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

                    ------------------------------

                            Form 10-QSB

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND 
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 
1996

                          BUSINESS ISSUERS

                    Commission File Number 0-20915
                    ------------------------------

                         GEO PETROLEUM, INC.
                         -------------------
            (Name of Small Business Issuer in its charter)

                             California
                             ----------
                   (State or other jurisdiction of
                    incorporation of organization)

                 25660 Crenshaw Boulevard, Suite 201
                 -----------------------------------
                        Torrance, California
                        --------------------
              (Address of principal executive offices)

                             33-0328958
                             ----------
                 (I.R.S. Employer Identification No.)

                               90505
                               -----
                            (Zip Code)

                          (310) 539-8191
                          --------------
                    (Issuer's telephone number)

Check whether the issuer (1) filed all reports required to be 
filed by Section 13 or 15 (d) of the Exchange Act during the past 
12 months (or for such shorter period that the Registrant was 
required to file reports), and (2) has been subject to such 
filing requirements for the past 90 days.

                     Yes ' X '             No
                         -----

<PAGE>
The issuer became a reporting company when its Form 10-SB 
registration statement was cleared on August 12, 1996.
Indicate the number of shares outstanding of each of the issuer's 
classes of common stock as of the latest practicable date.

<TABLE>
<CAPTION>
     Class                  Outstanding at September 30, 1996
     -----                  ---------------------------------
<S>                                     <C>
Common stock, no par value              5,203,787

</TABLE>








































<PAGE>
PART 1  FINANCIAL INFORMATION

                       Geo Petroleum, Inc.
                Unaudited Condensed Balance Sheet

<TABLE>
<CAPTION>
                                   September 30    December 31
                                      1996            1995
                                   -------------   ------------
<S>                                <C>             <C>

Assets
Current assets:
  Cash and cash equivalents        $   115,259     $   100,565
  Accounts receivable:
   Accrued oil and gas revenues        140,095         161,308
   Joint interest and other            228,262         200,026 
  Prepaid expenses and other            52,413          52,413
                                   ------------    ------------
Total current assets                   536,029         514,312

Property and equipment:
  Oil and gas properties             4,961,222       4,698,877 
  Office furniture and equipment        68,629          65,948
                                   ------------    ------------
                                     5,029,851       4,764,825
  Accumulated depletion and 
   depreciation                     (1,184,767)     (1,037,404)
                                   ------------    ------------
                                     3,845,084       3,727,421

Total assets                       $ 4,381,114     $ 4,241,733
                                   ============    ============

</TABLE>



















<PAGE>
                       Geo Petroleum, Inc.
                Unaudited Condensed Balance Sheet
<TABLE>
<CAPTION>
                                   September 30    December 31
                                       1996            1995
                                   ------------    -------------
<S>                                <C>             <C>

Liabilities and shareholders' 
 equity

Current liabilities:
   Accounts payable:
    Accrued royalties              $   477,508     $   438,507 
    Trade and other                    356,016         283,161 
   Dividends payable                    28,143          20,120 
   Accrued expenses                    128,639         107,821
   Current portion of notes 
    payable                            587,315       1,968,063
                                   ------------    ------------
Total current liabilities            1,577,621       2,817,672

Long term portion of notes 
  payable                            1,460,000               -

Redeemable convertible 
 preferred stock
   $1,000 par value; authorized 
   100,000 shares; issued and 
   outstanding 347 shares at 
   September 30, 1996                  347,156         505,150 

Stockholders' equity
   Common stock, no par value; 
   authorized 50,000,000 shares; 
   issued and outstanding 
   5,203,787 at September 30, 1996   2,512,983       2,157,702 

   Accumulated deficit              (1,516,646)     (1,238,791)
                                    -----------    ------------
Total stockholders' equity             996,337         918,911
                                    -----------    ------------

Total liabilities and 
 stockholders' equity              $ 4,381,114     $ 4,241,733 
                                   ============    ============

</TABLE>




<PAGE>
                       Geo Petroleum, Inc.
         Unaudited Condensed Statements of Operations	
	
<TABLE>
<CAPTION>		
                                       Three Months Ended
                                          September 30,
                                       ------------------
                                      1996            1995
                                      ----            ----
<S>                                <C>             <C>

Revenues:
   Oil and gas sales               $   220,559     $   287,958
   Other revenue                       164,431         101,784
   Interest income                         153             571
                                   ------------    ------------
                                       385,144         390,313

Expenses:
   Lease operating expenses            213,086         173,762
   Depletion and depreciation           49,121          35,925
   Amortization of deferred 
    loan costs                               -           6,750
   General and administrative           65,682          74,232
   Interest expense                     77,825          69,577
                                   ------------    ------------
Income (loss) before income taxes      (20,570)         30,066
Provision for income taxes                   -               -
                                  -------------    ------------
Net income (loss)                      (20,570)         30,066
Less preferred stock dividends         (16,305)              -
                                  -------------    ------------

Net income (loss) applicable
 to common stock                  $    (36,875)    $    30,066
                                  =============    ============

Net income (loss) per share of 
 common stock                     $      (0.01)    $      0.01
                                  =============    ============
	
Weighted average number of 
 common shares outstanding           5,203,787       4,477,913
                                  =============    ============

</TABLE

<PAGE>
                       Geo Petroleum, Inc.
         Unaudited Condensed Statements of Operations


