UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934 For the quarterly period ended December 31, 1999

                                       OR

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934


                        Commission File Number 001-11763

                               TRANSMONTAIGNE INC.

         Delaware                                      06-1052062
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                       Identification No.)

                   2750 Republic Plaza, 370 Seventeenth Street
                             Denver, Colorado 80202
          (Address, including zip code, of principal executive offices)

                                 (303) 626-8200
                     (Telephone number, including area code)


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such report), and (2) has been subject to such filing
requirements for the past 90 days.

                                 Yes [X] No [ ]

As of February 1, 2000 there were 30,592,024 shares of the registrant's Common
Stock outstanding.


<PAGE>

<TABLE>
<CAPTION>

                               TRANSMONTAIGNE INC.

                                      INDEX

                          PART I. FINANCIAL INFORMATION

                                                                                         Page No.

Item 1.  Financial Statements

         <S>                                                                                  <C>
         Condensed Consolidated Balance Sheets
         December 31, 1999 (Unaudited) and June 30, 1999........................................4

         Condensed Consolidated Statements of Operations
         Three Months and Six Months Ended December 31, 1999 and 1998 (Unaudited)...............5

         Condensed Consolidated Statements of Stockholders' Equity
         Year Ended June 30, 1999 and
         Six Months Ended December 31, 1999 (Unaudited).........................................6

         Condensed Consolidated Statements of Cash Flows
         Six Months Ended December 31, 1999 and 1998 (Unaudited)................................7

         Notes to Condensed Consolidated Financial Statements...................................9


Item 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations.........................................19

Item 3.  Quantitative and Qualitative Disclosures about Market Risk............................30


                  PART II. OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders...................................31

Item 6.  Exhibits and Reports on Form 8-K......................................................32

         Signatures............................................................................33

</TABLE>




                                       2
<PAGE>



PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

The condensed consolidated financial statements of TransMontaigne Inc. are
included herein beginning on the following page.
















                                       3
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TRANSMONTAIGNE INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets
December 31, 1999 (Unaudited) and June 30, 1999
(In thousands, except share amounts)

Assets                                                                          December 31,             June 30,
------                                                                              1999                   1999
                                                                             -----------------      -----------------
Current assets:
<S>                                                                        <C>                                <C>
     Cash and cash equivalents                                             $           36,015                 13,927
     Trade accounts receivable                                                        132,648                174,122
     Receivable from sale of Bear Paw Energy Inc.                                     131,150                      -
     Inventories                                                                      159,767                378,207
     Prepaid expenses                                                                   5,092                  4,355
                                                                             -----------------      -----------------
                                                                                      464,672                570,611
                                                                             -----------------      -----------------
Property, plant and equipment:
     Land                                                                              14,960                 15,165
     Plant and equipment                                                              339,339                458,749
     Accumulated depreciation                                                         (30,203)               (37,572)
                                                                             -----------------      -----------------
                                                                                      324,096                436,342
                                                                             -----------------      -----------------
Investments and other assets:
     Investments in petroleum related assets                                           46,141                 46,141
     Deferred tax assets, net                                                          27,380                      -
     Deferred debt issuance costs, net                                                  8,039                 11,529
     Unrealized gains on energy related contracts                                       4,987                  8,996
     Other assets, net                                                                  2,904                 21,889
                                                                             -----------------      -----------------
                                                                                       89,451                 88,555
                                                                             -----------------      -----------------
                                                                           $          878,219              1,095,508
                                                                             =================      =================
Liabilities and Stockholders' Equity
Current liabilities:
     Trade accounts payable                                                $          104,196                164,162
     Inventory due under exchange agreements                                           49,685                 25,791
     Excise taxes payable                                                              51,243                 25,681
     Other accrued liabilities                                                          6,418                  5,371
     Current portion of long-term debt                                                  1,990                  2,000
                                                                             -----------------      -----------------
                                                                                      213,532                223,005
                                                                             -----------------      -----------------

Long-term debt                                                                        335,000                495,672

Deferred tax liabilities, net                                                               -                    780
Stockholders' equity:
    Preferred stock, par value $.01 per share, authorized 2,000,000 shares,
      issued and outstanding 170,115 shares Series A Convertible at December
      31, 1999 and June 30, 1999, liquidation preference of $170,115,000              170,115                170,115
    Common stock, par value $.01 per share, authorized 80,000,000 shares at
      December 31, 1999 and June 30, 1999, issued and outstanding 30,592,024
      shares at December 31, 1999 and 30,479,024 shares at June 30, 1999                  306                    305
    Capital in excess of par value                                                    198,313                197,122
    Unearned compensation                                                              (1,072)                     -
    Retained earnings (accumulated deficit)                                           (37,975)                 8,509
                                                                             -----------------      -----------------
                                                                                      329,687                376,051
                                                                             -----------------      -----------------
                                                                           $          878,219              1,095,508
                                                                             =================      =================
</TABLE>

See accompanying notes to condensed consolidated financial statements.



                                       4
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TRANSMONTAIGNE INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations
Three Months and Six Months Ended December 31, 1999 and 1998 (Unaudited)
(In thousands, except per share amounts)

                                                               Three Months Ended                Six Months Ended
                                                                  December 31,                     December 31,
                                                         -------------------------------   -----------------------------
                                                              1999             1998            1999           1998
                                                         ----------------   ------------   -------------  --------------
<S>                                                    <C>                      <C>           <C>             <C>
Revenues                                               $       1,323,165        741,300       2,472,032       1,204,421

Costs and expenses:
     Product costs                                             1,308,525        714,084       2,428,339       1,157,290
     Operating expenses                                           16,887         10,640          33,112          19,157
     Impairment of long lived assets                              50,136              -          50,136               -
     General and administrative                                    5,825          5,182          11,700           8,217
     Depreciation and amortization                                 6,395          4,128          12,641           6,921
                                                         ----------------   ------------   -------------  --------------
                                                               1,387,768        734,034       2,535,928       1,191,585
                                                         ----------------   ------------   -------------  --------------

               Operating income (loss)                           (64,603)         7,266         (63,896)         12,836

Other income (expenses):
     Dividend income from petroleum related assets                   283            339             774             339
     Interest income                                                 295            381           1,182             759
     Gain on sale of Bear Paw Energy Inc.                         16,587              -          16,587               -
     Interest expense                                             (9,269)        (7,175)        (18,757)         (9,650)
     Amortization of deferred debt issuance costs                 (4,940)          (935)         (5,791)         (1,058)
     Other financing costs                                          (284)          (346)           (490)           (432)
                                                         ----------------   ------------   -------------  --------------
                                                                   2,672         (7,736)         (6,495)        (10,042)
                                                         ----------------   ------------   -------------  --------------
               Earnings (loss) before income taxes               (61,931)          (470)        (70,391)          2,794
Income tax (expense) benefit                                      24,776            178          28,160          (1,062)
                                                         ----------------   ------------   -------------  --------------
               Net earnings (loss)                               (37,155)          (292)        (42,231)          1,732
Preferred stock dividends                                         (2,127)             -          (4,253)              -
                                                         ----------------   ------------   -------------  --------------
               Net earnings (loss) attributable to
                    common stockholders                $         (39,282)          (292)        (46,484)          1,732
                                                         ================   ============   =============  ==============
Weighted average common shares outstanding:
               Basic                                              30,592         28,976          30,538          27,469
                                                         ================   ============   =============  ==============
               Diluted                                            30,592         28,976          30,538          28,201
                                                         ================   ============   =============  ==============
Earnings (loss) per common share:
               Basic                                   $           (1.28)         (0.01)          (1.52)           0.06
                                                         ================   ============   =============  ==============
               Diluted                                 $           (1.28)         (0.01)          (1.52)           0.06
                                                         ================   ============   =============  ==============
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       5
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TRANSMONTAIGNE INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders' Equity
Year Ended June 30, 1999 and Six Months Ended December 31, 1999 (Unaudited)

(In thousands)

                                                                                                       Retained
                                                                      Capital in                       earnings
                                           Preferred      Common       excess of       Unearned      (accumulated
                                             stock        stock        par value     Compensation      deficit)        Total
                                          ------------  -----------   ------------  ---------------  --------------  ----------

<S>                                     <C>                    <C>        <C>                 <C>            <C>       <C>
Balance at June 30, 1998                $           -          260        136,780             (618)          8,844     145,266

Preferred stock issued in connection
     with stock purchase agreements           170,115            -              -                -              -      170,115
Costs related to issuance of preferred
     Stock                                          -            -           (327)               -              -         (327)
Common stock issued for options
     Exercised                                      -            -             84                -              -           84
Common stock issued for services                    -            -             93                -              -           93
Tax benefit arising from options
     Exercised                                      -            -             63                -              -           63
Unearned compensation related to
     restricted stock awards                        -            -            162             (162)             -            -
Amortization of unearned compensation               -            -              -              780              -          780
Common stock issued in acquisition of
     Louis Dreyfus Energy Corp.                     -           45         60,390                -              -       60,435
Common stock repurchased and retired                -            -           (123)               -              -         (123)
Preferred stock dividends                           -            -              -                -          (2,274)     (2,274)
Net earnings                                        -            -              -                -           1,939       1,939
                                          ------------  -----------   ------------  ---------------  --------------  ----------
Balance at June 30, 1999                      170,115          305        197,122                -           8,509     376,051

Common stock issued for options
     Exercised                                      -            -             92                -              -           92
Unearned compensation related to
     restricted stock awards                        -            1          1,099           (1,100)             -            -
Amortization of unearned compensation               -            -              -               28              -           28
Preferred stock dividends                           -            -              -                -          (4,253)     (4,253)
Net loss                                            -            -              -                -         (42,231)    (42,231)
                                          ------------  -----------   ------------  ---------------  --------------  ----------

Balance at December 31, 1999            $     170,115          306        198,313           (1,072)       (37,975)     329,687
                                          ============  ===========   ============  ===============  ==============  ==========
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       6
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<CAPTION>


TRANSMONTAIGNE INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows
Six Months Ended December 31, 1999 and 1998 (Unaudited)

(In thousands)

                                                                                    1999                  1998
                                                                              ------------------    ------------------
Cash flows from operating activities:

