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                       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 Quarter Ended September 30, 1997

                                       OR

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


                         Commission file number: 1-8094

                           Seagull Energy Corporation
             (Exact name of registrant as specified in its charter)

           Texas                                                74-1764876
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                             Identification No.)

               1001 Fannin, Suite 1700, Houston, Texas 77002-6714
               (Address of principal executive offices) (Zip code)

                                 (713) 951-4700
              (Registrant's telephone number, including area code)

                                      None

(Former name,former address and former fiscal year,if changed since last report)

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 ___.

As of November 5, 1997,  63,242,950  shares of Common Stock, par value $0.10 per
share, were outstanding.


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<PAGE>

                   SEAGULL ENERGY CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                                    
                                      INDEX

                                                                          PAGE
                                                                         NUMBER

Part I.  Financial Information
<S>                                                                         <C>  
Item 1.  Unaudited Consolidated Financial Statements

         Consolidated  Statements  of  Operations - Three and Nine Months
           Ended September 30, 1997 and 1996................................ 3

         Consolidated Balance Sheets - September 30, 1997
           and December 31, 1996  .......................................... 4

         Consolidated Statements of Cash Flows - Nine Months
           Ended September 30, 1997 and 1996 ............................... 5

         Notes to Consolidated Financial Statements......................... 6


Item 2.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations ....................................... 13

Part II.  Other Information

Item 6.  Exhibits and Reports on Form 8-K................................... 20

Signatures.................................................................. 21
</TABLE>
                                      -2-
<PAGE>


 Item 1.  UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


                   SEAGULL ENERGY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (Amounts in Thousands Except Per Share Data)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                       Three Months Ended                 Nine Months Ended
                                                          September 30,                     September 30,
                                                 -------------------------------- ----------------------------------
                                                      1997            1996             1997              1996
                                                 --------------- ---------------- ----------------  ----------------
                                                                    Restated                           Restated
<S>                                              <C>             <C>               <C>               <C>   
Revenues:
   Oil and gas operations.......................   $  108,543      $   97,320       $   338,953       $   295,051
   Alaska transmission and distribution.........       12,112          12,611            63,455            63,744
                                                 --------------- ---------------- ----------------  ----------------
                                                      120,655         109,931           402,408           358,795
Costs of Operations:
   Operations and maintenance...................       39,744          35,551           123,620           105,613
    Alaska transmission and distribution
      cost of gas sold..........................        4,557           4,517            28,523            26,974
   Exploration charges..........................       15,217          10,791            31,516            31,253
   Depreciation, depletion and amortization.....       42,787          37,238           130,559           113,767
   General and administrative...................        4,894           2,634            10,317            10,997
                                                 --------------- ---------------- ----------------  ----------------
                                                      107,199          90,731           324,535           288,604
                                                 --------------- ---------------- ----------------  ----------------

Operating Profit................................       13,456          19,200            77,873            70,191

Other (Income) Expense:
   Interest expense.............................        9,990          10,795            29,985            33,478
   Interest income and other....................         (626)         (5,232)           (1,539)           (7,151)
                                                 --------------- ---------------- ----------------  ----------------
                                                        9,364           5,563            28,446            26,327
                                                 --------------- ---------------- ----------------  ----------------

Income Before Income Taxes......................        4,092          13,637            49,427            43,864

Income Tax Expense..............................          890           6,179            26,350            21,028
                                                 --------------- ---------------- ----------------  ----------------

Net Income......................................   $    3,202      $    7,458       $    23,077       $    22,836
                                                 =============== ================ ================  ================

Earnings Per Common Share.......................   $     0.05      $     0.12       $      0.36       $      0.36
                                                 =============== ================ ================  ================

Weighted Average Number of                                                                           
   Common Shares Outstanding....................       64,349          63,934            64,154            63,828
                                                 =============== ================ ================  ================

See accompanying Notes to Consolidated Financial Statements.

</TABLE>
                                      -3-
<PAGE>

                   SEAGULL ENERGY CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
             (Amounts in Thousands Except Share and Per Share Data)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                 September 30,      December 31,
                                                                                     1997               1996
                                                                               ------------------ ------------------
<S>                                                                            <C>                <C>    

Assets:
   Current Assets:
     Cash and cash equivalents...............................................    $      15,755       $     15,284
     Accounts receivable, net................................................          146,049            193,659
     Inventories.............................................................           18,271             12,285
     Prepaid expenses and other..............................................           16,430              6,389
                                                                               ------------------ ------------------
       Total Current Assets..................................................          196,505            227,617

   Property, Plant and Equipment - at cost...................................        2,241,442          2,049,356
   Accumulated Depreciation, Depletion and Amortization......................          933,638            804,715
                                                                               ------------------ ------------------
                                                                                     1,307,804          1,244,641

   Other Assets..............................................................           43,968             42,805
                                                                               ------------------ ------------------

   Total Assets..............................................................    $   1,548,277       $  1,515,063
                                                                               ================== ==================

Liabilities And Shareholders' Equity:
   Current Liabilities:
     Accounts and note payable...............................................    $     160,679       $    166,775
     Accrued expenses........................................................           39,758             57,368
     Current maturities of long-term debt....................................            7,097              7,227
                                                                               ------------------ ------------------
       Total Current Liabilities.............................................          207,534            231,370

   Long-Term Debt............................................................          604,783            573,455
   Other Noncurrent Liabilities..............................................           64,086             65,428
   Deferred Income Taxes.....................................................           33,935             31,021

   Redeemable Bearer Shares..................................................           15,775             16,059

   Commitments and Contingencies.............................................                -                  -

   Shareholders' Equity:
     Common Stock, $.10 par value; authorized 100,000,000 shares;
       issued 63,746,140 shares (1997) and 63,073,287 shares (1996)..........            6,375              6,307
     Additional paid-in capital..............................................          490,893            483,118
     Retained earnings.......................................................          138,882            115,805
     Foreign currency translation adjustment.................................             (769)                51
     Less - note receivable from employee stock ownership plan...............           (4,284)            (4,284)
     Treasury stock - 601,314 shares (1997) and 361,314 (1996)...............           (8,933)            (3,267)
                                                                               ------------------ ------------------

     Total Shareholders' Equity..............................................          622,164            597,730
                                                                               ------------------ ------------------

  Total Liabilities and Shareholders' Equity.................................    $   1,548,277       $  1,515,063
                                                                               ================== ==================

See accompanying Notes to Consolidated Financial Statements.
</TABLE>
                                      -4-
<PAGE>

                   SEAGULL ENERGY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Amounts in Thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                       Nine Months Ended
                                                                                           September 30,
                                                                                 ----------------------------------
                                                                                      1997              1996
                                                                                 ---------------  -----------------
<S>                                                                              <C>              <C>

