EXHIBIT 13

MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER  MATTERS

Principal Market

The  Company's  common  stock,  par  value  $.01 per  share,  is  traded  on the
NASDAQ/National Market System under the symbol "MAVK." Prior to October 5, 1994,
the Company's shares were listed on the American Stock Exchange.

Stock Price and Dividend Information

The high and low closing  sales prices on the  NASDAQ/National  Market System of
the Company's Common Stock during the first,  second,  third and fourth quarters
of fiscal 1997 and fiscal 1996, respectively, were as follows:
                                    Fiscal 1997                Fiscal 1996
         Quarter                    High    Low               High     Low

         First                    8 1/4    5 5/8             4 1/16   3 1/16
         Second                   9 1/2    6 1/8             6 1/8    3 11/16
         Third                   19 3/8    8 3/4             6 3/4    5 9/16
         Fourth                  41 3/4   17 1/8             7 5/16   5 1/4

The Company has not  declared or paid cash  dividends  on its common stock since
its  incorporation.  The Company currently intends to retain earnings to finance
the growth and  development of its business and does not anticipate  paying cash
dividends in the near future.  Any payment of cash  dividends in the future will
depend upon the financial  condition,  capital  requirements and earnings of the
Company as well as other factors the Board of Directors may deem  relevant.  The
Company's loan agreement with commercial lenders restricts the Company's ability
to pay dividends to its stockholders.

Approximate Number of Holders of Common Stock

There were 134 holders of record of the  Company's  common stock as of September
30, 1997.

                    Maverick Tube Corporation and Subsidiary

                        Historical Financial Information

The  following   selected   financial   data  are  derived  from  the  Company's
consolidated financial statements, which have been audited by Ernst & Young LLP,
independent  auditors.  The selected data should be read in conjunction with the
consolidated financial statements, related notes and other financial information
included herein.

<TABLE>
<CAPTION>
                                                           Year Ended September 30
                                           1997          1996(2)        1995(1)          1994         1993
                                                     (in thousands, except share data)
<S>                                      <C>           <C>             <C>            <C>           <C>   

Statement of Operations Data:
Net sales                                $291,060      $204,182        $167,896       $124,843      $133,729
Cost of goods sold                        252,803       182,042         159,865        117,833       121,596
Gross profit                               38,257        22,140           8,031          7,010        12,133
Selling, general and administrative        13,966        10,198           7,728          4,896         6,059
Structural start-up costs                      --            --             245            392            --
Relocation and restructuring costs             --            --              --             --           744
Income from operations                     24,291        11,942              58          1,722         5,330
Interest expense                            2,067         2,522           3,164          1,125           861
Other income                                   --            --             772             --            --
Income (loss) before income taxes          22,224         9,420          (2,334)           597         4,469
Provision for income taxes                  7,339         1,882              --            168           894
Net income (loss)                         $14,885        $7,538         $(2,334)          $429         3,575
Net income (loss) per common and
   common equivalent share (3)              $0.97         $0.51          $(0.16)         $0.04         $0.29

Weighted average common and common
   equivalent shares outstanding (3)   15,281,653    15,000,812      14,920,274     12,844,822    12,355,994

Other Data:
Depreciation and amortization               5,697         5,201           4,691          3,395         3,055
Capital expenditures                        9,537         5,497           5,592         20,759        11,730

Balance Sheet Data:
(End of period)
Working capital                            44,992        32,652          30,272         23,111        20,960
Total assets                              162,064       125,556         106,494         99,434        78,124
Revolving credit facility                  10,000        13,250          15,000          4,000         5,000
Current maturities of long-term debt          604         1,843           2,795          1,880         1,216
Long-term debt (less current maturities)    8,879        11,901          18,045         19,640        11,670
Stockholders' equity                       77,868        57,247          49,503         51,837        42,693
<FN>

(1)   Includes  the first  period  of  results  of  operation  of the  Company's
      structural tube facility which began operations in October, 1994.
(2)   Includes the one-time  effect of the change in accounting  practice  which
      resulted in a reduction  in net sales,  gross  profit,  net income and net
      income per common and common  equivalent share of $8,700,000,  $1,000,000,
      $839,000 and $0.06, respectively.
(3)   On August 1,  1997,  the  Company  declared  a two for one stock  dividend
      effective  in the form of a 100% stock  dividend  to all  stockholders  of
      record as of August 12,  1997.  All share and per share  amounts have been
      restated to reflect this stock dividend.
</FN>
</TABLE>


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

Certain  statements  contained in the  "Management's  Discussion and Analysis of
Financial  Condition and Results of Operations"  regarding  matters that are not
historical facts (including  statements as to the beliefs or expectations of the
Company) are forward-looking statements. Because such forward-looking statements
include risks and uncertainties, actual results may differ materially from those
expressed  or  implied  by  such   forward-looking   statements.   For  example,
uncertainty continues to exist as to future levels and volatility of oil and gas
price  expectations  and their  effect on  drilling  levels  and  demand for the
Company's energy-related products, the future impact of industry-wide draw-downs
of inventories and future import levels. Uncertainty also exists as to the trend
and direction of both product  pricing and purchased  steel costs.  Reference is
made to the "Risk Factors" discussed in Exhibit 99.1 of Maverick's Form 10-K for
its fiscal year ended September 30, 1997.

OVERVIEW

The Company's  products consist of ERW Oil Country Tubular Goods (OCTG) and line
pipe which are sold primarily to distributors who supply end users in the energy
industry,  and  structural  tubing and standard pipe which are sold primarily to
distributors who supply end users in construction,  transportation,  agriculture
and other  industrial  uses.  Demand for the Company's  energy related  products
depends  primarily upon the number of oil and natural gas wells being drilled in
the United States and Canada,  the depth and drilling  conditions of these wells
and the number of well completions, which are in turn primarily dependent on oil
and natural gas prices. Domestic consumption of OCTG is supplied by domestic and
foreign  pipe  producers  and  draw  downs  of  existing   inventories  held  by
distributors and end users. Demand for the Company's industrial related products
depends on the general level of economic  activity in the United States and draw
downs of existing inventories.

According  to  published  reports,  domestic  drilling,  the  primary  factor in
determining demand for the Company's OCTG products,  increased in fiscal 1997 by
19.2% from fiscal 1996.  Significant factors in this improvement in drilling was
an 18.5%  increase in gas related  drilling and a 23.6% increase in drilling for
oil. Energy prices improved for the year with oil up 7.9% and gas up 10.8%.  The
increases in energy prices had a positive affect on drilling levels.  At the end
of fiscal 1997, drilling was at 998 rigs, up 21.4% from its fiscal 1996 year end
level.  Energy  prices  were  mixed,  with  oil  down  16.9%  and gas up  54.4%.
Management  estimates  that  consumption  of OCTG rose faster than the  drilling
rates by an estimated  21.4% during fiscal 1997 due to increased rig  efficiency
and higher completion rates. Published information suggests that demand for line
pipe was also up during fiscal 1997 by an estimated 17.9%.

