<PAGE>

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

                                    FORM 10-Q

                (Mark One)

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

                  For the quarterly period ended June 30, 2000

                                       OR

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

              For the transition period from _________ to _________


                         Commission File Number 0-20125


                             BASIN EXPLORATION, INC.
             (Exact name of registrant as specified in its charter)


                 DELAWARE                                 84-1143307
     (State or other jurisdiction of                   (I.R.S. Employer
     incorporation or organization)                    Identification No.)


                   1670 BROADWAY, SUITE 2800, DENVER, CO 80202
               (Address of principal executive offices) (Zip Code)


                                 (303) 685-8000
              (Registrant's telephone number, including area code)


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                    YES X   NO
                                       ---    ---

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

                                              Outstanding at
              Class                           July 31, 2000
   ----------------------------             -----------------
   Common stock, $.01 par value             18,517,000 shares

<PAGE>

                             BASIN EXPLORATION, INC.

                                      INDEX

<TABLE>
<CAPTION>
PART I.    FINANCIAL INFORMATION                                                Page
                                                                                ----
<S>                                                                             <C>
     Item 1.  Consolidated Financial Statements

              Consolidated Balance Sheets as of
              December 31, 1999 and June 30, 2000...............................  3

              Consolidated Statements of Operations for the
              three and six months ended June 30, 1999 and 2000.................  5

              Consolidated Statements of Changes in
              Stockholders' Equity..............................................  6

              Consolidated Statements of Cash Flows for the
              six months ended June 30, 1999 and 2000...........................  7

              Notes to Consolidated Financial Statements........................  8

     Item 2.  Management's Discussion and Analysis of Financial
              Condition and Results of Operations...............................  9

     Item 3.  Quantitative and Qualitative Disclosures about Market Risk........ 18

PART II.  OTHER INFORMATION

     Item 1.  Legal Proceedings................................................. 18

     Item 2.  Changes in Securities and Use of Proceeds......................... 18

     Item 3.  Defaults Upon Senior Securities................................... 18

     Item 4.  Submission of Matters to a Vote of Security Holders............... 18

     Item 5.  Other Information................................................. 18

     Item 6.  Exhibits and Reports on Form 8-K.................................. 19


SIGNATURES ..................................................................... 20

</TABLE>


                                       2
<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                    BASIN EXPLORATION, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                     ASSETS
(In thousands)
                                                   December 31,        June 30,
                                                      1999              2000
                                                   -----------        ---------
<S>                                                <C>                <C>
CURRENT ASSETS
     Cash and equivalents                           $   3,777          $      15
     Accounts receivable                               20,332             22,803
     Prepaids and other                                 4,739              3,987
                                                    ---------          ---------
                                                       28,848             26,805
                                                    ---------          ---------
PROPERTY AND EQUIPMENT, at cost:
     Oil and gas properties, under the full
       cost method of accounting
         Proved                                       343,872            392,509
         Unproved                                      26,567             37,675
     Less accumulated depreciation,
       depletion and amortization                    (152,234)          (171,472)
                                                    ---------          ---------
                                                      218,205            258,712
     Furniture and equipment, net                       1,354              1,658
                                                    ---------          ---------
                                                      219,559            260,370
                                                    ---------          ---------
OTHER ASSETS                                              498                405
                                                    ---------          ---------
                                                    $ 248,905          $ 287,580
                                                    =========          =========
</TABLE>

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

                                       3
<PAGE>

                    BASIN EXPLORATION, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                      LIABILITIES AND STOCKHOLDERS' EQUITY

(In thousands, except share data)                   December 31,       June 30,
                                                       1999              2000
                                                    -----------        --------
<S>                                                 <C>                <C>
CURRENT LIABILITIES:
     Accounts payable                                $  12,187          $ 20,345
     Accrued liabilities                                27,039            32,498
                                                     ---------          --------
                                                        39,226            52,843
                                                     ---------          --------
LONG-TERM DEBT, net of current portion                  34,000            42,000

OTHER LONG-TERM OBLIGATIONS                                516               465

DEFERRED INCOME TAXES                                       --             4,504

STOCKHOLDERS' EQUITY:
     Preferred stock, par value $.01 per
       share; 10,000,000 shares authorized,
       shares issued and outstanding
       no shares issued and outstanding                     --                --
     Common stock, par value $.01 per
       share, 50,000,000 shares authorized,
       18,460,000 and 18,506,000 shares
       issued, respectively                                185               185
     Additional paid-in capital                        179,430           179,336
     Retained earnings (accumulated deficit)            (4,452)            8,247
                                                     ---------          --------
                                                       175,163           187,768
                                                     ---------          --------
                                                     $ 248,905          $287,580
                                                     =========          ========

</TABLE>

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


                                       4
<PAGE>


                    BASIN EXPLORATION, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                For the Three Months Ended      For the Six Months Ended
(In thousands, except per share data)                    June 30,                       June 30,
                                                  1999             2000           1999            2000
                                                 -------         -------         -------         -------
<S>                                             <C>             <C>             <C>             <C>
REVENUE:

Oil sales                                        $ 3,248         $ 7,465         $ 5,494         $13,926

Gas sales                                         17,033          17,111          27,829          33,352

Interest and other, net                               31              91              44             118
                                                 -------         -------         -------         -------
                                                  20,312          24,667          33,367          47,396
                                                 -------         -------         -------         -------
COST AND EXPENSES:

Lease operating expenses                           3,023           3,312           5,478           6,221

Production taxes                                     191             446             267             907

Depreciation, depletion and amortization          10,633           9,114          19,179          19,605

General and administrative, net                    1,287           1,473           2,460           2,828

Stock compensation, net                              585             358             839             288

