<PAGE>   1


                                  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 June 30, 2001

                                       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  001-14575
                        -----------

                               PRIZE ENERGY CORP.
                               ------------------
               (Exact name of registrant as specified in charter)

             Delaware                                          75-2766114
-------------------------------------                      -------------------
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                            Identification No.)

3500 William D. Tate, Suite 200  Grapevine, TX                    76051
--------------------------------------------------------------------------------
(Address of principal executive offices)                        (Zip Code)

                                 (817) 424-0400
       -------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                                 NOT APPLICABLE
              -----------------------------------------------------
              (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.

            Class                              Outstanding at August 8, 2001
-----------------------------                  -----------------------------
Common Stock, $.01 Par Value                           12,554,637



<PAGE>   2


                               PRIZE ENERGY CORP.

                       Index to Form 10-Q Quarterly Report
                    to the Securities and Exchange Commission

<Table>
<Caption>
                                                                                              Page No.
                                                                                              --------
<S>                                                                                           <C>
Part I.  Financial Information

   Item 1.  Consolidated Financial Statements............................................         3

      Consolidated Balance Sheets at June 30, 2001 (Unaudited)
      and December 31, 2000..............................................................         4

      Consolidated Statements of Operations (Unaudited),
      For the Three and Six Months Ended June 30, 2001 and 2000..........................         5

      Consolidated Statements of Stockholders' Equity, for the
      Periods Ended June 30, 2001 (Unaudited) and December 31, 2000......................         6

      Consolidated Statements of Cash Flows (Unaudited), for
      the Three and Six Months Ended June 30, 2001 and 2000..............................         7

      Notes to Unaudited Consolidated Financial Statements...............................         8

   Item 2.  Management's Discussion and Analysis of Financial
                Condition and Results of Operations......................................        14

   Item 3.  Quantitative and Qualitative Disclosures About Market Risk...................        19

Part II.  Other Information..............................................................        20
</Table>



                                   DEFINITIONS
                            As used in this document:
                         "Mcf" means thousand cubic feet
                         "MMcf" means million cubic feet
                         "Bcf" means billion cubic feet
                               "Bbl" means barrel
                         "MBbls" means thousand barrels
                         "MMBbls" means million barrels
                      "Boe" means equivalent barrels of oil
                 "Mboe" means thousand equivalent barrels of oil
                "MMboe" means million equivalent barrels of oil
                     "Oil" includes crude oil and condensate
                        "NGLs" means natural gas liquids


                                       2
<PAGE>   3


                               PRIZE ENERGY CORP.



                          PART I. FINANCIAL INFORMATION



                   ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS,
                             JUNE 30, 2001 AND 2000



                                       3
<PAGE>   4


                               PRIZE ENERGY CORP.
                           CONSOLIDATED BALANCE SHEETS
               (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS AND SHARES)


<Table>
<Caption>
                                                                                     JUNE 30,      DECEMBER 31,
                                                                                       2001            2000
                                                                                   ------------    ------------
                                                                                    (UNAUDITED)
<S>                                                                                <C>             <C>
 ASSETS
      Current assets:
         Cash  and cash equivalents                                                $      3,055    $        820
         Accounts receivable - oil & gas                                                 31,029          29,710
         Accounts receivable - trade, net of allowance for doubtful accounts
        of $251                                                                           5,261           4,942
         Prepaid income taxes                                                             6,146           5,153
         Fair value of derivatives                                                        6,302              --
         Other                                                                            8,450           3,078
                                                                                   ------------    ------------
      Total  current assets                                                              60,243          43,703

      Properties and equipment at cost:
         Oil and gas properties                                                         441,522         349,971
         Other                                                                            3,645           2,978
                                                                                   ------------    ------------
                                                                                        445,167         352,949
         Less accumulated depreciation and depletion                                    (51,300)        (34,186)
                                                                                   ------------    ------------
      Total properties and equipment at cost, net                                       393,867         318,763
      Fair value of derivatives - long-term                                               5,921              --
      Deposit on acquisition                                                                 --           6,500
      Other assets, net                                                                   2,529           2,698
                                                                                   ------------    ------------
 TOTAL ASSETS                                                                      $    462,560    $    371,664
                                                                                   ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
      Current liabilities:
        Accounts payable                                                           $     11,748    $     15,650
        Accrued production taxes                                                          4,292           2,240
        Accrued interest                                                                  1,904           2,583
        Fair value of derivatives                                                         4,255             390
        Other accrued liabilities                                                         6,774           5,895
                                                                                   ------------    ------------
       Total current liabilities                                                         28,973          26,758

       Fair value of derivatives - long term                                                676              --
       Long-term debt                                                                   254,819         214,319
       Deferred income taxes
                                                                                         36,663          19,019

       Stockholders' equity:
        Common stock, $.01 par value:
               authorized shares - 50,000,000
               issued and outstanding - 14,614,587                                          146             146
        Paid-in capital                                                                  96,304          96,413
        Retained earnings                                                                69,281          40,285
        Accumulated other comprehensive income                                            1,301              --
        Treasury stock - 1,741,350 and 1,747,182 shares, respectively                   (25,603)        (25,276)
                                                                                   ------------    ------------
       Total stockholders' equity                                                       141,429         111,568
                                                                                   ------------    ------------
 TOTAL LIABILITIES AND  STOCKHOLDERS' EQUITY                                       $    462,560         371,664
                                                                                   ============    ============
</Table>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       4
<PAGE>   5


                               PRIZE ENERGY CORP.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
          (UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS AND SHARES)

<Table>
<Caption>
                                                          THREE MONTHS ENDED               SIX MONTHS ENDED
                                                               JUNE 30,                        JUNE 30,
                                                     ----------------------------    ----------------------------
                                                         2001            2000            2001            2000
                                                     ------------    ------------    ------------    ------------
<S>                                                  <C>             <C>             <C>             <C>
OIL AND GAS SALES                                    $     48,507    $     37,330    $    102,706    $     66,318

COSTS AND EXPENSES
     Lease operations                                      11,378           7,902          20,687          15,504
     Production taxes                                       4,635           3,892          10,467           6,651
     Depletion, depreciation, and amortization              9,136           6,787          17,114          12,261
     General and administrative                             2,800           2,321           5,852           3,968
                                                     ------------    ------------    ------------    ------------
         Total costs and expenses                          27,949          20,902          54,120          38,384
                                                     ------------    ------------    ------------    ------------
OPERATING INCOME                                           20,558          16,428          48,586          27,934