<S>                                                                       <C>                                   <C>
     Net earnings (loss)                                                  $             (42,231)                1,732
     Adjustments to reconcile net earnings (loss) to net
       cash provided (used) by operating activities:
               Depreciation and amortization                                             12,641                 6,921
               Deferred tax expense (benefit)                                           (28,160)                  810
               Loss (gain) on disposition of assets                                     (16,546)                   14
               Impairment of long lived assets                                           50,136                     -
               Amortization of unearned compensation                                         28                   191
               Amortization of deferred debt issuance costs                               5,791                 1,058
               Changes in operating assets and liabilities,
                net of noncash activities:
                 Trade accounts receivable                                               41,474                10,351
                 Inventories                                                            222,449               (84,135)
                 Prepaid expenses                                                          (737)               (2,434)
                 Trade accounts payable                                                 (60,216)               33,152
                 Inventory due under exchange
                    Agreements                                                           23,894                 1,303
                 Excise taxes payable and other
                    accrued liabilities                                                  26,609                 5,773
                                                                              ------------------    ------------------
                           Net cash provided (used)
                              by operating activities                                   235,132               (25,264)
                                                                              ------------------    ------------------
Cash flows from investing activities:

     Purchases of property, plant and equipment                                         (45,920)              (40,224)
     Proceeds from sale of assets                                                           582                     -
     Acquisition of Louis Dreyfus Energy Corp.                                                -              (293,057)
     Investment in West Shore Pipe Line Company                                               -               (29,285)
     Increase in other assets, net                                                         (563)                 (251)
                                                                              ------------------    ------------------
                           Net cash (used) by
                              investing activities                                      (45,901)             (362,817)
                                                                              ------------------    ------------------
Cash flows from financing activities:

     Borrowings (repayments) of long-term debt, net                                    (160,682)              399,880
     Deferred debt issuance costs                                                        (2,300)               (9,423)
     Common stock issued                                                                     92                    32
     Common stock repurchased and retired                                                     -                  (123)
     Preferred stock dividends paid                                                      (4,253)                    -
                                                                              ------------------    ------------------
                           Net cash provided (used)
                              by financing activities                                  (167,143)              390,366
                                                                              ------------------    ------------------
                           Increase in cash
                              and cash equivalents                                       22,088                 2,285

Cash and cash equivalents at beginning of period                                         13,927                27,215
                                                                              ------------------    ------------------

Cash and cash equivalents at end of period                                $              36,015                29,500
                                                                              ==================    ==================
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       7
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<CAPTION>


TRANSMONTAIGNE INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Continued)
Six Months Ended December 31, 1999 and 1998 (Unaudited)

(In thousands)

                                                                                     1999                  1998
                                                                               ------------------    ------------------

Supplemental disclosures of cash flow information:

Acquisition of Louis Dreyfus Energy Corp. ("LDEC")

<S>                                                                         <C>                                <C>
Fair value of assets acquired                                               $                 -               456,990
Fair value of liabilities assumed                                                             -              (103,498)
                                                                               ------------------    ------------------
                                                                                              -               353,492
Fair value of common stock issued                                                             -               (60,435)
                                                                               ------------------    ------------------
Cash paid in acquisition                                                    $                 -               293,057
                                                                               ==================    ==================
Disposition of Bear Paw Energy Inc. ("BPEI")
Carrying basis of assets sold                                               $           114,563                    -
Net gain on disposition                                                                  16,587                    -
                                                                               ------------------    ------------------
Total consideration received                                                $           131,150                    -
                                                                               ==================    ==================

</TABLE>

See accompanying notes to consolidated financial statements.


                                       8
<PAGE>


TRANSMONTAIGNE INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements
December 31, 1999

(1)    Summary of Significant Accounting Policies

       Nature of Business

       TransMontaigne Inc. ("TransMontaigne") provides a broad range of
       integrated transportation, terminaling, storage, supply, distribution,
       gathering, processing and marketing services to producers, refiners,
       distributors, marketers and industrial end-users of petroleum products,
       chemicals, other bulk liquids, natural gas and crude oil in the
       downstream sector of the petroleum and chemical industries.
       TransMontaigne is a holding company which conducts its operations through
       wholly-owned subsidiaries primarily in the Mid-Continent, Gulf Coast,
       Southeast, Mid-Atlantic, Northeast and Rocky Mountain regions of the
       United States. TransMontaigne operations are divided into three
       logistical petroleum services business segments: pipelines, which
       includes transportation and delivery of refined petroleum products and
       crude oil; terminals, which includes terminaling and storage of refined
       petroleum products, crude oil, chemicals and other bulk liquids; and
       products, which includes supply, distribution and marketing of refined
       petroleum products and natural gas liquids ("NGL"); and a natural gas
       services business segment which includes gathering, treating, processing,
       fractionating and marketing NGL and natural gas, which was divested
       effective December 31, 1999. Segment information is presented in the
       notes to the condensed consolidated financial statements. TransMontaigne
       does not explore for, or produce, crude oil or natural gas; and does not
       own crude oil or natural gas reserves.

       Basis of Presentation

       The condensed consolidated financial statements included in this Form
       10-Q have been prepared by TransMontaigne without audit pursuant to the
       rules and regulations of the Securities and Exchange Commission.
       Accordingly, these statements reflect adjustments (consisting only of
       normal recurring entries) which are, in the opinion of TransMontaigne
       management, necessary for a fair statement of the financial results for
       the interim periods. Certain information and notes normally included in
       financial statements prepared in accordance with generally accepted
       accounting principles have been condensed or omitted pursuant to such
       rules and regulations, although TransMontaigne believes that the
       disclosures are adequate to make the information presented not
       misleading. These condensed consolidated financial statements should be
       read in conjunction with the financial statements and related notes,
       together with management's discussion and analysis of financial condition
       and results of operations included in TransMontaigne's Annual Report on
       Form 10-K for the year ended June 30, 1999.

       The preparation of financial statements in conformity with generally
       accepted accounting principles requires TransMontaigne management to make
       estimates and assumptions that affect the reported amounts of assets and
       liabilities at the date of the financial statements and the reported
       amounts of revenues and expenses during the reporting period. Changes in
       these estimates and assumptions will occur as a result of the passage of
       time and the occurrence of future events, and actual results will differ
       from the estimates.

       The accounting and financial reporting policies of TransMontaigne and its
       subsidiaries conform to generally accepted accounting principles and
       prevailing industry practices. All significant intercompany accounts and
       transactions have been eliminated in consolidation.


                                       9
<PAGE>


TRANSMONTAIGNE INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements
December 31, 1999

(1)    Summary of Significant Accounting Policies (continued)

       Inventory Risk Management

       TransMontaigne utilizes derivative financial instruments to manage market
       risks associated with certain energy commodities.

       In connection with its products supply, distribution and marketing
       business, TransMontaigne engages in trading activities. Trading
       activities are accounted for using the mark-to-market method of
       accounting. During the fiscal year ended June 30, 1999, TransMontaigne
       adopted the provisions of Emerging Issues Task Force Issue No. 98-10,
       Accounting for Contracts Involved in Energy Trading and Risk Management
       Activities ("EITF 98-10"), which requires energy trading contracts to be
       recorded at fair value on the balance sheet, with the changes in fair
       value included in earnings.

       Trading activities are conducted through a variety of financial
       instruments, including forward contracts involving cash settlement or
       physical delivery of energy commodities; swap contracts which require
       payments to (or receipts from) counterparties based on the differential
       between a fixed and variable price for the commodities; exchange-trade
       options; over-the-counter options; and other contractual arrangements.

       Under mark-to-market accounting, commodity and energy related contracts
       are reflected at fair value with resulting gains and losses recorded in
       operating income. The net gains and losses recognized in the current
       period result primarily from transactions originating within the period
       and the impact of current period price movements on transactions
       originating in prior periods. Unrealized gains and losses from energy
       trading activities are recorded as assets and liabilities.

       The market value of these energy contracts is based upon management's
       estimate, considering various factors including closing exchange and
       over-the-counter quotations, time value and volatility factors underlying
       the commitments. The market values are adjusted to reflect the potential
       impact of liquidating TransMontaigne's position in an orderly manner over
       a reasonable period of time under present market conditions.

       TransMontaigne's Product and Risk Management Committee reviews the total
       inventory and risk position on a regular basis in order to ensure
       compliance with TransMontaigne's inventory management policies, including
       hedging and trading activities. Policy change requires the prior approval
       of the Product and Risk Management Committee and the Audit Committee of
       the Board of Directors.

       Recently Issued Accounting Pronouncement

       In 1998, the Financial Accounting Standards Board issued Statement of
       Financial Accounting Standards ("SFAS") No. 133, Accounting for
       Derivative Instruments and Hedging Activities. SFAS 133 establishes
       accounting and reporting standards requiring that every derivative
       instrument (including certain derivative instruments embedded in other
       contracts) be recorded on the balance sheet as either an asset or
       liability measured at its fair value. The statement requires that changes
       in the derivative's fair value be recognized currently in earnings unless
       specific hedge accounting criteria are met. SFAS 133 as amended by SFAS
       137 is effective for fiscal quarters of fiscal years beginning after June
       15, 2000. TransMontaigne believes that SFAS 133 will not have a material
       impact on its accounting for price risk management activities.


                                       10
<PAGE>


TRANSMONTAIGNE INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements
December 31, 1999

(1)    Summary of Significant Accounting Policies (continued)

       Reclassifications

       Certain amounts in the accompanying condensed consolidated financial
       statements for prior periods have been reclassified to conform to the
       classifications used at December 31, 1999.

(2)    Disposition of Assets

       Effective December 31, 1999, TransMontaigne sold its natural gas
       gathering subsidiary, Bear Paw Energy Inc., ("BPEI"), to BPE Acquisition
       LLC ("BPE"), a special purpose entity formed by Bear Paw's management in
       association with Thomas J. Edelman and Chase Capital Partners. The sale
       of BPEI was for cash consideration of $107.5 million, plus $23.7 million
       of retroactive reimbursement for all of the capital expenditures made by
       TransMontaigne on BPEI's newly constructed Powder River coal seam
       gathering system from July 1, 1999 to December 31, 1999. This disposition
       generated an approximate $16.6 million net gain to TransMontaigne. In
       addition, TransMontaigne is carrying a liability of approximately $4
       million which represents the working capital shortfall as of December 31,
       1999. This amount is due BPE. The $131.2 million total sale proceeds
       received on January 20, 2000 were used to reduce long term debt and for
       general corporate purposes.