Interest expense                                   1,146             161           2,095             344
                                                 -------         -------         -------         -------
                                                  16,865          14,864          30,318          30,193
                                                 -------         -------         -------         -------
INCOME BEFORE INCOME TAXES                         3,447           9,803           3,049          17,203

Income tax provision                                  --           3,431              --           4,504
                                                 -------         -------         -------         -------
NET INCOME                                       $ 3,447         $ 6,372         $ 3,049         $12,699
                                                 =======         =======         =======         =======
BASIC:
   Earnings per share                            $  0.24         $  0.34         $  0.22         $  0.69
                                                 =======         =======         =======         =======
   Weighted average shares outstanding            14,373          18,506          14,179          18,492
                                                 =======         =======         =======         =======
DILUTED:
   Earnings per share                            $  0.23         $  0.34         $  0.21         $  0.68
                                                 =======         =======         =======         =======
   Weighted average shares outstanding            14,780          18,829          14,383          18,756
                                                 =======         =======         =======         =======

</TABLE>

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


                                       5
<PAGE>

                    BASIN EXPLORATION, INC. AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                                          RETAINED
                                         COMMON STOCK          ADDITIONAL        TREASURY STOCK           EARNINGS        TOTAL
                                         ------------           PAID-IN          --------------         (ACCUMULATED   STOCKHOLDERS'
(In thousands)                        SHARES       AMOUNT       CAPITAL        SHARES       AMOUNT         DEFICIT)       EQUITY
-----------------------------        -------       ------      ----------      ------      --------      -----------   -------------
<S>                                 <C>          <C>         <C>             <C>        <C>           <C>            <C>
BALANCES, January 1, 1999             14,151       $ 142       $ 113,136       (186)      $(2,571)      $(16,488)      $  94,219

Issuance of common stock               4,433          44          67,939         --            --             --          67,983

Common stock offering costs               --          --            (465)        --            --             --            (465)

Exercise of warrants for
  common stock                           123           1           1,715        (86)       (1,716)            --              --

Purchase of treasury stock                --          --              --        (30)         (669)            --            (669)

Issuance and vesting of
  restricted stock                        55           1           2,058         --            --             --           2,059


Retirement of treasury stock            (302)         (3)         (4,953)       302         4,956             --              --

Net income                                --          --              --         --            --         12,036          12,036
                                     -------       -----       ---------       ----       -------       --------       ---------
BALANCES, December 31, 1999           18,460         185         179,430         --            --         (4,452)        175,163

Issuance of common stock                  10          --              64         --            --             --              64

Purchase of treasury stock                --          --              --        (42)         (648)            --            (648)

Issuance and vesting of
  restricted stock                        78           1             489         --            --             --             490


Retirement of treasury stock             (42)         (1)           (647)        42           648             --              --

Net income                                --          --              --         --            --         12,699          12,699
                                     -------       -----       ---------       ----       -------       --------       ---------
BALANCES, June 30, 2000               18,506       $ 185       $ 179,336         --            --       $  8,247       $ 187,768
                                     =======       =====       =========       ====       =======       ========       =========

</TABLE>

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


                                       6
<PAGE>

                    BASIN EXPLORATION, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                       For the Six Months Ended
                                                                               June 30,
(In thousands)                                                          1999              2000
                                                                      --------          --------
<S>                                                                   <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
       Net income                                                     $  3,049          $ 12,699
       Adjustments to reconcile net income to
       net cash provided by operating activities -
         Depreciation, depletion and amortization                       19,179            19,605
         Deferred income tax expense                                        --             4,504
         Stock compensation expense                                        839               288
         Amortization of debt issuance costs and other                       7                88
                                                                      --------          --------
                                                                        23,074            37,184
         Changes in operating assets and liabilities -
           Decrease (increase) in -
              Receivables                                               (1,417)           (1,107)
              Prepaids and other                                        (1,579)              804
           (Decrease) increase in -
              Accounts payable and accrued liabilities                  (2,880)            3,023
                                                                      --------          --------
         Net cash provided by operating activities                      17,198            39,904
                                                                      --------          --------

CASH FLOWS FROM INVESTING ACTIVITIES:
       Capital additions                                               (41,054)          (53,696)
       Proceeds from sale of property and equipment                      8,682             2,614
                                                                      --------          --------
         Net cash used in investing activities                         (32,372)          (51,082)
                                                                      --------          --------

CASH FLOWS FROM FINANCING ACTIVITIES:
       Proceeds from notes payable and long-term debt                   43,000            36,500
       Principle payments on notes payable and long-term debt          (89,176)          (28,500)
       Proceeds from sale of stock, net                                 66,712                64
       Purchase of treasury stock                                          (10)             (648)
       Debt issuance costs and other                                      (440)               --
                                                                      --------          --------
         Net cash provided by financing activities                      20,086             7,416
                                                                      --------          --------

INCREASE (DECREASE) IN CASH AND EQUIVALENTS                              4,912            (3,762)
CASH AND EQUIVALENTS, beginning of period                                  331             3,777
                                                                      --------          --------
CASH AND EQUIVALENTS, end of period                                   $  5,243          $     15
                                                                      ========          ========

SUPPLEMENTAL CASH FLOW INFORMATION:
       Cash paid for interest                                         $  2,242          $    226
                                                                      ========          ========
       Cash paid for income taxes                                     $     --          $     --
                                                                      ========          ========

</TABLE>

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

                                       7
<PAGE>

                    BASIN EXPLORATION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(1)  UNAUDITED FINANCIAL STATEMENTS

In the opinion of management, the accompanying unaudited consolidated financial
statements contain all adjustments (consisting only of normal recurring items)
necessary to present fairly the financial position of Basin Exploration, Inc.
and its wholly-owned subsidiaries as of June 30, 2000, and the results of
operations and cash flows for the three and six-month periods presented. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to the Securities and Exchange Commission's rules
and regulations. The results of operations for the periods presented are not
necessarily indicative of the results to be expected for the full year.
Management believes the disclosures made are adequate to ensure that the
information is not misleading and suggests that these financial statements be
read in conjunction with Basin's Annual Report on Form 10-K for the year ended
December 31, 1999.

