<PAGE>

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

                                  FORM 10-QSB

  X    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
-----  ACT OF 1934

For the quarterly period ended   March 31, 2001
                                 --------------

                                      OR
_____  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934

For the transition period from __________ to __________

Commission File Number 1-7796


                             TIPPERARY CORPORATION
       (Exact name of small business issuer as specified in its charter)



       Texas                                         75-1236955
       (State or other jurisdiction of               (I.R.S. Employer
       incorporation or organization)                Identification No.)

       633 Seventeenth Street, Suite 1550
       Denver, Colorado                              80202
       (Address of principal executive offices)      (Zip Code)


                                (303) 293-9379
                           Issuer's telephone number


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 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  _____
     -----


Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.


           Class                                Outstanding May 1, 2001
----------------------------                    -----------------------
Common Stock, $.02 par value                    24,472,587 shares

<PAGE>

                    TIPPERARY CORPORATION AND SUBSIDIARIES

                             Index to Form 10-QSB

<TABLE>
<CAPTION>
                                                                                        Page No.

<S>                                                                                     <C>
PART I.   FINANCIAL INFORMATION (UNAUDITED)

                Item 1.  Financial Statements

                                Consolidated Balance Sheets
                                March 31, 2001 and December 31, 2000                           1

                                Consolidated Statements of Operations
                                Three months ended March 31, 2001 and 2000                     2

                                Consolidated Statements of Cash Flows
                                Three months ended March 31, 2001 and 2000                     3

                                Notes to Consolidated Financial Statements                   4-7

                Item 2.  Management's Discussion and Analysis of
                          Financial Condition and Results of Operations                     8-11


PART II.  OTHER INFORMATION

                Item 1.  Legal Proceedings                                                    12

                Item 2.  Changes in Securities                                                12

                Item 3.  Defaults Upon Senior Securities                                      12

                Item 4.  Submission of Matters to a Vote of Security Holders                  12

                Item 5.  Other Information                                                    12

                Item 6.  Exhibits and Reports on Form 8-K                                     13

SIGNATURES                                                                                    14
</TABLE>

<PAGE>

                        PART I - FINANCIAL INFORMATION
                        ------------------------------

Item 1.  Financial Statements

                    TIPPERARY CORPORATION AND SUBSIDIARIES
                          Consolidated Balance Sheets
                                (in thousands)
                                  (unaudited)
<TABLE>
<CAPTION>
                                                                  March 31,    December 31,
                                                                    2001           2000
                                                                ------------   ------------
<S>                                                             <C>            <C>
ASSETS
Current assets:
 Cash and cash equivalents                                      $      1,680   $      1,579
 Restricted cash                                                       2,842          1,459
 Receivables                                                             635            987
 Prepaid drilling costs                                                1,842          2,219
 Other current assets                                                    347            212
                                                                ------------   ------------
   Total current assets                                                7,346          6,456
                                                                ------------   ------------

Property, plant and equipment, at cost:
 Oil and gas properties, full cost method                             64,978         67,833
 Other property and equipment                                          3,177          1,069
                                                                ------------   ------------
                                                                      68,155         68,902

Less accumulated depreciation, depletion and amortization            (22,611)       (22,402)
                                                                ------------   ------------
 Property, plant and equipment, net                                   45,544         46,500
                                                                ------------   ------------

Deferred loan costs                                                    7,735            381
Other noncurrent assets                                                   84             13
                                                                ------------   ------------
                                                                $     60,709   $     53,350
                                                                ============   ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Current portion of note payable - related party                $          -   $        317
 Accounts payable                                                        512          3,312
 Accrued liabilities                                                     552            296
 Production taxes payable                                                 30             43
 Royalties payable                                                       267            232
                                                                ------------   ------------
   Total current liabilities                                           1,361          4,200
                                                                ------------   ------------

Long-term debt                                                         7,500              -
Long-term note payable - related party                                12,000         11,589
Advances from parent                                                   2,500              -

Commitments and contingencies (Note 5)

Minority interest                                                      1,024             42

Stockholders' equity:
 Preferred stock:
   Cumulative, $1.00 par value. Authorized
    10,000,000 shares; none issued                                         -              -
   Non-cumulative, $1.00 par value.  Authorized
    10,000,000 shares; none issued                                         -              -
 Common stock; par value $.02; 50,000,000 shares
  authorized; 24,482,185 issued and 24,472,587
  outstanding at March 31, 2001 and
  December 31, 2000                                                      490            490
 Capital in excess of par value                                      123,013        123,013
 Accumulated deficit                                                 (87,154)       (85,959)
 Treasury stock, at cost; 9,598 shares                                   (25)           (25)
                                                                ------------   ------------
   Total stockholders' equity                                         36,324         37,519
                                                                ------------   ------------
                                                                $     60,709   $     53,350
                                                                ============   ============
</TABLE>


         See accompanying notes to consolidated financial statements.