(3)    Acquisitions of Assets

       On June 30, 1999, TransMontaigne, through wholly-owned subsidiaries
       TransMontaigne Terminaling Inc. ("TTI") and TransMontaigne Product
       Services Inc. ("TPSI"), acquired from Amerada Hess Corporation the Hess
       Southeastern Pipeline Network ("Hess Terminals") of refined petroleum
       product facilities for approximately $66,200,000 cash, and related
       refined products inventory for $32,500,000 cash. The Hess Terminals,
       which are interconnected to the Colonial and Plantation pipeline systems,
       include approximately 5.3 million barrels of tankage at 11 storage and
       terminal facilities and 36 miles of proprietary pipelines.

       On October 30, 1998, TransMontaigne, through a wholly-owned subsidiary,
       TPSI, acquired all of the common stock of LDEC for approximately
       $161,000,000, including $100,565,000 cash and 4.5 million shares of
       TransMontaigne common stock valued at $60,435,000. In addition,
       TransMontaigne acquired LDEC's working capital for $192,492,000 cash. The
       LDEC acquisition included 24 refined petroleum products terminal and
       storage facilities, of which 7 are wholly owned and 17 are owned jointly
       with BP Amoco, together with its supply, distribution and marketing
       business. These facilities are located in 9 states in the Southern and
       Eastern regions of the United States; have approximately 4.2 million
       barrels of TransMontaigne owned storage capacity; and are supplied
       primarily by the Colonial and Plantation pipeline systems. Effective
       April 1, 1999, TransMontaigne Product Services East Inc. ("TPSI-East")
       was merged into its parent, TransMontaigne Product Services Inc.

       TransMontaigne has accounted for these acquisitions using the purchase
       method accounting as of the effective date of each transaction.
       Accordingly, the purchase price of each transaction has been allocated to
       the assets and liabilities acquired based upon the estimated fair value
       of those assets and liabilities as of the acquisition date.
       TransMontaigne received a third party appraisal in connection with the
       LDEC allocation. The cash used to purchase the above acquisitions was
       funded by advances from TransMontaigne's credit facility.


                                       11
<PAGE>


TRANSMONTAIGNE INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements
December 31, 1999

       The following summary presents unaudited actual and pro forma results of
       operations. The pro forma information for the three months and six months
       ended December 31, 1998 assumes that the acquisition of LDEC occurred as
       of July 1, 1998, and combines the historical results of operations of
       TransMontaigne for the three months and six months ended December 31,
       1998 with the historical results of operations of LDEC for the three
       months and six months ended December 31, 1998. The unaudited pro forma
       results of operations are not necessarily indicative of the results of
       operations which would actually have occurred if LDEC had been acquired
       as of the beginning of the pro forma period, or which will be attained in
       the future.

<TABLE>
<CAPTION>

                                                 Three Months Ended December 31,         Six Months Ended December 31,
                                               -------------------------------------  -------------------------------------
                                                      1999                1998               1999                1998
                                                 ----------------    ---------------    ----------------    ---------------
                                                    (Actual)          (Pro forma)          (Actual)          (Pro forma)
                                                 ----------------    ---------------    ----------------    ---------------
                                                  (In thousands, except per share        (In thousands, except per share
                                                              amounts)                               amounts)

<S>                                          <C>                            <C>               <C>                <C>
     Revenues                                $         1,323,165            987,659           2,472,032          2,054,553
                                                 ================    ===============    ================    ===============

     Net earnings (loss)                     $           (37,155)              (402)            (42,231)             3,544
     Preferred stock dividends                            (2,127)                 -              (4,253)                 -
                                                 ----------------    ---------------    ----------------    ---------------
     Net earnings (loss) attributable to
          common stockholders                $           (39,282)              (402)            (46,484)             3,544
                                                 ================    ===============    ================    ===============
     Earnings (loss) per common share:
               Basic                         $             (1.28)             (0.01)              (1.52)              0.12
                                                 ================    ===============    ================    ===============
               Diluted                       $             (1.28)             (0.01)              (1.52)              0.11
                                                 ================    ===============    ================    ===============
</TABLE>

(4)    Inventories

       TransMontaigne manages inventory by utilizing risk and portfolio
       management disciplines including certain hedging strategies, forward
       purchases and sales, swaps and other financial instruments to manage
       market exposure. In managing inventory balances and related financial
       instruments, management evaluates the market exposure from an overall
       portfolio basis which considers both continuous movement of inventory
       balances and related open positions in commodity trading instruments.

       TransMontaigne's refined petroleum products inventory consists primarily
       of gasoline and distillates. Inventory is divided into inventory held for
       sale or exchange in the ordinary course of business and minimum inventory
       which represents working stocks (pipeline in-transit and minimum terminal
       inventory), pipeline line fill and terminal tank bottoms. Minimum
       inventory is required to be held for operating balances in the conduct of
       TransMontaigne's daily supply, distribution and marketing activities and
       is maintained both in tanks and pipelines owned by TransMontaigne and
       pipelines owned by third parties.

       Contractual commitments are subject to risks including market value
       fluctuations, as well as counterparty credit and liquidity risk.
       TransMontaigne has established procedures to continually monitor these
       contracts in order to minimize credit risk, including the establishment
       and review of credit limits, margin requirements, master netting
       arrangements, letters of credit and other guarantees.


                                       12
<PAGE>


TRANSMONTAIGNE INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements
December 31, 1999

(5)    Property, Plant and Equipment

       Property, plant and equipment at December 31, 1999 and June 30, 1999 is
as follows (in thousands):

                                          December 31,          June 30,
                                             1999                1999
                                       -----------------   ------------------

 Land                                $           14,960               15,165
 Pipelines, rights of way
      and equipment                              35,665               33,661
 Terminals and equipment                        279,688              296,544
 Natural gas gathering
      and processing                                  -              108,533
 Other plant and equipment                       23,986               20,011
                                       -----------------   ------------------
                                                354,299              473,914
 Less accumulated depreciation                   30,203               37,572
                                       -----------------   ------------------

                                     $          324,096              436,342
                                       =================   ==================

(6)    Investments

       TransMontaigne, through its 65% ownership of TransMontaigne Holding Inc.,
       effectively owns 18.04% of the common stock of Lion Oil Company ("Lion").
       Lion owns a 65,000 barrel per day refinery in El Dorado, Arkansas; a
       188-mile crude oil transportation pipeline in east Texas; a 1,100-mile
       crude oil gathering system in south Arkansas and north Louisiana; and two
       refined petroleum products terminals in Tennessee. At December 31, 1999
       and June 30, 1999, TransMontaigne's investment in Lion, carried at cost,
       was approximately $10,111,000.

       TransMontaigne, through a wholly-owned subsidiary, TransMontaigne
       Pipeline Inc., owns 20.38% common stock interest in West Shore Pipe Line
       Company ("West Shore"). Although TransMontaigne owns 20.38%, it does not
       exercise significant influence over the operations of West Shore and
       therefore carries its $35,960,000 investment at cost. TransMontaigne
       recorded dividend income from West Shore of $774,000 and $339,000 during
       the six months ended December 31, 1999 and 1998, respectively.

(7)    Impairment on long lived assets

       During the three months ended December 31, 1999, TransMontaigne recorded
       non-cash impairment charges totaling $50.1 million, before income taxes.
       These charges include $31.9 million relating to certain of
       TransMontaigne's refined petroleum product terminals added in the 1998
       acquisition of LDEC and $18.2 million relating to certain intangible
       assets recorded as a result of the same acquisition. In accordance with
       generally accepted accounting principles, TransMontaigne is required to
       review the book values of long lived assets for impairment. In
       calculating this impairment charge, TransMontaigne applied FAS 121 in
       estimating future cash flows by terminal, discounting those estimated
       future cash flows at a 10% rate, which approximates TransMontaigne's cost
       of capital, and then comparing the discounted future cash flows to the
       net book value of each terminal. The impairment charge resulted from the
       change in the planned use of certain terminals and the abandonment of a
       pipeline that supplied one terminal, thereby significantly impacting the
       economic viability of such terminals. Each of these factors reduced or
       eliminated future cash flows. The $31.9 million impairment charge for the
       terminals reduces the book value of these assets to their estimated fair
       value as determined in TransMontaigne's impairment analysis.

       The additional $18.2 million impairment charge for the intangible assets
       represents the unamortized balance of these assets. Management's review
       of the market location differentials associated with these assets showed
       that TransMontaigne received little or no value from these assets in the
       last twelve months. In addition, management does not anticipate any
       material future value utilizing these assets.


                                       13
<PAGE>

TRANSMONTAIGNE INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements
December 31, 1999

(8)    Long-term Debt

       Long-term debt at December 31, 1999 and June 30, 1999 is as follows (in
thousands):

                                                  December 31,   June 30,
                                                     1999          1999
                                                   ---------   ----------
Line of credit                                 $    260,000      418,690
Senior promissory notes                              75,000       75,000
12 3/4% senior subordinated debentures, net
  of discount                                         1,990        3,982
                                                   ---------   ----------
                                                    336,990      497,672
Less current maturity                                 1,990        2,000
                                                   ---------   ----------

                                               $    335,000      495,672
                                                   =========   ==========

       TransMontaigne's bank credit facility consisted of a $600,000,000 credit
       facility led by BankBoston, N.A. The credit facility includes a
       $400,000,000 revolving component due December 31, 2003 and a $200,000,000
       term component due June 30, 2006. The term component has quarterly
       principal payments required beginning in September 2000. Borrowings under
       this credit facility bear interest at an annual rate equal to the
       lender's Alternate Base Rate plus margins, subject to a Eurodollar Rate
       pricing option at TransMontaigne's election. The average interest rate at
       December 31, 1999 was 8.7%. In December 1999, TransMontaigne entered into
       an agreement to sell its subsidiary, BPEI, and utilized the proceeds to
       pay down its long term debt (see Note 2). In anticipation of these
       paydowns, TransMontaigne amended its bank credit facility and Master
       Shelf Agreement effective December 31, 1999. The amended bank credit
       facility was reduced to a $395,000,000 credit facility consisting of a
       $300,000,000 revolving component and $95,000,000 term component. On
       January 20, 2000, TransMontaigne paid down $105,000,000 of its
       $200,000,000 term loan with a portion of the proceeds from the sale of
       BPEI.

       In April 1997, TransMontaigne entered into a Master Shelf Agreement with
       an institutional lender which provides that the lender will agree to
       quote, from time to time, an interest rate at which the lender would be
       willing to purchase, on an uncommitted basis, up to $100 million of
       TransMontaigne's senior promissory notes which will mature in no more
       than 12 years, with an average life not in excess of 10 years. On April
       17, 1997 and December 16, 1997, TransMontaigne sold $50,000,000 of 7.85%
       and $25,000,000 of 7.22% Senior Notes due April 17, 2003 and October 17,
       2004, respectively. Under the amended Master Shelf Agreement the
       commitment was reduced to $75,000,000. On January 20, 2000,
       TransMontaigne paid down $25,000,000 of the $50,000,000 of 7.85% senior
       notes with a portion of the proceeds from the sale of BPEI.

