<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q


(Mark One)

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

                  For the quarterly period ended March 31, 2002

                                       or

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

                For the transition period from _________ to __________

       Commission File No. 0-22483


                            SEVEN SEAS PETROLEUM INC.
             (Exact name of registrant as specified in its charter)

CAYMAN ISLANDS                                                        73-1468669
(State or other jurisdiction of                                 (I.R.S. Employer
incorporation or organization)                               Identification No.)


5555 SAN FELIPE, SUITE 1700 HOUSTON, TEXAS                                 77056
(Address of principal executive offices)                              (Zip Code)


Registrant' telephone number, including area code: (713) 622-8218


      Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such 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.

      As of May 8, 2002, there were 37,904,915 outstanding shares of the
registrant's ordinary shares (also called "common shares"), par value $0.001 per
share.



                                       1
<PAGE>
                   SEVEN SEAS PETROLEUM INC. AND SUBSIDIARIES


                                      INDEX
<Table>
<Caption>
                                                                                        PAGE
<S>                                                                                      <C>
PART I. FINANCIAL INFORMATION

    Item 1. Financial  Statements
            Condensed Consolidated Balance Sheets as of March  31, 2002
            (Unaudited) and December 31, 2001 .......................................    3


            Condensed Consolidated Statements of Operations for the three months
            ended March 31, 2002 and 2001 (Unaudited) ...............................    4

            Condensed Consolidated Statements of Cash Flows for the three months
            ended March 31, 2002 and 2001 (Unaudited) ...............................    5

            Notes to Condensed Consolidated Financial Statements (Unaudited) ........    6

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

    Item 3. Quantitative and Qualitative Disclosures about Market Risk ..............   14

PART II. OTHER INFORMATION

    Item 6. Exhibits & Reports on Form 8-K ..........................................   14

</Table>






                                       2
<PAGE>

PART I.  FINANCIAL INFORMATION
Item 1.  FINANCIAL STATEMENTS


                   SEVEN SEAS PETROLEUM INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                       (In thousands, except share data)
<Table>
<Caption>
                                                                                            MARCH 31,      DECEMBER 31,
                                                                                              2002             2001
                                                                                           -----------     ------------
                                                                                           (UNAUDITED)

                                ASSETS
<S>                                                                                         <C>             <C>
CURRENT ASSETS
    Cash and cash equivalents ..........................................................    $  12,596       $  18,638
    Restricted cash and cash equivalents ...............................................       11,136           6,041
    Short-term investments .............................................................          123             121
    Restricted short-term investments ..................................................        3,021          10,563
    Accounts receivable, net of $749 allowance .........................................        7,065           5,603
    Inventory ..........................................................................          903           1,052
    Prepaids and other .................................................................        1,604           2,064
                                                                                            ---------       ---------
Total Current Assets ...................................................................       36,448          44,082

Note receivable from related party .....................................................          200             200
Long term investments ..................................................................          286             283
Prepaid taxes ..........................................................................        3,100           2,482
Land ...................................................................................          945             945
Evaluated oil and gas interests, full-cost method, net of
       accumulated depletion of $7,172 at March 31, 2002
       and $5,014 at December 31, 2001 .................................................      183,263         183,021
Unevaluated oil and gas interests, full-cost method ....................................       79,481          70,616
Fixed assets, net of accumulated depreciation of $1,428 at
    March 31, 2002 and $1,336 at December 31, 2001 .....................................          679             754
Other assets, net of accumulated amortization of $2,716 at
    March 31, 2002 and $2,442 at December 31, 2001 .....................................        3,201           3,469
Deferred tax asset .....................................................................        1,042           1,042
                                                                                            ---------       ---------
TOTAL ASSETS ...........................................................................    $ 308,645       $ 306,894
                                                                                            =========       =========

                 LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Accounts payable ...................................................................    $   9,521       $  11,211
    Interest payable ...................................................................        5,156           1,719
    Other accrued liabilities ..........................................................        2,041           3,264
                                                                                            ---------       ---------
Total Current Liabilities ..............................................................       16,718          16,194

Long-term debt .........................................................................      153,267         153,102
Long term interest payable .............................................................        3,705           2,355
Deferred income taxes ..................................................................       27,040          27,040

COMMITMENTS AND CONTINGENCIES (NOTE 9)

STOCKHOLDERS' EQUITY
Share capital-
    Authorized 200,000,000 shares par value $0.001 per share, of
    which 150,000,000 shares are designated as ordinary shares and
    50,000,000 are designated as Series A Junior Preferred shares; and
    37,858,501 and 37,858,530 issued and outstanding common shares
    at March 31, 2002 an December 31, 2001, respectively ...............................      225,884         225,866

Warrants outstanding ...................................................................        2,192           2,192
Other comprehensive income (loss) ......................................................         (580)            (45)
Retained earnings ......................................................................     (119,581)       (119,810)
Treasury stock, 29 shares held at March 31, 2002 and December 31, 2001..................           --              --
                                                                                            ---------       ---------
Total Stockholders' Equity .............................................................      107,915         108,203
                                                                                            ---------       ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .............................................    $ 308,645       $ 306,894
                                                                                            =========       =========
</Table>

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



                                       3
<PAGE>



                   SEVEN SEAS PETROLEUM INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (Unaudited; In thousands, except share data)
<Table>
<Caption>
                                                                  THREE MONTHS ENDED MARCH 31,
                                                              ------------------------------------
                                                                  2002                   2001
                                                              ------------           ------------
<S>                                                           <C>                    <C>
REVENUES
  Crude oil sales .......................................     $      7,609           $      3,394
  Interest income .......................................              174                    242
                                                              ------------           ------------
                                                                     7,783                  3,636