OTHER:
     Interest expense                                       4,579           4,509           9,573           7,959
     Change in derivative fair value                       (1,288)             --          (6,380)             --
     Other income                                            (482)           (131)           (632)           (251)
                                                     ------------    ------------    ------------    ------------
         Total other expense                                2,809           4,378           2,561           7,708
                                                     ------------    ------------    ------------    ------------
INCOME BEFORE INCOME TAXES                                 17,749          12,050          46,025          20,226
PROVISION FOR INCOME TAXES                                 (6,567)         (4,459)        (17,029)         (7,484)
                                                     ------------    ------------    ------------    ------------
NET INCOME                                                 11,182           7,591          28,996          12,742
PREFERRED DIVIDEND                                             --              --              --            (458)
                                                     ------------    ------------    ------------    ------------
INCOME AVAILABLE TO
     COMMON STOCKHOLDERS                             $     11,182    $      7,591    $     28,996    $     12,284
                                                     ============    ============    ============    ============

NET INCOME PER COMMON SHARE:
     Basic                                           $       0.87    $       0.57    $       2.25    $       1.07
                                                     ============    ============    ============    ============
     Diluted                                         $       0.81    $       0.54    $       2.11    $       0.89
                                                     ============    ============    ============    ============

WEIGHTED-AVERAGE
     COMMON SHARES OUTSTANDING:
     Basic                                             12,910,895      13,268,688      12,894,311      11,448,049

     Diluted                                           13,767,994      14,155,276      13,754,954      14,245,822
</Table>


                 The accompanying notes are an integral part of
                    these consolidated financial statements.


                                       5
<PAGE>   6


                               PRIZE ENERGY CORP.
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                          (IN THOUSANDS, EXCEPT SHARES)

<Table>
<Caption>
                                          CONVERTIBLE VOTING
                                           PREFERRED STOCK            COMMON STOCK         ADDITIONAL                    OTHER
                                        ----------------------    ---------------------     PAID-IN      RETAINED    COMPREHENSIVE
                                          SHARES       AMOUNT       SHARES      AMOUNT       CAPITAL     EARNINGS       INCOME
                                        -----------    -------    -----------   -------    ----------    --------    -------------
<S>                                     <C>            <C>        <C>           <C>        <C>           <C>         <C>
Balance as of January 1, 2000             3,958,879    $30,907      8,291,301   $    83    $   49,260    $  8,202    $          --

Issuance of stock in acquisition                 --         --      2,339,089        23        15,788          --               --
Preferred stock dividend                     25,318        198             --        --            --        (459)              --
Preferred conversion                     (3,984,197)   (31,105)     3,984,197        40        31,065          --               --
Purchase of treasury shares                      --         --             --        --            --          --               --
Warrant exercises                                --         --             --        --           330          --               --
Option exercises                                 --         --             --        --           (30)         --               --

Net income                                       --         --             --        --            --      32,542               --
                                        -----------    -------    -----------   -------    ----------    --------    -------------

Balance as of December 31, 2000                  --         --     14,614,587       146        96,413      40,285               --

(UNAUDITED)
Option exercises                                 --        --              --        --          (109)         --               --
                                                                           --        --            --          --               --
Issuance of shares to directors                  --         --             --        --            --          --               --
Purchase of treasury shares                      --         --             --        --            --          --               --

Net income                                       --         --             --        --            --      28,996               --
Cumulative effect of change in
       accounting                                --         --             --        --            --          --          (55,409)
Hedge fair value adjustment                      --         --             --        --            --          --           50,330
Change in derivative fair value                  --         --             --        --            --          --            6,380
                                        -----------    -------    -----------   -------    ----------    --------    -------------
Other comprehensive income                       --         --             --        --            --      28,996            1,301
                                        -----------    -------    -----------   -------    ----------    --------    -------------

Balance as of June 30, 2001                      --    $    --     14,614,587   $   146    $   96,304    $ 69,281    $       1,301
                                        ===========    =======    ===========   =======    ==========    ========    =============
</Table>


<Table>
<Caption>
                                           TREASURY STOCK
                                     --------------------------
                                         SHARES       AMOUNT          TOTAL
                                     -----------    -----------    -----------
<S>                                  <C>            <C>            <C>
Balance as of January 1, 2000                 --    $        --    $    88,452

Issuance of stock in acquisition            (900)           (22)        15,789
Preferred stock dividend                      --             --           (261)
Preferred conversion                          --             --             --
Purchase of treasury shares           (1,810,182)       (26,138)       (26,138)
Warrant exercises                         45,000            615            945
Option exercises                          18,900            269            239

Net income                                    --             --         32,542
                                     -----------    -----------    -----------

Balance as of December 31, 2000       (1,747,182)       (25,276)       111,568

(UNAUDITED)
Option exercises                          85,033          1,230          1,121
Issuance of shares to directors              324              8              8
Purchase of treasury shares              (79,525)        (1,565)        (1,565)
Net income                                    --             --         28,996
Cumulative effect of change in
       accounting                             --             --        (55,409)
Hedge fair value adjustment                   --             --         50,330
Change in derivative fair value               --             --          6,380
                                     -----------    -----------    -----------
Other comprehensive income                    --             --         30,297
                                     -----------    -----------    -----------

Balance as of June 30, 2001           (1,741,350)   $   (25,603)   $   141,429
                                     ===========    ===========    ===========
</Table>


                 The accompanying notes are an integral part of
                    these consolidated financial statements.


                                       6
<PAGE>   7


                               PRIZE ENERGY CORP.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (UNAUDITED, IN THOUSANDS)

<Table>
<Caption>
                                                                THREE MONTHS ENDED           SIX MONTHS ENDED
                                                                     JUNE 30,                    JUNE 30,
                                                             ------------------------    ------------------------
                                                                2001          2000          2001          2000
                                                             ----------    ----------    ----------    ----------
<S>                                                          <C>           <C>           <C>           <C>
OPERATING ACTIVITIES
     Net Income                                              $   11,182    $    7,591    $   28,996    $   12,742

     Adjustments to reconcile net income to net cash
     by operating activities:
         Depreciation, depletion and amortization                 9,136         6,787        17,114        12,260
         Amortization of loan origination fees                      135           110           257           212
         Change in derivative fair value                         (1,288)           --        (6,380)           --
         Deferred income tax                                     11,499            --        17,644            --
                                                             ----------    ----------    ----------    ----------
                                                                 30,664        14,488        57,631        25,214
         Changes in operating assets and liabilities:
             Accounts receivable                                 14,092       (10,895)       (1,638)       (8,697)
             Other assets                                       (10,368)       (3,645)       (6,016)       (3,435)
             Accounts payable and accrued liabilities            (8,122)       11,952        (1,650)        5,071
                                                             ----------    ----------    ----------    ----------

