<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 March 31, 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 May 04, 2001
-----------------------------                        ---------------------------
Common Stock, $.01 Par Value                                 12,880,005




<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 March 31, 2001 (Unaudited)
      and December 31, 2000..............................................................         4

      Consolidated Statements of Operations (Unaudited),
      For the Three Months Ended March 31, 2001 and 2000.................................         5

      Consolidated Statements of Stockholders' Equity, For the
      Three Months Ended March 31, 2001 (Unaudited) and Year
      Ended December 31, 2000............................................................         6

      Consolidated Statements of Cash Flows (Unaudited), For
      the Three Months Ended March 31, 2001 and 2000.....................................         7

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

   Item 2.  Management's Discussion and Analysis of Financial
                Condition and Results of Operations......................................        13

   Item 3.  Quantitative and Qualitative Disclosures About Market Risk...................        18

Part II.  Other Information..............................................................        19
</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,
                             MARCH 31, 2001 AND 2000



                                       3
<PAGE>   4


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

<TABLE>
<CAPTION>
                                                                               MARCH 31,     DECEMBER 31,
                                                                                 2001            2000
                                                                             ------------    ------------
                                                                             (Unaudited)
<S>                                                                          <C>             <C>
 ASSETS
      Current assets:
         Cash  and cash equivalents                                          $     14,364    $        820
         Accounts receivable - oil & gas                                           44,687          29,710
         Accounts receivable - trade, net of allowance for doubtful
            accounts of $251                                                        5,695           4,942
         Assets held for sale                                                      12,190              --
         Other                                                                      3,169           8,231
                                                                             ------------    ------------
      Total  current assets                                                        80,105          43,703
                                                                             ------------    ------------

      Properties and equipment at cost:
         Oil and gas properties                                                   419,509         349,971
         Other                                                                      3,365           2,978
                                                                             ------------    ------------
                                                                                  422,874         352,949
         Less accumulated depreciation and depletion                              (42,164)        (34,186)
                                                                             ------------    ------------
      Total properties and equipment at cost, net                                 380,710         318,763
                                                                             ------------    ------------
      Deposit on acquisition                                                           --           6,500
      Other assets, net                                                             3,286           2,698
                                                                             ------------    ------------
 TOTAL ASSETS                                                                $    464,101    $    371,664
                                                                             ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
      Current liabilities:
        Accounts payable                                                     $     18,019    $     15,650
        Accrued interest                                                            3,085           2,583
        Fair value of hedge liability                                              22,829             389
        Other accrued liabilities                                                  11,674           8,136
                                                                             ------------    ------------
       Total current liabilities                                                   55,607          26,758
                                                                             ------------    ------------
       Fair value of hedge liability - long term                                    4,760              --
       Long-term debt                                                             281,319         214,319
       Deferred income taxes                                                       25,164          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                                                            96,392          96,413
        Retained earnings                                                          58,099          40,285
        Accumulated other comprehensive income                                    (32,292)             --
        Treasury stock - 1,734,582 and 1,747,182 shares, respectively             (25,094)        (25,276)
                                                                             ------------    ------------
       Total stockholders' equity                                                  97,251         111,568
                                                                             ------------    ------------
 TOTAL LIABILITIES AND  STOCKHOLDERS' EQUITY                                 $    464,101    $    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
                                                              ------------------
                                                                  MARCH 31,
                                                                  ---------
                                                            2001            2000
                                                        ------------    ------------
<S>                                                     <C>             <C>
 OIL AND GAS SALES                                      $     54,199    $     28,988
 COSTS AND EXPENSES

       Lease operations                                        9,309           7,602
       Production taxes                                        5,832           2,759
       Depletion, depreciation, and amortization               7,978           5,473
       General and administrative                              3,052           1,647
                                                        ------------    ------------
               Total costs and expenses                       26,171          17,481
                                                        ------------    ------------
 OPERATING INCOME                                             28,028          11,507

 OTHER:

       Interest expense                                        4,994           3,451
       Change in derivative fair value                        (5,092)             --
       Other income                                             (150)           (120)
                                                        ------------    ------------
              Total other  expense (income)                     (248)          3,331
                                                        ------------    ------------
INCOME BEFORE INCOME TAXES                                    28,276           8,176

PROVISION FOR INCOME TAXES                                   (10,462)         (3,025)
                                                        ------------    ------------
NET INCOME                                                    17,814           5,151

