
Nevertheless, there was an improved working capital position of $1,617,000 as of
February 28, 1998 which,  when combined with the Company's  expected annual cash
flow,  should be more than a  sufficient  source of capital to meet the  planned
1998  program of  $6,800,000  for  developing  undeveloped  reserves  along with
funding an  increased  exploratory  program  with an  emphasis  on  natural  gas
potential.

      A significant  portion of the costs incurred for the wells drilled in late
1997 have been paid for in 1998 and appears as  additions to  properties  in the
consolidated  Statements of Cash Flows. This required a short term draw from the
Company's bank credit  facility  pending  repayment from the additional  monthly
cash  flow  generated  normally  and as a  result  of  those  expenditures.  The
$10,000,000  credit  facility  continues  to be  primarily  targeted  for use by
management for  acquisitions of oil and gas properties,  but can be used for any
legal  corporate  purpose  and is  always  available  for  expanded  operational
expenditures.

      Generally accepted accounting  principles ("GAAP") require cash flows from
operating  activities  to be determined  after giving effect to working  capital
changes.  Accordingly,  GAAP's net cash provided from  operating  activities was
$1,373,000  for the first  three  months of 1998 and  compares  with  $2,171,000
during 1997's similar period. This cash flow (as defined),  along with temporary
backup from available short term borrowings  using the Company's credit facility
has provided  sufficient  liquidity to finance  capital  expenditures as well as
fund treasury stock repurchases.

                                       17
<PAGE>



          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                    AND RESULTS OF OPERATIONS - (Continued)


However,  an important  alternative  measure of computing a company's  cash flow
(not GAAP but one commonly used in the industry)  upon which  management  places
even greater reliance is one determined  before  consideration of either working
capital  changes or deduction of exploration  expenses and is generally known by
industry as Discretionary Cash Flow ("DCF").  DCF is used by successful efforts'
companies  when making  comparisons  with the cash flow results of a majority of
other  independent  energy  companies  who use the full cost  accounting  method
wherein all exploration costs are capitalized and do not adversely affect either
their  operating cash flow or net earnings.  Since  exploration  expenses can be
increased or decreased at manage ment's  discretion,  it is believed that DCF is
more comparable with those full cost accounting  results.  Columbus' DCF for the
first quarter of 1998 was $1,734,000 down from 1997's quarter which was a record
$2,599,000 and was later broken during the fourth quarter of 1997. This 33% drop
is directly  attributable  to lower natural gas and crude oil prices since crude
oil and natural gas  production  actually  increased  from last year's  quarter.
While DCF is calculated  without debt retirement  requirements being considered,
in  Columbus'  case it does  not  matter.  Outstanding  bank  debt  requires  no
principal payments before August 1, 1999 and interest expense on the outstanding
debt has been insignificant and is always deducted before arriving at DCF.

      Management  continues  to note its strong  exception  to the  Statement of
Financial  Accounting  Standards No. 95 which directs that  operating  cash flow
must only be determined  after consider  ation of working  capital  changes.  We
continue to reflect that position in all public filings and reports based on our
belief such a requirement  by GAAP ignores  entirely the  significant  impact on
working capital that the timing of income received for, and expenses incurred on
behalf of, third party owners in wells has on a company, such as Columbus, which
serves as an operator of properties with only a small working interest therein.

      However,  neither  DCF nor  operating  cash flow  before  working  capital
changes may be substituted  for net income or cash available from  operations as
defined by GAAP.  Furthermore,  currently reported cash flows do not necessarily
indicate that there always will be sufficient funds for future cash requirements
however defined.

      At the  present  time the  Company  has no hedges  of either  crude oil or
natural  gas prices  similar to the swaps it  negotiated  in prior  years.  As a
result the Company's oil and gas revenues are fully exposed to risk of declining
prices such as occurred during first quarter 1998.  However,  it will be able to
fully  benefit  from  price  increases,  if any,  which  occur  as  fiscal  1998
progresses.

