<PAGE>
 
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549
                                        
                                   FORM 10-K
(Mark One)
  X   Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
 ---  Act of 1934 For the fiscal year ended April 30, 1998

     
                                       OR

 ___  Transition Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934 For the transition period __________ to ___________

      Commission File Number 001-11763
 
                          TRANSMONTAIGNE OIL COMPANY

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

                  2750 REPUBLIC PLAZA, 370 SEVENTEENTH STREET
                            DENVER, COLORADO 80202
         (Address, including zip code, of principal executive offices)
                                (303) 626-8200
                    (Telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

                                                         NAME OF EACH EXCHANGE
     TITLE OF EACH CLASS                                 ON WHICH REGISTERED
     -------------------                                 -------------------
COMMON STOCK; $.01 PAR VALUE                             AMERICAN STOCK EXCHANGE

Securities registered pursuant to Section 12(g) of the Act:  NONE

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such report), and (2) has been subject to such filing requirements for
the past 90 days.

                                Yes [x]  No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [x]

State the aggregate market value of the voting stock held by non-affiliates of
the Registrant.  The aggregate market value is computed by reference to the last
sale price of the Registrant's Common Stock on the American Stock Exchange on
July 21, 1998.

                                   $177,023,000

The number of  shares of the registrant's Common Stock outstanding on July 21,
                                   1998 was
                                  25,953,324

                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Definitive Proxy Statement relating to the 1998 Annual Meeting
of Shareholders of the registrant are incorporated by reference into Part III.
<PAGE>
 
                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
 
          ITEM                                                         PAGE NO.
<S>                                                                    <C>
Part I      1.   Business                                                  3 
 
            2.   Properties                                               15
             
            3.   Legal Proceedings                                        15
                                        
            4.   Vote of Security Holders                                 15
 
Part II     5.   Market for Common Stock                                  16
 
            6.   Selected Financial Data                                  17
                                                                         
            7.   Management's Discussion and Analysis of                 
                   Financial Condition and Results of Operations          20
                                                                         
            8.   Financial Statements and Supplementary Data              39
                                                                         
            9.   Changes in and Disagreements with Accountants           
                   on Accounting and Financial Disclosures                69
 
Part III    10.  Directors and Executive Officers                         69
 
            11.  Executive Compensation                                   69
                                                                        
            12.  Security Ownership of Certain Beneficial               
                   Owners and Management                                  69
                                                                        
            13.  Certain Relationships and Related Transactions           69
 
Part IV     14.  Exhibits, Financial Statement Schedules and          
                   Reports on Form 8-K                                    71
</TABLE>

                                       2
<PAGE>
 
                                     PART I
ITEM 1.  BUSINESS

GENERAL
 
     TransMontaigne Oil Company ("TransMontaigne") provides a broad range of
integrated transportation, terminaling, supply, distribution, gathering,
processing and marketing services to producers, refiners, distributors,
marketers and end-users of petroleum products, chemicals, other bulk liquids,
natural gas and crude oil in the downstream sector of the petroleum and chemical
industry. TransMontaigne is a holding company which conducts its operations
through subsidiaries primarily in the mid-continent and Rocky Mountain regions
of the United States. TransMontaigne does not explore for, or produce, crude oil
or natural gas, and does not own crude oil or natural gas reserves.

     TransMontaigne owns and operates refined petroleum products, chemicals,
other bulk liquids, crude oil and natural gas assets. TransMontaigne refined
petroleum products, chemicals, other bulk liquids and crude oil assets consist
primarily of approximately 790 miles of pipeline and 31 terminal, storage and
delivery facilities located in 10 states with a combined tank storage capacity
of approximately 8,500,000 barrels. TransMontaigne natural gas gathering and
processing assets consist of 5 gathering and processing systems in 3 states with
combined throughput capacity of approximately 94 million cubic feet per day and
over 2,800 miles of pipeline. TransMontaigne also extensively utilizes refined
petroleum products common carrier pipelines and terminals owned by third parties
in order to increase product volumes shipped, marketed and sold to and exchanged
with customers in other locations. TransMontaigne management believes that the
use of these facilities should allow TransMontaigne to significantly expand its
geographic service area and the integrated logistical services it provides.

     TransMontaigne operations are conducted through its logistical petroleum
services business segment which primarily includes pipelining, terminaling,
storing, supplying, distributing and marketing refined petroleum products and
through its natural gas services business segment which includes the gathering,
treating, processing, fractionating and marketing natural gas liquids ("NGL")


                                       3
<PAGE>

and natural gas. Operating information relating to these business segments is
presented in note 18 to the financial statements.

     TransMontaigne believes that fundamental structural changes and the trend
toward outsourcing in the petroleum industry are creating opportunities for its
continued growth. Major oil companies and independents are undertaking
reorganization, rationalization and cost-saving measures in an effort to improve
operating and financial performance. This is expected to result in the
disposition of domestic non-strategic, non-core businesses and downstream assets
and facilities, and in the outsourcing of procurement, maintenance,
transportation, supply, distribution, gathering, processing, marketing and
administrative functions.

     TransMontaigne believes that the disposition of downstream assets and
facilities provides opportunities for it to selectively purchase pipeline,
storage, terminal, gathering and processing assets, and to apply focused
management and more cost effective utilization of these facilities while also
providing value added service at competitive prices to its customers, which
often include the former owners of the assets. TransMontaigne has acquired,
designed and developed its physical assets and its operating, risk management
and information systems in order to take advantage of these opportunities.

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

     In December 1996 TransMontaigne acquired the Grasslands natural gas
gathering, processing, treating and fractionation system (the "Grasslands
Facilities") for approximately $71,000,000 in cash. The Grasslands system is one
of the largest natural gas facilities in the Williston Basin which is currently
among the more active areas of onshore domestic drilling activity.  The
acquisition of the Grasslands Facilities has enabled TransMontaigne to increase
its earnings by capitalizing on the industry's divestiture trend and applying
its management expertise in the downstream sector of the petroleum industry.
These facilities are the cornerstone of TransMontaigne's natural gas gathering
and 

                                       4
<PAGE>
 
processing facilities in the Williston Basin of the Rocky Mountain region, and
enable TransMontaigne to provide high quality service to oil and gas producers
as well as to distributors, marketers and end-users of NGL and natural gas.

     In November 1997 TransMontaigne acquired the common stock of 17
corporations, known as the "ITAPCO Terminal Corporations", and certain related
property and property interests. The acquisition included 17 bulk liquid storage
and distribution terminals located in 8 states having total tankage capacity in
excess of 3.3 million barrels, handling primarily refined petroleum products,
chemicals and other bulk liquids together with the related operations of the
terminals and 7 contracts for providing management services to non-owned storage
and distribution terminals, pipelines and related facilities for third parties.
The ITAPCO Terminal Corporations purchase price was $32,000,000 ($31,458,000
cash plus assumption of outstanding bank debt of approximately $542,000) and was
funded by an advance of $22,000,000 from the TransMontaigne bank credit facility
with the balance from TransMontaigne cash reserves.

     Subsequent to the acquisition of the ITAPCO Terminal Corporations,
TransMontaigne acquired for an aggregate of $4,686,000 the remaining 50%
interest in a 153,000 barrel terminal located in Owensboro, Kentucky which it
did not previously own; a 259,000 barrel terminal located in Greenville,
Mississippi; and the remaining 50% interest in a partnership which owns and
operates a natural gas gathering and processing facility located in Lignite,
North Dakota which it did not previously own.  In addition, TransMontaigne has
expended  approximately $1,100,000 on improvements and enhancements to the 
ITAPCO Terminal Corporations facilities since its acquisition.

     TransMontaigne intends to continue to make strategic additions to and
expand its existing facilities in order to maintain quality service levels,
increase operating efficiencies, achieve incremental net earnings and improve
its competitive position. This strategy has resulted in capital improvements
aggregating over $10,000,000 at its East Chicago, Indiana storage facilities,
North Little Rock, Arkansas and South Bend, Indiana terminals and NORCO pipeline
system in Illinois, Indiana and Ohio during the year ended April 30, 1998.

                                       5
<PAGE>
 
     The executive offices of TransMontaigne, a Delaware corporation, are
located at 2750 Republic Plaza, 370 Seventeenth Street, Denver, CO  80202;
telephone number (303) 626-8200 and facsimile number (303) 626-8228.

     TransMontaigne's logistical petroleum services operations are headquartered
at 280 North College, Suite 500, Fayetteville, AR 72701; telephone number (501)
521-5565 and facsimile number (501) 442-4650. TransMontaigne's natural gas
services are headquartered at 2750 Republic Plaza, 370 Seventeenth Street,
Denver, CO 80202; telephone number (303) 626-8282 and facsimile number (303) 
626-8299.

LOGISTICAL PETROLEUM SERVICES

     Through its wholly owned subsidiary, TransMontaigne Transportation Services
Inc., TransMontaigne provides refined petroleum product and crude oil
transportation, terminal and storage services to over 600 customers, including
most major oil companies and independent refiners in the United States.
TransMontaigne owns 790 miles of pipeline and 31 terminal, storage and delivery
facilities in 10 states with a combined tank storage capacity of approximately
8,500,000 barrels in conjunction with major mid-continent pipeline and terminal
systems owned by others in order to transport products to market destinations
and to conduct exchange transactions with major and independent petroleum
companies. The combined utilization of TransMontaigne-owned and non-owned
facilities should allow it to significantly expand its geographic service area
and the nature of services it provides. Through its wholly owned subsidiary,
TransMontaigne Product Services Inc., TransMontaigne provides product services
consisting of the bulk purchase and sale of significant volumes of refined
petroleum products and the wholesale marketing of products at terminal truck
loading rack locations, both of which are high volume, low margin activities.

PIPELINES

     TransMontaigne owns and operates a 480-mile refined petroleum products
pipeline from Ft. Madison, Iowa through Chicago, Illinois to Toledo, Ohio (the
"NORCO pipeline") together with associated storage facilities located at
Hartsdale and East Chicago, Indiana and Toledo, Ohio and 

                                       6
<PAGE>

delivery facilities located at Elkhart, Indiana and Chillicothe and Galesburg,
Illinois. The NORCO pipeline system is interconnected to all major mid-continent
common carriers. TransMontaigne also owns a 60% interest in a 67-mile refined
petroleum products pipeline operating from Mt. Vernon, Missouri to Rogers,
Arkansas (the "Razorback pipeline") together with an associated storage facility
at Mt. Vernon. The Razorback pipeline is the only refined petroleum products
pipeline providing transportation services to northwest Arkansas. TransMontaigne
also owns and operates a 220-mile crude oil gathering pipeline system, with
627,500 barrels of tank storage capacity, located in east Texas (the "CETEX
pipeline").

     In general, a shipper owns the refined petroleum products or crude oil and
transfers custody of the products to the NORCO or Razorback pipelines, or the
crude oil to the CETEX pipeline, for shipment to a delivery location at which
point custody again transfers. Tariffs for the transportation service are
regulated and are charged by TransMontaigne to shippers based upon the
origination point on the pipelines to the point of product delivery. These
tariffs do not include fees for the storage of products at the NORCO and
Razorback pipeline storage facilities or crude oil at the CETEX pipeline storage
facilities.  Fees for the terminaling and storage of products at TransMontaigne
terminals are separately charged if those facilities are utilized.

     TransMontaigne's pipeline business depends in large part on the level of
demand for refined petroleum products in the markets served by the pipelines,
together with the ability and willingness of refiners and marketers having
access to the pipelines to supply that demand by shipments through these
pipelines. Competition is based primarily on pipeline operational dependability,
quality of customer service provided and proximity to end-users, although
product pricing at either the origin or terminal destination on a pipeline may
outweigh transportation cost considerations. TransMontaigne believes that high
capital costs, tariff regulation, environmental considerations, problems in
acquiring rights-of-way and TransMontaigne's existing available capacity make it
unlikely that additional competing pipeline systems comparable in size to the
NORCO and Razorback pipelines will be built in the near term.

                                       7
<PAGE>
 
TERMINALS

     TransMontaigne owned and operated terminals handling petroleum products
connect with product transportation systems, storage facilities and product
distribution locations. These terminals are located in Rogers, Arkansas; North
Little Rock, Arkansas; East Chicago, Indiana; Indianapolis, Indiana; South Bend,
Indiana; Mt. Vernon, Missouri; and Bryan, Ohio. The former ITAPCO Terminal
Corporations facilities handle petroleum products, chemicals and other bulk
liquids with transportation connections via pipelines, barges, rail cars and
trucks and are located in Brownsville, Texas; Evansville, Indiana; Cincinnati,
Ohio; Greenville, Mississippi; Henderson, Kentucky; New Albany, Indiana;
Louisville, Kentucky; Arkansas City, Arkansas; Cape Girardeau, Missouri; East
Liverpool, Ohio; Owensboro, Kentucky; Paducah, Kentucky; and Chippewa Falls,
Wisconsin.

     Products terminal revenues are based on volumes handled, generally at a
standard industry fee. Terminal fees are not regulated. The terminals receive
petroleum products in bulk quantities from connecting pipeline systems. Products
are stored in bulk at the terminals and made available to wholesale, shipment
and exchange customers which transport the products by truck to commercial and
retail destinations and then to the end-user.  TransMontaigne markets refined
petroleum products over truck loading racks at owned terminals, as well as
through exchanges with numerous companies at other non-owned terminals located
throughout the TransMontaigne distribution area. TransMontaigne believes that
based on location, pipeline connections and quality of service, its terminals
offer advantages over competing terminals.

     Chemicals and other bulk liquids terminal revenues are based upon the type
and volume of the liquids handled, including any special temperature
maintenance, labor intensive loading/off-loading requirements or other handling
services.  These terminal fees are not regulated; are generally negotiated on an
individual contract basis with a term of one year or less; and typically are at
rates which exceed those for handling petroleum products due to the particular
nature of the items handled.   TransMontaigne does not market or own inventories
of chemicals and other bulk liquids.



                                       8
<PAGE>

     Major and independent petroleum companies own terminal and storage
facilities which often have similar capabilities to those owned by independent
operators such as TransMontaigne, but generally do not provide terminaling and
storage services to third parties. In many instances, these companies are also
significant customers of TransMontaigne and frequently provide strong demand for
its terminals, particularly when TransMontaigne's terminals and storage
facilities have more cost effective locations near key transportation
connections. These companies also utilize TransMontaigne for terminaling and
storage services when their proprietary facilities are inadequate, either
because of size constraints, the nature of the products, chemicals and other
bulk liquids stored or the need for specialized handling requirements
particularly when certain types of chemicals and other bulk liquids are
involved. Terminal fees are not regulated.

     Ancillary services, including injection of shipper-furnished or
TransMontaigne-furnished additives, are also available for a fee at
TransMontaigne terminals.

STORAGE

     The East Chicago, Indiana facility, purchased in January 1997, has
approximately 1,254,000 barrels of storage capacity, including specialized
storage for aviation and jet fuel, and strategic connections to additional
pipelines and facilities in the Chicago, Illinois and Whiting, Indiana areas.
The South Bend Terminal, inactive since its purchase in 1992, was demolished and
rebuilt during 1996 and reopened in January 1997 with a storage capacity of
206,000 barrels and a capability of delivering volumes in excess of 25,000
barrels per day. These facilities enhance terminaling revenues as well as
increase utilization and tariff revenues on the NORCO pipeline system. Chemical
and other bulk liquids storage became a component of the logistical petroleum
business segment following the ITAPCO Terminal Corporations acquisition and
represents an important future source of both storage and terminal revenues.

     Storage of refined petroleum products, chemicals and other bulk liquids at
TransMontaigne-owned facilities pending delivery is an integral service
function.  Storage fees are generally based on a per gallon rate or on tankage
capacity committed and will vary with the duration of the storage arrangement,
the product stored and special handling requirements. Storage fees are not 
regulated.

                                       9
<PAGE>
 
PRODUCTS SUPPLY AND DISTRIBUTION
 
     TransMontaigne's supply and distribution efforts are enhanced by its
ownership and operation of products pipelines and terminals; a constant and
reliable supply of NGL from its natural gas gathering and processing
operations; and by its inventory positions in third-party common carrier
pipeline systems.

TransMontaigne utilizes these assets to arbitrage location product price
differentials and transportation costs; to purchase substantial bulk volumes of
products for resale in the spot market or over truck loading racks; and to take
advantage of opportunities presented by anticipated product price volatility
arising from changing economic conditions, seasonal variations and market supply
and demand considerations.

     TransMontaigne enters into product exchange transactions in order to
enhance operating margins in connection with its supply and distribution
activities. Exchanges are arranged through agreements under which TransMontaigne
agrees to buy and sell products that differ in terms of geographic location,
type of product or delivery schedule. Through such exchanges, which are
continuously monitored by TransMontaigne's real-time management information and
risk management systems, TransMontaigne seeks to increase its overall operating
margins by maximizing transportation, terminaling and product sales revenues
from each barrel of product sold while also minimizing related storage, shipping
and product costs.

     TransMontaigne may selectively hedge a portion of its inventory by entering
into a future physical delivery obligation to a third party or purchasing a
futures contract on the NYMEX in order to maintain a substantially balanced
position between product purchases and future product sales or delivery
obligations and in order to minimize exposure to unacceptable levels of product
inventory which would be subject to the adverse risk of price volatility.
TransMontaigne generally does not hedge the price risk on the portion of its
inventory consisting of pipeline fill, tank bottoms and a minimum product supply
required to satisfy exchange obligations, which inventory is generally not
available for sale. However, hedging positions may be considered and
strategically placed on this inventory when management believes it is
appropriate based upon an assessment of market conditions and the related impact
on operating income.

