UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                                         
                              WASHINGTON, D.C. 20549
                                         
                                    FORM 10-Q
                                         
   (Mark One)
   (X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934
    
   For the quarterly period ended   December 31, 1997
                                  ---------------------
                                        OR
    
   ( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934
    
   For the transition period from                       to                     

                                    --------------------    -------------------
    
   Commission file number  1-12859
                          -----------------------------------------------------
    
                               CTG RESOURCES, INC.
   ----------------------------------------------------------------------------
              (Exact name of registrant as specified in its charter)
    
    
               Connecticut                                        06-1466463
   ----------------------------------------------------------------------------
     (State or other jurisdiction of                         (I.R.S. Employer
      incorporation or organization)                        Identification No.)
    
   100 Columbus Boulevard, Hartford, Connecticut                        06103
   ----------------------------------------------------------------------------
     (Address of principal executive offices)                        (Zip Code)
    
    
                                  (860) 727-3010
   ----------------------------------------------------------------------------
               (Registrant's telephone number, including area code)
                                         
   ----------------------------------------------------------------------------
   (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 (applicable only
   to Corporate Issuers).   Number of shares of common stock outstanding as of
   the close of business on January 30, 1998:  8,652,159.
    
    <PAGE>


    
    
    
    
    
    
                               FINANCIAL STATEMENTS
                                         
                                CTG RESOURCES, INC.
                                         
                                         
                                         
                                         
        The condensed financial statements included herein have been prepared
   by the Company, without audit, pursuant to the rules and regulations of the
   Securities and Exchange Commission.  Certain information and footnote
   disclosures normally included in financial statements prepared in accordance
   with generally accepted accounting principles have been condensed or omitted
   pursuant to such rules and regulations.  Although the Company believes that
   the disclosures are adequate to make the information presented not
   misleading, it is suggested that these condensed financial statements be
   read in conjunction with the financial statements and the notes thereto
   included in the Company's annual report on Form 10-K (Commission File No. 1-
   12859).  In the opinion of the Company, all adjustments necessary to present
   fairly the consolidated financial position of CTG Resources, Inc. as of
   December 31, 1997 and 1996 and the results of its operations and its cash
   flows for the three months and twelve months ended December 31, 1997 and
   1996 have been included.  The results of operations for such interim periods
   are not necessarily indicative of the results for the full year.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    <PAGE>
<TABLE>
<CAPTION>
                                                                    "UNAUDITED"
                                CTG RESOURCES, INC.
                                         
                           CONSOLIDATED BALANCE SHEETS
                              (Thousands of Dollars)
    
    
                                              December 31,  Sept. 30,  December 31,

   <S>                                          <C>         <C>          <C>
                     ASSETS                        1997        1997         1996   
                     ------                     ---------   ---------    --------- 
   Plant and Equipment:
      Regulated energy                          $ 426,915   $ 423,087    $ 407,837 
      Unregulated energy                           60,615      61,163       60,726 
      Construction work in progress                 8,075       7,703        4,276 
                                                ---------   ---------    --------- 
                                                  495,605     491,953      472,839 
      Less-Allowance for depreciation             165,555     160,313      148,194 
                                                ---------   ---------    --------- 
                                                  330,050     331,640      324,645 
                                                ---------   ---------    --------- 

   Investments, at equity                          11,118      11,530       10,673 
                                                ---------   ---------    --------- 
   Current Assets:
      Cash and cash equivalents                     3,527       4,458        1,436 
      Accounts and notes receivable                45,341      28,726       41,596 
      Allowance for doubtful accounts              (3,551)     (3,439)      (5,025)
      Accrued utility revenue                      20,313       4,624       16,375 
      Inventories                                  14,414      17,584       13,992 
      Prepaid expenses                              5,213       8,903        3,708 
                                                ---------   ---------    --------- 
                                                   85,257      60,856       72,082 
                                                ---------   ---------    --------- 
   Deferred Charges and Other Assets:
      Unrecovered future taxes                     37,177      37,177       44,812 
      Recoverable transition costs                    464         839        2,128 
      Other assets                                 22,698      22,245       20,263 
                                                ---------   ---------    --------- 
                                                   60,338      60,261       67,203 
                                                ---------   ---------    --------- 
                                                $ 486,763   $ 464,287    $ 474,603 
                                                =========   =========    =========
</TABLE>
 <PAGE>

