<PAGE>
 
                                 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 January 31, 1998

                                       or

[ ]             TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934


                                                                      Commission
                                                                File No. 1-11763


                           TRANSMONTAIGNE OIL COMPANY
             (Exact name of registrant as specified in its charter)

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


                       370 SEVENTEENTH STREET, SUITE 2750
                             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 March 2, 1998, there were 25,940,370 shares of the Registrant's Common
Stock outstanding.

                                       1
<PAGE>
 
                          TRANSMONTAIGNE OIL COMPANY

                                     INDEX



                        PART I.   FINANCIAL INFORMATION


          
ITEM 1.   CONSOLIDATED FINANCIAL STATEMENTS                  PAGE NO.


          Consolidated Balance Sheets
          January 31, 1998 and April 30, 1997.................   3
 
          Consolidated Statements of Operations
          Three months ended January 31, 1998 and 1997........   4
 
          Consolidated Statements of Operations
          Nine months ended January 31, 1998 and 1997.........   5
 
          Consolidated Statements of Stockholders' Equity
          Nine months ended January 31, 1998 and
          Year ended April 30, 1997...........................   6
 
          Consolidated Statements of Cash Flows
          Nine months ended January 31, 1998 and 1997.........   7
 
          Notes to Consolidated Financial Statements..........   9
 

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS.......  18


                          PART II.  OTHER INFORMATION



ITEM 1.   LEGAL PROCEEDINGS...................................  37
 
ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.  37
 
ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K....................  37
 
          SIGNATURES..........................................  38

                                       2
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JANUARY 31, 1998 AND APRIL 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
 
 
                                            January 31,     April 30,
ASSETS                                         1998           1997
------                                    -------------   -----------
<S>                                       <C>             <C>
Current assets:
      Cash and cash equivalents             $40,822,014    36,384,325
      Trade accounts receivable              39,186,603    46,871,207
      Inventories                            63,625,882    42,346,451
      Deferred tax assets, net                        -     3,676,000
      Prepaid expenses and other              2,457,556     1,647,990
                                           ------------   ----------- 
                                            146,092,055   130,925,973
                                           ------------   -----------     
Property, plant and equipment:
      Land                                    1,372,577     1,222,195
      Plant and equipment                   171,535,343   120,010,811
      Accumulated depreciation              (16,374,455)  (10,704,252)
                                           ------------   -----------
                                            156,533,465   110,528,754
                                           ------------   -----------
Investments and other assets:
      Investments                            15,656,097    15,656,097
      Deferred debt issuance costs, net       1,418,087     1,638,909
      Other assets                            3,887,279     2,974,587
                                           ------------   -----------
                                             20,961,463    20,269,593
                                           ------------   -----------
                                           $323,586,983   261,724,320
                                           ============   =========== 
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
 
Current liabilities:
      Trade accounts payable               $ 27,643,983    36,893,399
      Inventory due under exchange            
       agreements                             6,810,895     4,982,179
      Excise taxes payable                    6,607,955     6,437,829
      Other accrued liabilities               5,975,394     4,189,528
                                           ------------    ----------
                                             47,038,227    52,502,935
                                           ------------    ----------

Long-term debt                              124,489,624    64,774,267
 
Minority interests                            5,475,377     5,475,377
 
Stockholders' equity:
      Preferred stock, par value $.01
       per share, authorized 2,000,000 
       shares, none issued                            -             -
      Common stock, par value $.01 per
       share, authorized 40,000,000 
       shares, issued and outstanding           
       25,939,370 shares at January 31,
       1998; and 25,794,720 shares at 
       April 30, 1997                           259,394       257,947
      Capital in excess of par value        136,115,850   134,843,884
      Retained earnings                      10,994,968     3,869,910
      Unearned compensation                    (786,457)            -
                                           ------------   -----------  
                                            146,583,755   138,971,741
                                           ------------   -----------
                                           $323,586,983   261,724,320
                                           ============   ===========
</TABLE>
See accompanying notes to consolidated financial statements.


                                       3
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED JANUARY 31, 1998 AND 1997 (UNAUDITED)
<TABLE>
<CAPTION>
 
 
                                              1998                       1997
                                              ----                       ----
<S>                                       <C>                         <C>
Revenue:
  Product sales, pipeline tariffs,
     terminaling fees and natural gas
     gathering and processing fees        $  470,731,798              340,653,668

Costs and expenses:
  Product costs and direct
     operating expenses                      460,141,569              335,357,040
  General and administrative                   3,736,259                1,856,742
  Depreciation and amortization                2,229,583                  995,983
                                          ---------------           ---------------
                                             466,107,411              338,209,765
                                          ---------------           ---------------
 
         Operating income                      4,624,387                2,443,903
   
Other income (expenses):
  Interest income                                484,154                  398,856
  Equity in losses of affiliates                       -                 (105,674)
  Minority interests                                   -                   42,186
  Interest expense                            (2,166,204)              (1,349,870)
  Other financing costs                         (124,316)                 (88,137)
  Other, net                                           -                  264,613
                                          ---------------           ---------------    
                                              (1,806,366)                (838,026)
                                          ---------------           ---------------  
 
         Earnings before
            income taxes                       2,818,021                1,605,877
 
Income tax expense                             1,100,000                  180,000
                                          ---------------           ---------------    
         Net earnings                     $    1,718,021                1,425,877
                                          ===============           ===============
 
Earnings per common share:
         Basic                            $         0.07                     0.07
                                          ===============           ===============     
         Diluted                          $         0.06                     0.07
                                          ===============           ===============
 
Weighted average common
  shares outstanding:
         Basic                                25,918,870               21,013,855
                                          ===============           =============== 
         Diluted                              26,685,256               21,856,622  
                                          ===============           =============== 
  
</TABLE>
See accompanying notes to consolidated financial statements.

                                       4
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED JANUARY 31, 1998 AND 1997 (UNAUDITED)
<TABLE>
<CAPTION>
 
                                                1998                   1997
                                                ----                   ----
<S>                                       <C>                        <C>
Revenue:
  Product sales, pipeline tariffs,
     terminaling fees and natural gas
     gathering and processing fees        $   1,477,980,875          811,476,612  
 
Costs and expenses:
  Product costs and direct
     operating expenses                       1,447,246,704          797,453,937
  General and administrative                      9,660,324            5,015,047
  Depreciation and amortization                   5,766,771            1,951,011
                                          ------------------   ------------------
                                              1,462,673,799          804,419,995
                                          ------------------   ------------------
 
       Operating income                          15,307,076            7,056,617
      
Other income (expenses):
  Interest income                                 1,629,738            1,291,907
  Equity in earnings of affiliates                        -              317,477    
  Minority interests                                      -             (106,863) 
  Interest expense                               (5,233,727)          (2,647,990)
  Other financing costs                            (408,029)            (160,297)
  Other, net                                              -              604,689
                                          ------------------   ------------------
                                                 (4,012,018)            (701,077)
                                          ------------------   ------------------
 
       Earnings before
          income taxes                           11,295,058            6,355,540
 
Income tax expense                                4,170,000              450,000
                                          ------------------   ------------------
       Net earnings                       $       7,125,058            5,905,540
                                          ==================   ==================
 
 Earnings per common share:
       Basic                              $            0.28                 0.28
                                          ==================   ==================
       Diluted                            $            0.27                 0.27
                                          ==================   ==================
 
Weighted average common
  shares outstanding:
       Basic                                     25,868,471           20,728,760
                                          ==================   ==================  
       Diluted                                   26,683,770           21,524,428 
                                          ==================   ==================
 
</TABLE>
See accompanying notes to consolidated financial statements.

                                       5
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED JANUARY 31, 1998 AND YEAR ENDED APRIL 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
 
                                                                        Retained
                                                        Capital in      earnings             
                               Preferred    Common      excess of       (accumulated        Unearned
                                 stock       stock      par value       deficit)            compensation        Total
                               ---------   ----------  -----------      ------------        ------------     ------------  
<S>                            <C>         <C>         <C>              <C>                 <C>              <C> 
BALANCE AT APRIL 30, 1996      $       -    1,933,117   61,187,476       (5,301,402)                   -       57,819,191

Change in the par value of
  common stock from
  $.10 to $.01 in connection
  with merger                          -   (1,739,805)   1,739,805                -                    -                -
Common stock issued in
  merger                               -       14,744    8,093,785                -                    -        8,108,529  
Common stock issued for
  minority interest in
  subsidiary                           -        1,000      974,000                -                    -          975,000 
Common stock repurchased
  and retired                          -         (148)    (199,852)               -                    -          782,952 
Common stock issued for
  options exercised                    -        2,130      780,822                -                    -         (200,000)
Common stock issued for cash
  in public offering                   -       46,909   62,952,321                -                    -       62,999,230    
Costs related to issuance of
  common stock                         -            -     (684,473)               -                    -         (684,473)
Net earnings                           -            -            -        9,171,312                    -        9,171,312
                               ---------   ----------  -----------      ------------        ------------     ------------     
 
BALANCE AT APRIL 30, 1997              -      257,947  134,843,884        3,869,910                    -      138,971,741

Common stock issued for
  options exercised                    -          887      387,389                -                    -          388,276  
Costs related to issuance of
  common stock                         -            -      (53,863)               -                    -          (53,863)
Unearned compensation
  relating to restricted
  stock  awards                        -          560      938,440                -             (939,000)               -
Amortization of unearned
   compensation                        -            -            -                -              152,543          152,543
Net earnings                           -            -            -        7,125,058                    -        7,125,058
                               ---------   ----------  -----------      ------------        ------------     ------------     
 
BALANCE AT JANUARY 31, 1998    $       -      259,394  136,115,850       10,994,968             (786,457)     146,583,755
                               =========   ==========  ===========      ============        ============     ============

 
</TABLE>
See accompanying notes to consolidated financial statements.