                                       10
<PAGE>
 
GROWTH

     TransMontaigne is seeking to significantly grow its Logistical Petroleum
Services business segment. Domestic gasoline demand increased during the
calendar year 1997 and is expected by TransMontaigne to continue to increase in
1998 due to a strong economy and the recent trend toward less fuel-efficient
vehicles. The 1998 demand for distillates should also increase due to the
trucking industry's anticipated growing diesel fuel requirements as well as
increased agricultural usage and forecasted more normal winter weather following
the unseasonably warm 1997 - 1998 winter. In addition, 1998 NGL demand,
primarily propane, should increase if weather patterns return to normal. These
anticipated increases in demand should positively impact TransMontaigne's
Logistical Petroleum Services performance in all operating areas.

     TransMontaigne expects to capitalize on this favorable business environment
by continuing to acquire strategically located downstream facilities as well as
other value-added business opportunities which are expected to contribute
additional cash flow and enhance net earnings. Growth by acquisition is expected
to be complemented by construction of new projects and expansion of existing
facilities in specific locations which are intended to develop and increase
TransMontaigne's present operating capabilities and business presence in the
markets served.

NATURAL GAS SERVICES

GRASSLANDS OPERATIONS

     TransMontaigne provides natural gas services through its wholly owned
subsidiary, Bear Paw Energy Inc. In December 1996 TransMontaigne acquired the
Grasslands Facilities. These facilities are the cornerstone of TransMontaigne's
natural gas gathering and processing facilities in the Williston Basin of the
Rocky Mountain region and enable TransMontaigne to provide high quality service
to oil and gas producers as well as to end-users of NGL and natural gas. The
Grasslands system is one of the largest natural gas gathering and processing
facilities in the Williston Basin which is currently among the more active areas
of domestic oil and gas drilling. Following the acquisition of the 

                                       11
<PAGE>
 
Grasslands Facilities, natural gas services has become a significant and
integral component of TransMontaigne's business.

     The Grasslands natural gas processing plant, located in McKenzie County,
North Dakota, was built in 1980 and is designed for approximately 75 million
cubic feet per day inlet capacity. The designed product recoveries are 88%
propane, 99% butane and 100% gasoline.  Current throughput is approximately 45
million cubic feet per day from over 1,200 active leases, which is gathered
through approximately 2,600 miles of low and high pressure gathering lines. The
majority of the wells connected to the Grasslands Facilities primarily produce
crude oil. They also produce small volumes of natural gas which are generally
high in NGL content. The natural gas gathering lines cover the Williston Basin
areas of western North Dakota and eastern Montana. Additional oil and gas wells
can be connected to this entire system if successful drilling continues. During
the year ended April 30, 1998, 37 new wells were connected to the system
providing additional inlet volumes of 5.4 million cubic feet per day.

     The Grasslands Facilities are strategically located between
TransMontaigne's Marmarth facility in southwestern North Dakota, its Baker
facility in eastern Montana and its Lignite facility in northern North Dakota.
TransMontaigne has natural gas gathering facilities covering the eastern
corridor of Montana and the western quarter of North Dakota, from the Canadian
border to the South Dakota border, which should significantly enhance
TransMontaigne's ability to provide a complete service package to North Dakota
and Montana producers as well as to end-users of NGL and natural gas.

OTHER NATURAL GAS SERVICES OPERATIONS

     The Marmarth system is an approximately 4 million cubic feet per day
capacity natural gas gathering, processing, and treating facility which gathers
natural gas at low pressure in southwestern North Dakota through approximately
32 miles of gathering pipeline. NGL are currently sold locally by truck after
being fractionated at the Baker facility.  The Baker system located in eastern
Montana is an approximately 4 million cubic feet per day capacity natural gas
processing plant connected to a 15 mile gathering pipeline presently under
construction.  The Baker system also fractionates the Marmarth system NGL and
provides processing for a major oil company. The Lignite system is an

                                       12
<PAGE>
 
approximately 8 million cubic feet per day capacity natural gas processing and
treating facility located in northern North Dakota connected to approximately
250 miles of gathering pipeline. In addition to the ownership of its 4 natural
gas systems, TransMontaigne manages 15 small natural gas gathering systems for a
major interstate pipeline company. TransMontaigne earns a fee for the management
of these systems and is compensated for any additional volumes which it connects
to them.

GROWTH

     TransMontaigne continually seeks to identify additional dedicated natural
gas supplies in order to maintain or increase throughput levels to offset
natural production declines in dedicated volumes. Such natural gas supplies are
obtained by purchasing existing systems from third parties or by connecting
additional wells. The opportunity to connect new wells to existing facilities is
primarily affected by levels of drilling activity near TransMontaigne's natural
gas gathering systems.

     The gathering, processing and marketing sector of the natural gas industry
is in a consolidation phase. As this consolidation takes place, it may become
more difficult for many companies to earn acceptable returns on smaller systems.
Many oil and gas producers that have previously operated their own natural gas
gathering and processing facilities may realize they lack the operational and
management skills necessary to maximize the return on these investments and
choose to sell these assets.  TransMontaigne looks for opportunities presented
by this consolidation in order to selectively acquire these facilities and
generate additional revenues while incurring only modest incremental costs.

LION OIL COMPANY INVESTMENT

     In 1985, a 65% owned subsidiary of TransMontaigne purchased 27.75% of the
stock of Lion Oil Company ("Lion"), which owns a modern 65,000 barrel per day
refinery in El Dorado, Arkansas; a 188-mile crude oil transportation pipeline in
east Texas; a 1,100-mile crude oil gathering system in south Arkansas and north
Louisiana; and two refined petroleum products terminals in Tennessee. Lion is
operated under a management contract with a company which owns 48.60% of Lion.
The remaining 23.65% of Lion is owned by various south Arkansas oil and gas
producers. TransMontaigne has two 

                                       13
<PAGE>
 
representatives on the board of directors of Lion. Through April 30, 1997
TransMontaigne's interest in Lion was reported for financial statement purposes
using the equity method of accounting and thereafter using the cost method of
accounting. For the year ended April 30, 1998 Lion reported net earnings of
$9,219,000 and did not distribute any cash dividends to its stockholders during
that period.

ENVIRONMENTAL AND TARIFF REGULATIONS

     The operations of TransMontaigne are subject to federal, state and local
laws and regulations relating to protection of the environment. Future
regulation may impose additional requirements. Although TransMontaigne believes
that its operations are in material compliance with applicable environmental
laws and regulations, and TransMontaigne has not accrued any material amounts
for environmental compliance as of April 30, 1998, risks of substantial costs
and liabilities are inherent in pipeline, terminal and processing operations,
and there can be no assurance that significant costs and liabilities will not be
incurred in the future.

     The interstate petroleum products pipeline operations of TransMontaigne are
subject to regulation by the Federal Energy Regulatory Commission (the "FERC")
under the Interstate Commerce Act (the "ICA") which requires, among other
things, that the rates set by the pipeline transportation tariffs be just and
reasonable and not unduly discriminatory. New and changed tariffs must be filed
with the FERC, which may investigate their lawfulness on shipper protest or its
own motion. The FERC may suspend the effectiveness of such tariffs and require
the pipeline to refund to shippers, with interest, any difference between the
level the FERC determines to be lawful and the filed tariffs under
investigation; the tariffs may also be challenged by litigation.

     The intrastate petroleum pipeline operations of TransMontaigne are subject
to regulation by the Texas Railroad Commission. Like interstate regulation, the
Texas regulation requires that intrastate tariffs be filed with the Texas
Railroad Commission and allows shippers to challenge such tariffs.

                                       14
<PAGE>
 
EMPLOYEES

     The Company had 375 employees at July 21, 1998.  No employees are subject
to representation by unions for collective bargaining purposes.

ITEM 2.  PROPERTIES

     For information regarding TransMontaigne properties, see "General",
"Logistical Petroleum Services" and "Natural Gas Services" sections under Item 
1.

ITEM 3.  LEGAL PROCEEDINGS

     Not Applicable

ITEM 4.  VOTE OF SECURITY HOLDERS

     Not Applicable

                                       15
<PAGE>
 
                                    PART II
                                        
ITEM 5.  MARKET FOR COMMON STOCK

     The Common Stock is traded on the American Stock Exchange under the symbol
"TMG." The following table sets forth, for the periods indicated, the range of
high and low per share sale prices for Common Stock as reported on the American
Stock Exchange, adjusted for a 2.432599 to 1 reverse stock split that occurred
in June 1996. On June 5, 1996, following the merger of TransMontaigne and a
predecessor company, the Common Stock began to trade on the American Stock
Exchange (Primary List).

<TABLE>
<CAPTION>
 
                                                     LOW      HIGH
                                                    ------   ------
<S>                                                 <C>      <C>
 
     April 1, 1996 through June 3, 1996 (1)         $10.03   $17.94
     June 5, 1996 through July 31, 1996 (2)         $ 9.75   $15.13
     August 1, 1996 through October 31, 1996        $ 9.69   $10.88
     November 1, 1996 through January 31, 1997      $ 9.81   $14.75
     February 1, 1997 through April 30, 1997        $13.50   $17.75
 
     May 1, 1997 through July 31, 1997              $14.88   $20.38
     August 1, 1997 through October 31, 1997        $15.38   $20.00
     November 1, 1997 through January 31, 1998      $13.00   $17.63
     February 1, 1998 through April 30, 1998        $13.00   $14.63
</TABLE>

_________
     (1)  Common Stock traded on American Stock Exchange (Emerging Company
          Marketplace) from December 14, 1993 through June 3, 1996.

     (2)  In June 1996, TransMontaigne adopted a fiscal year end of April 30.

     On July 21, 1998, the last reported sale price for the Common Stock on the
American Stock Exchange was $14.25.  As of July 21, 1998, there were
approximately 450 stockholders of record of the Common Stock.

     No dividends were declared or paid on the Common Stock during the periods
reported in the table above. TransMontaigne intends to retain future cash flow
for use in its business and has no current intention of paying dividends in the
foreseeable future. Any payment of future dividends and 

                                      16


<PAGE>
 
the amounts thereof will depend upon TransMontaigne's earnings, financial
condition, capital requirements and other factors deemed relevant by
TransMontaigne's Board of Directors. TransMontaigne's Credit Facility and Master
Shelf Agreement, as well as instruments governing certain of its other
indebtedness, contain certain restrictions on the payment of dividends. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

ITEM 6.  SELECTED FINANCIAL DATA

     The following selected financial data for the fiscal years ended April 30,
1998, 1997, 1996 and 1995, the seven months ended April 30, 1994, and the fiscal
year ended September 30, 1993, have been derived from applicable audited
consolidated financial statements.  This selected financial data should be read
in conjunction with Management's Discussion and Analysis of Financial Condition
and Results of Operations, Item 7, and the consolidated financial statements and
notes thereto included in Item 8, "Financial Statements and Supplementary Data."

                                       17
<PAGE>
 
<TABLE>
<CAPTION>
                                                                                                             SEVEN    
                                                                                                             MONTHS   
                                                        FISCAL YEARS ENDED                                   ENDED    
                                                            APRIL 30,                                       APRIL 30,  
                          -------------------------------------------------------------------------------------------- 
                                   1998                 1997               1996              1995              1994    
                          ------------------      --------------     -------------    --------------     -------------
<S>                          <C>                   <C>                 <C>               <C>               <C>         
STATEMENT OF                                                                                                           
OPERATIONS DATA:                                                                                                       
Revenue                       $1,967,506,496       1,166,664,621       533,106,747       324,591,409       296,086,981 
Operating Income                                                                                                       
     (Loss)                       19,234,449           9,900,568         6,548,953           406,042        (1,509,581)
Net Earnings                                                                                                           
     (Loss)                        7,637,630           9,171,312         4,617,969        (3,217,635)       (2,853,609)
Earnings (Loss)                                                                                                        
     Per Share                                                                                                         
          Basic                         0.30                0.42              0.31             (1.32)            (1.15)
          Diluted                       0.29                0.41              0.30             (1.32)            (1.15)
Weighted average common                                                                                                
     shares outstanding:                                                                                               
          Basic                   25,886,737          21,742,625        14,971,775         2,860,391         2,694,830 
          Diluted                 26,679,503          22,544,402        15,153,622         2,860,391         2,694,830 
                                                                                                                       
STATEMENT  OF                                                                                                          
CASH FLOWS                                                                                                             
DATA:                                                                                                                  
Net Cash                                                                                                               
     Provided                                                                                                          
     By (Used In):                                                                                                     
Operating                                                                                                              
     Activities               $   (4,570,101)         (9,585,653)       (3,864,165)         (236,580)       (2,187,251)
Investing                                                                                                              
     Activities                  (66,130,662)        (89,920,465)       (4,181,377)         (233,562)       (1,041,069)
Financing                                                                                                              
     Activities                   64,123,792          97,487,209        44,646,948            61,543         3,691,885 
                                                                                                                       
OTHER FINANCIAL                                                                                                        
DATA:                                                                                                                  
EBITDA (1)                    $   29,769,404          15,354,682         8,844,357         1,561,251          (364,156)
Capital                                                                                                                
     Expenditures (2)             66,634,291          92,294,394         4,124,264           747,774           461,888 
                                                                                                                       
                                                                     APRIL 30,                                         
                          -------------------------------------------------------------------------------------------- 
                                                                                                                       
                                        1998                1997              1996              1995              1994 
                          -------------------------------------------------------------------------------------------- 
BALANCE SHEET                                                                                                          
DATA:                                                                                                                  
Working Capital               $   94,393,264          78,423,038        55,651,839        37,989,205        11,554,715 
Total Assets                     323,304,830         261,724,320       120,962,976       104,220,346        75,470,266 
Long-Term Debt,                                                                                                        
     excluding current                                                                                                 
     maturities                  128,969,667          64,774,267        28,948,867        36,945,610        37,671,329 
Stockholders' Equity (3)         147,804,303         138,971,741        57,819,191        28,470,702         2,480,835 
</TABLE>                    

<TABLE> 
<CAPTION> 
                                                             FISCAL YEAR ENDED
                                                               SEPTEMBER 30, 
                                                            -------------------
                                                                     1993      
                                                            -------------------
<S>                                                         <C>             
STATEMENT OF                                                                 
OPERATIONS DATA:                                                             
Revenue                                                           507,936,810
Operating Income                                                             
     (Loss)                                                        (1,710,242)
Net Earnings                                                                 
     (Loss)                                                        (4,490,468)
Earnings (Loss)                                                              
     Per Share                                                               
          Basic                                                         (1.85)
          Diluted                                                       (1.85)
Weighted average common                                                      
     shares outstanding:                                                     
          Basic                                                     2,694,830
          Diluted                                                   2,694,830
                                                                             
STATEMENT  OF                                                                
CASH FLOWS                                                                   
DATA:                                                                        
Net Cash                                                                     
     Provided                                                                
     By (Used In):                                                           
Operating                                                                    
     Activities                                                     5,004,187
Investing                                                                    
     Activities                                                    (4,614,892)
Financing                                                                    
     Activities                                                    (1,315,700)
                                                                             
OTHER FINANCIAL                                                              
DATA:                                                                        
EBITDA (1)                                                           (669,698)
Capital                                                                      
     Expenditures (2)                                               4,730,726
</TABLE> 

<TABLE> 
<CAPTION> 
                                                                             
                                                                 SEPTEMBER 30,    
                                                                 -------------    
                                                                     1993
                                                                 -------------
<S>                                                              <C> 
BALANCE SHEET                                                                
DATA:                                                                        
Working Capital                                                    11,470,225
Total Assets                                                       86,334,703
Long-Term Debt,                                                              
     excluding current                                                       
     maturities                                                    33,953,590
Stockholders' Equity (3)                                            5,334,500 
</TABLE>                    

                                       18
<PAGE>
 
(1)  EBITDA is earnings (loss) before income taxes plus interest expense and
     other financing costs and depreciation and amortization.  TransMontaigne
     believes that, in addition to cash flow from operations and net earnings
     (loss), EBITDA is a useful financial performance measurement for assessing
     operating performance since it provides an additional basis to evaluate the
     ability of TransMontaigne to incur and service debt and to fund capital
     expenditures.  In evaluating EBITDA, TransMontaigne believes that
     consideration should be given, among other things, to the amount by which
     EBITDA exceeds interest costs for the period; how EBITDA compares to
     principal repayments on debt for the period; and how EBITDA compares to
     capital expenditures for the period.  To evaluate EBITDA, the components of
     EBITDA such as revenue and operating expenses and the variability of such
     components over time, should also be considered.  EBITDA should not be
     construed, however, as an alternative to operating income (loss) (as
     determined in accordance with generally accepted accounting principles
     (GAAP) as an indicator of TransMontaigne's operating performance or to cash
     flows from operating activities (as determined in accordance with GAAP)) as
     a measure of liquidity. TransMontaigne's method of calculating EBITDA may
     differ from methods used by other companies, and as a result, EBITDA
     measures disclosed herein may not be comparable to other similarly titled
     measures used by other companies.

(2)  Includes approximately $32,000,000 relating to the ITAPCO Terminal
     Corporations acquisitions in 1998 and $71,000,000 relating to the
     Grasslands acquisition in 1997.

(3)  No dividends were declared or paid on the Common Stock during the periods
     reported.

                                       19
<PAGE>
 
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF

         FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

     TransMontaigne provides a broad range of integrated transportation,
terminaling, supply, distribution, gathering, processing and marketing services
to producers, refiners, distributors, marketers and end-users of petroleum
products, chemicals, other bulk liquids, natural gas and crude oil in the
downstream sector of the petroleum and chemical industry. TransMontaigne is a
holding company which conducts its operations through subsidiaries primarily in
the mid-continent and Rocky Mountain regions of the United States.
TransMontaigne does not explore for, or produce, crude oil or natural gas; does
not own crude oil or natural gas reserves; and does not own chemicals or other
bulk liquids inventory.