CASH PROVIDED BY OPERATING ACTIVITIES                            26,266        11,900        48,327        18,153

INVESTING ACTIVITIES
     Additions to oil and gas properties                        (22,013)      (11,541)      (97,241)      (20,688)
     Additions to other properties and equipment                   (280)         (608)         (667)         (991)
     Proceeds from sale of properties and equipment              12,190            --        12,190            --
                                                             ----------    ----------    ----------    ----------

CASH USED IN INVESTING ACTIVITIES
                                                                (10,103)      (12,149)      (85,718)      (21,679)

FINANCING ACTIVITIES
     Proceeds from issuance of common stock                         593            --           691            --

     Purchase of treasury stock                                  (1,565)          (54)       (1,565)      (18,429)

     Borrowings under credit facilities                              --            --        68,000        28,750

     Repayment of credit facilities                             (26,500)           --       (27,500)           --

     Payment of preferred dividend                                   --            --            --          (261)
                                                             ----------    ----------    ----------    ----------

CASH PROVIDED (USED) BY FINANCING ACTIVITIES                    (27,472)          (54)       39,626        10,060

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                (11,309)         (303)        2,235         6,534
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                   14,364        10,190           820         3,353
                                                             ----------    ----------    ----------    ----------

CASH AND CASH EQUIVALENTS, END OF PERIOD                     $    3,055    $    9,887    $    3,055    $    9,887
                                                             ==========    ==========    ==========    ==========


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
     Cash paid during the period for income taxes            $       --    $    5,807    $       --    $    5,807
     Cash paid during the period for interest                $    5,048    $    7,192    $    9,995    $    7,192
</Table>


                 The accompanying notes are an integral part of
                    these consolidated financial statements.


                                       7
<PAGE>   8


                               PRIZE ENERGY CORP.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2001 AND 2000

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying consolidated financial statements and notes of Prize Energy
Corp. ("Prize" or the "Company") have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. The accompanying
consolidated financial statements and notes should be read in conjunction with
the consolidated financial statements and notes included in Prize's 2000 annual
report on Form 10-K.

In the opinion of Prize's management, all adjustments (all of which are normal
and recurring) have been made which are necessary to fairly state the
consolidated financial position of Prize and its subsidiaries as of June 30,
2001, and the results of their operations and cash flows for the three and six
months ended June 30, 2001 and 2000.

BUSINESS AND ORGANIZATION

Prize was formed on January 15, 1999 (inception) and is a Delaware corporation
engaged in the acquisition, development, and production of proved oil and gas
properties. The Company's corporate headquarters are located in Grapevine, Texas
with oil and gas producing properties primarily located in Texas, Louisiana, and
Oklahoma.

On February 8, 2000, the Company merged with Vista Energy Resources, Inc.
(Vista), an independent oil and gas development and production company. Though
the Company's stockholders exchanged their shares for new shares of Vista, the
stockholders of the Company acquired an 84% controlling interest in the merged
company. Accordingly, the transaction was accounted for as a purchase of Vista
by the Company in accordance with the provisions of APB 16. The merged company's
stock is listed on the American Stock Exchange under the ticker symbol "PRZ."

Under the terms of the merger, Prize stockholders effectively exchanged 16% of
their interest in Prize for an 84% interest in Vista. Prior to the merger, Prize
was a private company with no readily determinable market value. Thus, in order
to determine the purchase price paid by Prize, Prize management estimated the
fair value of Prize's oil and gas assets, its debt and other assets and
liabilities as of the purchase agreement date. The final purchase price of Vista
was $69.9 million, including liabilities assumed of $53.8 million. The final
purchase price was assigned to the assets of Vista based on their fair value,
resulting in current and other assets of $5.6 million, oil and gas properties of
$84.8 million, current liabilities of $13.7 million, debt of $53.7 million, and
a net deferred tax liability of $6.9 million. Additionally, $1.3 million of
accrued interest and bank fees were rolled into the debt principal.


                                       8
<PAGE>   9


2.   HEDGING

Effective January 1, 2001, the Company adopted Financial Accounting Standards
Board Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities" (Statement No. 133). The adoption of Statement No. 133 resulted in a
cumulative effect of an accounting change of $55.4 million being recognized as a
charge to accumulated other comprehensive income, a component of stockholders'
equity.

Under Statement No. 133, the accounting for changes in the fair value of a
derivative instrument depends on whether it has been designated and qualifies as
part of a hedging relationship and further, on the type of hedging relationship.
For those derivative instruments that are designated and qualify as hedging
instruments, a company must designate the hedging instrument, based upon the
exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a
net investment in a foreign operation. Substantially all of the Company's hedges
are cash flow hedges. As such, the effective portion of the gain or loss on the
derivative instrument is reported as a component of other comprehensive income
and reclassified into earnings in the same period or periods during which the
hedged transaction affects earnings. The remaining gain or loss on the
derivative instrument in excess of the cumulative change in the present value of
future cash flows of the hedged item, if any, is recognized in earnings during
the period of change. For derivative instruments not designated as hedging
instruments, the gain or loss is recognized in current earnings during the
period of change.

To protect against the volatility of oil and gas prices related to the Company's
production, the Company has instituted a program to hedge portions of its
forecasted revenues from oil and gas production. When oil and gas prices rise,
the increase in the expected cash flows from production is offset by hedging
losses. When oil and gas prices decrease, the decrease in the expected cash
flows from production is offset by hedging gains. The Company's hedging program
includes crude oil and natural gas swaps and collar options.

The Company's cumulative effect of adoption included a charge of $11.5 million
for certain options which previously qualified for hedge treatment but will not
qualify as hedges under Statement No. 133. Accordingly, this amount was charged
to accumulated other comprehensive income and will be reversed as these options
expire. $10.9 million was reversed from accumulated other comprehensive income
during the six months ended June 30, 2001. Subsequent changes in the fair value
of these options will be recognized in earnings on a mark to market basis.
Accordingly, a $1.9 million gain was recognized in earnings as a change in
derivative fair value during the six months ended June 30, 2001. Included in
this amount is $.5 million for two hedges which had previously qualified for
hedge treatment in the first quarter of 2001, but which did not qualify for
hedge treatment in the second quarter of 2001.

