<PAGE>
 
================================================================================

                                        

                                                                                
                    U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                  FORM 1O-QSB


            [X] Quarterly report under Section 13 or 15(d) of the 
                        Securities Exchange Act of 1934


               FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997


      [_] Transition report under Section 13 or 15(d) of the Exchange Act


           For the transition period from ___________ to ___________


                         Commission file number 1-9933


                           AMERAC ENERGY CORPORATION
       (Exact Name of Small Business Issuer as Specified in Its Charter)

                   DELAWARE                     75-2181442
       (State or Other Jurisdiction of       (I.R.S. Employer
       Incorporation or Organization)       Identification No.)


                           1201 LOUISIANA, SUITE 3350
                           HOUSTON, TEXAS 77002-5609
                    (Address of Principal Executive Offices)


                                 (713) 308-5250
                (Issuer's Telephone Number, Including Area Code)


   Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

Yes   [X]     No

   The number of shares of Common Stock, $0.05 par value, outstanding on October
31, 1997 was 3,891,981

   Traditional Small Business Disclosure Format (check one):

Yes   [X]     No


================================================================================
<PAGE>
 
                           AMERAC ENERGY CORPORATION

                          CONSOLIDATED BALANCE SHEETS

<TABLE> 
<CAPTION> 
                                                                 SEPTEMBER 30,  DECEMBER 31,
                                                                     1997          1996
                                                                 -------------  ------------
                                                                        (UNAUDITED)
                                     ASSETS
<S>                                                              <C>            <C>  
CURRENT ASSETS
 Cash and cash equivalents.....................................  $      53,000  $     712,000
 Receivables
   Trade and other, net of allowance for bad debts of $32,000..        338,000        327,000
   Gas and oil receivable......................................      1,001,000      1,451,000
   Prepaid expenses............................................        146,000        146,000
                                                                 -------------  -------------
     Total current assets......................................      1,538,000      2,636,000
                                                                 -------------  -------------
PROPERTY AND EQUIPMENT
   Oil and gas properties at cost..............................     32,770,000     32,290,000
   Less accumulated depreciation, depletion and amortization...    (15,050,000)   (12,949,000)
                                                                 -------------  -------------
     Net oil and gas properties................................     17,720,000     19,341,000

OTHER ASSETS...................................................        335,000        395,000
                                                                 -------------  -------------
TOTAL ASSETS...................................................  $  19,593,000  $  22,372,000
                                                                 =============  =============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
 Trade payables...............................................   $     314,000  $     199,000
 Accrued liabilities..........................................         288,000        527,000
 Current portion of long-term debt............................         579,000           ----
 Obligation under gas contract................................            ----        370,000
                                                                 -------------  -------------
     Total current liabilities................................       1,181,000      1,096,000
                                                                 -------------  -------------
LONG-TERM LIABILITIES
  Notes payable banks (less current portion)..................       7,250,000      7,704,000
  Other long-term liabilities.................................           8,000        140,000
                                                                 -------------  -------------
    Total long-term liabilities...............................       7,258,000      7,844,000
                                                                 -------------  -------------

COMMITMENTS AND CONTINGENT LIABILITIES (see Note 4)
         
STOCKHOLDERS' EQUITY
  Common stock, $0.05 par value; authorized - 20,000,000 
   shares; outstanding -3,891,981 shares at September 30, 1997
   and  3,883,526 shares at December 31, 1996.................         195,000        194,000
  Additional paid-in capital..................................     151,181,000    151,104,000
  Accumulated deficit.........................................    (140,222,000)  (137,866,000)
                                                                 -------------  -------------
   Total stockholders' equity...............................        11,154,000     13,432,000
                                                                 -------------  -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY..................     $  19,593,000  $  22,372,000
                                                                 =============  =============
</TABLE>

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

                                       1
<PAGE>
 
                           AMERAC ENERGY CORPORATION

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED               NINE MONTHS ENDED
                                                              SEPTEMBER 30,                   SEPTEMBER 30,
                                                       ---------------------------       -----------------------
                                                          1997            1996              1997         1996
                                                       ----------       ---------        ---------     ---------
<S>                                                    <C>              <C>              <C>           <C>  
REVENUES
 