                                       18
<PAGE>




          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                    AND RESULTS OF OPERATIONS - (Continued)


      Columbus had outstanding  borrowings of $3,300,000 as of February 28, 1998
against its $10,000,000  line of credit with Norwest Bank Denver,  N.A. which is
collateralized by oil and gas properties.  At the end of the first quarter 1998,
the ratio of bank debt to shareholders'  equity was 0.20 and to total assets was
0.15 and outstanding  debt used a LIBOR option with an average  interest rate of
7.1%. The net increase or decrease of long-term debt directly affects cash flows
from  financing  activities as does the purchase of treasury  shares  (discussed
below) and the proceeds from the exercise of stock options.

      Working  capital at February 28, 1998 rose to $1,617,000  from $722,000 at
November  30,  1997  despite  1998's  capital  expenditures  of  $1,370,000  for
additions to oil and gas properties and $482,000 for purchase of 56,650 treasury
shares.  These capital  expenditure  amounts differ from the amount shown in the
consolidated  Statement of Cash Flows which also  includes  payments made during
1998 for 1997 expenditures which had been incurred but not yet paid as of 1997's
year end.

      The Company has been  authorized  by the Board of Directors to  repurchase
its common  shares  from the market at various  prices  during the last  several
years.  During the first  quarter 1998 56,650  shares were  repurchased  (61,615
shares restated for the 10% stock dividend) at a restated average price of $7.77
per share.

      As of February 28, 1998 a total of 86,350 shares have been  authorized but
not yet  repurchased  at prices  not to exceed  $8.07 per  share.  Subsequently,
during March 1998,  28,100 more of those shares have been acquired at an average
price of $7.48 per share.

RESULTS OF OPERATIONS

      During 1998's first quarter, the Company's gross revenues decreased by 22%
while  operating  income  declined to $541,000  (excluding  the 1998  impairment
charge) which compares with $1,882,000 in 1997.  Other  comparisons for the 1998
quarter  versus  1997  related to prices,  production  and oil and gas sales are
covered later in this section.

      During  1998's first  quarter,  seven gross wells (2.56 net) were drilled.
These included  three (.22 net)  successful gas wells in the Laredo area and one
(.67 net) oil well in the Sralla Road field in Texas and one  discovery oil well
(.90 net) in Roosevelt County, Montana.

      The latter wildcat, McCabe Farms #1-4, was discussed in detail in the 1997
annual report began sales in late  December.  After the usual  initial  decline,
this well appears to have settled to a rate

                                       19
<PAGE>




          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                    AND RESULTS OF OPERATIONS - (Continued)


of about 60-70 BOPD with 30% water cut . The Sralla  Road field well,  Waitkus B
#2,  commenced  production  January  l, 1998 and has  settled at a daily rate of
45-50 barrels of oil and 320-330 Mcf of gas.

      Thus far during 1998, the Company has accelerated its exploration  efforts
by  acquiring  acreage and 3-D seismic for  approximately  $700,000 in three new
onshore  prospects along the Gulf Coast area of Texas between Houston and Corpus
Christi.  These prospects already had one or more chosen drillsites and hold the
possibility  for several more  locations.  These  multi-zone  prospects have the
potential to significantly  expand the Company's  production to equal or surpass
the more fully developed areas in Laredo and Sralla Road fields.

     Oil and Gas Revenues and Operating Costs

      The following table shows  comparative crude oil and natural gas revenues,
sales volumes,  average prices and percentage  changes  between  periods for the
first  quarters of 1998 and 1997 and the first quarter of 1998 versus the fourth
of 1997.
                               First Quarter
                             ------------------     %      Fourth Qtr.       %
                              1998        1997    Change       1997       Change
                             ------      ------   ------   -----------    ------

Natural gas revenues M$      $1,916      $2,511    (24)%     $ 2,781       (31)%
Oil revenue M$               $  921      $1,254    (27)%     $ 1,115       (17)%
Natural gas sales volumes:
  Millions of cubic feet        861         777     11 %         929        (7)%
  MCF/day                     9,572       8,628               10,210

Oil sales volumes:
  Barrels                    59,669      57,801      3 %      58,856         1 %
  Barrels/day                   663         642                  647