<TABLE>
<CAPTION>    
    
                                                                    "UNAUDITED"
                               CTG RESOURCES, INC.
                                         
                     CONSOLIDATED BALANCE SHEETS (Concluded)
                                (Thousands of Dollars)
                                         
                                         
                                              December 31,  Sept. 30,  December 31,

   <S>                                          <C>         <C>          <C>
         CAPITALIZATION AND LIABILITIES            1997        1997         1996   
         ------------------------------         ---------   ---------    --------- 
   Capitalization:
      Common Stock                              $  67,569   $ 120,409    $ 120,635 
      Retained Earnings                            55,868      49,924       51,735 
                                                ---------   ---------    --------- 
                                                  123,437     170,333      172,370 
      Unearned compensation -
         Restricted stock awards                     (932)     (1,034)      (1,342)
                                                ---------   ---------    --------- 
         Common stock equity                      122,505     169,299      171,028 
      Preferred stock, not subject to
         mandatory redemption                         883         884          899 
      Long-term debt                              187,374     126,787      135,474 
                                                ---------   ---------    --------- 
                                                  310,762     296,970      307,401 
                                                ---------   ---------    --------- 

   Current Liabilities:
      Current portion of long-term debt             4,085       1,487       14,069 
      Notes Payable                                30,500      27,500        9,000 
      Accounts payable and accrued expenses        32,369      36,968       41,221 
      Refundable purchased gas costs                5,577       4,714        3,315 
      Accrued liabilities                           8,211       4,531        3,539 
                                                ---------   ---------    --------- 
                                                   80,742      75,200       71,144 
                                                ---------   ---------    --------- 
   Deferred Credits:
      Deferred income taxes                        45,642      44,302       40,347 
      Unfunded deferred income taxes               37,177      37,177       44,812 
      Investment tax credits                        2,927       2,982        3,148 
      Refundable taxes                              3,491       3,491        3,445 
      Other                                         6,022       4,165        4,306 
                                                ---------   ---------    --------- 
                                                   95,259      92,117       96,058 
                                                ---------   ---------    --------- 
                                                $ 486,763   $ 464,287    $ 474,603 
                                                =========   =========    ========= 

</TABLE>



    <PAGE>
<TABLE>
<CAPTION>
                                                                    "UNAUDITED"
                               CTG RESOURCES, INC.
                                         
                         CONSOLIDATED STATEMENTS OF INCOME                     

                 (Thousands of dollars except for per share data)              


                                                    Three Months Ended
                                                       December 31, 
                                               -----------------------------
   <S>                                          <C>               <C>
                                                    1997              1996   
                                                ----------        ---------- 

   Operating Revenues                           $   92,396        $   89,269 
   Less:  Cost of Energy                            51,292            50,107 
          State Gross Receipts Tax                   3,369             3,470 
                                                ----------        ---------- 
   Operating Margin                                 37,735            35,692 
                                                ----------        ---------- 

   Other Operating Expenses:
      Operations & maintenance expenses             13,523            13,945 
      Depreciation                                   4,689             4,412 
      Income taxes                                   6,238             5,978 
      Other taxes                                    1,813             1,936 
                                                ----------        ---------- 
                                                    26,263            26,271 
                                                ----------        ---------- 
   Operating Income                                 11,472             9,421 
                                                ----------        ---------- 
   Other Income (Deductions):
      Allowance for equity funds used
        during construction                             49                49 
      Equity in partnership earnings                   874               851 
      Other income                                     188              (168)
      Income Taxes                                    (561)             (304)
                                                ----------        ---------- 
                                                       550               428 
                                                ----------        ---------- 
   Interest and Debt Expense                         3,899             3,133 
                                                ----------        ---------- 
   Net Income                                        8,123             6,716 
   Less-Dividends on Preferred Stock                    15                16 
                                                ----------        ---------- 
   Net Income Applicable to Common Stock        $    8,108        $    6,700 
                                                ==========        ========== 

   Income Per Average Share of
      Common Stock                              $     0.85        $     0.63 
                                                ==========        ========== 

   Dividends Per Share of Common Stock          $     0.25        $     0.38 
                                                ==========        ========== 
   Average Common Shares Outstanding
      During the Period                          9,521,734        10,623,137 
                                                ==========        ========== 
</TABLE>
    