       Each of the amended bank credit facility and amended Master Shelf
       Agreement is secured by certain current assets and fixed assets, and each
       also includes financial tests relating to fixed charge coverage, current
       ratio, maximum leverage ratio, consolidated tangible net worth,
       distributions and open inventory positions. As of December 31, 1999,
       TransMontaigne was in compliance with all such tests contained in the
       amended agreements.

       At December 31, 1999 TransMontaigne had an outstanding balance of
       $2,000,000 of the originally issued $4,000,000 of 12.75% senior
       subordinated debentures which are guaranteed by certain subsidiaries.
       TransMontaigne paid the $2,000,000 scheduled payment in December 1999.
       The outstanding debentures are subject to a required redemption on
       December 15, 2000. The debentures may be prepaid prior to maturity at a
       premium, under certain circumstances. In conjunction with the issuance of
       these debentures, TransMontaigne issued warrants to purchase 248,686
       shares of its common stock.

       Cash payments for interest were approximately $15,394,000 and $8,791,000
       for the six months ended December 31, 1999 and 1998, respectively.


                                       14
<PAGE>

TRANSMONTAIGNE INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements
December 31, 1999

(9)    Stockholders' Equity

       On March 25, 1999 and March 30, 1999, TransMontaigne closed a private
       placement of $170,115,000 of $1,000 Series A Convertible Preferred Stock
       Units (the "Units"). Each Unit consists of one share of 5% convertible
       preferred stock (the "Preferred Stock"), convertible into common stock at
       $15 per share, and 66.67 warrants, each warrant exercisable to purchase
       six-tenths of a share of common stock at $14 per share. Dividends are
       cumulative and payable quarterly. TransMontaigne may redeem the Preferred
       Stock on December 31, 2003 at the liquidation value of $1,000 per share
       plus any accrued but unpaid dividends. If the Preferred Stock remains
       outstanding after December 31, 2003, the dividend rate will increase to
       an annual rate of 16%. The Preferred Stock is convertible any time and
       may be called for redemption by TransMontaigne after the second year if
       the market price of the common stock is greater than 175% of the
       conversion price at the date of the call. Proceeds were used to reduce
       bank debt incurred in connection with the LDEC acquisition and for
       general corporate purposes.

(10)   Restricted Stock

       TransMontaigne has a restricted stock plan that provides for awards of
       common stock to certain key employees, subject to forfeiture if
       employment terminates prior to the vesting dates. The market value of
       shares awarded under the plan is recorded in stockholders' equity as
       unearned compensation. During the six months ended December 31, 1999 and
       1998, the TransMontaigne Compensation Committee of the Board of Directors
       awarded 100,000 and 12,000 shares to certain key employees, respectively.
       At March 25, 1999, the vesting of all the shares not then vested was
       accelerated due to an ownership change resulting from the private
       placement of the Series A Convertible Preferred Stock and the unamortized
       balance of the unearned compensation was fully amortized. Amortization of
       unearned compensation of $27,500 and $190,906 is included in general and
       administrative expense for the six months ended December 31, 1999 and
       1998, respectively.

(11)   Litigation

       TransMontaigne is a party to various claims and litigation in its normal
       course of business. Although no assurances can be given, TransMontaigne
       management believes that the ultimate resolution of such claims and
       litigation, individually or in the aggregate, will not have a materially
       adverse impact on TransMontaigne's financial position or its results of
       operations.


                                       15
<PAGE>


TRANSMONTAIGNE INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements
December 31, 1999

(12)    Earnings Per Share
<TABLE>
<CAPTION>

       The following table reconciles the computation of basic EPS and diluted
       EPS for the six months and three months ended December 31, 1999 and 1998:

                                                                Three Months Ended                   Six Months Ended
                                                                   December 31,                        December 31,
                                                         ---------------------------------     -----------------------------
                                                             1999               1998              1999            1998
                                                         --------------    ---------------     -----------    --------------
                                                                  (In thousands,                      (In thousands,
                                                            except per share amounts)           except per share amounts)

<S>                                                   <C>                            <C>          <C>                 <C>
      Net earnings (loss)                             $        (37,155)              (292)        (42,231)            1,732
      Preferred stock dividends                                 (2,127)                 -          (4,253)                -
                                                         --------------    ---------------     -----------    --------------
      Net earnings (loss) attributable to common
           stockholders for basic EPS                          (39,282)              (292)        (46,484)            1,732
      Effect of dilutive securities                                  -                  -               -                 -
                                                         --------------    ---------------     -----------    --------------
      Net earnings (loss) attributable to common
           stockholders for diluted EPS               $        (39,282)              (292)        (46,484)            1,732
                                                         ==============    ===============     ===========    ==============

      Basic weighted-average shares                             30,592             28,976          30,538            27,469
      Effect of dilutive securities:
                Stock options                                        -                  -               -               548
                Stock warrants                                       -                  -               -               184
                                                         --------------    ---------------     -----------    --------------
      Diluted weighted-average shares                           30,592             28,976          30,538            28,201
                                                         ==============    ===============     ===========    ==============
      Earnings (loss) per shares:
                Basic                                 $          (1.28)            (0.01)           (1.52)             0.06
                                                         ==============    ===============     ===========    ==============
                Diluted                               $          (1.28)            (0.01)           (1.52)             0.06
                                                         ==============    ===============     ===========    ==============
</TABLE>


                                       16
<PAGE>


TRANSMONTAIGNE INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements
December 31, 1999

(13)   Business Segments

       TransMontaigne provides a broad range of integrated transportation,
       terminaling, supply, distribution, gathering, processing and marketing
       services to producers, refiners, distributors, marketers and industrial
       end-users of petroleum products, chemicals, other bulk liquids, natural
       gas and crude oil in the downstream sector of the petroleum and chemical
       industries. TransMontaigne conducts its business through five segments:

o             Products - consists of services for the supply and distribution of
              refined petroleum products through product exchanges, and bulk
              purchases and sales in the physical, futures cash and New York
              Mercantile Exchange ("NYMEX") markets, and the marketing of
              refined petroleum products and NGL to retail, wholesale and
              industrial customers at truck terminal rack locations, and
              providing related value-added fuel procurement and management
              services.

o             Terminals - consists of services provided through the ownership
              and/or operation of terminaling and storage facilities handling
              petroleum products, chemicals and other bulk liquids with receipt
              and delivery connections via pipelines, barges, tankers, rail cars
              and trucks.

o             Pipelines - consists of services provided through the ownership
              and operation of refined petroleum product pipelines, and a crude
              oil gathering pipeline system, and related delivery and storage
              facilities with interconnections to other pipelines and to
              terminaling, storage delivery facilities.

o             Natural gas - consists of services provided through the ownership
              and operation of natural gas pipeline gathering systems,
              processing plants and related facilities for the gathering,
              treating, processing, fractionating and reselling of natural gas
              and NGL.

o             Corporate - consists of assets and corporate income and expense
              not specifically included in other business segments.

       Eliminations represent intercompany transactions between TransMontaigne's
       business segments, primarily relating to services performed by the
       terminals and pipelines segments for and sales of NGL by the natural gas
       segment to the product segment.

       For the three and six months ended December 31, 1999, revenues;
       depreciation and amortization; operating income; and capital expenditure
       amounts for the natural gas segment reflect the activities prior to the
       sale of this subsidiary effective December 31, 1999 (see Note 2).
       Accordingly, no identifiable assets are shown for this segment at
       December 31, 1999. Also, operating income for the products segment does
       not include the $18,236,000 expense and the terminals segment does not
       include the $31,900,000 expense related to the impairment of long lived
       assets for the three months and six months ended December 31, 1999.


                                       17
<PAGE>


TRANSMONTAIGNE INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements
December 31, 1999

(13)   Business Segments (continued)

       Information about TransMontaigne's business segments for the three months
       and six months ended December 31, 1999 and 1998 is summarized below (in
       thousands):
<TABLE>
<CAPTION>

                                                                Three Months Ended                   Six Months Ended
                                                                   December 31,                        December 31,
                                                         ---------------------------------     -----------------------------
                                                              1999              1998               1999            1998
                                                         ---------------    --------------     -------------    ------------
      Revenues:
<S>                                                   <C>                         <C>             <C>             <C>
           Products                                   $       1,303,295           733,057         2,434,327       1,179,815
           Terminals                                             16,121             8,987            31,828          15,379
           Pipelines                                              4,061             3,382             8,026           7,866
           Natural gas                                           21,579            13,926            39,620          27,224
           Corporate                                                416               429               864             809
           Eliminations                                         (22,307)          (18,481)          (42,633)        (26,672)
                                                         ---------------    --------------     -------------    ------------
           Total consolidated                         $       1,323,165           741,300         2,472,032       1,204,421
                                                         ===============    ==============     =============    ============

      Depreciation and amortization:
           Products                                   $             214                 5               491              10
           Terminals                                              3,535             2,146             6,975           2,966
           Pipelines                                                355               260               693             512
           Natural gas                                            1,571             1,439             3,141           2,930
           Corporate                                                720               278             1,341             503
                                                         ---------------    --------------     -------------    ------------
           Total consolidated                         $           6,395             4,128            12,641           6,921
                                                         ===============    ==============     =============    ============

      Operating income (loss):
           Products                                   $         (20,860)            5,046           (25,735)          6,413
           Terminals                                              3,020             2,824             6,102           5,230
           Pipelines                                                591               543             1,744           2,245
           Natural gas                                            3,465               803             5,262           1,348
           Corporate                                               (683)           (1,950)           (1,133)         (2,400)
                                                         ---------------    --------------     -------------    ------------
           Total consolidated                         $         (14,467)            7,266           (13,760)         12,836
                                                         ===============    ==============     =============    ============

      Identifiable assets:
           Products                                   $         293,465           475,930           293,465         475,930
           Terminals                                            282,300           246,332           282,300         246,332
           Pipelines                                             66,054            63,459            66,054          63,459
           Natural gas                                                -            93,817                 -          93,817
           Corporate                                            241,875            69,118           241,875          69,118
           Eliminations                                          (5,475)          (17,562)           (5,475)        (17,562)
                                                         ---------------    --------------     -------------    ------------
           Total consolidated                         $         878,219           931,094           878,219         931,094
                                                         ===============    ==============     =============    ============