EXPENSES
  Oil and gas operating expenses ........................            1,295                  1,032
  Depletion, depreciation and amortization ..............            2,524                    914
  Interest expense ......................................            2,746                    184
  General and administrative ............................            1,016                  1,503
  Other expense .........................................              (27)                    69
                                                              ------------           ------------
                                                                     7,554                  3,702
                                                              ------------           ------------
NET INCOME (LOSS) BEFORE INCOME TAXES ...................              229                    (66)
                                                              ------------           ------------
INCOME TAXES ............................................               --                     --
                                                              ------------           ------------
NET INCOME (LOSS) .......................................     $        229           $        (66)
                                                              ============           ============
BASIC  NET INCOME (LOSS) PER COMMON SHARE ...............     $        .01           $       (.00)
                                                              ============           ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING ..............       37,858,501             37,836,420
                                                              ============           ============
DILUTED NET INCOME (LOSS) PER COMMON SHARE ..............     $        .01           $       (.00)
                                                              ============           ============
WEIGHTED AVERAGE  FULLY DILUTED COMMON SHARES OUTSTANDING       42,000,018             37,836,420
                                                              ============           ============
</Table>


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

                                       4
<PAGE>
                   SEVEN SEAS PETROLEUM INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (Unaudited; In thousands)

<Table>
<Caption>
                                                                         THREE MONTHS ENDED MARCH 31,
                                                                           2002               2001
                                                                        ---------           ---------
<S>                                                                      <C>                <C>
OPERATING ACTIVITIES
     Net income (loss) ........................................          $    229           $    (66)
     Add (subtract) items not requiring (providing) cash:
     Interest expense .........................................             2,746                 --
     Depletion, depreciation and amortization .................             2,524                914
     Realization of losses on hedging instruments .............               580                 --
     Other non-working capital charges ........................                13                 --
     Amortization of investments ..............................                --                (84)
     Changes in working capital excluding changes to cash and
     cash equivalents:
          Accounts receivable .................................            (1,462)             4,597
          Interest receivable .................................                --                 52
          Inventory ...........................................               149                 --
          Prepaids and other, net .............................              (655)               (49)
          Accounts payable ....................................            (1,690)            (2,218)
          Other accrued liabilities and other .................            (1,223)                73
                                                                         --------           --------
     Cash flow Provided by Operating Activities ...............             1,211              3,219
                                                                         --------           --------
INVESTING ACTIVITIES
     Exploration and development of oil and gas properties.....            (9,675)            (7,724)
     Proceeds from sale of investments ........................             7,542              1,168
     Other asset additions ....................................               (25)               (37)
                                                                         --------           --------
     Cash Flow Used in Investing Activities ...................            (2,158)            (6,593)
                                                                         --------           --------
FINANCING ACTIVITIES
     Proceeds from issuance of long-term debt .................                --              3,000
                                                                         --------           --------
     Cash Flow Provided by Financing Activities ...............                --              3,000
                                                                         --------           --------
NET (DECREASE) IN CASH AND CASH EQUIVALENTS ...................              (947)              (374)
Cash and cash equivalents, beginning of period ................            24,679             12,128
                                                                         --------           --------
CASH AND CASH EQUIVALENTS, END OF PERIOD ......................          $ 23,732           $ 11,754
                                                                         ========           ========
</Table>

Supplemental disclosures of cash flow information:

      The Company incurred interest costs of $5.0 million and $3.4 million for
the three-month periods ended March 31, 2002 and 2001, respectively, and $2.2
million and $3.3 million was capitalized during the respective periods.

      Cash paid for interest for each of the three-month periods ended March 31,
2002 and 2001 was zero.

      The Company paid zero for estimated income taxes during each of the
three-month periods ended March 31, 2002 and 2001.


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




                                       5
<PAGE>
                   SEVEN SEAS PETROLEUM INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


1. BASIS OF PRESENTATION:

The accompanying unaudited condensed consolidated financial statements of Seven
Seas Petroleum Inc. and Subsidiaries (collectively the "Company" or "Seven
Seas") have been prepared in accordance with instructions to Form 10-Q as
prescribed by the United States Securities and Exchange Commission (the "SEC").
In the opinion of management, all adjustments, consisting of normal recurring
accruals, necessary to present fairly the information in the accompanying
unaudited condensed consolidated financial statements have been included.
Interim period results are not necessarily indicative of the results of
operations or cash flows for a full year period. The unaudited condensed
consolidated financial statements included herein should be read in conjunction
with the audited financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2001.


2. GENERAL:

    Seven Seas is an independent oil and gas company engaged in the exploration
and development of oil and gas properties located in Colombia, South America.
The Company's principal asset is a 57.7% interest (before participation by
Ecopetrol, the Colombian national oil company) in the Dindal and Rio Seco
association contracts.

    The Company is the operator of the Guaduas Oil Field, which is located in an
area defined by the Rio Seco and Dindal association contracts covering a total
of approximately 108,000 contiguous acres in central Colombia. The Guaduas Oil
Field is located in the capital state of Cundinamarca, approximately 60 miles
northwest of Bogota. The Company's 57.7% working interest is distributed among
the following three wholly owned subsidiaries: 1) Seven Seas Petroleum Colombia
("SSPC"), a Cayman Islands corporation with a 40.8% working interest, 2)
Petrolinson S.A. ("Petrolinson"), a Panamanian corporation with a 6% working
interest, and 3) GHK Company Colombia ("GHK Colombia"), an Oklahoma corporation
with a 10.9% working interest. GHK Colombia is the operator for the Guaduas Oil
Field.