During the first quarter of 2001, the Company recognized a net gain of $5
million related to the ineffectiveness of its cash flow hedging instruments. The
gain was primarily due to changes in the time and volatility value of the
Company's natural gas collar options during the first quarter of 2001. However,
beginning in April 2001, the Company adopted an interpretation of Statement No.
133 (Derivatives Implementation Group, or DIG, Issue G-20), which allows owners
of options to measure effectiveness based on a comparison of the cumulative
change in the fair


                                       9
<PAGE>   10


value of the option to the cumulative change in the expected future cash flows
of the hedged transaction. Under DIG Issue G-20, if the measurement of
effectiveness is performed as described above, and the option has the same basis
and maturity dates of the expected dates of the hedged transaction, all changes
in the option's fair value are recorded in other comprehensive income until
settlement of the hedged transaction. Accordingly, beginning with the second
quarter of 2001, changes in the time and volatility value of the Company's
collars was recognized in other comprehensive income. The settlement of the
Company's hedges which were designated against production during the three and
six months ended June 30, 2001 resulted in a charge to revenues of $9.5 million
and $27.9 million, respectively.

At June 30, 2001, $1.3 million remains in accumulated other comprehensive
income. Of this amount, an asset of $4.5 million relates to hedges which are
designated against 2001 production, while a liability of $3.2 million is
designated against 2002 and 2003 production. The amounts remaining in
accumulated other comprehensive income include $.6 million that relates to the
amount recorded in other comprehensive income upon adoption of Statement No. 133
for options which no longer qualify as hedges.

The following table summarizes the components recognized as change in derivative
fair value in earnings during the three and six months ended June 30, 2001 (in
thousands):

<Table>
<Caption>
                                                            Three Months Ended   Six Months Ended
                                                               June 30, 2001       June 30, 2001
                                                            ------------------   ----------------
<S>                                                         <C>                  <C>
        Change in fair value of derivatives not
           qualifying for hedge accounting.............         $   1,770            $  1,900
        Ineffective portion of derivatives qualifying
           for hedge accounting........................              (482)              4,480
                                                                ---------            --------
                                                                $   1,288            $  6,380
                                                                =========            ========
</Table>


The estimated fair values of the Company's derivatives as of June 30, 2001 are
provided below (in thousands):

<Table>
<Caption>
                                                                                      June 30, 2001
                                                                                    -----------------
<S>                                                                                 <C>
                         Derivative assets:
                            Natural gas collars.................................        11,627
                            Crude oil swaps.....................................           596
                                                                                      --------
                                                                                      $ 12,223
                                                                                      ========
                         Derivative liabilities:
                            Natural gas swaps...................................      $    936
                            Natural gas collars.................................         1,790
                            Crude oil collars...................................         2,205
                                                                                      --------
                                                                                      $  4,931
                                                                                      ========
</Table>


                                       10
<PAGE>   11


Set forth below is the contract amount and material terms of all natural gas
hedging instruments held by Prize at June 30, 2001:

<Table>
<Caption>
     NATURAL GAS
     -----------
                  TRADE                          PUT FLOOR     CALL CEILING               DAILY
                  DATE             TERM        PRICE PER MCF   PRICE PER MCF     TYPE     VOLUME
               -----------     -------------   -------------   -------------   --------  --------
<S>                            <C>             <C>             <C>             <C>       <C>
                   6/30/99       9/99 - 8/01   $   2.26/1.86   $        2.57     Collar     5,000
                   6/22/99       8/99 - 7/01            2.10            2.42     Collar     5,000
                   6/22/99       8/99 - 7/01            2.15            2.43     Collar     5,000
                    7/1/99       9/99 - 8/01       2.30/2.00            2.64     Collar     5,000
                   6/21/00      1/01 - 12/01            3.00            4.75     Collar     5,000
                    2/8/99      1/01 - 12/01            2.35            2.35     Swap       4,000
                   3/22/00      8/01 - 12/01            2.40            3.33     Collar    15,000
                  11/21/00      1/01 - 12/01            4.00            6.35     Collar    10,000
                  10/26/00      1/03 - 12/03            3.00            4.70     Collar    10,000
                   12/1/00      4/01 - 12/01            4.50            6.40     Collar     2,000
                   12/1/00      4/01 - 12/01            4.50            6.25     Collar     2,000
                   12/1/00      1/02 - 12/02            3.50            5.90     Collar     1,500
                   12/1/00      1/02 - 12/02            3.50            5.40     Collar     1,500
                    5/9/01      1/02 - 12/02            4.00            4.47     Collar    35,000
                   4/30/01      1/02 - 12/02       4.22-5.23       5.25-6.27     Collar     5,000
</Table>

Set forth below is the contract amount and material terms of all crude oil
hedging instruments held by Prize at June 30, 2001:

<Table>
<Caption>
      CRUDE OIL
      ---------
                  TRADE                          PUT FLOOR     CALL CEILING               DAILY
                  DATE             TERM        PRICE PER BBL   PRICE PER BBL     TYPE     VOLUME
               -----------     -------------   -------------   -------------   --------  --------
<S>                            <C>             <C>             <C>             <C>       <C>
                    7/1/99       9/99 - 8/01   $ 17.15/14.15   $       20.05     Collar       500
                   6/20/00      1/01 - 12/01           20.00           30.24     Collar     1,500
                   3/22/00      8/01 - 12/01           19.00           24.35     Collar     1,500
                   12/1/00      4/01 - 12/01           22.00           26.00     Collar     1,000
                   12/1/00      1/02 - 12/02           20.00           24.85     Collar     1,000
                   3/30/01      1/02 - 12/02     18.99-21.11     26.99-29.11     Collar     1,500
                   6/12/01      1/02 - 12/02           26.00           26.00     Swap       1,000
                   5/21/01       7/01 - 9/01           29.50           29.50     Swap       1,500
                   5/21/01     10/01 - 12/01           28.10           28.10     Swap       1,500
</Table>


3. ACQUISITIONS AND DISPOSITIONS

On February 28, 2001, the Company closed on the purchase of $61.4 million of
interests in oil and gas properties from Apache Corporation, net of subsequent
closing adjustments. At December 31, 2000, the Company had deposited $6.5
million towards the purchase. The Company financed the acquisition under its
existing bank credit facility.