(2)  ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities." SFAS 133 establishes accounting and reporting standards
requiring that, unless specific hedge accounting criteria are met, every
derivative instrument, including certain derivative instruments embedded in
other contracts, be recorded on the balance sheet as either an asset or
liability measured at its fair market value and that changes in the derivative's
fair market value be recognized currently in earnings. SFAS 133 is effective for
Basin as of January 1, 2001, but early adoption is allowed. We have not yet
quantified the impacts of adopting SFAS 133 or determined the timing or method
of adoption. However, Statement 133 could increase volatility in earnings and
other comprehensive income.

                                       8
<PAGE>

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

The following discussion is intended to assist you in understanding our results
of operations and our present financial condition. Basin's consolidated
financial statements and the accompanying notes contain additional detailed
information that should be referred to when reviewing this material.

Statements in this discussion may be forward-looking. Such forward-looking
statements involve risks and uncertainties that could cause actual results to
differ significantly from those expressed. See "Forward-Looking Statements."

HISTORY AND OVERVIEW

Basin Exploration, Inc. is a domestic independent oil and gas company that
conducts exploration, acquisition and production activities in the shallow
waters of the Gulf of Mexico and selected areas onshore.

We commenced operations in 1981 and completed an initial public offering of
common stock in 1992. From our inception through 1991, we primarily acquired and
developed properties in the Denver-Julesberg Basin in eastern Colorado. In 1992,
we began expanding into other areas within the Rocky Mountain region and
initiated exploration activities. In 1996, we sold our D-J Basin properties,
representing approximately two-thirds of our oil and gas properties at that
time, for $123.5 million and initiated operations in the Gulf of Mexico.

Since that time, Basin's principal activities have related to property
acquisitions, exploratory drilling and property development in the shallow
waters of the Outer Continental Shelf in the Gulf of Mexico. To a lesser extent,
we have conducted similar activities in the Rocky Mountain region, primarily in
the Green River and Powder River Basins in Wyoming, and, beginning in 1999, in
the onshore Gulf Coast areas of Louisiana and Texas. During the first six months
of 2000, we participated in drilling eleven exploratory wells and five
development wells in the Gulf of Mexico, including wells in progress at period
end. We have completed or plan to complete fourteen of these wells, including
nine of the exploratory wells and both of the development wells. In addition, we
participated in the drilling of four development wells in the Rocky Mountain
region, all of which were completed as producers.

RESULTS OF OPERATIONS

The following operating and financial data is provided to assist in
understanding our results of operations for the periods presented.

                                       9
<PAGE>

<TABLE>
<CAPTION>
                                                         Three months ended                     Six months ended
                                                               June 30,                              June 30,
                                                    -----------------------------         -----------------------------
                                                       1999               2000               1999                2000
                                                    ----------         ----------         ----------         ----------
<S>                                                 <C>                <C>                <C>                <C>
PRODUCTION:
   Oil (MBbl)                                              223                274                388                509
   Gas (MMcf)                                            7,932              5,281             13,736             11,779
   Total gas equivalents (MMcfe)                         9,270              6,925             16,064             14,833

AVERAGE REALIZED SALES PRICE:
   Oil (per Bbl)                                    $    14.57         $    27.26         $    14.15         $    27.35
   Gas (per Mcf)                                    $     2.15         $     3.24         $     2.03         $     2.83
   Total gas equivalents (per Mcfe)                 $     2.19         $     3.55         $     2.07         $     3.19

REVENUE (IN THOUSANDS):
   Oil sales                                        $    3,248         $    7,465         $    5,494         $   13,926
   Gas sales                                        $   17,033         $   17,111         $   27,829         $   33,352
   Total oil and gas sales                          $   20,281         $   24,576         $   33,323         $   47,278

EXPENSES (PER Mcfe):
   Lease operating expenses                         $     0.33         $     0.48         $     0.34         $     0.42
   Production taxes                                 $     0.02         $     0.06         $     0.02         $     0.06
   Depreciation, depletion and amortization         $     1.15         $     1.32         $     1.19         $     1.32
   General and administrative, net                  $     0.14         $     0.21         $     0.15         $     0.19

</TABLE>

REVENUE. Oil and gas sales for the three months ended June 30, 2000 totaled
$24.6 million, representing an increase of $4.3 million, or 21%, compared to the
second quarter of 1999. This growth was achieved on a 62% increase in unit
prices, offset by a 25% decline in net oil and gas production, based on net
equivalent unit measures. Oil and gas sales for the six months ended June 30,
2000 totaled $47.3 million, representing an increase of $14.0 million, or 42%,
compared to the first six months of 1999. This growth was achieved on a 54%
increase in unit prices, offset by an 8% decline in net oil and gas production.

Decreases in production were primarily attributable to depletion-related
declines which were only partially offset by initiation of production from new
wells. However, our production increased late in the second quarter of 2000 and
in the first half of the current quarter, as several successful wells that we
have drilled in the Gulf since mid-1999 commenced production. See "Liquidity and
Capital Resources" for additional discussion regarding our oil and gas
production.