    <PAGE>
<TABLE>
<CAPTION>
                                  CTG RESOURCES, INC.          "UNAUDITED"
    
                         CONSOLIDATED STATEMENTS OF INCOME                     

                 (Thousands of dollars except for per share data)
    
                                                    Twelve Months Ended
                                                       December 31, 
                                               -----------------------------
   <S>                                          <C>               <C>
                                                    1997              1996   
                                                ----------        ---------- 

   Operating Revenues                           $  308,692        $  314,170 
   Less:  Cost of Energy                           167,971           176,210 
          State Gross Receipts Tax                  11,006            11,390 
                                                ----------        ---------- 
   Operating Margin                                129,715           126,570 
                                                ----------        ---------- 

   Operating Expenses:
      Operations & maintenance expenses             56,500            58,702 
      Depreciation                                  18,461            17,794 
      Income taxes                                  17,219            13,912 
      Other taxes                                    7,600             7,604 
                                                ----------        ---------- 
                                                    99,780            98,012 
                                                ----------        ---------- 
   Operating Income                                 29,935            28,558 
                                                ----------        ---------- 
   Other Income (Deductions):
      Allowance for equity funds used
        during construction                            125               148 
      Equity in partnership earnings                 2,933             2,486 
      Other deductions                                  19               189 
      Nonrecurring items                                 -               892 
      Income Taxes                                    (923)           (1,267)
                                                ----------        ---------- 
                                                     2,154             2,448 
                                                ----------        ---------- 
   Interest and Debt Expense                        13,607            13,469 
                                                ----------        ---------- 
   Net Income                                       18,482            17,537 
   Less-Dividends on Preferred Stock                    61                63 
                                                ----------        ---------- 
   Net Income Applicable to Common Stock        $   18,421        $   17,474 
                                                ==========        ========== 

   Income Per Average Share of
      Common Stock                              $     1.78        $     1.69 
                                                ==========        ========== 

   Dividends Per Share of Common Stock          $     1.39        $     1.51 
                                                ==========        ========== 
   Average Common Shares Outstanding
      During the Period                         10,354,387        10,328,158 
                                                ==========        ========== 
</TABLE>
    <PAGE>
<TABLE>
<CAPTION>
                                                                    "UNAUDITED"
                                  CTG RESOURCES, INC.                    

                       CONSOLIDATED STATEMENTS OF CASH FLOWS                   

                              (Thousands of Dollars)                           

    
                                                  Three Months Ended 
                                                     December 31, 
                                                 ----------------------
   <S>                                             <C>          <C>
                                                     1997         1996   
                                                     ----         ----   

   Cash Flows from Operations                      $(10,040)    $ (7,186)
                                                   --------     -------- 

   Cash Flows from Investing Activities:
      Capital expenditures                           (4,322)      (3,623)
      Other investing activities                      2,265          210 
                                                   --------     -------- 
      Net cash used in investing activities          (2,058)      (3,413)
                                                   --------     -------- 
   Cash Flows from Financing Activities:
      Dividends paid                                 (2,178)      (4,007)
      Repurchase of common stock                    (52,839)           - 
      Other stock activity, net                          (2)        (616)
      Issuance of long-term debt                     64,000            - 
      Principal retired on long-term debt              (815)        (857)
      Short-term debt                                 3,000        9,000 
                                                   --------     -------- 
      Net cash provided by 
         financing activities                        11,166        3,520 
                                                   --------     -------- 
   Decrease in Cash and
      Cash Equivalents                                 (931)      (7,079)
   Cash and Cash Equivalents at
      Beginning of Period                             4,458        8,515 
                                                   --------     -------- 
   Cash and Cash Equivalents at
      End of Period                                $  3,527     $  1,436 
                                                   ========     ======== 
</TABLE>
    
    <PAGE>


<TABLE>
<CAPTION>    
    
    
                                                                    "UNAUDITED"
                                  CTG RESOURCES, INC.                     

