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                              DRAFT: MAY 23, 1996
                                                                File No. 70-8849
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D. C. 20549

                                Amendment No, 1

                                    Form U-1


                            APPLICATION-DECLARATION
                                     UNDER
                 THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935

                         THE COLUMBIA GAS SYSTEM, INC.
                               20 Montchanin road
                              Wilmington, DE 19807

                      COLUMBIA ENERGY SERVICES CORPORATION
                        121 Hill Pointe Drive, Suite 100
                             Canonsburg, PA  15317

                     COLUMBIA COAL GASIFICATION CORPORATION
                        COLUMBIA NATURAL RESOURCES, INC.
                            900 Pennsylvania Avenue
                              Charleston, WV 25362

              (Names of company or companies filing this statement
                 and addresses of principal executive offices)


                            L. J. Bainter, Treasurer
                         The Columbia Gas System, Inc.
                               20 Montchanin Road
                              Wilmington, DE 19807


                          Robert Gustafson, Controller
                      Columbia Energy Services Corporation
                        121 Hill Pointe Drive, Suite 100
                              Canonsburg, PA 15317


                           M. A. Chandler, Treasurer
                     Columbia Coal Gasification Corporation
                        Columbia Natural Resources, Inc.
                            900 Pennsylvania Avenue
                              Charleston, WV 25362

                    (Name and address of agent for service)
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Item 1.  Description of Proposed Transaction - Replaced in its Entirety

         (a)     Furnish a reasonably detailed and precise description of the
proposed transaction, including a statement of the reasons why it is desired to
consummate the transaction and the anticipated effect thereof.  If the
transaction is part of a general program, describe the program and its relation
to the proposed transaction.

         The Columbia Gas System, Inc. ("Columbia"), Columbia Energy Services
Corporation ("CES"), Columbia Natural Resources, Inc. ("CNR") and Columbia Coal
Gasification Corporation ("CGC") are parties to this application declaration
seeking authorization to effect restructuring of these subsidiaries as
described below.

         CES, a Kentucky corporation, is a wholly owned, nonutility subsidiary
of Columbia engaged in the energy marketing business.  Columbia and CES request
authorization to reincorporate CES in Delaware via a merger with and into a
newly-formed successor corporation for the sole purpose of converting CES from
a Kentucky to a Delaware corporation.

         CNR, a Texas corporation, is a wholly owned, nonutility subsidiary of
Columbia engaged in the exploration for and production of natural gas in the
Appalachian region.  CGC, a Delaware corporation and wholly owned nonutility
subsidiary of Columbia, leases coal reserves in the Appalachian region from
CNR.  Columbia proposes to transfer its shares of CGC common stock to CNR and
effect a merger of CGC into CNR.

REINCORPORATION OF CES

         For the reasons described below, CES has decided to reincorporate in
Delaware.  Under a Plan of Reorganization and Merger (Exhibit B-1), all of the
assets and trade liabilities of CES will be transferred to CES (DE) in exchange
for common stock of CES (DE) which would simultaneously be transferred to
Columbia in exchange for all outstanding shares of CES,
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leaving CES (DE) the surviving company.  The merger will qualify as a tax-free
reorganization under Sections 368(a)(1)(A) and (F) of the Internal Revenue Code
of 1986, as amended.  CES (DE) will succeed to all of the rights and assets of
CES and will assume all of its liabilities and obligations.  The officers and
directors of CES will become the officers and directors of CES (DE).

         CES's decision to reincorporate in Delaware is based on the following
factors:

         1) A majority of Columbia's subsidiaries are already incorporated in
Delaware.  Further, Delaware has followed a policy of encouraging incorporation
in that state and, in furtherance of that policy, has adopted comprehensive,
modern, and flexible corporation laws that are periodically updated and revised
to meet changing business needs.  Delaware courts have developed considerable
expertise in dealing with corporate legal issues, and a substantial body of
caselaw has developed construing the Delaware law and establishing public
policy with respect to Delaware corporations.  As a result, many major
corporations have chosen Delaware for their initial domicile or have
subsequently reincorporated in Delaware, in a manner similar to that proposed
by CES.

         2)  Kentucky, the current state of incorporation of CES, imposes a tax
on intangible property.  The Columbia Energy Market Center, currently a
division of CES, licenses and sublicenses commodity trading software for
purposes of operating The Fast Lane(TM) ("The Fast Lane") an electronic
bulletin board for the trading of natural gas. While the impact of such tax is
not currently significant, the tax would become increasingly significant if
revenues generated by The Fast Lane(TM) grow.
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         The expected benefits to be achieved as a result of the merger,
therefore, include: (i) a more reliable and flexible business law applicable to
the corporate governance of CES (DE), and (ii) the avoidance of tax on revenues
generated by intangible property held by CES (DE).  The amount of the tax
savings achieved cannot be quantified since the savings vary depending on the
future development of the Fast Lane(TM).

MERGER OF CGC AND CNR

         Columbia currently owns all 1,939,000 outstanding shares of common
stock of CGC.  Columbia requests authorization to transfer these shares to CNR
pursuant to an Agreement and Plan of Merger, a form of which is included in
this Application-Declaration as Exhibit B-2.

