U.S. SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C.  20549

                            FORM 10-QSB

         (Mark One)
[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD
      ENDING JUNE 30, 1997.

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
      FROM _____ TO ____.


Commission File Number 0-21609

                    CHASE PACKAGING CORPORATION
(Exact name of small business issuer as specified in its charter)

            Texas                    93-1216127
(State or other jurisdiction of    (I.R.S. Employer
incorporation or organization)      Identification No.)

      2550 NW Nicolai Street
        Portland, Oregon              97210
(Address of principal executive     (Zip Code)
offices)

Issuer's telephone number, including area code: 503/228-4366



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 such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                        Yes   X     No
                                             ----      ----

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

          Class                      Outstanding at July 31, 1997
Common Stock ($.10 Par Value)                    7,002,964


PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

         Incorporated herein is the following unaudited financial
information:

             Statement of Net Assets in Liquidation as of June 30,
             1997.

             Statement of Operations for the three and six month 
             periods ended June 30, 1997 and 1996.

             Statements of Cash Flows for the six month periods ended
             June 30, 1997 and 1996.

             Statements of Changes in Net Assets in Liquidation for
             June 30, 1997.

             Notes to Consolidated Financial Statements.










                      CHASE PACKAGING CORPORATION

                  STATEMENT OF NET ASSETS IN LIQUIDATION
                              (Unaudited)
<TABLE>
    <S>                                              <C>  <C>
                                                    June 30, 1997
ASSETS

    Cash and cash equivalents                        $    10,975
    
    Accounts receivable, net of allowance
       for doubtful accounts of $97,853                  830,511

    Inventories, net of write-down of $870,995         1,004,924

    Prepaid expenses                                      25,679


ASSETS HELD FOR SALE                                     767,400

OTHER ASSETS                                               3,495
                                                       ---------

                                                     $ 2,642,984
                                                       =========
                
See notes to financial statements.

</TABLE>










                       CHASE PACKAGING CORPORATION
        STATEMENT OF NET ASSETS IN LIQUIDATION --  CONTINUED
                               (Unaudited)
                                                                  
<TABLE>
    <S>                                              <C>
                                                    June 30, 1997

LIABILITIES AND STOCKHOLDERS' EQUITY

    Trade accounts payable                           $ 1,042,148

    Accrued liabilities                                  274,065

    Advance billings                                      86,222

    Line-of-credit                                     1,517,551

STOCKHOLDERS' EQUITY
    
    Deficit of assets in liquidation                    (277,002)
                                                       ----------
       
                                                     $ 2,642,984
                                                       =========

See notes to financial statements.

</TABLE>
 
                            CHASE PACKAGING CORPORATION
               (a wholly-owned subsidiary of TGC Industries, Inc.
                         through July 31, 1996 - see Note A)

                             STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<S>                                    <C>         <C>          <C>          <C>
                                        Three months ended         Six months ended
                                             June 30,                  June 30,
                                        -------------------       -------------------
                                          1997        1996          1997        1996
SALES                                  $1,638,161  $2,317,866   $3,805,516   $4,714,683

COSTS AND EXPENSES
    Cost of sales                       1,811,689   2,265,762    3,988,917    4,656,976
    Selling, general and administrative   336,726     447,101      702,300      957,237

    Interest expense                       45,324     205,990      114,165      418,650
                                        ---------    --------    ---------    --------- 
                                        2,193,739   2,918,853    4,805,382    6,032,863

        LOSS BEFORE EXTRAORDINARY ITEM
           AND INCOME TAXES            (  555,578)   (600,987)  (  999,866)  (1,318,180)
    Income tax expense                     --            --          --           --
    Loss before extraordinary item     (  555,578)   (600,987)  (  999,866)  (1,318,180)
    Extraordinary item - gain from 
      extinguishment of debt               --            --        173,893        --
                                        ---------    --------    ---------    --------- 

               NET LOSS               $(  555,578)  $(600,987) $(  825,973) $(1,318,180)

Weighted average shares                 7,002,964   6,960,714    7,002,964    6,960,714
     outstanding

LOSS PER COMMON SHARE

    Loss per share before
     extraordinary item                     $(.08)      $(.09)       $(.14)      $(.19)

    Extraordinary item                     --            --            .02        --
                                        ---------    --------    ---------    --------- 
          LOSS PER SHARE                    $(.08)      $(.09)       $(.12)      $(.19)

See notes to financial statements.
</TABLE>





                                CHASE PACKAGING CORPORATION
                    (a wholly-owned subsidiary of TGC Industries, Inc.
                            through July 31, 1996 - see Note A)

                                 STATEMENTS OF CASH FLOWS
                                        (Unaudited)
<TABLE>
<S>                                                  <C>               <C>
                                                         Six-Months Ended
                                                             June 30,