                 CONSOLIDATED STATEMENTS OF CASH FLOWS (Concluded)             

                              (Thousands of Dollars)                           

    
                                                  Three Months Ended 
                                                     December 31, 
                                                 ----------------------
   <S>                                             <C>          <C>
                                                     1997         1996   
                                                     ----         ----   

   Schedule Reconciling Earnings to
      Cash Flows from Operations:
      Net Income                                   $  8,123     $  6,716 
                                                   --------     -------- 
      Adjustments to reconcile net income
         to net cash:
         Depreciation and amortization                4,895        4,563 
         Deferred income taxes, net                   1,285          281 
         Equity in partnership earnings                (874)        (851)
         Cash distributions received from                   
           investments                                  244          200 
      Change in assets and liabilities:                     
         Accounts receivable                        (16,305)     (12,006)
         Accrued utility revenue                    (15,689)     (12,195)
         Inventories                                  3,170        1,976 
         Purchased gas costs                            863       (2,697)
         Prepaid expenses                             3,690        7,212 
         Accounts payable and accrued expenses         (544)       2,418 
         Other assets/liabilities                     1,103       (2,803)
                                                   --------     -------- 
           Total adjustments                        (18,163)     (13,902)
                                                   --------     -------- 

      Cash flows from operations                   $(10,040)    $ (7,186)
                                                   ========     ======== 

   Supplemental Disclosures of Cash Flow
      Information:
   Cash Paid During the Period for:
      Interest (net of amount capitalized)         $  3,869     $  4,936 
                                                   ========     ======== 
      Income taxes                                 $  1,614     $  1,517 
                                                   ========     ======== 
</TABLE>
    
    
    
    
    
    
    <PAGE>
<TABLE>
<CAPTION>
                                                                    "UNAUDITED"
                                  CTG RESOURCES, INC.                     

                       CONSOLIDATED STATEMENTS OF CASH FLOWS                   

                              (Thousands of Dollars)                           

    
                                                  Twelve Months Ended
                                                     December 31, 
                                                 ----------------------
   <S>                                             <C>          <C>
                                                     1997         1996   
                                                     ----         ----   

   Cash Flows from Operations                      $ 29,194     $ 34,388 
                                                   --------     -------- 

   Cash Flows from Investing Activities:
      Capital expenditures                          (25,293)     (23,900)
      Nonrecurring Items                                  -          892 
      Other investing activities                      2,109         (912)
                                                   --------     -------- 
      Net cash used in investing activities         (23,184)     (23,920)
                                                   --------     -------- 
   Cash Flows from Financing Activities:
      Dividends paid                                (14,348)     (15,807)
      Repurchase of common stock                    (53,473)      15,557 
      Other stock activity, net                         486         (652)
      Issuance of long-term debt                     64,000            - 
      Principal retired on long-term debt           (22,084)      (3,904)
      Short-term debt                                21,500       (5,100)
                                                   --------     -------- 
      Net cash used by
         financing activities                        (3,919)      (9,906)
                                                   --------     -------- 
   Increase in Cash and
      Cash Equivalents                                2,091          562 
   Cash and Cash Equivalents at
      Beginning of Period                             1,436          874 
                                                   --------     -------- 
   Cash and Cash Equivalents at
      End of Period                                $  3,527     $  1,436 
                                                   ========     ======== 
</TABLE>
    
    <PAGE>


    
<TABLE>
<CAPTION>    
    
                                                                    "UNAUDITED"
                                  CTG RESOURCES, INC.                     

                 CONSOLIDATED STATEMENTS OF CASH FLOWS (Concluded)             

                              (Thousands of Dollars)                           

    
                                                  Twelve Months Ended
                                                     December 31, 
                                                 ----------------------
   <S>                                             <C>          <C>
                                                     1997         1996   
                                                     ----         ----   

   Schedule Reconciling Earnings to
      Cash Flows from Operations:
      Net Income                                   $ 18,482     $ 17,537 
                                                   --------     -------- 
      Adjustments to reconcile net income
         to net cash:
         Depreciation and amortization               19,162       17,971 
         Deferred income taxes, net                   5,119        1,888 
         Equity in partnership earnings              (2,933)      (2,486)
         Nonrecurring Items                               -         (892)
         Cash distributions received from                   
           investments                                1,805        1,901 
      Change in assets and liabilities:                     
         Accounts receivable                         (4,317)       1,572 
         Accrued utility revenue                     (3,938)       5,288 
         Inventories                                   (422)      (2,659)
         Purchased gas costs                          2,262       (2,134)
         Prepaid expenses                            (1,505)      (1,538)
         Accounts payable and accrued expenses       (2,516)          87 
         Other assets/liabilities                    (2,005)      (2,147)
                                                   --------     -------- 
           Total adjustments                         10,712       16,851 
                                                   --------     -------- 

      Cash flows from operations                   $ 29,194     $ 34,388 
                                                   ========     ======== 

   Supplemental Disclosures of Cash Flow
      Information:
   Cash Paid During the Period for:
      Interest (net of amount capitalized)         $ 11,991     $ 13,051 
                                                   ========     ======== 
      Income taxes                                 $  8,358     $ 14,543 
                                                   ========     ======== 

</TABLE>
    
    
    
    
    
    
    <PAGE>
                                                                    "UNAUDITED"

                                  CTG RESOURCES, INC.                     
    