</TABLE>
<TABLE>
<CAPTION>
                                       Nine Months Ended
                                          September 30,
                                       -----------------
                                      1996            1995
                                      ----            ----
<S>                                <C>             <C>

Revenues:
   Oil and gas sales               $   646,756     $ 1,211,258
   Other revenue                       335,512         428,141
   Interest income                       4,382           2,404
                                   ------------    ------------
                                       986,650       1,641,803

Expenses:
   Lease operating expenses            615,775         730,907
   Depletion and depreciation          147,363         152,575
   Amortization of deferred loan 
    costs                                    -          36,750
   General and administrative          203,792         312,249
   Interest expense                    238,665         292,667
                                   ------------    ------------
Income (loss) before income taxes     (218,945)        116,653
Provision for income taxes                   -               -
                                   ------------    ------------
Net income (loss)                     (218,945)        116,653
Less preferred stock dividends         (44,346)              -
                                   ------------    ------------
Net income (loss) applicable 
 to common stock                   $  (263,291)    $   116,653
                                   ============    ============

Net income (loss) per share of 
 common stock                      $     (0.05)    $      0.03
                                   ============    ============

Weighted average number of 
 common shares outstanding           5,203,787       4,477,913
                                   ============    ============

</TABLE

<PAGE>
                       Geo Petroleum, Inc.
         Unaudited Condensed Statements of Cash Flows


</TABLE>
<TABLE>
<CAPTION>
                                       Nine Months Ended
                                         September 30,
                                       -----------------
                                       1996         1995
                                       ----         ----
<S>                                <C>             <C>
Operating activities
Net income (loss)                  $  (218,945)    $   116,653
Adjustments to reconcile net 
 income (loss) to net cash 
 provided By (used in) operating 
 activities:
   Depletion and depreciation          147,363         152,575
   Amortization of deferred loan 
    costs                                    -          36,750
   Fees paid in stock                        -           3,447
   Gain on sale of property and 
    equipment                         (166,000)              -
   Changes in operating assets and 
   liabilities:
    Accounts receivable                 (9,365)        (65,659)
    Prepaid expenses and other               -          (9,542)
    Accounts payable                   206,843         (15,949)
    Accrued expenses                    27,758           5,961
                                  -------------    ------------
Net cash provided by (used in) 
 operating activities                  (12,346)        224,237


   
Investing activities
Additions to property and 
 equipment                            (353,369)        (92,123)
Proceeds on sale of property and 
 equipment                             166,000               -
                                   -------------   ------------
Net cash used in investing 
 activities                           (187,369)        (92,123)
   
</TABLE>
   







<PAGE>
                       Geo Petroleum, Inc.
         Unaudited Condensed Statements of Cash Flows (Continued)

<TABLE>
<CAPTION>
                                       Nine Months Ended
                                         September 30,
                                       -----------------
                                       1996         1995
                                       ----         ----
<S>                                <C>             <C>
Financing activities   
Proceeds from notes payable            151,246         105,816
Payments on notes payable              (66,994)         (6,358)
Bank overdraft                               -           4,039
Preferred stock issued                 130,156          25,200
                                   ------------    ------------
Net cash provided by financing 
 activities                            214,408         128,696
                                   ------------    ------------

Net increase (decrease) in cash 
 and cash equivalents                   14,694         260,809
   
   
Cash and cash equivalents at 
 beginning of period                   100,565         (38,496)
                                   -----------     ------------
Cash and cash equivalents at 
 end of period                     $   115,259     $   222,314
                                   ============    ============
   
   
Supplemental disclosure of cash
 flow information:   
Cash paid during the period for 
 interest                          $   238,665     $   292,667
                                   ============    ============
Cash paid during the period for 
 income taxes                      $         -     $       400
                                   ============    ============

</TABLE>

<PAGE>
                       Geo Petroleum, Inc.
                   Statements of Cash Flows


September 30, 1996 Supplemental disclosure of noncash investing 
and financing activities:

     Dividends on the Company's redeemable convertible
     preferred stock, amounting to $24,028, were declared 
     during the quarter ended September 30, 1996.  However, 
     $7,723 of said dividends were automatically reinvested 
     into additional shares of preferred stock.

During the interim nine month period ended September 30, 1996, 
the Company issued 20 shares of the Company's redeemable 
convertible preferred stock in exchange for the retirement of 
certain notes payable aggregating $20,000.  Dividends on the 
Company's redeemable convertible preferred stock, amounting to 
$70,252, were declared during the nine month period ended 
September 30, 1996.  However, $25,906 of said dividends were 
automatically reinvested into additional shares of preferred 
stock.
































<PAGE>
                       Geo Petroleum, Inc.
             Notes to Condensed Financial Statements


1.  Organization and Summary of Significant Accounting Policies

Organization

Geo Petroleum, Inc. (the Company) is a private oil and gas 
production company that was founded in 1986 in the state of 
California. The Company engages in the development, production 
and management of oil and gas properties located in California.

On April 9, 1996, a proposed merger with Drake Investment Corp. 
(Drake) became effective after approval by the Company's Board of 
Directors and by Shareholders.

On June 21, 1996, the Company filed a Form 10-SB General Form for 
Registration of Securities of Small Business Issuers with the 
Securities and Exchange Commission, under Section 12 (b) or (g) 
of the Securities Exchange Act of 1934.  The issuer became a 
reporting company when its Form 10-SB registration statement was 
cleared on August 12, 1996.