On April 30, 2001, the Company closed on the sale of $12.2 million of interests
in oil and gas properties to Texas Petroleum Investment Company. The properties
divested are located in the


                                       11
<PAGE>   12


Onshore Gulf Coast region of South Texas and Louisiana. The sales price
approximated the carrying value of the properties, and no gain or loss was
recognized.

4. CREDIT FACILITIES

On February 8, 2000, in connection with the merger with Vista, the Company
amended its Senior Facility to provide for total borrowings of up to $400
million. Since then, the Company has further amended the Senior Facility which
is now due June 29, 2006. The revised Senior Facility provides for letters of
credit in addition to a revolving credit facility. In October 2000, the Company
amended the Senior Facility to provide for an increase in the limits for letters
of credit to an aggregate of $15 million with an additional supplemental letter
of credit (as defined by the credit agreement) of $15 million. On July 30, 2001,
the Company amended the Senior Facility and eliminated the $15 million
supplemental letter of credit provisions. At June 30, 2001, $2.5 million was
outstanding under the letter of credit provisions of the facility. As of April
1, 2001, the Company's borrowing base was raised from $325 million to $375
million. At June 30, 2001, $254.8 million was outstanding. Since financing the
Apache acquisition in February, 2001, the Company has repaid $30.5 million
through July 31, 2001.

The revolver converts to a term loan on June 29, 2004, with quarterly principal
payments after that date through June 29, 2008. Interest is due quarterly at
either the bank's prime rate or LIBOR rate plus a margin as defined in the
agreement. The bank credit facility has various restrictions including a limit
on incurred debt and asset dispositions. The Company is required to maintain
certain financial and non-financial covenants including minimum current and
interest coverage ratios. Borrowings under the credit facility are secured by
substantially all of the Company's assets.

5. STOCKHOLDERS' EQUITY

On March 28, 2000, Prize entered into an agreement with Pioneer Natural
Resources (Pioneer) to acquire 1,346,482 shares of Prize common stock for
approximately $18.4 million. Prior to the acquisition, Pioneer agreed to convert
all convertible preferred stock to common stock, resign the two board seats held
by Pioneer, and cancel the exploration and participation agreement associated
with the convertible preferred stock. The transaction was effective March 31,
2000 and was funded through the Company's Senior Credit Facility.

On May 8, 2001, 324 shares of common stock of the Company were issued in lieu of
cash to three of the outside directors of the Company for attending a meeting of
the Board of Directors of the Company.

On July 30, 2001, the Company amended its Senior Facility to allow for the
purchase of $25 million of its common shares from that date forward. Also, in
August 2001, the Company's Board of Directors approved a plan to buyback an
additional $25 million of its common stock which, when combined with the
previously approved $15 million repurchase plan, brings the total Board
authorized repurchases to $40 million.


                                       12
<PAGE>   13


From June 18, 2001 through June 28, 2001 Prize repurchased 79,525 of its common
shares for a total of $1.6 million. Subsequent to June 30, 2001 and through
August 8, 2001, Prize repurchased an additional 318,600 shares for a total of
$6.2 million.

6. EARNINGS PER SHARE

The following tables provide reconciliations between basic and diluted earnings
per common share for the three and six months ended June 30, 2001 and 2000.

Three Months Ended June 30, 2001 and 2000 (in thousands, except shares and per
share amounts):

<Table>
<Caption>
                                                      2001                                        2000
                                   ------------------------------------------   ------------------------------------------
                                                    Weighted                                    Weighted
                                                    Average       Per Share                      Average       Per Share
                                      Income         Shares        Amount          Income         Shares         Amount
                                   -------------  ------------  -------------   -------------  ------------  -------------
<S>                                <C>            <C>           <C>             <C>            <C>           <C>
Basic earnings per share
  Income available
    to common stockholders         $      11,182    12,910,895  $        0.87           7,591    13,268,688  $        0.57
Effect of dilutive securities:

  Employee stock options                               856,650                                      883,931

  Warrants                                                 449                                        2,657
                                   -------------  ------------  -------------   -------------  ------------  -------------
Diluted earnings per share         $      11,182    13,767,994  $        0.81           7,591    14,155,276  $        0.54
                                   =============  ============  =============   =============  ============  =============
</Table>

Six Months Ended June 30, 2001 and 2000 (in thousands, except shares and per
share amounts):

<Table>
<Caption>
                                                      2001                                        2000
                                   ------------------------------------------   ------------------------------------------
                                                    Weighted                                    Weighted
                                                    Average       Per Share                      Average       Per Share
                                      Income         Shares        Amount          Income         Shares         Amount
                                   -------------  ------------  -------------   -------------  ------------  -------------
<S>                                <C>            <C>           <C>             <C>            <C>           <C>
Basic earnings per share
  Income available
    to common stockholders         $      28,996    12,894,311  $        2.25   $      12,284    11,448,049  $        1.07
Effect of dilutive securities:
  Employee stock options                               860,355                                      805,571
  Convertible preferred shares                              --                            458           104
  Warrants                                                 288                                    1,992,098
                                   -------------  ------------  -------------   -------------  ------------  -------------
Diluted earnings per share         $      28,996    13,754,954  $        2.11          12,742    14,245,822  $        0.89
                                   =============  ============  =============   =============  ============  =============
</Table>


Warrants to purchase 1,708,724 and 1,687,296 shares of common stock have been
excluded from the earnings per share calculation as antidilutive for the three
months ended June 30, 2001 and 2000, respectively, and warrants to purchase
1,708,724 and 1,388,014 shares of common stock have been excluded from the
earnings per share calculation as antidilutive for the six months ended June 30,
2001 and 2000, respectively.


                                       13
<PAGE>   14


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

The following discussion addresses material changes in results of operations for
the three and six months ended June 30, 2001 compared to the same periods in
2000 and in financial condition since December 31, 2000. It is presumed that
readers have read or have access to Prize's 2000 annual report on Form 10-K.

OVERVIEW

On February 28, 2001, the Company closed on the purchase of $61.4 million of
interests in oil and gas properties from Apache Corporation, net of subsequent
closing adjustments. At December 31, 2000, the Company had deposited $6.5
million towards the purchase. The Company financed the acquisition under its
existing bank credit facility.

On April 30, 2001, the Company closed on the sale of $12.2 million of interests
in oil and gas properties to Texas Petroleum Investment Company. The properties
divested are primarily located in the Onshore Gulf Coast region of South Texas
and Louisiana. The sales price approximated the carrying value of the
properties, and no gain or loss was recognized.