    As the operator of the Guaduas Oil Field, the Company exercises direct
supervision over all field operations, including drilling and production. The
other interest owners are Cimarrona LLC (9.4%) and Sociedad International
Petrolera S.A. ("Sipetrol"), the international exploration and production
subsidiary of the Chilean national oil company (32.9%). Collectively the Company
and the other interest owners are referred to as the "Associates".

GUADUAS OIL FIELD DEVELOPMENT

     In May 2000, Ecopetrol elected not to participate in the development of the
Guaduas Oil Field. The Associates elected to proceed on a sole-risk basis.
Sole-risk means that the Associates pay 100% of development costs and retain all
revenues from production after the 20% Colombian royalty deduction that is
administered by Ecopetrol on the government's behalf. Ecopetrol has the right to
start participating in the development at any time subject to the Associates'
right to recover 200% of the development costs spent since Ecopetrol's decision
not to participate plus certain exploration costs.

    As of March 31, 2002, the Company has spent $242.2 million to acquire and
$111.4 million to delineate the reserve potential of the Guaduas Oil Field. The
Company has participated in the drilling of fourteen exploratory and six
development wells within the Dindal and Rio Seco association contract areas.
Twelve wells have been productive and one well is currently being tested. One
well has been converted into a gas injection well. All but one of the remaining
six wells are temporarily abandoned; one of these six wells has been plugged and
abandoned. As of March 31, 2002, the Guaduas Oil Field had produced a cumulative
volume of approximately 4.1 million (2.0 million net to Seven Seas) barrels of
oil.

    In 2001 and 2002 to date, the Company has drilled six successful development
wells and constructed a 40-mile pipeline that connects the Guaduas Oil Field to
international oil markets via Colombia's existing pipeline infrastructure. The
Guaduas - La Dorada pipeline has an initial throughput capacity of approximately
25,000 barrels of oil per day ("BOPD"), expandable to approximately 40,000 BOPD
with additional investment. Seven Seas also constructed production facilities
for production of approximately 25,000 BOPD.


                                       6
<PAGE>

SUBTHRUST DINDAL PROSPECT - DEEP DINDAL ASSOCIATION CONTRACT

    The Subthrust Dindal Prospect is located below the producing zones of the
Guaduas Oil Field. In December 2001, the Company commenced drilling of the
Escuela 2 exploratory well to test this prospect. The Escuela 2 well is
programmed to reach a total measured depth of approximately 18,000 feet. The
primary geologic objectives are the subthrust Hoyon reservoir (Tertiary age) and
the subthrust Cimarrona reservoir (Cretaceous age). Tertiary formations are the
major oil and gas producing reservoirs in Colombia. As of the date of issuance
of these financial statements, the objective formations have not been
encountered and the well had reached a plugged-back total depth of 15,800 feet
at an estimated cost of $13.5 million.

    As a result of a January 2001 farm-out agreement with its partners in the
Guaduas Oil Field, Seven Seas has a 100% working interest in the Deep Dindal
association contract, subject to an obligation to assign a portion of this
interest to its partners after the first well has been drilled. The Company will
pay all of the estimated $15 million cost of drilling and testing the Subthrust
Dindal Prospect. Should the Escuela 2 be completed as a commercial well, the
Company will be obligated to assign either a collective 25.85% working interest
to Cimarrona LLC and Sipetrol, its partners in the Guaduas Oil Field, or a 9.4%
working interest to Cimarrona LLC and a 4.86% overriding royalty interest to
Sipetrol.


3. CAPITAL AVAILABILITY AND LIQUIDITY:

    The Company remains dependent on Guaduas Oil Field production such that if
production is interrupted for an extended period of time or if prices were to
decline for an extended period of time, cash reserves may decline to the point
where discretionary exploration and development drilling activities would have
to be delayed or cancelled. Seven Seas believes that at present oil prices,
revenues from current levels of production will continue to exceed operating
expense, general and administrative costs and debt interest payments for the
current year.


4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

DEVELOPMENT STAGE OPERATIONS

    Since the Company's inception through the second quarter of 2001, Seven Seas
was considered a development stage enterprise. The financial statements as of
December 31, 2000 were presented including all necessary disclosures to identify
the Company as a "Development Stage Enterprise". In July 2001, the Company began
regular oil deliveries into the newly constructed Guaduas - La Dorada Pipeline.
Accordingly, the development stage enterprise classification and related
financial statement disclosures were no longer required beginning with the third
quarter 2001 interim reporting period.


RESTRICTED SHORT-TERM INVESTMENTS

    As of March 31, 2002, restricted short-term investments are comprised of
$3.0 million escrowed for the drilling of the Escuela 2 well. The $3.0 million
is expected to be used in the third quarter of 2002.

OIL AND GAS PROPERTY

    The Company follows the full-cost method of accounting for oil and natural
gas properties. Under this method, all costs incurred in the acquisition,
exploration and development, including unproductive wells, are capitalized in
separate cost centers for each country. Such capitalized costs include
association contract and concession acquisition, geological, geophysical and
other exploration work, drilling, completing and equipping oil and gas wells,
constructing production facilities and pipelines, certain general and
administrative expenses, and interest applicable to unevaluated property costs
and other related costs.

    We capitalized general and administrative costs of $0.4 million and $0.1
million, and interest costs of $2.2 million and $3.3 million for the periods
ending March 31, 2002 and 2001, respectively.