                                       1
<PAGE>

                    TIPPERARY CORPORATION AND SUBSIDIARIES
                     Consolidated Statements of Operations
                     (in thousands, except per share data)
                                  (unaudited)


                                                   Three months ended
                                                         March 31,
                                                  --------------------
                                                    2001        2000
                                                  --------    --------


Revenues                                          $    869    $  3,016
                                                  --------    --------

Costs and expenses:
 Operating                                             462       1,414
 General and administrative                            977         867
 Depreciation, depletion and amortization              210         193
                                                  --------    --------

    Total costs and expenses                         1,649       2,474
                                                  --------    --------

    Operating income (loss)                           (780)        542

Other income (expense):
 Interest income                                        47          23
 Interest expense                                     (461)       (458)
 Foreign currency exchange gain (loss)                 (92)        (45)
                                                  --------    --------

    Total other expense                               (506)       (480)
                                                  --------    --------

    Income (loss) before income taxes               (1,286)         62

Current income tax expense                               -           -
                                                  --------    --------

Income (loss) before minority interest              (1,286)         62

Minority interest in loss of subsidiary                 91          78
                                                  --------    --------

Net income (loss)                                 $ (1,195)   $    140
                                                  ========    ========

Net income (loss) per share - basic and diluted   $  (0.05)   $      -
                                                  ========    ========

Weighted average shares outstanding:
 Basic                                              24,473      20,778
                                                  ========    ========
 Diluted                                            24,473      21,339
                                                  ========    ========


         See accompanying notes to consolidated financial statements.


                                       2
<PAGE>

                    TIPPERARY CORPORATION AND SUBSIDIARIES
                     Consolidated Statements of Cash Flows
                                (in thousands)
                                  (unaudited)

                                                             Three months ended
                                                                  March 31,
                                                             ------------------
                                                               2001      2000
                                                             --------  --------

Cash flows from operating activities:
Net income (loss)                                             $(1,195)  $   140
Adjustments to reconcile net income (loss) to net cash
 used in operating activities:
  Depreciation, depletion and amortization                        210       193
  Amortization of deferred loan costs                             129         -
  Minority interest in loss of subsidiary                         (91)      (78)
  Change in assets and liabilities:
   (Increase) decrease in receivables                             352      (171)
   Increase (decrease) in prepaid drilling costs and other
    current assets                                                242       234
   Increase (decrease) in accounts payable and
    accrued liabilities                                        (1,374)      285
   Increase (decrease) in production taxes                        (13)        -
   Increase (decrease) in royalties payable                        35        61
                                                             --------  --------
Net cash provided by (used in) operating activities            (1,705)      664
                                                             --------  --------

Cash flows from investing activities:
 Net proceeds from asset sales                                      -       (26)
 Capital expenditures                                          (6,192)   (3,999)
                                                             --------  --------
Net cash used in investing activities                          (6,192)   (4,025)
                                                             --------  --------

Cash flows from financing activities:
 Proceeds from borrowings                                      14,500         -
 Principal repayments                                          (4,407)     (868)
 Increase in restricted cash                                   (1,383)        -
 Proceeds from issuance of stock                                    -     1,821
 Proceeds from issuance of warrants                                 -       576
 Payments for debt financing                                     (712)       (4)
                                                             --------  --------
Net cash provided by financing activities                       7,998     1,525
                                                             --------  --------

Net increase in cash and cash equivalents                         101    (1,836)

Cash and cash equivalents at beginning of period                1,579     5,314
                                                             --------  --------

Cash and cash equivalents at end of period                   $  1,680  $  3,478
                                                             ========  ========

Supplemental disclosure of cash flow information:
 Cash paid during the period for:
  Interest                                                   $    307  $    452
 Noncash investing and financing activities -
  Assets acquired through issuance of stock
  in subsidiary in 2001 and stock in Tipperary
  Corporation in 2000                                        $  1,074  $  1,861


         See accompanying notes to consolidated financial statements.


                                       3
<PAGE>

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

In the opinion of management, the accompanying unaudited financial statements
reflect all adjustments, consisting only of normal recurring adjustments, which
are necessary for a fair presentation of the consolidated financial position of
Tipperary Corporation and its subsidiaries (the "Company" or "Tipperary") at
March 31, 2001, and the results of its operations for the three-month periods
ended March 31, 2001 and 2000.  The consolidated financial statements include
the accounts of Tipperary Corporation and its wholly-owned subsidiaries
Tipperary Oil and Gas Corporation and Burro Pipeline Corporation, and its 90%-
owned subsidiary, Tipperary Oil and Gas (Australia) Pty Ltd ("TOGA"), and its
share of assets, liabilities, revenues and expenses of unincorporated joint
ventures and partnerships.  All intercompany transactions and balances have been
eliminated.  The accounting policies followed by the Company are included in
Note 1 to the Consolidated Financial Statements in the Annual Report on Form 10-
KSB for the transition period ended December 31, 2000.  These financial
statements should be read in conjunction with the Form 10-KSB.