Oil, gas and related product sales................... $ 1,889,000     $ 2,584,000      $ 7,206,000   $ 7,432,000
Other income.........................................       2,000          (4,000)          19,000        42,000
                                                      -----------     -----------      -----------   -----------
   Total revenues....................................   1,891,000       2,580,000        7,225,000     7,474,000
                                                      -----------     -----------      -----------   -----------
EXPENSES
Lease operating......................................     658,000         597,000        2,317,000     1,577,000
Exploration expenses, including dry hole costs.......      29,000          22,000          314,000        29,000
Provision for impairment of properties (see Note 2)..   1,573,000             ---        2,269,000           ---
Depreciation, depletion and amortization.............     733,000         699,000        2,144,000     1,693,000
General and administrative...........................     761,000         627,000        1,997,000     1,749,000
(Gain) Loss on sale of oil and gas properties........        ----            ----             ----      (124,000)
Interest.............................................     183,000         245,000          510,000       662,000
                                                      -----------     -----------      -----------   -----------
   Total expenses....................................   3,937,000       2,190,000        9,551,000     5,586,000
                                                      -----------     -----------      -----------   -----------
Income (loss)before income taxes.....................  (2,046,000)        390,000       (2,326,000)    1,888,000
Provision for federal income taxes...................         ---           5,000           30,000         5,000
                                                      -----------     -----------      -----------   -----------
NET INCOME (LOSS)....................................  (2,046,000)        385,000       (2,356,000)    1,883,000

Preferred dividends..................................         ----     (5,023,000)            ----    (5,434,000)
                                                      -----------     -----------      -----------   -----------
INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS...... $(2,046,000)    $(4,638,000)     $(2,356,000)  $(3,551,000)
                                                      ===========     ===========      ===========   ===========
INCOME (LOSS) PER COMMON SHARE
  (as adjusted, see Note 1).......................... $      (.53)    $     (1.64)     $      (.61)  $     (1.75)
                                                      ===========     ===========      ===========   ===========
AVERAGE COMMON SHARES AND EQUIVALENTS
  outstanding (as adjusted, see Note 1)..............   3,889,000       2,828,000        3,886,000     2,031,000
                                                      ===========     ===========      ===========   ===========
</TABLE> 

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

                                       2
<PAGE>
 
                           AMERAC ENERGY CORPORATION
                                        
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                        
                                  (UNAUDITED)

<TABLE> 
<CAPTION> 
                                                                NINE MONTHS ENDED SEPTEMBER 30,
                                                                -------------------------------
                                                                     1997             1996
                                                                --------------     ------------
<S>                                                             <C>                 <C>          
CASH FLOW FROM OPERATING ACTIVITIES
 Net income (loss)............................................  $  (2,356,000)  $    1,883,000
 Adjustments needed to reconcile net income to net cash flow
   provided by operating activities
   Depreciation, depletion and amortization...................      2,144,000        1,693,000
   Exploration expenses, including dry holes and impairments..      2,071,000           29,000
   Gain on sale of properties.................................           ----         (124,000)
   Stock issued for compensation..............................         50,000          180,000
   Recognition of deferred revenue............................       (370,000)        (105,000)
   Other......................................................        (44,000)            ----
   Changes in operating assets and liabilities:
     Oil and gas receivables and other........................        438,000         (931,000)
     Trade payables...........................................        115,000           72,000
     Accrued and other long-term liabilities..................       (372,000)         (84,000)
                                                                   ----------      -----------
NET CASH FLOW PROVIDED BY OPERATING ACTIVITIES................      1,676,000        2,613,000
                                                                   ----------      -----------
CASH FLOW FROM INVESTING ACTIVITIES
 Proceeds from sale of assets.................................           ----        1,281,000
 Oil and gas acquisitions and expenditures....................     (2,486,000)     (12,995,000)
 Other........................................................         19,000         (268,000)
                                                                   ----------      -----------
NET CASH USED FOR INVESTING ACTIVITIES........................     (2,467,000)     (11,982,000)
                                                                   ----------      -----------
CASH FLOW FROM FINANCING ACTIVITIES
 Bank borrowings, net.........................................        125,000        8,951,000
 Sale of common stock.........................................           ----          364,000
 Other........................................................          7,000           10,000
                                                                   ----------      -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES.....................        132,000        9,325,000
                                                                   ----------      -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS..........       (659,000)         (44,000)
 Cash and cash equivalents at beginning of period.............        712,000          144,000
                                                                   ----------      -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD....................  $      53,000   $      100,000
                                                                   ==========      ===========
</TABLE>