Average price received:
  Natural gas - $/MCF        $ 2.22      $ 3.23    (31)%      $ 2.99       (26)%
  Oil - $/BBL                $15.44      $21.69    (29)%      $18.95       (19)%

      Natural  gas  revenues  decreased  24% in the first  quarter  of 1998 when
compared  to  1997's  quarter  as a result  of much  lower  prices  and  despite
increased  volumes.  Average  prices for natural gas  decreased 31% in the first
quarter of 1998 compared with last year due to reduced  demand related to a warm
winter and abnormally  high prices in 1997.  Sales volumes  improved by 11% over
1997's  first  quarter as a result of  numerous  gas wells being  completed  and
connected during the intervening months. The latest quarter as compared with the
fourth  quarter of 1997 showed a sales volume  decrease of 7% was  primarily the
result of a production decline in the South Laredo area because a high interest,
high capacity well being off for repairs  which have now been  completed.  There
was a 26% decrease in average prices received which reduced revenues by 31%.

                                       20
<PAGE>



          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                    AND RESULTS OF OPERATIONS - (Continued)


      Oil  revenues for the 1998 first  quarter  were down  signifi  cantly when
compared to the similar 1997 quarter  because a decrease in the average price of
29% overcame a sales volume  increase of only 3%. Crude oil production  seems to
have  reversed its slide over a several year period as a few new wells have been
added which have  generated the  improvement.  However,  this may be short lived
because little or no exploration or development of crude oil can be justified in
this current price environment. In fact, consider ation was given to temporarily
halting  production  on  several  marginal  oil  wells or  deferral  of  further
operations altogether.  Fortunately,  there has been modest improvement in crude
oil prices  recently so such  drastic  action has been  postponed  albeit for an
unknown  period.  Oil revenues for the first quarter of 1997 had been reduced by
$92,660 ($1.60 per barrel) from crude oil swap  participation  but unfortunately
no swaps were in place this year to protect  from this price  debacle  for crude
oil.

      When  comparisons are made with the fourth quarter results for 1997, first
quarter oil revenues were 17% lower because of the 19% decrease in average price
per barrel received and because the 1% increase in production had little effect.

      Columbus' 1998 first quarter average sales volumes of natural gas of 9,572
Mcfd and oil and liquids production of 670 barrels per day equates to an average
daily  production of 2,265 barrels of oil equivalent (BOE) compared to 2,086 BOE
during 1997's first quarter.

      Lease  operating  expenses for the 1998 quarter were slightly  higher than
during  1997  because  this  year's  quarter  had  several  expensive  workovers
performed and equipment replaced on older wells. However,  lease operating costs
on a BOE basis were $2.75 in 1998 compared to $2.76 in 1997.  Operating costs as
a percentage of revenues was up to 20% in the 1998 first  quarter  primarily due
to reduced revenues versus 14% in 1997's comparable  quarter when  extraordinary
prices that prevailed produced record revenues.

     Production and property taxes  approximated 9% of revenues in both 1998 and
1997.  These may vary based on Texas'  percentage  share of the total production
where oil tax rates are lower than gas tax rates.  The relationship of taxes and
revenue  is  not  always  directly  proportional  since  several  of  the  local
jurisdiction's  property taxes are based upon reserve  evaluations as opposed to
revenues received or production rates for a given tax period.

     Operating and Management Services

     This  segment of the  Company's  business is  comprised  of opera tions and
services  conducted on behalf of third parties including  compressor rentals and
salt water disposal facilities.


                                       21
<PAGE>



          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                    AND RESULTS OF OPERATIONS - (Continued)


      Operating and management  services  profit  declined  during first quarter
1998.  With  unusual  expenses  related to  cleaning  out sand from a salt water
disposal  well,  there was only a  $37,000  profit  during  first  quarter  1998
compared  to a $79,000  profit  last year.  Revenues  improved  as the number of
operated wells and drilling activity increased.

      Interest Income

      Interest  income is earned  primarily from  short-term  invest ments whose
rates  fluctuate with changes in the commercial  paper rates and the prime rate.
Interest  income  increased  slightly in 1998 to $42,000  from $37,000 in 1997's
first quarter  primarily as a result of an increased  amount of investments  and
higher short-term interest rates.