                                       6
<PAGE>
 
<TABLE>
<CAPTION>
 
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED JANUARY 31, 1998 AND 1997 (UNAUDITED)
 

                                             1998                  1997
                                             ----                  ----
<S>                                      <C>                 <C>           
Cash flows from operating activities:
   Net earnings                           $ 7,125,058           5,905,540
   Adjustments to reconcile net earnings
    to net cash used by operating 
    activities:
      Depreciation and amortization         5,766,771           1,951,011
      Equity in earnings of affiliates              -            (317,477)
      Minority interests                            -             106,863
      Deferred tax expense                  3,676,000                   -
      Gain on disposition of assets              (349)            (76,872)
      Amortization of unearned                
       compensation                           152,543                   -
      Changes in operating assets and
       liabilities, net of noncash 
       activities:    
        Trade accounts receivable           7,684,604         (20,447,555)
        Inventories                       (21,279,431)        (25,687,666)
        Prepaid expenses and other           (809,566)            346,133
        Trade accounts payable             (9,249,416)         16,188,334
        Inventory due under exchange
           agreements                       1,828,716          (2,588,484)
        Excise taxes payable and other
           accrued liabilities              1,955,992           2,246,303
                                         ------------         -----------    
 
                  Net cash (used) by
                   operating activities    (3,149,078)        (22,373,870)
                                         ------------         -----------
Cash flows from investing activities:
   Purchases of property, plant and
    equipment                             (52,638,701)        (85,421,308)
   Proceeds from sale of assets                28,650              15,123
   Cash received in connection with
    acquisition                               906,267           2,315,527
   Costs related to acquisition              (130,755)           (399,284)
   Cash balance in subsidiary sold                  -            (111,341)
   Decrease (increase) in other assets,
    net                                      (849,286)            246,489
                                         ------------         -----------
                  Net cash (used) by
                   investing activities   (52,683,825)        (83,354,794)
                                         ------------         -----------

Cash flows from financing activities:
   Borrowings of long-term debt, net       59,715,357          95,957,800
   Deferred debt issuance costs               220,822          (1,139,398)
   Common stock issued for cash               388,276             675,401
   Costs related to issuance of               
    common stock                              (53,863)                  -
                                         ------------         -----------
                  Net cash provided by
                   financing activities    60,270,592          95,493,803
                                         ------------         -----------
                  Increase (decrease) 
                   in cash and cash 
                   equivalents              4,437,689         (10,234,861)
Cash and cash equivalents at beginning
 of period                                 36,384,325          38,403,234
                                         ------------         ----------- 
 
Cash and cash equivalents at end of
 period                                  $ 40,822,014          28,168,373
                                         ============         ===========
 
                                                                     (Continued)
</TABLE>

                                       7
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF  CASH FLOWS (CONTINUED)
NINE MONTHS ENDED JANUARY 31, 1998 AND 1997 (UNAUDITED)

<TABLE>
<CAPTION>
 
 
                                                1998         1997
                                                ----         ----
<S>                                       <C>             <C>
Supplemental disclosures of cash flow
 information:
 
Acquisition of Sheffield Exploration
 Company
 
Fair value of assets acquired             $           -     8,739,247
Fair value of liabilities assumed                     -      (231,484)
                                          -------------   -------------   
                                                      -     8,507,763
Costs related to acquisition                          -      (399,284)
                                          -------------   -------------   
     Fair value of stock issued           $           -     8,108,479
                                          =============   =============
Cash received in connection with
 acquisition included in assets
 acquired                                 $           -     2,315,527
                                          =============   =============
 
 
Sale of Sheffield Operating Company
 
Fair value of assets sold                 $           -     1,991,403
Fair value of liabilities assumed by
 purchaser                                            -       245,451
                                          -------------   -------------   

     Fair value of consideration                      
      received                            $           -     2,236,854
                                          =============   =============
 
Cash distributed in connection with sale
     included in assets sold              $           -       111,341
                                          =============   =============
 
Acquisition of ITAPCO Terminal
 Corporations:
 
Fair value of assets acquired             $  32,863,452             -
Fair value of liabilities assumed            (1,275,014)            -
                                          -------------   -------------   
                                             31,588,438             -
Costs related to acquisition                   (130,755)            -
                                          -------------   -------------   
     Fair value of cash given             $  31,457,683             -
                                          =============   =============
Cash received in connection with
 acquisition included in assets 
 acquired                                 $     906,267             -
                                          =============   =============
 
</TABLE>

See accompanying notes to consolidated financial statements.

                                       8
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 1998

(1) BASIS OF PRESENTATION

    The TransMontaigne Oil Company ("TransMontaigne") consolidated balance
    sheets at January 31, 1998 and April 30, 1997, the consolidated statements
    of operations for the three months and nine months ended January 31, 1998
    and 1997, the consolidated statements of stockholders' equity for the nine
    months ended January 31, 1998 and the year ended April 30, 1997 and the
    consolidated statements of cash flows for the nine months ended January 31,
    1998 and 1997 are unaudited and reflect all adjustments (consisting only of
    normal recurring adjustments) which are, in the opinion of management,
    necessary for a fair presentation of the financial position and operating
    results for the interim periods presented.  These consolidated financial
    statements should be read in conjunction with the consolidated financial
    statements and related notes, together with management's discussion and
    analysis of financial condition and results of operations, contained in
    TransMontaigne's  Annual Report on Form 10-K for the fiscal year ended April
    30, 1997.  The results of operations for the three months and nine months
    ended January 31, 1998 are not necessarily indicative of the results for the
    entire fiscal year ending April 30, 1998.

    Management makes various estimates and assumptions in determining the
    reported amounts of assets, liabilities, revenues and expenses for each
    period presented. 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.

(2) MERGER

    TransMontaigne is the surviving corporation of a merger (the "Merger")
    between TransMontaigne Oil Company and Sheffield Exploration Company, Inc.
    ("Sheffield") effective June 4, 1996. The Merger constituted a reverse
    acquisition of Sheffield, in which Sheffield survived the Merger, and was
    owned approximately 93% by the former stockholders of TransMontaigne Oil
    Company. Following the Merger, (i) the name of Sheffield was changed to
    TransMontaigne Oil Company;

                                        9
<PAGE>
 
    (ii) the par value of the common stock was reduced to $.01 per share; (iii)
    the number of shares of authorized common stock was increased to 40,000,000;
    and (iv) the stock options which Sheffield had outstanding prior to the
    Merger became options to purchase 79,338 shares of TransMontaigne's common
    stock at $3.65 per share and were exercised prior to their September 2, 1996
    expiration date.

(3) ACQUISITIONS

    On November 25, 1997 TransMontaigne, through a wholly-owned subsidiary,
    TransMontaigne Terminaling Inc., acquired the common stock of seventeen
    corporations, known as the "ITAPCO Terminal Corporations", from a common
    shareholder group, and certain related property and property interests. The
    acquisition included seventeen storage and distribution terminals located in
    eight states having total tankage capacity in excess of 3.3 million barrels,
    handling primarily refined petroleum products, chemicals and other bulk
    liquids together with the related operations of the terminals; seven
    contracts for providing management consulting services to non-owned storage
    and distribution terminals, pipelines and related facilities for third
    parties; and certain other assets.

    The ITAPCO Terminal Corporations purchase price was $32,000,000 cash, less
    assumption by TransMontaigne of outstanding bank debt of approximately
    $542,000 and was funded by an advance of $22,000,000 from the TransMontaigne
    bank credit facility with the balance from TransMontaigne cash reserves. The
    seventeen ITAPCO Terminal Corporations were merged into a wholly-owned
    subsidiary of TransMontaigne effective December 1, 1997. The cost of the
    ITAPCO Terminal Corporations has been allocated to the assets acquired and
    liabilities assumed based on their estimated fair market value as determined
    by TransMontaigne. The transaction was accounted for as a purchase.

    On December 20, 1996, TransMontaigne, through a wholly-owned subsidiary,
    Bear Paw Energy Inc., acquired for approximately $71,000,000 cash the
    Grasslands natural gas gathering, processing, treating and fractionating
    system located in western North Dakota and northeastern Montana. The
    Grasslands gas processing plant, located in McKenzie County, North Dakota,
    was built in 1980.