PREFERRED DIVIDEND                                                --            (458)
                                                        ------------    ------------
INCOME AVAILABLE TO COMMON STOCKHOLDERS                 $     17,814    $      4,693
                                                        ============    ============

NET INCOME PER COMMON SHARE:
       Basic                                            $       1.38    $       0.49
       Diluted                                          $       1.30    $       0.35

WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING

       Basic                                              12,877,542       9,627,410
       Diluted                                            13,741,834      14,594,508
</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)
 Cumulative effect of change in
     accounting                                  --           --             --       --           --          --          (55,409)
 Hedge fair value adjustment                     --           --             --       --           --          --           23,117
 Option Exercises                                --           --             --       --          (21)         --               --
 Net income                                      --           --             --       --           --      17,814               --
                                        -----------    ---------    -----------   ------   ----------    --------    -------------

 Balance as of March 31, 2001                    --    $      --     14,614,587   $  146   $   96,392    $ 58,099    $     (32,292)
                                        ===========    =========    ===========   ======   ==========    ========    =============

<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)
 Cumulative effect of change in
     accounting                                  --           --      (55,409)
 Hedge fair value adjustment                     --           --       23,117
 Option Exercises                            12,600          182          161
 Net income                                      --           --       17,814
                                        -----------    ---------    ---------

 Balance as of March 31, 2001            (1,734,582)   $ (25,094)   $  97,251
                                        ===========    =========    =========
</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
                                                             ------------------
                                                                 MARCH 31,
                                                                 --------
                                                            2001          2000
                                                         ----------    ----------
<S>                                                      <C>           <C>
OPERATING ACTIVITIES
 Net Income                                              $   17,814    $    5,151

 Adjustments to reconcile net income to net cash
 provided by operating activities:
  Depreciation, depletion and amortization                    7,978         5,473
  Amortization of loan origination fees                         122           102
  Change in derivative fair value                            (5,092)           --
  Deferred income tax                                         6,145            --
                                                         ----------    ----------
                                                             26,967        10,726
  Changes in operating assets and liabilities:
  Accounts receivable                                       (15,730)        2,198
  Other assets                                                4,352           210
  Accounts payable and accrued liabilities                    6,472        (6,881)
                                                         ----------    ----------
CASH PROVIDED BY OPERATING ACTIVITIES                        22,061         6,253

INVESTING ACTIVITIES
 Additions to oil and gas properties                        (75,228)       (9,147)
 Additions to other properties and equipment                   (387)         (383)
                                                         ----------    ----------
CASH USED BY INVESTING ACTIVITIES                           (75,615)       (9,530)

FINANCING ACTIVITIES
 Proceeds from issuance of common stock                          98            --
 Purchase of treasury stock                                      --       (18,375)
 Borrowings under credit facilities                          68,000        28,750
 Repayment of credit facilities                              (1,000)           --
 Payment of preferred dividend                                   --          (261)
                                                         ----------    ----------
CASH PROVIDED BY FINANCING ACTIVITIES                        67,098        10,114

Increase in Cash and Cash Equivalents                        13,544         6,837
Cash and Cash Equivalents, Beginning of Period                  820         3,353
                                                         ----------    ----------

CASH AND CASH EQUIVALENTS, END OF PERIOD                 $   14,364    $   10,190
                                                         ==========    ==========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
 Cash paid during the period for income taxes            $       --    $    5,490
 Cash paid during the period for interest                $    4,492    $    2,029

SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS:
 Dividend in kind                                        $       --    $      198
</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
                             MARCH 31, 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 March 31,
2001, and the results of their operations and their cash flows for the three
month periods ended March 31, 2001 and 2000.

BUSINESS AND ORGANIZATION

Prize was formed on January 15, 1999 (inception) and is a Delaware corporation
engaged in the 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." The adoption of Statement No. 133 resulted in a cumulative effect
of an accounting change being recognized as a charge to accumulated other
comprehensive income, a component of stockholders' equity, of $55.4 million.

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.

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. $6.0 million was reversed from accumulated other comprehensive income
during the first quarter of 2001. Subsequent changes in the fair value of these
options will be recognized in earnings on a mark to market basis. Accordingly,
$130,000 was credited to the change in derivative fair value during the first
quarter of 2001.

To protect against the volatility of oil and gas prices related to the Company's
production, the Company has instituted a cash flow hedging program. The Company
hedges 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.