Competition from imports increased  significantly  during fiscal 1997 from 11.1%
in  1996  to  17.2%.   Management  believes  that  this  increase  is  primarily
attributable  to higher OCTG  prices in the United  States.  Industry  inventory
build  positively  impacted  demand,  as  increases in  inventories  resulted in
additional  demand of 14.2% of total domestic OCTG shipments as compared to 4.6%
in fiscal 1996.  Management  believes that  inventories  remain at low levels in
relation  to  current  consumption  rates,  as  inventories  per rig  have  only
increased by approximately 5%.

As a result of increased drilling activity,  increased inventories and increased
consumption per rig offset somewhat by increased imports,  management  estimates
that  total  domestic  shipments  of OCTG rose  during  fiscal  1997 by 29.0% as
compared to fiscal 1996.  Maverick's  shipments of OCTG were up 53.9%  primarily
due to the strength of our energy  product  segment  (including  Canada) and the
early benefits of new product  offerings.  Management  estimates that Maverick's
OCTG market share increased by approximately 15% during fiscal 1997.

Management  estimates  that the demand for  structural  tube products  (commonly
referred to as hollow  structural  sections or HSS) of the type  produced by the
Company increased by 10.4% in fiscal 1997 and total domestic producer  shipments
rose by 11.0%.  According to published reports,  the standard pipe market demand
increased by an estimated 1.5% and total domestic  producer  shipments  remained
relatively constant.

Pricing of the  Company's  products was mixed during the year.  Pricing of OCTG,
due  to  increased  product  pricing  and  a  favorable  product  mix,  rose  by
approximately  2.9%. Line and standard  product  pricing  increased by 10.5% and
11.2%,  respectively  primarily  due to high  levels of  demand in fiscal  1997.
Structural  product  pricing  decreased  by  1.9%,  primarily  due to  increased
competitive pressures caused by excess supply in the industry.

Steel costs included in cost of goods sold  increased  during fiscal 1997 by $17
per ton or 5.1%.  Replacement  costs for steel fluctuated during the year as the
cost  increased by $10 per ton in late December and remained at that level until
September.  However,  the  Company's  major  supplier of steel has announced two
price  decreases  since   mid-September  which  reduced  the  Company's  current
replacement cost of steel by $35 per ton. Based on year end inventory levels and
the recently  announced price decreases,  the Company  estimates that such price
reductions  will be fully  reflected in the Company's  cost of goods sold in the
second quarter of fiscal 1998.  The supply of steel is increasing  significantly
as four new steel mills either have begun or are  scheduled to begin  production
ultimately  resulting  in the  planned  annual  sale  of  6.2  million  tons  of
additional hot rolled steel.  The Company  anticipates that these additions have
the potential to further lower the Company's  purchase price of hot rolled steel
in the future.

The favorable market  conditions  discussed above enables Maverick to capitalize
on its  position  as an  efficient  producer  of quality  energy and  industrial
tubular  steel  products.  However,  future levels of oil and gas prices are, by
their nature,  volatile and can have a substantial  effect upon drilling  levels
and resulting demand for Maverick's  energy related  products.  Uncertainty also
exists as to the  future  demand  levels  for HSS and other  industrial  related
products.  Although the Company believes that these favorable market  conditions
should  continue  throughout  fiscal 1998 and beyond,  no assurance can be given
that such will be the case.
























RESULTS OF OPERATIONS 
The following table sets forth, for the periods presented, certain information 
relating to the operations of the Company expressed as a percentage of net 
sales:

                                         Year Ended September 30,
                                    1997             1996              1995
                                    ---------------------------------------
Net sales                             100.0%          100.0%           100.0%

Cost of goods sold                     86.9            89.2             95.2
                                     ----------------------------------------

Gross profit                           13.1            10.8              4.8

Selling, general and
   administrative                       4.8             5.0              4.6

Structural start-up costs                --              --               .2
                                    -------------------------------------------

Income from operations                  8.3             5.8               --

Other income                             --              --               .5

Interest expense, net                    .7             1.2              1.9
                                    -------------------------------------------

Income (loss) before
   income taxes                         7.6             4.6             (1.4)

Provision for income taxes              2.5              .9               --
                                    -------------------------------------------

Net income (loss)                       5.1             3.7             (1.4)
                                    ===========================================


Fiscal Year Ended September 30, 1997 compared to Fiscal Year Ended September 30,
1996

In fiscal 1997, net sales increased  $86.9 million or 42.5%,  from the preceding
fiscal year.  Energy  product  sales  increased  $76.3  million or 51.7%;  while
industrial  products sales increased $10.6 million or 18.6%.  These results were
attributable primarily to an increase of 36.1% in total product shipments,  from
345,232  tons in fiscal  1996 to  469,958  tons in  fiscal  1997.  OCTG  product
shipments  increased  108,036 tons or 53.9%.  During fiscal 1997, an increase in
consumption  of OCTG  resulted from the average rig count rising by 146 or 19.2%
and a build in existing  inventories  held by  distributors.  Also export sales,
primarily  to Canada,  increased  by 95.8%,  from  20,985 tons in fiscal 1996 to
41,092  tons in fiscal  1997,  as  Canadian  drilling  rose by 18.8%.  Line pipe
shipments  decreased by 12.0%  principally due to lack of available  capacity at
Maverick.  Industrial  products shipments  increased 17.7%, from 114,728 tons in
fiscal 1996 to 135,029 tons in fiscal 1997. Total sales and total shipments were
positively  impacted  by  Maverick's  strengthened  position  in the  industrial
products market.  Overall average selling prices increased during fiscal 1997 by
4.7% (from an  average of $591 to $619 per ton).  This  increase  augmented  the
increase in volume of total sales. The average selling price for energy products
was $668, an increase of $28 per ton. The increase was principally due to higher
product pricing and improved sales of higher value products. The average selling
price of industrial  products was $498, an increase of $4 per ton. This increase
was principally due to improved product pricing.

Cost of goods sold  increased  $70.8 million or 38.9% in fiscal 1997 as compared
to fiscal 1996.  Energy  products cost of goods sold increased  $62.3 million or
47.7%,  and  industrial  products  costs of goods sold increased $8.5 million or
16.5%.  The overall increase was due primarily to increased  product  shipments.
However,  the overall unit cost per ton of products sold increased 2.0% (from an
average of $527 to $538 per ton) in fiscal 1997. This increase was due primarily
to an  increased  in  delivered  steel  costs in the first half of fiscal  1997,
resulting  in an increase  in the average  prime steel cost of goods sold of $17
per ton. See  "Overview." The increase in steel costs was offset somewhat by the
operating efficiencies achieved by Maverick and improved fixed cost absorption.