For the quarter ended June 30, 2001, net income was $11.2 million or $0.87
(basic) per common share. This compares to second quarter of 2000 net income of
$7.6 million or $.57 (basic) per common share. For the six months ended June 30,
2001, net income available to common stockholders was $29.0 million or $2.25
(basic) per common share. This compares to net income for the six months ended
June 30, 2000 of $12.3 million or $1.07 (basic) per common share. The
substantial increase in the 2001 net income is directly attributable to
increased production from acquisitions and heightened levels of development
activities as well as substantial increases in oil and gas prices.

RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000

Prize merged with Vista on February 8, 2000. Accordingly, the financial
statements of Prize for the six months ended June 30, 2000 include only five
months of the oil and gas operations from the Vista properties. Likewise, the
financial statements for the three and six months ended June 30, 2000 do not
contain any operations from the properties acquired from Apache on February 28,
2001. Consequently, a portion of the changes discussed below are due to these
acquisitions. Changes in oil/liquids and gas production, average realized prices
including the effects of hedging, and revenues for the three and six months
ended June 30, 2001 and 2000, are shown in the table below:


                                       14
<PAGE>   15


<Table>
<Caption>
                                      THREE MONTHS ENDED JUNE 30,       SIX MONTHS ENDED JUNE 30,
                                      ----------------------------    ----------------------------
                                                             2001                            2001
                                                              VS.                             VS.
                                        2001       2000      2000       2001       2000      2000
                                      --------   --------   ------    --------   --------   ------
<S>                                   <C>        <C>        <C>       <C>        <C>        <C>
PRODUCTION
   Oil/liquids (MBbls)                     993        944      5.2%      1,864      1,722      8.3%
   Gas (MMcf)                            7,570      5,989     26.4%     14,890     11,475     29.8%
   Total (Mboe)                          2,255      1,943     16.1%      4,346      3,634     19.6%

AVERAGE REALIZED PRICES
   Oil/liquids (per Bbl)              $  22.19   $  21.42      3.6%   $  23.28   $  20.88     11.5%
   Gas (per Mcf)                      $   3.50   $   2.86     22.4%   $   3.98   $   2.65     50.2%
   Per Boe                            $  21.51   $  19.22     11.9%   $  23.63   $  18.25     29.5%

 TOTAL REVENUES (IN THOUSANDS)
   Oil/liquids                        $ 22,035   $ 20,228      8.9%   $ 43,385   $ 35,952     20.7%
   Gas                                  26,472     17,102     54.8%     59,321     30,366     95.4%
                                      --------   --------             --------   --------
   Total                              $ 48,507   $ 37,330     30.0%   $102,706   $ 66,318     54.9%
</Table>


OIL/LIQUIDS REVENUES FOR 2001 COMPARED TO 2000. Oil/liquids revenues increased
$1.8 million or 8.9% in the second quarter of 2001 compared to the same period
in 2000. Production gains of 49,000 barrels, or 5.2%, increased oil/liquids
revenues by $1.0 million in the 2001 period. The increase in production occurred
as a result of Prize's ongoing development program and the Apache acquisition.
In addition to the production increases, oil/liquids revenues increased $.8
million as a result of the $0.77 per barrel, or 3.6%, price increase realized in
the second quarter of 2001 compared to the same period in 2000. Realized hedging
losses decreased oil/liquids revenue by $2.8 million or $2.82 per barrel for the
three months ended June 30, 2001 compared to $4.4 million or $4.66 per barrel in
the 2000 period.

Oil/liquids revenues increased $7.4 million or 20.7% in the first six months of
2001 compared to the same period in 2000. Production gains of 142,000 barrels,
or 8.3%, added $3 million of oil/liquids revenues in the 2001 period. The
increase in production occurred as a result of Prize's ongoing development
program and the Vista and Apache acquisitions. In addition to the production
increases, oil/liquids revenues increased $4.4 million as a result of the $2.40
per barrel, or 11.5%, price increase realized in the six month period of 2001.
Realized hedging losses decreased oil/liquids revenue by $5.5 million or $2.95
per barrel for the six months ended June 30, 2001 compared to $8.0 million or
$4.65 per barrel in the 2000 period.

GAS REVENUES FOR 2001 COMPARED TO 2000. Gas revenues increased $9.4 million or
54.8% in the second quarter of 2001 compared to the same period in 2000.
Production gains of 1.6 Bcf of gas, or 26.4%, added $4.6 million of gas revenues
in the 2001 period. The production gains were primarily the result of Prize's
ongoing development program and the Apache acquisition. In addition to the
production increases, gas revenues increased $4.8 million as a result of the gas
price realized increasing $.64 per Mcf, or 22.4%, in the second quarter of 2001
as compared to the same period in 2000. Realized hedging losses decreased gas
revenue by $6.7 million or $0.89 per Mcf for the three months ended June 30,
2001 compared to $3.0 million or $0.50 per Mcf in the 2000 period.


                                       15
<PAGE>   16


Gas revenue increased $29 million or 95.4% in the first six months of 2001
compared to the same period in 2000. Production increased by 3.4 Bcf of gas, or
29.8%, increasing revenues by $9.2 million in the 2001 period. The increase in
production occurred as a result of Prize's ongoing development program and the
Vista and Apache acquisitions. Gas revenues increased $19.8 million as a result
of the $1.33 per Mcf, or 50.2%, price increase realized in the first six months
of 2001. Realized hedging losses decreased gas revenue by $22.3 million or $1.50
per Mcf for the six months ended June 30, 2001 compared to $2.9 million or $0.25
per Mcf in the 2000 period.