Impact of New Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS 133").  This statement, as amended by SFAS 137
and SFAS 138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities, an amendment of SFAS 133," is effective for all fiscal quarters of
fiscal years beginning after June 15, 2000. SFAS 133 requires companies to
report the fair market value of derivatives on the balance sheet and record in
income or other comprehensive income, as appropriate, any changes in the fair
value of the derivatives. The Company's adoption of SFAS 133, effective January
1, 2001, did not have a significant impact upon the Company's financial position
or results of operations. Tipperary entered into a foreign exchange contract to
purchase Euros that were used to purchase a drilling rig from a manufacturer in
Italy on March 30, 2001

Liquidity and Operations

With the substantial reduction in cash flow from operations following the sale
of a majority of the Company's U.S. producing oil and gas assets during fiscal
2000, there is not sufficient cash flow from operations to support Tipperary's
overhead and other ongoing cash needs over the next year.  In addition, the
Company's cash on hand is not sufficient to cover anticipated capital
expenditures in excess of those to be financed by TCW Asset Management Company
("TCW"), discussed below. Tipperary's majority (54.1%) shareholder, Slough
Estates USA, Inc. ("Slough"), has indicated that it is willing to make an
additional equity investment of up to $20 million or, alternatively, that it
would be prepared to loan the Company additional funds if needed through March
2002.

NOTE 2 - RELATED PARTY TRANSACTIONS

At March 31, 2001, the Company had a corporate loan of $12,000,000 due its
largest shareholder, Slough Estates USA Inc. ("Slough"). The balance of this
loan at December 31, 2000 was $7,500,000. Tipperary increased this debt by
executing a new note for $12 million with the same terms as the $7.5 million
note, which included a maturity date of March 31, 2003.  Interest is due
quarterly on the corporate loan at the 90-day London Interbank Offered Rate plus
3.5% (8.38% at March 31, 2001). Related party debt due Slough at December 31,
2000, also included a project-financing loan with a balance of $4,407,000
bearing interest at 10% per annum.  In February 2001, the Company repaid the
project-financing loan using the initial proceeds of its financing with TCW
Asset Management Company ("TCW") discussed in Note 3.

On January 18, 2001, TOGA entered into a financing agreement with Slough which
provided that Slough advance payments to TOGA toward Slough's purchase of a
drilling rig and lease of the rig to TOGA. Slough has made advances under this
agreement of $2,500,000 to Tipperary, which bear interest of 10% per annum.
Under the terms of the


                                       4
<PAGE>

financing agreement, payments are due to Slough monthly for rents received from
an unaffiliated drilling contractor who has entered into an agreement with TOGA
to lease the rig. Payments are also due Slough for accrued interest on the
balance of aggregate advances less rent payments.

NOTE 3 - LONG-TERM DEBT

On April 28, 2000, the Company entered into a credit agreement with TCW ("Credit
Agreement") that provides a borrowing facility of up to $17 million to be funded
on or before December 31, 2001 upon the satisfaction of certain conditions.  The
obligation to repay the advances and accrued interest is evidenced by senior
secured promissory notes bearing interest at the rate of 10% per annum and
payable quarterly. Tipperary will also make monthly payments to TCW equal to a
6% overriding royalty from the gas sales revenues received by TOGA from the
Comet Ridge project. Upon payment of the loan in full, TCW has the option to
sell this overriding royalty's interest to Tipperary at the net present value of
the royalty's share of future net revenues from the then proved reserves,
discounted at a rate of 15% per annum. Tipperary has the right to purchase the
interest from TCW, when both the loan has been repaid in full and TCW has
achieved a 15% internal rate of return on its investment, at the net present
value of the royalty's share of future net revenues from the then proved
reserves, discounted at a rate of 15% per annum. Principal payments are due
quarterly in an amount equal to the greater of a percentage of TOGA's operating
cash flow as defined or a scheduled minimum principal payment. The scheduled
minimum principal payment begins in March 2003 and will be equal to 5% of the
unpaid principal balance, increasing to 9% in March 2004 and 10% in March 2005.
The outstanding principal balance is due in full on March 30, 2006.

In February 2001, the Company received an initial loan advance of $7.5 million
under the Credit Agreement. Proceeds from this initial advance were used to
repay the $4,407,000 Comet Ridge project-financing loan due to Slough and pay
$1.5 million in initial costs of a 20-well drilling program on the Comet Ridge
project, with the balance provided as working capital for lender-approved
purposes.  Of the $9.5 million remaining under the credit facility, about $4.8
million is available to finance the Company=s share of additional costs for the
20-well drilling program and the remainder may be used for other lender-approved
drilling projects. Upon the receipt of this initial funding, the Company
recorded deferred financing costs of approximately $6.8 million for the present
value (discounted at 15%) of the overriding royalty conveyed to TCW. This cost
reduced the book value of oil and gas properties and is amortized as
interest expense over the life of the loan (61 months ending March 30, 2006).
Deferred loan costs at March 31, 2001 also include approximately $1,000,000 of
other costs incurred to obtain the TCW financing, which are likewise being
amortized to interest expense over the life of the loan.