      Capital expenditures:
           Products                                   $               -                 -                 -               -
           Terminals                                              8,938            17,694            16,254          29,594
           Pipelines                                              1,161             1,417             2,005           5,811
           Natural gas                                           18,015             1,189            24,265           2,526
           Corporate                                              1,375             1,271             3,396           2,293
                                                         ---------------    --------------     -------------    ------------
           Total consolidated                         $          29,489            21,571            45,920          40,224
                                                         ===============    ==============     =============    ============

</TABLE>

                                       18
<PAGE>


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

GENERAL

TransMontaigne provides a broad range of integrated transportation, terminaling,
storage, supply, distribution, gathering, processing and marketing services to
producers, refiners, distributors, marketers and industrial end-users of
petroleum products, chemicals, other bulk liquids, natural gas and crude oil in
the downstream sector of the petroleum and chemical industries. TransMontaigne
is a holding company which conducts its operations through wholly-owned
subsidiaries primarily in the Mid-Continent, Gulf Coast, Southeast,
Mid-Atlantic, Northeast and Rocky Mountain regions of the United States.
TransMontaigne operations are divided into three logistical petroleum services
business segments: pipelines, which includes transportation and delivery of
refined petroleum products and crude oil; terminals, which includes terminaling
and storage of refined petroleum products, crude oil, chemicals and other bulk
liquids; and products, which includes supply, distribution and marketing of
refined petroleum products and natural gas liquids; and a natural gas services
business segment which includes gathering, treating, processing, fractionating
and marketing natural gas liquids ("NGL") and natural gas, which was divested
effective December 31, 1999. Segment information is presented in the notes to
the condensed consolidated financial statements. TransMontaigne does not explore
for, or produce, crude oil or natural gas; and does not own crude oil or natural
gas reserves.

TransMontaigne owns and operates refined petroleum products, chemicals, other
bulk liquids, crude oil and natural gas assets. TransMontaigne's refined
petroleum products, chemicals, other bulk liquids and crude oil assets consist
primarily of 3 pipeline systems with approximately 850 miles of petroleum
products and crude oil pipeline and 73 terminal, storage and delivery facilities
located in 19 states with a combined tank storage capacity of 20,000,000
barrels. Effective December 31, 1999, TransMontaigne sold its natural gas
gathering and processing assets which consisted of 6 gathering and processing
systems in 4 states and 1 Canadian province with combined throughput capacity of
115 million cubic feet per day and over 2,900 miles of pipelines. TransMontaigne
also extensively utilizes refined petroleum products common carrier pipelines
and terminals owned by third parties in order to increase product volumes
shipped, marketed and sold to and exchanged with customers in other locations.

ACQUISITIONS

On June 30, 1999, TransMontaigne acquired from Amerada Hess Corporation the Hess
Terminals for approximately $66,200,000 cash and related refined products
inventory for approximately $32,500,000 cash. The Hess Terminals, which are
interconnected to the Colonial and Plantation pipeline systems, include
approximately 5.3 million barrels of tankage at 11 storage and terminal
facilities and 36 miles of proprietary pipelines.

On October 30, 1998, TransMontaigne acquired all of the common stock of LDEC for
approximately $161,000,000, including $100,565,000 cash and 4.5 million shares
of TransMontaigne common stock valued at $60,435,000. In addition,
TransMontaigne acquired LDEC's working capital for $192,492,000 cash. The LDEC
acquisition included 24 refined petroleum products terminal and storage
facilities, of which 7 are wholly owned and 17 are owned jointly with BP Amoco,
together with its supply, distribution and marketing business. These facilities
are located in 9 states in the Southern and Eastern regions of the United
States; have approximately 4.2 million barrels of TransMontaigne owned storage
capacity; and are supplied primarily by the Colonial and Plantation pipeline
systems.


                                       19
<PAGE>


INFORMATION REGARDING FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes forward looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Important factors which could cause actual
results to differ materially from those in the forward looking statements herein
include but are not limited to the following: TransMontaigne's success in
expanding its business by capitalizing on the trend by other companies in the
oil and gas industry to divest assets and outsource certain services,
TransMontaigne will generate net operating margins affected by price volatility
of products purchased and sold, TransMontaigne will enter into transactions with
counterparties having the ability to meet their financial commitments to
TransMontaigne, TransMontaigne will not incur unanticipated costs in complying
with current and future environmental regulations, TransMontaigne will generate
working capital internally, or have the ability to access debt and equity
resources, to meet its capital requirements, operating and financial risk
related to managing rapid growth. Although TransMontaigne believes that its
expectations are based on reasonable assumptions, it can give no assurance that
its goals will be achieved.

RESULTS OF OPERATIONS

TransMontaigne reported a net loss of $37,155,000 for the three months ended
December 31, 1999, compared to net loss of $292,000 for the three months ended
December 31, 1998, a decrease of $36,863,000. After preferred stock dividends,
net loss attributable to common stockholders were $39,282,000 and $292,000 for
the three months ended December 31, 1999 and 1998, respectively. Loss per common
share for the three months ended December 31, 1999 was $(1.28) basic and diluted
based on 30,592,000 weighted average basic and diluted shares outstanding
compared to $(.01) basic and diluted for the three months ended December 31,
1998.

TransMontaigne reported a net loss of $42,231,000 for the six months ended
December 31, 1999, compared to net earnings of $1,732,000 for the six months
ended December 31, 1998, a decrease of $43,963,000. After preferred stock
dividends, net earnings (loss) attributable to common stockholders were
$(46,484,000) and $1,732,000 for the six months ended December 31, 1999 and
1998, respectively. Loss per common share for the six months ended December 31,
1999 was $(1.52) basic and diluted based on 30,538,000 weighted average basic
and diluted shares outstanding compared to earnings per share of $.06 basic and
diluted for the six months ended December 31, 1998.

Included in TransMontaigne's net loss for the three months and six months ended
December 31, 1999 is an impairment charge on long lived assets of approximately
$50.1 million ($30 million after tax) which was offset by a gain on the sale of
BPEI of approximately $16.6 million ($10 million after tax).


                                       20
<PAGE>


RESULTS OF OPERATIONS (continued)

Selected financial data from TransMontaigne's business segments are summarized
below (in thousands):
<TABLE>
<CAPTION>

                                                                           Three Months Ended              Six Months Ended
                                                                              December 31,                   December 31,
                                                                        --------------------------     -------------------------
                                                                           1999           1998            1999          1998
                                                                        -----------    -----------     -----------    ----------
Net operating margins (1):
     Product operations:
<S>                                                                  <C>                    <C>            <C>            <C>
          Products                                                   $     (12,780)         6,449          (9,457)        8,777
          Costs related to minimum inventory (2)                            (5,313)             -         (10,426)            -
                                                                        -----------    -----------     -----------    ----------
                                                                           (18,093)         6,449         (19,883)        8,777
     Terminal operations                                                     8,135          5,310          16,177         8,833
     Pipeline operations                                                     1,639          1,662           3,797         4,380
     Natural gas services operations                                         6,072          3,155          10,490         5,984
                                                                        -----------    -----------     -----------    ----------
          Total net operating margins                                       (2,247)        16,576          10,581        27,974

Impairment to long lived assets                                             50,136              -          50,136             -
General and administrative expenses                                          5,825          5,182          11,700         8,217
Depreciation and amortization expenses                                       6,395          4,128          12,641         6,921
                                                                        -----------    -----------     -----------    ----------
          Operating income (loss)                                          (64,603)         7,266         (63,896)       12,836

Interest expense and related financing costs                               (14,493)        (8,456)        (25,038)      (11,140)
Dividend and interest income                                                   578            720           1,956         1,098
Gain on sale of Bear Paw Energy Inc.                                        16,587              -          16,587             -
Income tax (expense) benefit                                                24,776            178          28,160        (1,062)
                                                                        -----------    -----------     -----------    ----------
          Net earnings (loss)                                              (37,155)          (292)        (42,231)        1,732

Preferred stock dividends                                                   (2,127)             -          (4,253)            -
                                                                        -----------    -----------     -----------    ----------
          Net earnings (loss) attributable to common stockholders    $     (39,282)         (292)         (46,484)        1,732
                                                                        ===========    ===========     ===========    ==========

</TABLE>

(1)  Net operating margins represent revenues less product costs and operating
     expenses for the product and natural gas services segments and revenues
     less operating expenses for terminal and pipeline operations.

(2)  TransMontaigne did not measure the costs related to its minimum inventory
     separately in the prior periods since it was not on mark to market
     accounting for its inventories. Therefore, there is not a comparable amount
     for the prior period.

Selected volumetric data for TransMontaigne's business segments are summarized
below:
<TABLE>
<CAPTION>

                                                                           Three Months Ended            Six Months Ended
                                                                              December 31,                 December 31,
                                                                        -------------------------    -------------------------
                                                                           1999          1998          1999           1998
                                                                        -----------    ----------    ----------     ----------
<S>                                                                        <C>           <C>           <C>            <C>
  Products volumes - barrels per day                                       690,748       398,855       724,527        334,700
  Terminal volumes - barrels per day                                       509,024       287,359       506,610        222,969
  Pipeline volumes - barrels per day                                        80,014        61,391        80,235         67,195
  Natural gas volumes:
       Inlet - million cubic feet per day                                       80            58            74             58
       NGL production - barrels per day                                      6,608         7,087         6,708          6,972
       Residue production - million British Thermal Units per day           44,183        46,439        44,497         47,030
     Note:   1 barrel equals 42 gallons
</TABLE>

                                       21
<PAGE>


THREE MONTHS ENDED DECEMBER 31, 1999 COMPARED TO
THREE MONTHS ENDED DECEMBER 31, 1998

Product Operations

Product revenues and fees are generated from bulk sales and exchanges of refined
petroleum products to major energy companies and large independent energy
companies; wholesale distribution and sales of refined petroleum products to
jobbers and retailers; regional and national industrial end-user and commercial
wholesale storage and forward sales marketing contracts of refined petroleum
products; and tailored short and long-term fuel margin and risk management
arrangements to wholesale, retail and industrial end-users. Refined petroleum
products storage and forward sales transactions enable TransMontaigne to
purchase refined petroleum products inventory; utilize proprietary and leased
tankage, as well as line space controlled by TransMontaigne in major common
carrier pipelines; arbitrage location product prices differentials and
transportation costs; store the inventory; and, depending upon market
conditions, realize margins through sales in the futures cash market or NYMEX
contracts. All energy related contracts are marked to market with changes being
recognized in operations. Margin and risk management provide both
TransMontaigne's large and small volume customers an assured, ratable and cost
effective short or long-term delivered source of refined petroleum product
supply through proprietary pipelines and terminals, as well as through
non-proprietary pipeline, terminal, truck, rail and barge distribution channels.