                                       10
<PAGE>
 
    The cost of the Grasslands Facilities has been allocated to the assets
    acquired based on their estimated fair market value as determined by
    TransMontaigne.

    The following summarized unaudited pro forma results of operations assumes
    that the acquisition of the ITAPCO Terminal Corporations and Grasslands
    Facilities occurred as of May 1, 1996 and combines the actual results of
    operations of TransMontaigne for the three months and nine months ended
    January 31, 1998 and 1997 with the pro forma historical results of
    operations of the ITAPCO Terminal Corporations for the three months and nine
    months ended January 31, 1998 and the pro forma historical results of the
    ITAPCO Terminal Corporations and Grasslands Facilities for the three months
    and nine months ended January 31, 1997.

    The unaudited pro forma results of operations are not necessarily indicative
    of the results of operations which would actually have occurred if the
    ITAPCO Terminal Corporations and Grasslands Facilities had been acquired as
    of May 1, 1996 or which will be attained in the future.
<TABLE>
<CAPTION>
 
                                 Three Months Ended            Nine Months Ended
                                      January 31                   January 31
                               ==========================  ============================
                                   1998          1997            1998          1997
                               -------------  -----------  ---------------  -----------                        
    <S>                        <C>            <C>          <C>              <C>
     Revenues                  $ 471,686,103  351,061,087  $ 1,485,244,409  851,095,966
                               =============  ===========  ===============  ===========                          
     Net Earnings              $   1,705,590    2,293,831  $     7,031,150    7,814,327
                               =============  ===========  ===============  ===========                            
     Earnings Per Common Share:                           
              Basic            $        0.07         0.11             0.27         0.38                          
                               =============  ===========  ===============  ===========  
              Diluted          $        0.06         0.10  $          0.26         0.36
                               =============  ===========  ===============  ===========  
</TABLE>

(4) PUBLIC OFFERING

    On February 13, 1997, TransMontaigne closed a public offering of 4,357,000
    shares of its common stock of which 4,035,000 shares were issued and sold by
    TransMontaigne and 322,000 shares were sold by certain selling stockholders.
    The net proceeds to TransMontaigne, based on the public offering price of
    $14.25 per share, were approximately $53,506,000, after deducting
    underwriting discounts and commissions and offering costs, of which
    $45,000,000 was used to repay a portion of the debt incurred under its bank
    credit facility.  On March 11, 1997 the underwriters' overallotment to
    purchase an additional 557,543 shares and the Merrill Lynch 

                                       11
<PAGE>
 
    Growth Fund antidilution right to purchase an additional 98,390 shares were
    both exercised and TransMontaigne received additional net proceeds of
    $8,809,000.

(5) INVENTORY MANAGEMENT

    TransMontaigne manages the risk associated with fluctuations in the price of
    refined petroleum products inventory and purchase and sales commitments, and
    may selectively enter into futures contracts which are designated as hedges
    of the products purchased or sold.  Hedging gains and losses are recognized
    and recorded in inventory when the related inventory is sold.  At January
    31, 1998, TransMontaigne had no open futures contracts designated as hedges.

    In connection with its trading activities, TransMontaigne recognizes gains
    and losses when incurred.  Net trading losses on futures contracts of
    approximately $249,000 were recognized during the quarter ended January 31,
    1998 and gains of approximately $123,000 were recognized during the quarter
    ended January 31, 1997.  TransMontaigne had outstanding contracts to sell
    3,950,000 barrels of product and outstanding contracts to purchase 3,950,000
    barrels of product at January 31, 1998 and outstanding contracts to sell
    1,775,000 barrels of product and outstanding contracts to purchase 1,775,000
    barrels of product at January 31, 1997.  Unrealized gains relating to such
    outstanding contracts were approximately $1,523,000 at January 31, 1998 and
    approximately $129,000 at January 31, 1997. TransMontaigne refined petroleum
    products inventory consists primarily of gasoline and distillates.

    A portion of TransMontaigne inventory represents line fill and tank bottoms;
    is required for operating balances in the conduct of TransMontaigne's daily
    supply and distribution activities; and is maintained both in tanks and
    pipelines owned by TransMontaigne and pipelines owned by third parties.
    Natural gas liquids and residue natural gas inventory are not significant.
    Inventories of refined petroleum products are stated at the lower of last-
    in, first-out (LIFO) cost or market.

(6) INCOME TAXES
 
    TransMontaigne utilizes the asset and liability method of accounting for
    income taxes, as prescribed by Statement of Financial Accounting Standards
    No. 109 (SFAS 109).  Under this method, deferred tax assets and liabilities
    are recognized for the future tax consequences 

                                       12
<PAGE>
 
    attributable to differences between the financial statement carrying amounts
    of existing assets and liabilities and their respective tax bases. Deferred
    tax assets and liabilities are measured using enacted tax rates expected to
    apply in the years in which these temporary differences are expected to be
    recovered or settled. Changes in tax rates are recognized in income in the
    period that includes the enactment date. As of January 31, 1998 the balance
    of net deferred tax assets has been recorded as a reduction of accrued
    income taxes payable.

(7) BANK CREDIT FACILITY

    TransMontaigne's bank credit facility at January 31, 1998 is an $85,000,000
    working capital revolving credit facility with a money center bank due
    December 31, 2001.  The amount available under the bank credit facility is
    to be reduced by $3,125,000 each calendar quarter beginning March 31, 2000.
    Borrowings under the bank credit facility generally bear interest at an
    annual rate equal to the lender's announced Base Rate, subject to a
    Eurodollar pricing option at TransMontaigne's election.  The interest rate
    at January 31, 1998 was 6.72%.

    At January 31, 1998, TransMontaigne had advances of $45,000,000 outstanding
    under the bank credit facility.  In addition, $2,600,000 of the facility was
    used to support a standby letter of credit to a bank to assist Lion Oil
    Company (Lion) in obtaining financing.

(8) MASTER SHELF AGREEMENT

    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 $100,000,000 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 to the lender,
    under the Master Shelf Agreement, $50,000,000 of 7.85% and $25,000,000 of
    7.22% Senior Notes due 2003 and 2004, respectively, of which the aggregate
    amount of $75,000,000 was outstanding at January 31, 1998.

                                       13
<PAGE>
 
(9)  SENIOR SUBORDINATED DEBENTURES

     In March 1991, TransMontaigne issued $4,000,000 of 12 3/4% senior
     subordinated debentures which are guaranteed by certain subsidiaries and
     are due December 15, 2000, with interest payable semi-annually on June 15
     and December 15. The debentures are subject to a required redemption of
     $2,000,000 on December 15, 1999 and 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 common stock. The warrant exercise
     price was reduced effective April 26, 1995 from $6.10 per share to $3.60
     per share, through December 15, 2000.

(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 quarters ended October 31, 1997 and January 31,
     1998, the TransMontaigne Board of Directors approved the issuance of 44,000
     and 12,000 shares, respectively, to certain key employees. Compensation
     expense is recognized over a four year vesting period.

(11) BUSINESS SEGMENTS

     TransMontaigne's primary operating business segment prior to November 1,
     1996 was logistical petroleum services related to pipelining, terminaling,
     storing and marketing refined petroleum products. During the quarter ended
     January 31, 1998 TransMontaigne acquired the ITAPCO Terminal Corporations
     the refined petroleum products, chemicals and other bulk liquids operations
     of which are included in the logistical petroleum services business
     segment. During the quarter ended January 31, 1997, TransMontaigne acquired
     the Grasslands Facilities and expanded other natural gas gathering and
     processing assets. The gas gathering and processing services business
     segment conducted operations during the one month ended January 31, 1997.

                                       14
<PAGE>
 
     These activities for the nine month periods ended January 31, 1998 and 1997
     are reflected in the following summary.


<TABLE>                                                                  


      
                                               
                                               
      Revenues                                            1998           1997                               
                                                      -------------   -----------
         <S>                                       <C>                <C> 
         Logistical petroleum services              $ 1,430,687,188   803,181,621 
         Gas gathering and processing services           47,293,687     8,294,991 
                                                      -------------   -----------
                                                    $ 1,477,980,875   811,476,612 
                                                      =============   ===========  
      Operating income                                                         
         Logistical petroleum services              $    11,136,093     6,072,095 
         Gas gathering and processing services            5,070,983     1,631,405 
         Corporate                                         (900,000)     (646,883)
                                                      -------------   -----------
                                                    $    15,307,076     7,056,617 
                                                      =============   ===========  
      Identifiable assets at the end of the                                    
      nine month period (net of depreciation)                                    
         Logistical petroleum services              $   166,208,117   112,033,593 
         Gas gathering and processing services           90,653,127    85,106,622 
         Corporate                                       66,725,739    51,061,564 
                                                      -------------   -----------      
                                                    $   323,586,983   248,201,779 
                                                      =============   ===========  
      Depreciation and amortization                                            
         Logistical petroleum services              $     1,616,163     1,155,059 
         Gas gathering and processing services            3,777,717       541,737 
         Corporate                                          372,891       254,215 
                                                      -------------   -----------
                                                    $     5,766,771     1,951,011 
                                                      =============   ===========  
      Capital expenditures                                                     
         Logistical petroleum services              $    41,108,583    11,211,485 
         Gas gathering and processing services           10,219,607    73,781,927 
         Corporate                                        1,310,511       427,896 
                                                      -------------   -----------

                                                    $    52,638,701    85,421,308  
                                                      =============   ===========  
</TABLE>
     The Corporate business segment represents all TransMontaigne activities and
     assets not specifically identified with the primary business segments,
     including cash and cash equivalents, investments and other assets.