 Operating Activities:
   Net income...............................................................        $   23,077        $   22,836
   Adjustments to reconcile net income to net cash
     provided by operating activities:
     Depreciation, depletion and amortization...............................           130,559           113,767
     Amortization of deferred financing costs...............................             1,629             2,362
     Deferred income taxes..................................................             2,914            11,020
     Dry hole expense.......................................................            13,844            14,137
     Other..................................................................               549            (2,021)
                                                                                 ---------------  -----------------
                                                                                       172,572           162,101
     Changes in operating assets and liabilities, net of acquisitions:
       Decrease in short-term liquid investments............................                 -             5,010
       Decrease in accounts receivable......................................            47,596            31,480
       Decrease (increase) in inventories, prepaid expenses and other.......           (16,706)            4,742
       Decrease in accounts payable.........................................           (12,151)          (10,959)
       Decrease in accrued expenses and other...............................           (15,378)           (7,462)
                                                                                 ---------------  -----------------

   Net Cash Provided By Operating Activities................................           175,933           184,912

 Investing Activities:
   Capital expenditures.....................................................          (205,564)         (135,946)
   Acquisitions, net of cash acquired.......................................            (7,421)         (100,153)
   Proceeds from sales of property, plant and equipment.....................             1,191             5,879
                                                                                 ---------------  -----------------

   Net Cash Used In Investing Activities....................................          (211,794)         (230,220)

 Financing Activities:
   Proceeds from debt.......................................................           695,297           272,559
   Principal payments on debt ..............................................          (656,858)         (218,106)
   Proceeds from sales of common stock......................................             5,586             4,000
   Purchase of treasury stock...............................................            (5,667)                -
   Other....................................................................            (1,998)           (1,677)
                                                                                 ---------------  -----------------

   Net Cash Provided By Financing Activities................................            36,360            56,776

 Effect of exchange rate changes on cash....................................               (28)               (8)
                                                                                 ---------------  -----------------

   Increase In Cash And Cash Equivalents....................................               471            11,460

 Cash And Cash Equivalents At Beginning Of Period...........................            15,284            21,477
                                                                                 ---------------  -----------------

 Cash And Cash Equivalents At End Of Period.................................        $   15,755        $   32,937
                                                                                 ===============  =================

See accompanying Notes to Consolidated Financial Statements.

</TABLE>
                                      -5-
<PAGE>
                        


                   SEAGULL ENERGY CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

Note 1.  Presentation of Financial Information

     Merger  with  Global  Natural  Resources  Inc.  -- On October 3, 1996,  the
shareholders of Seagull Energy  Corporation and  Subsidiaries  (the "Company" or
"Seagull") and Global Natural Resources Inc.  ("Global")  approved a merger of a
wholly owned subsidiary of Seagull into Global (the "Global  Merger").  Pursuant
to the Global Merger,  each share of Global common stock was converted into 0.88
shares of Seagull common stock with  approximately 26.3 million shares issued to
the shareholders of Global.  The Global Merger was accounted for as a pooling of
interests.  Accordingly, the financial statements for 1996 have been restated to
combine the results of Seagull and Global.

     In  the  opinion  of  management,   the  unaudited  consolidated  financial
statements presented herein contain all adjustments  necessary to present fairly
the financial  position of Seagull as of September 30, 1997,  and the results of
its operations and cash flows for the three and nine months ended  September 30,
1997 and 1996.  All  adjustments  made are of a normal,  recurring  nature.  The
results of operations for the three and nine months ended September 30, 1997 and
1996 are not  necessarily  indicative of the results to be expected for the full
year.

     The financial  information  presented  herein should be read in conjunction
with the consolidated  financial  statements and notes included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996.

     Certain  reclassifications have been made to the 1996 financial information
to conform to the presentation used in 1997.

     Derivative  Financial  Instruments  -- The Company enters into a variety of
commodity derivative financial  instruments (futures contracts,  price swaps and
options) only for non-trading purposes as a hedging strategy to manage commodity
prices  associated  with oil and gas  sales and to  reduce  the  impact of price
fluctuations.  To  qualify  as a hedge,  these  instruments  must  correlate  to
anticipated future production such that the Company's exposure to the effects of
price  changes is  reduced.  The Company  uses the hedge or  deferral  method of
accounting for these instruments and, as a result, gains and losses on commodity
derivative financial  instruments are generally offset by similar changes in the
realized  prices of the  commodities.  Income and costs related to these hedging
activities  are  recognized  in oil and gas revenues  when the  commodities  are
produced.  Any realized  income and costs that are deferred at the balance sheet
date and any margin  accounts for futures  contracts are included as net current
assets. While commodity derivative financial  instruments are intended to reduce
the  Company's  exposure to declines in the market price of oil and natural gas,
the commodity derivative financial instruments may limit the Company's gain from
increases in those market prices.

     The  Company  recorded as a reduction  of  revenues  $8.3  million and $7.7
million  related to  commodity  hedging  activities  for the nine  months  ended
September 30, 1997 and 1996, respectively, and $0.6 million and $0.4 million for

                                       -6-
<PAGE>

                  SEAGULL ENERGY CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                  (Unaudited)

Note 1.  Presentation  of Financial  Information

the  third  quarter  of 1997 and 1996,  respectively.  While  substantially  all
commodity  hedges for equity  production  were  settled by March 31,  1997,  the
Company has  commodity  hedges in place as required by the  monetary  production
payment (related to the 1995 sale of the Company's Section 29 tax credit-bearing
properties) for approximately 11 MMcf per day through December 1998.

     From  time  to  time,  the  Company  has  entered  into  various  financial
instruments,  such as interest rate swaps and interest rate lock agreements,  to
manage the impact of changes in  interest  rates.  To qualify as a hedge,  these
instruments must correlate to anticipated  future changes in interest rates such
that the Company's  exposure to the effects of interest rate changes is reduced.
The  Company  uses  the  hedge  or  deferral  method  of  accounting  for  these
instruments  and, as a result,  gains and losses on these financial  instruments
are  generally  offset by similar  changes in the realized  interest  rate.  The
differential interest to be paid or received is accrued as interest rates change
and is  recognized  over the life of the  agreements  as a component of interest
expense. Currently, Seagull has no open interest rate swap or interest rate lock
agreements.

     Accounting  Pronouncements  -- In February 1997,  the Financial  Accounting
Standards Board (the "FASB") issued Statement of Financial  Accounting Standards
("SFAS") No. 128, Earnings per Share. This statement  establishes  standards for
computing and  presenting  earnings per share and requires,  among other things,
dual  presentation  of basic and diluted  earnings  per share on the face of the
statement of operations. The statement is effective for financial statements for
periods  ending after  December 15, 1997. The Company will adopt SFAS No. 128 by
December 31, 1997 and does not expect the adoption to have a material  impact on
its calculation of earnings per share.