                                       7
<PAGE>
OTHER ASSETS

    Included in other assets are costs associated with the issuance of long-term
debt. These costs are being amortized ratably over the life of the notes. Total
debt issuance costs for the Senior Notes amounted to $4.2 million, of which $1.9
million has not been amortized as of March 31, 2002. Total debt issuance costs
for the $45 Million Notes amounted to $1.7 million, of which $1.3 million
remains unamortized as of March 31, 2002. See Note 8 for additional information
on the notes.

PREPAIDS AND OTHER

    Prepaids and other includes $1.3 million of Colombian tax advances as of
March 31, 2002.

REVENUE RECOGNITION

    The Company records revenue using the entitlement method or, simply stated,
presents only its share of revenues. Any oil received and sold by the Company in
excess of its share is recorded as a liability. As of September 30, 2001, the
Company and its partners began to make up 261,987 barrels owed to Ecopetrol
(151,166 net to Seven Seas valued at $3.4 million). During the first quarter of
2002, the Company and its partners satisfied all make up obligations by
delivering to Ecopetrol the remaining 104,821 barrels (60,482 barrels net to
Seven Seas valued at $1.2 million) owed to them.


5. CASH AND CASH EQUIVALENTS:

    The Company considers highly liquid investments with a maturity of three
months or less as cash equivalents. The following table sets forth the Company's
cash and cash equivalents (in thousands):

<Table>
<Caption>
                                                       MARCH 31   DECEMBER 31
                                                         2002        2001
                                                       --------   ------------
<S>                                                      <C>         <C>
           Cash..................................        15,256      14,549
           Cash Equivalents......................         8,476      10,130
                                                        --------    -------
             Total Cash and Cash Equivalents.....        23,732      24,679
                                                        =======     =======
</Table>

    The March 31, 2002, cash balance includes total restricted cash of $11.1
million which is comprised of $6.4 million for the drilling of the Escuela 2
well, $4.6 million of escrowed interest for the May 15, 2002 semiannual interest
payment on the Senior Notes and $0.1 million committed to Colombian
reforestation efforts. The reforestation amount is related to a Colombian
requirement to commit 1% of drilling expenditures to reforestation of the
drilling development area.

6. DERIVATIVE INSTRUMENTS:

    Effective January 1, 2001, Seven Seas adopted Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS 133"). SFAS 133 establishes accounting and reporting
standards requiring that all derivative instruments be recorded on the balance
sheet as either an asset or liability measured at fair value and requires that
changes in fair value be recognized currently in earnings unless specific hedge
accounting criteria are met. Hedge accounting treatment allows unrealized gains
and losses on cash flow hedges to be deferred into other comprehensive income
(for the effective portion of the hedge) until such time as the forecasted
transaction occurs. Effectiveness is monitored quarterly and any ineffectiveness
is reported in revenues in the statement of consolidated operations.

    On November 9, 2001, the Company acquired financial put options that
established a monthly average WTI floor price of $20.00 per barrel on 3,750
barrels of crude oil per day beginning January 1, 2002, and continuing for six
months. The put options were acquired for $1,161,000 from a major commercial
bank as a cash flow hedge to ensure the required funds would be available to
fully execute the Company's 2002 exploration and development program in the
event of a further oil price decline. As of March 31, 2002, the fair value of
the remaining put options is zero. First quarter revenues reflect a $580,000
reduction related to the portion of the cash flow hedge that was settled in the
first quarter and a $30,000 gain related to the settlement of the January put
options. The remaining $580,000 is included in other comprehensive income as an
unrealized loss to reflect the change in fair value of the unrealized portion of
the cash flow hedge. The Company expects that such amount will be reclassified
into revenues in the second quarter of 2002 as the hedges are settled.

                                       8
<PAGE>



<Table>
<Caption>
<S>                                                                   <C>
        Roll-forward of Other Comprehensive Income (Loss)
        (In thousands):
             Balance at December 31, 2001 ........................    $    (45)
             Change in fair value of derivate instruments ........      (1,115)
             Realization of losses on hedging instruments ........         580
                                                                      --------
             Balance at March 31, 2002 ...........................    $   (580)
                                                                      --------
</TABLE>


7. OIL AND GAS PROPERTY - UNEVALUATED COSTS:

    Under the full-cost method, capitalized costs associated with the
acquisition and evaluation of unproved properties are excluded from amortization
until it is determined whether proved reserves can be assigned to such
properties or until the value of the properties is impaired. As of March 31,
2002, the Company has $79.5 million of unevaluated property costs. The $8.9
million increase as compared to December 31, 2001 is primarily comprised of
Escuela 2 exploration costs of $6.7 million and capitalized interest of $2.2
million.

8.   DEBT AND LONG-TERM OBLIGATIONS:

$45 MILLION FINANCING

CHESAPEAKE SENIOR NOTE ISSUANCE

    On July 23, 2001, Chesapeake Energy Corporation purchased $22.5 million of
senior secured notes ("CHK Notes") with detachable warrants to purchase
12,619,500 shares of Seven Seas common stock at approximately $1.78 per share.
The CHK Notes will bear interest at 12% per annum, compounded quarterly, and
interest will be accrued for the first two years.