TransMontaigne's refined petroleum products inventory consists primarily of
gasoline and distillates. Inventory is divided into inventory held for sale or
exchange in the ordinary course of business and minimum inventory which
represents working stocks (pipeline in-transit and minimum terminal inventory),
pipeline line fill and terminal tank bottoms. Minimum inventory is required to
be held for operating balances in the conduct of TransMontaigne's daily supply,
distribution and marketing activities and is maintained both in tanks and
pipelines owned by TransMontaigne and pipelines owned by third parties.

Product costs of product operations consist primarily of the cost of products
purchased, but also include transportation, storage, terminaling and sales
commission costs. In addition, product costs include the market valuation change
of the refined petroleum products minimum inventory.

Operating expenses of product operations primarily include wages and employee
benefits, property taxes, travel and entertainment expenses.

The net operating loss from product operations for the three months ended
December 31, 1999 was $18,093,000, which includes $5,313,000 costs related to
minimum inventory and an increase of $1,750,000 in the reserve for doubtful
accounts. This net operating loss compares to a net operating margin of
$6,449,000 for the three months ended December 31, 1998. Revenues were
$1,303,295,000 for the three months ended December 31, 1999 compared to
$733,057,000 for the three months ended December 31, 1998, an increase of
$570,238,000. Revenue increases were due to an increase in barrels sold, which
included the liquidation of discretionary barrels held; an increase in the price
per barrel of refined petroleum products over the prior year quarter; and the
inclusion of three months of LDEC operations, whereas the prior year quarter had
only two months of operations.

TransMontaigne's continued strategy of hedging its inventory resulted in no
benefit from the significant price increase of crude oil and refined petroleum
products during the three months ended December 31, 1999. For the three months
ended December 31, 1999, the petroleum market pricing structure, as indicated by
the NYMEX futures market, was in an inverse for gasoline of approximately $.021
per gallon, i.e., nearby futures prices were higher than the succeeding periods.
This compares to a $.015 carry, i.e., nearby futures prices were lower than
succeeding periods, for the same period in 1998. For the quarter ended December
31, 1999, the distillate market began a carry of approximately $.011 and then
moved into an inverse of $.024 per gallon by the end of the quarter. This
compares to $.021 average carry for the same period in 1998. TransMontaigne
obtains maximum margin by utilizing its storage space and inventory positions
when the market structure is in a carry. The continued gasoline inverse, the
distillate carry moving to an inverse, and the abnormal price relationship
between crude oil and distillates, costs related to minimum inventory and the
increased reserve for doubtful accounts resulted in the $18,093,000 net
operating loss for the three months ended December 31, 1999.


                                       22
<PAGE>


Terminal Operations

Terminal revenues are based on the volume of refined petroleum products handled
at TransMontaigne terminal loading racks, generally at a standard per gallon
rate. Storage fees are generally based on a per barrel rate or tankage capacity
committed and will vary with the duration of the arrangement, the product stored
and special handling requirements, particularly when certain types of chemicals
and other bulk liquids are involved.

Operating expenses of terminal operations include wages and employee benefits,
utilities, communications, maintenance and repairs, property taxes, rent,
insurance, vehicle expenses, environmental compliance costs, materials and
supplies.

The net operating margin from terminal operations for the three months ended
December 31, 1999 was $8,135,000 compared to $5,310,000 for the three months
ended December 31, 1998, an increase of $2,825,000. The margin per barrel for
the three months ended December 31, 1999 of $.17 decreased $.03 compared to the
three months ended December 31, 1998. The increase in net operating margin
resulted from a $7,134,000 increase in revenues which was partially offset by a
$4,309,000 increase in operating costs. These increases were the result of
terminal acquisitions during the past year and the related additional 20,393,000
barrels handled. The decrease in the margin per barrel resulted from increased
handling of lower margin activity and increased operating costs, which included
approximately $800,000 resulting from terminal inventory theft.

Pipeline Operations

Pipeline revenues are based on the volume of refined petroleum products or crude
oil transported and the distance from the origin point to the delivery point.
TransMontaigne's interstate pipeline systems transport refined petroleum
products and their tariffs are regulated by the Federal Energy Regulatory
Commission ("FERC"). TransMontaigne's intrastate pipeline transports crude oil
and its tariffs are not regulated by the FERC, but are regulated by the Texas
Railroad Commission.

Operating expenses of pipeline operations include wages and employee benefits,
utilities, communications, maintenance and repairs, property taxes, rent,
insurance, vehicle expenses, environmental compliance costs, materials and
supplies.

The net operating margin from pipeline operations for the three months ended
December 31, 1999 was $1,639,000 compared to $1,662,000 for the three months
ended December 31, 1998, a decrease of $23,000. The margin per barrel for the
three months ended December 31, 1999 of $.22 decreased $.07 compared to the
three months ended December 31, 1998. Pipeline volumes per day increased 18,600
barrels primarily due to increased short haul movements in the East Chicago
area. The decreases in the net operating margin and the margin per barrel
resulted from a decrease in higher tariff movements, a minimal increase in
operating costs and the transfer of non-carrier assets and their associated
margins to terminal operations.

Natural Gas Services Operations

Natural gas gathering and processing revenues are based on the inlet volume of
natural gas purchased from producers under both percentage of proceeds and fee
based arrangements. Natural gas is gathered and processed into residue natural
gas and NGL products, principally propane, butane and natural gasoline. The NGL
products are transported by truck or pipeline to storage facilities from which
they are further transported and marketed by TransMontaigne to wholesalers and
end-users. The residue natural gas is delivered to and marketed through
connections with third-party interstate natural gas pipelines.

Product costs of natural gas services operations consist primarily of the cost
of product purchased and transportation costs.

Operating expenses of natural gas services operations include wages and employee
benefits, utilities, maintenance and repairs, property taxes, rent, insurance,
vehicle expenses, environmental compliance costs, materials and supplies.

The net operating margin from natural gas services operations for the three
months ended December 31, 1999 was $6,072,000 compared to $3,155,000 for the
three months ended December 31, 1998, an increase of $2,917,000. Revenues for
the three months ended December 31, 1999 were $21,579,000 compared to
$13,926,000 for the three months ended December 31, 1998, an increase of
$7,653,000. Increases in net operating margin and revenues were attributable
primarily to the higher NGL product prices, notwithstanding a decrease in NGL
and residue natural gas production and increased gathering fees.


                                       23
<PAGE>


Corporate and Other

General and administrative expenses for the three months ended December 31, 1999
were $5,825,000 compared to $5,182,000 for the three months ended December 31,
1998, an increase of $643,000. The increase was due primarily to additional
personnel costs and related employee benefits; increased office lease rentals
and increased communication expenses directly attributable to the continued
expansion of TransMontaigne's integrated logistical petroleum services and to
the acquisition and operation of LDEC and the Hess Terminals; and additional
personnel costs related to a separation and release agreement.

Depreciation and amortization expenses for the three months ended December 31,
1999 were $6,395,000 compared to $4,128,000 for the three months ended December
31, 1998, an increase of $2,267,000. The increase was due primarily to terminal
related assets being acquired and constructed during the past year.

Dividend income for the three months ended December 31, 1999 was $283,000
compared to $339,000 for the three months ended December 31, 1998, a decrease of
$56,000. The dividend income is solely from West Shore. Increased operating
expenses at West Shore resulted in the decreased dividends. Interest income for
the three months ended December 31, 1999 was $295,000 compared to $381,000 for
the three months ended December 31, 1998, a decrease of $86,000. The decrease in
interest income was due primarily to the decrease in interest bearing cash
balances.

Interest expense, amortization of deferred debt issuance costs, and other
financing costs during the three months ended December 31, 1999 were $14,493,000
compared to $8,456,000 during the three months ended December 31, 1998, an
increase of $6,037,000. The increase in interest expense of $2,094,000 was due
to increased average interest rates from 7.2% to 8.8% notwithstanding a decrease
in average outstanding debt of $17,000,000, and $875,000 expenses related to
prepayment of outstanding long-term debt. Amortization of deferred debt issuance
costs increased $4,005,000 largely due to write off of approximately $3,845,000
due to the amended debt agreements.

Income tax benefit was $24,776,000 for the three months ended December 31, 1999,
which represents an effective combined federal and state income tax rate of 40%.
Income tax benefit was $178,000 for the three months ended December 31, 1998,
which represents an effective combined federal and state income tax rate of 38%.

The net loss for the three months ended December 31, 1999 was $37,155,000
compared to net loss of $292,000 for the three months ended December 31, 1998, a
decrease of $36,863,000. The net loss resulted primarily from the negative $18.1
million net operating margin contribution from products operations which
includes $5.3 million costs related to minimum inventory; the $50.1 million
impairment charge; increased general and administrative expenses; additional
depreciation and amortization expenses attributable to the acquisitions and
facilities expansion projects; increased interest expense, primarily
attributable to the financing of acquisitions during the past year and related
increased working capital requirements; and an approximately $3.8 million charge
to amortization of deferred debt issuance costs due to the amended debt
agreements. The net loss was partially offset by increased net operating margin
contributions from terminal operations and natural gas services operations; the
$16.6 million gain on the sale of Bear Paw Energy Inc.; and the $24.8 million
net deferred tax benefit.

Preferred stock dividends on the Series A Convertible Preferred Stock were
$2,127,000 for the three months ended December 31, 1999. The preferred stock
dividends were paid December 31, 1999.


                                       24
<PAGE>


SIX MONTHS ENDED DECEMBER 31, 1999 COMPARED TO
SIX MONTHS ENDED DECEMBER 31, 1998

Product Operations

Product revenues and fees are generated from bulk sales and exchanges of refined
petroleum products to major energy companies and large independent energy
companies; wholesale distribution and sales of refined petroleum products to
jobbers and retailers; regional and national industrial end-user and commercial
wholesale storage and forward sales marketing contracts of refined petroleum
products; and tailored short and long-term fuel margin and risk management
arrangements to wholesale, retail and industrial end-users. Refined petroleum
products storage and forward sales transactions enable TransMontaigne to
purchase refined petroleum products inventory; utilize proprietary and leased
tankage, as well as line space controlled by TransMontaigne in major common
carrier pipelines; arbitrage location product prices differentials and
transportation costs; store the inventory; and, depending upon market
conditions, realize margins through sales in the futures cash market or NYMEX
contracts. All energy related contracts are marked to market with changes being
recognized in operations. Margin and risk management provide both
TransMontaigne's large and small volume customers an assured, ratable and cost
effective short or long-term delivered source of refined petroleum product
supply through proprietary pipelines and terminals, as well as through
non-proprietary pipeline, terminal, truck, rail and barge distribution channels.