     General and Administrative Expenses

      General  and  administrative  expenses  are  considered  to be those which
relate to the direct costs of the Company which do not originate  from operation
of properties  or providing of services.  Corporate  expense  represents a major
part of this category although other nonbillable expenses are also included.

      The Company's general and administrative  expenses in the first quarter of
1998 were 15% lower than last year. The 1997 quarter  included  $56,000 of costs
associated  with a proposed  preferred  stock  offering  (which  was  withdrawn)
including  professional services related thereto. There were some cost increases
in 1998  primarily  due to upward  salary  adjustments  granted  in May 1997 for
officers and December 1997 for employees.

      Reimbursement for services provided by Columbus officers and employees for
managing  Resources  is expected to decrease  during  1998.  This  assumes  that
another  management  will take over following an expected  business  combination
that  Resources  is  currently  aggressively  seeking.   Columbus'  general  and
administra tive expense will rise  commensurately  when Resources' merger occurs
since no staff  reductions are  contemplated.  Reimbursement of $60,000 was down
10% from the $67,000  received  during the first  quarter of 1997 for  providing
those services to Resources.

     Depreciation, Depletion and Amortization

     Depreciation,  depletion  and  amortization  of  oil  and  gas  assets  are
calculated  based upon the units of production for the period compared to proved
reserves of each  successful  efforts  property  pool.  This expense is not only
directly  related to the level of  production,  but also is dependent  upon past
costs to find, develop,


                                       22
<PAGE>



          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                    AND RESULTS OF OPERATIONS - (Continued)


and recover related  reserves in each of the cost pools or fields.  Depreciation
and amortization of office  equipment and computer  software is also included in
the total charge.

      Total  charges for this  expense item  increased  over 1997 as a result of
increased  production  and added  development  expenditures  in the  intervening
period as well as lower  reserves in several of the pools due to lower crude oil
prices. The 1998 first quarter depletion rate of $4.91 per BOE compared with the
$3.88 per BOE for the like  period  of fiscal  1997 and $3.91 per BOE for all of
1997. The 1998 rate is primarily a reflection of those lower  quarter-end  crude
oil  prices  although  performance  of some wells  also  contributed  to reserve
quantities  being  reduced in  addition  to  development  costs  incurred.  This
required impairment of carrying values at quarter-end of several different pools
predominantly  made up of crude oil reserves.  The  reduction  will decrease the
depletable  basis in future  periods  and reduce the per barrel  depletion  rate
accordingly.  Had the  Company  been  using  the full  cost  accounting  method,
impairment on a company-wide basis would have been only a fraction of the amount
reported.

     Exploration Expense

      In  general,  the  exploration  expense  category  includes  the  cost  of
Company-wide   efforts  to  acquire  and  explore  new  prospective  areas.  The
successful  efforts  method of accounting  for oil and gas  properties  requires
expensing the costs of unsuccessful exploratory wells. Other exploratory charges
such as seismic and geologic costs must also be immediately  expensed regardless
of whether a prospect is ultimately proved to be successful. Exploration charges
of $263,000 for 1998's first quarter was up  dramatically  from $62,000 for 1997
because  $199,000  was expensed  due to a dry  exploratory  oil well in Montana.
Exploration  expenses not only  decrease  net earnings but also reduce  reported
GAAP cash flow from  operations  even  though they are  discretionary  expenses;
however,  such charges are added back for purposes of  determining  DCF which is
why it is more  comparable  to  cash  flow  reported  by  full  cost  accounting
companies.  Approximately  $570,000 of total 3-D seismic  costs were  originally
budgeted for 1998 in the S.E.  Froid and Hay Creek areas in Montana but with the
decline in crude oil prices only a small  portion of this program will  actually
be undertaken in 1998.