                                       5
<PAGE>

NOTE 4 - EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings
(loss) per share ("EPS") (in thousands except per share data):

<TABLE>
<CAPTION>
                                                                       Three months ended
                                                                           March 31,
                                                                       ------------------
                                                                         2001      2000
                                                                       --------  --------
<S>                                                                    <C>       <C>
Numerator:
  Net income (loss)                                                    $ (1,195) $    140
  Less: preferred stock dividends                                             -       (79)
                                                                       --------  --------
  Net income (loss) available for common stockholders                  $ (1,195) $     61
                                                                       ========  ========
Denominator:
  Weighted average shares outstanding                                    24,473    20,778
  Effect of dilutive securities:
     Assumed conversion of dilutive options                                   -       561
                                                                       --------  --------
     Weighted average shares and dilutive potential common shares        24,473    21,339
                                                                       ========  ========
Basic earnings (loss) per share                                        $  (0.05) $      -
                                                                       ========  ========
Diluted earnings (loss) per share                                      $  (0.05) $      -
                                                                       ========  ========

Potentially dilutive common stock from the exercise of options and
  warrants not included in EPS that would have been antidilutive            983         -
                                                                       ========  ========
Total common stock and warrants which could potentially dilute basic
  EPS in future periods                                                   3,513     3,343
                                                                       ========  ========
</TABLE>

NOTE 5 - COMMITMENTS AND CONTINGENCIES

The Company is plaintiff in a lawsuit filed on August 6, 1998, styled Tipperary
Corporation and Tipperary Oil & Gas (Australia) Pty Ltd v. Tri-Star Petroleum
Company, Cause No. CV42,265, in the District Court of Midland County, Texas
involving the Comet Ridge project.  By amended petition filed May 1, 2000,
Tipperary Oil & Gas Corporation joined the action as a plaintiff, along with the
already-named plaintiffs and two unaffiliated non-operating working interest
owners who previously intervened in the action as plaintiffs.  James H. Butler,
Sr., and James H. Butler, Jr., owners of defendant Tri-Star Petroleum Company,
("Tri-Star") were also joined as defendants in the amended petition.  The
Company and the other plaintiffs allege, among other matters, that Tri-Star
and/or the individual defendants have failed to operate the properties in a good
and workmanlike manner and have committed various other breaches of a joint
operating contract, have breached a previous mediation agreement between the
parties, have committed certain breaches of fiduciary and other duties owed to
the plaintiffs, and have committed fraud in connection with the project.
Plaintiffs also allege that Tri-Star has been removed as operator, and that
Tipperary Oil & Gas (Australia) Pty Ltd has been elected successor operator
under the operating contract. Tri-Star has answered the amended petition, and on
December 22, 2000, Tri-Star filed its first amended counterclaim alleging
tortious interference with contract, the authority to prospect covering the
project and with contractual relationships and with vendors; commercial
disparagement; foreclosure of operator's lien and alternatively forfeiture of
undeveloped acreage; unjust enrichment and declaratory relief.  As of February
8, 2001, the court enjoined Tri-Star from asserting any forfeiture claims based
upon events prior to that date.  Discovery is in progress and the case presently
is set for trial in December 2001.

In 1997, the Company filed a complaint along with several other plaintiffs in
BTA Oil Producers, et al. v. MDU Resources Group, Inc. in Stark County Court in
the Southwest Judicial District of North Dakota. The plaintiffs include major
integrated oil companies and agricultural cooperatives, as well as independent
oil and gas producers such as the Company. The plaintiffs brought the action
against the defendants for breach of gas sales contracts and processing
agreements, unjust enrichment, implied trust and related business torts. The
case concerns the sale by plaintiffs and certain predecessors of natural gas
processed at the McKenzie Gas Processing Plant in North Dakota to Koch
Hydrocarbons Company. It also concerns the contracts for resale of that gas to
MDU Resources Group, Inc. and Williston Basin Interstate Pipeline Company. After
the complaint was answered, both the plaintiffs and the defendants moved for
summary judgment on certain issues. On July 3 and October 4, 2000, and on March
5, 2001, the trial court entered two orders and a judgment deciding the issues
in the case. The plaintiffs

                                       6
<PAGE>

prevailed on some issues, and the defendants prevailed on other issues. The
plaintiffs filed a Notice of Appeal on May 4, 2001.