     The  following  represents  the pro forma  effect on earnings  per share as
though SFAS No. 128 were adopted effective January 1, 1997:
                                      -7-
<PAGE>
                  SEAGULL ENERGY CORPORATION AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements
                                  (Unaudited)
<TABLE>
<CAPTION>

                               EARNINGS PER SHARE
                  (Amounts in Thousands Except Per Share Data)

                                                           Three Months Ended              Nine Months Ended
                                                              September 30,                  September 30,
                                                      ------------------------------   -----------------------------
                                                          1997             1996            1997           1996
                                                      --------------   -------------   -------------  --------------
                                                                         Restated                       Restated
<S>                                                   <C>              <C>             <C>            <C>
As Reported:
   Earnings per share..............................     $   0.05         $   0.12         $  0.36         $  0.36
   Weighted average number of common
     shares outstanding............................       64,349           63,934          64,154          63,828

Pro Forma:
   Earnings per share:
     Basic.........................................      $  0.05          $  0.12         $  0.37         $  0.37
     Diluted.......................................      $  0.05          $  0.12         $  0.36         $  0.35

   Weighted average number of common
     shares outstanding:
     Basic.........................................       63,160           62,666          62,986          62,547
     Diluted.......................................       64,765           64,460          64,562          64,556
</TABLE>


     In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive Income.
This statement  establishes standards for reporting and display of comprehensive
income and its components in a full set of financial  statements.  Comprehensive
income  includes  all  changes in a  company's  equity,  including,  among other
things,  foreign currency translation  adjustments.  In June 1997, the FASB also
issued SFAS No. 131,  Disclosures  about  Segments of an Enterprise  and Related
Information.  This  statement  establishes  standards for reporting  information
about  operating  segments in annual  financial  statements  and  requires  that
enterprises  report selected  information  about  operating  segments in interim
reports  issued to  shareholders.  Both of these  statements  are  effective for
financial statements for periods beginning after December 15, 1997. As both SFAS
No. 130 and 131 establish standards for reporting and display,  the Company does
not expect the  adoption of these  statements  to have a material  impact on its
financial condition or results of operations.
                                      -8-
<PAGE>

                  SEAGULL ENERGY CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                  (Unaudited)
                             (Amounts in Thousands)

Note 2.  Supplemental Disclosure of Cash Flow Information
<TABLE>
<CAPTION>

                                                                           Nine Months Ended September 30,
                                                                 ----------------------------------------------------
                                                                          1997                         1996
                                                                 -----------------------       ----------------------
<S>                                                              <C>                           <C>    
Cash paid during the period for:                                                                     Restated
   Interest, net of amount capitalized........................        $   35,801                    $   38,660
   Income taxes...............................................            20,305                        13,247
</TABLE>


Note 3.  Long-Term Debt

     On September 30, 1997,  Seagull issued $150 million Senior Notes offered at
a public offering price of 99.544% of face value. The Senior Notes have a coupon
of 7.5% and mature September 15, 2027. The Senior Notes are not redeemable prior
to  maturity  and are not  subject to any  sinking  fund.  The net  proceeds  of
approximately  $146  million  were used to repay  existing  debt and for general
corporate  purposes.  The Senior Notes  represent  unsecured  obligations of the
Company and rank pari passu with all other unsecured, unsubordinated obligations
of the Company.  The Senior Notes contain conditions and restrictive  provisions
including,  among other things,  restrictions on additional  indebtedness by the
Company and its subsidiaries and entering into sale and leaseback transactions.

     On June 17,  1997,  the Company  amended and restated its U.S. and Canadian
revolving credit facilities (the "Credit Facilities") to increase the "Borrowing
Base" from $550 million to $650 million,  extend the maturity date from December
31, 2002 to May 31, 2004 and reduce stated  interest rate margins.  At September
30, 1997, the maximum  commitment  under the Credit  Facilities was $550 million
with immediately available unused commitments of approximately $366 million. The
Credit   Facilities   bear   interest,   at   Seagull's   option,   at   various
market-sensitive  rates plus an applicable  margin or a competitive bid rate. At
September  30,  1997 and 1996,  the  average  interest  rates  under the  Credit
Facilities were 5.6% and 6.1%,  respectively.  The amount of senior indebtedness
the Company is permitted to incur under the provisions of the Credit  Facilities
is subject to a "Borrowing  Base" based on the proved  reserves of the Company's
Oil and Gas  Operations  segment and the financial  performance of the Company's
other business segments. See Note 5 for further discussion.

Note 4.  Commitments and Contingencies

     Royalty Litigation -- Increasingly, royalty owners under oil and gas leases
are challenging  valuation  methodology and  post-production  deductions used by
producers. These cases have arisen because oil and gas producers such as Seagull
have  begun  to  provide  services  that had  previously  been  provided  by the
interstate gas pipelines prior to the "unbundling" of gas services. For example,
in 1996,  Seagull was sued in Anne K. Barnaby,  et al. v. Seagull Mid-South Inc.
This case is pending in state court of Latimer County,  Oklahoma.  In this case,
                                      -9-
<PAGE>
                  SEAGULL ENERGY CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                  (Unaudited)
                             (Amounts in Thousands)

Note 2.  Supplemental Disclosure of Cash Flow Information

the plaintiffs seek additional  royalties based upon the deduction by Seagull of
post-production  costs,  such  as  those  related  to  gathering,   compression,
dehydration and treating. In addition,  the plaintiffs have questioned the sales
price  used by  Seagull as a basis for  calculating  royalty to the extent  that
sales were made to Seagull's gas marketing subsidiary.  While Seagull intends to
vigorously  defend this case,  the Company  cannot  predict the outcome of these
matters.

     NorAm Litigation -- Seagull also was sued in NorAm Gas Transmission Co., et
al. v. Seagull  Mid-South  Inc.  (the "NorAm  Litigation").  The case relates to
Seagull's  termination of a 1956 gas contract which provided for the sale of gas
by Seagull from certain  wells in the Aetna Field in Arkansas for  approximately
$0.16 per Mcf.  NorAm Gas  Transmission  Co.  ("NorAm") has sought a declaratory
judgment that the gas contract remains in effect with respect to these wells or,
in the alternative,  money damages.  Since the termination by Seagull of the gas
contract,  Seagull has been  selling  the gas in  question  on the spot  market.
Seagull  believes  that  it had  reasonable  grounds  for  terminating  the  gas
contract.  NorAm has also  sought a  declaratory  judgment  to the  effect  that
certain  additional  wells in the Aetna Field (including any new wells) would be
subject to the $0.16 per Mcf price (the "Additional Well Claim"). See Note 5 for
discussion of a Settlement  Proposal.  If NorAm would have been  successful with
the Additional  Well Claim,  Seagull's  operations in the Aetna Field would have
been materially affected in an adverse manner. Prior to the Settlement Proposal,
the estimate of potential  loss in these matters ranged from zero to $91 million
plus attorneys' fees.