Gross  profit  increased  $16.1  million or 72.8% in fiscal  1997 as compared to
fiscal 1996.  Gross profit for energy  products  increased  approximately  $14.1
million or 82.3%, while industrial  products gross profit increased $2.0 million
or 40.3%.  Gross profit as a percentage  of net sales was 13.1% for fiscal 1997,
as compared to 10.8% for fiscal 1996.  Energy  products gross profit  percentage
was 13.9% and  industrial  products  gross  profit  percentage  was  10.5%.  The
improved  gross  profit  percentages  were  primarily  attributable  to improved
product pricing and improved operating efficiencies during fiscal 1997.

Selling,  general and administrative  expenses increased $3.7 million,  or 36.9%
from fiscal 1996 to fiscal  1997.  These  expenses  increased  principally  as a
result of increased employee incentive compensation, salary increases, increased
selling  expenses  related to higher  sales  volumes  and the  increase in sales
commissions on industrial products. Selling, general and administrative expenses
as a  percentage  of net sales  decreased  from  5.0% in fiscal  1996 to 4.8% in
fiscal 1997.

Interest  expense  decreased  $455,000  or 18.0%,  in fiscal 1997 as compared to
fiscal 1996 as a result of decreased  borrowings.  The decreased borrowings were
principally the result of principal repayments from internally generated funds.

The provision for income taxes increased $5.5 million in fiscal 1997 as compared
to fiscal 1996 as a result of the Company generating $12.8 million in additional
income  before  income  taxes in fiscal  1997,  as compared to fiscal  1996.  As
permitted  under the provisions of Statement of Financial  Accounting  Standards
(SFAS) No. 109  "Accounting  for Income  Taxes,"  realization  of the  Company's
deferred tax asset is dependent on generating sufficient taxable income prior to
expiration of the net operating loss carryforwards.

At  September  30,  1997,   the  Company  had   available  net  operating   loss
carryforwards  of $3.5 million which it may use to offset future taxable income,
of which $1.1 million is available in 1998. In addition,  at September 30, 1997,
the  Company  had  alternative  minimum  tax credit  carryforwards  of  $390,000
available for income tax purposes.  See Note 7 of the Notes to the  Consolidated
Financial Statements as of September 30, 1997.

As a result of the foregoing factors, net income increased $7.4 million from net
income of $7.5  million or $0.51 per share in fiscal 1996 to net income of $14.9
million or $.97 per share in fiscal 1997.

Fiscal Year Ended September 30, 1996 compared to Fiscal Year Ended September 30,
1995

In fiscal 1996, net sales increased  $36.3 million or 21.6%,  from the preceding
fiscal year.  Energy  product  sales  increased  $19.3  million or 15.1%;  while
industrial  products sales increased $17.0 million or 42.8%.  These results were
attributable primarily to an increase of 24.9% in total product shipments,  from
276,376  tons in fiscal  1995 to  345,232  tons in  fiscal  1996.  OCTG  product
shipments  increased  38,074  tons or 23.4%.  During  fiscal 1996 an increase in
consumption  of OCTG  resulted  from the  average  rig count  rising by 67.  The
increased  rig count was only one of many  positive  factors  which  caused  the
increase in  Maverick's  OCTG product  shipments  and total sales.  In addition,
decreased  import  activity  and  a  build  in  existing   inventories  held  by
distributors  also  positively  affected  shipments of OCTG.  Also export sales,
primarily to Canada,  increased by 10% from 20,000 tons in fiscal 1995 to 20,985
tons in fiscal  1996 as Canadian  drilling  rose by 14.2%.  Line pipe  shipments
decreased  by 27.4%  due to lack of  capacity  at  Maverick  and  limited  steel
availability.  Industrial  products shipments  increased 58% from 72,600 tons in
fiscal 1995 to 114,728  tons in fiscal 1996 as the Company  continues  to gain a
foothold in the market.  Total sales and total shipments were further positively
impacted by Maverick's strengthening position in the industrial products market.
Average selling prices  decreased during fiscal 1996 of 2.7% (from an average of
$607 to $591 per ton). This reduction offset some of the volume-driven  increase
in total sales.  The average  selling  price for energy was $640, an increase of
$11 per ton. The increase was  principally due to improved sales of higher value
products.  The average selling price of industrial products was $494, a decrease
of $52 per ton. The decrease in the average  industrial  products  selling price
was due to corresponding reduced steel costs during the fiscal year.

Cost of goods sold  increased  $22.2 million or 13.9% in fiscal 1996 as compared
to fiscal 1995.  Energy cost of goods sold  increased  $7.8 million or 6.4%, and
industrial  products costs of goods sold increased  $14.4 million or 37.8%.  The
increase  in costs of goods sold was due  primarily  to the  increased  level of
shipments  offset by an  approximate  10%  decrease  in steel cost of goods sold
compared to fiscal 1995.

Gross  profit  increased  $14.1  million or 175.7% in fiscal 1996 as compared to
fiscal 1995.  Gross profit for energy increased  approximately  $11.5 million or
203.5%, while industrial products gross profit increased $2.6 million or 210.1%.
Gross profit as a percentage  of net sales was 10.8% for fiscal 1996 as compared
to 4.8% for fiscal 1995. Energy gross profit percentage was 11.6% and industrial
products  gross profit margin was 8.9%.  The improved  gross profit  percentages
were mainly attributable to lower steel costs during fiscal 1996.

Selling,  general and administrative  expenses increased $2.5 million,  or 32.0%
from fiscal 1995 to fiscal  1996.  These  expenses  increased  principally  as a
result of increased employee incentive compensation, salary increases, increased
selling  expenses  related to higher  sales  volumes  and the  increase in sales
commissions on industrial products. Selling, general and administrative expenses
as a percentage of net sales increased from 4.6% in 1995 to 5% in fiscal 1996.

Interest  expense  decreased  $642,000  or 20.3%,  in fiscal 1996 as compared to
fiscal 1995 as a result of decreased  borrowings.  The decreased borrowings were
principally the result of the net income and cash flow generated during 1996.

The provision for income taxes  increased  $1,882,000 in fiscal 1996 as compared
to fiscal 1995 as a result of the Company  generating income before income taxes
in fiscal 1996,  as compared to a loss before  income taxes in fiscal 1995.  The
Company continues to maintain a conservative valuation allowance of $1.1 million
on a gross tax asset of $6 million.

As a result of the foregoing  factors,  net income increased $9.9 million from a
net loss of $2.3 million or $0.31 per share in fiscal 1995 to net income of $7.5
million or $1.01 per share in fiscal 1996.