NOTE 6 - OPERATIONS BY GEOGRAPHIC AREA

The Company has one operating and reporting segment - oil and gas exploration,
development and production - in the United States and Australia.  Information
about the Company's operations by geographic area is shown below (in thousands):

                                        United
                                        States     Australia      Total
                                        ------     ---------     -------
Three months ended March 31, 2001
  Revenues                              $  321       $   548     $   869
  Property, plant and equipment, net    $8,290       $37,254     $45,544

Three months ended March 31, 2000
  Revenues                              $2,501       $   515     $ 3,016
  Property, plant and equipment, net    $  947       $34,301     $35,248

NOTE 7 - SUBSEQUENT EVENTS

On May 4, 2001, the Company sold a 50% working interest in its 52,000-acre Lay
Creek project in Moffat County, Colorado to an unaffiliated third party and
entered into an agreement to jointly conduct exploratory drilling over this
area. The Company received $2,000,000 at closing and will be reimbursed for
$2,000,000 of its share of costs to drill and complete wells on the project
acreage.  If the entire reimbursement amount has not been paid within 18 months
of the closing, the purchaser is obligated to pay the Company the remainder of
the $2,000,000 in cash. The parties are committed to drill two wells on or
before July 15, 2001, subject to extensions that may be obtained due to rig
availability or regulatory delays, and three additional wells by June 17, 2002.
Under the full cost method of accounting, no gain or loss will be recognized on
the sale of this interest.


                                       7
<PAGE>

Item 2.  Management's Discussion and Analysis or Plan of Operation

Information herein contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 that are based on management's
beliefs, assumptions, current expectations, estimates and projections about the
oil and gas industry, the world economy and about the Company itself.  Words
such as "may," "will," "expect," "anticipate," "estimate" or "continue," or
comparable words are intended to identify such forward-looking statements. In
addition, all statements other than statements of historical facts that address
activities that the Company expects or anticipates will or may occur in the
future are forward-looking statements.  These statements are not guarantees of
future performance and involve certain risks, uncertainties and assumptions that
are difficult to predict with regard to timing, extent, likelihood and degree of
occurrence.  Therefore, actual results and outcomes may materially differ from
what may be expressed or forecasted in such forward-looking statements.
Furthermore, the Company undertakes no obligation to update, amend or clarify
forward-looking statements, whether as a result of new information, future
events or otherwise.  Readers are encouraged to read the SEC reports of the
Company, particularly its Form 10-KSB for the transition period ended December
31, 2000, for meaningful cautionary language disclosing why actual results may
vary materially from those anticipated by management.

Overview

The Company is principally engaged in the exploration for and development and
production of natural gas.  The Company is primarily focused on coalbed methane
properties, with its major producing property located in Queensland, Australia.
Tipperary also holds exploration permits in Queensland and is involved in
coalbed methane exploration in the United States through projects in the Hanna
Basin of Wyoming and in western Colorado.  The Company seeks to increase its
coalbed methane gas reserves through exploration and development projects and
possibly through the acquisition of producing properties.

The Company's exploration and development efforts, and the majority of its
capital investment in recent years, have been focused on the Comet Ridge coalbed
methane project in Queensland, Australia.  The Company's 90%-owned Australian
subsidiary, Tipperary Oil & Gas (Australia) Pty Ltd ("TOGA"), owns a 62.25% non-
operating undivided interest in the project, which consists of Authority to
Prospect ("ATP") 526 covering approximately 1,088,000 acres in the Bowen Basin.
In addition to the interest in the Comet Ridge property, TOGA holds a 100%
interest in other exploration permits granted to TOGA by the Queensland
government.  These permits cover a total of approximately 1.5 million acres
comprising ATPs 655, 675 and 690, which have initial terms expiring on October
31, 2003, February 29, 2004 and November 30, 2004, respectively.

Financial Condition, Liquidity and Capital Resources

The Company's primary sources of liquidity during the past few years have been
from debt and equity financing and sales of producing properties. Tipperary has
used these funds to pay off outstanding bank debt and for exploration and
development operations including the acquisition of additional interests in the
Comet Ridge project. Remaining funds were invested in domestic properties, most
notably in the Hanna Basin coalbed methane project, in which the Company owns a
non-operated 49% working interest, and in undeveloped oil and gas leasehold
interests in Colorado.

With the substantial reduction in cash flow from operations following the sale
of a majority of the Company's U.S. producing oil and gas assets during fiscal
2000, there is not sufficient cash flow from operations to support Tipperary's
overhead and other ongoing cash needs over the next year.  In addition, the
Company's cash on hand is not sufficient to cover anticipated capital
expenditures in excess of those to be financed through its credit agreement with
TCW Asset Management Company ("TCW"), discussed below.  The Company is
evaluating various transactions that would enable it to meet the aforementioned
cash funding needs, including additional debt financing, sales of common stock
and asset sales. On April 17, 2001, the Company filed a registration statement
with the U.S. Securities and Exchange Commission to register shares under a
rights offering in order to raise up to $30,000,000. The offering price and
number of shares have not yet been determined. Tipperary's majority (54.1%)
shareholder, Slough Estates USA, Inc. ("Slough"), has indicated that it is
willing to make an additional equity investment of up to $20 million through
this rights offering or, alternatively, that it would be prepared to loan the
Company additional funds if needed through March 2002.