     TransMontaigne owns and operates refined petroleum products, chemicals,
other bulk liquids, crude oil and natural gas assets. TransMontaigne refined
petroleum products, chemicals, other bulk liquids and crude oil assets consist
primarily of approximately 790 miles of pipeline and 31 terminal, storage and
delivery facilities located in 10 states with a combined tank storage capacity
of approximately 8,500,000 barrels. TransMontaigne natural gas gathering and
processing assets consist of 5 gathering and processing systems in 3 states with
combined throughput capacity of approximately 94 million cubic feet per day and
over 2,800 miles of pipeline. TransMontaigne also extensively utilizes refined
petroleum products common carrier pipelines and terminals owned by third parties
in order to increase product volumes shipped, marketed and sold to and exchanged
with customers in other locations. Management believes that the use of these
facilities should allow TransMontaigne to significantly expand its geographic
service area and the integrated logistical services it provides.

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

                                       20
<PAGE>

     Since TransMontaigne present management assumed control in April 1995,
TransMontaigne has raised approximately $117,000,000 in equity capital
($30,000,000 private placement in May 1995; $25,000,000 private placement in
March 1996; and $62,000,000 public offering in February 1997); established an
initial $130,000,000 working capital and acquisition revolving bank credit
facility (in December 1996) which converted to an $85,000,000 bank credit
facility due December 31, 2001 (in February 1997) and subsequently increased to
a $175,000,000 bank credit facility due December 31, 2002 (in April 1998); and
issued $50,000,000 of 7.85% and $25,000,000 of 7.22% Senior Notes due April 17,
2003 (in April 1997) and October 17, 2004 (in December 1997), respectively, to
an institutional lender under a $100,000,000 Master Shelf Agreement.

     TransMontaigne's management also has increased net operating margins to
$41,251,000 and $21,344,000 for the years ended April 30, 1998 and 1997,
respectively, by improving the performance of its facilities through selective
capital improvements, restructured operating and administrative functions,
expanded marketing of services and by implementing an operating plan together
with financial management systems which provide the foundation for its current
operations and future growth. In addition, new information systems, policies,
procedures and operating controls have been established; experienced managerial
personnel have been added to improve operational efficiencies in all service
areas as well as to expand the products supply and distribution and marketing
functions; more effective management of inventory price risk and quantities has
been implemented; and inventory carrying costs have been reduced.

     In December 1996 TransMontaigne acquired the Grasslands Facilities natural
gas gathering, processing, treating and fractionation system for approximately
$71,000,000 in cash and through April 30, 1998 has additionally invested
approximately $21,500,000 in improvements and expansion of the Grasslands
Facilities and other assets in its natural gas services business segment. The
Grasslands Facilities are strategically located between TransMontaigne's
Marmarth facility in southwestern North Dakota, its Baker facility in eastern
Montana and its Lignite facility in northern North Dakota. TransMontaigne has
natural gas gathering facilities covering the eastern corridor of Montana and
the western quarter of North Dakota, from the Canadian border to the South
Dakota border, which should significantly enhance TransMontaigne's ability to
provide a complete service
                                       21
<PAGE>
 
package to North Dakota and Montana producers as well as to end-users of NGL and
natural gas. The Grasslands Facilities contributed approximately 92% and 86% of
the total net operating margin of TransMontaigne's natural gas gathering and
processing operations during the years ended April 30, 1998 and 1997,
respectively.

     In November 1997 TransMontaigne acquired the common stock of 17
corporations, known as the "ITAPCO Terminal Corporations", and certain related
property and property interests. The acquisition included 17 bulk liquid storage
and distribution terminals located in 8 states having total tankage capacity in
excess of 3.3 million barrels, handling primarily refined petroleum products,
chemicals and other bulk liquids together with the related operations of the
terminals and 7 contracts for providing management services to non-owned storage
and distribution terminals, pipelines and related facilities for third parties.
The ITAPCO Terminal Corporations purchase price was $32,000,000 ($31,458,000
cash plus assumption of outstanding bank debt of approximately $542,000) and was
funded by an advance of $22,000,000 from the TransMontaigne bank credit facility
with the balance from TransMontaigne cash reserves. Following the November 25,
1997 acquisition date, the ITAPCO Terminal Corporations contributed
approximately 36% of the total net operating margin of the TransMontaigne
terminal operations for the year ended April 30, 1998.

     Subsequent to the acquisition of the ITAPCO Terminal Corporations,
TransMontaigne acquired for an aggregate of $4,686,000 the remaining 50%
interest in a 153,000 barrel terminal located in Owensboro, Kentucky which it
did not previously own; a 259,000 barrel terminal located in Greenville,
Mississippi; and the remaining 50% interest in a partnership which owns and
operates a natural gas gathering and processing facility located in Lignite,
North Dakota which it did not previously own.  In addition, TransMontaigne has
expended $22,500,000 on improvements and enhancements to the Grasslands 
Facilities and ITAPCO Terminal Corporations facilities since their respective
acquisitions.

     TransMontaigne intends to continue to make strategic additions to and
expansion of its existing facilities is necessary in order to maintain quality
service levels, increase operating efficiencies, achieve incremental net
earnings and improve its competitive position. This strategy has resulted in
capital improvements aggregating over $10,000,000 at its East Chicago, Indiana
storage facilities,
                   

                                      22
<PAGE>
 
North Little Rock, Arkansas and South Bend, Indiana terminals and NORCO pipeline
system in Illinois, Indiana and Ohio during the year ended April 30, 1998.

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

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

     .  that TransMontaigne will continue to grow its business

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

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

     .  that TransMontaigne will selectively and effectively hedge certain
        inventory positions

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

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

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

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

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

     .  that TransMontaigne will achieve year 2000 compliance without incurring
        material costs adversely impacting its operating results.

                                       23
<PAGE>
 
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                     YEARS ENDED APRIL 30,
                                                       -------------------------------------------------
                                                             1998              1997            1996
                                                             ----              ----            ----
                                                         (in thousands, except margin per gallon data)
<S>                                                    <C>                 <C>             <C>
PIPELINE OPERATIONS
     Volume (1)                                             19,578            19,580          18,902        
     Revenues                                          $    13,252            12,196           9,577        
     Net Operating Margin (2)                          $     7,469             6,848           4,454        
     Margin per Gallon                                 $    0.0091            0.0083          0.0056         
                                                       
TERMINAL AND STORAGE OPERATIONS                        
     Volume (1)                                          1,509,000           774,000         587,000        
           Refined petroleum products                    1,492,000           774,000         587,000        
           Chemicals and other bulk liquids                 17,000                 -               -        
     Revenues                                          $    13,882             5,387           3,346        
           Refined petroleum products                  $    11,297             5,387           3,346        
           Chemicals and other bulk liquids            $     2,585                 -               -        
     Net Operating Margin (2)                          $     8,985             3,524           2,434        
     Margin per Gallon                                 $    0.0060            0.0046          0.0041         
                                                       
PRODUCTS SUPPLY AND                                    
DISTRIBUTION OPERATIONS                                
     Volume (1)                                          3,550,000         1,774,000         958,000        
     Revenues                                          $ 1,879,907         1,125,941         520,184        
     Net Operating Margin (2)                          $    10,454             3,984           5,829        
     Margin per Gallon                                 $    0.0029            0.0022          0.0061         
                                                       
NATURAL GAS SERVICES OPERATIONS                               
     Inlet Volume (3)                                       20,477             5,332               -           
     NGL Production (3)                                     98,359            27,219               -           
     Residue Production (3)                                 16,918             4,533               -           
     Revenues                                          $    60,465            23,141               -           
     Net Operating Margin (2)                          $    14,343             6,988               -            
                                                       
TOTAL OPERATIONS                                       
     Revenues                                          $ 1,967,506         1,166,665         533,107       
     Net Operating Margin (2)                          $    41,251            21,344          12,717       
     Net Earnings                                      $     7,638             9,171           4,618        
</TABLE>

                                       24
<PAGE>
 
(1)  Pipeline volumes are expressed in thousands of barrels (42 gallons per
     barrel).  Terminal and storage and products supply and distribution volumes
     are expressed in thousands of gallons.

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

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

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

     Pipeline revenues are based on the volume of refined petroleum products or
crude oil transported and the distance from the origin point to the delivery
point. TransMontaigne's interstate pipeline systems transport refined petroleum
products and their tariffs are regulated by the FERC. TransMontaigne's
intrastate pipeline transports crude oil and its tariffs are not regulated by
the FERC but are regulated by the Texas Railroad Commission.

     Terminal revenues are based on the volume of refined petroleum products
handled, generally at a standard per gallon rate. Terminal fees are not
regulated. Storage fees are generally based on a per gallon rate or tankage
capacity committed and will vary with the duration of the arrangement, the

                                       25
<PAGE>
 
product stored and special handling requirements, particularly when certain
types of chemicals and other bulk liquids are involved.  Storage fees are not
regulated.

     Direct operating expenses of pipelines and terminals include wages and
employee benefits, utilities, communications, maintenance and repairs, property
taxes, rent, insurance, vehicle expenses, environmental protection costs,
materials and supplies.

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

     Direct operating expenses of products supply and distribution are primarily
the cost of products sold and also include transportation and sales commission
expenses.

     Natural gas gathering and processing revenues are based on the inlet volume
of natural gas purchased from producers under both percentage of proceeds and
fee based arrangements.  Natural gas is gathered and processed into NGL
products, principally propane, butane and natural gasoline.  These products are
transported by truck or pipeline to storage facilities from which they are
further transported and marketed by TransMontaigne to wholesalers and end-users.
Residue natural gas is delivered to and marketed through connections with
interstate pipelines.

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

                                       26
<PAGE>
 
YEAR ENDED APRIL 30, 1998 COMPARED TO YEAR ENDED APRIL 30, 1997
  
     The net operating margin from pipeline operations of $7,469,000 increased
9%, or $621,000, in the current year on essentially flat volumes. This increase
resulted primarily from a 9% increase in revenues of $1,056,000, primarily due
to a net increase in the volumes of higher tariff long haul pipeline shipments,
together with increases in joint tariff participation and terminal facility
rental income.  This increase was  partially offset by an 8% increase in
operating costs of $435,000 which was due to incremental power costs from
additional long haul shipment volumes as well as increased field personnel
costs, maintenance and vehicle expenses.

     The net operating margin from terminal operations of $8,985,000 increased
155%, or $5,461,000, in the current year on revenues of $13,882,000, an increase
of 158%, or $8,495,000.  This increase resulted from an overall 93% increase in
refined petroleum products volumes handled of 718,000,000 gallons and 17,000,000
gallons of chemical and other bulk liquids handled by the ITAPCO Terminal
Corporations facilities acquired in November 1997; additional volumes of
303,093,000 gallons at the East Chicago terminal facility acquired in December
1996; and new jet fuel contract volumes of 6,395,000 gallons at the
Indianapolis, Indiana terminal.  These increases were offset in part by a 163%
increase in terminal operating costs largely attributable to the ITAPCO Terminal
Corporations facilities operations; expanded East Chicago terminal operations; a
new terminal lease; additional freight charges on products; and increased field
personnel costs and maintenance expenses.

     The net operating margin from product sales of $10,454,000 increased 162%,
or $6,470,000, in the current year.  Revenues increased $753,966,000, or 67%, on
additional volume of 1,776,534,000 gallons of products sold, an increase of
100%. The $.0029 net operating margin per gallon realized in the current year
increased 32% from the $.0022 per gallon realized during the prior year.  The
significant increase in volumes and revenues was attributable to
TransMontaigne's continuing and expanding supply, distribution and marketing
program.  The higher net operating margin was positively impacted by strategic
bulk sales transactions during the last six months of the year. Volatile refined
petroleum product market conditions influenced by the international political
climate and atypical and erratic weather patterns, however, drove product prices
to unanticipated lows 


                                       27
<PAGE>
 
which adversely affected fourth quarter products supply and distribution
performance and resulted in a lower of cost or market write down adjustment to
inventory of $1,688,000 as of April 30, 1998. The inventory write down
adjustment was charged to product costs resulting in a decrease of $.0005 in net
operating margin per gallon sold during the year. Overall, however, the
increased product sales volume contributed to the substantial increase in
terminal throughput volumes, which resulted in increasing the related terminal
revenues for the year. By providing an integrated logistical service to
customers through the effective utilization of its transportation, storage and
terminaling facilities as well as its product supply, distribution and marketing
capabilities, TransMontaigne's aggregate net operating margin from the
logistical petroleum services business segment was $26,908,000 in the current
year, an increase of $12,552,000, or 87%, over the prior year.

     The net operating margin from natural gas services operations of
$14,343,000 in the current year includes a full year of the business activities
of the Grasslands Facilities whereas the prior year included only a four and 
one-half month period. Net operating margin contributions from the Marmarth,
Baker, Lignite and Wiggins natural gas gathering and processing facilities as
well as management fees from 15 small natural gas gathering systems, are also
included for a full year. Net operating margin during the latter part of the
current year was impacted by a steep decline in NGL prices, primarily propane,
notwithstanding an increase in natural gas inlet volumes per day.

     General and administrative expenses increased $5,554,000, a 70% increase in
the current year, primarily due to additional personnel costs of $3,512,000, a
72% increase in the current year.  In addition, office lease expense increased
as well as employee relocation, regulatory reporting, travel, insurance,
information systems and communication expenses.  These expense increases were
directly attributable to the ITAPCO Terminal Corporations operations, and a full
year of natural gas gathering and processing operations included in the current
year, as well as expenses related to TransMontaigne's expanded integrated
logistical petroleum services.

     Other income in the current year includes interest income of $2,059,000.
In the prior year other income included TransMontaigne's share of Lion earnings,
net of related minority interests, of approximately $70,000 and interest income
of $1,777,000.  The $282,000 increase in interest income


                                       28
<PAGE>
 

in the current year was due primarily to an increase in interest bearing cash
balances held for future investments.
    
     Interest expense represents interest on the TransMontaigne bank credit
facility and senior promissory notes which were used primarily to finance the
acquisitions of the ITAPCO Terminal Corporations in November, 1997 and
Grasslands Facilities in December, 1996, other continuing capital expenditures
and working capital to carry inventory and accounts receivable.  Also included
is interest on TransMontaigne senior subordinated debentures.  Other financing
costs include commitment fees and amortization of debt issuance costs paid in
connection with the credit facility.  Interest expense and other financing costs
during the year ended April 30, 1998 increased $3,748,000, or 85%, of which
$3,549,000 represented increased interest expense over the prior year primarily
due to an increase of approximately $51,500,000 in average outstanding debt over
the prior year.

     Earnings before income taxes for the current year were $13,130,000, a 75%
increase of $5,648,000 over the $7,483,000 for the prior year. This improvement
was primarily a result of the aggregate increase in the logistical petroleum
services business segment net operating margin of $12,552,000, including the
additional contribution from the ITAPCO Terminal Corporations acquisition and
after the inventory write down adjustment; the positive impact of the $7,355,000
increase in net operating margin contribution from the gas gathering and
processing business segment attributable to the inclusion of the Grasslands
Facilities operations for a full year; and additional interest income of
$282,000. These increases were partially offset by the $5,554,000 increase in
general and administrative expenses; increased depreciation and amortization of
$5,019,000, including $3,102,000 attributable to the Grassland Facilities and
$653,000 attributable to the ITAPCO Terminal Corporations; and increased
interest expense of $3,549,000 primarily attributable to the financing of the
Grasslands Facilities and ITAPCO Terminal Corporations acquisitions.
 
     Income tax expense for the current year of $5,492,500 was based upon an
effective 41.8% combined federal and state income tax rate.  At April 30, 1997
TransMontaigne determined that its net deferred tax assets would more likely
than not be realized and recognized a one-time income tax benefit of $2,275,000
reduced by state income taxes of $586,000 for a net income tax benefit of
$1,689,000.


                                      29
<PAGE>

     Net earnings of TransMontaigne for the current year, after providing for
income taxes, were $7,638,000 compared to $9,171,000 for the prior year, a
decrease of 17%. Earnings per share for the year ended April 30, 1998 were $ .30
basic and $ .29 diluted based on 25,886,737 weighted average basic shares
outstanding and 26,679,503 weighted average diluted shares outstanding,
respectively. This compares to earnings per share of $. 42 basic and $. 41
diluted for fiscal 1997.

YEAR ENDED APRIL 30, 1997 COMPARED TO YEAR ENDED APRIL 30, 1996

     The net operating margin from pipeline operations of $6,848,000 increased
54%, or $2,394,000, in fiscal year 1997. This increase resulted primarily from a
net increase in the volumes of higher tariff long haul pipeline shipments, based
on a 4% increase in total volumes shipped, together with increases in joint
tariff participation and tankage rental income all of which resulted in a 27%
increase in revenues of $2,619,000 in fiscal year 1997. This increase in
revenues was partially offset by a 4% increase in operating costs of $225,000,
primarily due to incremental power costs from additional long haul shipment
volumes and increased field personnel costs, repairs and maintenance and
property tax assessments.

     The net operating margin from terminal operations of $3,524,000 increased
45%, or $1,090,000, in fiscal year 1997. This increase resulted from an overall
32% increase in volumes handled, primarily due to a 22% increase at the Little
Rock, Arkansas terminal and additional volumes at the East Chicago terminal
facility acquired in December 1996; offset in part by a 104% increase in
terminal operating costs attributable to the East Chicago terminal, a new
terminal lease, additional freight charges on products, field personnel expenses
and property tax assessments.