                           NOTES TO FINANCIAL STATEMENTS                       

                                December 31, 1997
                              (Thousands of Dollars)
    
    
   (1)  Stock Repurchase
    
        On October 30, 1997, through a tender offer made by The Energy Network,
        Inc. (TEN), a wholly-owned, unregulated subsidiary of the Company, the
        Company repurchased 2.0 million shares of its no par common stock at
        $26.00 per share for a total purchase price of approximately $52,000. 
        Effective with the first quarter of fiscal 1998 the Company also
        reduced its quarterly dividend on common stock from $0.38 ($1.52
        annually) to $0.25 ($1.00 annually) per share.  The stock repurchase
        was financed with a combination of revolving bank debt and a term loan.
     

   (2)  Short-term Debt
    
        On October 1, 1997, TEN entered into a 364-day secured revolving credit
        agreement for $10,000 with a bank.  This agreement matures on September
        29, 1998.  Interest is based on a Bank Rate or a LIBOR rate plus a
        variable margin and is determined at the time of each borrowing.  There
        is a one-time $5 commitment fee and a .35% facility fee upon renewal.  
    
        On October 1, 1997, TEN entered into a three year revolving credit
        agreement for $10,000 with a bank.  The maximum borrowing amount is
        reduced by $500 at the start of each fiscal quarter, beginning January
        1, 1998.  Interest is based on a Bank Rate or a LIBOR rate plus a
        variable margin and is determined at the time of each borrowing.  There
        is a one-time $5 commitment fee and an on-going .45% to .6% facility
        fee on the unused portion of the agreement.

     
   (3)  Long-term Debt
    
        On October 1, 1997, TEN issued Senior Secured Notes for $45,000, due in
        2009, at 6.99%.  The principal will be retired through semi-annual
        payments of $2,500 beginning in 2001.  The proceeds were used to
        repurchase approximately 2.0 million shares of CTG common stock.
    
        In October 1997, the Company issued a total of $19,000 of Medium Term
        Notes ("MTNs") due 2007.  These MTNs are unsecured and have no call
        provisions or sinking fund requirements.  The proceeds were used to
        refinance existing short-term debt.  The face values and interest rates
        of these MTNs are:

                       Face Value        Interest Rate
                       ----------        -------------
                         $ 1,000              6.62%   
                         $ 1,000              6.65%   
                         $17,000              6.69%   


    <PAGE>


        In a Forward Equity Purchase Agreement dated October 1, 1997, CTG has
        committed to fund $7,500 per year into TEN from 1998 through 2009 for
        an aggregate additional cash infusion into TEN of $90,000.  In
        exchange, TEN caused all shares of CTG common stock purchased through
        the October 1997 tender offer to be transferred directly to CTG by the
        depositary.  As a provision of this agreement, CTG is restricted from
        declaring or paying any dividends or distributions to its holders of
        common stock if any amounts due and payable under this agreement are in
        arrears.
    
     
   (4)  Reclassifications
    
        Certain prior year amounts have been reclassified to conform with
        current year classifications.
    
    <PAGE>



                                                                    "UNAUDITED"

                               CTG RESOURCES, INC.
                                         
                       MANAGEMENT'S DISCUSSION AND ANALYSIS
                                         
                                DECEMBER 31, 1997
                 (Thousands of Dollars Except Per Share Amounts)
     
    
   CTG Resources, Inc. ("the Company" or "CTG")is a holding company and parent
   of the Connecticut Natural Gas Corporation ("CNG") and The Energy Network,
   Inc. ("TEN").  CNG is an energy provider engaged in the regulated
   distribution, sale and transportation of natural gas.  TEN holds and
   operates, through divisions or wholly-owned subsidiaries, CTG's unregulated,
   diversified businesses.  The diversified businesses are primarily engaged in
   district heating and cooling and also include energy-related products and
   services, energy equipment rentals, energy system management and operating
   services and the Company's equity investments in several partnerships.
    