                                       8
<PAGE>

The Company had unrestricted cash and temporary investments of $1,680,000 as of
March 31, 2001, compared to $1,579,000 as of December 31, 2000.  The restricted
cash as of March 31, 2001 includes cash in collateral accounts maintained in
connection with TCW financing, the use of which is restricted to disbursements
made either to TCW or as otherwise approved by TCW.  At March 31, 2001, the
Company had working capital of $5,985,000 compared to working capital of
$2,256,000 as of December 31, 2000.  During the three months ended March 31,
2001, cash flows were provided by debt financing.  These proceeds were used to
fund capital expenditures and operating activities.

Net cash used by operating activities was $1,705,000 during the three months of
2001 compared to cash provided of $664,000 during the corresponding prior year
period.  The decrease in net cash from operations was attributable primarily to
the sale of most of the Company's U.S. oil and gas properties during fiscal
2000.

During the three months ended March 31, 2001, the Company had net receipts of
$7,998,000 from financing, which included borrowings of $7,500,000 from TCW and
$4,500,000 from Slough. Capital expenditures of $6,192,000 included $2,076,000
for the purchase of a drilling rig to be leased to a drilling contractor in
Queensland, Australia (discussed below), $1,718,000 for acreage acquisitions in
Colorado, $1,293,000 for drilling, completion and other costs on the Comet Ridge
project and $932,000 for drilling and completion costs in the Hanna Basin of
Wyoming.

For the prior year's quarter ended March 31, 2000, the Company invested
approximately $4,000,000 in property plant and equipment, which was primarily
for the acquisition of additional interests in the Comet Ridge project.  Net
cash provided by financing activities was $1,525,000 and included $2,400,000
received from the sale of stock and issuance of warrants in connection with
financing arrangements with two individual investors.  These equity proceeds
were used to partially fund the aforementioned acquisition.  During the prior
year's quarter, the Company also made principal repayments of $868,000 on the
Comet Ridge project-financing loan then outstanding from Slough.

At December 31, 2000, the Company owed Slough $11,906,000, consisting of a
corporate loan of $7,500,000 and a project-financing loan of $4,406,000, which
was used to finance the Company=s share of an eight-well drilling program on the
Comet Ridge project during fiscal 1999 and fiscal 2000. The Company repaid the
project-financing loan in February 2001, using the initial proceeds of a
financing agreement with TCW discussed below. Since December 31, 2000, the
Company has borrowed an additional $4.5 million under the corporate loan
agreement with Slough, increasing the total amount owed to Slough to $12 million
as of March 31, 2001. The promissory note for $12 million matures March 31, 2003
and bears interest at the 90-day London Interbank Offered Rate plus 3.5%. The
interest rate was 8.38% at March 31, 2001.

In February 2001, the Company received an initial loan advance of $7.5 million
under a $17 million borrowing facility with TCW (ACredit Agreement). Proceeds
from this initial advance were used to repay Slough for the Comet Ridge project-
financing loan of $4,407,000, pay $1.5 million in initial costs of a 20-well
drilling program on the Comet Ridge project and pay approximately $240,000 of
expenses related to the financing. The balance of $1,353,000 is to be used as
working capital for lender-approved purposes. Of the $9.5 million remaining
under the credit facility, about $4.8 million is available to finance the
Company=s share of additional costs for the 20-well drilling program and the
remainder may be used for other lender-approved drilling projects. Upon the
receipt of this initial funding, the Company recorded deferred financing costs
of $6.8 million for the present value (discounted at 15%) of the overriding
royalty conveyed to TCW. This cost reduced the book value of oil and gas
properties and is amortized as interest expense over the life of the loan.
Deferred loan costs at March 31, 2001 also include approximately $1,000,000 of
costs incurred to obtain the TCW financing, which are likewise being amortized
to interest expense over the life of the loan.

Tipperary proposed the 20-well drilling program to the other owners in July 2000
and estimated the cost at approximately $10 million.  The Company subsequently
received Authorities for Expenditure ("AFEs") from the operator with estimated
costs of $15 million.  If the operator is unable to complete the project below
the AFE costs, Tipperary's share of the $5 million difference, or almost $3.1
million, will have to be funded from other sources, as Tipperary does not have
internal sources of capital at this time to cover increased drilling and
completion costs.  With


                                       9
<PAGE>

the approval of TCW, approximately $1 million of working capital available from
their initial funding could be used to cover a portion of any excess capital
costs.

The obligation to repay the TCW advances and accrued interest is evidenced by
senior secured promissory notes bearing interest at the rate of 10% per annum
and payable quarterly. Tipperary will also make monthly payments to TCW equal to
a 6% overriding royalty from the gas sales revenues received by TOGA from the
Comet Ridge project. Upon payment of the loan in full, TCW has the option to
sell this overriding royalty interest to Tipperary at the net present value of
the royalty's share of future net revenues from the then proved reserves,
discounted at a rate of 15% per annum. Tipperary has the right to purchase the
interest from TCW, when both the loan has been repaid in full and TCW has
achieved a 15% internal rate of return on its investment, at the net present
value of the royalty's share of future net revenues from the then proved
reserves, discounted at a rate of 15% per annum. Principal payments on the TCW
financing will be due quarterly in an amount equal to the greater of a
percentage of TOGA's operating cash flow as defined, or a scheduled minimum
principal payment. The scheduled minimum principal payment begins March 2003 and
will be equal to 5% of the unpaid principal balance, increasing to 9% in March
2004 and 10% in March 2005. The outstanding principal balance is due in full on
March 30, 2006.