(12) LION OIL COMPANY INVESTMENT

     Effective May 1, 1997 TransMontaigne Holding Inc., a 65% owned subsidiary
     of TransMontaigne, issued to its 35% minority shareholders irrevocable
     proxies to vote their 35% share of the 27.75% interest in Lion owned by
     TransMontaigne Holding Inc. to assure that the 35% minority interest
     shareholders would continue to post their pro rata share of $1,400,000 in
     standby letters of credit to assist Lion in obtaining financing. Since the
     issuance of the irrevocable proxies reduced TransMontaigne's voting
     interest in Lion from 27.75% to 18.0375%, TransMontaigne changed its

                                       15
<PAGE>
 
     method of accounting for the investment in Lion from the equity method,
     under which the investment originally recorded at cost is adjusted to
     recognize TransMontaigne's share of Lion net earnings or losses as
     incurred, to the historical cost method, under which the investment is
     recorded at cost and dividends or other distributions are recognized as
     received. As of May 1, 1997 the investment in Lion by TransMontaigne
     Holding Inc. representing its original cost plus accumulated net earnings
     was $15,586,097 and the related minority interest was $5,475,377.

(13) EARNINGS PER SHARE

     Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
     ("SFAS 128") was issued in February 1997, by the Financial Accounting
     Standards Board. SFAS 128 established new standards for computing and
     presenting earnings per share ("EPS") including simplifying the standards
     for computing EPS and making them comparable to international EPS
     standards. This statement replaces the presentation of primary EPS
     previously prescribed by Accounting Principles Board Opinion No. 15 ("APB
     No. 15") with a presentation of basic EPS which is computed by dividing
     income available to common stockholders by the weighted average number of
     common shares outstanding for the period. SFAS 128 also requires dual
     presentation of basic and diluted EPS. Diluted EPS is computed similarly to
     fully diluted EPS pursuant to APB No. 15. This statement is effective for
     financial statements issued for periods ending after December 15, 1997, and
     requires restatement of all prior period EPS data presented. The following
     tables reconcile the computation of basic EPS and diluted EPS for the three
     months and nine months ended January 31, 1998 and 1997.

                                       16
<PAGE>
 
<TABLE>
<CAPTION>
 
 
                                                   FOR THE THREE MONTHS ENDED JANUARY 31
                             ----------------------------------------------------------------------------------
                                                1998                                     1997
                             ---------------------------------------    ---------------------------------------
                              EARNINGS          SHARES        PER         EARNINGS         SHARES         PER
                             (NUMERATOR)     (DENOMINATOR)   SHARE       (NUMERATOR)    (DENOMINATOR)    SHARE
                             -----------    --------------   -------    ------------    -------------    ------
 <S>                         <C>            <C>            <C>          <C>             <C>              <C>           
Basic EPS - Net earnings
 available to common
 stockholders                $ 1,718,021      25,918,870      $  0.07     $  1,425,877    21,013,855     $ 0.07
                                                              =======                                    ======
Effect of Dilutive
 Securities
   Stock options                       -         576,664                             -       663,045
   Stock warrants                      -         189,722                             -       179,722
                             -----------      ----------                  ------------     ---------      
Diluted EPS - Net
 earnings available to
 common stockholders
 and assumed
 conversions                 $ 1,718,021      26,685,256      $  0.06     $  1,425,877    21,856,622     $ 0.07
                             ===========      ==========      =======     ============    ==========     ======
</TABLE> 

<TABLE> 
<CAPTION> 
                                                    FOR THE NINE MONTHS ENDED JANUARY 31
                             ----------------------------------------------------------------------------------
                                            1998                                     1997
                             ---------------------------------------    ---------------------------------------
                              EARNINGS         SHARES          PER       EARNINGS          SHARES         PER
                             (NUMERATOR)    (DENOMINATOR)     SHARE     (NUMERATOR)     (DENOMINATOR)    SHARE
                             -----------    --------------    -----     ------------    -------------    ------ 
<S>                         <C>             <C>              <C>        <C>             <C>              <C> 
Basic EPS - Net earnings
 available to common
 stockholders                $ 7,125,058       25,868,471     $  0.28     $ 5,905,540     20,728,760     $ 0.28
                                                              =======                                    ======
Effect of Dilutive
 Securities
   Stock options                       -          619,953                           -        630,668
   Stock warrants                      -          195,346                           -        165,000
                              ----------        ---------                 -----------     ----------      
Diluted EPS - Net
 earnings available to
 common stockholders
 and assumed
 conversions                 $7,125,058        26,683,770     $  0.27     $ 5,905,540     21,524,428     $ 0.27
                             ===========       ==========     =======     ============    ==========     ======

 Note: Stock options to purchase 521,000 shares of common stock at $17.25 per share were outstanding during the three 
       months ended January 31, 1998, but were not included in the computation of diluted EPS because the options' 
       exercise price was greater than the average market price of the common shares during the three months ended 
       January 31, 1998.
</TABLE>

                                       17
<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, supply, distribution, gathering, processing and marketing services
to producers, refiners, distributors, marketers and end-users of petroleum
products, chemicals, other bulk liquids, natural gas and crude oil in the
downstream sector of the petroleum and chemical industry. TransMontaigne is a
holding company which conducts its operations through subsidiaries primarily in
the mid-continent and Rocky Mountain regions of the United States.
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
refined petroleum products, chemicals, other bulk liquids and crude oil assets
consist primarily of approximately 770 miles of pipeline and 31 storage,
terminal and delivery facilities located in ten states with a combined tank
storage capacity of approximately 8,300,000 barrels. TransMontaigne natural gas
gathering and processing assets consist of six gathering and processing systems
in three states with combined throughput capacity of approximately 93 million
cubic feet per day and over 2,800 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 marketed,
shipped and sold to and exchanged with customers in other locations. Management
believes that the use of all these facilities allows TransMontaigne to
significantly expand its geographic service area and the integrated logistical
services it provides.

          The principal predecessor of TransMontaigne was formed in 1977 and in
April 1995, present management and certain institutional stockholders of
TransMontaigne acquired control of the predecessor through a merger in which the
name was changed to TransMontaigne Oil Company. In June 1996, TransMontaigne and
a publicly held corporation merged, with the stockholders of TransMontaigne
receiving approximately 93% of the stock of the merged corporation.

                                       18
<PAGE>
 
          Since TransMontaigne present management assumed control in April 1995,
TransMontaigne has raised approximately $117,000,000 in equity capital
($30,000,000 private placement in May 1995; $25,000,000 private placement in
March 1996; and $62,000,000 public offering in February 1997); established an
initial $130,000,000 working capital and acquisition revolving bank credit
facility (in December 1996) which converted to the present $85,000,000 bank
credit facility due December 31, 2001 (in February 1997); and issued $50,000,000
of 7.85% and $25,000,000 of 7.22% Senior Notes due 2003 and 2004, respectively,
to an institutional lender under a $100,000,000 Master Shelf Agreement (in April
1997 and December 1997, respectively).
 
          In December 1996 TransMontaigne acquired the Grasslands natural gas
gathering, processing, treating and fractionation system (the "Grasslands
Facilities") for approximately $71,000,000 in cash and through January 31, 1998
has additionally invested approximately $19,000,000 in improvements and
expansion of the Grasslands Facilities and other assets in its natural gas
gathering and processing business segment. The Grasslands Facilities complement
TransMontaigne's other natural gas gathering and processing facilities in the
Williston Basin of the Rocky Mountain region, and enables TransMontaigne to
provide expanded services to oil and gas producers as well as to end-users of
natural gas liquids ("NGLs") and natural gas.  The Grasslands Facilities
contributed approximately 89% and 91% of the total net operating margins of
TransMontaigne's natural gas gathering and processing operations during the
three months and nine months ended January 31, 1998, respectively.
 