On September 5, 1996, the Company became a listed company on the 
NASDAQ OTC Bulletin Board, symbol GOPL.

Basis of Presentation

The accompanying unaudited financial statements have been 
prepared in accordance with Item 310 of Regulation S-B and do not 
include all of the information and footnotes required by 
generally accepted accounting principles for complete financial 
statements.  In the opinion of management, all adjustments 
(consisting of normal recurring adjustments) considered necessary 
for a fair presentation have been included.  These statements 
should be read in conjunction with the financial statements and 
notes thereto included in Form 10-SB filed June 21, 1996, which 
is available without cost from Geo Petroleum, Inc. upon request.

The accompanying unaudited financial statements have been 
prepared on a going concern basis, which contemplates the 
realization of assets and the satisfaction of liabilities in the 
normal course of business.  As shown in the financial statements, 
as of September 30, 1996, the Company's accumulated deficit 
totaled $1,516,646, and current liabilities exceeded current 
assets by $1,041,592.  These factors, among others, may indicate 
that the Company will be unable to continue as a going concern 
for a reasonable period of time.

The Company's continuation as a going concern is dependent upon 
its ability to generate sufficient cash flow to meet its current 
obligations on a timely basis, to obtain additional financing, 
<PAGE>
                       Geo Petroleum, Inc.
            Notes to Condensed Financial Statements

1.  Organization and Summary of Significant Accounting Policies 
(continued)


and ultimately to attain successful operations.  Management is 
continuing its efforts to obtain additional funds so that the 
Company can meet its obligations and sustain operations.  These 
potential alternatives include, among other things, a private and 
public placement of debt or equity, extending or refinancing the 
bank loan using oil and gas properties as collateral, sale of oil 
and gas properties, and obtaining an advance on future production 
from an end user.  As a first step in a potential public or 
private offering, the Company has merged with Drake Investment 
Corporation.  There can be no assurance that any of these 
potential alternatives will materialize.

The financial statements do not include any adjustments that 
might result from the outcome of this uncertainty.

Cash and Cash Equivalents

Cash equivalents include certificates of deposit with original 
maturity dates of less than three months.  The Company maintains 
a $100,000 certificate of deposit for state of California 
authorization purposes to perform additional oil and gas well 
recompletions.  These funds are subject to certain withdrawal 
restrictions until completion of the work.

Investment in Partnership

Included in oil and gas properties is an investment in a general 
partnership that was created in 1991 to produce oil at a well 
located on one of the Company's oil and gas properties.  The 
Company is the managing partner in this general partnership, and 
this investment is accounted for under the pro rata consolidation 
method.

Property and Equipment

The Company follows the full cost method of accounting for oil 
and gas properties.  Accordingly, all costs associated with the 
acquisition, exploration and development of oil and gas reserves 
are capitalized as incurred.  The costs of oil and gas properties 
are accumulated in a cost center and are subject to a cost center 
ceiling which such costs do not exceed.

All capitalized costs of oil and gas properties, including the 
estimated future costs to develop proved reserves, are depleted 
over the estimated useful lives of the properties by application 

<PAGE>
                       Geo Petroleum, Inc.
            Notes to Condensed Financial Statements

1.  Organization and Summary of Significant Accounting Policies 
(continued)


of the unit-of-production method using only proved oil and gas 
reserves, excluding future estimated costs and related proved 
undeveloped oil reserves at the Vaca Oil Sands property, which 
relate to a major development project involving an enhanced 
recovery process.  The evaluations of the oil and gas reserves 
were prepared by Sherwin D. Yoelin, a petroleum engineer.

Substantially all additions to oil and gas properties during the 
quarter ended September 30, 1996, relate to recompletions of 
existing producing or previously producing wells and the purchase 
of equipment.  Depreciation of office equipment and furniture is 
computed using the straight-line method, with depreciation rates 
based upon their estimated useful lives, which range between five 
and seven years.

Revenue

Revenue is recorded net of royalties and certain other costs that 
the Company incurs to bring the oil and gas into salable 
condition.

The Company had two significant customers during the quarters 
ended September 30, 1996, and 1995, which comprised approximately 
75% and 65% of gross oil and gas sales, respectively.

Earnings Per Common Share

Net income (loss) per common share for all periods presented is 
based upon average outstanding common shares, adjusted for the 
stock split described herein.  Such calculations do not assume 
any conversion of the redeemable convertible preferred stock into 
common stock because determination of the conversion price is 
subject to future events.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with 
generally accepted accounting principles requires management to 
make estimates and assumptions that affect the reported amounts 
of assets and liabilities and disclosures of contingent assets 
and liabilities at the date of the financial statements and the 
reported amounts of revenues and expenses during the reporting 
period. Actual results could differ from those estimates.



<PAGE>
                       Geo Petroleum, Inc.
            Notes to Condensed Financial Statements

1.  Organization and Summary of Significant Accounting Policies 
(continued)

Reclassifications

Certain prior year amounts in the financial statements have been 
reclassified to conform to current year presentation.


2.  Notes Payable

Notes payable consisted of the following:

<TABLE>
<CAPTION>
                                             September 30
                                                 1996
                                                 ----
<S>                                          <C>

          Note payable to bank               $ 1,460,000
          Notes payable to investors             587,315
                                             ------------
                                               2,047,315
          Less current portion                  (587,315)
                                             ------------
          Total long-term debt               $ 1,460,000

</TABLE>

The Company has issued notes payable to various investors bearing 
an interest rate of 10% and a guaranteed oil and gas production 
payment equal to 20% of the outstanding principal amount per 
annum.  The holders of the notes have extended the maturities of 
the notes either to 1997 or on a month to month basis, and all of 
the notes are secured by interests in the Company's oil and gas 
properties. 