During the first quarter of 2001, the Company recognized a net gain of $5.0
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. The Company's hedges resulted in a charge
to revenues of $18.4 million for those derivatives which were designated against
first quarter production.

At March 31, 2001, $32.3 million remains in accumulated other comprehensive
income. Of this amount $25.3 million relates to hedges which are designated
against 2001 production, while the


                                       9
<PAGE>   10


remainder is designated against 2002 and 2003 production. The amounts remaining
in accumulated other comprehensive income includes $5.5 million that relates to
the options previously discussed that do not qualify as hedges under Statement
No. 133.

The following table summarizes the components recognized in the change in
derivative fair value during the first quarter of 2001 (in thousands):

<TABLE>
<CAPTION>
                                                    Three months ended
                                                      March 31, 2001
                                                    ------------------
<S>                                                 <C>
Change in fair value for derivatives not
   qualifying for hedge accounting................      $      130
Ineffective portion of derivatives qualifying
   for hedge accounting...........................           4,962
                                                        ----------
                                                        $    5,092
                                                        ==========
</TABLE>


The estimated fair values of the Company's derivatives as of March 31, 2001 are
provided below (in thousands):

<TABLE>
<CAPTION>
                                          March 31, 2001
                                          --------------
<S>                                       <C>
Derivative liabilities:
   Natural gas swaps.....................  $      3,371
   Natural gas collars...................        19,209
   Crude oil swaps.......................         1,256
   Crude oil collars.....................         3,753
                                           ------------
                                           $     27,589
                                           ============
</TABLE>


3. ACQUISITIONS

On February 28, 2001, the Company closed on the purchase of $60.5 million of
interests in oil and gas properties from Apache Corporation. 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.

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. At March 31,
2001, $13.5 million was outstanding under the letter of credit provisions of the
facility. The revolver converts to a term loan on June 29, 2004, with quarterly
principal payments after that date through June 29, 2006. Interest is due
quarterly at either the bank's prime rate or eurodollar rate plus a margin as
defined in the agreement. The Company assumed $54 million of debt when it
purchased Vista. At March 31, 2001, $281.3


                                       10
<PAGE>   11


million was outstanding. As of April 1, 2001, the Company's borrowing base was
raised from $325 million to $375 million. 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. In
April and May 2001, Prize paid a total of $26.5 million of principal on the
Senior Credit Facility. At May 14, 2001, $254.8 million was outstanding.
Additionally, in May 2001, Prize reduced the balance on its outstanding letter
of credit to $10 million.

5. STOCKHOLDERS' EQUITY

On March 28, 2000, Prize entered into an agreement with 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.

6. EARNINGS PER SHARE

The following tables provide reconciliations between basic and diluted earnings
per common share for the three months ended March 31, 2001 and 2000.

Three Months Ended March 31, 2001 (in thousands, except shares and per share
amounts):

<TABLE>
<CAPTION>
                                                                   WEIGHTED      PER SHARE
                                                     INCOME     AVERAGE SHARES    AMOUNT
                                                   ----------   --------------   ---------
<S>                                                <C>              <C>          <C>
Basic earnings per share
    Income available to common stockholders ....   $   17,814       12,877,542   $    1.38
Effect of Dilutive Securities:
   Employee Stock Options ......................           --          864,059
   Warrants ....................................           --              233
                                                   ----------   --------------
   Diluted earnings per share ..................   $   17,814       13,741,834   $    1.30
                                                   ==========   ==============
</TABLE>


                                       11
<PAGE>   12


Three Months Ended March 31, 2000 (in thousands, except shares and per share
amounts):

<TABLE>
<CAPTION>
                                                                  WEIGHTED      PER SHARE
                                                    INCOME     AVERAGE SHARES    AMOUNT
                                                  ----------   --------------   ---------
<S>                                               <C>              <C>          <C>
Basic earnings per share
    Income available to common stockholders ....  $    4,693        9,627,410   $    0.49
Effect of Dilutive Securities:
    Employee Stock Options .....................          --          982,902
    Convertible preferred shares ...............         458        3,984,196
    Warrants ...................................          --               --
                                                  ----------   --------------
    Diluted earnings per share .................  $    5,151       14,594,508   $    0.35
                                                  ==========   ==============
</TABLE>


Warrants to purchase 1,708,724 and 1,773,724 shares of common stock have been
excluded from the earnings per share calculation as antidilutive for the three
months ended March 31, 2001 and 2000, respectively.