    
   RESULTS OF OPERATIONS
    
   The Company recorded consolidated earnings per share of $.85 for the quarter
   ended December 1997, compared to $.63 for the quarter ended December 1996. 
   Earnings for the twelve months ended December 1997 were $1.78 as compared to
   $1.69 for the twelve months ended December 1996.  Lower weighted average
   shares outstanding, as a result of the stock repurchase described below,
   provided an $.08 benefit to earnings per share for the quarter ended
   December 1997.  The twelve months ended December 1996 include earnings per
   share of $.05 related to the sale of a building and land.
    
   Higher earnings in the three months ended December 1997, as compared to
   1996, are the result of higher operating margins recorded because of cooler 
   winter heating season weather.  Higher twelve months ended December 1997
   earnings, as compared to December 1996, reflect the benefits of lower
   operating and maintenance expenses and additional natural gas heating
   customers as well as the impact of the cooler December 1997 quarter.  Our
   customers' greatest use of energy during the year is in the winter, mostly
   for the purpose of heating their homes or businesses.
     
    
   Operating Margin
    
   The following table presents the changes in gas revenues, gas operating
   margin, heating degree days (a measure of weather) and gas deliveries for
   all periods reported in the statements of income:
<PAGE>
    
                             Three Months      Twelve Months
                                Ended              Ended
                             December 31,      December 31,
                            1997     1996     1997      1996   
                          -------- -------- --------  -------- 
   Gas Revenues           $ 87,627 $ 84,279 $286,672  $291,936 
                          ======== ======== ========  ======== 
   Gas Operating Margin   $ 34,614 $ 32,490 $114,677  $114,664 
                          ======== ======== ========  ======== 
   Heating Degree Days       2,269    2,169    6,156     6,288 
                             =====    =====    =====     =====
 
   Commodity and
      Transportation
      Volumes(mmcf):
      Firm Gas Sales         7,260    6,815   22,799    23,426 
      Interruptible Gas
        Sales                2,886    2,829    9,630     8,926 
      Off-System Gas
        Sales                2,163    3,247    9,080    12,004 
      Transportation -
        Services             1,102    1,160    4,073     4,442 
                            ------   ------   ------    ------ 
         Total              13,411   14,051   45,582    48,798 
                            ======   ======   ======    ====== 

    
   Gas operating margin is equal to gas revenues less the cost of gas and
   Connecticut gross revenues tax.   A higher gas operating margin was earned
   in the three months ended December 1997 as compared to 1996.  Cooler winter
   heating season weather is the principal reason for this increase in gas
   operating margin.  This has resulted in higher gas sales to the firm class
   of customers because more gas was needed by these customers for the purpose
   of heating.  Because firm sales generate the highest per-unit margin,
   changes in firm sales impact gas operating margin more than changes in other
   sales categories.

   Between the comparable twelve months ended periods gas operating margin is
   nearly unchanged.  The benefits of additional heating customers offset the
   impact of warmer weather during the twelve months ended December 1997.
    
    
   Operations and Maintenance Expenses
    
   Variations in many different costs have combined to result in lower
   operations and maintenance expenses in both the three and twelve months
   periods ended December 1997, as compared to 1996.  Lower costs were incurred
   for labor, reflecting the savings from early retirements.  A reduction in
   pension costs reflects the absence of the expenses related to the early
   retirement program offered in fiscal 1996 and reduced costs because of those
   retirements.  Fluctuations in bad debt costs relate to customers' natural
   gas bills which are higher in colder winters and lower in warmer winters. 
   Costs related to workers compensation insurance were lower because of lower
   actual and projected claims (used to set the Company's premiums) as a result
   of the Company's aggressive management of claims.  Lower costs were also
   recorded for outside purchased services.
     
    
   Income Taxes
    
   Higher income taxes have been recorded in the quarter ending December 1997,
   as compared to 1996, because of higher taxable income.  In the twelve months
   ended December 1997, as compared to 1996, higher income taxes reflect both
   higher taxable income and an increase to the Company's income tax reserve
   that was recorded in fiscal 1997.
    