The note payable to a bank bears interest at prime plus 2.0%.  At 
September 30, 1996, the prime rate was 8.25%.  Interest payments 
are due monthly, and the outstanding principal amount and all 
unpaid interest is due on January 1, 1998, contingent upon the 
payment to the bank of $750,000 out of the proceeds of an 
institutional stock offering now in progress.  If said offering 
does not close, the Company will seek to negotiate another 
extension.  The bank has indicated that it will not seek to 
foreclose on the note, so long as negotiations for a further 
extension continue on a good faith basis and progress is being 
made in obtaining financing. 


<PAGE>
                       Geo Petroleum, Inc.
            Notes to Condensed Financial Statements

2.  Notes Payable (continued)


In 1990, the Company issued 273,669 shares of common stock, an 
option to purchase 180,660 additional shares of common stock at 
$6 per share, and a recorded deed of trust on 20% of the 
Company's interest in its Vaca Oil Sands property to certain 
parties in exchange for those parties providing the collateral, 
35,000 shares of Union Pacific Corp. common stock, for the 
Company's note payable to a bank.  The consideration issued was 
valued at $300,000, its estimated fair market value, and was 
amortized as additional loan costs over five years.  The 35,000 
shares of Union Pacific Corp. common stock are held in a trust 
and had an approximate value of $2,563,750 at September 30, 1996.

<PAGE>
In the event of default on the bank note payable, the parties 
providing the collateral may take steps to recover from the 
Company the value of any collateral taken by the bank.  The 
collateral agreements have been extended subject to the same 
conditions as the bank loan.  


3.  Related Party Transactions

The Company has entered into agreements with another entity to 
sell gas and offer industrial waste disposal services at certain 
locations.  The principal officer/shareholder of the Company is 
also the principal officer/shareholder of the other entity.  
Total revenue to the Company from these agreements was $30,387 
during the quarter ended September 30, 1996.  At September 30, 
1996, the Company had a net receivable balance of $142,608 from 
the other entity.

At September 30, 1996, the Company had notes payable to relatives 
of the principal officer/shareholder totaling $162,315.

The principal officer/shareholder of the Company has not taken a 
salary since inception of the Company.

4.  Redeemable Convertible Preferred Stock

Dividends on the Company's redeemable convertible preferred 
stock, amounting to $24,028, were declared during the quarter 
ended September 30, 1996.  However, $7,723 of said dividends were 
automatically reinvested into additional shares of preferred 
stock.



<PAGE>
                       Geo Petroleum, Inc.
            Notes to Condensed Financial Statements

4.  Redeemable Convertible Preferred Stock (continued)


The series of preferred stock issued, carrying an annual dividend 
of 30%, is callable by the Company at par at any time on notice 
to the holder. If the Company has not called the preferred stock 
for redemption by January 1, 1997, the holder may require the 
Company to redeem the preferred stock.  The preferred stock is 
convertible into common stock, at the option of the holder, at a 
price equal to 80% of the price at which the common stock may be 
sold in an initial public offering of the common stock of the 
Company.  Additionally, the preferred stock is convertible, at 
the option of the holder, into the common stock at a price of 
$2.50 per common share in lieu of converting based upon the IPO 
price.  In addition, for every two shares of common stock 
acquired through said conversion, holder shall receive one 
warrant for the purchase of common stock at $3 per share.

5.  Common Stock

In June 1995, the Company issued 185,498 shares of common stock 
to a consulting company as payment for services that were 
performed in 1994 and 1995.  The parties agreed that the stock 
issued had a value of $10,000 and that approximately 80% of the 
services were performed at December 31, 1994.  Accordingly, at 
December 31, 1994, the Company had a payable balance of $8,000 
relating to these services.

On November 17, 1995, the Company's Articles of Incorporation 
were amended to provide for an authorized capital of fifty 
million shares of common stock.  In connection with the merger 
with Drake, the outstanding shares, including those issued in 
connection with the acquisition, were split at the rate of 2.5505 
to 1.
















<PAGE>
                       Geo Petroleum, Inc.
            Notes to Condensed Financial Statements


6.  Income Taxes

Deferred income taxes result from temporary differences in the 
recognition of revenues and expenses for financial accounting and 
tax reporting purposes.  Net deferred income taxes were composed 
of the following:

<TABLE>
<CAPTION>
                                             September 30
                                                 1996
                                                 ----
<S>                                          <C>
Deferred income tax asset - operating 
 loss carryforwards                          $ 1,470,000
Deferred income tax liability - 
 differences between book and tax basis 
 of property                                  (1,050,000)
Valuation allowance                             (420,000)
                                             ------------
Net deferred income taxes                    $         -
                                             ============

</TABLE>

As of September 30, 1996, the Company, based on 1995 information, 
had net operating loss carryforwards available in future periods 
to reduce income taxes that may be payable at those dates.  For 
federal income tax purposes, net operating loss carryforwards at 
September 30, 1996, amounted to approximately $3,800,000, and 
expire during the years 2001 through 2010.  For state income tax 
purposes, net operating loss carryforwards at September 30, 1996 
amounted to approximately $2,000,000, and expire during the years 
2004 through 2011.  The Company is delinquent in filing its 1994 
income tax returns, but there will be no taxes owing.