     The net operating margin from product sales in fiscal year 1997 of
$3,984,000 decreased 32%, or $1,845,000.  Net revenues increased $605,757,000 or
117%, on additional volume of 816,000,000 gallons of products sold. The $.0022
net operating margin per gallon realized in fiscal year 1997 decreased $.0039,
or 64%, from the higher than normal $.0061 per gallon realized during fiscal
year 1996, primarily due to substantially reduced product margins realized
during the second half of fiscal year 1997, notwithstanding the significant
increase in sales volume attributable to an expanded supply,      

     

                                       30
<PAGE>
 
distribution and marketing program. The lower net operating margin was affected
by generally weak market conditions. The net operating margin was also
negatively impacted during certain periods in the latter part of fiscal year
1997 by bulk sales of products shipped to locations on TransMontaigne pipelines
which resulted in minimal or negative margins. However, these product shipments
increased pipeline and terminal throughput volumes, and maximized related tariff
and handling revenues. By providing an integrated logistical service to
customers through the effective utilization of both its transportation and
product supply, distribution and marketing capabilities, the TransMontaigne
aggregate net operating margin from the logistical petroleum services business
segment increased $1,639,000, or 13%, over fiscal year 1996.

     The net operating margin from natural gas gathering and processing
operations of $6,988,000 in fiscal year 1997 was primarily attributable to the
business activities of the Grasslands Facilities for the period from the
December 20, 1996 acquisition closing date through April 30, 1997 and also
includes net operating margin contributions from the Marmarth and Baker
facilities as well as fees for the management of fifteen small natural gas
gathering systems. These were not previously sources of net operating margins
since TransMontaigne natural gas gathering and processing operations commenced
in June 1996.

     General and administrative expenses increased $2,988,000, a 60% increase in
fiscal year 1997, primarily due to additional personnel costs and increased
office lease expense together with increases in employee relocation, insurance,
information systems and communication expenses, a significant portion of which
expenses was attributable to TransMontaigne's expanded natural gas gathering and
processing business activities.

     Other income includes equity in earnings of affiliates and interest income.
Equity in earnings of affiliates in fiscal year 1997 was represented by
TransMontaigne's share of Lion's earnings, net of related minority interests, of
approximately $70,000 compared to $605,000 for fiscal year 1996.  The decrease
was primarily due to both planned and unanticipated turnaround costs (major
maintenance expenditures) which adversely impacted earnings.


                                       31
<PAGE>
 
     Interest income in fiscal year 1997 increased to $1,777,000 from $521,000
primarily due to an increase in interest bearing cash balances held for future
investments.

     Interest expense represents interest on the revolving and successor bank
lines of credit which were used primarily to finance the Grasslands Facilities
acquisition, other capital expenditures, inventory and accounts receivable and
also includes interest on TransMontaigne's senior subordinated debentures.
Other financing costs include fees paid for letters of credit issued to product
suppliers, loan commitment fees and debt acquisition costs paid in connection
with credit facilities.  Interest expense and financing costs during fiscal year
1997 increased $1,552,000, or 54%, over fiscal year 1996. Lower interest rates
in fiscal year 1997 were offset by the effect of a $25,000,000 increase in
average outstanding debt.

     Earnings before income taxes for fiscal year 1997 were $7,483,000, a 56%
increase of $2,672,000 over the $4,811,000 for fiscal year 1996. This
improvement was primarily a result of the aggregate increase in the logistical
petroleum services business segment net operating margin; the positive impact of
the net operating margin contribution from the gas gathering and processing
business segment attributable essentially to the inclusion of over four months
operations of the Grasslands Facilities; and additional interest income. These
increases were partially offset by increased general and administrative,
depreciation and interest expenses, primarily attributable to the Grasslands
Facilities acquisition.

     As of April 30, 1997 management assessed the realizability of
TransMontaigne's deferred tax assets. Realization of the net deferred tax assets
is dependent upon the generation of future taxable income in periods when
temporary differences between financial statement carrying amounts and tax bases
of assets become deductible. Projected future taxable income and tax planning
strategies are considered in making the assessment. As a result of the
Grasslands Facilities acquisition in December 1996 and the public offering of
common stock in February 1997, management believed it was more likely than not
that the benefits of future deductible differences would be realized and, as a
result, the valuation allowance of $4,474,000 was reversed and recorded as an
income tax benefit in fiscal year 1997. Fiscal year 1997 income tax benefit of
$1,689,000 includes state tax expense of $586,000.


                                      32
<PAGE>
     
     Net earnings of TransMontaigne for fiscal year 1997, after providing for
income taxes, were $9,171,000 compared to $4,618,000 for fiscal year 1996, an
increase of 99%. Earnings per share for fiscal year 1997 were $ .42 basic and 
$ .41 diluted based on 21,742,625 weighted average basic shares outstanding and
22,544,402 weighted average diluted shares outstanding, respectively.  This 
compares to earnings per share of $ .31 basic and $ .30 diluted for fiscal 1996.

LIQUIDITY AND CAPITAL RESOURCES

     The following summary reflects TransMontaigne's comparative net cash flows
for the years ended April 30, 1998, 1997 and 1996.

<TABLE>
<CAPTION>
                                                                   Years Ended April 30,
                                               ---------------------------------------------------------
                                                       1998                1997                1996
                                                       ----                ----                ---- 
<S>                                            <C>                <C>                 <C>
Net cash (used) by operating activities        $    (4,570,000)         (9,586,000)         (3,864,000)
Net cash (used) by investing activities        $   (66,131,000)        (89,920,000)         (4,181,000)
Net cash provided by financing activities      $    64,124,000          97,487,000          44,647,000
</TABLE>

     TransMontaigne's net cash used by operating activities in the year ended
April 30, 1998 was $4,570,000 an improvement of $5,016,000 compared to the year
ended April 30, 1997. This improvement was primarily attributable to the
increase in earnings before income tax of $5,648,000 increased by additional
depreciation and amortization of $5,238,000 and decreased by the net change in
operating assets and liabilities of $6,242,000. TransMontaigne's current ratio
(current assets divided by current liabilities) was 3.1 to 1.0 at April 30, 1998
compared to 2.5 to 1.0 at April 30, 1997.

     Net cash used by investing activities was $66,131,000 during the year ended
April 30, 1998 as TransMontaigne continued its growth through acquisitions,
construction and improvements to existing operating facilities. Capital
expenditures included the acquisitions of the ITAPCO Terminal Corporations, a
terminal in Greenville, Mississippi and the remaining 50% interests in the
Owensboro 


                                       33
<PAGE>

terminal and Lignite natural gas gathering and processing facility; improvements
to the East Chicago,  South Bend, Mt. Vernon facilities and several of the 
purchased ITAPCO terminals; enhancements to the Grasslands Facilities; and 
additions to its corporate communications and data processing infrastructure. 
Net cash used for investing activities was $89,920,000 during the year ended 
April 30, 1997 which included acquisitions of and improvements to the Grasslands
Facilities and East Chicago storage facilities and the rebuilding of the South 
Bend terminal.

      Net cash provided by financing activities of $64,124,000 during the year 
ended April 30, 1998 was used to finance TransMontaigne's operating and 
investing activities primarily through a net increase in cash borrowings. Net 
cash provided by financing activities for the year ended April 30, 1997 was used
to finance operations and capital expenditures primarily through proceeds from 
the isssuance of common stock and an increase in cash borrowings. At April 30, 
1998 TransMontaigne had approximately $279,000,000 borrowing capacity with 
availability of approximately $147,400,000 under its credit agreements.

      EBITDA represents earnings before income taxes plus interest expense and
other financing costs and depreciation and amortization. Management uses EBITDA
as part of its overall assessment of TransMontaigne performance by analyzing
and comparing EBITDA between reporting periods. Management believes that, in
addition to cash flow from operations and net earnings as indicators of
operating performance, EBITDA is used increasingly by the financial community to
measure operating effectiveness and as a method to evaluate the market value of
companies like TransMontaigne. EBITDA is also used to evaluate TransMontaigne's
ability to incur and service debt and to fund capital expenditures, although it
is not considered in isolation or a substitute for the other measurements of
performance and liquidity. EBITDA for the current year was $29,769,000, a 94%
increase over EBITDA of $15,355,000 for the prior year, and was generally
consistent with management's expectations, based upon TransMontaigne's
operations, including the incremental EBITDA contributed by the Grasslands
Facilities for a full year and the ITAPCO Terminal Corporations for five months
as well as prevailing economic and market conditions. EBITDA for the current
year also reflects the charge to product costs for the lower of cost or market
write down adjustment to inventory as of April 30, 1998; an inventory adjustment
of this nature was not made in fiscal year 1997. In addition, several facility
improvement and enhancement projects which would


                                       34
<PAGE>

have contributed additional EBITDA in the current year were delayed, although
the impact on EBITDA was offset by the improved performance of TransMontaigne's
continuing operations. Achieving continued EBITDA growth through acquisitions
and internal expansion of existing facilities is a primary objective of
TransMontaigne.

     Capital expenditures anticipated in the year ending April 30, 1999 are
estimated to be approximately $100,000,000 for pipeline, terminal, storage and 
natural gas gathering and processing facilities, including assets to support
these facilities, and could exceed that amount if additional facilities
enhancement projects and possible acquisitions being considered by
TransMontaigne materialize. Future capital expenditures will depend on numerous
factors, including the availability, economics and cost of appropriate asset
acquisitions which TransMontaigne continuously identifies and evaluates; the
economics, cost and required regulatory approvals of expanding and enhancing
existing systems and facilities; the demand for the services TransMontaigne
provides; local, state and federal governmental regulations; environmental
compliance requirements; fuel conservation efforts; and the availability, to the
extent required, of financing on acceptable terms.

     In February 1997, TransMontaigne closed a public offering of 4,357,000
shares of its common stock of which 4,035,000 shares were issued and sold by
TransMontaigne and 322,000 shares were sold by certain selling stockholders.
The net proceeds to TransMontaigne, based on the public offering price of $14.25
per share, were $53,506,000 after deducting underwriting discounts and
commissions and offering costs, of which $45,000,000 was used to repay a portion
of the long-term debt incurred under its bank credit facility and the balance
was added to working capital. In March 1997 the underwriters' overallotment
option to purchase an additional 557,543 shares and the Merrill Lynch Growth
Fund antidilution right to purchase an additional 98,390 shares were both
exercised and TransMontaigne received additional net proceeds of $8,809,000
which was added to working capital. The total net proceeds from this offering
was $62,315,000.
     

                                       35
<PAGE>
 
     The TransMontaigne bank credit facility at April 30, 1998 is a $175,000,000
revolving credit facility with a money center bank due December 31, 2002.
Borrowings under the bank credit facility generally bear interest paid in
arrears at an annual rate equal to the lenders' announced rate on Alternate Base
Rate loans, subject to a Eurodollar Rate loan pricing election.  In addition, a
$10,000,000 same day swing line of credit is available to TransMontaigne under
which advances may be drawn at an interest rate comparable to the Eurodollar
Rate.

     As of April 30, 1998, TransMontaigne had advances of $50,000,000
outstanding under the bank credit facility utilizing the Eurodollar Rate loan
pricing election and $2,600,000 of the facility was used to support a standby
letter of credit to a bank to assist Lion in obtaining financing. The interest
rate at April 30, 1998 was 6.375%.

     In April 1997 TransMontaigne entered into a Master Shelf Agreement with an
institutional lender which provides that the lender will agree to quote, from
time to time, an interest rate at which the lender would be willing to purchase,
on an uncommitted basis, up to $100,000,000 of TransMontaigne's senior
promissory notes which will mature in no more than 12 years, with an average
life not in excess of 10 years.

     At April 30, 1998, TransMontaigne had outstanding under the Master Shelf
Agreement, $50,000,000 of 7.85% and $25,000,000 of 7.22% Senior Notes due April
17, 2003 and October 17, 2004, respectively.

     The bank credit facility agreement and the Master Shelf Agreement contain a
negative pledge covenant by TransMontaigne and its subsidiaries and are secured
by the stock of the subsidiaries.  These agreements also include financial tests
relating to fixed charges coverage, leverage ratio, consolidated tangible net
worth, distributions and inventory positions.  As of April 30, 1998,
TransMontaigne was in compliance with all such tests.

     As of April 30, 1998, TransMontaigne had approximately $15,350,000 of net
operating loss carryforwards for federal income tax purposes which are available
to offset taxable income through 2010. As a result of the merger in June 1996,
TransMontaigne acquired net operating loss 


                                       36

<PAGE>
 
carryforwards of approximately $7,892,000 as of June 4, 1996, which are included
in the aggregate net operating loss carryforwards, and are limited to
approximately $1,300,000 annually. A portion of the tax benefit of such
carryforwards has been recognized as a net reduction of goodwill recorded in the
acquisition. Due to changes in ownership which occurred through April 30, 1996,
the use of the remaining net operating loss carryforwards to offset taxable
income is limited to approximately $4,300,000 annually.

      The financial condition of TransMontaigne strengthened during the year
ended April 30, 1998. At April 30, 1998, TransMontaigne had working capital of
$94,393,000; availability under its bank credit facility of $122,400,000; and
additional borrowing capacity of $25,000,000 under the Master Shelf Agreement.

     Management believes that TransMontaigne's current working capital position;
future cash provided by operating activities; proceeds from the private
placement or public offering of debt and common stock; available borrowing
capacity under the bank credit facility agreement and the Master Shelf
Agreement; additional borrowing allowed under those agreements; and its
relationship with institutional lenders and equity investors should enable
TransMontaigne to meet its future capital requirements.

YEAR 2000 MATTERS

     Historically, certain computer programs, as well as certain hardware, were
structured to utilize a two-digit date field and may not be able to properly
recognize dates in the Year 2000.  This could result in significant system
failures.  TransMontaigne relies on its computer-based management information
systems, as well as computer chip embedded instruments and equipment in
conducting its normal business activities.  Certain of these computer-based
programs and embedded computer chips may not have been designed to function
properly with respect to the application of dating systems relating to the Year
2000.

     In response, TransMontaigne has developed a "Year 2000" Plan and
established an internal group to identify and assess potential areas of risk and
to make any required modifications relating to 


                                       37
<PAGE>

its computer systems; pipeline, terminaling, storage and natural gas gathering
and processing operations; and product supply and distribution activities. After
these assessments are complete, plans for modification or replacement, testing,
and certification will be developed and implemented to ensure that the material
facilities and business activities will continue to operate safely and reliably,
and without interruption after 1999. TransMontaigne is also monitoring the
compliance efforts of suppliers, contractors and other third parties with whom
it does business to ensure that operations will not be adversely affected by the
Year 2000 compliance problems of others.

     While TransMontaigne is not yet able to estimate the total costs of
conducting Year 2000 remedial activities, based upon information developed to
date, it believes that the total cost of Year 2000 remediation will not be
material to TransMontaigne's cash flow, results of operations, or financial
condition. TransMontaigne expects to complete its Year 2000 Plan within a time
frame that will enable its computer-based and embedded chip systems to function
without significant disruption in the Year 2000.

     The discussion of TransMontaigne's efforts, and management's expectations,
relating to Year 2000 compliance contains forward-looking statements.
Presently, TransMontaigne does not anticipate that the Year 2000 will have a
material adverse effect on its operations or financial performance.  However,
there can be no assurance that the Year 2000 will not adversely affect
TransMontaigne and its business.

NEW ACCOUNTING STANDARDS

     Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" ("SFAS 130"), was issued in June 1997, by the Financial
Accounting Standards Boards. SFAS 130 established new standards which require 
that changes in comprehensive income be shown in a financial statement that is
displayed with the same prominence as other financial statements. This statement
is effective for fiscal years beginning after December 15, 1997. TransMontaigne
does not expect adoption of SFAS 130 to have a material effect on the
presentation of its financial statements.


                                       38
<PAGE>

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

     Statement of Financial Accounting Standards No. 133, "Accounting for 
Derivative Instruments and Hedging Activities" ("SFAS 133"), was issued in June 
1998, by the Financial Accounting Standards Board.  SFAS 133 establishes new 
accounting and reporting standards for derivative instruments and for hedging 
activities.  This statement requires an entity to establish at the inception of 
a hedge, the method it will use for assessing the effectiveness of the hedging 
derivative and the measurement approach for determining the ineffective aspect 
of the hedge.  Those methods must be consistent with the entity's approach to 
managing risk.  SFAS 133 is effective for all fiscal quarters of fiscal years 
beginning after June 15, 1999.  TransMontaigne does not expect adoption of SFAS
133 to have a material effect on its consolidated financial statements.
 
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     TransMontaigne's consolidated financial statements are included herein
beginning on the following pages.

                                       39
<PAGE>
 
                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------
                                        


THE BOARD OF DIRECTORS AND STOCKHOLDERS
TRANSMONTAIGNE OIL COMPANY:


We have audited the accompanying consolidated balance sheets of TransMontaigne
Oil Company and subsidiaries as of April 30, 1998 and 1997, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
each of the years in the three-year period ended April 30, 1998.  These
consolidated financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of TransMontaigne Oil
Company and subsidiaries as of April 30, 1998 and 1997, and the results of their
operations and their cash flows for each of the years in the three-year period
ended April 30, 1998 in conformity with generally accepted accounting
principles.