     Gulf Coast  Vacuum Site -- In 1993,  the  Environmental  Protection  Agency
("EPA")  notified the Company that a subsidiary  was a  potentially  responsible
party ("PRP") at the Gulf Coast Vacuum Services  Superfund Site (the "GCV Site")
in Vermilion Parish,  Louisiana.  Based upon the Company's investigation of this
claim, the Company believes that the basis for its alleged liability is a series
of  transactions  between the Company's  subsidiary  and the operator of the GCV
Site that occurred  during 1979 and 1980.  While the EPA's cleanup cost estimate
of the GCV Site is in the range of  $17 million,  the Company  believes that its
liability  is unlikely to be material  to its  financial  condition,  results of
operations or cash flows because of the large number of PRPs at the GCV Site and
the relative amount of  contamination,  if any, that may have been caused at the
GCV Site by the disposal of wastes by the Company during 1979 and 1980.

     Comstock Mill Site -- On February 21, 1996, the United States Department of
Interior  Bureau  of Land  Management  ("BLM")  sent a letter to  Houston  Oil &
Minerals Corporation ("HO&M"), a wholly owned subsidiary of Seagull,  requesting
HO&M to prepare and submit a plan for sampling and  analyzing  groundwater  at a
former mining operation  located near Virginia City,  Nevada (the "Comstock Mill
Site").  The  basis for the  BLM's  request  was the  alleged  operation  of the
Comstock  Mill Site by HO&M  between  1978 and 1982.  Pursuant  to an  indemnity
provision in the stock purchase agreement by which Seagull acquired HO&M in 1988
(the "HO&M Purchase  Agreement"),  Seagull  tendered the BLM's letter to Tenneco
Inc.  ("Tenneco")  with a demand for indemnity and notified the BLM that Tenneco
would  respond to the BLM letter on behalf of HO&M.  The BLM has also  indicated
that  Tenneco  and HO&M might be required to address  cyanide  contamination  of
groundwater at the Comstock Mill Site by separate  action of the Nevada Division
                                      -10-
<PAGE>
                  SEAGULL ENERGY CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                                  (Unaudited)

of Environmental Protection. Seagull believes that any liability associated with
the Comstock  Mill Site is the  responsibility  of Tenneco or its  successors in
liability pursuant to the HO&M Purchase Agreement.

     Other -- The Company is a party to other  ongoing  litigation in the normal
course of business.  Management  regularly analyzes current  information and, as
necessary,   provides   accruals  for  probable   liabilities  on  the  eventual
disposition of these matters. While the outcome of lawsuits or other proceedings
against the Company cannot be predicted with certainty, management believes that
the effect on its financial condition,  results of operations and cash flows, if
any, will not be material.

Note 5.  Subsequent Events

     Sale of Canadian Oil and Gas Properties -- On October 6, 1997, Seagull sold
its  Canadian  oil and gas  subsidiary,  Seagull  Energy  Canada Ltd.  ("Seagull
Canada"), to Rio Alto Exploration Ltd. ("Rio Alto"). The economic effective date
for the disposition is July 1, 1997 (the  "Effective  Date").  Seagull  realized
approximately  $185 million of sales proceeds.  Seagull will recognize a pre-tax
gain of  approximately  $12 million in the fourth  quarter of 1997.  The Company
applied the sales proceeds to repay existing  long-term  debt,  including all of
its U.S. and Canadian bank debt. As a result of the sale of Seagull Canada,  the
Company  terminated  the Canadian  component of the Credit  Facilities,  thereby
lowering the maximum commitment to $450 million,  and reduced the Borrowing Base
to $550 million.

     The Company's operations in Canada consisted of oil and gas exploration and
production activities through interests in fields located in Alberta, Canada. As
of  December  31,  1996,  the  Company's   proved  reserves  in  Canada  totaled
approximately  42.7 million barrels of oil equivalents  representing  17% of the
Company's reserves.  The Company's Canadian  operations  contributed $26 million
and $23 million in revenue and $5.5 million and $(3.9)  million in income (loss)
before  taxes  for  the  nine  months  ended   September   30,  1997  and  1996,
respectively.  At September 30, 1997,  the  Company's  Canadian  operations  had
assets less associated liabilities of $106 million.

                                      -11-
<PAGE>
                  SEAGULL ENERGY CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                                  (Unaudited)

     The following  table presents the unaudited pro forma results of Seagull as
though the disposition of Seagull Canada had occurred on January 1, 1996:
<TABLE>
<CAPTION>

                              PRO FORMA INFORMATION
                  (Amounts in Thousands Except Per Share Data)

                                                         Three Months Ended                 Nine Months Ended
                                                           September 30,                      September 30,
                                                 ----------------------------------- --------------------------------
                                                       1997              1996             1997             1996
                                                 -----------------  ---------------- ---------------  ---------------
                                                                       Restated                          Restated
<S>                                              <C>                <C>              <C>              <C>    

Revenues.......................................       $113,083          $102,670         $376,452        $335,676
Net income.....................................          3,773             9,782           24,917          30,060
Earnings per share.............................           0.06              0.15             0.39            0.47
</TABLE>

     The  unaudited pro forma  information  does not purport to be indicative of
actual results,  if the disposition of Seagull Canada had been in effect for the
periods indicated, or of future results.

     NorAm Litigation  Settlement -- On November 10, 1997, the Company and NorAm
signed  a  Settlement  Proposal  that  could  lead  to a  final  settlement  and
resolution of the NorAm Litigation  discussed in Note 4. The Settlement Proposal
is contingent  upon the  negotiation and execution of the gas contract and other
final  settlement  documentation no later than December 15, 1997. The Settlement
Proposal  calls for a cash  payment to NorAm upon  execution of the gas contract
described below and other final settlement documentation. Under the terms of the
proposed long-term gas sales contract,  Seagull will deliver 6,800 MMBtu per day
of natural gas to NorAm over a five-year period at an initial price of $0.53 per
MMBtu. As a result of this subsequent event and assuming the Settlement Proposal
is ultimately  executed under its existing terms, the Company will record in the
fourth quarter a charge to net income of  approximately  $2.7 million ($0.04 per
share).