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

                                       3
<PAGE>
 
                           AMERAC ENERGY CORPORATION

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                    DECEMBER 31, 1996 TO SEPTEMBER 30, 1997
                                  (UNAUDITED)


<TABLE>
<CAPTION>
 
 
                                         COMMON SHARES       
                                       ($0.05 PAR VALUE)     ADDITIONAL    
                                      --------------------    PAID-IN      ACCUMULATED
                                       SHARES      AMOUNT     CAPITAL        DEFICIT         TOTAL
                                      ---------   --------  ------------  -------------   -----------
<S>                                   <C>         <C>         <C>          <C>            <C> 
BALANCE - DECEMBER 31, 1996.........  3,883,526   $194,000  $151,104,000  $(137,866,000)  $13,432,000
  Stock issued for director's fees..      8,295      1,000        50,000           ----        51,000
  Options exercised.................      2,667       ----         7,000           ----         7,000
  Net income........................       ----       ----          ----     (2,356,000)   (2,356,000)
  Other.............................     (2,507)      ----        20,000           ----        20,000
                                      ---------   --------  ------------  -------------   -----------
BALANCE - SEPTEMBER 30, 1997........  3,891,981   $195,000  $151,181,000  $(140,222,000)  $11,154,000
                                      =========   ========  ============  =============   ===========
</TABLE>


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

                                       4
<PAGE>
 
                           AMERAC ENERGY CORPORATION

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


1.  BASIS OF PRESENTATION

    The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB of the Securities
and Exchange Commission.  In the opinion of management, all normal and recurring
adjustments necessary for a fair presentation of results of operations and
financial position for the interim periods have been included.  The results of
operations for the interim periods shown in this report are not necessarily
indicative of results to be expected for the year or any other interim period.
These financial statements and notes should be read in conjunction with Amerac
Energy Corporation's (the "Company") annual report for the year ended December
31, 1996.

    Earnings per share and weighted average common shares outstanding for the
three and nine months ended September 30, 1996, have been retroactively restated
to reflect the one for fifteen reverse Common Stock split approved by the
Company's stockholders in November 1996.

    Certain prior year amounts have been reclassified to conform with the
current year presentation.


2.  IMPAIRMENTS

    The Company follows the successful efforts method of accounting for its oil
and gas operations, as prescribed in Statement of Financial Accounting Standards
("SFAS") 19 issued by the Financial Accounting Standards Board.  Under the
successful efforts method, costs of productive wells, development dry holes and
productive leases are capitalized and amortized on a unit-of-production basis
over the life of remaining proved reserves.  Costs centers for amortization
purposes are determined on a field-by-field basis.

    Prior to January 1, 1996, capitalized costs of proved properties were
reviewed for impairment on a field-by-field basis limiting capitalized costs to
estimated future net revenues from proved properties, assuming current prices
and costs.  Commencing January 1, 1996, the Company adopted SFAS 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of".  Pursuant to SFAS 121, the Company assesses the need for an
impairment of capitalized costs of proved oil and gas properties on a field-by-
field basis utilizing undiscounted expected future cash flows.  If an impairment
is indicated, the amount of such impairment is recognized to the extent that the
net capitalized costs of the proved oil and gas properties exceeds the fair
market value so determined.

    Based on such an assessment, the Company has recorded a Provision for
impairment for the nine months ended September 30, 1997 of $2,269,000. This
provision primarily was attributable to the $534,000 non-cash write off in the
second quarter of 1997 of the Company's Sacatosa project and a $1,523,000 non-
cash write-down of the Company's Blackwell/RQS field in the third quarter of
1997.