PRODUCTION AND OPERATING EXPENSE. Listed below are the changes in production and
operating expenses for the three and six months ended June 30, 2001 as compared
to the 2000 period:

<Table>
<Caption>
                                      THREE MONTHS ENDED JUNE 30,       SIX MONTHS ENDED JUNE 30,
                                      ----------------------------    ----------------------------
                                                             2001                            2001
                                                              VS.                             VS.
                                        2001       2000      2000       2001       2000      2000
                                      --------   --------   ------    --------   --------   ------
<S>                                   <C>        <C>        <C>       <C>        <C>        <C>
PRODUCTION AND OPERATING
  EXPENSES (000'S)
   Recurring Operations and
      Maintenance Expense             $  8,529   $  5,894     44.7%   $ 15,138   $ 11,366     33.2%
   Well Workover Expense                 2,849      2,008     41.9%      5,549      4,138     34.1%
   Production Taxes                      4,635      3,892     19.1%     10,467      6,651     57.4%
                                      --------   --------             --------   --------
        Total                         $ 16,013   $ 11,794     35.8%   $ 31,154     22,155     40.6%

PER BOE PRODUCED
   Recurring Operations and
      Maintenance Expense             $   3.78   $   3.03     24.8%   $   3.48       3.13     11.2%
   Well Workover Expense              $   1.26   $   1.03     22.3%   $   1.28       1.14     12.3%
   Production Taxes                   $   2.06   $   2.00        3%   $   2.41       1.83     31.7%
</Table>



Recurring operations and maintenance expenses increased $2.6 million or 44.7% in
the second quarter of 2001 and $3.8 million or 33.2% in the six months ended
June 30, 2001. The increase in the recurring operations and maintenance expenses
is substantially attributable to operating expenses from the Apache acquisition
properties and increased well servicing activities. Well workover expense
increased $0.8 million or 41.9% in the second quarter of 2001 and $1.4 million
or 34.1% in the six months ended June 30, 2001. The rise in well workover
expense is a result of the Company's ongoing effort to enhance production and
reserves. Production taxes increased $0.7 million or 19.1% and $3.8 million or
57.4% in the three and six months ended June 30, 2001. This increase was caused
by the dramatic increases in oil and gas prices and production in 2001 versus
the 2000 period.


DEPRECIATION, DEPLETION AND AMORTIZATION EXPENSES (DD&A). DD&A expense in the
quarter ended June 30, 2001 was $9.1 million as compared to $6.8 million in the
2000 period. On a Boe basis, the average DD&A rate was $4.05, or 16% higher than
the rate of $3.49 in 2000. The


                                       16
<PAGE>   17


DD&A expense in the six months ended June 30, 2001 was $17.1 million or $3.94
per Boe, as compared to $12.3 million or $3.37 per Boe for 2000. The increase in
rate is attributable to higher production, the Vista and Apache acquisitions and
investment resulting from Prize's ongoing development program.

GENERAL AND ADMINISTRATIVE EXPENSES (G&A). G&A expense in the quarter ended June
30, 2001 was $2.8 million versus $2.3 million for the 2000 period. On a Boe
basis, the G&A rate was $1.24, 3% higher than the rate of $1.20 for the 2000
period. G&A expense during the six months ended June 30, 2001 was $5.9 million,
or $1.35 per Boe, versus $4 million, or $1.09 per Boe in the 2000 period. The
increase in the 2001 period resulted substantially from Prize's increase in its
corporate staff during the second half of 2000 and the first half of 2001.

INTEREST EXPENSE. Interest expense for the three and six months ended June 30,
2001 was $4.6 million and $9.6 million, respectively, as compared to $4.5
million and $8 million in the 2000 periods. The average rate on the debt
outstanding was 6.93% and 7.51% for the three and six months ended June 30, 2001
compared to 8.44% and 8.34% for the 2000 periods. In addition, the 2000 period
included $53.7 million of debt assumed in the Vista acquisition only from
February 8, 2000, forward and $18.4 million borrowed on March 28, 2000 for the
purchase of shares from Pioneer. The 2001 period also included the effect of the
interest after February 28, 2001 on $54 million borrowed in connection with the
Apache acquisition.

CHANGE IN DERIVATIVE FAIR VALUE. The Company recorded an unrealized gain of $1.3
million in the 2001 second quarter and $6.4 million for the six month period
primarily relating to the ineffective portion of derivatives qualifying for
hedge accounting. No comparable amounts were recorded during 2000.

INCOME TAXES. Income tax expense is based upon the estimated effective income
tax rate that is expected for the entire fiscal year. The estimated effective
tax rate for 2001 and 2000 is 37%.

CAPITAL EXPENDITURES, CAPITAL RESOURCES, AND LIQUIDITY

The following discussion of capital expenditures, capital resources and
liquidity should be read in conjunction with the consolidated statements of cash
flows included in Part 1, Item 1 elsewhere herein.

CAPITAL EXPENDITURES. Approximately $22.2 million was spent in the second
quarter of 2001 for capital expenditures bringing the 2001 year to date total to
$97.2 million. Of the $22.2 million incurred, $21.3 million was spent on
drilling and development, and $.9 million was spent on closing adjustments for
the Apache acquisition. Of the $97.2 million incurred for the six months ended
June 30, 2001, $42.3 million was spent on drilling and development, and $54.9
million was spent on the Apache acquisition. For the three and six months ended
June 30, 2001, the Company has participated in the drilling of 26 and 41 wells,
respectively, achieving a success rate of 96% and 95%, respectively. In
addition, the Company has performed a total of 19 and 44 recompletions,
respectively, with a success rate of 89% for both periods. The success rates
achieved in the 2001 capital expenditure program have significantly contributed
to the increase in production realized in 2001.


                                       17
<PAGE>   18


The timing of most of the Company's capital expenditures is discretionary with
no material long-term capital expenditure commitments. Consequently, the Company
has a significant degree of flexibility to adjust the level of such expenditures
as circumstances warrant. The Company uses internally generated cash flow to
substantially fund capital expenditures other than significant acquisitions and
anticipates that its cash flow, net of debt service obligations, will be
sufficient to fund its planned 2001 capital expenditures of approximately $60
million, excluding acquisitions.

Prize does not have a specific acquisition budget since the timing and size of
acquisitions are difficult to forecast. Prize regularly engages in discussions
relating to the potential acquisition of oil and gas properties. Any future
acquisitions may require additional financing and will be dependent upon
financing arrangements being available at the time.

CAPITAL RESOURCES AND LIQUIDITY. On February 8, 2000, in connection with the
merger agreement with Vista, the Company amended its Senior Facility to provide
for total borrowings of $400 million. The amended Senior Facility is due June
29, 2006. As of April 1, 2001, the Company's borrowing base was raised from $325
million to $375 million. Also, in June 2001, the Company reduced the outstanding
balance on its letter of credit to $2.5 million. On July 30, 2001, the Company
amended the Senior Facility and eliminated the $15 million supplemental letter
of credit provisions. As of June 30, 2001, Prize's outstanding long-term debt
was $254.8 million. During the first six months of 2001, Prize borrowed $67
million on the Senior Facility. Prize utilized the borrowings to fund the Apache
acquisition and a portion of its capital expenditures. Since financing the
Apache acquisition in February, 2001, the Company has repaid $30.5 million
through July 31, 2001. As of August 8, 2001, the Company had long-term debt of
$250.8 million.