LIQUIDITY AND CAPITAL  RESOURCESWorking  capital at September 30, 1997 was $45.0
million and the ratio of current assets to current  liabilities  was 1.7 to 1 as
compared to September  30, 1996 when  working  capital was $32.7 and the current
ratio was 1.8 to 1. The  increase in working  capital was  principally  due to a
$9.3  million  increase in accounts  receivable,  an $18.8  million  increase in
inventory  (which  includes  approximately  $13.6 million in  customer-obligated
inventory) and a $2.4 million  increase in the deferred income tax asset,  which
was partially  offset by an $8.4 million  increase in accounts  payable,  a $5.1
million  increase in accrued  expenses and an $8.1 million  increase in deferred
revenue.  The increase in accounts receivable,  inventory,  accounts payable and
accrued expenses is due to the increased volume of business. The increase in the
current  deferred  income tax asset is due to the  elimination  of the valuation
allowance  and the Company  will realize the tax  benefits  associated  with the
exercise of nonqualified stock options.  The increase in deferred revenue is due
to the OCTG customer  purchases  before an announced  October price  increase as
well as an overall increase in demand for the Company's  energy  products.  Cash
provided by operating  activities for fiscal 1997 was $16.7 million. The primary
source  of cash was net  income,  exclusive  of the  impact  of  non-cash  items
(primarily depreciation, amortization and deferred income tax expense), of $23.3
million.

During fiscal 1996 and 1995,  net cash provided  (used) by operations  was $14.2
and ($6.3)  million,  respectively.  In fiscal  1996,  the net cash  provided by
operations was primarily used to fund capital  expenditures  and the pay-down of
net long-term borrowings. In fiscal 1995, the Revolving Credit Facility was used
to fund operations and capital expenditures.

Cash  used in  investing  activities  in  fiscal  1997,  1996  and 1995 was $9.4
million, $5.5 million and $5.6 million, respectively. This use was primarily for
purchases of property,  plant,  and equipment of $9.5 million,  $5.5 million and
$5.6 million (of which $3.9 million was spent on the structural tube facility in
fiscal 1995) during fiscal 1997, 1996 and 1995, respectively.

During fiscal 1997, 1996 and 1995 cash provided  (used) by financing  activities
was $(5.0)  million,  ($8.6) million and $11.5  million.  Cash used by financing
activities  in fiscal  1997 is  primarily  attributable  to the  pay-off of $3.7
million term note,  the proceeds of which were used to finance the relocation of
the Energy  facility to Arkansas,  a $3.3 million net decrease in the  Company's
Revolving  Credit  Facility and other  regularly  scheduled  term debt payments.
These debt pay-downs were partially  offset by $2.5 million of proceeds from the
exercise of stock options.  The cash used by financing activities in fiscal 1996
was primarily attributed to a $5.5 million term note, the proceeds of which were
used to finance the  structural  facility and a $1.8 million net decrease in the
Company's Revolving Credit Facility.  The cash provided by financing  activities
in fiscal 1995 was  primarily  attributed  to an $11 million net increase in the
Company's revolving credit facility.

The Company's  capital budget for fiscal 1998 is $9.5 million which will be used
principally to acquire new equipment for its existing manufacturing  facilities.
Such funds are expected to be provided from cash flows from operations.

The Company  expects that it will meet its ongoing  working  capital and capital
requirements from a combination of cash flow from operations,  which constitutes
its primary source of liquidity,  and available  borrowings  under its Revolving
Credit Facility. The Revolving Credit Facility, as amended, provides for maximum
borrowings up to the lesser of the eligible borrowing base or $27.5 million, and
bears  interest at either the  prevailing  prime rate or an adjusted  Eurodollar
rate, plus an interest margin,  depending upon certain  financial  measurements.
The Revolving  Credit Facility is secured by the Company's  accounts  receivable
and  inventories  and will mature on May 31, 1999. As of September 30, 1997, the
applicable  interest rate was 6.78 percent per annum,  and the Company had $17.2
million in available borrowings under the Revolving Credit Facility. The Company
anticipates  renegotiating its Revolving Credit Facility during fiscal 1998. The
amount  and terms of the  renegotiated  credit  facility  will  depend on future
working capital requirements, projected cash flows and other anticipated funding
needs.  As of September 30, 1997,  the Company had $2.9 million in cash and cash
equivalents.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
<TABLE>
<CAPTION>

                            Maverick Tube Corporation
                                 and Subsidiary
                           Consolidated Balance Sheets
                        (In thousands, except share data)
                                                                           September 30
                                                                    1997                1996
<S>                                                               <C>                  <C>    

Assets
Current assets:
   Cash and cash equivalents                                      $ 2,886              $  613
   Accounts receivable, less allowances of $388
      and $629 in 1997 and 1996, respectively                      27,714              18,400
   Inventories                                                     69,436              50,624
   Deferred income taxes                                            5,104               2,679
   Prepaid expenses and other current assets                          798                 875
                                                                 --------           ---------
Total current assets                                              105,938              73,191

Property, plant and equipment                                      55,506              51,695
Other assets                                                          620                 670
                                                                  -------            --------
                                                                 $162,064            $125,556
                                                                 ========            ========
Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable                                               $31,477           $  23,042
   Accrued expenses and other liabilities                          12,614               7,478
   Deferred revenue                                                16,251               8,176
   Current maturities of long-term debt                               604               1,843
                                                                  -------           ---------
Total current liabilities                                          60,946              40,539
Long-term debt, less current maturities                             8,879              11,901
Revolving credit facility                                          10,000              13,250
Deferred income taxes                                               4,371               2,619
Commitments and contingencies (Notes 4, 10 and 11)                     --                  --

Stockholders' Equity:
Preferred stock, $.01 par value; 5,000,000
   authorized shares                                                   --                  --
Common stock, $.01 par value; 20,000,000
   authorized shares; 15,410,974 and 14,944,142
   shares issued and outstanding in 1997 and 1996,
   respectively                                                       154                 150
Additional paid-in capital                                         43,406              37,674
Retained earnings                                                  34,308              19,423
                                                                ---------          ----------
                                                                   77,868              57,247
                                                                ---------          ----------
                                                                 $162,064            $125,556
                                                                 ========            ========
<FN>
See accompanying notes.
</FN>
</TABLE>
<TABLE>
<CAPTION>

                            Maverick Tube Corporation
                                 and Subsidiary

                      Consolidated Statements of Operations
                      (In thousands, except per share data)

                                                 Year ended September 30
                                              1997         1996           1995
<S>                                        <C>           <C>           <C>    

Net sales                                  $291,060      $204,182      $167,896
Cost of goods sold                          252,803       182,042       159,865
                                            ------------------------------------
Gross profit                                 38,257        22,140         8,031

Selling, general and administrative          13,966        10,198         7,728
Structural start-up costs                        --            --           245
                                            ------------------------------------
Income from operations                         24,291        11,942          58

Other income (expense):
Interest expense                               (2,067)       (2,522)     (3,164)
Other income                                       --            --         772
                                            ------------------------------------
Income (loss) before income taxes              22,224         9,420      (2,334)
Provision for income taxes                      7,339         1,882          --
                                            ------------------------------------
Net income (loss)                           $  14,885         $7,538    $(2,334)
                                            ====================================