Hedging transactions had the effect of decreasing oil and gas sales by $0.9
million, or $0.09 per Mcfe, in the three-month period ended June 30, 1999, and
by $2.0 million, or $0.28 per Mcfe, in the three-month period ended June 30,
2000. Hedging transactions increased oil and gas sales by $0.5 million, or $0.03
per Mcfe, in the six-month period ended June 30, 1999, and decreased oil and gas
sales by $2.3 million, or $0.15 per Mcfe, in the six-month period ended June 30,
2000. See "Liquidity and Capital Resources" for additional discussion regarding
our outstanding hedging positions.

LEASE OPERATING EXPENSES. Lease operating expenses for the three and six months
ended June 30, 2000 increased by $0.3 million, or 10%, and $0.7 million, or 14%,
respectively, from amounts reported for the comparable periods in the prior
year. The increases were principally attributable to higher workover expenses
and costs incurred for extended production testing of a discovery well drilled
on East Cameron Block 220 in the fourth quarter of 1999. A significant portion
of our lease operating expenses is substantially unaffected by our production
rates. As a result, our per-unit operating expenses have generally varied
inversely with changes in our production level. Due to the decline in production
volumes in the second quarter of 2000, as discussed above, our lease operating

                                       10
<PAGE>

expenses per Mcfe produced increased from $0.33 and $0.34 in the three and six
months ended June 30, 1999 to $0.48 and $0.42 during the three and six months
ended June 30, 2000. Based primarily on our projections of increasing
production, as described in "Liquidity and Capital Resources", we anticipate
improvements in our per-unit operating expenses in the second half of 2000.

PRODUCTION TAXES. Production taxes for the three and six months ended June 30,
2000 were $0.4 million and $0.9 million, representing increases of $0.3 million
and $0.6 million respectively, compared to the same periods in 1999. These
increases resulted from greater revenues from onshore properties, due primarily
to higher oil and gas prices in 2000. Production taxes as a percentage of total
oil and gas sales for the three and six months ended June 30, 2000 were 1.8% and
1.9%, compared to 0.9% and 0.8% in 1999, due to a greater portion of our sales
in 2000 being attributable to onshore properties. Sales from Gulf of Mexico
properties in federal waters offshore are generally not subject to production
taxes.

DEPRECIATION, DEPLETION AND AMORTIZATION. Depreciation, depletion and
amortization expense for the three months ended June 30, 2000 totaled $9.1
million, representing a decrease of $1.5 million, or 14%, compared to the same
three-month period in 1999. The decrease was attributable to the 25% decline in
production volumes in the second quarter of 2000, compared to 1999, partially
offset by an increase in the per-unit depletion rate. The depletion rate of
$1.29 per Mcfe in the three months ended June 30, 2000 was 14% greater than the
$1.13 per Mcfe rate applicable during the second quarter of 1999. Depreciation,
depletion and amortization expense for the six months ended June 30, 2000
totaled $19.6 million, representing an increase of $0.4 million, or 2%, compared
to the same six-month period in 1999. The increase was attributable to a higher
per-unit depletion rate, partially offset by an 8% decline in production volumes
in 2000. The depletion rate of $1.29 per Mcfe produced in the six months ended
June 30, 2000 was 10% greater than the $1.17 per Mcfe average depletion rate
during the first half of 1999. The higher depletion rates in 2000 reflect
reserve additions during the past year at a higher average unit cost than our
adjusted historical average after recording a property impairment charge in the
fourth quarter of 1998.

GENERAL AND ADMINISTRATIVE, NET. General and administrative expenses for the
three and six months ended June 30, 2000 aggregated $1.5 million and $2.8
million, representing increases of $0.2 million, or 14%, and $0.4 million, or
15%, respectively, as compared to such periods in 1999. The increases resulted
from incremental costs incurred to manage expanded operations in the Gulf of
Mexico, increased rent expense due to expiration of lower-cost office leases in
both Denver and Houston, and inflation-related increases in labor costs. General
and administrative expenses increased, while production volumes decreased,
resulting in increases in general and administrative expenses per Mcfe produced
from $0.14 and $0.15 in the three and six months ended June 30, 1999, to $0.21
and $0.19 in the comparable periods in 2000. Since our general and
administrative expenses generally do not vary proportionately with changes in
production volumes, we anticipate improvements in this measure during the
balance of 2000, based on our expectations of higher production.

STOCK COMPENSATION, NET. Stock compensation expense for the three and six months
ended June 30, 2000 was $0.4 million and $0.3 million, representing decreases of
$0.2 million and $0.6 million, respectively, as compared to the 1999 periods.
Stock compensation expense relates to annual grants to employees of restricted
stock, including shares awarded to senior management that will be earned only if
certain performance measures are achieved by Basin. Expense is recognized based
on vesting schedules, projections of performance, and changes in the price of
our common stock during applicable vesting periods. The decreases reflect the
effects of less appreciation in Basin's common

                                       11
<PAGE>

stock price during the three and six-month periods ended June 30, 2000 than
during the comparable periods of 1999.

INTEREST EXPENSE. Interest expense for the three and six months ended June 30,
2000 totaled $0.2 million and $0.3 million, representing decreases of $1.0
million, or 86%, and $1.8 million, or 84%, compared to such periods in 1999. The
variances were attributable to decreases in average borrowings offset by
increases in average effective interest rates. During the three months ended
June 30, 2000, Basin had average outstanding debt of $43.2 million, with an
average effective interest rate of 7.8%, compared to average debt of $94.4
million and an average interest rate of 6.8% in the 1999 period. During the six
months ended June 30, 2000, Basin had average outstanding debt of $40.1 million,
with an average effective interest rate of 7.4%, compared to average debt of
$91.5 million and an average interest rate of 6.8% in the 1999 period. Interest
expense for the three and six months ended June 30, 2000, excludes $0.6 million
and $1.2 million, respectively, of interest capitalized to unproved property
costs in accordance with Statement of Financial Accounting Standards No. 34, as
compared to $0.5 million and $1.1 million in the 1999 periods.