    
   Other Income (Deductions)
    
   Overall, other income (deductions) have not changed significantly between
   fiscal 1998 and 1997 for the quarter and twelve months ended December. 
   There are several offsetting factors that have produced this result.  The
<PAGE>


   first quarter of fiscal 1998 reflects higher costs for life insurance
   premiums, as compared to fiscal 1997, offset by lower promotional and
   advertising expenses.  Between the comparable twelve months ended, higher
   interest income from the investment of available cash balances was offset by
   higher premiums related to certain life insurance plans and higher
   promotional and advertising expenses.
    
    
   Interest and Debt Expense
    
   Higher interest and debt expense has been recorded in fiscal 1998 primarily
   because of the additional long-term debt issued during the first quarter.
    
    
   Earnings from Diversified Businesses
    
   The diversified, unregulated businesses contributed $.06 and $.25 to
   earnings per share for the quarter and twelve months ended December 1997. 
   These compare to $.06 and $.34 contributed to earnings per share for the
   quarter and twelve months ended December 1996.  The twelve months ended
   December 1996 include $.05 of earnings per share related to the sale of a
   building and land.
    
   Two significant factors impacting earnings from diversified businesses
   occurred in this first quarter of fiscal 1998.  First, the assets of TEN's
   wholly-owned HVAC subsidiary, ENServe, Corp., were sold in October 1997. 
   The subsequent winding up of this operation is still in progress.  This
   transaction has produced an immediate benefit to earnings in this first
   quarter of fiscal 1998 by ending the losses that had been incurred from this
   operation throughout fiscal 1997.  Second, higher interest costs have been
   incurred as a result of an additional $45,000 of long-term debt and $4,000
   of short-term borrowings issued to finance the purchase of approximately 2.0
   million shares of the Company's common stock in a tender offer made by TEN
   in October of 1997 (See Stock Repurchase, below).
    
    
   MATERIAL CHANGES IN FINANCIAL CONDITION
    
   Cash Flows
    
   Negative cash flows from operations are frequently experienced during the
   first quarter of the fiscal year which begins the winter heating season. 
   This occurs because the Company must pay for large quantities of natural gas
   in advance of the receipt of payments from customers.  This lag between when
   gas is consumed and when payment for it is received creates the need to
   provide cash for operations from other sources.
    
   Available cash on hand and short-term borrowings provided the necessary cash
   for the Company's operations, dividend payments, long-term debt principal
   payments and construction expenditures during the first quarter of both
   fiscal 1998 and 1997.  Long-term financing issued in the first quarter of
   fiscal 1998 was used to finance a stock repurchase and to refinance existing
   short-term debt, as described below.
    
   In the twelve months ended December 31, 1997, available cash from
   operations, together with short-term borrowings, paid for expenses related
   to operations and for construction, dividends and principal payments on
   long-term debt.  In the twelve months ended December 31, 1996, available
   cash from operations, together with the proceeds from the June 1996 issue of
   common stock, funded both construction and all other financing activities.
<PAGE>
    
    
   Stock Repurchase 
    
   On October 30, 1997, through a tender offer made TEN, the Company
   repurchased 2.0 million shares of CTG common stock for $52,000.  TEN
   financed the purchase with a combination of revolving bank debt and the
   issuance of Senior Subordinated Notes.  The shares repurchased by TEN were
   transferred by the depositary directly to CTG.  In connection with the
   repurchase, effective with the first quarter of fiscal 1998, CTG reduced its
   quarterly dividend on common stock from $0.38 ($1.52 annually) to $0.25
   ($1.00 annually) per share.  In future periods the lower shares outstanding
   should help to increase overall earnings per share.  In the long-term, the
   lower dividend will enable CTG to retain more of its earnings to fund the
   future growth of the Company.  
    

   Forward Equity Purchase Agreement 
    
   In a Forward Equity Purchase Agreement dated October 1, 1997, CTG has
   committed to fund $7,500 per year into TEN from 1998 through 2009 for an
   aggregate additional cash infusion into TEN of $90,000.  In exchange, TEN
   caused all shares of CTG common stock purchased through the October 1997
   tender offer to be transferred directly to CTG by the depositary.  As a
   provision of this agreement, CTG is restricted from declaring or paying any
   dividends or distributions to its holders of common stock if any amounts due
   and payable under this agreement are in arrears.
    
    
   Financing Activities 
    
   On October 1, 1997, TEN issued Senior Secured Notes for $45,000, due in
   2009, at 6.99%.  The principal will be retired through semi-annual payments
   of $2,500 beginning in 2001.  The proceeds were used to repurchase
   approximately 2.0 million shares of CTG common stock.
    
