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 Quarter Ended Commission File Number
April 30, 1996 1-7965

CASPEN OIL, INC.
(Exact name of registrant as specified in its charter)

Nevada 75-1325831
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

777 S. Wadsworth Boulevard
Irongate 3, Suite 201
Lakewood, CO 80226
(Address or principal executive offices)

(303) 987-0925

(Registrant's telephone number, including area code)

(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 and 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
requirement for the past 90 days.

Yes X No

As of April 30, 1996, the Registrant had 18,092,200 shares of
Common Stock outstanding.

Transitional Small Business Disclosure Format: Yes ; No X

CASPEN OIL, INC.
AND SUBSIDIARIES

FORM 10-QSB

April 30, 1996

PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements:

Condensed Consolidated Balance Sheets. . . . . . . . . . . . . . . . . . .1

Condensed Consolidated Statements of Operations. . . . . . . . . . . . .2-3

Condensed Consolidated Statement of Shareholders' Equity . . . . . . . . .4

Condensed Consolidated Statements of Cash Flows. . . . . . . . . . . . . .5

Notes to Condensed Consolidated Financial Statements . . . . . . . . . .6-7

Item 2. Management's Discussion and Analysis or
Plan of Operation. . . . . . . . . . . . . . . . . . . . . . . . . . . .8-9

PART II - OTHER INFORMATION

Item 4.Submission of Matters to a Vote of Security Holders . . . . . . . 10

Item 6.Exhibits and Reports on Form 8- K . . . . . . . . . . . . . . . . 10

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

CASPEN OIL, INC.
AND SUBSIDIARIES

Condensed Consolidated Balance Sheets
(Unaudited)

April 30, July 31,
ASSETS 1996 1995

CURRENT ASSETS
Cash and equivalents $ 29,188 $ 464,876
Accounts rec., prepaid exp.
net of allowance 275,658 327,038
Notes receivable 6,267 8,346
311,113 800,260
PROPERTY AND EQUIPMENT, AT COST
Oil and gas properties, full cost 19,819,641 19,626,347
Other 240,830 240,830
20,060,471 19,867,177
Less accum. depl., deprec., and amort. (16,797,727) 16,659,765
3,262,744 3,207,412
OTHER
Investments 774,244 833,520
Notes receivable, related party 66,622 42,223
Notes receivable, noncurrent 48,045 48,045
Other 1,950 1,950
890,861 925,738
TOTAL ASSETS $ 4,464,718 $ 4,933,410

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Notes payable (1) $ 1,547,500 $ 1,597,500
Accounts payable 830,969 956,116
Accrued expenses 448,041 523,973
Note payable, other 10,000 10,000
2,836,510 3,087,589
LONG-TERM LIABILITIES
Accrued expenses - 66,667
Note payable, other 20,000 20,000
20,000 86,667
SHAREHOLDERS' EQUITY
Convertible preferred stock:
Series A 600,000 600,000
Series C 300,000 300,000
Series E 125,000 125,000
Common stock 180,922 180,922
Additional paid-in capital 21,091,871 21,091,871
Accumulated deficit (20,679,875) (20,528,929)
1,617,918 1,768,864
Less treasury stock 9,710 9,710
1,608,208 1,759,154
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 4,464,718 $ 4,933,410

See accompanying notes to condensed consolidated financial statements.

(1) See Note 2.
1

CASPEN OIL, INC.
AND SUBSIDIARIES

Condensed Consolidated Statements of Operations
(Unaudited)

Three months ended
1996 1995

REVENUE
Oil and gas sales $ 237,328 $ 228,600
Overhead income 12,826 12,415
Interest income 3,601 9,789
Other 11 1,998
253,766 252,802

COSTS AND EXPENSES
Production and operating 105,694 116,186
Depl., deprec., and amort. 43,358 103,144
General and administrative 189,355 198,171
Interest expense - 32,297
338,407 449,798
NET LOSS (84,641) (196,996)

DIVIDEND REQUIREMENTS ON PREFERRED STOCK 269,775 269,775

LOSS APPLICABLE TO COMMON STOCK $(354,416) $(466,771)

LOSS PER COMMON SHARE $ (.02) $ (.03)

See accompanying notes to condensed consolidated financial statements.