          In November 1997 TransMontaigne acquired the common stock of seventeen
corporations, known as the "ITAPCO Terminal Corporations", and certain related
property and property interests.  The acquisition included seventeen bulk liquid
storage and distribution terminals located in eight states having total tankage
capacity in excess of 3.3 million barrels, handling primarily refined petroleum
products, chemicals and other bulk liquids together with the related operations
of the terminals; seven contracts for providing management consulting services
to non-owned storage and distribution terminals, pipelines and related
facilities for third parties; and certain other assets.  The ITAPCO Terminal
Corporations purchase price was $32,000,000 cash less assumption of outstanding
bank debt of approximately $542,000 and was funded by an advance of $22,000,000
from the TransMontaigne bank credit facility with the balance from
TransMontaigne cash reserves.  Following the November 25, 1997 acquisition date,
the ITAPCO Terminal Corporations contributed approximately 46% and 22% of 

                                       19
<PAGE>
 
the total net operating margins of the TransMontaigne terminal operations during
the three months and nine months ended January 31, 1998.

          Effective December 1, 1997, TransMontaigne became the managing partner
of operations of the Lignite gas gathering and processing facilities, in which
TransMontaigne owns a 50% partnership interest.

CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

          This report contains "forward-looking statements" within the meaning
of the federal securities laws and may include the words or phrases "believes,"
"will depend," "will become" and "plans to" or similar expressions as well as
other statements of expectations, beliefs, future strategies and comments
concerning matters which are not historical facts. These forward-looking
statements are subject to risks and uncertainties which could cause actual
results to differ materially from those expressed in or implied by the
statements including, but not limited to, the following:

          . that TransMontaigne will generate net operating margins from high
            sales volumes

          . that TransMontaigne will generate net operating margins affected by
            price volatility of products purchased and sold

          . that TransMontaigne will selectively and effectively hedge certain
            inventory positions

          . that TransMontaigne will be required to recognize a noncash
            financial statement loss through a lower of cost or market write-
            down of inventories

          . that TransMontaigne will incur unanticipated costs in complying with
            current and possibly future environmental regulations

          . that TransMontaigne will capitalize on the trend by other companies
            in the oil and gas industry to divest assets and outsource certain
            services

          . that TransMontaigne will replace the supply of dedicated natural gas
            reserves gathered and processed by its facilities

          . that TransMontaigne will internally generate working capital or have
            the availability of debt and equity resources to meet its future
            capital requirements.

                                       20
<PAGE>
 
<TABLE>
<CAPTION>
 
 
RESULTS OF OPERATIONS
                                            THREE MONTHS ENDED                NINE MONTHS ENDED  
                                                JANUARY 31                        JANUARY 31
                                          -----------------------           ------------------------
                                               1998      1997                  1998         1997
                                          -----------  ----------           ------------  ----------
<S>                                       <C>          <C>                 <C>          <C>                
PIPELINE OPERATIONS                                                                                         
     Volume (1)                                4,365       4,506               14,120        14,271                                
     Revenues (2)                         $    3,194       2,866                9,588         8,927                        
     Net Operating Margins (2)            $    1,724       1,505                5,155         4,885                         
     Margin per barrel handled            $   0.3950      0.3340               0.3651        0.3423                         
                                                                                                                            
TERMINAL OPERATIONS                                                                                                         
     Volume (1)                                                                                                             
       Refined petroleum products            421,000     178,000            1,015,000       530,000                         
       Chemicals and other bulk liquids       10,000           -               10,000             -                         
     Revenues (2)                                                                                                           
       Refined petroleum products         $    3,110       1,305                7,478         3,680                         
       Chemicals and other bulk liquids   $    1,026           -                1,026             -                         
     Net Operating Margins (2)            $    2,655         740                5,550         2,488                         
     Margin per gallon handled            $   0.0062      0.0042               0.0054        0.0047                         
                                                                                                                            
PRODUCTS SUPPLY AND                                                                                                         
DISTRIBUTION OPERATIONS                                                                                                     
     Volume (1)                              808,000     491,000            2,473,000     1,237,000                         
     Revenues (2)                         $  446,822     328,188            1,412,595       790,575                         
     Net Operating Margins (2)            $    2,403         580                8,429         4,178                         
     Margin per gallon sold               $   0.0030      0.0012               0.0034        0.0034                         
                                                                                                                            
GAS GATHERING AND                                                                                                           
PROCESSING OPERATIONS                                                                                                       
     Inlet Volume (3)                          5,337       1,609               15,401         1,609                         
     NGLs Production (3)                      25,085       9,253               73,847         9,253                         
     Residue Production (3)                5,054,379   1,452,000           12,959,773     1,452,000                     
     Revenues (2)                         $   16,580       8,295               47,294         8,295                         
     Net Operating Margins (2)            $    3,808       2,472               11,600         2,472                         
                                                                                                                            
TOTAL OPERATIONS                                                                                                            
     Revenues (2)                         $  470,732     340,654            1,477,981       811,477                         
     Net Operating Margins (2)            $   10,590       5,297               30,734        14,023                         
     Net Earnings (2)                     $    1,718       1,426                7,125         5,906                          
                                                                                          
</TABLE>                                                                

                                       21
<PAGE>
 
(1) Pipeline volumes are expressed in thousands of barrels (42 gallons per
barrel). Terminal and products supply and distribution volumes are expressed in
thousands of gallons.

(2) Revenues, net operating margins, and net earnings are expressed in thousands
of dollars. Net operating margin represents (a) revenues less direct operating
expenses for pipeline and terminal operations; (b) revenues less cost of refined
petroleum products purchased for products supply and distribution operations,
and (c) revenues less cost of natural gas gathered, processed and sold and
direct operating expenses for natural gas gathering and processing operations.

(3) Natural gas inlet volumes are expressed in million cubic feet; NGLs
production is expressed in thousands of gallons; and residue natural gas
production is expressed in million British Thermal Units.

    Prior to the acquisition of the ITAPCO Terminal Corporations facilities in
November 1997 and the Grasslands Facilities in December 1996, TransMontaigne's
revenues were derived from the logistical petroleum services business segment
consisting primarily of transporting refined petroleum products (and to a lesser
extent crude oil) in pipelines; storing and terminaling refined petroleum
products; and refined petroleum products supply, distribution and marketing.
Chemicals and other bulk liquids storage and terminaling became a component of
the logistical petroleum business segment following the ITAPCO Terminal
Corporations acquisition and will represent an important source of future
revenue. Natural gas gathering and processing services became a separate
business segment with the acquisition of the Grasslands Facilities and
significantly impacts TransMontaigne's results of 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 (the "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.

    Terminal revenues are based on the volume of refined petroleum products,
chemicals and other bulk liquids handled, generally at a standard per gallon fee
or negotiated bulk contract rate. Terminal fees are not regulated. Storage fees
are generally based on a per barrel rate, which varies with the

                                       22
<PAGE>
 
duration of the storage arrangement, the product stored and special handling
requirements particularly when certain types of chemicals and other bulk liquids
are involved. Storage fees are not regulated.
 
    Direct operating expenses of pipelines and terminals include wages and
employee benefits, utilities, communications, maintenance and repairs, property
taxes, rent, insurance, vehicle expenses, environmental protection costs,
materials and supplies.

    Products supply and distribution revenues are based on the volume of bulk
sales of refined petroleum products and the wholesale distribution of refined
petroleum products from terminals. Bulk purchase and sale transactions in
quantities of 25,000 barrels to 50,000 barrels are common and are generally made
at small margins. Wholesale distribution of refined petroleum products is
conducted from eight proprietary and seventy-one nonproprietary terminal truck
loading rack locations primarily by truck load sales of 8,000 gallons.

    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 NGLs
products, principally propane, butane and natural gasoline. These 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.
Residue natural gas is delivered to and marketed through connections with
interstate pipelines.

    Direct operating expenses of natural gas gathering and processing include
wages and employee benefits, utilities, maintenance and repairs, property taxes,
insurance, vehicle expenses, environmental protection costs, material and
supplies.

THREE MONTHS ENDED JANUARY 31, 1998 COMPARED TO
    THREE MONTHS ENDED JANUARY 31, 1997

    The net operating margin from pipeline operations of $1,724,000 increased
15%, or $219,000, in the current year quarter. This increase resulted primarily
from an 11% increase in revenues of $328,000, primarily due to increases in
joint tariff participation and a small increase in volumes of higher tariff long
haul pipeline shipments, notwithstanding an overall 3% volume decrease of
141,000 barrels, primarily in lower tariff short haul pipeline shipments. This
increase was partially offset by an 8%

                                       23
<PAGE>
 
increase in operating costs of $109,000 which was due to incremental power costs
from additional long haul shipment volumes and increased field personnel costs,
maintenance and vehicle expense.

     The net operating margin from terminal operations of $2,655,000 increased
259%, or $1,915,000, in the current year quarter. This increase resulted from an
overall 137% increase in refined petroleum products volumes handled and
10,000,000 gallons of chemicals and other bulk liquids not previously handled,
primarily due to the operations of the ITAPCO Terminal Corporations terminal
facilities acquired in November 1997; additional volumes at the East Chicago
terminal facility acquired in December 1996; and new jet fuel contract volumes
at the Indianapolis, Indiana terminal. These increases were offset in part by a
162% increase in terminal operating costs largely attributable to the ITAPCO
Terminal Corporations terminals operations; expanded East Chicago terminal
operations; a new terminal lease; additional freight charges on products; and
increased field personnel costs and maintenance expenses.