   Net income (loss) per common and
       common equivalent share              $     .97         $  .51    $  (.16)
                                            ====================================
<FN>
See accompanying notes.
</FN>
</TABLE>
<TABLE>

                    Maverick Tube Corporation and Subsidiary

                 Consolidated Statements of Stockholders' Equity
                        (In thousands, except share data)


                                                                          Common Stock
                                            ------------------------------------------------------------------------
                                                                                   Additional
                                                                                     Paid-in     Retained Earnings
                                                  Shares            Amount           Capital
                                            ------------------------------------------------------------------------
<S>                                              <C>                <C>              <C>              <C>   

Balance at October 1, 1994                       14,880,458         $149             $37,469          $14,219
   Net loss                                              --           --                  --           (2,334)
                                            ------------------------------------------------------------------------
Balance at September 30, 1995                    14,880,458           149             37,469           11,885
   Net income                                            --           --                  --            7,538
   Exercise of stock options                         63,684             1                 205              --
                                            ------------------------------------------------------------------------
Balance at September 30, 1996                    14,944,142          150              37,674           19,423
   Net income                                            --             --                   --        14,885
   Exercise of stock options                        466,832              4             2,482               --
   Tax benefit associated with the
      exercise of nonqualified stock
      options                               --                        --                3,250              --
                                            ------------------------------------------------------------------------
Balance at September 30, 1997                    15,410,974         $154            $ 43,406          $34,308
                                            ========================================================================
<FN>
See accompanying notes.
</FN>
</TABLE> 
<TABLE>
<CAPTION>

                    Maverick Tube Corporation and Subsidiary
                      Consolidated Statements of Cash Flows
                                 (In thousands)

                                                                            Year ended September 30
                                                                    1997             1996              1995
                                                              -----------------------------------------------------
<S>                                                              <C>                 <C>              <C>   

Operating activities
Net income (loss)                                                $    14,885         $  7,538         $   (2,334)
Adjustments to reconcile net income (loss) to net cash
   provided (used) by operating activities:
     Depreciation and amortization                                     5,697            5,201             4,691
     Deferred income taxes                                             2,577              585                --
     Provision for losses on accounts receivable                          44              339                53
     Loss (gain) on sale of equipment                                     50               (3)              (20)
     Changes in operating assets and liabilities:
       Accounts receivable                                            (9,358)             175            (6,945)
       Inventories                                                   (18,812)         (17,352)             (624)
       Prepaid expenses and other current assets                          59                5              (145)
       Other assets                                                      (67)             207              (168)
       Accounts payable                                                8,435            5,623            (1,313)
       Accrued expenses and other liabilities                          5,136            3,746               504
       Deferred revenue                                                8,075            8,176                --
                                                              -----------------------------------------------------
Cash provided (used) by operating activities                          16,721           14,240            (6,301)
Investing activities
   Expenditures for property, plant and equipment                     (9,537)           (5,497)          (5,592)
   Proceeds from disposals of equipment                                   96                 3               20
Collection of notes receivable                                            18                15               18
                                                              ------------------------------------------------------
Cash used by investing activities                                     (9,423)           (5,479)          (5,554)
Financing activities
Proceeds from long-term borrowings and notes                          92,400            64,250           62,992
   Principal payments on long-term borrowings and notes              (99,911)          (73,095)         (51,530)
                                                              ------------------------------------------------------
                                                                      (7,511)           (8,845)          11,462
Proceeds from exercise of stock options                                2,486               206               --
                                                              ------------------------------------------------------
Cash provided (used) by financing activities                          (5,025)           (8,639)          11,462
                                                              ------------------------------------------------------
Increase (decrease) in cash and cash equivalents                       2,273               122             (393)
Cash and cash equivalents at beginning of year                           613               491              884
                                                              ------------------------------------------------------
Cash and cash equivalents at end of year                         $     2,886         $     613        $     491
                                                              ======================================================

Supplemental  disclosures of cash flow information:  Cash paid (received) during
   the year for:
     Interest (net of amounts capitalized of $268, $81 and
       $142)                                                     $     2,138         $    2,677       $    2,949
     Income taxes                                                $     4,020         $    1,370       $     (148)
<FN>
See accompanying notes.
</FN>
</TABLE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

Principles of Consolidation

The  consolidated  financial  statements  include the accounts of Maverick  Tube
Corporation  and its wholly owned  subsidiary  (collectively  referred to as the
Company).  All  significant  intercompany  accounts and  transactions  have been
eliminated.

Revenue Recognition

The Company  records revenue from product sales when the product is shipped from
its  facilities.  Prior to January 1, 1996, the Company had recorded  revenue on
the sale of energy products to certain  customers at the time the goods were set
aside  for  storage  at the  customer's  request.  Included  in the  results  of
operations for the year ended  September 30, 1996 was a one-time  effect of this
change in practice which resulted in a reduction in net sales, gross profit, net
income and net income per  common  and common  equivalent  share of  $8,700,000,
$1,000,000, $839,000 and $0.06, respectively.

Inventories

Inventories are principally valued at the lower of average cost or market.

Property, Plant and Equipment

Property,  plant and equipment are stated on the basis of cost.  Depreciation is
computed  under the  straight-line  method over the  respective  assets'  useful
lives. Useful lives of the Company's assets are as follows:

           Land and leasehold improvements                10 to 20 years
           Buildings                                      20 to 40 years
           Transportation equipment                       4 to 5 years
           Machinery and equipment                        5 to 12 years
           Furniture and fixtures                         3 to 7 years

Income Taxes

Deferred taxes are provided on an asset and liability  method  whereby  deferred
tax assets are  recognized for deductible  temporary  differences  and operating
loss and other  tax  credit  carryforwards  and  deferred  tax  liabilities  are
recognized for taxable  temporary  differences.  Temporary  differences  are the
differences between the reported amounts of assets and liabilities and their tax
bases.

Stock-Based Compensation

As permitted by Statement  of  Financial  Accounting  Standards  (SFAS) No. 123,
"Accounting  for  Stock-Based  Compensation,"  the  Company  follows  Accounting
Principles  Board Opinion No. 25 and related  interpretations  in accounting for
its director and employee stock options.  The Company grants stock options for a
fixed number of shares to directors and employees  with an exercise  price equal
to the fair  value of the  shares  at the time of the  grant.  Accordingly,  the
Company has not  recognized  compensation  expense  for any of its stock  option
grants.  If the Company had elected to recognize  compensation cost based on the
fair value of the options  granted at the grant date as  prescribed  by SFAS No.
123, net income and earnings per share would not have been reduced by a material
amount.  The  compensation  cost  associated  with the fair value of the options
calculated in 1997 and 1996 is not necessarily  representative  of the potential
effects on reported net income in future years.