                                      -12-
<PAGE>
              Item 2. SEAGULL ENERGY CORPORATION AND SUBSIDIARIES
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                              RESULTS OF OPERATIONS
                                   (Unaudited)

     The following  discussion is intended to assist in an  understanding of the
Company's  financial  position and results of operations for each of the periods
indicated.  The Company's  accompanying  unaudited financial  statements and the
notes thereto and the  consolidated  financial  statements and notes included in
the Company's  Annual  Report on Form 10-K for the year ended  December 31, 1996
contain detailed  information that should be referred to in conjunction with the
following discussion.

                              RESULTS OF OPERATIONS

                             Consolidated Highlights
                 (Amounts in Thousands Except Per Share Amounts)
<TABLE>
<CAPTION>

                                                         Three Months Ended                Nine Months Ended
                                                           September 30,                     September 30,
                                                   -------------------------------    ------------------------------
                                                       1997              1996             1997            1996
                                                   --------------    -------------    -------------   --------------
                                                                        Restated                         Restated
<S>                                                <C>               <C>              <C>             <C>  
Revenues:
   Oil and gas operations........................    $  108,543        $  97,320        $ 338,953       $ 295,051
   Alaska transmission and distribution..........        12,112           12,611           63,455          63,744
                                                   --------------    -------------    -------------   --------------
                                                     $  120,655        $ 109,931        $ 402,408       $ 358,795
                                                   ==============    =============    =============   ==============

Operating Profit:
   Oil and gas operations........................    $   18,603        $  21,134        $  77,363       $  67,733
   Alaska transmission and distribution..........           548            1,225           12,985          14,992
   Corporate.....................................        (5,695)          (3,159)         (12,475)        (12,534)
                                                   --------------    -------------    -------------   --------------
                                                     $   13,456        $  19,200        $  77,873       $  70,191
                                                   ==============    =============    =============   ==============
                                                    
Net income.......................................    $    3,202        $   7,458        $  23,077       $  22,836
Earnings per share...............................    $     0.05        $    0.12        $    0.36       $    0.36
Weighted average number of common                                     
   shares outstanding............................        64,349           63,934           64,154          63,828
Net cash provided by operating activities before
   changes in  operating assets and liabilities..    $   48,623        $  53,354        $ 172,572       $ 162,101
Net cash provided by operating activities........    $   49,939        $  59,525        $ 175,933       $ 184,912

</TABLE>

     Revenues increased  approximately $11 million,  or 10%, and $44 million, or
12%,  respectively for the three and nine months ended September 30, 1997 versus
the  prior  year.  These  increases  were  primarily  due  to the  increases  in
international  oil and gas  revenues.  The nine months ended  September 30, 1997
also  benefited  from a 9%  increase in  domestic  and 31%  increase in Canadian
natural gas prices.

     Operating  profit  for the nine  months  of 1997  increased  by  nearly  $8
million,  or  11%,  over  1996  primarily  due  to the  increased  international
production,  partially  offset  by a  decrease  in  operating  profit  from  the
Company's Alaska transmission and distribution  segment.  For the third quarter,
while  operating  profit  related to  international  exploration  and production
("E&P") activities increased,  total operating profit decreased by approximately
                                      -13-
<PAGE>
              Item 2. SEAGULL ENERGY CORPORATION AND SUBSIDIARIES
        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                             RESULTS OF OPERATIONS
                                  (Unaudited)

$6 million through increases in dry hole expenses and general and administrative
("G&A") expenses  associated with  compensation  plans that are tied directly to
the market price of Seagull's common stock.

     Net income for the nine months ended  September 30, 1997 was unchanged from
1996 as decreases in other income, such as gains on sales of property, plant and
equipment and distributions  from  investments,  and an increase in income taxes
nearly offset the increase in operating profit. Net income for the third quarter
of 1997  decreased  approximately  $4 million from the prior year as a result of
the decreases in operating profit and in other income, such as gains on sales of
property,  plant and equipment and  distributions  from  investments,  partially
offset by a decrease in income tax expense.


                             Oil and Gas Operations
                             (Amounts in Thousands)
<TABLE>
<CAPTION>

                                                    Three Months Ended                    Nine Months Ended
                                                      September 30,                         September 30,
                                             ---------------------------------    ----------------------------------               
                                                 1997               1996              1997                1996
                                             ---------------    --------------    ---------------    ---------------
                                                                   Restated                                Restated
<S>                                          <C>                <C>                <C>               <C>  
Revenues:
   Natural gas............................     $  70,374          $  71,467         $  224,093        $  217,293
   Oil and NGL............................        32,986             20,259             96,220            54,703
   Pipeline and marketing.................         5,183              5,594             18,640            23,055
                                             ---------------    --------------     --------------    ---------------
                                                 108,543             97,320            338,953           295,051
                                             ---------------    --------------     --------------    ---------------

E&P operating expenses....................        27,967             24,701             87,091            72,685
Pipeline and marketing expenses...........         6,860              6,017             20,840            17,268
Exploration charges.......................        15,217             10,791             31,516            31,253
Depreciation, depletion and amortization..        39,896             34,677            122,143           106,112
                                             ---------------    --------------     --------------    ---------------
   Operating profit.......................     $  18,603          $  21,134         $   77,363         $  67,733
                                             ===============    ==============     ==============    ===============
</TABLE>

     With  the  purchase  of  two  Egyptian  concessions  from  units  of  Exxon
Corporation  in September  1996, and the October 1996 merger with Global Natural
Resources Inc.,  Seagull's  operations  gained both a significant  international
component  and an  increase  in oil  production  as a  percentage  of the  total
production.  The $10 million increase in the operating profit of the Oil and Gas
Operations ("O&G") segment for the first nine months of 1997 was principally due
to the resulting  five-fold  increase in oil  production in Egypt.  Increases in
Egyptian oil  production  accounted for just over $14 million and $39 million of
the total increase in revenue for the third quarter and the nine months of 1997,
respectively,  as Seagull realized  contributions from the East Zeit concession,
one of two  concessions  purchased  from Exxon  Corporation,  and as  additional
production facilities became operational at the Company's Qarun concession.  The
increase in revenue due to increased Egyptian production was partially offset by
a decline in oil prices for both the three and nine months ended  September  30,
1997 versus 1996. The nine months ended September 30, 1997 also benefited from a
9% increase in domestic natural gas prices.
                                      -14-
<PAGE>
              Item 2. SEAGULL ENERGY CORPORATION AND SUBSIDIARIES
         MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                             RESULTS OF OPERATIONS
                                  (Unaudited)

                    EXPLORATION AND PRODUCTION OPERATING DATA
                   (Amounts in thousands except per unit data)
<TABLE>
<CAPTION>