SHAREHOLDER RIGHTS OFFERING

    The Company offered its non-Canadian shareholders of record as of October 8,
2001, in the form of a shareholder rights offering ("Rights Offering"), $22.5
million of Series A senior secured notes ("Series A Notes") with detachable
warrants to purchase 12,619,500 shares at approximately $1.78 per share. The
Series A Notes will bear interest at 12% annum, compounded quarterly, and
interest will accrue for the first two years. As of March 31, 2002, the combined
accrued interest on the CHK Notes and Series A Notes is $3.7 million and is
classified on the balance sheet as long-term interest payable. Accrued interest
will be due at maturity on November 7, 2004. Shareholders purchased
approximately $2 million of Series A senior secured notes with warrants to
purchase approximately 1.1 million shares at an exercise price of $1.78. The
remainder of the Series A Notes were purchased by a group of qualified investors
led by Robert A. Hefner III, the Company's Chairman and Chief Executive Officer.

CHESAPEAKE NOTE COVENANTS

     Pursuant to the Company's agreement under the CHK Notes, $15 million of the
total proceeds from the $45 million financing were escrowed for the drilling of
the Escuela 2 exploration well to test the Subthrust Dindal Prospect, located
below the Guaduas Oil Field. Additionally, for the first two years or until the
CHK Notes are redeemed, if the redemption occurs before July 23, 2003, the
Company will escrow monthly 1/6 of its semi-annual $6.9 million interest payment
on its $110 million Senior Notes.

    The CHK Notes covenants preclude the Company from incurring additional
indebtedness in excess of $1,000,000 excluding trade debt incurred in the
ordinary course of business. Also, the Company agreed to secure payment of the
CHK Notes and the Series A Notes by pledging to Chesapeake, as collateral agent,
all of the Company's right, title and interest in and to all of the capital
stock and equity of the subsidiaries of the Company and all dividends,
distributions, proceeds and products thereof or therefrom.

DISCOUNT ON $45 MILLION NOTES

    The $22.5 million CHK Notes and the $22.5 million Series A Notes are
collectively referred to as the "$45 Million Notes". The $45 Million Notes were
issued along with detachable warrants to purchase shares of common stock. Based
on an independent valuation, the fair market valuation of the detachable
warrants at the date of issuance was determined to be $2.2 million, and the $45
Million Notes were valued at $42.8 million, representing a $2.2 million
discount. The discount is amortized to interest expense over the life of the $45
Million Notes in order to reduce the discount to zero by the due date of the $45
Million Notes. During the first quarter of 2002, $0.2 million of imputed
interest expense was recognized in the Consolidated Statements of Operations.
Cumulative

                                       9
<PAGE>
imputed interest from inception amounts to $0.5 million as of March 31, 2002.

$110 MILLION SENIOR NOTES

    The Company issued $110 million aggregate principal amount of 12-1/2% notes
due 2005 ("Senior Notes") in a private transaction on May 7, 1998 that was not
subject to registration requirements of the Securities Act of 1933. The Senior
Notes mature May 15, 2005. Interest payments of approximately $6.9 million are
due on May 15 and November 15 of each year. The Senior Notes place restrictions
on, among other things, net working capital balances, dividend distributions,
changes in control, asset sales and indebtedness.

    The Senior Notes represent senior obligations of the Company, ranking pari
passu in right and priority of payment with all existing and future senior
indebtedness and senior in right and priority of payment to all indebtedness
that is expressly subordinated to the Senior Notes.


9.   COMMITMENTS AND CONTINGENCIES:

POPULAR ACTION SUIT

    In February 2002, the Company was served notice of a popular action suit
before the Guaduas Equity Court. This claim was filed by the Peoples' Committee
for the Environmental Protection of Guaduas, a local, non-governmental
organization. The plaintiffs are requesting that the courts take the following
actions: a) suspend oil activity on the upper part of the San Francisco River
Basin because that area is a forest reserve and b) suspend the underground
waters concession GHK Colombia has over the El Hoyon aquifer. If the court
decided in favor of the plaintiff's claims, the Company's Escuela 2 drilling
operations would cease or become impaired.

    On April 29, 2002, the Company appeared before the Guaduas Equity Court
stating that the Company has obtained a proper environmental license from the
competent environmental authority to conduct oil exploration activities, drill
the Escuela 2 well in the San Francisco River Basin and use the aquifer water.
The Company also contends that the drilling activities do not affect the basin,
which is an argument that is supported by independent third party studies and
served as the basis to obtain the environmental permit to drill the Escuela 2
well in that area. The purpose of the Court hearing was to gather information.
No actions were taken by the Guaduas Equity Court; however, the Court did
acknowledge that the Colombian Ministry of Environment is a party to this suit.
Based on this acknowledgement, the Company has requested a change of venue to
the Administrative Court in Bogota.

    The Company's Colombian counsel believes that it is unlikely these adverse
rulings will be rendered by the Court.

HEIRS OF NICOLAS BELTRAN FRANCO

    Two of the Company's subsidiaries, Petrolinson and GHK Colombia, along with
the former owner of Petrolinson, Norman Rowlinson and the heirs of Howard Thomas
Corrigan, are defendants in a lawsuit that was filed in Santa Fe de Bogota,
Colombia in 1998. The plaintiffs, who are the heirs of Nicolas Beltran Franco,
have two claims. First, they claim that a de facto company existed between
Nicolas Beltran Franco and the defendants concerning the Dindal and Rio Seco
association contract areas. Second, they claim that before the Dindal and Rio
Seco association contracts were executed, the de facto company conducted
exploration works in the Dindal and Rio Seco association contract areas. The
plaintiffs claim they have the right to participate in income earned from the
Dindal and Rio Seco association contract areas. None of the plaintiffs are party
to the association contracts. However, they are seeking 50% of the income
generated by the de facto company they claim existed. It is not clear what
percentage of the Dindal and Rio Seco association contract areas are covered by
the plaintiffs' claims. The Company's Colombian counsel believes that it is
unlikely these adverse rulings will be rendered by the Court.


