---

Securities and Exchange CommissionWashington, D.C. 20549

# Form 10Q

(Mark One)

XQUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE             
            

SECURITIES EXCHANGE ACT OF 1934

For
the Quarter Ended June 30, 2002

OR

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

Commission file number: 1-8094

Ocean Energy, Inc.(Exact name of registrant as specified in its charter)

Delaware                     
               741764876(State or other jurisdiction of               
                (I.R.S. Employerincorporation or organization)      
                       Identification No.)

1001 Fannin Street, Suite 1600, Houston, Texas
77002-6794(Address of principal executive offices)
                   
   (Zip code)(713) 265-6000(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 July 25, 2002, 175,896,977 shares of Common Stock, par value $0.10 per share, were
outstanding.

---

Ocean
Energy, Inc.

Index

|                                                                          | Page Number
|------------------------------------------------------------------------- | -----------
|Part I. Financial Information                                             |            
|                                                                         
|Item 1. Unaudited Consolidated Financial Statements                       |            
|                                                                         
|Consolidated Statements of Operations for the Three Months and Six Months |            
|Ended June 30, 2002 and 2001                                              |            
|                                                                         
|Consolidated Balance Sheets  June 30, 2002 and December 31, 2001         |            
|                                                                         
|Consolidated Statements of Cash Flows for the Six Months Ended            |            
|June 30, 2002 and 2001                                                    |            
|                                                                         
|Consolidated Statements of Comprehensive Income for the Three             |            
|Months and Six Months Ended June 30, 2002 and 2001                        |            
|                                                                         
|Notes to Consolidated Financial Statements                                |            
|                                                                         
|Item 2. Managements Discussion and Analysis of Financial Condition       |            
|and Results of Operations                                                 |            
|                                                                         
|Item 3. Quantitative and Qualitative Disclosures about Market Risks       |            
|                                                                         
|Part II. Other Information                                                |            
|                                                                         
|Signatures                                                                |            
|                                                                         
|Exhibit Index                                                             |            

(i)

---

Item 1.
Unaudited Consolidated Financial Statements

Ocean Energy, Inc.Consolidated Statements of Operations(Amounts in Thousands Except Per Share Data)(Unaudited)

|                                            | Three Months | Six Months
|------------------------------------------- | ------------ | ----------
|
|                                           
|
|                                           
|Revenues                                    |              |           
|Costs of Operations:                        |              |           
|Operating expenses                          |              |           
|Depreciation, depletion and amortization    |              |           
|General and administrative                  |              |           
|                                           
|                                            |              |           
|                                           
|Operating Profit                            |              |           
|                                            |              |           
|Other Expense (Income):                     |              |           
|Interest expense                            |              |           
|Interest income and other                   |              |           
|                                           
|Income Before Income Taxes                  |              |           
|Income Tax Expense                          |              |           
|                                           
|Income Before Extraordinary Loss            |              |           
|Extraordinary Loss, Net of Income Taxes     |              |           
|                                           
|Net Income                                  |              |           
|Preferred Stock Dividends                   |              |           
|                                           
|Net Income Available to Common Stockholders |              |           
|                                           
|                                            |              |           
|Basic Earnings Per Common Share:            |              |           
|Income Before Extraordinary Loss            |              |           
|Extraordinary Loss, Net of Income Taxes     |              |           
|                                           
|Net Income to Common Stockholders           |              |           
|                                           
|                                            |              |           
|Diluted Earnings Per Common Share:          |              |           
|Income Before Extraordinary Loss            |              |           
|Extraordinary Loss, Net of Income Taxes     |              |           
|                                           
|Net Income                                  |              |           
|                                           
|                                            |              |           
|Cash Dividends Declared Per Common Share    |              |           
|                                           
|                                            |              |           
|Weighted Average Number of Common           |              |           
|Shares Outstanding:                         |              |           
|Basic                                       |              |           
|                                           
|Diluted                                     |              |           
|                                           

See
accompanying Notes to Consolidated Financial Statements.

1

---

Ocean
Energy, Inc.Consolidated Balance Sheets(Amounts in Thousands Except Share
Data)(Unaudited)