                                                        1997             1996

Increase (decrease) in cash

Cash flows from operating activities

Net Loss                                             $ (825,973)       (1,318,180)
Adjustments to reconcile net loss to
net cash provided by (used in) operating
activities
     Non-Cash Compensation                                 --               3,600
     Depreciation and amortization                      180,481           320,696
      and equipment                                    ( 42,988)            8,629
     Gain from extinguishment of debt                  (173,893)              --
     Non-Cash Expenses                                   62,428               --
     Change in assets and liabilities
      Accounts Receivable                               499,413             24,380
      Inventories                                       477,328          1,137,626
      Prepaid Expenses                                   66,225             32,390
      Accounts Payable                                 (161,906)         ( 206,430)
     Accrued Liabilities                               (147,930)           105,533
     Advance Billings                                  ( 28,109)         (  74,277)

        Net cash provided by (used in) 
         operating activities                          ( 94,924)            33,967

Cash flows from investing activities
  Capital expenditures                                 (113,360)         (  97,063)
  Proceeds from sale of property
  and equipment                                         886,250              9,000
  Other assets                                              500

             Net cash provided by (used in)
               investing activities                     773,390          (  88,063)

Cash flows from financing activities
  Principal payments of debt obligations               (350,000)         ( 185,001)
  Net payments on line of credit                       (348,187)         ( 720,160)
  Receivable from/payable to parent                        --              935,607
  Capital contributed                                     9,318                 --

            Net cash provided by (used in) 
              financing activities                     (688,869)            30,446

            NET DECREASE IN CASH                       ( 10,403)         (  23,650)

Cash at beginning of period                              21,378             25,123

Cash at end of period                                $   10,975        $     1,473

Supplemental cash flow information
Cash paid during the year for

          Interest                                   $   94,156         $  252,640

</TABLE>


NON-CASH INVESTING AND FINANCING ACTIVITIES

During the 1997 first quarter, Chase incurred rent expense of 
$55,427 for use of the manufacturing facility owned by TGC.  
TGC converted the rent receivable to equity in Chase.

On March 18, 1997 TGC sold the Portland, Oregon facility 
occupied by Chase.  Proceeds of $1,780,00 were applied against 
Chase's outstanding mortgage indebtedness to Union Camp.  
Proceeds of $284,500 were placed into escrow for future repairs 
and rental payments and recorded as a prepaid expense.  
Proceeds of $22,000 were utilized to repay Chase's rent on the 
Portland facility from the date of closing through April 30,1997 
and proceeds of $133,129 were applied against property taxes on 
the Portland facility.

See notes to financial statements.




                                CHASE PACKAGING CORPORATION

                     Statement of Changes in Net Assets in Liquidation
                                        (Unaudited)
<TABLE>
                                       June 30, 1997
     <S>                                              <C>
Sales                                                     --

Costs and Expenses
     Cost of sales                                        --
     Selling, general and administrative                  --
     Write-down of assets in liquidation              1,962,533
                                                      ---------
     Interest Expense                                 1,962,533

       ACCUMULATED LOSS ON ASSETS
         IN LIQUIDATION                             $(1,962,533)

Net assets before write-down in liquidation          (1,685,531)

Deficit of assets in liquidation                    $(  277,002)






</TABLE>


CHASE PACKAGING CORPORATION
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
June 30, 1997 

NOTE A -- BASIS OF PRESENTATION

On June 25, 1997 Chase Packaging Corporation ("Chase" or "the
Company") announced to employees and creditors that Chase would
begin an orderly liquidation of all Chase's assets beginning at 
the close of business on June 30, 1997.  On July 25, 1997, the
Company notified its creditors by mail that the Company would
commence with an orderly liquidation of all its remaining assets 
outside of a formal bankruptcy or receivership proceeding in a
manner intended to maximize asset values.  The Company's
Board of Directors determined that it is in the best interest of
the Company and all of its creditors to liquidate in an orderly
fashion.  As a result of the plan of liquidation, the accompanying
unaudited financial statements reflect a change in the basis of
accounting used to determine the amounts at which assets and
liabilities are carried from a going concern basis to a liquidation
basis.  The statement of net assets in liquidation, statements of 
operations, statements of cash flows and the statement of changes 
in net assets in liquidation have been prepared in accordance with 
the instructions to Form 10-QSB and therefore do not include all 
information and footnotes necessary for a fair presentation in 
conformity with generally accepted accounting principles.  The
statement of changes in net assets in liquidation contains only the
write-down of assets as of the close of business on June 30, 1997.