10. NEW ACCOUNTING PRONOUNCEMENTS:

    During 2001, the Financial Accounting Standards Board issued the following
four new pronouncements:

    Statement 141, Business Combinations, requires the purchase method of
accounting for all business combinations and applies to all business
combinations initiated after June 30, 2001 and to all business combinations
accounted for by the purchase method that are completed after June 30, 2001.

                                       10
<PAGE>

    Statement 142, Goodwill and Other Intangible Assets, requires that goodwill
as well as other intangible assets be tested annually for impairment and is
effective for fiscal years beginning after December 15, 2001.

    Statement 143, Accounting for Asset Retirement Obligations, requires
entities to record the fair value of a liability for an assets retirement
obligation in the period in which it is incurred and a corresponding increase in
the carrying amount of the related long-lived asset and is effective for fiscal
years beginning after June 15, 2002.

    Statement 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, provides that long-lived assets to be disposed of by sale be measured at
the lower of carrying amount or fair value less cost to sell, whether reported
in continuing operations or in discontinued operations, and broadens the
reporting of discontinued operations to include all components of an entity with
operations that can be distinguished from the rest of the entity and that will
be eliminated from the ongoing operations if the entity is a disposal
transaction. Statement 144 is effective for fiscal years beginning after
December 15, 2001.

  The Company does not believe Statement 143 will have a material effect in its
financial condition and results of operations going forward. The adoption of
Statements 141, 142 and 144 has not resulted in any significant effect in the
Company's financial statements.


11.  RELATED PARTY TRANSACTIONS:

    On March 31, 2002, the Company amended a $200,000 unsecured loan to Larry A.
Ray, President and Chief Operating Officer. The new terms provide for an
interest rate of 2.69% and a due date of September 9, 2003. The original
$200,000 loan was made on November 1, 1997 at a 6.06% interest rate for purposes
of purchasing a residence and was due on November 1, 2002.


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

     The following discussion and analysis should be read in conjunction with
the unaudited condensed consolidated financial statements included elsewhere and
with the Company's Annual Report on Form 10-K for the year ended December 31,
2001.

                                    OVERVIEW

    Our principal asset is a 57.7% interest (before participation by Ecopetrol,
the Colombian national oil company) in the Dindal and Rio Seco association
contracts, which cover the area in which the Guaduas Oil Field is located. As of
December 31, 2001, the Ryder Scott Company Petroleum Consultants estimated Seven
Seas' net proved reserves attributable to the delineation of 12,821 acres of the
Guaduas Oil Field were 47.6 million barrels with a present value (discounted
continually over the expected life of the production at 10% per annum) of $272.3
million. As the operator of the field, we exercise direct supervision over all
field operations, including drilling and production. The other interest owners
are Cimarrona (9.4%), and Sipetrol (32.9%). In May 2000, Ecopetrol elected not
to participate in the development of the Guaduas Oil Field. Together with our
partners, we elected to proceed with field development on a sole-risk basis,
meaning we pay 100% of the costs and receive 100% of the revenues from
production less a fixed 20% Colombian government royalty. After we have
recovered 200% of the development costs and certain exploration costs, Ecopetrol
will have the right to become a 50% working interest partner in the project.

                               RECENT DEVELOPMENTS
DEVELOPMENT DRILLING PROGRAM

    In January 2002, the Tres Pasos 6-N development well was successfully
completed with initial production of 3,000 BOPD. The well is located 1.5
kilometers northwest of the surface location of the El Segundo 1-E, the Guaduas
Oil Field discovery well.

    In March 2002, a fifth development well, the Tres Pasos 6-E was successfully
completed with initial production of 1,000 BOPD. This well was drilled from the
same location as the fourth development well, the Tres Pasos 6-N.

    The sixth Guaduas Oil Field development well, the Tres Pasos 7-W, is
currently in production test and is flowing at approximately 600 BOPD. The
Company is evaluating possible well stimulation treatments to enhance
production.

                                       11
<PAGE>

GAS INJECTION PROGRAM

    Our gas injection program is expected to commence operations in mid-May
after experiencing delays due to compressor availability. Guaduas Oil Field
production has been curtailed pursuant to Colombian regulatory guidelines
limiting gas disposal through flaring. This resulted in several well's
production being curtailed at various times due to excess gas production.

EXPLORATION DRILLING

After commencing drilling in December 2001 to test the Subtthrust Dindal
Prospect, the Escuela 2 exploration well was drilled to a total measured depth
of 16,471 feet in early May 2002. At this depth, the drill pipe became stuck at
16,265 feet while a gas influx was being circulated out of the hole. The drill
pipe was recovered to a depth of 15,955 feet, leaving 310 feet of drill pipe and
drilling tools in the hole. Currently, the Company is running 9 5/8 inch casing
to a depth of 15,800 feet before recommencing drilling activities. Cumulative
costs as of the date of issuance of the financial statements, are estimated at
$13.5 million. Absent additional well problems, the Company believes that it can
reach the total targeted depth of 18,000 at a cost not to exceed the $15 million
that has been escrowed to drill the well.

ASSOCIATION CONTRACTS

In April 2002, Ecopetrol granted a four-month extension to August 23, 2002 for
the Company to comply with its obligations under the first stage of the
Cristales Association Contract exploration period.