|                                                                                     | June 30, | December 31,
|------------------------------------------------------------------------------------ | -------- | ------------
|
|                                                                                    
|Assets                                                                               |          |             
|                                                                                     |          |             
|Current Assets:                                                                      |          |             
|Cash and cash equivalents                                                            |          |             
|Accounts receivable, net                                                             |          |             
|Other current assets                                                                 |          |             
|                                                                                    
|Total Current Assets                                                                 |          |             
|                                                                                     |          |             
|Property, Plant and Equipment, at cost, full cost method for oil and gas properties: |          |             
|Proved oil and gas properties                                                        |          |             
|Oil and gas properties excluded from amortization                                    |          |             
|Other                                                                                |          |             
|                                                                                    
|                                                                                     |          |             
|Accumulated Depreciation, Depletion and Amortization                                 |          |             
|                                                                                    
|                                                                                     |          |             
|Other Assets                                                                         |          |             
|                                                                                    
|Total Assets                                                                         |          |             
|                                                                                    
|                                                                                     |          |             
|Liabilities and Stockholders Equity                                                
|                                                                                     |          |             
|Current Liabilities:                                                                 |          |             
|Accounts and notes payable                                                           |          |             
|Accrued liabilities                                                                  |          |             
|                                                                                    
|Total Current Liabilities                                                            |          |             
|                                                                                     |          |             
|LongTerm Debt                                                                       |          |             
|Deferred Revenue                                                                     |          |             
|Deferred Income Taxes                                                                |          |             
|Other Noncurrent Liabilities                                                         |          |             
|                                                                                     |          |             
|Stockholders Equity:                                                                |          |             
|Preferred stock, $1.00 par value; authorized                                         |          |             
|10,000,000 shares; issued 50,000 shares                                              |          |             
|Common stock, $0.10 par value; authorized                                            |          |             
|520,000,000 shares; issued 178,372,459                                               |          |             
|and 174,936,240 shares, respectively                                                 |          |             
|Additional paidin capital                                                           |          |             
|Accumulated deficit                                                                  |          |             
|Less  treasury stock, at cost;                                                      |          |             
|2,553,625 and 2,641,640 shares, respectively                                         |          |             
|Deferred compensation and other                                                      |          |             
|Accumulated other comprehensive income (loss)                                        |          |             
|                                                                                    
|Total Stockholders Equity                                                           |          |             
|                                                                                    
|Total Liabilities and Stockholders Equity                                           |          |             
|                                                                                    

See
accompanying Notes to Consolidated Financial Statements.

2

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Ocean
Energy, Inc.Consolidated Statements of Cash Flows(Amounts
in Thousands)(Unaudited)

|                                                   | Six Months Ended June 30,
|-------------------------------------------------- | -------------------------
|                                                  
|
|                                                  
|Operating Activities:                              |                          
|Net income                                         |                          
|Adjustments to reconcile net income to net cash    |                          
|provided by operating activities:                  |                          
|Depreciation, depletion and amortization           |                          
|Deferred income taxes                              |                          
|Extraordinary loss, net of taxes                   |                          
|Other                                              |                          
|Changes in operating assets and liabilities,       |                          
|net of acquisitions:                               |                          
|Decrease (increase) in accounts receivable         |                          
|Increase in other current assets                   |                          
|Decrease in accounts payable                       |                          
|Amortization of deferred revenue                   |                          
|Increase (decrease)  in accrued expenses and other |                          
|                                                  
|Net Cash Provided by Operating Activities          |                          
|                                                  
|Investing Activities:                              |                          
|Oil and gas capital expenditures                   |                          
|Acquisition costs, net of cash acquired            |                          
|Other                                              |                          
|                                                  
|Net Cash Used in Investing Activities              |                          
|                                                  
|Financing Activities:                              |                          
|Proceeds from debt                                 |                          
|Principal payments on debt                         |                          
|Proceeds from issuance of common stock             |                          
|Dividends paid                                     |                          
|Premiums paid on debt buy back                     |                          
|Purchase of treasury stock                         |                          
|Other                                              |                          
|                                                  
|Net Cash Provided by Financing Activities          |                          
|                                                  
|Increase in Cash and Cash Equivalents              |                          
|Cash and Cash Equivalents at Beginning of Period   |                          
|                                                  
|Cash and Cash Equivalents at End of Period         |                          
|                                                  

See
accompanying Notes to Consolidated Financial Statements.

3

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Ocean
Energy, Inc.Consolidated Statements of Comprehensive Income(Amounts in Thousands)(Unaudited)

|                                       | Three Months | Six Months
|-------------------------------------- | ------------ | ----------
|
|                                      
|
|                                      
|Net income                             |              |           
|Other comprehensive income (loss),     |              |           
|net of tax:                            |              |           
|Cumulative effect of accounting change |              |           
|for derivative financial instruments   |              |           
|Net change in fair value of derivative |              |           
|financial instruments                  |              |           
|Financial derivative settlements       |              |           
|taken to income                        |              |           
|Other                                  |              |           
|                                      
|                                       |              |           
|                                      
|Comprehensive income                   |              |           
|                                      

See
accompanying Notes to Consolidated Financial Statements.

4

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Ocean
Energy, Inc.Notes to Consolidated Financial Statements(Unaudited)

Note 1.
Presentation of Financial Information

The consolidated
financial statements of Ocean Energy, Inc. (Ocean, OEI
or the Company), a Delaware corporation, included herein have been
prepared, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission (SEC). Although certain information normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States has been condensed or
omitted, management believes that the disclosures are adequate to make the
information presented not misleading. The financial statements reflect all
normal recurring adjustments that, in the opinion of management, are necessary
for a fair presentation.