7.  Commitments

The Company leases office space under a month-to-month lease 
agreement which may be terminated on 30-days' notice.  The 
Company also leases equipment under month-to-month leases.


8.  Events Subsequent to September 30, 1996

The Company's bank debt of $1,460,000, due June 15, 1996, was 
extended to January 1, 1998.


<PAGE>
                       Geo Petroleum, Inc.
            Notes to Condensed Financial Statements


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

     The following discussion and analysis for the interim nine 
months periods ended September 30, 1996 and September 30, 1995, 
and for the two quarters ended September 30, 1996, and September 
30, 1995,  are to be read in combination with the Financial 
Statements presented elsewhere herein.

Results of Operations

     Nine months 1996 compared with nine months 1995.  During the 
nine months ended September 30, 1996, Geo had a net loss of 
$218,945, and cash used in operations of $12,346, compared to a 
net profit of $116,653 and cash provided by operations of 
$224,237 for the nine months ended September 30, 1995.  Oil and 
gas revenues decreased 47% to $646,756 for the 1996 period, 
compared to $1,211,258 for the 1995 period.  This was due mostly 
to a reduction in the number of wells on production in the 
Rosecrans and East Los Angeles/Bandini Fields, temporary 
interruptions in production due to shut-down of surface 
facilities for repairs, and due to predicted, normal declines.  
The well reduction occurred because of mechanical malfunctions 
which the Company is in the process of repairing.  Average oil 
prices increased to $19.65 per barrel in the 1996 period, 
compared to $16.45 per barrel in the comparable 1995 period.  Gas 
prices increased from $1.35 in the 1995 period to $1.81 in the 
comparable 1996 period.

     Average production costs per barrel of oil and equivalents 
increased to $12.60 in the 1996 period from $7.01 in the 1995 
period.  This was the result of increased repair costs and 
because fixed costs increased.

     Lease operating expenses for the nine-month 1996 period 
amounted to $615,775, as compared to $730,907 for the 1995 
period, a 16% decrease, reflecting the fewer number of wells on 
production and the lower level of production.  In addition to the 
normal operating expenses of existing wells during the 1996 
period, expenses were incurred in repairing and recompleting 
wells to ready them for production, repairing facilities damaged 
by a contractor's negligence, and completing construction and 
testing of automated custody transfer facilities necessary for 
shipping oil by pipeline.  




<PAGE>
                       Geo Petroleum, Inc.
            Notes to Condensed Financial Statements


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

Results of Operations (Continued)


     General and administrative expenses for the 1996 period were 
$203,792, as compared to $312,249 for the 1995 period, a decrease 
of 35% due to lower legal and accounting costs, and to lower 
administrative costs related to lower production.  Lower 
engineering and investment banking costs were incurred in the 
1996 period in connection with equity offerings.

     Interest expense for the 1996 period was $238,665, as 
compared to $292,667 for the 1995 period, a decrease of 18%.  
This decrease was due to a reduction in short-term notes 
outstanding.  The Company's provision for depletion and 
depreciation decreased to $147,363 for the 1996 period, as 
compared to $152,575 for the 1995 period, a decrease of 3%.  This 
decrease was due to lower production rates of oil and gas.

Capital Resources and Liquidity

     Financial Position.  At September 30, 1996, the Company's 
total assets increased by approximately $139,381 over December 
31, 1995, primarily as a result of additions to oil and gas 
properties due to the recompletion and equipping of idle wells on 
its East Los Angeles and Bandini properties to bring them on 
production, and installation of gas processing equipment.  At 
September 30, 1996, the Company had a working capital deficiency 
of $1,041,592, which deficiency is less by $1,261,768 over such 
deficiency at December 31, 1995.

     The Company's $1,460,000 bank loan is with City National 
Bank, 606 S. Olive Street, Los Angeles, California 90014.  City 
National acquired First Los Angeles Bank, the original lender to 
Geo.  The maturity date of the loan is January 1, 1998, 
contingent upon an interim payment of $750,000 from the proceeds 
of an institutional stock offering now in progress.

     As stated in "Financial Condition" above, the "going 
concern" reference set forth in the independent auditor's report 
on the Company's financial statements is largely a result of the 
fact that the Company's bank loan is due January 1, 1998, 
contingent upon the successful closing of an institutional 
offering, and that the Company currently does not have cash 
reserves or income sufficient to pay it off.  The Company is 
seeking to extend the loan for a period sufficient to enable it 
to complete one or more equity financings, joint ventures, or, if 
<PAGE>
                       Geo Petroleum, Inc.
            Notes to Condensed Financial Statements


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

Capital Resources and Liquidity (continued)



such measures are not adequate, property sales.  Based on the 
evaluations of an independent petroleum engineer and of its 
investment banker, and due to firm oil and gas prices, the 
Company expects that it can find financing sufficient to develop 
and rework its properties, thereby obtaining the cash flow 
necessary to pay off its bank loan.  The engineering evaluations 
support the Company's belief that the sale of a portion of its 
properties would enable it to pay off the loan.  The Company is 
discussing proposed financings from individual and institutional 
investors, and from large oil companies.

     Recurring sources of Other Revenue consist of sales of 
interests in future net profits; rent; miscellaneous income; and 
industrial waste disposal fees.  Other sources include proceeds 
from the settlement of legal actions, gains on sales of assets, 
and proceeds from Geo's merger with Drake.