CASPEN OIL, INC.
AND SUBSIDIARIES

Condensed Consolidated Statements of Operations
(Unaudited)

Nine months ended
April 30,
1996 1995

REVENUE
Oil and gas sales $ 704,600 $ 891,958
Overhead income 37,193 39,992
Interest income 14,380 21,530
Other 46,597 267,104
802,770 1,220,584

COSTS AND EXPENSES
Production and operating 347,851 439,999
Depletion, depreciation, and amortization 137,962 309,432
General and administrative 467,883 634,635
Interest expense 20 92,425
953,716 1,476,491
NET LOSS (150,946) (255,907)

DIVIDEND REQUIREMENTS ON PREFERRED STOCK 809,325 809,550

LOSS APPLICABLE TO COMMON STOCK $(960,271) $(1,065,457)

LOSS PER COMMON SHARE $ (.05) $ (.06)

See accompanying notes to condensed consolidated financial statements.

CASPEN OIL, INC.
AND SUBSIDIARIES

Condensed Consolidated Statement of Shareholders' Equity
(Unaudited)

Preferred Stock Common Stock Additional Accumu- Total
paid-in lated Treasury shareholders'
Series Shares Amount Shares Amount capital deficit stock equity
Balance at July 31, 1995 A 600,000 $600,000 18,092,222 $ 180,922 $21,091,871 $(20,528,929) $( 9,710) $1,759,154

C 300,000 300,000

E 125,000 125,000

Net Income for the three months ended
October 31, 1995 8,431 8,431

Balance at October 31, 1995
Series A 600,000 $600,000 18,092,222 $ 180,922 $21,091,871 $(20,520,498) $( 9,710) $1,767,585
Series C 300,000 $300,000
Series E 125,000 $125,000

Net Loss for the three months
ended January 31, 1996 ( 74,737) ( 74,737)

Balance at January 31, 1996
Series A 600,000 $600,000 18,092,222 $ 180,922 $21,091,871 $(20,595,235) $( 9,710)$1,692,848
Series C 300,000 $300,000
Series E 125,000 $125,000

Net Loss for the three months
ended April 30, 1996 ( 84,641) ( 84,641)

Balance at April 30, 1996
Series A 600,000 $600,000 18,092,222 $ 180,922 $21,091,871 $(20,679,876) $( 9,710)$1,608,207
Series C 300,000 $300,000
Series E 125,000 $125,000

4
CASPEN OIL, INC.
AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows
(Unaudited)

Nine months ended
April 30,
1996 1995

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(150,946) $(255,907)
Adjustments to reconcile net income
to net cash provided by (used in) operating activities:
Depletion, depreciation, and amortization 137,962 309,432
Issuance of common stock for services - 1,000

Changes in operating assets and liabilities:
Decrease in accounts receivable
and prepaid expenses 51,380 139,059
Decrease in notes receivable 2,079 -
(Increase) decrease in other assets 34,877 ( 30,992)
Increase (decrease) in notes/accots. pay/accrued exps. (317,746) (326,681)

NET CASH USED IN
OPERATING ACTIVITIES (242,394) (164,089)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposition of property and equipment 2,957 6,754
Purchase of property and equipment, net of property
sales and well credits (196,251) (105,388)

NET CASH USED IN INVESTING ACTIVITIES (193,294) ( 98,634)

CASH FLOWS FROM FINANCING ACTIVITIES
Sale of treasury stock for working capital - 207,694
Purchase of treasury stock - ( 523)
Payment on note payable - ( 12,500)

NET CASH PROVIDED BY FINANCING ACTIVITIES - 194,671

INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (435,688) ( 68,052)

CASH AND EQUIVALENTS, BEG. OF PERIOD 464,876 628,955

CASH AND EQUIVALENTS, END OF PERIOD $ 29,188 $ 560,903

See accompanying notes to condensed consolidated financial statements.

CASPEN OIL, INC.
AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Nine Months Ended April 30, 1996

(1) Basis of Presentation

The condensed interim consolidated financial statements included herein are
unaudited but in the opinion of management reflect all adjustments
(consisting of normal recurring accruals) necessary for a fair presentation
of the financial position of the Company at April 30, 1996, and the results
of operations for the nine month periods ended April 30, 1996, and 1995.
Interim results are not necessarily indicative of expected annual results
because of the impact of prices obtained for oil and gas and other factors.
These condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements of the Company, and
related notes thereto, included in its annual report on Form 10-KSB.