7. SUBSEQUENT EVENTS

On April 30, 2001, the Company closed on the sale of $12.9 million of interests
in oil and gas properties to Texas Petroleum Investment Company. The properties
divested are 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.

                                       12
<PAGE>   13


                  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 months ended March 31, 2001 compared to the same period 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 $60.5 million of
interests in oil and gas properties from Apache Corporation. 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 $12.9 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 March 31, 2001, net income was $17.8 million or $1.38
(basic) per common share. This compares to first quarter of 2000 net income
available to common stockholders of $4.7 million or $.49 (basic) per common
share. The substantial increase in the 2000 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 MONTHS ENDED MARCH 31, 2001 AND 2000

As previously discussed, Prize merged with Vista on February 8, 2000.
Accordingly, the financial statements of Prize for the three months ended March
31, 2000 include only two months of the oil and gas operations from the Vista
properties. Likewise, the financial statements for the three months ended March
31, 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
months ended March 31, 2001 and 2000, are shown in the table below:


                                       13
<PAGE>   14


<TABLE>
<CAPTION>
                                       THREE MONTHS ENDED MARCH 31,
                                      ------------------------------
                                                              2001
                                                               VS.
                                        2001       2000       2000
                                      --------   --------   --------
<S>                                   <C>        <C>        <C>
PRODUCTION

   Oil/liquids (MBbls)                     877        777         13%
   Gas (MMcf)                            7,319      5,486         33%
   Total (Mboe)                          2,097      1,691         24%

AVERAGE REALIZED PRICES
   Oil/liquids (per Bbl)              $  24.34   $  20.24         20%
   Gas (per Mcf)                          4.51   $   2.42         86%
   Per Boe                            $  25.91   $  17.14         51%

TOTAL REVENUES (IN THOUSANDS)
   Oil/liquids                        $ 21,349   $ 15,723         36%
   Gas                                $ 32,850   $ 13,265        148%
                                      --------   --------
   Total                              $ 54,332   $ 28,988         87%
</TABLE>


OIL/LIQUIDS REVENUES FOR 2001 COMPARED TO 2000. Oil/liquids revenues increased
$5.6 million or 36% in the first quarter of 2001 compared to the same period in
2000. Production gains of .1 million barrels, or 13%, added $2.4 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 $3.2 million as a result of the $4.10 per barrel, or 20%, price
increase realized in the first quarter of 2001 compared to the same period in
2000. Realized hedging losses decreased oil/liquids revenue by $2.8 million or
$3.17 per barrel for the three months ended March 31, 2001 compared to $3.6
million or $4.64 per barrel in the 2000 period.

GAS REVENUES FOR 2001 COMPARED TO 2000. Gas revenues increased $19.6 million or
148% in the first quarter of 2001 compared to the same period in 2000.
Production gains of 1.8 Bcf of gas, or 33%, added $4.4 million of gas revenues
in the 2001 period. The production gains were primarily the result of Prize's
ongoing development program and the Vista and Apache acquisitions. In addition
to the production increases, gas revenues increased $15.2 million as a result of
the gas price realized increasing $2.09 per Mcf, or 86%, in the first quarter of
2001 as compared to the same period in 2000. Realized hedging losses decreased
gas revenue by $15.5 million or $2.11 per Mcf for the three months ended March
31, 2001 compared to a negligible increase in the 2000 period.


                                       14
<PAGE>   15


PRODUCTION AND OPERATING EXPENSE. Listed below are the changes in production and
operating expenses for the three months ended March 31, 2001 as compared to the
2000 period:

<TABLE>
<CAPTION>
                                                        THREE MONTHS ENDED MARCH 31,
                                                       ------------------------------
                                                                               2001
                                                                                VS.
                                                         2001       2000       2000
                                                       --------   --------   --------
<S>                                                    <C>        <C>        <C>

PRODUCTION AND OPERATING EXPENSES
   (IN THOUSANDS)
   Recurring Operations and Maintenance expense        $  6,609   $  5,471         21%
   Well Workover Expense                               $  2,701   $  2,131         27%
   Production Taxes                                    $  5,832   $  2,759        111%
                                                       --------   --------
      Total                                            $ 15,142   $ 11,361         33%

Per Boe Produced
   Recurring Operations and Maintenance expense        $   3.15   $   3.23         (2)%
   Well Workover Expense                               $   1.29   $   1.26          2%
   Production Taxes                                    $   2.78   $   1.63         71%
</TABLE>