     The net operating margin from product sales of $2,403,000 increased 314%,
or $1,823,000, in the current year quarter. Revenues increased $118,634,000 or
36%, on additional volume of 317,000,000 gallons of products sold, an increase
of 65%. The $.0030 net operating margin per gallon realized in the current year
quarter increased $.0018, or 150%, from the $.0012 per gallon realized during
the prior year quarter. The significant increase in volumes and revenues was
attributable to TransMontaigne's continuing and expanding supply, distribution
and marketing program. The higher net operating margin in both dollars and per
gallon sold was positively impacted by strategic bulk sales transactions,
notwithstanding volatile refined petroleum product market conditions influenced
by the international political climate and atypical and erratic weather
patterns. Overall, the increased product sales volume contributed to the small
increase in long haul pipeline volumes and the large increase in terminal
throughput volumes, which resulted in increasing related revenues in the current
year quarter. By providing an integrated logistical service to customers through
the effective utilization of its transportation, storage and terminaling
facilities as well as its product supply, distribution and marketing
capabilities, TransMontaigne's aggregate net operating margin from the
logistical petroleum services business segment was $6,782,000 in the current
year quarter, an increase of $3,957,000, or 140%, over the prior year quarter.

     The net operating margin from natural gas gathering and processing
operations of $3,808,000 increased 54%, or 1,336,000 in the current year
quarter. Revenues increased $8,285,000 or 100% on

                                       24
<PAGE>
 
substantial increases in both NGLs and residue production. These increases were
primarily attributable to the business activities of the Grasslands Facilities,
and also include net operating margin contributions from the Marmarth, Baker,
Lignite and Wiggins natural gas gathering and processing facilities as well as
management fees from fifteen small natural gas gathering systems.

          The unaudited pro forma results of operations reflected in Note 3 to
the Consolidated Financial Statements include the pro forma historical operating
performance of the ITAPCO Terminal Corporations and Grasslands Facilities under
prior ownership and are presented for comparative purposes.  The pro forma
information includes historical ITAPCO Terminal Corporations revenues of
$2,850,000 for the three months ended January 31, 1998 representing an increase
of $255,000, or 10%, over pro forma historical revenues of $2,595,000 for the
prior year quarter and actual Grasslands Facilities revenues of $14,053,000 for
the three months ended January 31, 1998 representing a decrease of $1,759,000,
or 11%, over pro forma historical revenues of $15,812,000 for the prior year
quarter. The ITAPCO Terminal Corporations revenue increase for the current year
quarter was primarily due to increased storage volumes from facility
acquisitions and improved terminal storage utilization and the Grassland
Facilities revenue decrease for the current year quarter was primarily due to
depressed product prices for NGLs and residue natural gas. The ITAPCO Terminal
Corporations historical net operating margin from operations for the current
year quarter was $1,693,000, a 48% increase of $551,000 over the pro forma
historical net operating margin of $1,142,000 for the prior year quarter and the
Grassland Facilities actual net operating margin from operations for the current
year quarter was $3,387,000, a 35% decrease of $1,824,000 from the pro forma
historical net operating margin of $5,211,000 for the prior year quarter. The
ITAPCO Terminal Corporations net operating margin increase for the current year
quarter was primarily due to increased storage volumes from facility
acquisitions and improved terminal storage utilization and lower operating
expenses and the Grasslands Facilities net operating margin decrease for the
current year quarter was primarily due to the depressed product prices as well
as increased operating expenses.

          General and administrative expenses increased $1,879,000, a 101%
increase in the current year quarter, primarily due to additional personnel
costs. In addition, office lease expense increased as well as regulatory
reporting, travel, insurance, information systems and communication expenses.
Approximately $212,000, or 11%, of these expense increases was directly
attributable to the ITAPCO Terminal Corporations together with three months of
natural gas gathering and processing business 

                                       25
<PAGE>
 
activities included in the current year quarter and TransMontaigne's overall
expanded integrated logistical petroleum services.

          Other income in the current year quarter includes interest income of
$484,000.  In the prior year quarter other income included TransMontaigne's
share of Lion losses, net of related minority interests, of  approximately
$63,000 and  interest income of $399,000.  The $85,000 increase in interest
income in the current year quarter was due primarily to an increase in interest
bearing cash balances held for future investments.

          Interest expense represents interest on the TransMontaigne bank credit
facility and senior promissory notes which were used primarily to finance the
acquisitions of the ITAPCO Terminal Corporations in November, 1997 and
Grasslands Facilities in December, 1996, other continuing capital expenditures
and additional inventory.  Also included is interest on TransMontaigne senior
subordinated debentures.  Other financing costs principally include commitment
fees and amortization of debt acquisition costs paid in connection with the
credit facility.  Interest expense and financing costs during the current year
quarter increased $853,000, or 59%, of which $816,000 represented increased
interest expense over the prior year quarter primarily due to an increase of
approximately $41,000,000 in average outstanding debt over the prior year
quarter.

          Earnings before income taxes of TransMontaigne for the current year
quarter were $2,818,000, a 75% increase of $1,212,000 over the $1,606,000 for
the prior year quarter.  This improvement was primarily a result of the
aggregate increase in the logistical petroleum services business segment net
operating margin, including the additional contribution from the ITAPCO Terminal
Corporations acquisition; the positive impact of the net operating margin
contribution from the gas gathering and processing business segment attributable
essentially to the Grasslands Facilities operations; and additional interest
income.  These increases were partially offset by the increase in general and
administrative expenses, depreciation of $1,234,000, including $703,000
attributable to the Grassland Facilities and $253,000 attributable to the ITAPCO
Terminal Corporations and interest expense, primarily attributable to the
financing of the Grasslands Facilities and ITAPCO Terminal Corporations
acquisitions.
 
          Income tax expense for the current year quarter of $1,100,000 is based
upon estimated combined federal and state income tax, whereas only state income
tax of $180,000 was provided for the prior year 

                                       26
<PAGE>
 
quarter, an increase of 511% in the current year quarter. At April 30, 1997
TransMontaigne determined that its net deferred tax assets would more likely
than not be realized, and recognized an income tax benefit in the year ended
April 30, 1997 for the remaining balance of the previously recorded valuation
allowance. As a result of this prior year recognition of the net deferred tax
assets, deferred income tax expense of $770,000 and current federal and state
income tax expense of $330,000 were provided in the current year quarter against
net earnings before income tax.

          Net earnings of TransMontaigne for the current year quarter, after
providing for income taxes, were $1,718,000 compared to $1,426,000 for the prior
year quarter, an increase of 20%.

NINE MONTHS ENDED JANUARY 31, 1998 COMPARED TO
          NINE MONTHS ENDED JANUARY 31, 1997

          The net operating margin from pipeline operations of $5,155,000
increased 6%, or $270,000, in the current nine month period. This increase
resulted primarily from a 7% increase in revenues of $661,000, primarily due to
net increases in the volumes of higher tariff long haul pipeline shipments,
together with increases in joint tariff participation and terminal facility
rental income.  This increase was  partially offset by a 10% increase in
operating costs of $391,000 which was due to incremental power costs from
additional long haul shipment volumes and increased field personnel costs,
maintenance and vehicle expenses.

          The net operating margin from terminal operations of $5,550,000
increased 123%, or $3,062,000, in the current nine month period. This increase
resulted from an overall 92% increase in refined petroleum products volumes
handled and 10,000,000 gallons of chemical and other bulk liquids not previously
handled, primarily due to the operations of the ITAPCO Terminal Corporations
terminal facilities acquired in November 1997; additional volumes at the East
Chicago terminal facility acquired in December 1996; and new jet fuel contract
volumes at the Indianapolis, Indiana terminal.  These increases were offset in
part by an 148% increase in terminal operating costs largely attributable to the
ITAPCO Terminal Corporations terminals operations; expanded East Chicago
terminal operations; a new terminal lease; additional freight charges on
products; and increased field personnel costs and maintenance expenses.
 

                                       27
<PAGE>
 
          The net operating margin from product sales of $8,429,000 increased
102%, or $4,251,000, in the current nine month period. Net revenues increased
$622,020,000, or 79%, on additional volume of 1,236,000,000 gallons of products
sold, an increase of 100%. The $.0034 net operating margin per gallon realized
in the current nine month period was unchanged from the $.0034 per gallon
realized during the prior year nine month period. The significant increase in
volumes and revenues was attributable to TransMontaigne's continuing and
expanding supply, distribution and marketing program. The higher net operating
margin in dollars was positively impacted by strategic bulk sales transactions
in the quarter ended January 31, 1998, notwithstanding volatile refined
petroleum product market conditions influenced by the international political
climate and atypical and erratic weather patterns. Overall, however, the
increased product sales volume contributed to a small increase in long haul
pipeline volumes and a large increase terminal throughput volumes, which
resulted in increasing the related revenues in the current nine month period. By
providing an integrated logistical service to customers through the effective
utilization of its transportation, storage and terminaling facilities as well as
its product supply, distribution and marketing capabilities, TransMontaigne's
aggregate net operating margin from the logistical petroleum services business
segment was $19,134,000 in the current nine month period, an increase of
$7,583,000, or 66%, over the prior year nine month period.