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  requires  management to periodically  make estimates and
assumptions  that affect the amounts  reported in the financial  statements  and
accompanying notes.
Actual results could differ from those estimates.

Net Income (Loss) per Common and Common Equivalent Share

Net income  (loss) per common and common  equivalent  share were computed on net
income  (loss) and the  weighted  average  number of shares of common  stock and
common stock equivalents outstanding during each period (15,281,653,  15,000,812
and  14,920,274  for  the  years  ended  September  30,  1997,  1996  and  1995,
respectively).

In 1997, the Financial  Accounting Standards Board issued SFAS No. 128 "Earnings
Per Share."  SFAS No. 128 is  effective  for both  interim and annual  reporting
periods ending after December 15, 1997 with earlier  application  not permitted.
The Company  will apply the new rules  starting  in the first  quarter of fiscal
1998.  The Company  does not  believe the  adoption of the new rules will have a
material effect on its earnings per share.

Business Segments

The Company's two identifiable  segments are energy products,  consisting of Oil
Country  Tubular Goods (OCTG) and line pipe products sold primarily to customers
in the  energy  industry,  and  industrial  products,  consisting  primarily  of
structural  tubing and standard pipe products.  Energy  products are used in the
completion of new wells and the handling and transporting of the oil and natural
gas  produced  from these  wells.  Industrial  products are sold to customers in
various industries including construction,  agriculture and transportation.  The
Company's  products are sold primarily to a network of distributors and are sold
throughout the United States and Canada.

Sales  commission  expenses  are  charged  directly to the  associated  business
segments.  Remaining selling,  general and administrative expenses are allocated
based upon the net sales dollars generated by each segment.

Cash Equivalents

The Company's  policy is to consider demand deposits and short-term  investments
with a maturity of three months or less when purchased as cash equivalents.

Financial Instruments

Financial instruments consist of cash and cash equivalents, accounts receivable,
accounts payable and long-term debt  obligations.  The carrying value of amounts
reported  in the  consolidated  balance  sheets  for cash and cash  equivalents,
accounts  receivable and accounts payable  approximate fair value.  Management's
estimate of the fair value of long-term debt  obligations is discussed in Note 4
to the consolidated financial statements.

Reclassifications

Certain  prior year  amounts  have been  reclassified  to conform  with the 1997
financial statement presentation.



2.  Structural Start-Up Costs

During  1994,  the Company  constructed  a new  production  facility in Hickman,
Arkansas and entered the structural tube business. The Company incurred costs of
$245,000 in 1995 related to the  commencement  of  operations  of this  facility
which began production in late October 1994. These costs are comprised primarily
of salary and related costs for the production and sales  personnel prior to the
fully integrated operation of the facility.

3.  Stock Split

On August 1, 1997,  the Company  declared a two-for-one  stock split effected in
the form of a 100% stock dividend to all stockholders of record as of August 12,
1997.  The  dividend  was paid on August 21,  1997 and  increased  the number of
shares  outstanding  from  7,544,071 to  15,088,142.  Approximately  $75,000 was
transferred from retained earnings to common stock to record this dividend.  All
share  and  per  share  amounts,  including  stock  option  information,  in the
accompanying  consolidated  financial  statements  have been restated to reflect
this stock dividend.

4. Long-Term Debt and Revolving Credit Facility

Long-term  debt and  revolving  credit  facility at September  30, 1997 and 1996
consists of the following (in thousands):
<TABLE>
<CAPTION>

                                                                                  1997           1996
                                                                             ------------------------------
<S>                                                                              <C>          <C>    

Term loan notes payable, secured by machinery and equipment;  payable in monthly
   installments  (including  interest  at  9.27%)  of  $130,920;   balance  paid
   September 3,
   1997                                                                         $        --   $      3,699

Capital lease  obligation,  secured by property,  plant and equipment  (net book
value $8,854,000 at September 30, 1997); payable in monthly installments
(including interest at 8.0%) of $59,479; final payment due on August 1, 2007          4,875          5,185

Capital  lease  obligation,  secured  by  property  and plant  (net  book  value
   $6,814,000 at September 30, 1997); interest of 7.5% payable monthly;  payable
   in monthly  principal  installments of approximately  $20,000 (plus interest)
   commencing on March 1, 1996; increasing to $31,250 in years two through seven
   and increasing to $240,417 in year eight; final
   payment due on February 1, 2004                                                    4,608          4,860

Revolving credit notes, secured by all accounts receivable and inventories;  due
   on May 31, 1999;  interest  payable monthly at either prime or the Eurodollar
   rate, plus an interest margin, depending upon
   certain financial measurements                                                    10,000         13,250
                                                                             ------------------------------
                                                                             ------------------------------
                                                                                     19,483         26,994
Less current maturities                                                                (604)        (1,843)
                                                                             ------------------------------
                                                                                $    18,879    $    25,151
                                                                             ==============================
</TABLE>


The  revolving  credit  agreement  provides  for  advances  up to the  lesser of
$27,500,000  or the eligible  borrowing  base. At September 30, 1997,  there was
$10,000,000  outstanding  under this line of credit at an interest  rate of 6.78
percent. In addition, the Company had an outstanding letter of credit under this
revolving  credit  agreement of $350,000 at September 30, 1997 (which expires in
September 1998).  Additional available borrowings at that date were $17,150,000.
The  agreement  includes  restrictive  covenants  relating  to levels of working
capital  and  other   financial   measurements.   It  also   restricts   capital
expenditures,   asset  disposals,  capital  restructurings  and  borrowings  and
precludes  payment of dividends on common stock.  The revolving credit agreement
requires an annual commitment fee based upon certain financial measurements.

The present  value of future  minimum  lease  payments  under the capital  lease
obligations as of September 30, 1997 is as follows (in thousands):


                                                               Present Value of
                   Total Minimum                               Minimum Lease
                   Lease Payments           Interest              Payments
              ------------------------------------------------------------------

1998                   $1,317                 $713                  $604
1999                    1,313                  660                   653
2000                    1,320                  612                   708
2001                    1,315                  555                   760
2002                    1,315                  493                   822
Thereafter              6,783                  847                 5,936
             ------------------------------------------------------------------
               $       13,363             $  3,880                $9,483
             ==================================================================


Property, plant and equipment at September 30, 1997 and 1996 include $20,000,000
and  $19,864,000,   respectively,  under  leases  that  have  been  capitalized.
Accumulated  depreciation  for these assets was  $2,362,000,  and  $1,666,000 at
September 30, 1997 and 1996, respectively.

The fair  value of the  Company's  long-term  debt is based on  estimates  using
discounted cash flow analyses, based on quoted market prices for similar issues.
The estimated fair value of debt at September 30, 1997 and 1996 was  $19,991,000
and $28,266,000, respectively.