     Other Revenues for the nine-month periods ended September 
30, 1996 and September 30, 1995 are itemized as follows:

<TABLE>
<CAPTION>
                                       Nine Months Ended
                                         September 30
                                       -----------------
                                      1996            1995
                                      ----            ----
<S>                                <C>             <C>
Other revenue
 Net Profits Interests             $    31,700     $    88,416
 Rent                                    3,650           5,831
 Miscellaneous Income                   18,932          38,206
 Industrial Waste Disposal              50,231          77,078
 Legal Settlement                       45,000         218,610
 Gain on Sale of Assets                166,000               -
 Proceeds from Merger                   20,000               -
                                   ------------    ------------
     Total                         $   335,512     $   428,141
                                   ============    ============

</TABLE>

<PAGE>
                       Geo Petroleum, Inc.
            Notes to Condensed Financial Statements


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

Capital Resources and Liquidity (continued)


     The reasons for the decrease in Other Revenues from the nine 
months ended September 30, 1995 to the comparable 1996 period are 
as follows:

     a)  Net Profits Interests:  1995 sales of these interests 
were higher than 1996 sales.
     b)  Rent:  1995 rent charges were higher than in 1996.
     c)  Miscellaneous Income:  Represents primarily management 
fees and royalties earned by the Company which were higher in 
1995 than in 1996 due to higher production rates of oil and gas 
and higher prices for oil.
     d)  Industrial Waste Disposal:  1995 volumes of waste water 
received were higher than in 1996.
     e)  Legal Settlement:  In 1995, Geo received $250,000 from 
the settlement of a lawsuit against a contractor for damages 
incurred while performing services on one of the Company's oil 
and gas properties.  In 1996, Geo received $45,000 from the 
settlement of a lawsuit against an adjacent property owner for 
damages to Company property incurred while trespassing on a 
Company easement.
     f)  Geo did not realize any gains on the sale of assets in 
1995.
     g)  Proceeds from Merger:  Geo completed its merger with 
Drake in April 1996.  Geo did not receive any such income in 
1995.

     In the event of noncompliance with the Bank's loan payment 
requirements, the Company will be required to allocate the 
proceeds of any financing first to the payment of the loan.  If 
such funds are not available, the Company would sell off 
sufficient assets to pay the loan.  If the Bank foreclosed on the 
pledgors' collateral, which had a market value as of September 
30, 1996, of more than 176% of the amount of the loan, the 
pledgors could seek to collect the amount paid by them by 
foreclosing on a 40% interest in Geo's Vaca Tar Sands property. 

     Historically, the net cash flow from the properties of the 
Company has been sufficient to fund its costs of operations but 
insufficient to fund such costs and its debt servicing 
requirements.



<PAGE>
                       Geo Petroleum, Inc.
            Notes to Condensed Financial Statements


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

Capital Resources and Liquidity (continued)



     The Company's primary sources of liquidity and capital 
resources in the near term will consist of working capital 
derived from its oil and gas production and industrial waste 
disposal operations, augmented by any such funds as may be 
derived from the sale of equity in the Company and of 
participating interest in its operations.  The Company's net 
revenues from oil and gas sales in excess of production and 
operating expenses during the nine months ended September 30, 
1996 and 1995 were $30,981 and $480,351, respectively.

     With respect to the long-term development of its Vaca Oil 
Sands properties in the Oxnard Field, a plan for the development 
of the property using the same enhanced recovery process 
presently in use on the producing Vaca Oil Sands wells has been 
deemed feasible by the Company's independent petroleum engineer.  
The future costs for the complete development of the property are 
estimated by the independent petroleum engineer to be $66,650,000 
with net cash flow before income taxes estimated to be 
$169,977,000 on an undiscounted basis or $69,879,000 discounted 
to present value at 10%.  The Company does not now have the 
capital resources adequate to pay these development costs.  At 
such time as the Company obtains equity financing, it intends to 
commence the development to the extent that it obtains such 
funds.  Part of the future costs may be paid out of revenues 
derived from the initial development work.  Full development will 
require large amounts of equity financing.  The Company 
alternatively may offer participation in a joint venture to 
larger companies in return for the necessary capital.  A 
significant uncertainty remains involving the financial ability 
of the Company to develop the reserves.

     Cash used in operations for the nine months ended September 
30, 1996, was $12,346 compared to cash provided by operations of 
$224,237 for the nine months ended September 30, 1995.  This 
decrease in cash provided by operations of $236,583 is primarily 
a result of decreased oil and gas production and revenues and the 
recovery in 1995 in a lawsuit of a net $183,000 for damages to a 
Company well, but no comparable recovery in 1996.




<PAGE>
                       Geo Petroleum, Inc.
            Notes to Condensed Financial Statements


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

Capital Resources and Liquidity (continued)



     Geo is seeking long-term equity financing.  The first step 
in obtaining it was a merger with Drake Investment Corporation, 
which closed on April 9, 1996, as provided for in the Agreement 
of Merger filed by the Company with its Form 10-SB.  This was for 
the purpose of increased access to capital sources.  The Company 
plans now to sell additional shares of its common or preferred 
stock in equity offerings, which, if successfully completed, will 
permit it to eliminate its working capital deficiency, debt and 
interest obligations, to perform improvement and remedial work on 
its existing properties, to acquire additional properties, and to 
drill a large number of wells on its properties.  All of these 
activities are expected to substantially increase the revenues of 
the Company and permit it to operate on a positive cash flow 
basis.