Cash provided by operating activity before changes in working capital
("operating cash flow") was the primary source of capital and liquidity in the
first six months of 2001. Operating cash flow for the three and six months ended
June 30, 2001 was $30.7 million and $57.6 million, respectively.

On March 28, 2000, the Company entered into a stock purchase agreement with
Pioneer Natural Resources to acquire 1,346,482 shares of Prize common stock for
$18.4 million. In September 2000, the Company's Board of Directors approved a
plan to buy back up to an additional $15 million of its common stock from time
to time in the open market or through negotiated transactions. On July 30, 2001,
the Company amended its Senior Facility to allow for the purchase of $25 million
of its common shares from that date forward. Also, in August 2001, the Company's
Board of Directors approved a plan to buyback an additional $25 million of its
common stock, which when combined with the previously approved $15 million
repurchase plan, brings the total Board authorized repurchases to $40 million.
As of June 30, 2001, the Company had acquired an additional 543,225 common
shares for $9.3 million and reissued 85,033 shares for stock option exercises.
Additionally, from July 1, 2001 through August 8, 2001, the Company acquired an
additional 318,600 common shares for $6.2 million.


                                       18
<PAGE>   19


             ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
                                   MARKET RISK

See the information included in "Quantitative and Qualitative Disclosures About
Market Risk" in Item 7A of Prize's 2000 Annual Report on Form 10-K and the
information included in Note 2 in Part 1, Item 1 elsewhere herein. Such
information includes a description of Prize's potential exposure to market
risks, including commodity price risk and interest rate risk. As a result of the
decrease in both oil and natural gas prices, Prize had a net asset of $7.3
million, at fair market value, relating to its hedges, as compared to a net
liability of $55.4 million as of December 31, 2000.




                                       19
<PAGE>   20


PART II.  OTHER INFORMATION

         ITEM 1.           LEGAL PROCEEDINGS

                           Not applicable.

         ITEM 2.           CHANGES IN SECURITIES AND USE OF PROCEEDS

                           The outside directors of the Company receive a fee
                           payable in cash for each meeting of the Board of
                           Directors of the Company that they attend. The
                           outside directors, however, may elect to receive 50%
                           of that fee in common stock of the Company. Three of
                           the directors have elected to receive 50% of their
                           fees in common stock. On May 8, 2001, an aggregate of
                           324 shares of common stock of the Company were issued
                           to such directors at a price of $23.20 per share. The
                           issuance of such shares was exempt from registration
                           under Section 4(2) of the Securities Act of 1933, as
                           amended. Each of the outside directors is an
                           accredited investor.

         ITEM 3.           DEFAULTS UPON SENIOR SECURITIES

                           Not applicable.

         ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                           The Annual Meeting of Stockholders of the Company
                           (the "Annual Meeting") was held on May 24, 2001, in
                           Irving, Texas. At the Annual Meeting, the
                           stockholders of the Company elected Philip B. Smith,
                           Lon C. Kile, Kenneth A. Hersh, David R. Albin,
                           Theresa L. Killgore, James R. Latimer III and Robert
                           Kelley as directors. The stockholders also considered
                           and approved the appointment of Ernst & Young LLP as
                           the independent public accountants of the Company for
                           the fiscal year ending December 31, 2001.

                           There were present at the Annual Meeting, in person
                           or by proxy, stockholders holding 12,465,419 shares
                           of the common stock of the Company, or 96.7% of the
                           total stock outstanding and entitled to vote at the
                           Annual Meeting. The table below describes the results
                           of voting at the Annual Meeting:

<Table>
<Caption>
                                            Votes          Votes                      Broker
                                             For          Against     Abstentions    Non-Votes
                                         -----------      -------     -----------    ---------
<S>                                      <C>              <C>         <C>            <C>
           1.  Election of Directors :
               Philip B. Smith            12,022,633     442,786             -0-       -0-
               Lon C. Kile                12,022,633     442,786             -0-       -0-
               Kenneth A. Hersh           12,420,973      44,446             -0-       -0-
               David R. Albin             12,420,973      44,446             -0-       -0-
               Theresa L. Killgore        12,022,074     443,345             -0-       -0-
               James R. Latimer III       12,022,633     442,786             -0-       -0-
               Robert Kelley              12,420,973      44,446             -0-       -0-

           2.  Ratification of Ernst &    12,436,091      24,108           5,220       -0-
               Young LLP as
               independent public
               accountants of the
               Company for fiscal 2001
</Table>


                                       20
<PAGE>   21


         ITEM 5.           OTHER INFORMATION

                           Not applicable.

         ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K
                           a)  Exhibits
                           The following documents are included as exhibits to
                           this Form 10-Q. Those exhibits below incorporated by
                           reference herein are indicated as such by the
                           information supplied in the parenthetical thereafter.
                           If no parenthetical appears after an exhibit, such
                           exhibit is filed herewith.

  EXHIBIT
  NUMBER                                  DESCRIPTION

   10.1       Fifth Amendment to Amended and Restated Credit Agreement, dated as
              of July 30, 2001, among Prize Energy Resources, L.P., the Company,
              Fleet National Bank, successor-in-interest to BankBoston, N.A., as
              administrative agent, and certain financial institutions.



                           b) Reports on Form 8-K
                           None.



                                       21
<PAGE>   22


                                   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.



                                           Prize Energy Corp.
                                        ----------------------------------------
                                        (Registrant)


DATE:     August  14, 2001                   /s/ Lon C. Kile
        --------------------            ----------------------------------------
                                        Lon C. Kile
                                        President
                                        (Principal Accounting Officer)


                                       22
<PAGE>   23


                                  EXHIBIT INDEX


The following documents are included as exhibits to this Form 10-Q. Those
exhibits below incorporated by reference herein are indicated as such by the
information supplied in the parenthetical thereafter. If no parenthetical
appears after an exhibit, such exhibit is filed herewith.


<Table>
<Caption>
  EXHIBIT
  NUMBER                                  DESCRIPTION
  -------                                 -----------
<S>           <C>
   10.1       Fifth Amendment to Amended and Restated Credit Agreement, dated as of July 30, 2001, among
              Prize Energy Resources, L.P., the Company, Fleet National Bank, successor-in-interest to
              BankBoston, N.A., as administrative agent, and certain financial institutions.
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