5. Property, Plant and Equipment

Property,  plant and  equipment  at  September  30, 1997 and 1996 consist of the
following (in thousands):

                                                          1997           1996
                                               --------------------------------

    Land                                             $   1,519       $   1,576
    Land and leasehold improvements                        521             700
    Buildings                                           22,212          22,138
    Transportation equipment                             1,204           1,209
    Machinery and equipment                             54,470          45,582
    Furniture and fixtures                               2,780           2,266
                                               --------------------------------
                                                        82,706          73,471
    Less accumulated depreciation                      (27,200)        (21,776)
                                               --------------------------------
                                                     $  55,506       $  51,695
                                               ================================


6. Inventories

Inventories  at  September  30,  1997  and 1996  consist  of the  following  (in
thousands):

                                                        1997            1996
                                              --------------------------------

Finished goods                                      $  41,188      $  28,323
Work-in-process                                         3,589          2,671
Raw materials                                          14,065         10,081
In-transit materials                                    6,911          6,274
Storeroom parts                                         3,683          3,275
                                               -------------------------------
                                                    $  69,436      $  50,624
                                              ================================

Finished  goods  at  September  30,  1997  and  1996  includes  $13,590,000  and
$7,200,000, respectively of customer-obligated inventory.

7. Income Taxes

The  components of the provision for income taxes for the years ended  September
30, 1997, 1996 and 1995 are as follows (in thousands):

                                            1997            1996          1995
                                    -------------------------------------------

Current:
   Federal                              $  3,804          $1,297       $     --
                                                                             
   State                                     958              --             --
                                                                             
Deferred                                   2,577             585             --
                                      ------------------------------------------
                                        $  7,339          $1,882       $     --
                                      ==========================================

The difference between the effective income tax rate and the U.S. federal income
tax rate for the years ended  September 30, 1997,  1996 and 1995 is explained as
follows (in thousands):
<TABLE>
<CAPTION>

                                                       1997         1996          1995
                                                -------------------------------------------
<S>                                               <C>           <C>           <C>   

Provision (credit) at statutory tax rate          $  7,845      $  3,203      $   (794)
State and local taxes, net of federal tax benefit      958            --            --
Alternative minimum tax                               (510)        1,282            --
Operating loss carryforwards                            --        (1,192)           --
Increase (decrease) in valuation allowance          (1,147)       (1,590)        1,094
Other items                                            193           179          (300)
                                                 ------------------------------------------
                                                  $  7,339       $ 1,882     $      --
                                                 ==========================================
</TABLE>

The  1997  decrease  in  the  valuation   allowance  relates  primarily  to  the
utilization of alternative minimum tax credit carryforwards.  Realization of the
Company's  deferred  tax assets is dependent on  generating  sufficient  taxable
income prior to the expiration of the net operating loss carryforwards. Although
realization is not assured,  management believes it is more likely than not that
the net deferred tax assets will be realized.

Temporary  differences which give rise to deferred tax assets and liabilities at
September 30, 1997, 1996 and 1995 are as follows (in thousands):

                                                      1997                1996
                                                      ------------------------
Deferred tax assets:
      Various accrued liabilities and reserves         $1,419           $1,586
      Net operating loss carryforwards                  1,288            2,359
      Alternative minimum tax carryforwards               390            2,047
      Tax benefit associated with the exercise
         of nonqualified stock options                  3,250               --
      Valuation allowance                                  --           (1,147)
                                                       ------           ------
         Total deferred tax assets                     $6,347           $4,845
                                                        -----            -----

Deferred tax liabilities:
      Accelerated depreciation                         $5,101           $ 4,372
      Asset valuations                                    513               413
                                                          ---               ---
         Total deferred tax liabilities                 5,614             4,785
                                                        -----             -----
         Net deferred tax assets                      $   733           $    60
                                                       ======            ======

The  Company  has  available   acquired  net  operating  loss  carryforwards  of
$3,480,000  at  September  30,  1997 which it may use to offset  future  taxable
income.   The  acquired  net  operating  loss   carryforwards   are  limited  to
approximately  $1,160,000 annually. Any unused amounts can be carried forward to
increase the limitation in the following  taxable year. These net operating loss
carryforwards  expire  in 2000.  The  total  carryforwards  will be  applied  to
financial statement earnings after temporary differences. At September 30, 1997,
the  Company  had  alternative  minimum  tax credit  carryforwards  of  $390,000
available for income tax  purposes,  all of which are available for use in 1998.
These credit carryforwards do not expire.

8. Defined Contribution Plans

The Company  sponsors a defined  contribution  401(k) plan that is  available to
substantially  all employees.  The plan may be amended or terminated at any time
by the Board of Directors.  The Company,  although not required to, has provided
matching  contributions to the plan for the years ended September 30, 1997, 1996
and 1995 of $590,000, $343,000 and $245,000, respectively.

The Company also began  sponsoring  two  deferred  compensation  plans  covering
officers  and key  employees  in  1996.  One  plan  provides  for  discretionary
contributions based solely upon the Company's profitability and the individuals'
gross wages. The other plan provides for fixed contributions to certain officers
of the  Company.  The  Company  contribution  to these plans for the years ended
September 30, 1997 and 1996 was $200,000 and $192,000, respectively.

9. Segment Information

The following table sets forth data for the years ended September 30, 1997, 1996
and 1995 for the reportable  industry segments of energy products and industrial
products.  Intersegment  sales are not material.  Identifiable  assets are those
used in the Company's operations in each segment.
<TABLE>
<CAPTION>

                                     Energy         Industrial
                                    Products         Products          Corporate        Total

<S>                                 <C>               <C>             <C>             <C>
1997:
Net sales                           $223,879          $67,181         $    --         $291,060
Operating income                      17,641            6,650              --           24,291
Identifiable assets                  116,433           34,565          11,066          162,064
Depreciation and amortization          3,760            1,455             482            5,697
Capital expenditures                   8,385              363             789            9,537

1996:
Net sales                           $147,555          $56,627         $    --         $204,182
Operating income                      10,529            1,413              --           11,942
Identifiable assets                   87,091           32,033           6,432          125,556
Depreciation and amortization          3,375            1,331             495            5,201
Capital expenditures                   3,757              894             846            5,497

1995:
Net sales                           $128,234          $39,662         $    --         $167,896
Operating income (loss) (1)            1,724           (1,666)             --               58
Identifiable assets                   70,469           31,954           4,071          106,494
Depreciation and amortization          3,466              953             272            4,691
Capital expenditures                   1,197            3,922             473            5,592

<FN>

(1)   The operating loss from the industrial  products  segment  includes a $1.2
      million  charge  to  earnings  for the  reduction  in  carrying  value  of
      inventory, primarily related to a decline in the replacement costs of flat
      rolled steel.
</FN>
</TABLE>


Transactions with two significant  energy customers for the year ended September
30, 1997 represented  approximately 25 percent of total sales. Transactions with
one significant  energy customer for the years ended September 30, 1996 and 1995
represented   approximately   16  percent   and  12  percent  of  total   sales,
respectively.