   In October 1997, the Company issued a total of $19,000 of Medium Term Notes
   ("MTNs") due 2007.  These MTNs are unsecured and have no call provisions or
   sinking fund requirements.  The proceeds were used to refinance existing
   short-term debt.  The face values and interest rates of these MTNs are:

                       Face Value        Interest Rate
                       ----------        -------------
                         $ 1,000              6.62%   
                         $ 1,000              6.65%   
                         $17,000              6.69%   
                        
   The MTNs are rated at A3 by Moody's and A- by Standard and Poor's. 
    
   On October 1, 1997, TEN entered into a 364-day secured revolving credit
   agreement for $10,000 with a bank.  This agreement matures on September 29,
   1998.  Interest is based on a Bank Rate or a LIBOR rate plus a variable
   margin.  It is determined at the time of each borrowing.  There is a one-time
   $5 commitment fee and a .375% facility fee upon renewal.  

    <PAGE>


   On October 1, 1997, TEN entered into a three-year revolving credit agreement
   for $10,000 with a bank.  The maximum borrowing amount is reduced by $500 on
   each fiscal quarter, beginning January 1, 1998.  Interest is based on a Bank
   Rate or a LIBOR rate plus a variable margin and is determined at the time of
   each borrowing.  There is a one-time $5 commitment fee and an on-going .45%
   to .6% facility fee on the unused portion of the agreement.

    
   Sale of Assets
    
   In October 1997, the Company sold the operating assets of ENServe Corp., a
   wholly owned subsidiary of TEN engaged in the HVAC business, for
   approximately $1,200.  ENServe is currently in the process of winding up its
   operations.  Any gain or loss is not expected to be significant.
    
    
   FORWARD LOOKING INFORMATION
    
   This report and other Company reports, including filings with the Securities
   and Exchange Commission, press releases and oral statements, contain forward
   looking statements.  Forward looking statements are made based upon
   management's expectations and beliefs concerning future developments and
   their potential effect upon the Company.  The Company cautions that, while it
   believes such statements to be reasonable and makes them in good faith, they
   almost always vary from actual results, and the differences can be material,
   depending upon the circumstances.  Investors should be aware of important
   factors that could have a material impact on future results.  These factors
   include, but are not limited to, weather, the regulatory environment,
   legislative and judicial developments which affect the Company or significant
   groups of its customers, economic conditions in the Company's service
   territory, fluctuations in energy-related commodity prices, customer
   conservation efforts, financial market conditions, interest rate
   fluctuations, customers' preferences, unforeseen competition, and other
   uncertainties, all of which are difficult to predict and beyond the control
   of the Company. 
    
    <PAGE>


   PART II - OTHER INFORMATION
    
    
   Item 6.  Exhibits and Reports on Form 8-K
   -----------------------------------------
    
   (a)  Exhibits
    
        99(i)       Exhibit Index
    
         27         Financial Data Schedule
    
    
   (b)(1)    A report on Form 8-K was filed by the Company on October 31, 1997,
             to file a copy of a press release, dated October 31, 1997, which
             announced the preliminary results of the Company's stock repurchase
             plan.

      (2)    A report on Form 8-K was filed by the Company on November 6, 1997,
             to file a copy of a press release, dated November 6, 1997, which
             announced the Company's fourth quarter results and fiscal year 1997
             earnings and to file unaudited financial statements of the Company
             for the fiscal year ended September 30, 1997.
    
      (3)    A report on Form 8-K was filed by the Company on November 7, 1997,
             to file a copy of a press release, dated November 7, 1997, which
             announced the final results of the Company's stock repurchase plan.

    
    
    
    <PAGE>


    
    
    
    
    
    
    
    
    
    
    
                                     SIGNATURE                                  
    
    
    
    
   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.
    
    
                                            CTG RESOURCES, INC. 
    
    
    
    
   Date    02/05/98                     By:   S/ Andrew H. Johnson     
       --------------------                 -----------------------------------
                                                    (Andrew H. Johnson)
                                          Treasurer and Chief Accounting Officer
                                                                                
    
                                             (On behalf of the registrant and as
                                                   Chief Accounting Officer)    
    
    
    
    
    
    
    
    
    
    
    
    
    
    <PAGE>