INCOME TAX BENEFIT (PROVISION). No income tax provision was recorded in 1999 due
to an equivalent decrease in a previously established deferred tax asset
valuation allowance. The income tax provision for the three months ended June
30, 2000 approximates the amount that would be calculated by applying statutory
income tax rates to income before income taxes. Basin's provision for income
taxes for the six months ended June 30, 2000 benefited from utilization of a
$1.5 million deferred tax asset valuation allowance remaining at December 31,
1999. No such deferred asset remains at June 30, 2000, so Basin's effective tax
rate in future periods should generally approximate its statutory rate, which
currently is 35%.


LIQUIDITY AND CAPITAL RESOURCES

Historically, Basin's principal sources of capital have been cash flow from
operations, borrowings under a revolving line of credit, proceeds from asset
sales, and proceeds from sales of common stock. Our principal uses of capital
have been for the exploration, acquisition, and development of oil and gas
properties.

Basin's gross accrual-basis capital expenditures during the first six months of
2000 totaled approximately $63.0 million. Net capital expenditures totaled
approximately $60.4 million, after reflecting recoupments from partners of $2.6
million from sales of partial interests in prospects. Our principal sources of
funds in the first six months of 2000 were $37.2 million of net cash provided by
operations before changes in working capital, a $15.7 million increase in the
working capital deficit, and $8.0 million of net proceeds from borrowings under
our revolving line of credit. At June 30, 2000, we had a working capital deficit
of approximately $26.0 million and long-term debt outstanding under our
revolving line of credit of $42.0 million. The borrowing base currently
established under our revolving line of credit is $90 million.

Our budget for net capital expenditures on exploration and development in 2000
was recently increased from $85 million to $100 million. For reasons stated in
"Production and cash flow" on the following page, we project that our cash flow
from operations before changes in working capital will exceed our total capital
expenditures on exploration and development during the second half of 2000.

                                       12
<PAGE>

PRODUCTION AND CASH FLOW. Our cash flow from operations is generally determined
primarily by our oil and gas production volumes and price realizations. During
the first six months of 2000, we produced approximately 14,833 MMcfe of oil and
gas and realized prices averaging $3.19 per Mcfe. Our total production of 6,925
MMcfe in the second quarter of 2000 reflected declines from 9,270 MMcfe reported
for the comparable period of 1999 and 7,908 MMcfe generated in the first quarter
of 2000. These declines were principally attributable to anticipated natural
depletion of relatively high-rate wells in the Gulf of Mexico and performance
problems that arose on West Delta Block 61 and Eugene Island Block 65 in late
1999 and earlier this year. Such declines were only modestly offset in the
quarter ended June 30, 2000 by contributions from new wells.

However, during the latter part of the second quarter of 2000 and the first half
of the current quarter, we established initial sustained production from 13
wells in the Gulf of Mexico. These include one well on Mississippi Canyon Block
110, two wells on South Timbalier Block 143, three wells on Vermilion Block 267,
one well on Vermilion Block 329, a well on West Cameron Block 172, two wells on
West Delta Block 58, a well on West Delta Block 59, and two wells on West Delta
Block 122. We also recently resolved production start-up problems affecting the
performance of one well on East Cameron Block 220 and two wells on West Delta
Block 63, which were brought on-line earlier this year. All 16 of these wells
were drilled by Basin and its partners during the past year. As a result of
these additions to our production base, we expect our production to be
significantly higher in the third quarter of 2000 than in the preceding quarter,
and anticipate further increases in the fourth quarter of this year, as greater
contributions are received from wells brought on-line in the current quarter.
For the full year, we project that our net production will total at least 33,000
MMcfe. Although we believe that these projections are reasonable, there is no
assurance that they will be met. See "Forward-Looking Statements" for a
description of certain risks that may impact our ability to achieve projected
production levels.

Based on prevailing market prices for oil and gas, we also expect to realize
improved average unit prices during the second half of 2000, compared to 1999
and the first half of this year. As summarized below, we currently have oil and
gas hedging contracts in effect covering approximately 4,600 MMcfe of production
during the remainder of 2000, at an anticipated average realizable NYMEX price
of $2.74 per Mcfe, based on recent NYMEX trading levels. We will receive
prevailing market prices at the time of sale for the remainder of our
production, subject to entering into additional hedging arrangements in the
future. Based on our projections of higher production and average price
realizations in the second half of 2000, we anticipate significantly greater
cash flow from operations during the period than in the first half of the year.

MARKETING AND HEDGING TRANSACTIONS. Basin's production is generally sold under
month-to-month contracts at prevailing prices. From time-to-time, however, as we
think conditions warrant, we have entered into hedging transactions or fixed
price sales contracts for a portion of our oil and gas production. The purposes
of these transactions are to limit Basin's exposure to future oil and gas price
declines and achieve a more predictable cash flow, and to take advantage of
prices that we view as attractive. However, such contracts also limit the
benefits we would realize if prices increase. Hedging transactions had the
effect of decreasing oil and gas sales by $0.9 million, or $0.09 per Mcfe, in
the three-month period ended June 30, 1999, and by $2.0 million, or $0.28 per
Mcfe, in the three-month period ended June 30, 2000. Hedging transactions had
the effect of increasing oil and gas sales by $0.5 million, or $0.03 per Mcfe,
in the six-month period ended June 30, 1999, while decreasing oil and gas sales
by $2.3 million, or $0.15 per Mcfe, in the six-month period ended June 30, 2000.