                                       5
<PAGE>
 
                           AMERAC ENERGY CORPORATION

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)



3.  SUPPLEMENTAL CASH FLOW INFORMATION
<TABLE> 
<CAPTION> 
                                                         NINE MONTHS ENDED SEPTEMBER 30,
                                                         -------------------------------
                                                             1997             1996
                                                         ------------      -------------
<S>                                                          <C>            <C>
   Cash payments for:
     Interest..............................................  $  510,000  $    662,000
     Income taxes..........................................      60,000         5,000
   Non-cash investing and financing activities:
     Senior Preferred Stock dividends......................        ----     5,434,000
     Compensation paid in Common Stock.....................      50,000       180,000
     Approximate value of Common Stock issued for Fremont
       acquisition.........................................        ----       640,000
 
</TABLE>


4.  CONTINGENCIES
 
    The Company has a reserve established for the estimated costs associated
with platform abandonment at its South Timbalier 198 property. At September 30,
1997, the reserve for such abandonment was $454,000, compared with $389,000 at
December 31, 1996. Such amounts are included in Accumulated Depreciation,
Depletion and Amortization.

    The Company is subject to various possible contingencies which arise
primarily from interpretation of federal and state laws and regulations
affecting the oil and gas industry. Such contingencies include differing
interpretations as to the prices at which oil and gas sales may be made, the
prices at which royalty owners may be paid for production from their leases and
other matters. Although management believes it has complied with the various
laws and regulations, administrative rulings and interpretations thereof,
adjustment could be required as new interpretations and regulations are issued.
In addition, production rates, marketing and environmental matters are subject
to regulation by various federal and state agencies.

    The Company is not currently a party to any litigation which would have a
material impact on its financial statements.  However, due to the nature of its
business, certain legal or administrative proceedings may arise in the ordinary
course of its business.

                                       6
<PAGE>
 
                           AMERAC ENERGY CORPORATION

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                        

RESULTS OF OPERATIONS

Three Months Ended September 30, 1997, Compared With Three Months Ended
September 30, 1996

  The Company reported a loss of $2,046,000 for the three months ended September
30, 1997, compared with net income of $385,000 for the three months ended
September 30, 1996.  This loss primarily was attributable to a $1,523,000 non-
cash impairment of the Blackwell/RQS field and, to a lesser extent, to lower
revenues for both oil and natural gas and to generally higher expenses.

  Oil and gas revenues decreased from approximately $2.6 million during the
third quarter of 1996 to approximately $1.9 million during the third quarter of
1997, primarily due to lower volumes and lower realized prices.  The decline in
production volumes was due primarily to lower natural gas production at the
Company's South Timbalier 198.  The primary well at South Timbalier began to
produce water during December of 1996, and net production declined from
approximately 382,200 thousand cubic feet ("Mcf") of natural gas during the
third quarter of 1996 to approximately 259,300 Mcf of natural gas during the
third quarter of 1997.

  During the third quarter of 1997, the Company's net production was
approximately 40,000 barrels ("Bbls") of oil and 566,600 Mcf of natural gas,
compared with approximately 48,800 Bbls of oil and 649,200 Mcf of natural gas
produced during the third quarter of 1996.

  The Company's average realized prices during the third quarter of 1997 were
$17.23 per Bbl of oil and $2.12 per Mcf of natural gas.  During the three months
ended September 30, 1996, the Company's realized prices for oil and natural gas
were $20.42 per Bbl and $2.37 per Mcf, respectively.

  Lease operating expense increased from $597,000 in the third quarter of 1996
to $658,000 in the third quarter of 1997.  This increase is attributable to
higher lease operating expense per unit of production and to workovers of
approximately $55,000 incurred in the third quarter of 1997.

  Provision for impairments for the three months ended September 30, 1997 was
$1,573,000, compared with no provision for the comparable period of 1996.  This
provision was essentially attributable to a $1,523,000 non-cash write-down of
the Company's Blackwell/RQS field, resulting from unsuccessful or marginal
drilling activity in the field and the subsequent downward evaluation of the
field's reserves.

  Depreciation, depletion and amortization ("DD&A") expense increased from
approximately $699,000 during the third quarter of 1996 to approximately
$733,000 during the third quarter of 1997.  This increase was due primarily to a
revision in the DD&A rate in the third quarter of 1997 and to additional
investments in oil and gas properties made subsequent to the third quarter of
1996.

  General and administrative expenses increased from approximately $627,000 in
the third quarter of 1996 to approximately $761,000 in the third quarter of
1997, primarily as a result of increased staffing due to property acquisitions
made in 1996.  This increase was partially offset by overhead billed by the
Company to other working interest owners and reimbursement of general and
administrative costs by certain of the Company's joint interest partners.