TransMontaigne's refined petroleum products inventory consists primarily of
gasoline and distillates. Inventory is divided into inventory held for sale or
exchange in the ordinary course of business and minimum inventory which
represents working stocks (pipeline in-transit and minimum terminal inventory),
pipeline line fill and terminal tank bottoms. Minimum inventory is required to
be held for operating balances in the conduct of TransMontaigne's daily supply,
distribution and marketing activities and is maintained both in tanks and
pipelines owned by TransMontaigne and pipelines owned by third parties.

Product costs of product operations consist primarily of the cost of products
purchased, but also include transportation, storage, terminaling and sales
commission costs. In addition, product costs include the market valuation change
of the refined petroleum products minimum inventory.

Operating expenses of product operations primarily include wages and employee
benefits, property taxes, travel and entertainment expenses.

The net operating loss from product operations for the six months ended December
31, 1999 was $19,883,000, which includes a $10,426,000 costs related to minimum
inventory and an increase of $1,750,000 in the reserve for doubtful accounts.
This net operating loss compares to a net operating margin of $8,777,000 for the
six months ended December 31, 1998. Revenues were $2,434,327,000 for the six
months ended December 31, 1999 compared to $1,179,815,000 for the six months
ended December 31, 1998, an increase of $1,254,512,000. Revenue increases were
due to an increase in barrels sold, which included the liquidation of
discretionary barrels held; an increase in the price per barrel of refined
petroleum products over the prior year; and the inclusion of six months of LDEC
operations, whereas the prior year had only two months of operations.

TransMontaigne's strategy of hedging its inventory resulted in no benefit from
the significant price increase of crude oil and refined petroleum products
during the six months ended December 31, 1999. For the six months ended December
31, 1999, the petroleum market pricing structure, as indicated by the NYMEX
futures market, was in an inverse for gasoline of approximately $.028 per
gallon, i.e., nearby futures prices were higher than the succeeding periods.
This compares to a $.010 carry, i.e., nearby futures prices were lower than
succeeding periods, for the same period in 1998. For the six months ended
December 31, 1999, the distillate market was in an average carry of
approximately $.003 as compared to $.024 for the same period in 1998.
TransMontaigne obtains maximum margin by utilizing its storage space and
inventory positions when the market structure is in a carry. The gasoline
inverse, diminished distillate carry, and abnormal price relationships between
crude oil and distillate during the fourth calendar quarter, costs related to
minimum inventory and the increased reserve for doubtful accounts resulted in
the approximate $19,883,000 net operating loss for the six months ended December
31, 1999.


                                       25
<PAGE>


Terminal Operations

Terminal revenues are based on the volume of refined petroleum products handled
at TransMontaigne terminal loading racks, generally at a standard per gallon
rate. Storage fees are generally based on a per barrel rate or tankage capacity
committed and will vary with the duration of the arrangement, the product stored
and special handling requirements, particularly when certain types of chemicals
and other bulk liquids are involved.

Operating expenses of terminal operations include wages and employee benefits,
utilities, communications, maintenance and repairs, property taxes, rent,
insurance, vehicle expenses, environmental compliance costs, materials and
supplies.

The net operating margin from terminal operations for the six months ended
December 31, 1999 was $16,177,000 compared to $8,833,000 for the six months
ended December 31, 1998, an increase of $7,344,000. The margin per barrel for
the six months ended December 31, 1999 of $.17 decreased $.04 compared to the
six months ended December 31, 1998. The increase in net operating margin
resulted from a $16,449,000 increase in revenues which was partially offset by a
$9,105,000 increase in operating costs. These increases were the result of
terminal acquisitions during the past year and the related additional 52,190,000
barrels handled. The decrease in the margin per barrel resulted from increased
handling of lower margin activity, and increased operating costs which included
approximately $800,000 resulting from terminal inventory theft.

Pipeline Operations

Pipeline revenues are based on the volume of refined petroleum products or crude
oil transported and the distance from the origin point to the delivery point.
TransMontaigne's interstate pipeline systems transport refined petroleum
products and their tariffs are regulated by the Federal Energy Regulatory
Commission ("FERC"). TransMontaigne's intrastate pipeline transports crude oil
and its tariffs are not regulated by the FERC, but are regulated by the Texas
Railroad Commission.

Operating expenses of pipeline operations include wages and employee benefits,
utilities, communications, maintenance and repairs, property taxes, rent,
insurance, vehicle expenses, environmental compliance costs, materials and
supplies.

The net operating margin from pipeline operations for the six months ended
December 31, 1999 was $3,797,000 compared to $4,380,000 for the six months ended
December 31, 1998, a decrease of $583,000. The margin per barrel for the six
months ended December 31, 1999 of $.26 decreased $.10 compared to the six months
ended December 31, 1998. Pipeline volumes per day increased 13,040 barrels
primarily due to increased short haul movements in the East Chicago area. The
decreases in the net operating margin and the margin per barrel resulted from a
decrease in higher tariff movements, an increase in operating costs, and the
transfer of non-carrier assets and their associated margins to terminal
operations.

Natural Gas Services Operations

Natural gas gathering and processing revenues are based on the inlet volume of
natural gas purchased from producers under both percentage of proceeds and fee
based arrangements. Natural gas is gathered and processed into residue natural
gas and NGL products, principally propane, butane and natural gasoline. The NGL
products are transported by truck or pipeline to storage facilities from which
they are further transported and marketed by TransMontaigne to wholesalers and
end-users. The residue natural gas is delivered to and marketed through
connections with third-party interstate natural gas pipelines.

Product costs of natural gas services operations consist primarily of the cost
of product purchased and transportation costs.

Operating expenses of natural gas services operations include wages and employee
benefits, utilities, maintenance and repairs, property taxes, rent, insurance,
vehicle expenses, environmental compliance costs, materials and supplies.

The net operating margin from natural gas services operations for the six months
ended December 31, 1999 was $10,490,000 compared to $5,984,000 for the six
months ended December 31, 1998, an increase of $4,506,000. Revenues for the six
months ended December 31, 1999 were $39,620,000 compared to $27,224,000 for the
six months ended December 31, 1998, an increase of $12,396,000. Increases in net
operating margin and revenues were attributable primarily to the higher NGL
product prices, notwithstanding a decrease in NGL and residue natural gas
production and increased gathering fees.


                                       26
<PAGE>


Corporate and Other

General and administrative expenses for the six months ended December 31, 1999
were $11,700,000 compared to $8,217,000 for the six months ended December 31,
1998, an increase of $3,483,000. The increase was due primarily to additional
personnel costs and related employee benefits, increased office lease rentals
and increased communication expenses directly attributable to the continued
expansion of TransMontaigne's integrated logistical petroleum services and to
the acquisition and operation of LDEC and the Hess Terminals and additional
personnel costs related to separation and release agreements.

Depreciation and amortization expenses for the six months ended December 31,
1999 were $12,641,000 compared to $6,921,000 for the six months ended December
31, 1998, an increase of $5,720,000. The increase was due primarily to terminal
related assets being acquired and constructed during the past year.

Dividend income for the six months ended December 31, 1999 was $774,000 compared
to $339,000 for the six months ended December 31, 1998, an increase of $435,000.
Dividend income is solely from West Shore, and includes only three months of
activity for prior six month period. Interest income for the six months ended
December 31, 1999 was $1,182,000 compared to $759,000 for the six months ended
December 31, 1998, an increase of $423,000. The increase in interest income was
due primarily to the increase in interest bearing cash balances.

Interest expense, amortization of deferred debt issuance costs, and other
financing costs during the six months ended December 31, 1999 were $25,038,000
compared to $11,140,000 during the six months ended December 31, 1998, an
increase of $13,898,000. The increase in interest expense of $9,107,000 was due
to a $153,000,000 increase in average outstanding debt, primarily to fund
acquisitions and increased working capital requirements, increased average
interest rates from 7.2% to 8.5% and $875,000 expense related to prepayment of
outstanding long-term debt. Amortization of deferred debt issuance costs
increased $4,733,000 largely due to write off of approximately $3,845,000 due to
the amended debt agreements.

Income tax benefit was $28,160,000 for the six months ended December 31, 1999,
which represents an effective combined federal and state income tax rate of 40%.
Income tax expense was $1,062,000 for the six months ended December 31, 1998,
which represents an effective combined federal and state income tax rate of 38%.

The net loss for the six months ended December 31, 1999 was $42,231,000 compared
to net earnings of $1,732,000 for the six months ended December 31, 1998, a
decrease of $43,963,000. The net loss resulted primarily from the negative $19.9
million net operating margin from products operations which includes $10.4
million costs related to minimum inventory; the $50.1 million impairment charge;
increased general and administrative expenses; additional depreciation and
amortization expenses attributable to the acquisitions and facilities expansion
projects; increased interest expense, primarily attributable to the financing of
acquisitions during the past year and related increased working capital
requirements; and an approximate $3.8 million charge to amortization of deferred
debt issuance costs due to the amended debt agreements. The net loss was
partially offset by increased net operating margin contributions from terminal
operations and natural gas services operations, the $16.6 million gain on the
sale of Bear Paw Energy Inc., and the $28.2 million net deferred tax benefit.

Preferred stock dividends on the Series A Convertible Preferred Stock were
$4,253,000 for the six months ended December 31, 1999.


                                       27
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

TransMontaigne believes that its current working capital position; future cash
provided by operating activities; proceeds from the private placement or public
offering of debt and common stock; available borrowing capacity under the bank
credit facility and the Master Shelf Agreement; additional borrowing allowed
under those agreements; and its relationship with institutional lenders and
equity investors should enable TransMontaigne to meet its current capital
requirements.

Net cash provided by operating activities was $235,132,000 for the six months
ended December 31, 1999, which was attributable primarily to decreased
inventories and trade accounts receivable, reduced by decreased trade accounts
payable and the net loss. Net cash used by operating activities was $25,264,000
for the six months ended December 31, 1998, which was attributable primarily to
increased inventories and reduced by decreased trade accounts receivable and
increased trade accounts payable.