                                       13
<PAGE>

Through August 10, 2000, Basin had entered into the following fixed price swap
and collar arrangements covering the period beginning July 1, 2000 (one MMBtu
approximates one Mcf of natural gas):

<TABLE>
<CAPTION>
                            Gas Swaps                       Gas Collars
                    -----------------------   -------------------------------------------
                    Average Daily    NYMEX    Average Daily      NYMEX         NYMEX
                       Volume        Price/      Volume       Floor Price   Ceiling Price
  Time Period         (MMBtu)         MMBtu      (MMBtu)         /MMBtu        /MMBtu
----------------    -------------    ------   -------------   -----------   -------------
<S>                 <C>            <C>        <C>             <C>           <C>
07/1/00-09/30/00       10,000         3.00        10,000          2.80          3.20
10/1/00-12/31/00        6,600         2.15         3,400          2.80          3.20
01/1/01-12/31/03       10,000         2.15

</TABLE>

As of August 4, 2000, Basin had also sold call options covering 10,000 MMBtu of
gas per day for the period from July 2000 through December 2001, at an average
strike price of $2.50 per MMBtu.

REVOLVING LINE OF CREDIT. Effective January 1, 1999, and as subsequently
amended, we entered into a credit agreement with our bank group that provides
for borrowings of up to $150 million. The maximum amount that we can draw is
limited to the borrowing base that is periodically established by the bank
group. Interest rates applied to borrowings under the credit agreement are
determined by reference to the prime rate or LIBOR, at our election. A varying
spread of 0% to 0.25% is added to the prime rate, or a spread of 0.75% to 1.5%
is applied to LIBOR, based upon our facility usage ratio. Our credit agreement
contains various covenants, including limitations on our ability to incur other
debt, dispose of assets, pay dividends, or repurchase stock. Pursuant to our
credit agreement, substantially all of our producing properties are subject to
mortgages in favor of the banks and our remaining properties are subject to a
negative pledge.

Our credit agreement provides for borrowings to be revolving loans until
November 30, 2002, at which time the outstanding balance will be converted into
a four-year amortizing term loan unless the credit agreement is amended. The
borrowing base under the credit agreement is scheduled to be re-determined at
six-month intervals until the revolving loan is converted into a term loan. Our
borrowing base is currently set at $90 million, and the next re-determination is
scheduled to occur as of December 1, 2000. Borrowing base re-determinations
conducted by the bank group reflect a number of estimates and assumptions
including, but not limited to, future production from Basin's proved properties,
risk factors for estimates of proved reserves, future oil and gas prices, future
operating and development costs, and future interest rates. Changes in such
estimates and assumptions can significantly impact the size of the borrowing
base established by the banks. Because these factors will be influenced by
future events, which cannot be forecast with certitude, we cannot predict what
level of borrowing base will be established at any future determination date.

The weighted average interest rate on borrowings outstanding under the credit
agreement at June 30, 2000 was 7.7%. Our annual interest costs will fluctuate
based upon changes in short-term interest rates and borrowings outstanding.
Assuming debt outstanding during 2000 remained unchanged from the amount
outstanding at June 30, 2000, the annual impact on interest expense of a ten
percent change in the average interest rate would be approximately $0.3 million,
before amounts capitalized. As the interest rate is variable and is reflective
of current market conditions, the carrying value of Basin's debt approximates
its fair value.

                                       14
<PAGE>

Positive or negative changes in the borrowing base during 2000 could impact the
level of our capital expenditures during the year. Increases, supported by
performance of our properties, drilling results, and/or higher oil and gas
prices, could improve our ability to grow. Decreases would adversely affect our
liquidity and capital resources, potentially resulting in a reduction of planned
capital expenditures or the sale of assets or the issuance of securities.

CAPITAL EXPENDITURES. Our capital expenditures are generally discretionary and
we determine our activity levels based upon a number of factors, including oil
and gas prices, availability of funds, quantity and character of identified
investment projects, availability of service providers, and competition. Since
the beginning of 1996, we have largely focused our exploration activities in the
shallow waters of the Gulf of Mexico, primarily off the coast of Louisiana.
During the second half of 1998 we began to direct a relatively small portion of
our exploration budget toward onshore projects. In addition to our exploration
activities, we also pursue property acquisition opportunities in the vicinity of
our Gulf of Mexico exploration operations, in the Rocky Mountain region where we
have an existing base of proved reserves and producing wells, and in certain
other major domestic producing basins where we believe significant upside
potential exists.

Basin's gross capital expenditures during the six months ended June 30, 2000
totaled approximately $63.0 million. Our net capital expenditures totaled
approximately $60.4 million, after reflecting $2.6 million of proceeds from
asset sales. Gulf of Mexico operations accounted for approximately 88% of our
aggregate gross capital investments during the period. Such investments
principally related to the ongoing development of six properties with productive
wells drilled in earlier periods, participation in the drilling of sixteen
wells, development costs related to several of the fourteen of these wells that
were successful, and costs related to identification and acquisition of
exploratory prospects, including acquisition of ten leases at the March 2000
federal Central Gulf of Mexico lease sale for a total of $5.4 million. The
remainder of our investments was associated with our onshore activities,
including exploitation of various Rocky Mountain properties and investments in
seismic data and leaseholds for future exploration.

Basin's initial exploration and development budget for 2000 provided for net
capital investments of approximately $85 million. Reflecting the benefits of
higher oil and gas prices on cash flows and economic returns, Basin's board of
directors recently approved an 18% increase in the budget to $100 million. The
additional funds will primarily be targeted toward increased exploratory
drilling and related development activities in the Gulf of Mexico. This revised
budget primarily provides for:

     -    development of six Gulf of Mexico properties with one or more
          discovery wells yet to commence sustained production as of the end of
          1999;

     -    participation in 25 to 28 gross (11 to 13 net) wells in the Gulf of
          Mexico, most of which will be exploratory wells;

     -    participation in 4 to 6 gross (2 to 4 net) onshore exploration
          prospects and 7 to 9 gross (3 to 5 net) onshore development wells;

     -    development of year 2000 exploratory discoveries, including projected
          discoveries in the second half of the year;

     -    continued exploitation of our other offshore and onshore properties;
          and



                                       15
<PAGE>

     -    acquisitions of seismic data and exploratory leaseholds, both in the
          Gulf of Mexico and onshore.