      Impairments

      A non-cash impairment loss of $2,816,000 in 1998 was recognized during the
first  quarter.  The  decline  in crude oil  prices  was the  major  contributor
although  performance of certain wells during the quarter also  contributed to a
reduction in reserve  quantities.  Accordingly,  the remaining carrying value of
several

                                       23
<PAGE>



          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                    AND RESULTS OF OPERATIONS - (Continued)


cost pools  exceeded the expected  undiscounted  future net cash flows.  Certain
property pools were written down to a fair value based on an assumption that the
average  future crude oil price would be $18.75 per barrel  during the remaining
life.  Some  portion of these crude oil  reserves  will be restored as crude oil
prices  improve but  impairment  charges of $2,360,000  are not  reversible.  An
additional  $400,000 of impairments  were provided for probable loss in value of
undeveloped   acreage  holdings  (unproved   properties)  located  primarily  in
Louisiana along with $56,000 expensed for an expired lease.

     Interest Expense

     Interest expense varies in direct proportion to the amount of bank debt and
the level of bank interest  rates.  The average amount of bank debt  outstanding
has been higher  during  1998's  first  quarter  than in 1997.  The average bank
interest rate paid this latest quarter was 7.3% which compares to 7.0% in 1997.

      Income Taxes

      During the first quarter of 1998, the net deferred tax liability decreased
to  only  $61,000  as a  result  of the  large  financial  statement  impairment
write-off which substantially reduced the book versus tax temporary differences.
The net  liability  is  comprised  of  $197,000  current  portion  and  $136,000
long-term  asset.  A tax deduction of $14,000 from the benefit of  disqualifying
disposition of incentive  stock options was added to additional  paid-in capital
during first quarter of 1998. The estimated  increase in deferred tax assets was
$914,000 during the quarter. The valuation allowance has remained unchanged thus
far in 1998.  The  effective  tax rate for 1998 is 38%.  See also  Note 3 to the
consolidated financial statements for further explanation of income taxes.

      Statement Pursuant to Safe Harbor Provision of the Private
      Securities Litigation Reform Act of 1995

      This report may contain  certain  "forward-looking  statements"  that have
been based on imprecise  assumptions  with regard to  production  levels,  price
realizations,  and  expenditures for exploration and development and anticipated
results  therefrom.  Such statements are subject to risks and uncertainties that
could cause actual results to differ  materially from those expressed  herein or
implied by such statements.






                                       24
<PAGE>



                          PART II - OTHER INFORMATION


Item 1.  LEGAL PROCEEDINGS

      Management is unaware of any asserted or unasserted  claims or assessments
against the Company which would materially affect the Company's future financial
position or results of operations.

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

          (a)     Exhibits

                  11    - Computation of per share earnings

                  27    - Financial data schedule

          (b)     Reports on Form 8-K

                     Report dated  February 12, 1998 related to the amendment of
                     the   By-laws   providing   that  the  annual   meeting  of
                     shareholders  shall  be  held  at 9:30  a.m.  on the  first
                     Thursday in May in each year beginning with the year 1998.































                                       25
<PAGE>




                                  SIGNATURES

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



                                                    COLUMBUS ENERGY CORP.
                                                        (Registrant)



DATE:      April 14, 1998                       /s/ Harry A. Trueblood, Jr.
     -----------------------------              ---------------------------
                                                Harry A. Trueblood, Jr.
                                                Chairman, President and
                                                Chief Executive Officer
                                                (a duly authorized officer)



DATE:      April 14, 1998                       /s/ Ronald H. Beck
     -----------------------------              ------------------
                                                Ronald H. Beck
                                                Vice President
                                                (Chief Accounting Officer)





























                                       26
<PAGE>

                                                      Commission File No. 1-9872



                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549





                                   EXHIBITS

                                      TO

                                   FORM 10-Q



                               QUARTERLY REPORT

                        PURSUANT TO SECTION 13 OR 15(d)

                                      OF

                      THE SECURITIES EXCHANGE ACT OF 1934

                    FOR THE QUARTER ENDED FEBRUARY 28, 1998















                             COLUMBUS ENERGY CORP.
                          (Exact Name of Registrant)

                              1660 Lincoln Street
                            Denver, Colorado 80264
                    (Address of Principal Executive Office)




                                       27
<PAGE>