                              KPMG PEAT MARWICK LLP


Denver, Colorado
July 10, 1998

                                      40
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

Consolidated Balance Sheets

APRIL 30, 1998 AND 1997
<TABLE> 
<CAPTION> 
---------------------------------------------------------------------------------------------------------------------------------


                                                                                      1998                   1997
                                                                                      ----                   ---- 
<S>                                                                         <C>                         <C> 
ASSETS 
------
Current assets:
 Cash and cash equivalents                                                   $      29,807,354            36,384,325
 Trade accounts receivable                                                          74,118,482            46,871,207
 Inventories                                                                        33,410,481            42,346,451
 Deferred tax assets, net                                                                    -             3,676,000
 Prepaid expenses and other                                                          2,673,807             1,647,990
                                                                             -----------------      ---------------- 
                                                                                   140,010,124           130,925,973
                                                                             -----------------      ----------------
Property, plant and equipment:                                                                          
 Land                                                                                2,801,964             1,222,195
 Plant and equipment                                                               183,669,911           120,010,811
 Accumulated depreciation                                                          (18,705,670)          (10,704,252)
                                                                             -----------------      ----------------
                                                                                   167,766,205           110,528,754
                                                                             -----------------      ----------------
Investments and other assets:                                                                           
 Investments                                                                        10,180,720            15,656,097
 Deferred debt issuance costs, net                                                   1,661,878             1,638,909
    Other assets                                                                     3,685,903             2,974,587
                                                                             -----------------      ---------------- 
                                                                                    15,528,501            20,269,593
                                                                             -----------------      ---------------- 
                                                                             $     323,304,830           261,724,320
                                                                             =================      ================
LIABILITIES AND STOCKHOLDERS' EQUITY                                                                    
------------------------------------
                                                                                                        
Current liabilities:                                                                                    
 Trade accounts payable                                                      $      28,834,154            36,893,399
 Inventory due under exchange agreements                                             4,568,886             4,982,179
 Excise taxes payable                                                                7,329,667             6,437,829
 Other accrued liabilities                                                           4,884,153             4,189,528
                                                                             -----------------      ----------------
                                                                                    45,616,860            52,502,935
                                                                             -----------------      ----------------

Long-term debt                                                                     128,969,667            64,774,267
Deferred tax liabilities                                                               914,000                     -
Minority interests                                                                           -             5,475,377
                                                                                                        
Stockholders' equity:                                                                                   
 Preferred stock, par value $.01 per share,                                                             
   authorized 2,000,000 shares, none issued                                                  -                     -
 Common stock, par value $.01 per share, authorized 40,000,000                                          
   shares, issued and outstanding 25,942,870 shares at                                                  
   April 30, 1998; and 25,794,720 shares at April 30, 1997                             259,429               257,947
 Capital in excess of par value                                                    136,717,865           134,843,884
 Unearned compensation                                                                (680,531)                    -
 Retained earnings                                                                  11,507,540             3,869,910
                                                                             -----------------      ----------------
                                                                                   147,804,303           138,971,741
                                                                             -----------------      ---------------- 
                                                                             $     323,304,830           261,724,320
                                                                             =================      ================
</TABLE>
See accompanying notes to consolidated financial statements.

                                       41
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

Consolidated Statements of Operations

YEARS ENDED APRIL 30, 1998, 1997 AND 1996
<TABLE> 
<CAPTION> 
-----------------------------------------------------------------------------------------------------------------------------------

                                                                1998                         1997                        1996
                                                           -------------                -------------                 -----------
<S>                                             <C>                             <C>                          <C> 
Revenues:
 Product sales, pipeline tariffs, terminal
   and storage fees and natural gas
   gathering and processing fees                       $   1,967,506,496                1,166,664,621                 533,106,747
 
Costs and expenses:
 Product costs and direct
   operating expenses                                      1,926,255,573                1,145,320,892                 520,389,482
 General and administrative                                   13,541,013                    7,987,162                   4,998,771
 Depreciation and amortization                                 8,475,461                    3,455,999                   1,169,541
                                                       -----------------            -----------------            ---------------- 
                                                           1,948,272,047                1,156,764,053                 526,557,794
                                                       -----------------            -----------------            ---------------- 
 
     Operating income                                         19,234,449                    9,900,568                   6,548,953
 
Other income (expenses):
 Interest income                                               2,059,494                    1,777,441                     520,900
 Equity in earnings of affiliates                                      -                       92,280                     942,216
 Minority interests                                                    -                      (22,414)                   (337,253)
 Interest expense                                             (7,591,223)                  (4,042,616)                 (2,530,945)
 Other financing costs                                          (572,590)                    (373,533)                   (333,155)
 Other, net                                                            -                      150,808                           -
                                                       -----------------            -----------------            ---------------- 
                                                              (6,104,319)                  (2,418,034)                 (1,738,237)
                                                       -----------------            -----------------            ---------------- 
     Earnings before
       income taxes                                           13,130,130                    7,482,534                   4,810,716
 
Income tax (expense) benefit                                  (5,492,500)                   1,688,778                    (192,747)
                                                       -----------------            -----------------            ----------------  
     Net earnings                                      $       7,637,630                    9,171,312                   4,617,969
                                                       =================            =================            ================
 
Weighted average common
 shares outstanding:
     Basic                                                    25,886,737                   21,742,625                  14,971,775
                                                       =================            =================            ================
     Diluted                                                  26,679,503                   22,544,402                  15,153,622
                                                       =================            =================            ================
 
Earnings per common share
     Basic                                             $            0.30                         0.42                        0.31
                                                       =================            =================            ================
     Diluted                                           $            0.29                         0.41                        0.30
                                                       =================            =================            ================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       42
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

Consolidated Statements of Stockholders' Equity

YEARS ENDED APRIL 30,  1998, 1997 AND 1996

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
 
                                                  Capital in
                                  Common          excess of          Unearned          Retained
                                   stock          par value        Compensation        earnings          Total
                               ------------   ---------------   -----------------   --------------   -------------
<S>                         <C>              <C>               <C>                 <C>               <C>              
BALANCE AT APRIL 30, 1995      $ 1,478,071        36,912,002                  -       (9,919,371)       28,470,702
 
Common stock issued for
     cash                          455,046        24,558,462                  -                -        25,013,508
Costs related to issuance of
     common stock                        -          (282,988)                 -                -          (282,988)
Net earnings                             -                 -                  -        4,617,969         4,617,969
                               -----------     -------------    ---------------     ------------     -------------
BALANCE AT APRIL 30, 1996        1,933,117        61,187,476                  -       (5,301,402)       57,819,191
 
Change in the par value of
     common stock from
     $.10 to $.01 in
     connection with merger     (1,739,805)        1,739,805                  -                -                 -
      
Common stock issued in
     merger                         14,744         8,093,785                  -                -         8,108,529
Common stock issued for
     minority interest in
     subsidiary                      1,000           974,000                  -                -           975,000
Common stock repurchased
     and retired                      (148)         (199,852)                 -                -          (200,000)
Common stock issued for
     options exercised               2,130           780,822                  -                -           782,952
Common stock issued for
     cash in public                 
     offering                       46,909        62,952,321                  -                -        62,999,230
Costs related to 
     issuance of common stock            -          (684,473)                 -                -          (684,473)
Net earnings                             -                 -                  -        9,171,312         9,171,312
                               -----------     -------------    ---------------     ------------     -------------
BALANCE AT APRIL 30, 1997          257,947       134,843,884                  -        3,869,910       138,971,741
 
Common stock issued for
     options exercised                 922           406,404                  -                -           407,326
Tax benefit arising from
     options exercised                   -           583,000                  -                -           583,000
Costs related to
 issuance of common stock                -           (53,863)                 -                -           (53,863)
Unearned compensation
     related to restricted
     stock awards                      560           938,440           (939,000)               -                 -
     
Amortization of unearned
     compensation                        -                 -            258,469                -           258,469
Net earnings                             -                 -                  -        7,637,630         7,637,630
                               -----------     -------------    ---------------     ------------     -------------
BALANCE AT APRIL 30, 1998      $   259,429       136,717,865           (680,531)      11,507,540       147,804,303
                               ===========    ==============    ===============     ============     =============
</TABLE>

See accompanying notes to consolidated financial statements.

                                       43
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

Consolidated Statements of Cash Flows
 
YEARS ENDED APRIL 30, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------ 
                                                                      1998              1997              1996
                                                                  ------------      ------------      ------------
<S>                                                             <C>               <C>               <C>
Cash flows from operating activities:
   Net earnings                                                $    7,637,630         9,171,312         4,617,969
   Adjustments to reconcile net earnings to net                                    
    cash used by operating activities:                                            
     Depreciation and amortization                                  8,475,461         3,455,999         1,169,541
     Equity in earnings of affiliates                                       -           (92,280)         (942,216)
     Minority interests                                                     -            22,414           337,253
     Deferred tax expense (benefit)                                 5,173,000        (2,274,600)                -
     Loss (gain) on disposition of assets                             (35,097)          (70,489)          167,459
     Amortization of deferred debt issuance costs                     402,102           183,591            55,588
     Changes in operating assets and liabilities,                                
       net of noncash activities:                                                
             Trade accounts receivable                            (27,247,275)      (25,750,916)       (3,297,248)
             Inventories                                            8,935,970       (18,737,315)       (2,247,795)
             Prepaid expenses and other                            (1,025,817)          199,516          (569,818)
             Trade accounts payable                                (8,059,245)       26,656,549       (10,979,599)
             Inventory due under exchange                                        
               agreements                                            (413,293)       (3,892,466)        4,978,815
             Excise taxes payable and other                                      
               accrued liabilities                                  1,586,463         1,543,032         2,845,886
                                                               ---------------     ------------     ------------- 
                  Net cash (used) by                                                
                    operating activities                           (4,570,101)       (9,585,653)       (3,864,165)
                                                               ---------------     ------------     ------------- 
Cash flows from investing activities:                                            
   Purchases of property, plant and equipment                     (66,634,291)      (92,294,394)       (4,124,264)
   Proceeds from sale of assets                                        83,875            18,318           320,210
   Cash received in connection with acquisitions                    1,222,360         2,315,527                 -
   Costs related to acquisition                                      (130,755)         (399,284)                -
   Cash balance in subsidiary sold                                          -          (111,341)                -
   Decrease (increase) in other assets, net                          (671,851)          550,709          (377,323)
                                                               ---------------     ------------     ------------- 
                  Net cash (used) by                                                  
                    investing activities                          (66,130,662)      (89,920,465)       (4,181,377)
                                                               ---------------     ------------     ------------- 
Cash flows from financing activities:                                            
   Borrowings (repayments) of long-term debt, net                  64,195,400        35,825,400        (9,100,568)
   Deferred debt issuance costs                                      (425,071)       (1,435,900)         (295,360)
   Common stock issued for cash                                       407,326        63,782,182        25,013,508
   Stock subscription received in cash                                      -                 -        30,000,002
   Costs related to issuance of common stock                          (53,863)         (684,473)         (970,634)
                                                               ---------------     ------------     ------------- 
                  Net cash provided by                                        
                    financing activities                           64,123,792        97,487,209        44,646,948
                                                               ---------------     ------------     ------------- 
                  Increase (decrease) in cash                                       
                    and cash equivalents                           (6,576,971)       (2,018,909)       36,601,406
                                                                                 
Cash and cash equivalents at beginning of year                     36,384,325        38,403,234         1,801,828
                                                               ---------------     ------------     ------------- 
Cash and cash equivalents at end of year                       $   29,807,354        36,384,325        38,403,234
                                                               ===============     ============     =============
 
                                                                                                       (Continued)
</TABLE>
                                                                               
See accompanying notes to consolidated financial statements.

                                       44
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

Consolidated Statements of Cash Flows (continued)

YEARS ENDED APRIL 30, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
                                                                     1998             1997         1996
                                                                     ----             ----         ----
<S>                                                           <C>               <C>           <C>      
Supplemental disclosures of cash flow information:                                                
                                                                                                  
Acquisition of Sheffield Exploration Company
                                                                                                  
Fair value of assets acquired                                   $          -       8,739,247               -
Fair value of liabilities assumed                                          -        (231,484)              -
                                                               -------------     -----------     -----------
                                                                           -       8,507,763               -
Costs related to acquisition                                               -        (399,284)              -
                                                               -------------     -----------     -----------
                                                                                                  
Fair value of stock issued                                       $         -       8,108,479               -
                                                               =============     ===========     ===========
                                                                                                  
Cash received in connection with acquisition                                                     
     included in assets acquired                                $          -       2,315,527               -
                                                               =============     ===========     ===========
                                                                                                 
Sale of Sheffield Operating Company                                                                            
                                                                                                  
Fair value of assets sold                                      $           -       1,991,403               -
Fair value of liabilities assumed by purchaser                             -         245,451               -
                                                               -------------     -----------     -----------
                                                                                                  
Fair value of consideration received                           $           -       2,236,854               -
                                                               =============     ===========     ===========
                                                                                                  
Cash distributed in connection with sale                                                          
     included in assets sold                                   $           -         111,341               -
                                                               =============     ===========     ===========
</TABLE>
                                                                                
See accompanying notes to consolidated financial statements.

                                       45
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

APRIL 30, 1998 AND 1997

--------------------------------------------------------------------------------

(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     (a) NATURE OF BUSINESS AND BASIS OF PRESENTATION


     TransMontaigne Oil Company ("TransMontaigne") is a holding company which
     pursues, through its subsidiaries, business opportunities in the downstream
     sector of the petroleum industry. TransMontaigne's principal operating
     subsidiaries are engaged in pipelining, terminaling, storing and marketing
     refined petroleum products principally in the Mid-Continent region of the
     United States and in natural gas gathering and processing in the Rocky
     Mountain region of the United States.

     Management makes various estimates and assumptions in determining the
     reported amounts of assets, liabilities, revenues and expenses for each
     period presented, and in the disclosures of commitments and contingencies.
     Changes in these estimates and assumptions will occur as a result of the
     passage of time and the occurrence of future events, and actual results
     will differ from those estimates.

     (b) PRINCIPLES OF CONSOLIDATION

     The accompanying consolidated financial statements include TransMontaigne
     and its subsidiaries. Principal TransMontaigne subsidiaries are
     TransMontaigne Transportation Services Inc. which provides refined
     petroleum product and crude oil pipeline transportation, terminal and
     storage services to the downstream sector of the petroleum industry through
     its subsidiaries, TransMontaigne Pipeline Inc. and TransMontaigne
     Terminaling Inc.; TransMontaigne Product Services Inc. which provides
     refined petroleum products, crude oil and natural gas liquids supply,
     distribution and marketing services to the downstream sector of the
     petroleum industry; Bear Paw Energy Inc. which provides natural gas
     gathering and processing services to oil and gas producers as well as to
     end-users of natural gas liquids and residue natural gas; and
     TransMontaigne's 65% owned subsidiary, TransMontaigne Holding Inc. which
     owns a minority interest in a refinery. All significant intercompany
     accounts and transactions have been eliminated in consolidation.

     (c) CASH AND CASH EQUIVALENTS

     TransMontaigne considers all short-term investments with a maturity of
     three months or less when acquired to be cash equivalents.

                                       46
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

APRIL 30, 1998 AND 1997

--------------------------------------------------------------------------------

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

    (d) INVENTORIES
 
    Inventories of refined products are stated at the lower of last-in, first-
    out (LIFO) cost or market determined on an aggregate basis. Refined products
    due from third parties under exchange agreements are included in inventory
    and recorded at current replacement cost. Refined products due to third
    parties under exchange agreements are recorded at current replacement cost.
    Adjustments resulting from changes in current replacement cost for refined
    products due to or from third parties under exchange agreements are
    reflected in cost of products sold. The exchange agreements are typically
    for a term of 30 days and are generally settled by delivering product to or
    receiving product from the party to the exchange.

    (e) PROPERTY, PLANT AND EQUIPMENT

    Depreciation of equipment is provided by the straight-line and double-
    declining balance methods.  Depreciation of all other assets is provided by
    the straight-line method.  Estimated useful lives are 25 years for plant,
    which includes buildings, storage tanks, pipelines and 3 to 20 years for
    equipment.  All items of property, plant and equipment are carried at cost.

    (f) INVESTMENT IN LION OIL COMPANY

    Effective May 1, 1997 TransMontaigne Holding Inc., a 65% owned subsidiary of
    TransMontaigne, issued to its 35% minority shareholders irrevocable proxies
    to vote their 35% share of the 27.75% interest in Lion owned by
    TransMontaigne Holding Inc. in order to assure that the 35% minority
    interest shareholders would continue to post their pro rata share of
    $1,400,000 in standby letters of credit to assist Lion in obtaining
    financing. Since the issuance of the irrevocable proxies reduced
    TransMontaigne's voting interest in Lion from 27.75% to 18.0375%,
    TransMontaigne changed its method of accounting for the investment in Lion
    from the equity method, under which the investment originally recorded at
    cost is adjusted to recognize TransMontaigne's share of Lion net earnings or
    losses as incurred, to the historical cost method, under which the
    investment is recorded at cost and dividends or other distributions are
    recognized as received. As of May 1, 1997 the investment in Lion by
    TransMontaigne Holding Inc. representing its original cost plus accumulated
    net earnings was $15,586,097 and the related minority interest was
    $5,475,377.

                                       47
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

APRIL 30, 1998 AND 1997

--------------------------------------------------------------------------------

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

    (g) GOODWILL
 
    Goodwill is included in other assets and its amortization is included in
    depreciation and amortization expense. Goodwill related to the purchase of
    the minority interest of Bear Paw Energy Inc. is amortized on a straight-
    line basis over fifteen years. Accumulated amortization was $97,500 and
    $32,500 at April 30, 1998 and 1997, respectively.