                              OUR CURRENT STRATEGY

    Our strategy for 2002 includes the continued development of the Guaduas Oil
Field and new exploration on our Colombian properties.

DEVELOPMENT

    We will continue the 2001/2002 nine well development drilling program. Five
of the nine wells were successfully completed as commercial producers in 2001
and 2002. The sixth well is currently being tested. Additionally, an existing
well has been converted to a gas injection well as part of our gas injection
program. We believe additional development well drilling coupled with the gas
injection program and submersible pump reconfigurations will increase pipeline
production from current rates of approximately 7,500 BOPD to 18,000 to 25,000
BOPD . The three remaining wells of the 2001/2002 nine well development program
will cost $ 10.1 million and the gas injection system $0.6 million. Our share of
these costs will be $6.2 million.

    Depending on the success of the initial nine-well development program and
the price of oil, we have tentatively planned to drill two additional
development wells in 2002 at a cost of $6.7 million, $3.9 million net to Seven
Seas.

EXPLORATION

    On December 6, 2001, we commenced drilling the Escuela 2 subthrust
exploratory test. Refer to previous comments under "Recent Developments."

    By July 28, 2002, we are committed to drill an exploratory well to test the
Aguachica prospect under the Rosablanca association contract. The proposed Santa
Fe 1 well is planned to a projected depth of 3,500 feet at a total gross cost of
approximately $1.0 million. We will incur 100% of these costs.

                         LIQUIDITY AND CAPITAL RESOURCES

WORKING CAPITAL

    We had working capital of $5.6 million as of March 31, 2002, net of
restricted cash and cash equivalents and restricted investments. This amount
includes unrestricted cash and cash equivalents of $12.6 million. The restricted
investments total $14.1 million and are comprised of the Escuela 2 escrow fund
in the amount of $9.5 million and Senior Notes interest escrow in the amount of
$4.6 million. During the first quarter of 2002, working capital decreased by
$8.2 million primarily because of drilling operations. Our non-discretionary
cash commitments for 2002 are limited to the May and November semi-annual
interest payments on the Senior

                                       12
<PAGE>
Notes totaling $13.8 million. The CHK Notes limits additional indebtedness to
$1.0 million. Continuing operations and drilling activities for the year must be
funded from operational cash flows. This makes the implementation of the
Company's current business strategy more susceptible to crude oil price
declines, Colombian internal political unrest as well as the other risk factors
detailed in the Company's 2001 Annual Report on Form 10-K.

    During the three month periods ending March 31, 2002 and 2001, cash flows
provided by operating activities were $1.2 million and $3.2 million,
respectively. The completion of the Guaduas - La Dorada Pipeline and production
facilities and the ongoing successful 2001/2002 development drilling program has
resulted in sustained production volumes in the range of 7,500 to 10,500 BOPD.
Seven Seas believes that at present oil prices, revenues from current levels of
production will continue to exceed operating expense, general and administrative
costs and debt interest payments for the current year.


EQUITY AND FINANCING ACTIVITIES

    As of March 31, 2002, we had 37,858,501 outstanding common shares, par value
of $0.001 per share, of which none are restricted.

                              RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2002 AND 2001.

    For the three months ended March 31, 2002 (the "Current Quarter"), we
incurred a net gain of $229,000, or $0.01 per common share. This compares to a
net loss of $66,000, or $0.00 per common share during the three months ended
March 31, 2001 (the "Prior Quarter").

    Crude oil sales in the Current Quarter increased by $4.2 million to $7.6
million as compared to the Prior Quarter largely because of the July 2001
commencement of pipeline operations and the ongoing successful development
drilling program. The Current Quarter had total sales of 448,702 barrels at an
average price of $18.42 per barrel. The Prior Quarter had total sales of 162,981
barrels at an average price of $20.83 per barrel. The effect of the put option
settlement during the Current Quarter was immaterial.

    Oil production in the Current Quarter and Prior Quarter respectively was
421,018 barrels and 162,981 barrels.

    Depletion, depreciation and amortization costs increased $1.6 million to
$2.5 million in the Current Quarter as compared to $0.9 million in the Prior
Quarter. The increase is primarily the result of increased production.

    Operating expenses in the Current Quarter and the Prior Quarter were $1.3
million and $1.0 million, respectively. The $0.3 million increase is related to
increased production.

    General and administrative costs were $1.0 million and $1.5 million for the
Current Quarter and Prior Quarter respectively. The $0.5 million decrease is
primarily attributable to non-recurring general and administrative costs related
to the migration of the Company to the Cayman Islands from the Yukon Territory
incurred in the Prior Quarter.

    Interest expense increased by $2.5 million to $2.7 million in the Current
Quarter as compared to the Prior Quarter. The $2.5 million increase is the
result of $1.4 million of additional interest expense associated with the $45
million financing in July 2001 and the year-end reduction of unevaluated
property costs that resulted in $1.1 million reduction in capitalized interest
costs.

                           FORWARD-LOOKING INFORMATION

    From time to time, Seven Seas may make certain statements that provide
shareholders and the investing public with "forward-looking" information as
defined by the federal securities laws. Words such as "anticipate," "assume,"
"believe," "estimate," "project," and similar expressions are intended to
identify such forward-looking statements. Forward-looking statements may be made
by management orally or in writing, including, but not limited to, in press
releases, as part of this "Management's Discussion and Analysis of Financial
Condition and Results of Operations" section and as part of other sections of
Seven Seas' filings with the U.S. Securities and Exchange Commission. Such
forward-looking statements may include, but not be limited to, statements
concerning estimates of current and future results of operations, financial
position, reserves, the timing and commencement of wells and


                                       13
<PAGE>
development plans, drilling results as indicated by log analysis, core samples,
examination of cuttings, hydrocarbons shows while drilling and production
estimates from wells drilled based upon drill stem tests and other test data,
future capacity under credit arrangements, future capital expenditures,
liquidity requirements and liquidity sufficiency.