TOGA has entered into an Agreement for Hire ("Lease Agreement") with an
unaffiliated drilling contractor in Queensland, Australia ("Lessee") to lease
from TOGA the drilling rig and related equipment.  The terms of the Lease
Agreement provide that the Lessee will use the rig to drill on TOGA's ATPs and
possibly on ATP 526.  To the extent the rig is not being used for TOGA's
drilling activities, it may, with TOGA's consent, be used by the Lessee to drill
wells for others. The lease payments are structured to be due and payable with
the drilling of each well on which the rig is used.  No interest or finance
charge accrues on the lease, but the Company will benefit from reduced costs to
drill wells on ATP 526 or TOGA's ATPs. In the case of drilling on the Comet
Ridge project, the Company's co-owners will also benefit from their
proportionate share of the cost reduction.  The lessee also received a two-year
option to buy the rig and related equipment at TOGA's net cost.

During January 2001, Slough advanced $2,500,000 to Tipperary for Slough's
purchase of the rig from TOGA.  The advances were made pursuant to a financing
agreement between Slough and the Company dated January 18, 2001, providing that
Slough would purchase the rig from TOGA and enter into a lease agreement to
lease the rig to TOGA.  The parties are considering restructuring the
transaction as a loan rather than as advances toward the purchase of the rig.
See Note 2 to the Consolidated Financial Statements.

Results of Operations - Comparison of the Three Months Ended March 31, 2001 and
2000

The Company incurred a net loss of $1,195,000 for the three months ended March
31, 2001, compared to net income of $140,000 for the three months ended March
31, 2000. This decrease is attributable to reduced revenues due to the sale of
most of the Company's producing properties in the U.S. during 2000. The table
below provides a comparison of operations for the three months ended March 31,
2001 with those of the prior year's quarter.

<TABLE>
<CAPTION>
                                                        March 31      March 31        Increase        % Increase
                                                          2001          2000         (Decrease)      (% Decrease)
                                                        --------     ----------     ------------     ------------
<S>                                                     <C>          <C>            <C>              <C>
Worldwide operations:

Operating Revenue                                       $869,000     $3,016,000     $ (2,147,000)         (71%)
Oil Volumes (Bbls)                                         4,800         72,000          (67,200)         (93%)
Gas Volumes (Mcf)                                        513,000        650,000         (137,000)         (21%)
Average Oil Price per Bbl                               $  28.35     $    24.63     $       3.72           15%
Average Gas Price per Mcf                               $   1.43     $     1.91     $      (0.48)         (25%)
Operating Expense                                       $462,000     $1,414,000     $   (952,000)         (67%)
Average Lifting Cost per Mcf Equivalent ("Mcfe")        $   0.86     $     1.31     $      (0.45)         (34%)
General and Administrative Expense                      $977,000     $  867,000     $    110,000           13%
Depreciation, Depletion and Amortization ("DD&A")       $210,000     $  193,000     $     17,000            9%
DD&A Rate per Mcfe                                      $   0.36     $     0.17     $       0.19          117%
Interest Expense                                        $461,000     $  458,000     $      3,000            1%
</TABLE>


                                       10
<PAGE>

<TABLE>
<CAPTION>
                                                        March 31      March 31        Increase        % Increase
                                                          2001          2000         (Decrease)      (% Decrease)
                                                        --------     ----------     ------------     ------------
<S>                                                     <C>          <C>            <C>              <C>
Domestic operations:

 Operating Revenue                                      $321,000     $2,501,000     $ (2,180,000)          (87%)
 Oil Volumes (Bbls)                                        4,800         72,000     $    (67,200)          (93%)
 Gas Volumes (Mcf)                                        23,000        259,000     $   (236,000)          (91%)
 Average Oil Price per Bbl                              $  28.35     $    24.63     $       3.72            15%
 Average Gas Price per Mcf                              $   8.01     $     2.75     $       5.26           191%
 Operating Expense                                      $148,000     $1,034,000     $   (886,000)          (86%)
 Average Lifting Cost per Mcfe                          $   2.86     $     1.50     $       1.36            91%
 DD&A                                                   $ 55,000     $   13,000     $     42,000           323%
 DD&A rate per Mcfe                                     $   0.83     $        -     $       0.83           N/A

Australia operations:

 Operating Revenue                                      $548,000     $  515,000     $     33,000             6%
 Gas Volumes (Mcf)                                       490,000        391,000     $     99,000            25%
 Average Gas Price per Mcf                              $   1.12     $     1.32     $      (0.20)          (15%)
 Operating Expense                                      $314,000     $  380,000     $    (66,000)          (17%)
 Average Lifting Cost per Mcf                           $   0.64     $     0.97     $      (0.33)          (34%)
 DD&A                                                   $155,000     $  180,000     $    (25,000)          (14%)
 DD&A rate per Mcf                                      $   0.31     $     0.46     $      (.15)           (32%)
</TABLE>

The sale of domestic producing properties significantly reduced worldwide oil
and gas volumes.  This volume reduction caused significant decreases in
worldwide operating revenue, operating expense and net income.  The Company's
overall average gas price decreased due to an unfavorable exchange rate
adversely affecting the price received for Australia sales. The average lifting
cost per Mcfe decreased 34% worldwide due to an increase in gas production
volumes from the Company's Australian operations.