  Interest expense decreased from approximately $245,000 in the third quarter of
1996 to approximately $183,000 in the third quarter of 1997, primarily as a
result of lower levels of bank debt outstanding during the third quarter of
1997.

                                       7
<PAGE>
 
                           AMERAC ENERGY CORPORATION

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Nine Months Ended September 30, 1997, Compared With Nine Months Ended September
30, 1996

  The Company reported a net loss of $2,356,000 for the nine months ended
September 30, 1997, compared with net income of $1,883,000 for the nine months
ended September 30, 1996. This nine month loss was attributable primarily to an
aggregate of $2,980,000 of increases in expenses comprised of increases in:
Provision for impairments ($2,269,000); Exploration expenses ($285,000),
primarily geological and geophysical; and workovers, a component of Lease
operating expense, ($426,000).

  Oil and gas revenues decreased from approximately $7.4 million for the nine
months ended September  30, 1996 to approximately $7.2 million for the nine
months ended September 30, 1997.  This decrease was primarily the result of
lower production due to production declines in various of the Company's
properties, which was partially offset by production from properties acquired
during the third quarter of 1996.

  During the nine months ended September 30, 1997, the Company's net production
was approximately 140,900 Bbls of oil and 1,898,900 Mcf of natural gas.  During
the comparable period of 1996, the Company's net production was approximately
142,000 Bbls of oil and 2,102,400 Mcf of natural gas.

  During the nine months ended September 30, 1997, the Company's average
realized price for oil was $19.76 per Bbl and for natural gas was $2.33 per Mcf,
compared with prices during the nine months ended September 30, 1996 of $19.96
per Bbl of oil and $2.37 per Mcf of natural gas.

  Lease operating expense increased from approximately $1.6 million for the nine
months ended September 30, 1996 to approximately $2.3 million for the nine
months ended September 30, 1997.  This increase primarily is attributable to
approximately $426,000 of workover expense incurred in the 1997 period, compared
with less than $1,000 of workover expense incurred during the comparable period
of 1996.  Additionally, higher lease operating expense resulted from costs
incurred in operating oil and gas properties acquired during the third quarter
of 1996.

  Exploratory costs increased from approximately $29,000 for the nine months
ended September 30, 1996 to approximately $314,000 for the nine months ended
September 30, 1997.  This increase primarily was attributable to increases in
geological and geophysical costs incurred in connection with the Company's
prospect development activities in the Easter Shelf of the Permian Basin.

  Provision for impairments for the nine months ended September 30, 1997 was
$2,269,000, compared with no provision during the comparable period of 1996.
This provision was attributable primarily to the $534,000 non-cash write-off in
the second quarter of 1997 of the Company's Sacatosa project and to a $1,523,000
non-cash write-down of the Company's Blackwell/RQS field in the third quarter of
1997.

  DD&A expense for the  nine months ended September 30, 1997 was approximately
$2.1 million, exceeding the approximate $1.7 million reported for the comparable
period in 1996. This increase was due primarily to a revision in the DD&A rate
in the third quarter of 1997 and to additional investments in oil and gas
properties made subsequent to the third quarter of 1996.

  General and administrative expenses increased from approximately $1.7 million
for the nine months ended September 30, 1996 to approximately $2.0 million for
the nine months ended September 30, 1997.  This increase was primarily
attributable to increased salaries and benefits expense due to the hiring of
additional employees subsequent to the third quarter of 1996; costs incurred in
connection with listing of its Common Stock on the American Stock Exchange; and
the preparation of a "shelf" registration statement, as required by agreements
with certain stockholders.  These increases were partially offset by overhead
billed by the Company to other working interest owners/partners.

                                       8
<PAGE>
 
                           AMERAC ENERGY CORPORATION

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS



  Interest expense decreased from approximately $662,000 for the nine months
ended September 30, 1996 to approximately $510,000 for the nine months ended
September 30, 1997, primarily as a result of lower levels of bank debt
outstanding during the comparable 1997 period.

DRILLING AND DEVELOPMENT ACTIVITIES

  In September 1997, the Company announced that it had revised upward its proved
undeveloped reserves in the Golden Trend Field in Garvin County, Oklahoma with
the identification of ten additional proved undeveloped drilling locations in
the field.  The gross drilling and completion cost per well is approximately
$700,000, and if all ten wells are drilled and completed, the Company's
estimated share of the aggregate drilling and completion costs would be
approximately $5.8 million.  The Company has not yet formalized a timetable for
drilling these proved undeveloped locations.