    Such forward-looking statements are subject to certain risks, uncertainties
and assumptions, including without limitation, those defined below. Should one
or more of these risks or uncertainties materialize, or should any of the
underlying assumptions prove incorrect, actual results of current and future
operations may vary materially from those anticipated, estimated or projected.

    Among the factors that have a direct bearing on Seven Seas' results of
operations and the oil and gas industry in which it operates are uncertainties
inherent in estimating oil and gas reserves and future hydrocarbon production
and cash flows, particularly with respect to wells that have not been fully
tested and with wells having limited production testing histories; access to
additional capital; changes in the price of oil and natural gas, services and
equipment; the limited exploration of the concessions; the status of existing
and future contractual relationships with Ecopetrol; foreign currency
fluctuation risks; Seven Seas' substantial indebtedness; the presence of
competitors with greater financial resources and capacity; and difficulties and
risks associated with operating in Colombia.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    We are exposed to market risk, including adverse changes in commodity
prices, interest rates and foreign currency exchange rates as discussed below.

COMMODITY RISK

    The market prices for oil and natural gas historically have been volatile
and are likely to continue to be volatile in the future. Oil and natural gas
prices may fluctuate in response to relatively minor changes in supply of and
demand for oil and natural gas, market uncertainty and a variety of additional
factors that are beyond our control. Decreases in oil and natural gas prices
will adversely affect our future revenues, results of operations and cash flows.
Additionally, decreases in oil and natural gas prices may impede our ability to
raise additional capital. The Company has acquired financial put options that
established our monthly average WTI floor price of $20.00 per barrel for 3,750
barrels of crude oil per day for the entire second quarter.

INTEREST RATE RISK

    We consider our interest rate risk exposure to be minimal as a result of a
fixed interest rate on the $110 million 12 1/2% Senior Notes and 12% Chesapeake
Note and Series A Notes. We currently have no open interest rate swap
agreements.

FOREIGN CURRENCY EXCHANGE RATE RISK

    We conduct business in a foreign currency and are subject to foreign
currency exchange rate risk on cash flows related to sales, expenses and capital
expenditures. However, because predominately all transactions in our existing
foreign operations are denominated in U.S. dollars, the U.S. dollar is the
functional currency for all operations.

PART II. OTHER INFORMATION

     Item 1.  Legal Proceedings - NA
     Item 2.  Changes in Securities and Use of Proceeds - N/A
     Item 3.  Defaults Upon Senior Securities - N/A
     Item 4.  Submission of Matters to a Vote of Security Holders - N/A
     Item 5.  Other Information - N/A
     Item 6.  Exhibits & Reports on Form 8-K



                                       14
<PAGE>
(a)      Exhibits


<Table>
<Caption>

            EXHIBIT
            NUMBER                                         DESCRIPTION
<S>                 <C>      <C>
        (3)         Articles of Incorporation and By-laws

                    (A)     Certificate of Continuance to the Cayman Islands,
                            incorporated by reference to Exhibit 3(A) in the
                            Company's annual report on Form 10-K for the year
                            ended December 31, 2000

                    (B)     Memorandum of Association, incorporated by reference
                            to Exhibit 3(B) in the Company's annual report on
                            Form 10-K for the year ended December 31, 2000

                    (C)     Articles of Association, incorporated by reference
                            to Exhibit 3(C) in the Company's annual report on
                            Form 10-K for the year ended December 31, 2000

        (4)         Instruments Defining the Rights of Security Holders,
                    Including Indentures

                    (A)     Resolution of Board of Directors authorizing Series
                            A Junior Participating Preferred Stock of the
                            Company, incorporated by reference to Exhibit 4 in
                            the Company's current report on Form 8-K filed March
                            19, 2002

                    (B)     Form of Stock Certificate of the Company,
                            incorporated by reference to Exhibit 4(A) in the
                            Company's annual report on Form 10-K for the year
                            ended December 31, 2001

                    (C)     Description of Capital Stock of the Company,
                            incorporated by reference to Exhibit 4(B) in the
                            Company's annual report on Form 10-K for the year
                            ended December 31, 2001

       (10)         Material Contracts

                    (A)     Rights Agreement dated as of March 15, 2002 between
                            the Company and American Stock Transfer & Trust
                            Company, Rights Agent, incorporated by reference to
                            Exhibit 10 in the Company's current report on Form
                            8-K filed March 19, 2002
</Table>

       (b) Reports on Form 8-K. The Company filed a Current Report on Form 8-K
       January 22, 2002 updating the Company's description of its capital stock.
       The Company filed a Current Report on Form 8-K March 19, 2002 reporting
       the adoption of a preferred shareholder rights plan. The Company filed a
       Current Report on Form 8-K May 3, 2002 reporting production rates of the
       Guaduas Oil Field.


SIGNATURES

                                      SEVEN SEAS PETROLEUM INC.




Date: May 15, 2002                    By: /s/ LARRY A. RAY
                                         ---------------------------------------
                                          Larry A. Ray, President and
                                          Chief Operating Officer



                                      By: /s/ RONALD A. LEFAIVE
                                         ---------------------------------------
                                          Ronald A. Lefaive, Chief Financial
                                          Officer and Secretary




                                       15