An increase in general and administrative expense of 13% is primarily due to the
absence of overhead reimbursements on operated properties sold during 2000.  The
9% increase in DD&A costs is attributable to increased balances in property
plant and equipment from March 31, 2000 to March 31, 2001.  The Company
experienced a 117% increase in the overall DD&A rate per Mcfe despite a 32%
decrease in the DD&A rate for Australian operations. The overall DD&A rate
increase was caused by the suspension of DD&A on U.S. oil and gas properties for
the three months ended March 31, 2000 due to the Company holding these assets
for sale and resumption of DD&A on remaining domestic oil and gas properties for
the three months ended March 31, 2001. DD&A for domestic operations in the three
months ended March 31, 2000 related to furniture, fixtures and equipment.

Interest expense for the three months ended March 31, 2001 increased by $129,000
due to the amortization of deferred financing cost and decreased by $64,000 for
interest capitalization. The remaining $65,000 decrease was attributable to a
lower average debt balance and lower interest rates during the current quarter
as compared to the prior year's quarter. Both deferred financing cost
amortization and interest capitalization are non-cash items and were not
included in interest expense for the three months ended March 31, 2000.


                                       11
<PAGE>

                          PART II - OTHER INFORMATION


Item 1.  Legal Proceedings

         See Note 5 to the Consolidated Financial Statements under Part I - Item
1.

Item 2.  Changes in Securities and Use of Proceeds

         None

Item 3.  Defaults Upon Senior Securities

         None

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

         The Company held its Annual Meeting of Shareholders on January 23,
         2001, and proxies for such meeting were solicited pursuant to
         Regulation 14A adopted under the Securities Exchange Act of 1934. There
         was no solicitation in opposition to management's nominees for
         directors as listed in the proxy statement and all such nominees were
         elected. The table below summarizes voting results:

                                        Votes For       Votes Withheld
                                        ----------      --------------
                Kenneth L. Ancell       21,080,437         138,981
                David L. Bradshaw       21,080,437         138,981
                Eugene I. Davis         21,080,432         138,986
                Douglas Kramer          21,080,437         138,981
                Marshall D. Lees        21,080,437         138,981
                Charles T. Maxwell      21,080,432         138,986
                D. Leroy Sample         21,080,427         138,991

         In addition, the shareholders ratified the following proposal:

         A proposal to ratify the reappointment of PricewaterhouseCoopers LLP as
         the Company's independent accountants for the transition period ended
         December 31, 2000 and the fiscal year ending December 31, 2001;

                   For                  Against         Abstain
                21,218,566                  326             526


Item 5.  Other Information

         None


                                       12
<PAGE>

Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits:

              Filed in Part I

                        11.   Computation of per share earnings, filed herewith
                              as Note 4 to the Consolidated Financial
                              Statements.

              Filed in Part II

                        4.69  Promissory Note dated March 6, 2001, in the amount
                              of $12,000,000 issued by Registrant to Slough
                              Estates USA Inc.

                        4.70  Fourth Amendment to Security Agreement dated March
                              6, 2001, between the Registrant and Slough Estates
                              USA Inc.

                        4.71  First Amended and Restated Credit Agreement among
                              Tipperary Corporation as Borrower, Tipperary Oil &
                              Gas (Australia) Pty Ltd (ACN 077536871) as
                              Guarantor, Tipperary Oil & Gas Corporation,
                              Lenders party thereto and TCW Asset Management
                              Company in the capacities described therein dated
                              as of February 20, 2001.

                        The other material contracts of the Company are
                        incorporated herein by reference from the exhibit list
                        in the Company's Annual Report on Form 10-KSB for the
                        Transition Period Ended December 31, 2000.

         (b)  Reports on Form 8-K:

              None


                                      13
<PAGE>

                                  SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                              Tipperary Corporation
                              --------------------------------------------------
                              Registrant



Date:  May 15, 2001           By: /s/ David L. Bradshaw
                                  ----------------------------------------------
                                  David L. Bradshaw, President, Chief Executive
                                  Officer and Chairman of the Board of Directors



Date:  May 15, 2001           By: /s/ Lisa S. Wilson
                                  ----------------------------------------------
                                  Lisa S. Wilson, Chief Financial Officer and
                                  Principal Accounting Officer


                                      14