As previously disclosed, in May 1996 a formal plan was adopted to
reorganize TGC Industries, Inc. (TGC) and Chase.  Pursuant to the
plan, the following actions were taken:

1.  TGC liquidated Chase (Old Chase) with TGC receiving all of Old
    Chase's assets and liabilities in cancellation of the Old Chase
    stock held by TGC.  TGC formed a new wholly-owned subsidiary, 
    New Chase, and transferred to it all of the assets and 
    liabilities received in the liquidation of Old Chase, except  
    TGC retained the manufacturing facility located in Portland, 
    Oregon and canceled Old Chase's net payable to TGC.

2.  TGC contributed $2,716,403 as additional capital to New Chase.

3.  Effective July 31, 1996, TGC spun-off New Chase by a dividend
    distribution to the stockholders of record of TGC common and 
    preferred stock.  At the same time, the name was changed from 
    New Chase to Chase Packaging Corporation (Chase).

The financial statements are presented on the basis that the 
principal operations of Old Chase continued with the formation of 
New Chase, therefore the statements of operations and cash flows
for the three months and six months ended June 30, 1996 consist of 
three and six months operations of Old Chase as a wholly-owned 
subsidiary of TGC.

NOTE B -- MANAGEMENT PRESENTATION

In the opinion of management, all adjustments (consisting of write-
downs to realizable value) considered necessary for a fair
presentation of net assets in liquidation, statements of operations, 
statements of cash flows, and the related statement of changes in net 
assets in liquidation have been made.  For further information,
refer to the financial statements and the footnotes thereto included 
in the Company's Annual Report for the year ended December 31, 1996 
filed on Form 10-KSB.

NOTE C -- LOSS PER COMMON SHARE

Loss per common share before and after extraordinary gain for the
quarter and six months ended June 30, 1997 were calculated by dividing net loss
for the period by the number of shares outstanding for the period. 
Loss per common share for the quarter and six months ended June 30,
1996 was based on the assumption that the 6,960,714 shares of
common stock issued under the reorganization plan were issued at
the beginning of the period.

NOTE D -- EXTRAORDINARY ITEM - GAIN FROM EXTINGUISHMENT OF DEBT

On March 18, 1997 TGC sold the Portland, Oregon facility for 
$2,430,000 with $1,780,000 of the proceeds applied against Chase's 
outstanding mortgage indebtedness to Union Camp with respect to 
such facility.  The $1,780,000 payment to Union Camp, when 
combined with a principal payment of $350,000 made to Union 
Camp on January 7, 1997 from the sale proceeds of Chase's 
polypropylene weaving equipment, resulted in the Union Camp 
note being declared paid in full as of March 19, 1997.  A gain 
from debt extinguishment of $173,893 was recognized in the 1997 
first quarter as a result of these payments.  The gain consisted 
of $4,383 in principal and $169,510 in interest carried on the 
Company's financial statements and forgiven by Union Camp.  Due to 
the Company's net operating loss position there is no income tax
applicable to the gain.

NOTE E -- LOAN DEFAULTS

As a result of the March 18, 1997 sale of the Portland facility 
by TGC and subsequent payment made to Union Camp, the Company 
cured its default condition under terms of the Union Camp
Promissory Note as the Note was declared paid in full.  The Company
also cured its cross-default condition with the bank as a result of
the payment to Union Camp.  In addition, the Company resolved the
violation of the tangible net worth covenant in the Accounts
Financing Agreement with the bank due to the contribution made by
TGC to the paid-in capital of Chase during the first quarter of
1997.

NOTE F -- LIQUIDATION
As part of the Company's plan of liquidation, effective July 21,
1997, Chase sold to Lockwood Packaging Corporation Idaho (Lockwood)
the Company's operation at Idaho Falls, Idaho, as a going concern.

The assets sold included substantially all of the Company's
equipment, furniture, fixtures, and other assets located in the
Company's Idaho Falls, Idaho facility for a total of $75,000.00. 
In addition, the Company sold inventory from the Idaho Falls
operation to Lockwood for $255,000.00.  The total proceeds of
$330,000.00 were deposited with the Company's bank to pay down the
Company's loan balance with the bank.

Lockwood has entered into a lease with the Company for the
Company's Idaho Falls facility.  The Company intends to sell the
Idaho Falls facility in the near future, and, upon such sale, it is
intended that the new owner will lease the property to Lockwood and
that the Company's lease with Lockwood will be terminated.

On July 25, 1997, the Company notified its creditors by mail that
the Company would commence with an orderly liquidation of all its
remaining assets outside of a formal bankruptcy or receivership
proceeding in a manner intended to maximize asset values.  Inventory
and equipment has been sold to other packaging concerns and an
auction was held on August 14, 1997 to liquidate the remaining
inventory, equipment and supplies at the Company's Portland, Oregon
facility.