         The transaction would involve an exchange of 1,939,000 shares of CGC
common stock held by Columbia, $25 par value per share, for approximately
343,000 shares of newly issued CNR common stock, $25 par value per share.  The
actual number of shares of CNR stock exchanged will depend upon the net book
value of CGC on the effective date.  Based upon the net book value of CGC as of
February 29, 1996 of $8.581 million, 343,245 CNR shares would be issued to
Columbia and the 1,939,000 shares of CGC would be transferred to CNR.  CGC
currently has no other class of equity security stock outstanding.  The
proposed transaction will qualify as a tax-free reorganization under Section
368(a)(1)(A) of the Internal Revenue Code of 1986, as amended.

         This exchange will make CNR the parent corporation of CGC and the
temporary owner of 100% of CGC's outstanding shares.  Promptly thereafter CGC
will be merged with and into CNR pursuant to Article 5.16 of the Texas Business
Corporation Act.  Article 5.16 provides that
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upon the merger, CNR will succeed to all of the assets and liabilities
of CGC and will assume all of its liabilities and obligations.

         The benefits expected to be achieved as a result of the merger
include: (i) simplified and less costly internal and external accounting
operations; (ii) reduced and less costly regulatory and compliance
requirements; (iii) reduced general and administrative costs, and (iv) the
realization of certain state tax benefits associated with being a single
operating (natural resource) company.

SUMMARY OF AUTHORIZATION REQUESTED

         1.      Columbia and CES request authorization to reincorporate CES in
Delaware via a merger into a newly-formed successor corporation.

         2.      Columbia requests authorization to effect a merger of CGC into
CNR by transferring all of the outstanding shares of CGC common stock to CNR in
exchange for shares of CNR common stock and merging CGC into CNR.   No
additional capital financing will occur as a result of the transactions.

Item 2.  Fees, Commissions and Expenses - Replaced in its Entirety

         (a)     State (1) the fees, commissions and expenses paid or incurred,
or to be paid or incurred, directly or indirectly, in connection with the
proposed transaction by the applicant or declarant or any associate company
thereof, and (2) if the proposed transaction involves the sale of securities at
competitive bidding, the fees and expenses to be paid to counsel selected by
applicant or declarant to act for the successful bidder.
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                 Columbia Gas System Service Corporation has provided certain
services in connection with the preparation of this filing as follows:

                                                                                 
         Securities and Exchange Commission Filing Fee  . . . . . . . . . . . . . . .        $   2,000
         Services of Columbia Gas System Service Corporation
         in connection with the preparation of the Application-Declaration  . . . . .           15,000
                                                                                             ---------

                 Total      . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         $ 17,000
                                                                                              ========

         

         (b)     If any person to whom fees or commissions have been or are to
be paid in connection with the proposed transaction is an associate company or
an affiliate of any applicant or declarant, or is an affiliate of an associate
company, set forth the facts with respect thereto.

                 Columbia Gas System Service Corporation is a wholly owned
subsidiary of Columbia and has performed certain services at cost as set forth
in Item 2(a) (1) above.


Item 3.  Applicable Statutory Provisions - Replaced in its Entirety

         (a)     State the section of the Act and the rules thereunder believed
to be applicable to the proposed transaction.  If any section or rule would be
applicable in absence of a specific exemption, state the basis of exemption.

         The issuance of common stock by CES (DE) and CNR will be made pursuant
to Sections 6(a) and 7 and Rule 43.  Sections 9(a), 10, and 12(f) and Rule 45
are deemed applicable to the acquisition of the capital stock of
newly-incorporated CES (DE) and capital stock and notes of CGC by CG and CNR,
respectively, as described above.

         To the extent that the proposed transactions are considered by the
Commission to require authorization, approval or exemption under any section of
the Act or provision of the rules and
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regulations other than those specifically referred to herein, a request for
such authorization, approval or exemption is hereby made.  

         CG, CES, CNR and CGC do not own nor operate and are not equity
participants in any Exempt Wholesale Generator or any Foreign Utility Company
and will not be  companies that own, operate or have equity participation in an
Exempt Wholesale Generator or Foreign Utility Company as a result of the
approvals requested  herein.  CG, CES, CNR and CGC do not have any rights, nor
will they have any  rights or obligations under a service, sales or
construction contract with an  Exempt Wholesale Generator or Foreign Utility
Company as a result of the  proposed transactions.

         (b)     If any applicant is not a registered holding company or a
subsidiary thereof, state the name of each public utility company of which it
is an affiliate, or of which it will become an affiliate a result of the
proposed transaction, and the reasons why it is or will become such an
affiliate.

                 Not applicable
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                                   SIGNATURE

         Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, each of the undersigned companies has duly caused this Declaration to
be signed on its behalf by the undersigned thereunto duly authorized.

         The signatures of the Declarants and of the persons signing on their
behalf are restricted to the information contained in this Declaration which is
pertinent to the application of the respective companies.

                                            THE COLUMBIA GAS SYSTEM, INC.



Date: May 24, 1996                          By:        //S// L. J. Bainter
                                                       L. J. Bainter
                                                       Treasurer



                                        COLUMBIA ENERGY SERVICES CORPORATION
                                        COLUMBIA COAL GASIFICATION CORPORATION
                                        COLUMBIA NATURAL RESOURCES, INC.




Date: May 24, 1996                          By:       //s// L. J. Bainter
                                                       L. J. Bainter
                                                       Vice President