                                                          Three Months Ended September 30,
                           ------------------------------------------------------------------------------------------------
                                     Revenues                    Net Daily Production                  Unit Price
                           -----------------------------     -----------------------------     ----------------------------
                              1997             1996             1997             1996             1997            1996
                           ------------    -------------     ------------    -------------     -----------    --------------
<S>                        <C>             <C>               <C>             <C>               <C>            <C>
   Gas Sales (1):                            Restated                          Restated                         Restated
     Domestic............   $ 60,453         $  61,370            299.4            312.6            2.19           2.13
     Canada..............      6,254             5,818             49.2             57.5            1.38           1.10
     Cote d'Ivoire.......      1,131               581              7.0              3.5            1.77           1.79
     Indonesia...........      2,519             3,698              7.6             11.7            3.58           3.43
     Other...............         17                 -              0.1                -            1.07              -
                           ------------    -------------     ------------    -------------     -----------    --------------
                            $ 70,374         $  71,467            363.3            385.3            2.11           2.02
                           ============    =============     ============    =============     ===========    ==============

  Oil and NGL Sales(2):
     Domestic............   $    8,040       $   7,288            5,292            4,163           16.52          19.04
     Canada..............        1,318           1,443              932            1,011           15.37          15.51
     Egypt...............       16,309           5,225            9,838            2,680           18.02          21.19
     Cote d'Ivoire.......        1,839           2,273            1,146            1,258           17.44          19.64
     Tatarstan...........        5,276           3,529            4,113            3,102           13.94          12.37
     Indonesia...........          190             495               94              266           22.01          20.26
     Other...............           14               6                9                5           15.49          10.64
                           ------------    -------------     ------------    -------------     -----------    ------------
                            $   32,986       $  20,259           21,424           12,485           16.74          17.64
                           ============    =============     ============    =============     ===========    ============

                                                           Nine Months Ended September 30,
                           -------------------------------------------------------------------------------------------------
                                     Revenues                     Net Daily Production                  Unit Price
                           -----------------------------     -----------------------------     -----------------------------
                               1997             1996             1997             1996            1997             1996
                           ------------    -------------     ------------    -------------     -----------    --------------
   Gas Sales (1):                            Restated                          Restated                         Restated
     Domestic............   $  189,022       $ 185,294            304.2            323.3            2.28           2.09
     Canada..............       21,961          19,006             49.5             56.1            1.63           1.24
     Cote d'Ivoire.......        2,876           1,996              5.8              4.2            1.81           1.74
     Indonesia...........       10,178          10,997             10.6             12.0            3.54           3.34
     Other...............           56               -              0.2                -            1.02              -
                           ------------    -------------     ------------    ----- --------     -----------    --------------
                            $  224,093       $ 217,293            370.3            395.6            2.22           2.00
                           ============    =============     ============    =============     ===========    ==============

   Oil and NGL Sales(2):
     Domestic............   $   23,083       $  21,503            4,689            4,351           18.03          18.04
     Canada..............        3,995           4,113              889              991           16.46          15.16
     Egypt...............       44,897          10,182            8,987            1,851           18.30          20.07
     Cote d'Ivoire.......        6,686           7,333            1,285            1,421           19.06          18.83
     Tatarstan...........       16,540          10,595            4,224            2,898           14.34          13.34
     Indonesia...........          954             956              166              178           20.99          19.55
     Other...............           65              21               15                7           17.18          12.08
                           ------------    -------------     ------------    -------------     -----------    --------------
                            $   96,220       $  54,703           20,255           11,697           17.40          17.07
                           ============    =============     ============    =============     ===========    ==============

(1)  Net Daily Production in MMcf per day;  Unit Price in $ per Mcf.
(2)  Net Daily Production in Bbl per day;  Unit Price in $ per Bbl.
</TABLE>
                                      -15-
<PAGE>
              Item 2. SEAGULL ENERGY CORPORATION AND SUBSIDIARIES
         MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                             RESULTS OF OPERATIONS
                                  (Unaudited)

     The  domestic  natural gas price  increase  from $2.09 per Mcf for the nine
months  ended  September  30, 1996 to $2.28 per Mcf for the first nine months of
1997 accounted for  approximately $16 million of the overall increase in natural
gas revenue.  Additionally,  the $0.39 per Mcf increase in Canadian  natural gas
prices  over the same  period  accounted  for  approximately  $5  million of the
overall increase in revenue.  Ultimately, U.S. and Canadian natural gas revenues
increased  only $7  million  for the first nine  months of 1997 as the  increase
related to higher prices was partially  offset by lower  production and Canadian
royalties   increasing  in  tandem  with  prices.   This  lower  production  was
principally the result of normal production  declines from developed  properties
combined with the impact of substantially lower development expenditures in late
1994 and all of 1995.  On October 6, 1997,  Seagull sold all of its Canadian oil
and  gas  properties.  See  Note  5  to  the  Unaudited  Consolidated  Financial
Statements for additional discussion.

     The Company  recorded as a reduction  of  revenues  $8.3  million and $7.7
million  related to  commodity  hedging  activities  for the nine  months  ended
September 30, 1997 and 1996, respectively, and $0.6 million and $0.4 million for
the  third  quarter  of 1997 and 1996,  respectively.  While  substantially  all
commodity  hedges for equity  production  were  settled by March 31,  1997,  the
Company has  commodity  hedges in place as required by the  monetary  production
payment (related to the 1995 sale of the Company's Section 29 tax credit-bearing
properties) for approximately 12 MMcf per day through December 1998.

     E&P  operating  expenses per BOE increased for the third quarter from $3.50
in 1996 to $3.71 in 1997 and from $3.42 for the nine months ended  September 30,
1996 to $3.89 in 1997 as a result of (i) increased  domestic  production  taxes,
(ii)  increased  domestic  lease  operating  and  workover  expenses,  and (iii)
increased lease operating expenses in Tatarstan.

     Exploration charges increased 41% for the third quarter of 1997 compared to
1996  principally  due to increases in dry hole costs  associated with increased
drilling activities.