The table below sets forth the assets of Chase on a going concern
basis as of June 30, 1997 and the corresponding write-down to the
estimated net realizable value at time of disposal:
<TABLE>
<S>                             <C>                    <C>                    <C>
                       Going concern basis
                       6/30/97 Balance      Liquidation Write-down  Net Realizable Value
                       -------------------  ----------------------  --------------------

Cash                            $   10,975               --                   $   10,975
Accounts Receivable (net)          830,511               --                      830,511
Inventories                      1,875,919             $  870,995              1,004,924
Prepaid Expenses                   292,068                266,389                 25,679

Buildings (net book value)         332,319                 80,209                325,000
Land                                72,890                 --          (included in above)
Machinery & Equipment (n.b.v.)   1,181,654                739,254                442,400

Other Assets                         9,181                  5,686                  3,495

TOTAL                           $4,605,517             $1,962,533             $2,642,984
</TABLE>

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

RESULTS OF OPERATIONS

Revenues were $1,638,161 for the three months ended June 30, 1997,
compared to revenues of $2,317,866 for the same period of 1996. 
Net loss for the three months ended June 30, 1997 was $555,578 as
compared to net loss of $600,987 for the three months ended June
30, 1996. 

Revenue for the first six months of 1997 was $3,805,516 as compared
to revenue of $4,714,683 for the first six months of 1996.  Net
loss for the first half of 1997 was $825,973  as compared to
net loss of $1,318,180 for the first half of 1996.

The 29% reduction in revenues in the 1997 second quarter when
compared to the second quarter of 1996 was the result of continued
sluggish demand for the Company's woven polypropylene onion bags
and consumer-size mesh potato bags,  Competition from cheap import
onion bags and low market prices for potatoes were the primary
factors impacting the lower demand for Chase's products.  Although
costs throughout the operation were lower in 1997 than in 1996, the
expense reductions could not offset rapidly declining revenues. 
The continuation in operating losses, when combined with the
decision of the Company's secured lender not to renew the Company's
operating line of credit, resulted in the decision of Chase's Board
of Directors to liquidate the Company in an orderly fashion.

Financial Condition

Chase Packaging experienced cash losses for the past four years in
spite of numerous infusions of working capital and an aggressive
program of inventory and expense reduction.  The Board of Directors
therefore determined that an orderly liquidation of Chase was in
the best interest of the Company and all of its creditors.  Chase
has retained the firm of Edward Hostmann, Inc. to assist the
Company in such liquidation.

As part of the liquidation program, effective July 21, 1997, Chase
sold most of its assets in Idaho Falls, Idaho (excluding real
estate) to Lockwood Packaging Corporation Idaho for $330,000.  As
discussed earlier, the Company intends to sell the Idaho Falls real
estate (land and building) in the near future.  During July and
August of 1997 Chase sold most of its inventory in Portland to
other packaging companies.  The Company also sold its band label
extruder for $125,000 with remaining inventory and machinery and
equipment sold at the August 14 auction for gross proceeds of
approximately $340,000.  Closure of the Idaho Falls real estate
sale and collection of outstanding auction proceeds and accounts
receivable are the remaining items to be completed in the Company's
liquidation program as of August 21.

As a result of the orderly liquidation, the loan balance with the 
Company's secured lender has been paid down from a June 30, 1997 
balance of $1,517,551 to $131,259 as of August 21, 1997.  Although
it is difficult to determine the final return to unsecured
creditors from such liquidation, the Company estimates at the
present time that general creditors will receive a distribution
equal to ten to fifteen percent (10-15%) of each creditor's claim.


PART II  -  OTHER INFORMATION

ITEM 5.  OTHER INFORMATION

         a.  On June 23, 1997, Mr. William J. Barrett and Mr.
             Herbert M. Gardner resigned as directors of Chase
             Packaging Corporation.  The resignations of Mr.
             Barrett and Mr. Gardner were not due to any
             disagreement with the Company on any matter relating
             to the Company's operations, policies or practices.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

         a.  Exhibits -- None.

         b.  Reports -- No reports on Form 8-K have been filed  
             during the quarter for which this report is filed. 
             However, the following report on Form 8-K has been
             filed subsequent to June 30, 1997:  

             (1) A report under Item 2 and Item 5 was filed on July
                 31, 1997.  Such reporting under Item 2 was to
                 disclose the sale of the Company's Idaho Falls
                 operation as a going concern to Lockwood Packaging
                 Corporation Idaho effective July 21, 1997.  Such
                 reporting under Item 5 was to disclose that the
                 Company notified its creditors on July 25, 1997
                 that Chase was beginning an orderly liquidation of
                 all of its remaining assets outside of a formal
                 bankruptcy or receivership proceeding.


                            SIGNATURES


In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                   CHASE PACKAGING CORPORATION


Date:  August 28, 1997                /s/  Doug Kirkpatrick
                                   ______________________________ 
                                        Doug Kirkpatrick,
                                        President and Treasurer
                                    (Principal Executive Officer  
                                     and Principal Financial and
                                     Accounting Officer)

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