(2) Daiwa Bank, Ltd. Loan

In December 1990, at the request of Daiwa, the Company sold property, which
was mortgaged to Daiwa, for approximately $5,200,000. From the proceeds of
the sale, Daiwa received the total $5,200,000. Daiwa applied $4,700,000 to
the reduction of principal. Simultaneously, the Company executed a 30-month
extension note in the amount of $2,000,000, with the guarantee by Daiwa that,
upon payment of $500,000 in June 1993, the note would be renewed or
restructured. Daiwa recognized that the Company would be unable to make the
$500,000 principal payment in June 1993 and therefore returned $500,000 from
the December 1990 sale of property to the Company.

In June 1993, after the Company paid interest for thirty (30) months of
approximately $425,000, Daiwa refused to accept the $500,000 principal
reduction payment offered by the Company and refused to renew or restructure
the note claiming no legal obligation to do so and citing its decision to
divest itself of oil and gas loans.

On July 9, 1993, the Company received a demand notice from Daiwa for
$1,997,500 in payment of the loan balance remaining on the $15,000,000 Credit
Revolver established by Daiwa in late 1988. On February 17, 1994, the
Company sold certain oil and gas properties for $300,000 the proceeds of
which were used to reduce the bank debt principal to $1,697,500.

As of April 30, 1996, the Company has voluntarily reduced the outstanding
principal balance to $1,547,500.

CASPEN OIL, INC.
AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

Nine Months Ended April 30, 1996

(2) Daiwa Bank, Ltd. Loan (Continued)

The Company has attempted to resolve the loan dispute. The Company expects
one of two developments between the Company and Daiwa in fiscal year 1996:
(a) the Company and Daiwa reach an agreement to reduce to zero the
outstanding loan balance inclusive of interest (However, there can be no
assurance that Daiwa will agree to do so, nor can there be any assurance that
Daiwa will not proceed to foreclose on the oil and gas properties which
secure the debt.); or (b) litigation results in which the Company asserts
lender liability claims for refusal to renew the credit as represented, and
Daiwa asserts claims for default interest and attorneys' fees. Under the
second alternative, the Company estimates legal fees in the range of $150,000
in fiscal years 1996-1997.

The Company received correspondence in late January 1996 from The Daiwa Bank,
Ltd. notifying Caspen Oil that it (Daiwa) had decided to "re-book" its
account with the Company and effectively assign the account to another
Japanese bank, The Sumitomo Bank, Limited, whereby, The Sumitomo Bank would
now be the servicer of the account. In the correspondence, Daiwa Bank
further stated that unless told so in writing, they would assume that the
Company would have no objections to the "re-booking" of the account.

Upon receipt of the letter from Daiwa Bank, the Company immediately objected
telephonically and followed with written objection dated January 31, 1996,
whereby, the Company directly objected to the "re-booking" of the account by
Daiwa Bank and further clarified that the Company's account, related to our
respective agreements, should not be "re-booked", nor should the account be
serviced by anyone other than Daiwa Bank. The Company further stated in the
objection that Daiwa Bank's present account relative to the Company's
respective agreements should a) reflect a receivable remaining due from the
Company of $50,000, b) show total amounts paid by the Company on account to
date of $14,885,114, c) reflect a contingent liability to the Company of
$10,355,000, and d) reflect a contingent liability to Torch Operating Company
of $142,733.

Simultaneous to the formal written objection described above, the Company has
forwarded a copy of the same written objection to Daiwa Bank's legal counsel.

Even though the Company's management feels strongly that it will not pay
Daiwa Bank any amount greater than $50,000 in total settlement (inclusive of
principal and interest), because of Generally Accepted Accounting Principals
(GAAP), it is obliged to retain the total alleged indebtedness on its books.
This in no way should be interpreted that the Company will pay or owes the
alleged indebtedness.
7
CASPEN OIL, INC.
AND SUBSIDIARIES

Item 2. Management's Discussion and Analysis or Plan of Operation

The following discussion of the Company's financial condition and results of
operations should be read in conjunction with the condensed consolidated
financial statements included in this report and the consolidated financial
statements and notes contained in the Company's annual report on Form 10-KSB
for the fiscal year ended July 31, 1995.