Demand for drilling rigs and related products and services has generally been
increasing during 2000, resulting in cost increases and occasional delays in
obtaining materials and services. These conditions have been factored into
our planning and investment decisions and we do not anticipate that they will
have a material adverse impact on our planned operations unless there is
significant further deterioration in the cost, availability or quality of
such goods and services.

Subject to realization of our projected production volumes and average oil and
gas prices in the second half of 2000, we anticipate being able to fund our
planned capital investments during the period with cash flow from operations.
See "Production and cash flow."

We also intend to pursue acquisitions of properties with proved and probable
reserves as an integral part of our overall business strategy. This strategy
contemplates pursuing onshore proved properties to further establish core
operating areas complementary to our Gulf of Mexico operations, and Gulf of
Mexico properties with identified upside potential. We expect that these efforts
will result in significant investment activity over time. However, we presently
have not specifically allocated any portion of our 2000 budget for acquisitions
of proved properties. If such a transaction is executed, it may require a
re-allocation of funds from other planned activities and/or external financing,
in addition to utilization of our revolving line of credit with our banks. In
such instance, our overall capital budget for the year would likely be
increased, potentially significantly.

The amount and allocation of future capital expenditures will depend on a number
of factors that are not entirely within Basin's control or ability to forecast,
including drilling results, scheduling of activities by other operators,
availability of service providers, success in acquiring prospect leaseholds, and
success in consummating acquisitions of proved properties. Basin's planned
capital expenditures are also based on estimates regarding availability of
capital that depend on assumptions and projections regarding production, oil and
gas prices, and borrowing base re-determinations under our revolving line of
credit. Due to these uncertainties, and other matters described under
"Forward-Looking Statements", actual capital expenditures may vary significantly
from current expectations.

                                       16
<PAGE>

FORWARD-LOOKING STATEMENTS

Some of the information in this report contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. These statements express, or are based
on, expectations about future events, activities, or developments that we
expect, believe, project, intend, estimate, plan or anticipate will, should,
could or may occur. These include such matters as:

     -    business strategies;

     -    amount and nature of capital expenditures;

     -    estimated oil and gas reserves;

     -    timing and amount of future production of oil and gas;

     -    operating costs and other expenses;

     -    cash flow and anticipated liquidity;

     -    marketing of oil and gas;

     -    drilling of wells; and

     -    prospect development and property acquisitions.

There are many factors that could cause these forward-looking statements to be
incorrect, including, but not limited to, the risks described in the foregoing
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and Basin's Annual Report on Form 10-K filed with the Securities and
Exchange Commission on March 29, 2000. These factors include, among others:

     -    general economic conditions;

     -    oil and gas price volatility;

     -    our ability to find, acquire, market, develop and produce new
          properties;

     -    the risks associated with acquisitions and exploration;

     -    operating hazards attendant to the oil and gas business;

     -    downhole drilling and completion risks that are generally not
          recoverable from third parties or insurance;

     -    uncertainties in the estimation of proved reserves and in the
          projection of future rates of production and timing of development
          expenditures;

     -    potential mechanical failure or underperformance of significant wells;

     -    concentration of value in a relatively small number of properties
          offshore;

     -    the strength and financial resources of Basin's competitors;

     -    Basin's ability to find and retain skilled personnel;

     -    climatic conditions;

     -    availability of capital;

     -    availability and cost of material and equipment;

     -    delays in anticipated start-up dates;

     -    environmental risks;

     -    actions or inactions of third-party operators of Basin's properties;
          and

     -    regulatory developments.

When you consider these forward-looking statements, you should keep in mind
these risk factors and the other cautionary statements in this report. Our
forward-looking statements speak only as of the date made. Neither Basin nor any
person acting on Basin's behalf undertakes any obligation to update any
forward-looking statements in this report or any statement incorporated by
reference.

                                       17
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

The Company's exposure to interest rate risk and commodity price risk is
discussed in Management's Discussion and Analysis of Financial Condition and
Results of Operations under the headings "Liquidity and Capital Resources
Marketing and hedging transactions" and "Liquidity and Capital Resources -
Revolving line of credit". The Company has no exposure to foreign currency
exchange rate risks.


                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     None


ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

     (a)  None

     (b)  None

     (c)  None

     (d)  None


ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     None


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Proxies for the Company's annual meeting of shareholders held on May 11, 2000
were solicited pursuant to Regulation 14A during the quarter ended June 30,
2000. There was no solicitation in opposition to the nominees listed in the
proxy statement and all such nominees were elected. The following is a summary
of the matters voted upon at such meeting and the number of votes cast for,
against and abstentions:

<TABLE>
<CAPTION>
                                                            Number of Votes Cast
                                                 -------------------------------------
                                                    For          Against       Abstain
                                                 ----------      -------       -------
<S>                                              <C>             <C>         <C>
Election of Directors
         Howard L. Boigon                        16,338,652          16         80,670
         J. Paul Hellstrom                       16,338,652          16         80,670

Ratify selection of Arthur Andersen, LLP
as independent auditors                          16,417,622         575          1,141

</TABLE>

ITEM 5. OTHER INFORMATION

     None

                                       18
<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

<TABLE>
<CAPTION>
Exhibit
Number         Description of Exhibits
------         -----------------------
<S>            <C>
  2.1          Agreement and Plan of Merger between Sterling Energy Corporation,
               Basin Energy, Inc. and Basin Exploration, Inc. dated October 13,
               1994.(4)