     The  increase in E&P  depreciation,  depletion  and  amortization  ("DD&A")
expense  from $4.92 per BOE for the first  nine  months of 1996 to $5.41 per BOE
for the first  nine  months  of 1997  combined  with the  increase  in  Egyptian
production  to produce a 15%  increase  in DD&A  expense for the O&G segment for
both the three and nine months ended September 30, 1997, respectively.  A change
in the mix of the  properties  being  produced  internationally  was the primary
factors for the increase, partially offset by a decrease in DD&A expense related
to Canadian oil and gas properties.
                                      -16-
<PAGE>
              Item 2. SEAGULL ENERGY CORPORATION AND SUBSIDIARIES

         MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                             RESULTS OF OPERATIONS
                                  (Unaudited)

                      Alaska Transmission and Distribution
                   (Amounts in Thousand Except Per Unit Data)
<TABLE>
<CAPTION>

                                                          Three Months Ended                 Nine Months Ended
                                                             September 30,                     September 30,
                                                    --------------------------------    ----------------------------
                                                        1997              1996             1997            1996
                                                    --------------    --------------    ------------    ------------
<S>                                                 <C>               <C>               <C>             <C>
   
Revenues........................................     $   12,112         $ 12,611         $ 63,455        $  63,744
Cost of gas sold................................          4,557            4,517           28,523           26,974
                                                    --------------    --------------    ------------    ------------
   Gross margin.................................          7,555            8,094           34,932           36,770
Operations and maintenance expense..............          4,917            4,833           15,689           15,660
Depreciation, depletion and amortization........          2,090            2,036            6,258            6,118
                                                    --------------    --------------    ------------    ------------
   Operating profit.............................     $      548         $  1,225         $ 12,985        $  14,992
                                                    ==============    ==============    ============    ============

OPERATING DATA:
   Degree days (1)..............................            762              948            6,053            6,771

     (1) A measure  of  weather  severity  calculated  by  subtracting  the mean
temperature for each day from 65 degrees fahrenheit.  More degree days equate to
colder weather.
</TABLE>

     Operating  profit  of the  Alaska  transmission  and  distribution  segment
(ENSTAR  Natural Gas  Company,  a division of the Company,  and Alaska  Pipeline
Company, a wholly owned subsidiary,  (collectively referred to herein as "ENSTAR
Alaska") for the three and nine month periods ended September 30, 1997 declined
from the  comparable  1996  periods  primarily  as the warmer  weather  led to a
decrease in volumes.

     This  segment's  business is seasonal with  approximately  65% of its sales
made in the first and fourth quarters of each year.
                                      -17-
<PAGE>
              Item 2. SEAGULL ENERGY CORPORATION AND SUBSIDIARIES
        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                             RESULTS OF OPERATIONS
                                  (Unaudited)

                         LIQUIDITY AND CAPITAL RESOURCES
                              Capital Expenditures
                             (Amounts in Thousands)
<TABLE>
<CAPTION>

                                                   Three Months Ended                     Nine Months Ended
                                                      September 30,                         September 30,
                                            ----------------------------------     ---------------------------------
                                                 1997               1996               1997               1996
                                            ---------------    ---------------     --------------     --------------
                                                                  Restated                              Restated
<S>                                         <C>                <C>                 <C>                <C>
Exploration and production:
   Leasehold.............................     $   2,786          $   4,420          $    16,101          $    9,767
   Exploration...........................        29,304             18,535               74,881              48,790
   Development...........................        30,359             33,118              101,109              68,137
                                            ---------------    ---------------     --------------     --------------
                                                 62,449             56,073              192,091             126,694
Pipeline and marketing...................           162                  -                  207                   -
                                            ---------------    ---------------     --------------     --------------
   Oil and gas operations................        62,611             56,073              192,298             126,694
Alaska transmission and distribution.....         3,081              3,458                6,532               6,805
Corporate................................         2,524              1,147                6,734               2,447
                                            ---------------    ---------------     --------------     --------------
                                              $  68,216          $  60,678          $   205,564          $  135,946
                                            ===============    ===============     ==============     ==============
</TABLE>

     Seagull's  capital  expenditure  program was designed to be consistent with
the  Company's  strategic  objectives  to  achieve  a  greater  balance  between
additions from exploration, development and acquisitions than in preceding years
and grow oil and gas  deliverability  in 1998. To further meet those objectives,
in July 1997,  Seagull's Board of Directors  approved an increase in the capital
expenditures  budget of $36 million to a total of $287 million,  including  just
over $270 million in E&P. More than 43% of this spending is targeted outside the
United States.  As drilling  activities  increased  substantially  to meet these
objectives  for  1997,  E&P  capital  expenditures  increased  primarily  in the
Company's domestic and Egyptian areas of operations.

     On June 17, 1997, the Company amended and restated the Credit Facilities to
increase  the  "Borrowing  Base" from $550 million to $650  million,  extend the
maturity date from December 31, 2002 to May 31, 2004 and reduce stated  interest
rate margins.  At September 30, 1997,  the maximum  commitment  under the Credit
Facilities was $550 million with  immediately  available  unused  commitments of
approximately  $366 million.  The Credit Facilities bear interest,  at Seagull's
option,  at  various  market-sensitive  rates  plus an  applicable  margin  or a
competitive bid rate. The amount of senior indebtedness the Company is permitted
to  incur  under  the  provisions  of the  Credit  Facilities  is  subject  to a
"Borrowing  Base"'based on the proved  reserves of the Company's O&G segment and
the financial performance of the Company's other business segments. On September
30, 1997,  Seagull issued $150 million Senior Notes offered at a public offering
price of 99.54% of face value. The Senior Notes have a coupon of 7.5% and mature
                                      -18-
<PAGE>
              Item 2. SEAGULL ENERGY CORPORATION AND SUBSIDIARIES
        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                             RESULTS OF OPERATIONS
                                  (Unaudited)

September 15, 2027.  The Senior Notes are not  redeemable  prior to maturity and
are not subject to any sinking  fund.  The net  proceeds of  approximately  $146
million were used to repay existing debt and for general corporate purposes. The
Senior Notes represent unsecured  obligations of the Company and rank pari passu
with all other unsecured,  unsubordinated obligations of the Company. The Senior
Notes contain  conditions  and  restrictive  provisions  including,  among other
things,   restrictions  on  additional  indebtedness  by  the  Company  and  its
subsidiaries and entering into sale and leaseback transactions.

     On October 6,  1997,  Seagull  sold its  Canadian  oil and gas  subsidiary,
Seagull Energy Canada Ltd.  ("Seagull  Canada"),  to Rio Alto  Exploration  Ltd.
("Rio Alto").  The economic  effective date for the  disposition is July 1, 1997
(the "Effective  Date").  Seagull realized  approximately  $185 million of sales
proceeds,  net of selling  expenses.  Seagull  will  recognize a pre-tax gain of
approximately $12 million in the fourth quarter of 1997. The Company applied the
sales proceeds to repay existing  long-term debt,  including all of its U.S. and
Canadian  bank debt.  As a result of the sale of  Seagull  Canada,  the  Company
terminated the Canadian component of the Credit Facilities, thereby lowering the
maximum  commitment  to $450  million  and reduced  the  Borrowing  Base to $550
million.