Recurring operations and maintenance expenses increased $1.1 million or 21%, in
the first quarter of 2001 primarily due to acquisitions. Well workover expense
increased $.6 million in the first quarter of 2001. The increase in the
recurring operations and maintenance expenses is attributable to operating
expenses for the month of March 2001 from the Apache acquisition properties. The
rise in well workover expense is a result of the Company's ongoing effort to
enhance production and reserves. Production taxes increased $3.1 million, or
111% in the three months ended March 31, 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 March 31, 2001 was $8 million as compared to $5.5 million in the
2000 period. On a Boe basis, the average DD&A rate was $3.80, or 17% higher than
the rate of $3.24 in 2000. The increase in rate is attributable to higher
production, the acquisitions and investment resulting from Prize's ongoing
development program.

GENERAL AND ADMINISTRATIVE EXPENSES (G&A). G&A expense in the quarter ended
March 31, 2001 was $3 million versus $1.6 million for the 2000 period. On a Boe
basis, the G&A rate was $1.43, 47% higher than the rate of $.97 for 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.

INTEREST EXPENSE. Interest expense for the three months ended March 31, 2001 was
$5 million as compared to a $3.5 million in the 2000 period. The $1.5 million
increase in the expense resulted from the $69.9 million increase in debt
outstanding between the two 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
treasury shares. The 2001 period also included interest for only one month of
the period on $54 million of the $60.5 million borrowed in the Apache
acquisition. The average rate on the


                                       15
<PAGE>   16


debt outstanding was 7.70% for the three months ended March 31, 2001 compared to
the rate of 8.23% in 2000.

CHANGE IN DERIVATIVE FAIR VALUE. In accordance with SFAS 133, the Company
recorded an unrealized gain of $5.1 million in the 2001 first quarter. The gain
resulted substantially from the ineffective portion of derivatives qualifying
for hedge accounting.

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 $75 million was spent in the first quarter
of 2001 for capital expenditures, including $54 million for the Apache
acquisition, and $21 million for the drilling and development of oil and gas
properties. Of the $21 million incurred, $13.1 million was spent on drilling,
$4.0 million on development, and $3.9 million on oil and gas equipment and
facilities. For the quarter March 31, 2001, the Company has participated in the
drilling of 16 wells, achieving a success rate of 94%. In addition, the Company
has performed a total of 25 recompletions, with a success rate of 88%. The
success rates achieved in the 2001 capital expenditure program have
significantly contributed to the increase in production realized in 2001.

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
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.

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 Apri1 1, 2001, the Company's borrowing base was raised from $325
million to $375 million. As of March 31, 2001, Prize's outstanding long-term
debt was $281.3 million. During April and May, 2001, the Company paid $26.5
million of its long-term debt. At May 14, 2001, $254.8 million was outstanding.
Also, in May 2001, the Company reduced the outstanding balance on its letter of
credit to $10 million.


                                       16
<PAGE>   17


Cash provided by operating activity before changes in working capital
("operating cash flow") continued to be the primary source of capital and
liquidity in the first quarter of 2001. Operating cash flow for the three months
ended March 31, 2001 was $26.9 million.

During the first quarter of 2001, Prize borrowed $67 million on the Senior
Credit Facility. Prize utilized the borrowings to fund the Apache acquisition
and a portion of its capital expenditures.

In March 2000 and September 2000, the Company's Board of Directors approved a
plan to buy back up to $20 million and $15 million, respectively, of its common
stock from time to time in the open market or through negotiated transactions.
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. As of December 31, 2000, the Company had acquired an additional
463,700 common shares for $7.7 million.


                                       17
<PAGE>   18

             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. 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's market risk relating to the
fair market value exposure of hedges is $27.6 million as of March 31, 2001
compared to $55.4 million as of December 31, 2000.




                                       18
<PAGE>   19


PART II.  OTHER INFORMATION

         ITEM 1.           LEGAL PROCEEDINGS
                           Not applicable.

         ITEM 2.           CHANGES IN SECURITIES AND USE OF PROCEEDS
                           Not applicable.

         ITEM 3.           DEFAULTS UPON SENIOR SECURITIES
                           Not applicable.

         ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
                           Not applicable.

         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     Fourth Amendment to Amended and Restated Credit Agreement,
                  dated as of May 4, 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.



                                       19
<PAGE>   20



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



                                       20
<PAGE>   21



                                 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     Fourth Amendment to Amended and Restated Credit Agreement,
                  dated as of May 4, 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.
</TABLE>