Net cash used by investing activities was $45,901,000 during the six months
ended December 31, 1999 as TransMontaigne continued its growth through
construction and improvements to existing operating facilities. Net cash used by
investing activities was $362,817,000 during the six months ended December 31,
1998, which included the acquisitions of LDEC, the Southwest Terminal, a 15.38%
common stock interest in West Shore, and enhancements to the pipeline and
terminal facilities.

Net cash used by financing activities for the six months ended December 31, 1999
was $167,143,000, which primarily represented net repayments of $160,682,000
under TransMontaigne's bank credit facility. Net cash provided by financing
activities for the six months ended December 31, 1998 of $390,366,000
represented borrowings under TransMontaigne's bank credit facility primarily
used to finance the acquisition of LDEC, other capital expenditures and
operations.

TransMontaigne amended its bank credit facility, effective as of December 31,
1999. The amended bank credit facility includes a $300,000,000 revolving
component due December 31, 2003 and a $95,000,000 term component due June 30,
2006. The term component has quarterly principal payments required beginning in
September 2000. Borrowings under this credit facility bear interest at an annual
rate equal to the lender's Alternate Base Rate plus margins subject to a
Eurodollar Rate pricing option. The credit facility includes a $20,000,000 same
day revolving swing line under which advances may be drawn at an interest rate
comparable to the Eurodollar Rate.

At December 31, 1999, TransMontaigne had advances of $260,000,000 outstanding
under the bank credit facility utilizing the Eurodollar Rate loan pricing
option. The average interest rate at December 31, 1999 was 8.7%. On January 20,
2000, TransMontaigne paid down $105,000,000 of the $200,000,000 term loan with a
portion of the proceeds from the sale of BPEI.

At December 31, 1999, TransMontaigne had outstanding under the Master Shelf
Agreement, $50,000,000 of 7.85% Senior Notes due April 17, 2003 and $25,000,000
of 7.22% Senior Notes due October 17, 2004. On January 20, 2000, TransMontaigne
paid down $25,000,000 of its $50,000,000 7.85% Senior Notes with a portion of
the proceeds from the sale of BPEI.

Each of the amended bank credit facility and amended Master Shelf Agreement is
secured by certain current assets and fixed assets, and each also includes
financial tests relating to fixed charge coverage, current ratio, maximum
leverage ratio, consolidated tangible net worth, distributions and inventory
positions. As of December 31, 1999, TransMontaigne was in compliance with all
such tests contained in the amended agreements.

Additional capital expenditures anticipated through June 30, 2000 are estimated
to be $15,000,000 for pipeline and terminal facilities, and assets to support
these facilities and could exceed that amount if additional facilities
enhancement projects and possible acquisitions being considered by
TransMontaigne materialize. Future capital expenditures will depend on numerous
factors, including the availability, economics and cost of appropriate
acquisitions which TransMontaigne identifies and evaluates; the economics, cost
and required regulatory approvals with respect to the expansion and enhancement
of existing systems and facilities; the customer demand for the services
TransMontaigne provides; local, state and federal governmental regulations;
environmental compliance requirements; and the availability of debt financing
and equity capital on acceptable terms.


                                       28
<PAGE>


YEAR 2000 MATTERS

Historically, certain computer software and computer based management
information systems ("Information Technology"), as well as certain hardware
containing embedded microcontrollers and microprocessors ("Embedded
Technology"), were designed to utilize a two-digit rather than a four-digit date
field and consequently may cause computers, computer controlled systems and
equipment with embedded technology to malfunction or incorrectly process data in
the Year 2000, resulting in significant system failures. TransMontaigne relies
on Information Technology, as well as Embedded Technology, to operate
instruments and equipment in conducting its normal business activities. Certain
of the Information Technology and Embedded Technology may not have been designed
to function properly with respect to the application of dating systems relating
to the Year 2000.

In response, TransMontaigne developed a "Year 2000" Plan. While achieving
Year 2000 readiness does not mean correcting every Year 2000 limitation,
critical systems, as well as relationships with third-party customers, vendors
and local, state and federal government agencies have been, and continue to be,
evaluated and are expected to be suitable for continued use into and beyond the
Year 2000.

Through December 31, 1999, TransMontaigne had incurred third party costs of
approximately $1,375,000 related to Year 2000 compliance matters. These costs
have been funded through operating cash flows and do not include internal costs.
TransMontaigne does not presently separately record internal costs incurred with
respect to implementation of the Year 2000 Plan. Such costs are principally the
related payroll costs for the information systems and field operations
personnel, including senior management, involved in carrying out the Year 2000
Plan, as well as related travel and other out-of-pocket expenses. TransMontaigne
has had minimal business disruptions as the result of Year 2000 issues during
the month of January 2000.

While TransMontaigne does not anticipate that Year 2000 issues will have a
material adverse effect on the business, results of operations or financial
condition of TransMontaigne, if TransMontaigne Information Technology or
Embedded Technology, or those of business partners, fail to maintain Year 2000
readiness it could have a material adverse impact on the business, results of
operations or financial condition of TransMontaigne.

NEW ACCOUNTING STANDARDS

Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"), was issued in June 1998 by the
Financial Accounting Standards Board. SFAS 133 establishes new accounting and
reporting standards for derivative instruments and for hedging activities. This
statement requires an entity to establish at the inception of a hedge, the
method it will use for assessing the effectiveness of the hedging derivative and
the measurement approach for determining the ineffective aspect of the hedge.
Those methods must be consistent with the entity's approach to managing risk.
SFAS 133, as amended, is effective for all fiscal quarters of fiscal years
beginning after June 15, 2000. TransMontaigne is in the process of assessing the
impact, if any, that SFAS 133 will have on its consolidated financial
statements.


                                       29
<PAGE>


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information contained in Item 3 updates, and should be read in conjunction
with information set forth in Part II, Item 7A in TransMontaigne's Annual Report
on Form 10-K for the year ended June 30, 1999, in addition to the interim
condensed consolidated financial statements and accompanying notes presented in
Items 1 and 2 of this Form 10-Q.

There are no material changes in market risks faced by TransMontaigne from those
reported in its Annual Report on Form 10-K for the year ended June 30, 1999.


                                       30
<PAGE>


PART II.  OTHER INFORMATION

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

At the TransMontaigne Annual Meeting of Stockholders held on November 18, 1999,
the stockholders of TransMontaigne (a) elected nine directors; (b) ratified the
amendment of Section 4.1 of the Equity Incentive Plan of TransMontaigne Inc.
(the "1997 Option Plan") (i) to increase from 1,800,000 to 3,500,000 shares the
aggregate number of authorized shares of TransMontaigne Common Stock that may be
issued under the 1997 Option Plan, and (ii) to add an "evergreen" provision, the
effect of which is to automatically increase the number of shares of the
TransMontaigne Common Stock available for issuance under the 1997 Option Plan
beginning on June 30, 2000 and on each June 30 thereafter during the term of the
1997 Option Plan, a number of shares of TransMontaigne Common Stock equal to one
percent (1%) of the total number of the issued and outstanding shares of
TransMontaigne Common Stock on the last day of the immediately preceding fiscal
year; and (c) ratified the appointment of KPMG LLP as independent auditors for
TransMontaigne for the fiscal year ending June 30, 2000.

The following persons were elected as directors:

Cortlandt S. Dietler
Donald H. Anderson
Richard E. Gathright
John A. Hill
Bryan H. Lawrence
Harold R. Logan, Jr.
William E. Macaulay
Edwin H. Morgens
Simon B. Rich, Jr.

A total of 23,978,101 votes were cast for and a total of 285,939 votes were cast
against each of the following nominees for election to the Board of Directors:
Messrs. Gathright, Hill, Lawrence, Logan, Macaulay, Morgens and Rich. A total of
23,859,212 votes were cast for and a total of 404,828 votes were cast against
Mr. Dietler. A total of 23,977,101 votes were cast for and a total of 286,939
votes were cast against Mr. Anderson. There were no abstentions.

A total of 28,112,633 votes were cast in favor of the proposal to amend Section
4.1 of the 1997 Option Plan, while 2,242,064 votes were cast against the
proposal, 25,912 abstained, and there were 1,724,431 broker non-votes.

With respect to the ratification of the appointment of KPMG LLP as independent
auditors for TransMontaigne for the fiscal year ending June 30, 2000, a total of
31,941,440 votes were cast in favor of the appointment, while 132,782 votes were
cast against and 30,818 abstained. There were no broker non-votes.


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<PAGE>


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

     10.1 Agreement and Plan of Merger dated December 27, 1999, by and between
          Bear Paw Energy Inc., TransMontaigne Inc. and BPE Acquisition, LLC.
          Incorporated by reference to TransMontaigne Inc. Current Report on
          Form 8-K (Securities and Exchange Commission File No. 001-11763) filed
          on January 18, 2000.

     10.2 Amendment No. 3 dated as of December 31, 1999 to the Third Amended and
          Restated Credit Agreement between TransMontaigne Inc. and BankBoston,
          N.A., as Agent, dated as of June 29, 1999. FILED HEREWITH.

     10.3 Letter Amendment No. 7, dated as of December 31, 1999, to Master Shelf
          Agreement dated as of April 17, 1997, among TransMontaigne Oil
          Company, The Prudential Insurance Company of America and U.S. Private
          Placement Fund. FILED HEREWITH.

     27.1 12-31-99 Financial Data Schedule.  FILED HEREWITH.

     27.2 6-30-99 Financial Data Schedule.  FILED HEREWITH.

(b)       Reports on Form 8-K

          A Form 8-K dated December 27, 1999 reporting Item 5 of Form 8-K,
          announcing the signing of a definitive agreement with BPE Acquisition
          LLC; and Item 7 of Form 8-K, providing the December 27, 1999 press
          release as the exhibit, was filed on January 6, 2000.

          A Form 8-K dated December 31, 1999 reporting Item 2, the sale of all
          the issued and outstanding capital stock of its wholly-owned natural
          gas gathering subsidiary, Bear Paw Energy Inc., to BPE Acquisition
          LLC; and Item 7, deferring filing of the pro forma financial
          statements reflecting the sale, was filed on January 18, 2000.


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<PAGE>


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.

Dated:  February 14, 2000             TRANSMONTAIGNE INC.
                                      (Registrant)

                                      /s/ DONALD H. ANDERSON
                                      -------------------------------------
                                      Donald H. Anderson
                                      President and Chief Executive Officer

                                      /s/ RODNEY S. PLESS
                                      -------------------------------------
                                      Rodney S. Pless
                                      Vice President and Controller
                                      (Principal Accounting Officer)


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