     Management believes that the Company's internally generated funds and bank
borrowing  capabilities  will be  sufficient to finance  current and  forecasted
operations.

Defined Terms

     Natural gas is stated herein in billion  cubic feet "Bcf"),  million cubic
feet ("MMcf") or thousand  cubic feet ("Mcf").  Oil,  condensate and natural gas
liquids  ("NGL")  are stated in barrels  ("Bbl") or thousand  barrels  ("MBbl").
MMcfe and Mcfe  represent the  equivalent of one million and one thousand  cubic
feet of natural gas, respectively.  Oil, condensate and NGL are converted to gas
at a ratio of one barrel of liquids per six Mcf of gas, based on relative energy
content.  MBOE and BOE represent one thousand  barrels of oil equivalent and one
barrel of oil  equivalent,  respectively,  with six Mcf of gas  converted to one
barrel of liquid.

Forward Looking Statements

     Item 2 of this document  includes  forward  looking  statements  within the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the  Securities  Exchange  Act of  1934,  as  amended.  Although  Seagull
believes that its  expectations  are based upon reasonable  assumptions,  it can
give no assurance that its goals will be achieved.  Important factors that could
cause  acutal  results to differ  materially  from those in the forward  looking
statements  include  the  resolution  of various  litigation  matters  discussed
earlier,  political  developments  in  foreign  countries,   federal  and  state
regulatory  developments,  the timing and extent of changes in commodity prices,
the timing and extent of success in  discovering,  developing  and  producing or
acquiring oil and gas reserves and  conditions of the capital and equity markets
during the periods covered by the forward looking statements.
                                      -19-
<PAGE>
                   SEAGULL ENERGY CORPORATION AND SUBSIDIARIES

                           PART II. OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

(a)        Exhibits:

3.1    Bylaws of the  Company  as amended  through  March 7, 1997  (incorporated
       by reference  to  Exhibit 4.9  to  Form S-3 filed with the Securities and
       Exchange Commission on September 18, 1997).

*4.1   Note Agreement dated May 14, 1992 by  and among  Alaska Pipeline  Company
       and each  of the purchasers  thereto (including  forms of notes and other
       exhibits thereto)  and  Inducement  Agreement  of even date  therewith by
       and among Seagull and Aid  Association  of Lutherans,  The Equitable Life
       Assurance Society of the United States, Equitable Variable Life Insurance
       Company,  Provident  Life  &  Accident  Insurance  Company  and  Teachers
       Insurance & Annuity Association  of America (including exhibits thereto).

4.2    Terms Agreement and the  resolutions  of adopted  by  the Chairman of the
       Board of Directors  related to Exhibit 4.3  (incorporated by reference to
       Exhibit  2.3  to  Form  8-K  filed   with  the  Securities  and  Exchange
       Commission on October 17, 1997).

4.3    Form of Senior  Indenture  among the Company  and The Bank of New York,  
       as Trustee  (incorporated  by  reference to Exhibit 2.4 to Form 8-K filed
       with the Securities and Exchange Commission on October 17, 1997).

*#10.1 Seagull Energy Corporation 1993 Nonemployee Directors' Stock Option Plan,
       including forms of agreements, as amended.

*#10.2 Seagull Energy Corporation 1993 Stock Option Plan, as amended.

*#10.3 Consulting Agreement between Robert Vagt and Seagull Energy Corporation.

*27.1  Financial Data Schedule.

______________
*  Filed herewith.
#  Identifies management contracts and compensatory plans or arrangements.

(b)        Reports on Form 8-K:

     On September 18, 1997, the Company filed a current report on Form 8-K dated
September 11, 1997 with respect to Seagull's disposition of its Canadian oil and
gas  operations.  The items  reported in such current  report were Item 5 (Other
Events) and Item 7 (Financial Statements and Exhibits).
                                      -20-
<PAGE>
                  SEAGULL ENERGY CORPORATION AND SUBSIDIARIES

     On October 17, 1997,  the Company filed a current  report on Form 8-K dated
October 6, 1997 with  respect to Seagull's  disposition  of its Canadian oil and
gas  operations.  The  items  reported  in  such  current  report  were  Item  2
(Acquisition  or  Disposition  of  Assets),  Item 5  (Other  Events)  and Item 7
(Financial Statements and Exhibits).


                                   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.

                                    SEAGULL ENERGY CORPORATION



                                     By:     /S/ William L. Transier      
                                             William L.  Transier
                                             Senior Vice  President and
                                             Chief  Financial  Officer 
                                             (Principal Financial Officer)

                                     Date:   November 13, 1997




                                     By:     /s/ Gordon L. McConnell 
                                             Gordon L. McConnell, Vice President
                                             and Controller
                                             (Principal Accounting Officer)

                                     Date:   November 13, 1997
                                      -21-
<PAGE>
                                



                                  EXHIBIT INDEX



EXHIBIT                                                                   PAGE  
NUMBER                                                                   NUMBER


3.1  Bylaws of the Company as amended  through  March 7, 1997 
     (incorporated  by reference to Exhibit 4.9 to Form S-3 filed
     with the Securities and Exchange Commission on September
     18, 1997).

*4.1 Note Agreement dated May 14, 1992 by and among Alaska Pipeline 
     Company and each of the purchasers thereto (including forms of 
     notes and other exhibits thereto)  and  Inducement  Agreement 
     of even date  therewith  by and among Seagull and Aid  Asso-
     ciation  of Lutherans,  The Equitable  Life  Assurance Society
     of the United States,  Equitable  Variable Life Insurance 
     Company, Provident  Life & Accident  Insurance  Company  and 
     Teachers  Insurance & Annuity Association of America (including
     exhibits thereto).

4.2  Terms Agreement and the resolutions of adopted by the Chairman
     of the Board of Directors  related to Exhibit 4.3  (incorporated
     by reference to Exhibit 2.3 to Form 8-K  filed  with the  
     Securities  and  Exchange  Commission  on October 17, 1997).

4.3  Form of Senior  Indenture  among the Company  and The Bank of
     New York, as Trustee (incorporated by reference to Exhibit 2.4
     to Form 8-K filed with the Securities and Exchange Commission
     on October 17, 1997).

*#10.1 Seagull Energy Corporation 1993 Nonemployee Directors' Stock 
       Option Plan, including forms of agreements, as amended.

*#10.2 Seagull Energy Corporation 1993 Stock Option Plan, as amended.

*#10.3 Consulting Agreement between Robert Vagt and Seagull Energy 
       Corporation.

*27.1  Financial Data Schedule.


______________
*  Filed herewith.
#  Identifies management contracts and compensatory plans or arrangements.