          The net operating margin from natural gas gathering and processing
operations of $11,600,000 in the current nine month period is primarily
attributable to the business activities of the Grasslands Facilities, and also
includes net operating margin contributions from the Marmarth, Baker, Lignite
and Wiggins natural gas gathering and processing facilities as well as
management fees from fifteen small natural gas gathering systems.

          The unaudited pro forma results of operations reflected in Note 3 to
the Consolidated Financial Statements include the pro forma historical operating
performance of the ITAPCO Terminal Corporations and Grasslands Facilities under
prior ownership and are presented for comparative purposes. The pro forma
information includes historical ITAPCO Terminal Corporations revenues of
$9,159,000 for the nine months ended January 31, 1998 representing an increase
of $1,000,000, or 12%, over pro forma historical revenues of $8,159,000 for the
prior year nine month period and actual Grasslands Facilities revenues of
$41,283,000 for the nine months ended January 31, 1998 representing an increase
of $1,822,000, or 5%, over pro forma historical revenues of $39,461,000 for the
prior year nine month period. The ITAPCO Terminal Corporations revenue increase
for the current year nine month period was primarily due to increased storage
volumes from facility acquisitions during the 

                                       28
<PAGE>
 
period and improved terminal storage utilization and the Grassland Facilities
revenue increase for the current year nine month period was primarily due to an
increase in product volumes sold. The ITAPCO Terminal Corporations historical
net operating margin from operations for the current year nine month period was
$4,692,000, a 17% increase of $690,000 over the pro forma historical net
operating margin of $4,002,000 for the prior year nine month period and the
Grassland Facilities actual net operating margin from operations for the current
year nine month period was $10,569,000, an 8% decrease of $932,000 from the pro
forma historical net operating margin of $11,501,000 for the prior year nine
month period. The ITAPCO Terminal Corporations net operating margin increase for
the current year nine month period was primarily due to increased storage
volumes from facility acquisitions during the period and improved terminal
storage utilization, partially offset by higher operating expenses, and the
Grasslands Facilities net operating margin decrease for the current year nine
month period was primarily due to the depressed product prices as well as
increased operating expenses.
 
          General and administrative expenses increased $4,645,000, a 93%
increase in the current nine month period, primarily due to additional personnel
costs. In addition, office lease expense increased as well as employee
relocation, regulatory reporting, travel, insurance, information systems and
communication expenses. Approximately $212,000, or 5%, of these expense
increases was directly attributable to the ITAPCO Terminal Corporations,
together with nine months of natural gas gathering and processing business
activities included in the current year nine month period and TransMontaigne's
overall expanded integrated logistical petroleum services.

         Other income in the current year nine month period includes interest
income of $1,630,000.  In the prior year nine month period other income included
TransMontaigne's share of Lion earnings, net of related minority interests, of
approximately $211,000 and interest income of $1,292,000.  The $338,000 increase
in interest income in the current nine month period was due primarily to an
increase in interest bearing cash balances held for future investments.

          Interest expense represents interest on the TransMontaigne bank credit
facility and senior promissory notes which were used primarily to finance the
acquisitions of the ITAPCO Terminal Corporations in November, 1997 and
Grasslands Facilities in December, 1996, other continuing capital expenditures,
additional inventory and accounts receivable.  Also included is interest on
TransMontaigne senior subordinated debentures.  Other financing costs
principally include commitment fees and amortization of debt acquisition costs
paid in connection with the credit facility.  Interest expense and 

                                       29
<PAGE>
 
financing costs during the nine months ended increased $2,833,000, or 101%, of
which $2,586,000 represented increased interest expense over the prior year nine
month period primarily due to an increase of approximately $42,000,000 in
average outstanding debt over the prior year nine month period.
 
          Earnings before income taxes of TransMontaigne for the current nine
month period were $11,295,000, a 78% increase of $4,939,000 over the $6,356,000
for the prior year nine month period. This improvement was primarily a result of
the aggregate increase in the logistical petroleum services business segment net
operating margin, including the additional contribution from the ITAPCO Terminal
Corporations acquisition; the positive impact of the net operating margin
contribution from the gas gathering and processing business segment attributable
essentially to the inclusion of the Grasslands Facilities operations; and
additional interest income. These increases were partially offset by the
increase in general and administrative expenses, depreciation of $3,816,000,
including $2,969,000 attributable to the Grassland Facilities and $253,000
attributable to the ITAPCO Terminal Corporations and interest expense, primarily
attributable to the financing of the Grasslands Facilities and ITAPCO Terminal
Corporations acquisitions.

         Income tax expense for the current nine month period of $4,170,000 is
based upon estimated combined federal and state income tax, whereas only state
income tax of $450,000 was provided for the prior year nine month period, an
increase of 827% in the current year nine month period.  At April 30, 1997
TransMontaigne determined that its net deferred tax assets would more likely
than not be realized, and recognized an income tax benefit in the year ended
April 30, 1997 for the remaining balance of the previously recorded valuation
allowance.  As a result of this prior year recognition of the net deferred tax
assets, deferred income tax expense of $3,676,000 and current federal and state
income tax expense of $494,000 were provided in the current nine month period
against net earnings before income tax.

          Net earnings of TransMontaigne for the current nine month period,
after providing for income taxes, were $7,125,000 compared to $5,906,000 for the
prior year nine month period, an increase of 21%.

                                       30
<PAGE>
 
LIQUIDITY AND CAPITAL RESOURCES
                                                                                
          The following summary reflects TransMontaigne's comparative net cash
flows for the nine months ended January 31, 1998 and 1997.
<TABLE>
<CAPTION>
 
                                                    Nine Months Ended

                                                       January 31
                                          -----------------------------------
                                                 1998                1997
                                                 ----                ----
<S>                                       <C>                    <C>
Net cash (used) by operating activities   $   (3,149,000)        (22,374,000)
Net cash (used) by investing activities   $  (52,684,000)        (83,355,000)
Net cash provided by financing            $   60,271,000          95,494,000
 activities
</TABLE>
  
          Net cash used by operating activities in the current year nine month
period decreased $19,225,000 from the prior year nine month period.  This
decrease in net cash used, which represents an increase in net cash generated
over the prior year nine month period, resulted from increased net earnings,
depreciation and amortization and deferred income tax expense; decreased trade
receivables from refined petroleum products and NGLs sales; increased inventory
due under exchange agreements; and increased other accrued liabilities.
Partially offsetting the foregoing were increased inventories and decreased
trade accounts payable.

          Net cash used by investing activities in the current year nine month
period decreased $30,671,000 from the prior year nine month period. This
decrease in net cash used, which represents an increase in net cash generated
over the prior year nine month period, resulted from a decrease in capital
expenditures to $52,639,000 for additions and improvements to pipeline,
terminals and natural gas gathering and processing facilities, including
approximately $31,458,000 net of debt assumed for the acquisition of the ITAPCO
Terminal Corporations and approximately $10,000,000 for additions to the
Grassland Facilities.  During the prior year nine month period capital
expenditures were $85,421,000, of which approximately $73,782,000 was for
expansion of the Grasslands Facilities and other assets in the natural gas
gathering and processing business segment and $2,316,000 in cash was received in
connection with an acquisition.


                                       31
<PAGE>
 
          Net cash provided by financing activities in the current year nine
month period decreased $35,223,000 from the prior year nine month period.  This
decrease resulted primarily from a reduction in net long-term borrowings, during
the current year nine month period as compared to the prior year nine month
period which included the debt incurred for financing the Grasslands Facilities.
 
          EBITDA represents earnings before income taxes plus interest expense
and other financing costs and depreciation and amortization. Management uses
EBITDA as part of its overall assessment of TransMontaigne's performance by
analyzing and comparing EBITDA between reporting periods. Management believes
that, in addition to cash flow from operations and net earnings as indicators of
operating performance, EBITDA is used increasingly by the financial community to
measure operating effectiveness and as a method to evaluate the market value of
companies like TransMontaigne. EBITDA is also used to evaluate TransMontaigne's
ability to incur and service debt and to fund capital expenditures, although it
is not considered in isolation or a substitute for the other measurements of
performance and liquidity. EBITDA for the current year nine month period was
$22,704,000, a 104% increase over EBITDA of $11,115,000 for the prior year nine
month period, and was generally consistent with management's expectations, based
upon TransMontaigne operations, including the incremental EBITDA contributed by
the ITAPCO Terminal Corporations, and prevailing economic and market conditions.
Several anticipated sources of revenues which would have contributed additional
EBITDA in the current year nine month period were either delayed or did not
fully reach expected volume levels with the related impact on EBITDA offset in
part by the improved performance of the continuing operations. These delays and
reduced volumes are considered by management to be only temporary and should not
impact TransMontaigne's future operating performance. Achieving continued EBITDA
growth through acquisitions and internal expansion of existing facilities is a
primary objective of TransMontaigne.