    (h) RECOGNITION OF REVENUE

    Revenue from the sale of refined petroleum products, natural gas liquids and
    residue natural gas is recorded at the time title and risk of ownership
    pass. Transfers of products to or from third parties under exchange
    agreements do not culminate the earnings process and are recorded as
    inventory and liability transactions with no effect on income.

    (i) DEFERRED DEBT ISSUANCE COSTS

    Deferred debt issuance costs related to senior subordinated debentures and
    the long-term credit agreements are amortized on the interest method over
    the term of the underlying debt instrument. Accumulated amortization was
    $742,613 and $340,511 at April 30, 1998 and 1997, respectively.

    (j) INCOME TAXES

    TransMontaigne utilizes the asset and liability method of accounting for
    income taxes, as prescribed by Statement of Financial Accounting Standards
    No. 109 (SFAS 109). Under this method, deferred tax assets and liabilities
    are recognized for the future tax consequences attributable to differences
    between the financial statement carrying amounts of existing assets and
    liabilities and their respective tax bases. Deferred tax assets and
    liabilities are measured using enacted tax rates expected to apply in the
    years in which these temporary differences are expected to be recovered or
    settled. Changes in tax rates are recognized in income in the period that
    includes the enactment date.

    (k) MINORITY INTERESTS

    Minority interests consist of ownership interests in TransMontaigne Holding
    Inc. attributable to shareholders other than TransMontaigne.

                                       48
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

APRIL 30, 1998 AND 1997

--------------------------------------------------------------------------------

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

    (l) INVENTORY MANAGEMENT

    TransMontaigne manages the risk associated with fluctuations in the price of
    refined petroleum products inventory and purchase and sales commitments, and
    may selectively enter into futures  contracts which are designated as hedges
    of the products purchased or sold.  Hedging gains and losses are recorded in
    inventory and are recognized when the inventory is sold.  Since February
    1996, TransMontaigne has also engaged in the trading of futures contracts.
    Gains and losses from these trading activities are recognized as incurred.

    TransMontaigne's Risk and Product Management Committee reviews the total
    inventory position on a weekly basis in order to ensure compliance with
    TransMontaigneOs inventory management policies, including all hedging and
    trading activities.  TransMontaigne has adopted policies whereby its net
    inventory position subject to price risk requires the prior approval of the
    Risk and Product Management Committee.

    At April 30, 1998, TransMontaigne had no net open futures contracts
    designated as hedges, and there were no deferred hedging gains or losses.

    In connection with its trading activities, TransMontaigne had outstanding
    contracts to sell 17,485,000 barrels of product and contracts to purchase
    17,485,000 barrels of product at April 30, 1998 and outstanding contracts to
    sell 1,300,000 barrels of product and contracts to purchase 1,300,000
    barrels of product at April 30, 1997. The net unrealized gains relating to
    such contracts of approximately $2,585,000 at April 30, 1998 and the net
    unrealized losses of approximately $148,000 at April 30, 1997 have been
    included in operations. Net trading losses on futures contracts of
    approximately $389,000 for the year ended April 30, 1998 and net trading
    gains of approximately $161,000 for the year ended April 30, 1997 have been
    included in product sales and product costs and direct operating expenses in
    the accompanying consolidated statements of operations.

    Product futures contracts are traded on the New York Mercantile Exchange
    (NYMEX).  The change in market value of NYMEX-traded futures contracts
    requires daily cash settlements in margin accounts with brokers.  NYMEX
    future contracts are guaranteed by the NYMEX and have nominal credit risk.
    TransMontaigne is exposed to credit risk in the event the counterparties to
    other third party agreements are not able to perform their contractual
    obligations.

                                       49
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

APRIL 30, 1998 AND 1997

--------------------------------------------------------------------------------

(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     (m) EARNINGS PER COMMON SHARE

     Earnings per common share has been calculated based on the weighted average
     number of common shares outstanding during the period in accordance with
     the Statement of Financial Accounting Standards No. 128, issued in February
     1997.

     (n) RECLASSIFICATIONS

     Certain amounts in the accompanying consolidated financial statements for
     prior periods have been reclassified to conform to the classifications used
     in 1998.

(2)  MERGER

     TransMontaigne is the surviving corporation of a merger between
     TransMontaigne Oil Company and Sheffield Exploration Company, Inc.
     (Sheffield) effective June 4, 1996. The merger constituted a reverse
     acquisition, in that Sheffield survived the merger, but was then owned
     approximately 93% by the former stockholders of TransMontaigne Oil Company.
     Consequently, the transaction was accounted for as a purchase of Sheffield
     by TransMontaigne. As a result of the merger, (i) Sheffield's name was
     changed to TransMontaigne Oil Company; (ii) the number of shares of
     authorized common stock was increased to 40,000,000; and (iii) stock
     options which Sheffield had outstanding prior to the merger became options
     to purchase 79,338 shares of TransMontaigne's common stock at $3.65 per
     share. These options were exercised prior to their September 2, 1996
     expiration date.

                                       50
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

APRIL 30, 1998 AND 1997

--------------------------------------------------------------------------------

(3) ACQUISITIONS
 
    On November 25, 1997 TransMontaigne, through a wholly owned subsidiary,
    TransMontaigne Terminaling Inc., acquired the common stock of 17
    corporations, known as the "ITAPCO Terminal Corporations", and certain
    related property and property interests. The acquisition included 17 bulk
    liquid storage and distribution terminals located in 8 states having total
    tankage capacity in excess of 3.3 million barrels, handling primarily
    refined petroleum products, chemicals and other bulk liquids together with
    the related operations of the terminals; and certain other assets.
    
    The ITAPCO Terminal Corporations purchase price was $32,000,000 ($31,458,000
    cash plus assumption of outstanding bank debt of approximately $542,000) and
    was funded by an advance of $22,000,000 from the TransMontaigne bank credit
    facility with the balance from TransMontaigne cash reserves. The 17 ITAPCO
    Terminal Corporations were merged into a wholly owned subsidiary of
    TransMontaigne effective December 1, 1997. The cost of the ITAPCO Terminal
    Corporations has been allocated primarily to the terminal facilities
    acquired and to the other related assets acquired and liabilities assumed
    based on their estimated fair market value as determined by TransMontaigne.
    The transaction was accounted for as a purchase.

    On December 20, 1996, TransMontaigne, through a wholly owned subsidiary,
    Bear Paw Energy Inc., acquired for approximately $71,000,000 cash the
    Grasslands natural gas gathering, treating, processing and fractionating
    system located in western North Dakota and northeastern Montana (the
    "Grasslands Facilities"). The cost of the Grasslands Facilities has been
    allocated to the assets acquired based on their estimated fair market value
    as determined by TransMontaigne. The transaction was accounted for as a
    purchase.

    The following summarized unaudited pro forma results of operations assumes
    that the acquisitions of the ITAPCO Terminal Corporations and Grasslands
    Facilities occurred as of May 1, 1996.

                                       51
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

APRIL 30, 1998 AND 1997

--------------------------------------------------------------------------------

(3) ACQUISITIONS (CONTINUED)

    The unaudited pro forma results of operations are not necessarily indicative
    of the results of operations which would actually have occurred if the
    ITAPCO Terminal Corporations and Grasslands Facilities had been acquired as
    of May 1, 1996 or which will be attained in the future.

                                                         1998           1997
                                                         ----           ----
       Revenues                                    $1,974,770,030  1,208,635,978
                                                   ==============  =============
       Net earnings                                $    7,548,372     11,117,170
                                                   ==============  =============
                                                                            
       Earnings per common share:    
            Basic                                  $         0.29           0.51
                                                   ==============  =============
            Diluted                                $         0.28           0.49
                                                   ==============  =============

(4)   INVENTORIES

                                                         1998           1997
                                                         ----           ----
       Refined petroleum products                  $   28,874,634     35,758,217
       Refined petroleum products due from
           third parties under exchange agreements      4,392,462      6,148,220
       Other                                              143,385        440,014
                                                   --------------  -------------
 
                                                   $   33,410,481     42,346,451
                                                   ==============  =============

    As of April 30, 1998, TransMontaigne recorded an adjustment of approximately
    $1,688,000 to reduce inventories to the lower of cost (LIFO) or market and
    decrease net earnings for the year ended April 30, 1998 by approximately
    $999,000.

    If the lower of average or replacement cost method of accounting had been
    used instead of the LIFO method for valuing refined petroleum products,
    inventories would have been approximately the same at April 30, 1998 due to
    the fourth quarter adjustment of inventory to replacement cost and
    $5,563,000 greater than reported at April 30, 1997.

    

                                      52
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

APRIL 30, 1998 AND 1997

-------------------------------------------------------------------------------

(4)  INVENTORIES (CONTINUED)

     TransMontaigne's refined petroleum products inventory consists primarily of
     gasoline and distillates. A portion of this inventory represents line fill
     and tank bottoms which is required for operating balances in the conduct of
     TransMontaigne's daily distribution activities and is maintained both in
     tanks and pipelines owned by TransMontaigne and pipelines owned by third
     parties. TransMontaigne's natural gas liquids and residual natural gas
     inventory is not significant.

(5)  PROPERTY, PLANT AND EQUIPMENT

                                                   1998            1997
                                                   ----            ----
     Land                                       $  2,801,964      1,222,195
     Pipelines, rights of way and equipment       25,267,771     19,088,562
     Terminals and equipment                      53,722,440     14,726,237
     Natural gas gathering and processing         98,253,680     83,209,767
     Other plant and equipment                     6,426,020      2,986,245
                                                ------------   ------------
                                                 186,471,875    121,233,006
     Less accumulated depreciation                18,705,670     10,704,252
                                                ------------   ------------
                                                $167,766,205    110,528,754
                                                ============   ============

                                       53
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

APRIL 30, 1998 AND 1997

--------------------------------------------------------------------------------

(6)  INVESTMENT IN LION

     TransMontaigne, through its 65% ownership of TransMontaigne Holding Inc.,
     effectively owns 18% of the common stock of Lion. At April 30, 1998
     TransMontaigne's investment in Lion, carried at cost, was approximately
     $10,111,000. At April 30, 1997 TransMontaigne's investment in Lion, carried
     at equity, was approximately $15,586,000 and the minority interests were
     approximately $5,475,000.
 
     TransMontaigne has a $2,600,000 standby letter of credit outstanding to a
     bank to assist Lion in obtaining financing. No outstanding obligations
     exist under this letter of credit as of April 30, 1998.

(7)  LONG-TERM DEBT

     Long-term debt at April 30, 1998 and 1997 is as follows:


                                                          1998          1997
                                                          ----          ----

     Line of credit with a bank                      $  50,000,000    10,815,000
     Senior notes                                       75,000,000    50,000,000
     12  3/4% senior subordinated debentures, net                             
              of discount (face amount $4,000,000)       3,969,667     3,959,267
                                                     -------------   -----------
                                                     $ 128,969,667    64,774,267
                                                     =============   ===========

     TransMontaigne's bank credit facility at April 30, 1998 is a $175,000,000
     working capital revolving credit facility with a money center bank due
     December 31, 2002. Borrowings under the bank credit facility generally bear
     interest at an annual rate equal to the lender's announced Base Rate,
     subject to a Eurodollar pricing option at TransMontaigne's election. The
     interest rate at April 30, 1998 was 6.375% and at April 30, 1997 was 6.94%.

     As of April 30, 1998, TransMontaigne had advances of $50,000,000
     outstanding under the bank credit facility and $2,600,000 of the facility
     was used to support a standby letter of credit to a bank on behalf of Lion.

     In April 1997 TransMontaigne entered into a Master Shelf Agreement with an
     institutional lender which provides that the lender will agree to quote,
     from time to time, an interest rate at which the lender would be willing to
     purchase, on an uncommitted basis, up to $100 million of TransMontaigne's
     senior promissory notes which will mature in no more than 12 years, with an
     average life not in excess of 10 years.

                                       54
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

APRIL 30, 1998 AND 1997

--------------------------------------------------------------------------------

(7)  LONG-TERM DEBT (CONTINUED)

     On April 17, 1997 and December 16, 1997, TransMontaigne sold to the lender,
     under the Master Shelf Agreement, $50,000,000 of 7.85% and $25,000,000 of
     7.22% Senior Notes due April 17, 2003 and October 17, 2004, respectively,
     all of which was outstanding at April 30, 1998.

     The bank credit facility agreement and the Master Self Agreement each
     contain similar negative pledge covenants by TransMontaigne and its
     subsidiaries and both are secured by the stock of the subsidiaries.  These
     agreements also include financial tests relating to fixed charges coverage,
     leverage ratio, consolidated tangible net worth, distributions and open
     inventory positions.  As of April 30, 1998, TransMontaigne was in
     compliance with all such tests.

     In March 1991, TransMontaigne issued 12 3/4% senior subordinated debentures
     which are guaranteed by certain subsidiaries and are due December 15, 2000.
     The debentures are subject to a required redemption of $2,000,000 on
     December 15, 1999 and December 15, 2000.  The debentures may be prepaid
     prior to maturity at a premium, under certain circumstances.  In
     conjunction with the issuance of these debentures, TransMontaigne issued
     warrants to purchase 248,686 shares of its common stock.  The warrant
     exercise price was reduced effective April 26, 1995 from $6.10 per share to
     $3.60 per share, through December 15, 2000.

     Maturities of long-term debt for fiscal years subsequent to 1998 are as
     follows:

<TABLE>
<S>                                     <C>
        1999                               $            -
        2000                                    2,000,000
        2001                                    1,969,667
        2002                                            -
        2003                                  100,000,000
        2004                                            -
        2005                                   25,000,000
                                           --------------
                                           $  128,969,667
                                           ==============
</TABLE>

     Cash payments for interest were approximately $6,995,000, $4,404,000, and
     $2,994,000 for the years ended April 30, 1998, 1997 and 1996, respectively.

                                       55
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

APRIL 30, 1998 AND 1997

--------------------------------------------------------------------------------

(8)  DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

     The following methods and assumptions were used to estimate the fair value
     of each of on and off-balance sheet financial instruments, along with the
     methods and assumptions used to estimate such fair values at April 30, 1998
     and 1997:

     CASH AND CASH EQUIVALENTS, TRADE RECEIVABLES AND TRADE ACCOUNTS PAYABLE

     The carrying amount approximates fair value because of the short term
     maturity of these instruments.

     LONG-TERM DEBT

     The carrying value of the line of credit approximates fair value since it
     bears interest at current market interest rates.

     The carrying values of the Senior notes approximate fair value since the
     interest rates  approximate the current market rates for similar debt
     instruments.

     The estimated fair value of the 12 3/4% senior subordinated debentures
     is $4,477,000.  The fair value estimate has been calculated assuming a 
     current market rate for similar debt instruments of 9%.

     FUTURES CONTRACTS

     The carrying value and fair value of the futures contracts entered into for
     trading purposes was an asset of approximately $2,585,000 at April 30, 1998
     and a liability of approximately $148,000 at April 30, 1997 based on the
     quoted market price of the related futures contracts.

     LIMITATIONS

     Fair value estimates are made at a specific point in time, based on
     relevant market information and information about the financial instrument.
     These estimates are subjective in nature and involve uncertainties and
     matters of significant judgment and therefore cannot be determined with
     precision. Changes in assumptions could significantly affect the estimates.

                                       56
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

APRIL 30, 1998 AND 1997

--------------------------------------------------------------------------------

(9)  SALE OF SUBSIDIARY

     On October 31, 1996 TransMontaigne sold a wholly owned subsidiary for
     approximately $2,237,000 and received as consideration a note for
     approximately $2,067,000 payable over five years, a receivable for $100,000
     and shares of common stock representing an approximate 18% interest in the
     acquiring company's common stock. On November 4, 1996 TransMontaigne
     received a $700,000 cash payment on the note and the $100,000 receivable
     was collected. On January 3, 1997, 14,815 shares of TransMontaigne's stock
     and cash of $200,000 were received as payment on the note. These shares
     were valued at the January 2, 1997 closing price of $13.50 and were
     retired. Additional cash payments on the note of $50,000 were received on
     January 2, 1998 and April 1, 1998.

(10) SHAREHOLDERS' EQUITY

     In April 1996 TransMontaigne completed a private placement of 4,545,456
     shares of common stock at $5.50 per share receiving net proceeds of
     $24,731,000.

     In February 1997, TransMontaigne closed a public offering of 4,357,000
     shares of its common stock of which 4,035,000 shares were issued and sold
     by TransMontaigne and 322,000 shares were sold by certain selling
     stockholders. The net proceeds to TransMontaigne, based on the public
     offering price of $14.25 per share, were approximately $53,506,000, after
     deducting underwriting discounts and commissions and offering costs, of
     which $45,000,000 was used to repay a portion of the debt incurred under
     its bank credit facility. In March 1997 the underwriters' overallotment
     option to purchase an additional 557,543 shares and the Merrill Lynch
     Growth Fund antidilution right to purchase an additional 98,390 shares were
     both exercised and TransMontaigne received additional net proceeds of
     $8,809,000.

(11) RESTRICTED STOCK

     TransMontaigne has a restricted stock plan that provides for awards of
     common stock to certain key employees, subject to forfeiture if employment
     terminates prior to the vesting dates. The market value of shares awarded
     under the plan is recorded in stockholders' equity as unearned
     compensation. During the year ended April 30, 1998, the TransMontaigne
     Board of Directors approved the issuance of 56,000 shares to certain key
     employees. Unearned compensation is amortized over the four year vesting
     period. Accumulated amortization was $258,469 at April 30, 1998. 
 