Liquidity and Capital Resources

During the nine months ended April 30, 1996, the working capital deficit
increased from July 31, 1995, by approximately $238,000. This increase is due
largely to the reduction of severance tax liability, due to settlement with
Torch Operating Company. (The Consent Judgment for dismissal of the
litigation with Torch was filed with the Louisiana federal district court and
approved on January 5, 1996.) And to the pay down of certain outstanding
trade payables, as well as principal loan reduction to the Daiwa Bank debt of
$50,000.

The Company's current liabilities exceed current assets by $2,525,397 at April
30, 1996. The working capital deficit at January 31, 1996, is due primarily to
the $1,547,500 of the Company's debt due to Daiwa Bank which matured in June
1993 (See Note 2) and to outstanding trade and note payables of an approximate
$860,000.

The Company anticipates that given its current cash position and assuming a
satisfactory resolution of the Daiwa matter, and further, and assuming no
unexpected interruption of current cash flows or unanticipated expenditures, it
will have sufficient working capital to meet its obligations throughout the
remaining fiscal year.

CASPEN OIL, INC.
AND SUBSIDIARIES

Item 2. Management's Discussion and Analysis or Plan of Operation, Continued

Results of Operations

Oil and gas revenues were substantially lower in the nine months ended April 30,
1996, as compared to the nine months ended April 30, 1995. This was primarily
attributable to lower unit production at both the Vermilion Bay and the Werner
Sawmill leases and to a less than successful recompletion of the non-operated
Manville Forest Products 1-10 lease, as well as a workover on a non-operated
Texas well, the Hill - 1T in fiscal year 1996 as compared to fiscal year 1995.

The Company experienced slightly higher gas prices in the nine months ended
April 30, 1996, compared with those received in the same period last year,
whereas relatively stable oil prices were experienced in the first nine months
of fiscal year 1996 when compared with the same period last year. Average oil
and gas prices received in the nine months ended April 30, 1996, were
approximately $16.10 per barrel of oil and $1.60 per MCF gas as compared to
approximately $16.00 per barrel of oil and $1.40 per MCF gas for the nine monthS
ended April 30, 1995.

The Company reported a net loss of $(150,946) for the nine months ended April
30, 1996, compared to a net loss of $(255,907) for the nine months ended April
30, 1995. Although oil and gas revenues were somewhat lower in the nine months
ended April 30, 1996, than in the same period in 1995, production and operating
expenses and general and administrative expenses were lower in 1996 over 1995
resulting in a lower net loss in 1996. Oil and gas revenues approximated
$705,000 for the nine months ended April 30, 1996, while revenues for the same
period in 1995 approximated $892,000. Production and operating expenses for the
period ended April 30, 1996, were approximately $348,000, as compared to the
period ended April 30, 1995, which were approximately $440,000.

General and administrative expenses for the nine months ended April 30, 1996,
decreased by approximately $167,000 from the corresponding nine months ended
April 30, 1995. This decrease primarily related to lower costs of merger and
acquisition activities, including legal and accounting costs.

Series A Preferred Stock Cumulative Dividends In Arrears

The terms of the Series A Shares provide that no dividends may be paid on the
Common Shares or Series C or E Preferred Shares while dividends on the Series A
Shares are in arrears. The Company has not paid any dividends on the Series A
Shares since June 30, 1988. As of April 30, 1996, dividends on the Company's
Series A Shares are in arrears $16.64 per share for a total of $9,975,302.

9
CASPEN OIL, INC.
AND SUBSIDIARIES

Part II. Other Information

Item 4. Submission of Matters to a Vote of Security Holders

On March 26, 1996, the Company held its Annual Meeting of
Stockholders at which the following items were voted on and approved:

(1) John J. Crawford was elected a director. Following is the
number of votes cast for and withheld for Mr. Crawford:

Votes For Votes Withheld

Common Shares 14,255,852 240,527
Series A Preferred Shares415,994 55,129
Series C Preferred Shares300,000 -0-
Series E Preferred SharesNo Vote -0-

There were no abstentions or broker non-votes.

Following are the other directors whose term of office as a director continued
after the meeting:

Anthony J. Carroll
Gary N. Davis
Kimberley J. Love

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits - none

(b) Reports on Form 8-K:

A report dated February 13, 1996, was filed reporting information under Item
4 - Changes in Registrant's Certifying Accountant.

SIGNATURES

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

CASPEN OIL, INC.

June 13, 1996 By:/s/ Gary N. Davis
Gary N. Davis, Treasurer