  2.2          Plan of Merger between Basin Sterling, Inc. and Basin
               Exploration, Inc. dated November 22, 1994.(4)

  2.3          Plan of Merger between Basin Operating Company and Basin
               Exploration, Inc. dated December 14, 1994.(5)

  3.1          Restated Certificate of Incorporation of Basin.(2)

  3.2          Restated Bylaws of Basin, as amended February 23, 2000.(13)

  4.1          Common Stock Certificate of Basin.(2)

 10.1          Equity Incentive Plan as amended May 12, 1999.(11)

 10.2          Employment Agreement dated March 31, 1992 by and between Basin
               Exploration, Inc. and Michael S. Smith.(3)

 10.3          Gulf Coast Geoscientist Overriding Royalty Interest Plan as
               amended November 10, 1999.(12)

 10.4          Onshore Geoscientist Overriding Royalty Interest Plan dated
               August 24, 1999.(12)

 10.5          Form of Rights Agreement dated as of February 24, 1996, between
               Basin Exploration, Inc. and Corporate Stock Transfer, Inc. as
               Rights Agent.(6)

 10.6          Performance Shares Plan approved February 4, 1997.(8)

 10.7          Change of Control Employment Agreement dated October 13, 1995
               between Basin Exploration, Inc. and Howard L. Boigon.(7)

 10.8          Amendment to Change of Control Employment Agreement dated June 2,
               1999 between Basin Exploration, Inc. and Howard L. Boigon.(11)

 10.9          Change of Control Agreement dated August 28, 1997 between Basin
               Exploration, Inc. and Samuel D. Winegrad.(11)

 10.10         Change of Control Agreement dated August 1, 1997 between Basin
               Exploration, Inc. and Neil L. Stenbuck.(12)

 10.11         Employment Agreement dated February 1, 1999, between Basin
               Exploration, Inc. and David A. Pustka.(10)

 10.12         Change of Control Agreement dated March 24, 1999 between Basin
               Exploration, Inc. and Thomas J. Corley.(13)

 10.13         Employment Agreement dated January 28, 1999, between Basin
               Exploration, Inc. and Patrick A. Jackson.(10)

 10.14         Change of Control Agreement dated May 12, 1999 between Basin
               Exploration, Inc. and Dalton F. Polasek.(13)

 10.15         Order of the United States Bankruptcy Court for the Southern
               District of Texas Corpus Christi Division, dated November 18,
               1997, with exhibits, including the Agreement of Purchase and
               Sale.(9)

 10.16         Amended and Restated Credit Agreement dated January 1, 1999 among
               the Company and NationsBank, N.A., U.S. Bank National Association
               and Union Bank of California, N.A.(10)

 10.17         First Amendment of Amended and Restated Credit Agreement dated
               July 1, 1999 among the Company, NationsBank, N.A., U.S. Bank
               National Association and Union Bank of California, N.A.(11)

 10.18         Second Amendment of Amended and Restated Credit Agreement dated
               October 15, 1999 among the Company and U.S. Bank National
               Association, Union Bank of California, Toronto Dominion (Texas),
               Inc. and Bank of America National Trust and Savings
               Association.(12)

 10.19         Third Amendment of Amended and Restated Credit Agreement dated
               December 1, 1999, among Basin Exploration, Inc. and U.S. Bank
               National Association, Union Bank of California, Toronto Dominion
               (Texas), Inc. and Bank of America National Trust and Savings
               Association.(12)

 27            Financial Data Schedule.(1)

</TABLE>

          (1)  Filed herewith.

          (2)  Filed as an Exhibit to Basin's Registration Statement on Form S-1
               as filed on March 17, 1992, Registration No. 33-46486, and
               incorporated herein by reference.

          (3)  Filed as an Exhibit to Amendment No. 1 to Basin's Registration
               Statement on Form S-1 as filed on April 21, 1992, Registration
               No. 33-46486, and incorporated herein by reference.

          (4)  Filed as an Exhibit to Form 8-K filed on December 10, 1994, and
               incorporated herein by reference.

          (5)  Filed as an Exhibit to Form 10-K filed on March 28, 1995, and
               incorporated herein by reference.

          (6)  Filed as an Exhibit to Form 8-K filed on February 26, 1996, and
               incorporated herein by reference.

          (7)  Filed as an Exhibit to Form 10-K filed on March 28, 1996, and
               incorporated herein by reference.

          (8)  Filed as an Exhibit to Form 10-K filed on March 31, 1997, and
               incorporated herein by reference.

          (9)  Filed as an Exhibit to Form 8-K filed on December 11, 1997, and
               incorporated herein by reference.

          (10) Filed as an Exhibit to Form 10-K filed on March 30, 1999, and
               incorporated herein by reference.

          (11) Filed as an Exhibit to Form 10-Q filed on August 16, 1999, and
               incorporated herein by reference.

          (12) Filed as an Exhibit to Form 10-Q filed on November 15, 1999 and
               incorporated herein by reference.

          (13) Filed as an Exhibit to Form 10-K filed on March 29, 2000, and
               incorporated herein by reference.

     (b)  Reports on Form 8-K

          None

                                       19
<PAGE>

                                   SIGNATURES


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


                                       BASIN EXPLORATION, INC.
                                           (Registrant)


Date: August 11, 2000                  By: /s/ Neil L. Stenbuck
                                           -----------------------
                                           Neil L. Stenbuck
                                           Chief Financial Officer



Date: August 11, 2000                  By: /s/ James A Tuell
                                           -----------------------
                                           James A. Tuell
                                           Controller and
                                           Chief Accounting Officer


                                       20