                                       57
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

APRIL 30, 1998 AND 1997

--------------------------------------------------------------------------------

(12)  STOCK OPTIONS

      TransMontaigne has adopted three stock option plans, (the "1991 Plan", the
      "1995 Plan" and the "1997 Plan") under which stock options may be granted
      to employees. No additional options are available to be granted under
      either the 1991 Plan or the 1995 Plan. Options granted under the 1991 Plan
      and 1997 Plan expire no later than ten years from the date of grant and
      under the 1995 Plan expire no later than seven years from the date of
      grant. At April 30, 1998, options granted under the 1991 Plan and 1995
      Plan have vested and none of the options granted under the 1997 Plan have
      vested. The options granted under the 1997 Plan, vest 10% end of first
      year, 20% end of second year, 30% end of third year, and 40% end of fourth
      year.

      The following table summarize information about stock options outstanding
      for the years ended April 30, 1998, 1997 and 1996:
 
<TABLE>
<CAPTION>
                                          1991 Plan                     1995 Plan                       1997 Plan
                                ------------------------------   ---------------------------     ----------------------------
                                                 Weighted                       Weighted                      Weighted 
                                                 average                        average                        average
                                  Shares     exercised price      Shares    exercised price       Shares    exercised price
                                ----------  ------------------   --------  -----------------     --------  ------------------
<S>                                <C>           <C>              <C>            <C>               <C>          <C>
Outstanding at April 30, 1995       95,754        $5.12           482,500        $2.70                  -             -
Granted                                  -            -           421,746         5.23                  -             -
Exercised                                -            -            (5,000)        2.70                  -             -
                                ----------  ------------------   --------  -----------------     --------  ------------------
Outstanding at April 30, 1996       95,754         5.12           899,246         3.88                  -             -
Granted                                  -            -                 -            -                  -             -
Exercised                          (17,500)        6.10          (118,246)        3.27                  -             -
                                ----------  ------------------   --------  -----------------     --------  ------------------
Outstanding at April 30, 1997       78,254         4.90           781,000         3.98                  -             -
Granted                                  -            -                 -            -            711,000        $16.65
Cancelled                                -            -                 -            -            (17,500)        17.25
Exercised                          (50,000)        4.46           (42,150)        4.37                  -             -
                                ----------  ------------------   --------  -----------------     --------  ------------------
Outstanding at April 30, 1998       28,254        $5.66           738,850        $3.96            693,500        $16.63
                                ==========  ==================   ========  =================     ========  ================== 
 
Exercisable at April 30, 1998       28,254        $5.66           738,850        $3.96                  -             -
                                ==========  ==================   ========  =================     ========  ================== 
</TABLE>

                                      58
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

APRIL 30, 1998 AND 1997

--------------------------------------------------------------------------------

(12)  STOCK OPTIONS (CONTINUED)

      The following table summarizes information about options outstanding at
      April 30, 1998:

<TABLE>
<CAPTION>
                                      Options Outstanding                               Options Exercisable                 
                            ---------------------------------------------------------    ---------------------------------- 
                                                  Weighted               Weighted                             Weighted      
     Range of                   Number        average remaining          average            Number            average       
 exercise prices             outstanding        life in years        exercise prices      exercisable      exercise prices  
-----------------           -------------    -------------------    -----------------    -------------    -----------------  
<S>                        <C>                <C>                   <C>                  <C>              <C>
1991 Plan $ 3.50 - 6.10         28,254               2                   $ 5.66              28,254             $5.66
 
1995 Plan   2.70 - 5.50        738,850               4                     3.96             738,850              3.96
 
1997 Plan  15.00 - 17.25       693,500               9                    16.63                   -                 -
</TABLE>


      TransMontaigne applies Accounting Principles Board Opinion No. 25,
      Accounting for Stock Issued to Employees, and related Interpretations in
      accounting for its plans. Accordingly, no compensation cost has been
      recognized for its stock option plans. If compensation cost for
      TransMontaigne's three stock-based compensation plans had been determined
      on the fair value at the grant dates for awards under those plans
      consistent with Statement of Financial Accounting Standards No. 123,
      Accounting for Stock-Based Compensation, TransMontaigne's net earnings and
      earnings per common share would have been reduced to the pro forma amounts
      indicated below:


                                          1998           1997           1996    
                                          ----           ----           ----   
        Net earnings:                                                          
           As reported                  $7,637,630     $9,171,312     $4,617,969
           Pro forma                    $5,943,340     $8,724,685     $4,268,159
                                                                                
        Earnings per common share                                               
           As reported                                                          
                 Basic                  $      .30     $      .42     $      .31
                 Diluted                $      .29     $      .41     $      .30
           Pro forma                                                            
                 Basic                  $      .23     $      .40     $      .29
                 Diluted                $      .22     $      .39     $      .28

      
                                       59
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

APRIL 30, 1998 AND 1997

--------------------------------------------------------------------------------
(12) STOCK OPTIONS (CONTINUED)

      The fair value of each option grant is estimated on the date of grant
      using the Black-Scholes option-pricing model with the following weighted
      average assumptions used for options granted: no dividend yield; expected
      volatility of 31%; risk-free rate of 6.14% and 6.27%; and expected life of
      7 years and 6.37 years during the years ended April 30, 1998 and 1996,
      respectively. The weighted average fair value at grant date for options
      granted during the years ended April 30, 1998 and 1996 was $16.68 and
      $5.23, respectively. There were no stock options granted during the year
      ended April 30, 1997.

(13)  EMPLOYEE BENEFIT PLAN

      TransMontaigne has established a 401(k) retirement savings plan for all
      employees. The plan allows participants to contribute up to 15% of their
      compensation, with TransMontaigne making a discretionary percentage
      matching contribution as determined by management based upon its financial
      performance. Employees vest 25% per year in TransMontaigne's contribution.
      The total amount of TransMontaigne's discretionary percentage matching
      contributions for the year ended April 30, 1998 was $172,434 and for the
      year ended April 30, 1997 was $31,410. TransMontaigne did not make a
      contribution to a predecessor employee profit sharing plan for the year
      ended April 30, 1996.

                                       60
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

APRIL 30, 1998 AND 1997

--------------------------------------------------------------------------------

(14)  INCOME TAXES

      Income tax expense (benefit) expense for years ending April 30 consists of
      the following:

<TABLE> 
<CAPTION> 
                                                   1998          1997           1996   
                                                   ----          ----           ----                   
      <S>                                       <C>           <C>            <C>                       
      Current state income taxes                $   319,500       585,822       192,747                
      Deferred federal income taxes               4,630,000    (1,975,300)            -                
      Deferred state income taxes                   543,000      (299,300)            -                
                                                 ----------   -----------    ----------                
                 Income tax expense (benefit)   $ 5,492,500    (1,688,778)      192,747                
                                                ===========   ===========    ==========         
</TABLE> 

      Income tax expense (benefit) differs from the amount computed by applying
      the federal corporate income tax rate of 34% to pretax earnings as a
      result of the following:

<TABLE> 
<CAPTION> 
                                                   1998           1997           1996    
                                                   ----           ----           ----                    
      <S>                                       <C>            <C>           <C>                        
      Computed "expected"                                                                               
        tax expense                             $ 4,464,000     2,544,000     1,636,000                 
                                                                                                        
      Increase (reduction) in income                                                                    
        taxes resulting from:                                                                           
          Increase (decrease) in the                                                                    
             valuation allowance for                                                                    
             deferred tax assets                                                                        
             allocated to income tax                                                                    
             expense                                      -    (4,474,000)   (1,785,000)                
          Recognition of tax benefit of net                                                             
             operating loss carryforwards                                                               
             of acquired entity                           -    (1,021,600)            -                 
          Adjustment of prior year's                                                                    
             cumulative temporary differences                                                           
             offset by a change in the                                                                  
             valuation allowance                          -       497,000             -                 
          State income taxes, net of                                                                    
             federal income tax benefit             723,300       387,000       127,000                 
          Other, net                                305,200       378,822       214,747                 
                                                -----------   -----------   -----------                 
                                                                                                        
               Income tax expense (benefit)     $ 5,492,500    (1,688,778)      192,747                 
                                                ===========   ===========   ===========          
</TABLE> 
                                      61
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

APRIL 30, 1998 AND 1997

--------------------------------------------------------------------------------

(14)   INCOME TAXES (CONTINUED)

       The tax effects of temporary differences which give rise to significant
       portions of the deferred tax assets and deferred tax liabilities at April
       30, 1998 and 1997 are as follows:

<TABLE>
<CAPTION> 
                                                             1998            1997
                                                             ----            ---- 
<S>                                                     <C>                <C> 
       Deferred tax assets:                            
        Inventories, principally due to difference in  
            costing method used for tax purposes        $  3,384,000       2,196,000
        Net operating loss carryforwards                   5,829,000       6,969,000
        Alternative minimum tax credit carryforwards          67,000          24,000
                                                        ------------    ------------
                                                       
              Gross deferred tax assets                    9,280,000       9,189,000
                                                       
       Deferred tax liabilities:                       
        Unrealized commodity futures contract          
          gains                                             (957,000)       (122,000)
        Plant and equipment, principally due to                           (4,895,000)
          differences in depreciation methods             (8,741,000)
        Investments in affiliated company,             
          principally due to undistributed earnings         (496,000)       (496,000)
                                                        ------------      ----------
                                                       
              Deferred tax (liabilities) assets, net    $   (914,000)      3,676,000
                                                        ============      ==========
</TABLE>

       In assessing the realizability of deferred tax assets, management
       considers whether it is more likely than not that some portion or all of
       the deferred tax assets will not be realized. The ultimate realization of
       deferred tax assets is dependent upon the generation of future taxable
       income during the periods in which those temporary differences become
       deductible. Management considers the scheduled reversal of deferred tax
       liabilities, projected future taxable income, and tax planning strategies
       in making this assessment.

       As of April 30, 1996, management believed that the benefits of future
       deductible differences might not be realized due to losses incurred in
       recent years and uncertainty about future earnings. Accordingly, a
       valuation allowance was provided for net deferred tax assets at that
       date.
       

                                      62
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 1998 AND 1997

--------------------------------------------------------------------------------

(14)  INCOME TAXES (CONTINUED)

      As a result of the Grasslands acquisition in December 1996 and the public
      offering of common stock in February 1997, and based upon projections for
      future taxable income over the periods which the deferred tax assets are
      deductible, management believed the "more likely than not" criteria had
      been satisfied as of April 30, 1997, and that the benefits of future
      deductible differences will be realized. Accordingly, the remaining
      valuation allowance was reversed to income for the year ended April 30,
      1997.

      At April 30, 1998, TransMontaigne has aggregate net operating loss
      carryforwards for federal income tax purposes of approximately $15,350,000
      which are available to offset future federal taxable income, if any,
      through 2010.  In addition, TransMontaigne has alternative minimum tax
      credit carryforwards of approximately $67,000 available to reduce future
      federal regular income taxes, if any, which can be carried forward
      indefinitely.

      As a result of the merger in June 1996, TransMontaigne acquired net
      operating loss carryforwards of approximately $7,892,000, which are
      included in the aggregate net operating loss carryforwards, and are
      limited to approximately $1,300,000 annually. A portion of the tax benefit
      of the utilization of such carryforwards has been recognized as a
      reduction of goodwill recorded in the acquisition. Due to changes in
      ownership which occurred through April 30, 1996, the use of the remaining
      net operating loss carryforwards to offset taxable income is limited to
      approximately $4,300,000 annually.

      Under SFAS 109, TransMontaigne provides for deferred income taxes on the
      undistributed net earnings of Lion.  Under the transition rules in SFAS
      109, TransMontaigne is not required to recognize a deferred tax liability
      of approximately $6,100,000 for the undistributed net earnings of Lion
      which arose prior to the adoption of SFAS 109 because TransMontaigne
      currently does not expect those undistributed earnings to become taxable
      to it in the foreseeable future. A deferred tax liability will be
      recognized on these undistributed earnings when TransMontaigne expects
      that it will recover those undistributed earnings in a taxable manner,
      such as through the receipt of dividends or the sale of the investment.

      TransMontaigne paid in cash federal income taxes of approximately $500,000
      and $126,000 for the years ended April 30, 1998 and April 30, 1997,
      respectively, and state income taxes of approximately $575,000, $214,000
      and $106,000 for the years ended April 30, 1998, 1997 and 1996,
      respectively.

                                       63
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 1998 AND 1997

--------------------------------------------------------------------------------

(15)  RELATED PARTY TRANSACTIONS

      TransMontaigne had sales of $13,550,000 and $10,900,000 to, and purchases
      of $51,940,000 and $49,700,000 from, Lion for the years ended April 30,
      1998 and 1997, respectively.

      Related party balances at April 30, 1998 and 1997 were:



                                            1998             1997
                                            ----             ----   
        Accounts receivable               $   99,095       2,694,913
        Accounts payable                   1,644,195         228,462


(16)  NEW ACCOUNTING STANDARDS

      Statement of Financial Accounting Standards No. 121, "Accounting for
      Impairment of Long-Lived Assets to be Disposed of" ("SFAS 121"), was
      issued in March, 1995, by the Financial Accounting Standards Board. It
      requires that long-lived assets and certain identifiable intangibles to be
      held and used by an entity be reviewed for impairment whenever events or
      changes in circumstances indicate that the carrying amount of an asset may
      not be recoverable. The adoption of this statement by TransMontaigne as of
      May 1, 1996 had no effect on its consolidated financial statements.

      Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
      ("SFAS 128"), was issued in February 1997, by the Financial Accounting
      Standards Board. SFAS 128 established new standards for computing and
      presenting earnings per share ("EPS") including simplifying the standards
      for computing EPS and making them comparable to international EPS
      standards. This statement replaces the presentation of primary EPS
      previously prescribed by Accounting Principles Board Opinion No. 15 ("APB
      No. 15") with a presentation of basic EPS which is computed by dividing
      income available to common stockholders by the weighted average number of
      common shares outstanding for the period. SFAS 128 also requires dual
      presentation of basic and diluted EPS. Diluted EPS is computed similarly
      to fully diluted EPS pursuant to APB No. 15. This statement is effective
      for financial statements issued for periods ending after December 15,
      1997, and requires restatement of all prior period EPS data presented. The
      following tables reconcile the computation of basic EPS and diluted EPS
      for the years ended April 30, 1998, 1997 and 1996.

                                       64
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 1998 AND 1997

--------------------------------------------------------------------------------

(16) NEW ACCOUNTING STANDARDS (CONTINUED)

<TABLE>
<CAPTION>
                                                    1998                                                1997
                             -----------------------------------------------     -----------------------------------------------
                                 Earnings           Shares            Per           Earnings           Shares             Per 
                               (Numerator)       (Denominator)       Share         (Numerator)       (Denominator)       Share
                             ---------------   -----------------   ---------     ---------------   -----------------   ---------
<S>                            <C>               <C>                <C>            <C>               <C>                <C>
Basic EPS - Net earnings
  available to common          
  stockholders                  $7,637,630        25,886,737         $0.30          $9,171,312         21,742,625         $0.42
                                                                   =========                                           =========
 
Effect of Dilutive
  Securities
     Stock options                       -           600,478                                 -            630,900
     Stock warrants                      -           192,288                                 -            170,877
                             ---------------   -----------------                 ---------------   -----------------   
 
Diluted EPS - Net earnings
   available to common
   stockholders            
   and assumed
   conversions                  $7,637,630        26,679,503         $0.29          $9,171,312         22,544,402         $0.41
                             ===============   =================   =========     ===============   =================   =========
</TABLE>
                                                                                
<TABLE>
<CAPTION>
                                                             1996
                           ----------------------------------------------------------------------
                                   Earnings                      Shares                  Per 
                                  (Numerator)                (Denominator)              Share
                           ---------------------       ----------------------       -------------
 
<S>                           <C>                         <C>                          <C>
Basic EPS - Net earnings
  available to common      
  stockholders                        $4,617,969                  $14,971,775               $0.31
                                                                                    =============
 
Effect of Dilutive
  Securities
     Stock options                             -                      160,370
     Stock warrants                            -                       21,477
                           ---------------------       ----------------------
 
Diluted EPS - Net
  earnings available
   to
  common stockholders
  and assumed                         
  conversions                         $4,617,969                  $15,153,622               $0.30
                           =====================       ======================       =============
</TABLE>
                                                                                
       Stock options to purchase 503,500 and 190,000 shares of common stock at
       $17.25 and $15.00 per share, respectively, were outstanding at April 30,
       1998, but were not included in the computation of diluted EPS because the
       options' exercise price was greater than the market price of the common
       shares at April 30, 1998.

                                       65
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 1998 AND 1997

--------------------------------------------------------------------------------

(17)  CONCENTRATION OF CREDIT RISK

      Substantially all of TransMontaigne's trade accounts receivable at April
      30, 1998 and 1997 result from sales of refined petroleum products to
      numerous companies in the oil and gas industry. This concentration could
      impact TransMontaigne's overall credit risk since these companies could be
      affected by industry-wide changes in economics or other conditions. Since
      TransMontaigne provides short-term credit to its customers, which are
      generally either major and large independent oil companies or wholesale
      distributors of these products, it may require collateral, such as letters
      of credit, liens on products and guarantees as determined on a customer by
      customer basis. TransMontaigne maintains allowances for potential
      uncollectible accounts receivable, which historically have been minimal.
      The trade accounts receivable outstanding at April 30, 1998 and 1997 were
      substantially paid during the 60 day period subsequent to those respective
      dates.

(18)  BUSINESS SEGMENTS

      Prior to the year ended April 30, 1997 TransMontaigne's principal
      operating business segment was logistical petroleum services related to
      pipelining, terminaling and storing and supply, distribution and marketing
      of refined petroleum products. In November 1997 TransMontaigne acquired
      the ITAPCO Terminal Corporations the refined petroleum products, chemicals
      and other bulk liquids operations of which are included in the logistical
      petroleum services business segment.