     Sources of Capital Resources.  On October 11, 1996, 
retroactive to June 15, 1996, the Company was able to extend the 
maturity date of its bank credit facility in the amount of 
$1,460,000 from June 15, 1996 to January 1, 1998.  The conditions 
of the extension are set forth under Capital Resources and 
Liquidity.

     At September 30, 1996, the decrease in the Company's working 
capital deficiency from December 31, 1995 was primarily due to 
the classification of its bank debt as long term.  Historically, 
the net cash flow from the properties of the Company has been 
insufficient to fund its costs of operations and its debt 
servicing requirements.

     The Company's cash used in investing activities, primarily 
additions to its oil and gas properties, was $187,369 in the nine 
months ended 1996 and $92,123 in the nine months ended 1995.  
This was financed in the 1995 and 1996 period by cash provided by 
operations and the proceeds from the issuance of additional notes 
payable and preferred stock.

     Cash provided by financing activities amounted to $214,408 
in the 1996 period and $128,696 in the 1995 period.  This cash 
was primarily the net proceeds from the issuance of notes payable 
in both periods.  During the 1996 period, holders of $20,000 of 
notes payable exchanged such notes for $20,000 of redeemable 
convertible preferred stock.
<PAGE>
                       Geo Petroleum, Inc.
            Notes to Condensed Financial Statements


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
CONDITION AND RESULTS OF OPERATIONS (continued)

Results of Operations

     Third quarter 1996 compared with third quarter 1995. 

     During the quarter ended September 30, 1996, Geo had a net 
loss of $20,570 and cash used in operations of $47,334, compared 
to net income of $30,066 and cash provided by operations of 
$7,056 for the comparable 1995 period.  Oil and gas revenues 
declined to $220,559 for the 1996 period, compared to $287,958 
for the 1995 period.  This was attributable mostly to normal 
declines and to a reduction of the number of wells on production 
in the Rosecrans and East Los Angeles/Bandini Fields as a result 
of temporary mechanical malfunctions.  Average oil prices 
increased to $20.65 per barrel in the 1996 period, compared to 
$15.92 per barrel in the comparable 1995 period, while gas prices 
increased from $1.32 to $2.09 per mcf.

     Lease operating expenses for the third quarter of 1996 
increased to $213,086, as compared to $173,762 in the comparable 
1995 period, an 18% increase reflecting the fewer number of wells 
on production and numerous repair and maintenance expenditures.  
Average production costs per barrel of oil and equivalents 
increased to $13.96 in the 1996 period from $7.01 in the 1995 
period.  This was the result of increased repair costs and 
because fixed costs increased.  In addition to the normal 
operating expenses of existing wells, expenses were incurred in 
repairing and recompleting wells to bring them on production, 
performing repairs on wells and facilities damaged by a fire 
caused by contractor negligence, and putting into service 
automated custody transfer facilities necessary for the delivery 
of oil into a refiner's pipeline.

     General and administrative expenses for the 1996 third 
quarter were $65,682, as compared to $74,232 for the 1995 period, 
a decrease of 12%.  The decrease was largely due to a reduction 
in legal costs and fees after substantially resolving two 
lawsuits successfully, and due to lower accounting and consulting 
fees.

     Interest expense for the 1996 quarter was $77,825, as 
compared to $69,577 for the comparable 1995 period, an increase 
of 11%.  This increase was due primarily to the issuance of 
additional short-term loans.  The Company's provision for 
depletion and depreciation increased to $49,121 for the third 
quarter of 1996, as compared to $35,925 for the 1995 period, an 
increase of 27%
<PAGE>
                       Geo Petroleum, Inc.
            Notes to Condensed Financial Statements


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


Capital Resources and Liquidity

     Financial Position

     At September 30, 1996, the Company had a working capital 
deficiency of $1,041,592, which deficiency is less by $1,261,768 
over such deficiency at December 31, 1995. The Company's 
$1,460,000 bank loan is due January 1, 1998, contingent upon 
matters set forth above.

     Historically, the net cash flow from the properties of the 
Company has been sufficient to fund its costs of operations but 
insufficient to fund such costs and its debt servicing 
requirements.

     The Company's primary sources of liquidity and capital 
resources in the near term will consist of working capital 
derived from its oil and gas production and industrial waste 
disposal operations, augmented by any such funds as may be 
derived from the sale of equity in the Company and of 
participating interests in its operations.  The Company's net 
revenues from oil and gas sales in excess of production and 
operating expenses during the third quarter of 1996 and 1995 were 
$7,473 and $114,196, respectively.  This decline is primarily 
attributable to the drop in revenues in the third quarter 1996 
which was previously discussed.

     Cash used in operations for the quarter ended September 30, 
1996, was $47,334 compared to cash provided by operations of 
$7,056 for the period ended September 30, 1995.  This decrease in 
cash provided by operations of $54,390 is primarily a result of 
decreased oil and gas production and revenues, increased costs 
per unit of production, and costs of repair of fire damage and 
lease facilities.