          Capital expenditures during the current year nine month period were
$52,639,000 and for the year ending April 30, 1998 are estimated to be
approximately $65,000,000 for pipeline, terminal and natural gas gathering and
processing facilities, including assets to support these facilities, and
including the $32,000,000 expended in connection with the acquisition of the
ITAPCO Terminal Corporations in November, 1997.  On a regular basis management
identifies prospective asset acquisitions which are analyzed and evaluated to
determine their operational suitability and potential financial contribution to
TransMontaigne's cash flow, EBITDA and net earnings.  Future capital
expenditures will depend on numerous factors in addition to operating and
financial considerations, including the availability, 

                                       32
<PAGE>
 
economics and cost of appropriate asset acquisitions; the economics, cost and
required regulatory approvals of expanding and enhancing existing systems and
facilities; the demand for the services TransMontaigne provides; local, state
and federal governmental regulations; the evaluation of environmental
considerations and compliance requirements; fuel conservation efforts; and the
availability, to the extent required, of financing on acceptable terms.
 
          In February 1997, TransMontaigne closed a public offering of 4,357,000
shares of its common stock of which 4,035,000 shares were issued and sold by
TransMontaigne and 322,000 shares were sold by certain selling stockholders. The
net proceeds to TransMontaigne, based on the public offering price of $14.25 per
share, were $53,506,000 after deducting underwriting discounts and commissions
and offering costs, of which $45,000,000 was used to repay a portion of the 
long-term debt incurred under its bank credit facility and the balance added to
working capital. In March 1997 the underwriters' overallotment option to
purchase an additional 557,543 shares and the Merrill Lynch Growth Fund
antidilution right to purchase an additional 98,390 shares were both exercised
and TransMontaigne received additional net proceeds of $8,809,000 which was
added to working capital.
 
          The TransMontaigne bank credit facility at January 31, 1998 was an
$85,000,000 revolving credit facility with a money center bank due December 31,
2001.  The amount available under the bank credit facility is to be reduced by
$3,125,000 each calendar quarter beginning March 31, 2000.  Borrowings under the
bank credit facility generally bear interest at an annual rate equal to the
lender's announced Base Rate, subject to a Eurodollar pricing option at
TransMontaigne's election.  The interest rate at January 31, 1998 was 6.72%.
 
          At January 31, 1998, TransMontaigne had advances of $45,000,000
outstanding under the bank credit facility; $2,600,000 of the facility was used
to support a standby letter of credit to a bank to assist Lion in obtaining
financing.
 
          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 $100,000,000 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.
 

                                       33
<PAGE>
 
          At January 31, 1998, TransMontaigne had outstanding under the Master
Shelf Agreement, $50,000,000 of 7.85% and $25,000,000 of 7.22% Senior Notes due
2003 and 2004, respectively.

          The bank credit facility agreement and the Master Shelf Agreement
contain a negative pledge covenant by TransMontaigne and its subsidiaries and
are secured by the stock of the subsidiaries.  These agreements also include
financial tests relating to fixed charges coverage, leverage ratio, consolidated
tangible net worth, distributions and inventory positions.  At January 31, 1998,
TransMontaigne was in compliance with all of such tests.

          On March 16, 1998 TransMontaigne received a firm commitment from a
group of lenders led by BankBoston, N.A. to provide a new $175,000,000 revolving
line of credit facility to TransMontaigne due December 31, 2002. Borrowings
under the new credit facility will generally bear interest paid in arrears at an
annual rate equal to the lenders' announced rate on Alternate Base Rate loans,
subject to a Eurodollar Rate loan pricing election. In addition, a $10,000,000
same day swing line of credit will be made available to TransMontaigne under
which advances may be drawn at an interest rate less than on the Alternate Base
Rate loan. The new credit facility will contain a negative pledge covenant and
financial tests similar to the existing credit facility. The new credit facility
is scheduled to close on or before March 31, 1998.

          As of April 30, 1997, TransMontaigne's fiscal year end, approximately
$18,339,000 of net operating loss carryforwards for federal income tax purposes
were available to offset taxable income through 2010.  Due to changes in
ownership which occurred prior to April 30, 1997, the use of these net operating
loss carryforwards to offset taxable income is limited to approximately
$4,300,000 annually.  As a result of the merger in June 1996, TransMontaigne
acquired additional net operating loss carryforwards of approximately
$7,892,000, which are included in the aggregate net operating loss
carryforwards; are limited to approximately $1,300,000 annually; and a portion
of the tax benefit of which was recognized as a net reduction of goodwill
recorded in the acquisition.
 
          At January 31, 1998, TransMontaigne had working capital of
$99,054,000; availability under its bank credit facility of $37,400,000; and
additional borrowing capacity of $25,000,000 under the Master Shelf Agreement.
Management believes that TransMontaigne's current working capital position;
future cash provided by operating activities; proceeds from a private placement
or public offering of common stock; available borrowing permitted under its bank
credit facility agreement and the Master Shelf 

                                       34
<PAGE>
 
Agreement; additional borrowing allowed under those agreements; and its
relationship with institutional lenders and equity investors should enable
TransMontaigne to meet its future capital requirements.

NEW ACCOUNTING STANDARDS

          Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" ("SFAS 130") was issued in June 1997, by the Financial
Accounting Standard Board.  SFAS 130 established new standards which require
that changes in comprehensive income be shown in a financial statement that is
displayed with the same prominence as other financial statements.  This
statement is effective for fiscal years beginning after December 15, 1997.
TransMontaigne does not expect adoption of the SFAS 130 to have a material
effect on the presentation of its financial statements.
 
          Statement of Financial Accounting Standard No. 131, "Disclosures About
Segments of an Enterprise and Related Information" ("SFAS 131"), was issued in
June 1997, by the Financial Accounting Standard Board.  SFAS 131 established new
standards which change the way public companies report information about
segments.  This statement is based on the management approach to segment
reporting and requires companies to report selected quarterly segment
information and entity-wide disclosures about products and services, major
customers and geographic areas in which the entity holds assets and reports
revenues.  SFAS 131 is effective for financial statements for fiscal years
beginning after December 31, 1997.  TransMontaigne does not expect adoption of
the SFAS 131 to have a material effect on the presentation of its financial
statements.

EBITDA AS AN ALTERNATIVE MEASURE OF FINANCIAL PERFORMANCE

          EBITDA is earnings (loss) before income taxes plus interest expense
and other financing costs and depreciation and amortization.  TransMontaigne
believes that, in addition to cash flow from operations and net earnings (loss),
EBITDA is a useful financial performance measurement for assessing operating
performance since it provides an additional basis to evaluate the ability of
TransMontaigne to incur and service debt and to fund capital expenditures.  In
evaluating EBITDA, TransMontaigne believes that consideration should be given,
among other things, to the amount by which EBITDA exceeds interest expense for
the period; how EBITDA compares to principal repayments on debt for the period;
and how EBITDA compares to capital expenditures for the period.  To evaluate
EBITDA, the components of 

                                       35
<PAGE>
 
     EBITDA, such as revenue and operating expenses and the variability of such
components over time, should also be considered. EBITDA should not be construed,
however, as an alternative to operating income (loss), as determined in
accordance with generally accepted accounting principles (GAAP), as an indicator
of TransMontaigne's operating performance or to cash flows from operating
activities, as determined in accordance with GAAP, as a measure of liquidity.
TransMontaigne's method of calculating EBITDA may differ from methods used by
other companies, and as a result, EBITDA measures reported by TransMontaigne may
not be comparable to other similarly titled measures used by other companies.

                                       36
<PAGE>
 
PART II. OTHER INFORMATION
--------------------------

ITEM 1.   LEGAL PROCEEDINGS

Not applicable.

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

Not applicable

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

 
          (a)  Exhibits

               27  Financial Data Schedule.  FILED HEREWITH

          (b)  The following report on Form 8-K was filed during the quarter
               ended January 31, 1998 and is included in this Form 10-Q by
               reference:

               December 10, 1997, reporting Item 2 (acquisition by Registrant,
               through a wholly-owned subsidiary, of all of the outstanding
               shares of common stock of seventeen corporations, known as the
               "ITAPCO Terminal Corporations", from a common shareholder group
               and certain related property and property interests from
               Independent Terminal and Pipeline Company, a Texas joint venture,
               from certain individuals in the same group) and Item 7 (deferring
               filing of the historical and pro forma financial statements for
               the ITAPCO acquisition and attaching as Exhibit 2.1 a copy of the
               Offer to Purchase Stock and Certain Assets of the ITAPCO
               Corporations, together with Exhibits) of Form 8-K.
 
                                       37
<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:  March 16, 1998                   TRANSMONTAIGNE OIL COMPANY
                                         (Registrant)



                                         /s/ CORTLANDT S. DIETLER
                                         ------------------------------------
                                         Cortlandt S. Dietler
                                         Chairman and Chief Executive Officer



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

 

                                      38