      In December 1996, TransMontaigne acquired the Grasslands Facilities and
      expanded its other natural gas gathering and processing facilities. The
      natural gas services business segment conducted operations for
      approximately five months during the year ended April 30, 1997 and during
      all of the year ended April 30, 1998.

                                      66
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 1998 AND 1997

--------------------------------------------------------------------------------

(18)  BUSINESS SEGMENTS (CONTINUED)

      

      Information about TransMontaigne's business segments for the years ended
      April 30, 1998 and 1997 is summarized below:

<TABLE>
<CAPTION>
Revenues                                                                             1998                        1997
                                                                                     ----                        ----
<S>                                                                       <C>                         <C>
 Logistical petroleum services                                           $        1,907,041,515     $          1,143,524,074
 Natural gas services                                                                60,464,981                   23,140,547
                                                                           --------------------       ----------------------
                                                                         $        1,967,506,496     $          1,166,664,621
                                                                           ====================       ======================
Operating income
 Logistical petroleum services                                           $           15,203,078     $              6,747,996
 Natural gas services                                                                 5,231,371                    4,189,122
 Corporate                                                                           (1,200,000)                  (1,036,550)
                                                                           --------------------       ----------------------
                                                                         $           19,234,449     $              9,900,568
                                                                           ====================       ======================
Identifiable assets at year end (net of
   depreciation)
 Logistical petroleum services                                           $          177,707,215     $            112,178,478
 Natural gas services                                                                94,089,703                   86,730,296
 Corporate                                                                           51,507,912                   62,815,546
                                                                           --------------------       ----------------------
                                                                         $          323,304,830     $            261,724,320
                                                                           ====================       ======================
Depreciation and amortization
 Logistical petroleum services                                           $            2,515,030     $              1,338,768
 Natural gas services                                                                 5,114,745                    1,735,034
 Corporate                                                                              845,686                      382,197
                                                                           --------------------       ----------------------
                                                                         $            8,475,461     $              3,455,999
                                                                           ====================       ======================
Capital expenditures
 Logistical petroleum services                                           $           47,588,090     $             11,118,556
 Natural gas services                                                                15,561,633                   80,059,318
 Corporate                                                                            3,484,568                    1,116,520
                                                                           --------------------       ----------------------
                                                                         $           66,634,291     $             92,294,394
                                                                           ====================       ======================
</TABLE>

      The Corporate business segment represents all of TransMontaigne's
      activities and assets which are not specifically identified with the
      primary business segments, including cash and cash equivalents,
      investments and other assets.

                                      67
<PAGE>
 
TRANSMONTAIGNE OIL COMPANY
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 1998 AND 1997

--------------------------------------------------------------------------------

(19)  FINANCIAL RESULTS BY QUARTER (UNAUDITED)

<TABLE>
<CAPTION>
                                                               Three Months Ended                             Year Ended
                                      -------------------------------------------------------------------  ---------------
                                           July 31        October 31       January 31        April 30          April 30
                                            1997             1997             1998             1998              1998
                                      ----------------  ---------------  ---------------  ---------------  ---------------
<S>                                  <C>                  <C>              <C>              <C>              <C>
Revenues                             $   462,149,000      545,100,000      470,732,000      489,525,000      1,967,506,000
Total costs
   and expenses                          456,462,000      540,105,000      466,108,000      485,597,000      1,948,272,000
                                      ----------------  ---------------  ---------------  ---------------  ---------------
 
Operating income                     $     5,687,000        4,995,000        4,624,000        3,928,000         19,234,000
 
Net earnings                         $     3,010,000        2,397,000        1,718,000          513,000          7,638,000
Earnings per
   common share
   Basic                             $           .12              .09              .07              .02                .30
   Diluted                           $           .12              .09              .06              .02                .29
</TABLE>

<TABLE>
<CAPTION>
                                                               Three Months Ended                             Year Ended
                                      -------------------------------------------------------------------  ---------------
                                           July 31        October 31       January 31        April 30          April 30
                                            1996             1996             1997             1997              1997
                                      ----------------  ---------------  ---------------  ---------------  ---------------
<S>                                  <C>                 <C>              <C>              <C>              <C>
Revenues                             $   194,052,000      276,771,000      340,654,000      355,188,000      1,166,665,000
Total costs
   and expenses                          191,816,000      274,298,000      338,210,000      352,440,000      1,156,764,000
                                      ----------------  ---------------  ---------------  ---------------  ---------------
 
Operating income                     $     2,236,000        2,473,000        2,444,000        2,748,000          9,901,000
 
Net earnings                         $     1,807,000        2,673,000        1,426,000        3,265,000          9,171,000
Earnings per
   common share
   Basic                             $           .08              .13              .07              .14                .42
   Diluted                           $           .08              .12              .07              .14                .41
</TABLE>

<TABLE>
<CAPTION>
                                                               Three Months Ended                             Year Ended
                                      -------------------------------------------------------------------  --------------
                                           July 31        October 31        January 31        April 30         April 30
                                            1995             1995              1996             1996             1996
                                      ----------------  ---------------  ---------------  ---------------  ---------------
<S>                                      <C>              <C>              <C>               <C>              <C>
Revenues                             $   107,691,000      134,324,000      105,960,000       185,132,000      533,107,000
Total costs
   and expenses                          105,128,000      133,461,000      106,118,000       181,851,000      526,558,000
                                      ----------------  ---------------  ---------------  ---------------  ---------------
 
Operating income                     $     2,563,000          863,000         (158,000)        3,281,000        6,549,000
 
Net earnings                         $     2,031,000          438,000         (867,000)        3,016,000        4,618,000
Earnings per
   common share
   Basic                             $           .14              .03             (.06)              .20              .31
   Diluted                           $           .14              .03             (.06)              .19              .30
</TABLE>

                                       68
<PAGE>
 
ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURES

          Not Applicable


                                    PART III
                                        
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS

          The information required by Item 10 concerning executive officers of
          the registrant is included under the caption "Executive Officers of
          the Registrant" on page 70 of this report.

ITEM 11.  EXECUTIVE COMPENSATION

              *

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

              *

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

              *

     *    Incorporated by reference from the Proxy Statement dated August 6, 
          1998 for the Annual Meeting of Stockholders to be held on August 26, 
          1998.

                                       69
<PAGE>
 
EXECUTIVE OFFICERS OF THE REGISTRANT

<TABLE>
<CAPTION>
                                                         Current Positions and Principal
            Name                  Age                  Occupations During Last Five Years
            ----                  ---                  ----------------------------------
 
<S>                               <C>         <C>
Cortlandt S. Dietler               76         Chairman, Chief Executive Officer and a Director since    
                                              April 1995; Chief Executive Officer of Associated Natural 
                                              Gas Corporation prior to its 1994 merger with Panhandle   
                                              Eastern Corporation (now Duke Energy Corporation) from    
                                              1985 to 1994                                               
Richard E. Gathright               44         President and Chief Operating Officer since September        
                                              1996; Director since April 1995; Executive Vice President    
                                              from April 1995 to September 1996; President of a            
                                              subsidiary of TransMontaigne from December 1993 to April     
                                              1995; President and Director of North American Operations    
                                              for Aberdeen Petroleum PLC from 1988 to 1993                  
Harold R. Logan, Jr.               53         Executive Vice President/Finance, Treasurer and a Director
                                              since April 1995; Senior Vice President/Finance of
                                              Associated Natural Gas Corporation from 1985 to 1994
W. A. Sikora                       61         Executive Vice President since September 1996; Senior Vice
                                              President and Chief Financial Officer of a subsidiary of
                                              TransMontaigne from May 1995 to September 1996; business
                                              consultant from 1982 to April 1995
Erik B. Carlson                    51         Senior Vice President, General Counsel, and Secretary
                                              since January 1998; Senior Vice President, General Counsel
                                              and Secretary for Duke Energy Field Services, Inc.
                                              (formerly known as Pan Energy Field Services, Inc. and
                                              Associated Natural Gas, Inc.) in Denver from 1983 until
                                              December 1997
Frederick W. Boutin                43         Senior Vice President since April 1995; Vice President of
                                              Associated Natural Gas Corporation from 1985 to 1994
Rodney S. Pless                    37         Vice President, Controller and Chief Accounting Officer
                                              since December 1996; Vice President, Controller and other
                                              accounting positions of a subsidiary of TransMontaigne
                                              from 1987 to December 1996
Robert W. Bradberry                44         President of TransMontaigne Product Services Inc. since
                                              January 1, 1997; other senior management positions of a
                                              subsidiary of TransMontaigne from 1979 to January 1997
Robert J. Clark                    53         President of Bear Paw Energy Inc. since June 1996;
                                              President of a predecessor of Bear Paw Energy Inc. from
                                              March 1995 to June 1996; Senior Vice President of Snyder
                                              Oil Corporation from 1988 to March 1995
Larry F. Clynch                    53         President of TransMontaigne Transportation Services Inc.
                                              since January 1, 1997; Senior Vice President of a
                                              subsidiary of TransMontaigne from January 1996 to January
                                              1997; prior to January 1996 employed 28 years by Conoco
                                              Pipe Line Company, the last 3 years as President
</TABLE>

                                       70
<PAGE>
 
                                    PART IV
                                        
ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
           ON FORM 8-K

(a)  The following documents are filed as a part of this report.

     (1) Consolidated Financial Statements:

         TransMontaigne Oil Company

            Independent Auditors' Report

            Consolidated Balance Sheets as of April 30, 1998 and 1997

            Consolidated Statements of Operations for the years ended
                    April 30, 1998, 1997 and 1996

            Consolidated Statements of Stockholders' Equity for the years ended
                    April 30, 1998, 1997, and 1996

            Consolidated Statements of Cash Flows for the years ended
                    April 30, 1998, 1997 and 1996

            Notes to Consolidated Financial Statements

   (2) Financial Statement Schedules:  Not Applicable

   (3) Exhibits:

            A list of the exhibits required by Item 601 of Regulation S-K to
            be filed as part of this report:

<TABLE>
<CAPTION>
Exhibit No.                                    Description
-----------                                    -----------
<S>                   <C> 
    3.1               Restated Articles of Incorporation and Certificate of Merger.
                      Incorporated by reference to TransMontaigne Oil Company Form
                      10-K (Securities and Exchange Commission File No. 001-11763) for
                      the year ended April 30, 1996.
    3.2               Amended and Restated By-Laws.  Incorporated by reference to
                      TransMontaigne Oil Company Form S-2  (Securities and Exchange
                      Commission File No. 333-18795).
</TABLE>

                                       71
<PAGE>
 
ITEM 14.      EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
              ON FORM 8-K (continued)

<TABLE>
<S>            <C> 
    10.1       The TransMontaigne Oil Company Amended and Restated 1995 Stock
               Option  Plan. Incorporated by reference to TransMontaigne Oil
               Company Form 10-K (Securities and Exchange Commission File No.
               001-11763) for the year ended April 30, 1996.
    10.2       TransMontaigne Oil Company Equity Incentive Plan. Incorporated by
               reference to TransMontaigne Oil Company's Definitive Proxy
               Statement (Securities and Exchange Commission File No. 001-11763)
               filed in connection with the August 28, 1997 Annual Meeting of
               Shareholders.
    10.3       Stock Purchase Agreement effective April 17, 1996 between
               TransMontaigne Oil Company and the investors named therein.
               Incorporated by reference to TransMontaigne Oil Company Form 10-K
               (Securities and Exchange Commission File No. 001-11763) for the
               year ended April 30, 1996.
    10.4       Anti-dilution Rights Agreement dated as of April 17, 1996 between
               TransMontaigne Oil Company and Waterwagon & Co., nominee for
               Merrill  Lynch Growth Fund. Incorporated by reference to
               TransMontaigne Oil Company Form 10-K (Securities and Exchange
               Commission File No. 001-11763) for the year ended April 30, 1996.
    10.5       Agreement to Elect Directors dated as of April 17, 1996 between
               TransMontaigne Oil Company and the First Reserve Investors named
               therein.  Incorporated by reference to TransMontaigne Oil Company
               Form 10-K (Securities and Exchange Commission File No. 001-11763)
               for the year ended April 30, 1996.
    10.6       Registration Rights Agreement dated as of April 17, 1996 between
               TransMontaigne Oil Company and the entities named therein.
               Incorporated by reference to TransMontaigne Oil Company Form 10-K
               (Securities and Exchange Commission File No. 001-11763) for the
               year ended April 30, 1996.
    10.7       Agreement for Sale of McKenzie Gas Processing Plant and
               Grasslands Gas Gathering System dated as of October 31, 1996
               between Bear Paw Energy, Inc. and Koch Hydrocarbon Company.
               Incorporated by reference to TransMontaigne Oil Company Form S-2
               (Securities and Exchange Commission File No. 333-18795).
    10.8       Credit Agreement between TransMontaigne Oil Company and The First
               National Bank of Boston, as Agent, dated December 18, 1996.
               Incorporated by reference to  TransMontaigne Oil Company Form S-2
               (Securities and Exchange Commission File No. 333-18795).
</TABLE>

                                       72
<PAGE>
 
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
          ON FORM 8-K (continued)

<TABLE>
<S>           <C> 
   10.9       Amendment No. 2 to Credit Agreement between TransMontaigne Oil
              Company and The First National Bank of Boston, as Agent, dated
              April 17, 1997. Incorporated by reference to TransMontaigne Oil
              Company Form 10-K (Securities and Exchange Commission File No.
              001-11763) for the year ended April 30, 1997.
   10.10      Amendment No. 3 to Credit Agreement between TransMontaigne Oil
              Company and BankBoston, N.A. (formerly known as The First
              National Bank of Boston), as Agent, dated December 1, 1997.
              FILED HEREWITH.
   10.11      Amended and Restated Credit Agreement between TransMontaigne
              Oil Company and BankBoston, N.A., as Agent, dated March 31,
              1998. FILED HEREWITH.
   10.12      Master Shelf Agreement among TransMontaigne Oil Company, The
              Prudential Insurance Company and U.S. Private Placement Fund,
              dated April 17, 1997. Incorporated by reference to
              TransMontaigne Oil Company Form 10-K (Securities and Exchange
              Commission File No. 001-11763) for the year ended April 30,
              1997.
   10.13      Letter Amendment No. 1, dated March 31, 1998, to Master Shelf
              Agreement dated as of April 17, 1997, among TransMontaigne Oil
              Company, The Prudential Insurance Company of America and U.S.
              Private Placement Fund. FILED HEREWITH.
   10.14      Offer to Purchase Stock and Certain Assets of the ITAPCO
              Corporations as listed therein and the Independent Terminal and
              Pipeline Company as described therein dated October 20, 1997,
              together with Exhibits A-E. Incorporated by reference to
              TransMontaigne Oil Company Current Report on Form 8-K
              (Securities and Exchange Commission File No. 001-11763) filed
              on December 10, 1997.
    21        Schedule of TransMontaigne's Subsidiaries. FILED HEREWITH.
   23.1       Consent of KPMG Peat Marwick LLP. FILED HEREWITH.
   27.1       Financial Data Schedule for the Fiscal Year Ended April 30,
              1998. FILED HEREWITH.
   27.2       Financial Data Schedules (restated) for the Quarters Ended July
              31, 1997 and October 31, 1997. FILED HEREWITH.
   27.3       Financial Data Schedules (restated) for the Quarters Ended July
              31, 1996, October 31, 1996 and January 31, 1997 and the Fiscal
              Years Ended April 30, 1997 and April 30, 1996. FILED HEREWITH.
</TABLE>

                                       73
<PAGE>
 
(b)   Reports on Form 8-K.
 
      The following amendment on form 8-K/A was filed during the quarter ended
April 30, 1998:

February 9, 1998 Amendment on Form 8-K/A to Current Report on Form 8-K filed by
TransMontaigne Oil Company on December 10, 1997, amending the Form 8-K solely to
add the financial statements of the business acquired, ITAPCO Terminal
Corporations, as required by Item 7(a) of Form 8-K, and the pro forma financial
information, as required by Item 7(b) of Form 8-K.

                                       74
<PAGE>
 
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                      TRANSMONTAIGNE OIL COMPANY

                                      By  /s/CORTLANDT S. DIETLER
                                          -----------------------
                                          Cortlandt S. Dietler
                                          Chairman and Chief Executive Officer
Date:  July 28, 1998

Pursuant to the requirements of the Securities and Exchange Act of 1934, this
report is signed below by the following persons on behalf of the Registrant and
in the capacities indicated on July 24, 1998.

<TABLE> 
<CAPTION> 
  Name and Signature                                     Title
  ------------------                                     -----
<S>                                             <C> 
(i)  Principal executive officer:

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

(ii)   Principal operating officer:

/s/RICHARD E. GATHRIGHT                        President, Chief Operating Officer and Director
-----------------------                                                     
Richard E. Gathright

(iii)  Principal financial officer:

/s/HAROLD R. LOGAN, JR.                        Executive Vice President/Finance,
-----------------------                        Treasurer and Director     
Harold R. Logan, Jr.                        

(iv)  Principal accounting officer:

/s/RODNEY S. PLESS                             Vice President, Controller and Chief Accounting Officer
------------------                                                       
Rodney S. Pless

(v)  Non Employee Directors:
 
/s/THOMAS R. DENISON                           Director
--------------------              
Thomas R. Denison

/s/JOHN A. HILL                                Director
-----------------                          
John A. Hill

/s/BRYAN H. LAWRENCE                           Director
--------------------              
Bryan H. Lawrence

/s/EDWIN H. MORGENS                            Director
-------------------              
Edwin H. Morgens
</TABLE> 

                                       75