<PAGE>
                       Geo Petroleum, Inc.
            Notes to Condensed Financial Statements


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

Capital Resources and Liquidity

     Financial Position (continued)


     Other Revenue for the quarters ended September 30, 1996 and 
September 30, 1995 is itemized as follows:

<TABLE>
<CAPTION>
                                       Three Months Ended
                                          September 30
                                       -----------------
                                      1996            1995
                                      ----            ----
<S>                                <C>             <C>

Other revenue
 Net Profits Interests             $     7,200     $    21,020
 Rent                                    1,250           1,386
 Miscellaneous Income                    5,454           9,083
 Industrial Waste Disposal              20,527          18,324
 Legal Settlement                            -          51,971
 Gain on Sale of Assets                130,000               -
                                   ------------    ------------
     Total                         $   164,431     $   101,784
                                   ============    ============

</TABLE>


     The reasons for the increase in Other Revenues from the 
three months ended September 30, 1995 to the comparable 1996 
period are as follows:

     a)  Net Profits Interests:  1995 sales of these interests 
were higher than 1996 sales.
     b)  Rent:  1995 rent charges were higher than in 1996.
     c)  Miscellaneous Income:  Represents primarily management 
fees and royalties earned by the Company which were higher in 
1995 than in 1996 due to higher production rates of oil and gas 
and higher prices for oil.
     d)  Industrial Waste Disposal:  1996 volumes of waste water 
received were higher than in 1995.


<PAGE>
                       Geo Petroleum, Inc.
            Notes to Condensed Financial Statements


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

Capital Resources and Liquidity

     Financial Position (continued)

     e)  Legal Settlement:  In 1995, Geo received $250,000 from 
the settlement of a lawsuit against a contractor for damages 
incurred while performing services on one of the Company's oil 
and gas properties.  Geo did not receive any such income in the 
1996 three month period.
     f)  Gain on Sale of Assets:  Geo completed the sale of part 
of its Orcutt lease to another independent operator in September 
1996.  Geo did not receive any such income in 1995.

     Geo is seeking long-term equity financing, as set forth 
above in this Item, to permit it to continue to operate on a 
positive cash flow basis.

     Sources of Capital Resources.  The status of the Company's 
bank loan is discussed above in this Item.  A portion of the 
proceeds from the planned equity offering will be dedicated to 
the repayment of such indebtedness.

     The Company's cash used in investing activities, primarily 
additions to its oil and gas properties, net of any sales or 
disposals, was $8,754 in the third quarter of 1996 and $175,181 
for the comparable 1995 period.	

Inflation

     In recent years inflation has not had a significant impact 
on the Company, its operations or financial condition.

     Trends.  Although there is no assurance that the Company 
will be able to successfully complete its planned equity 
offering, the Company believes that if it is successful, the 
Company will be able to increase its revenues by investing a 
portion of the anticipated proceeds in remedial and recompletion 
operations, development and exploratory drilling and planned 
acquisitions.  As a result of any increase in activities, the 
Company anticipates that its general and administrative expenses 
will measurably increase, since the Company is contemplating 
hiring additional personnel, expanding its administrative offices 
and increasing compensation to its existing staff, including its 
president.  


<PAGE>
                       Geo Petroleum, Inc.
            Notes to Condensed Financial Statements


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

Capital Resources and Liquidity

     Financial Position

Inflation (continued)


     Legislation has been enacted which permits the export of 
Alaskan North Slope crude oil, primarily to the Far East.  
Previously, large quantities of such crude were shipped to 
California for refining and sale, which depressed prices paid for 
crude oil produced in California.  The major producer of Alaskan 
oil has begun delivery of a large portion of its oil production 
from Alaska to the Far East in 1996.  As the predicted reduction 
of Alaskan supplies to the West Coast occurs, it is expected to 
have, and may already be creating, a positive effect upon the 
price paid for California crude oil.  

     During the first nine months of 1996, crude oil prices have 
increased by an average of $3.20 per barrel over prices in 1995.  
Geo anticipates that there will be a gradual strengthening in the 
prices for both its oil and gas production, but that periods of 
unstable pricing may occur.  The Company will be subject to 
variations in cash flow depending upon changes in prices paid for 
oil and gas.  Based upon historical swings in prices, the Company 
does not envision a situation where reductions in prices will 
create an operating loss from its properties at the field level.  
Severe drops in prices would, however, strain the Company's 
ability to conduct remedial work using its revenues.

















<PAGE>
                       Geo Petroleum, Inc.
            Notes to Condensed Financial Statements


PART II.  Other Information.  

     The Company hereby incorporates by reference its discussion 
in Form 10-SB, Part I, Item 1, Description of Business of the 
Agreement to Merger dated December 20, 1995, between it and Drake 
Investment Corporation. 

     Geo's Articles of Incorporation were amended December 5, 
1995, authorizing an increase in the number of preferred shares 
to 100,000 and the common shares to 50,000,000, and the split of 
each outstanding common share into 2.5505 shares.

     The Boards of Directors and Shareholders of both companies 
approved the merger on April 9, 1996, which was the effective 
date of the merger.  The merger was authorized by a Permit issued 
by the Department of Corporations, State of California.  The 
merger had no significant or appreciable effect on the Company, 
its operations, or financial condition.

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

                                    GEO PETROLEUM, INC.
                                       (Registrant)
<TABLE>
<S>                                 <C>
November 12, 1996




      GERALD T. RAYDON                  ALYDA L. RAYDON

-------------------------------     --------------------------
By Gerald T. Raydon                 By Alyda L. Raydon
(President and Chairman)            (Chief Financial Officer)
                                    
</TABLE>