LIQUIDITY AND CAPITAL RESOURCES

  During the first nine months of 1997, the Company generated cash flow from
operations of approximately $1.7 million and had net borrowings of $125,000,
which were used primarily to fund its exploration and development drilling
activities.  At the end of the third quarter of 1997, the Company had
outstanding debt of approximately $7.8 million under its bank credit facility.
Effective August 1, 1997, the Company's borrowing base was increased to $10.5
million, which decreases $250,000 on the first day of each month, commencing
September 1, 1997.  The Company's borrowing base at September 30, 1997 was
approximately $10.2 million, providing available borrowing capacity of
approximately $2.4 million.  At November 14, 1997, the Company's borrowing base
was approximately $9.8 million, which with bank debt of $8.3 million provided
the Company with borrowing capacity of approximately $1.5 million.


  The Company's working capital position at September 30, 1997 was $357,000,
down from approximately $1.5 million of working capital reported at December 31,
1996.  Working capital at June 30, 1997 was approximately $1.6 million.  The
decline primarily was attributable to a reclassification of $579,000 in long-
term debt to current maturities during the third quarter of 1997 and to the
reduction of cash to pay for the Company's drilling and other development
activities.  The Company expects to further draw on its working capital which,
together with additional bank borrowing, will be used to fund the Company's
participation in drilling and other development activities anticipated during
the fourth quarter of 1997.  The Company believes it has sufficient borrowing
capacity, together with internally generated cash flow, to fund its fourth
quarter drilling and other development plans.

  In early 1998, the Company anticipates it will need additional funds to
augment internally generated cash flow to fund its operations and capital
spending plans.  The Company may seek to raise such additional funds through
supplemental bank borrowing, mezzanine financing, sale of production payments or
equity offerings, or some combination of the foregoing, or through a merger with
an adequately capitalized merger partner.  However, there is no assurance the
Company will be successful in obtaining any such additional financing or in
consummating any such merger.


RECENT DEVELOPMENTS

  In September, the Company announced that pursuant to a previously announced
plan to consider alternatives for maximizing shareholder value, its Board of
Directors authorized and had initiated discussions with a select group of
companies regarding a possible strategic merger or similar business combination.
The Company's financial advisor recommended this course of action as a result of
their analysis of the various options available to the Company.

                                       9
<PAGE>
 
                           AMERAC ENERGY CORPORATION

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS


NEW ACCOUNTING STANDARDS

  In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128").  SFAS
128 requires dual presentation of "basic earnings per share" and "diluted
earnings per share" on the face of the Consolidated Statement of Operations.
SFAS 128 will be effective for fiscal yearend reporting and requires restatement
of all prior period earnings per share data presented.  The impact of adopting
this statement in not expected to have a material effect on the Company's
earnings per share.

FORWARD-LOOKING STATEMENTS

  When included in this report, the words "expects," "intends," "plans,"
"anticipates," "estimates," and analogous expressions are intended to identify
forward-looking statements.  Such statements inherently are subject to a variety
of risks and uncertainties that could cause actual results to differ materially
from those projected.  Such risks and uncertainties include, among others,
general economic and business conditions, changes in foreign and domestic oil
and gas exploration and production activity, information regarding oil and gas
reserves, future drilling and operations, future production of oil and gas,
future net cash flows, competition, changes in foreign, political, social and
economic conditions, regulatory initiatives and compliance with governmental
regulations, and various other matters, many of which are beyond the Company's
control.  These forward-looking statements speak only as of the date of this
report.  The Company expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any forward-looking statement
contained herein to reflect any changes in the Company's expectations with
regard thereto or any changes in events, conditions or circumstances on which
any such statement is based.

                                       10
<PAGE>
 
                                    PART II
                               OTHER INFORMATION
                                        

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

  See Exhibit Index following this page.

  A report on Form 8-K was filed on September 24, 1997 reporting the Company had
issued a press release on September 22, 1997 announcing that its Board of
Directors had authorized the initiation of discussions with a select group of
companies regarding a possible strategic merger or similar business combination.
The Company also announced that it was revising upward its proved undeveloped
reserves in the Golden Trend Field in Garvin County, Oklahoma.