Export sales were  $26,665,000,  $13,244,000 and $12,963,000 for the years ended
September  30,  1997,  1996 and 1995,  respectively.  These  energy  sales  were
primarily to Canadian customers.

10. Operating Leases

The Company  rents office  facilities  and  equipment  under  various  operating
leases.  Future minimum  payments  under  noncancellable  operating  leases with
initial or  remaining  terms in excess of one year,  are as follows at September
30, 1997 (in thousands):

                  1998                       $1,353
                  1999                        1,564
                  2000                        1,303
                  2001                        1,281
                  2002                        1,262
                                          ---------
                                             $6,763
                                          =========

Rent expense for all operating leases was $1,222,000, $973,000, and $742,000 for
the years ended September 30, 1997, 1996 and 1995, respectively.

11. Contingencies

Various  claims,  incidental  to the ordinary  course of  business,  are pending
against the Company.  In the opinion of  management,  after  consultations  with
legal  counsel,  resolution  of these matters is not expected to have a material
effect on the accompanying financial statements.

12. Stock Option Plans

The Company  sponsors two  employee  stock option plans (the "1990 Plan" and the
"1994  Plan")  allowing  for  incentive  stock  options and  nonqualified  stock
options.  The Company also  sponsors a stock option plan for eligible  directors
(the "Director  Plan") allowing for nonqualified  stock options.  The 1990 Plan,
1994 Plan and the  Director  Plan  provide  that  340,000,  600,000  and 200,000
shares, respectively,  may be issued under the plans at an option price not less
that the fair market  value of the stock at the time the option is granted.  The
1990 Plan,  1994 Plan, and the Director Plan expire in December  2000,  November
1999 and November 2004, respectively.  The options vest pursuant to the schedule
set forth for each option. Effective August 29, 1997, the Compensation Committee
of the Board of  Directors  removed the  exercise  restriction  with  respect to
certain  options  granted in 1995 which made them  immediately  exercisable.  At
September 30, 1997 and 1996,  167,500 and 52,000 shares were available for grant
under the option plans.

The fair value of the options granted was estimated at the date of grant using a
Black-Scholes   option  pricing  model  with  the  following   weighted  average
assumptions for fiscal years ending  September 30, 1997 and 1996,  respectively:
risk-free  interest  rate of 5.53% and 6.05%;  no  dividend  payments  expected;
volatility factors of the expected market price of the Company's common stock of
0.478 and a  weighted-average  expected  life of the options of 1.0 year and 4.7
years.

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded  options which have no vesting  restrictions  and are fully
transferable.  In  addition,  option  valuation  models  require  the  input  of
subjective  assumptions  including the expected stock price volatility.  Because
the Company's stock options have  characteristics  significantly  different from
those of traded options and because changes in the subjective input  assumptions
can materially  affect the fair value  estimate,  in management's  opinion,  the
existing models do not necessarily provide a reliable single measure of the fair
value of its stock options.

The following table summarizes option activity and related information for years
ended September 30, 1997, 1996 and 1995:
                                                                            
                                                         Weighted      Weighted
                                       Shares Under       Average       Average
                                          Option      Exercise Price  Fair Value
         Options outstanding at
            October 1, 1994              260,000            $3.95
         Options granted                 538,000             5.89
                                         -------             ----
         Options outstanding at
            September 30, 1995           798,000             5.26
         Options exercised               (63,684)            3.25
         Options expired                (146,316)            5.37
         Options granted                 284,000             5.29         $2.42
                                         -------             ----
         Options outstanding at
            September 30, 1996           872,000             5.39
         Options exercised              (466,832)            5.33
         Options expired                  (3,000)            5.92
         Options granted                  37,500             8.50         $1.80
                                          ------             ----
         Options outstanding at
            September 30, 1997           439,668            $5.71


The following table summarizes information about fixed stock options outstanding
at September 30, 1997:
<TABLE>
<CAPTION>

                                  Options Outstanding                 Options Exercisable
Range of                        Weighted-Average     Weighted-                      Weighted-
Exercise                          Remaining           Average                       Average
Prices             Options     Contractual Life    Exercise Price      Options   Exercise Price
<S>                <C>              <C>               <C>            <C>             <C>    

$4.00 to $5.88     224,478          4.4 years         $4.54          84,478          $5.44
$6.13 to $8.50     215,190          4.1               $6.93          95,190          $7.32
--------------     -------         ----                ----          ------           ----
$4.00 to $8.50     439,668          4.3               $5.71         179,668          $6.44
</TABLE>

13. Quarterly Financial Data (Unaudited)

The  results  of  operations  by quarter  for 1997 and 1996 were as follows  (in
thousands):
<TABLE>
<CAPTION>

                                                         Quarter Ended
                               December 31,    March 31,         June 30,        September 30,
                                   1996           1997              1997              1997
                               ---------------------------------------------------------------
 
<S>                                <C>           <C>              <C>              <C> 
1997
 Net sales                         $64,190       $  66,920        $  74,669        $  85,281
 Gross profit                        6,663           7,692            9,794           14,108
 Net income                          2,608           2,978            3,938            5,361
 Net income per common and common
    equivalent share                   .18             .19              .25              .35
</TABLE>
<TABLE>
<CAPTION>

                                                         Quarter Ended
                               December 31,     March 31,        June 30,         September 30,
                                   1995           1996             1996               1996
                               ----------------------------------------------------------------
<S>                                <C>           <C>              <C>               <C>           
1996
 Net sales                         $44,878       $  40,856(1)     $  56,333         $  62,115
 Gross profit                        4,225           4,373(1)         6,583             6,959
 Net income                          1,101           1,049(1)         2,555             2,833
 Net income per common and common
    equivalent share                   .08             .07(1)           .17               .19
<FN>
(1)   Net sales,  gross  profit and net income for the  quarter  ended March 31,
      1996  included a one-time  effect of the change in the  Company's  revenue
      recognition   practices  of  $8.7  million,  $1.0  million  and  $839,000,
      respectively, or $.06 per share.
</FN>
</TABLE>


                         Report of Independent Auditors


Board of Directors and Stockholders
Maverick Tube Corporation

We have audited the  accompanying  consolidated  balance sheets of Maverick Tube
Corporation  and  subsidiary as of September 30, 1997 and 1996,  and the related
consolidated statements of operations,  stockholders' equity, and cash flows for
each of the three years in the period ended September 30, 1997.  These financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Maverick Tube Corporation and subsidiary at September 30, 1997 and 1996, and the
consolidated  results of their  operations  and their cash flows for each of the
three years in the period ended September 30, 1997, in conformity with generally
accepted accounting principles.


                                             /s/ ERNST & YOUNG, LLP

St. Louis, Missouri
October 29, 1997