                                   SIGNATURE

  In accordance with the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, hereunto duly authorized.


                                          AMERAC ENERGY CORPORATION
                                                (Registrant)
 


                                                  /s/ Jeffrey B. Robinson
                                          -------------------------------------
Date:  November 14, 1997                        Jeffrey B. Robinson
                                          President and Chief Executive Officer

                                       11
<PAGE>
 
                                 EXHIBIT INDEX


3-(1)  Certificate of Incorporation of Wolverine Exploration Company
       (incorporated by reference to Exhibit 3-(1) to the Company's Registration
       Statement No. 33-21824 filed May 13, 1988).

3-(2)  Amendment to Certificate of Incorporation of Wolverine Exploration
       Company dated September 12, 1988 (incorporated by reference to Exhibit 3-
       (1)(a) to the Company's Registration Statement No. 33-24429 filed
       September 28, 1988).

3-(3)  Amendment to Certificate of Incorporation of Wolverine Exploration
       Company, dated March 16, 1995 (filed herewith).

3-(4)  Amendment to Certificate of Incorporation of Wolverine Exploration
       Company dated March 28, 1995 (incorporated by reference to Annex IV to
       Exhibit (a)(1) to the Company's Schedule 13E-4, dated November 15, 1994).

3-(5)  Amendment to Certificate of Incorporation of Amerac Energy Corporation
       dated July 12, 1996 (incorporated by reference to Exhibit 4(i).4 to the
       Company's Current Report on Form 8-K dated February 28, 1997).

3-(6)  Amendment to Certificate of Incorporation of Amerac Energy Corporation
       dated July 12, 1996 (incorporated by reference to Exhibit 4(i).5 to the
       Company's Current Report on Form 8-K dated February 28, 1997).

3-(7)  Amendment to Certificate of Incorporation of Amerac Energy Corporation
       dated November 20, 1996 (incorporated by reference to Exhibit 4(i).6 to
       the Company's Current Report on Form 8-K dated February 28, 1997).

3-(8)  Corporate Bylaws (filed herewith).

4-(1)  Warrant Agreement, dated November 18, 1996, between Amerac Energy
       Corporation and Petroleum Financial, Inc. (incorporated by reference to
       Exhibit 4(I).8 to the Company's Registration Statement No. 333-24643
       filed April 4, 1997).

4-(2)  Form of Warrant (incorporated by reference to Exhibit I to the Warrant
       Agreement referred to in Exhibit 4-(1)).

4-(3)  Registration Rights Agreement, dated November 18, 1996, between Amerac
       Energy Corporation and the party identified therein. A document identical
       to this document, except for the name of the Holder and the Holder's
       address for notices, was entered into by the Company with each purchaser
       of Common Stock in the Company's private sale of Common Stock completed
       on November 18, 1996 (incorporated by reference to Exhibit 4(I).10 to the
       Company's Registration Statement No. 333-24643 filed April 4, 1997).

4-(4)  Form of Warrant Agreement (incorporated by reference to Exhibit VI to the
       Exploitation Agreement filed as Exhibit 10-(11) to the Company's Current
       Report on Form 8-K, dated February 28, 1997).

4-(5)  Form of Warrant (incorporated by reference to Exhibit I to the Form of
       Warrant Agreement referred to in Exhibit 4-(4)).

4-(6)  Form of Registration Rights Agreement (incorporated by reference to
       Exhibit VII to the Exploitation Agreement filed as Exhibit 10-(11) to the
       Company's Current Report on Form 8-K, dated February 28, 1997)).

4-(7)  Registration Rights Agreement, dated January 16, 1996 among Amerac Energy
       Corporation, Powell Resources, Inc., The Langstroth Family Limited I,
       Thomas O. Goldsworthy and James B. Tollerton. Related to acquisition of
       Fremont Energy Corporation Properties (incorporated by reference to
       exhibit 10-(10) to Form 10-K for the fiscal year ended December 31,
       1995).

10-(1) Agreement between the Company and William P. Nicoletti, dated October
       20, 1997 (filed herewith).

10-(1) Agreement between the Company and Peak Enernomics, Inc., dated October
       20, 1997 (filed herewith).

27     Financial Data Schedule

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