The
accompanying consolidated financial statements of the Company 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, 2001.

Oil
and Gas Properties  The Company  uses the full cost  method to account for
its oil and gas  exploration and production activities.  Proved oil and gas properties
include costs accumulated on a countrybycountry  basis. Oil and gas  properties  excluded
from  amortization  include  costs in areas  where  exploration  activities  are occurring
where the existence of proved reserves has not yet been determined and major  development  project costs.  At
June 30, 2002 oil and gas  properties  excluded from  amortization  are located as follows:  Domestic  (U.S.) ($489
million),  Equatorial  Guinea ($75  million),  Egypt ($25 million),  Angola ($96 million),  Pakistan ($46 million),
Brazil ($34 million) and other international locations ($12 million).

The
Company capitalizes interest and certain employeerelated costs that are directly
attributable to capital expenditures for exploration and development activities. For the
three months ended June 30, 2002 and 2001, the Company capitalized interest in the amount
of $12 million and $10 million, respectively, and certain employeerelated costs in the
amount of $14 million and $15 million, respectively. For the six months ended June 30,
2002 and 2001, the Company capitalized interest in the amount of $25 million and $20
million, respectively, and certain employeerelated costs in the amount of $31 million
and $29 million, respectively.

Revenue
Recognition  The Company records revenues from the sales of crude oil
and natural gas when delivery to the customer has occurred and title has
transferred. This occurs when production has been delivered to a pipeline or a
tanker lifting has occurred. The Company may have an interest with other
producers in certain properties. The Company uses the entitlements method to
account for sales of production in these instances. The Company may receive more
or less than its entitled share of production. Under the entitlements method, if
the Company receives more than its entitled share of production, the imbalance
is treated as a liability. If the Company receives less than its entitled share,
the imbalance is recorded as an asset.

Earnings
Per Share  The following table provides a
reconciliation between basic and diluted earnings per share (stated in thousands
except per share data):

5

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Ocean
Energy, Inc.Notes to Consolidated Financial Statements(Unaudited)

|                                  | Net Income Available | Weighted Average | Earnings
|--------------------------------- | -------------------- | ---------------- | --------
|
|
|                                 
|Three Months Ended June 30, 2002: |                      |                  |         
|Basic                             |                      |                  | $       
|Effect of dilutive securities:    |                      |                 
|Stock options                     |                      |                  |         
|Convertible preferred stock       |                      |                  |         
|                                 
|Diluted                           |                      |                  | $       
|                                 
|Three Months Ended June 30, 2001: |                      |                  |         
|Basic                             |                      |                  | $       
|Effect of dilutive securities:    |                      |                 
|Stock options                     |                      |                  |         
|Convertible preferred stock       |                      |                  |         
|                                 
|Diluted                           |                      |                  | $       
|                                 
|Six Months Ended June 30, 2002:   |                      |                 
|Basic                             |                      |                  | $       
|Effect of dilutive securities:    |                      |                 
|Stock options                     |                      |                  |         
|Convertible preferred stock       |                      |                  |         
|                                 
|Diluted                           |                      |                  | $       
|                                 
|Six Months Ended June 30, 2001:   |                      |                 
|Basic                             |                      |                  | $       
|Effect of dilutive securities:    |                      |                 
|Stock options                     |                      |                  |         
|Convertible preferred stock       |                      |                  |         
|                                 
|Diluted                           |                      |                  | $       
|                                 

Options
to purchase 2.8 million shares of common stock at $21.50 to $36.54 per share and
3.7 million shares of common stock at $19.31 to $36.54 per share were
outstanding for the three months and six months ending June 30, 2002,
respectively, and weighted average options to purchase 4.7 million shares of
common stock at $18.37 to $36.54 per share were outstanding for both the three
months and six months ending June 30, 2001, respectively, but were not included
in the computation of diluted earnings per share because the options
exercise prices were greater than the average market price of the common shares.
These options expire at various dates through 2012.

The
Companys preferred stock is subject to automatic conversion to shares of
OEI common stock if, and only if, for 20 consecutive trading days the closing
price of OEI common stock equals or exceeds the automatic conversion price which
was $22.14 at June 30, 2002.

Treasury
Stock  The Company follows the average cost method of accounting for
treasury stock transactions.

6

---

Ocean
Energy, Inc.Notes to Consolidated Financial Statements(Unaudited)

Derivative
Instruments and Hedging Activities  From time to time, the Company has
utilized and expects to continue to utilize derivative financial instruments to
hedge cash flow from operations or to hedge the fair value of financial
instruments. The Company accounts for its derivative instruments and hedging
activities in accordance with Statement of Financial Accounting Standards
(SFAS) No. 133, Accounting for Derivative Instruments and Hedging
Activities, as amended. The Company adopted SFAS No. 133 as of January 1,
2001, with deferred hedging losses of $14 million, net of taxes, included in accumulated other comprehensive
income as the effect of the change in accounting principle.

The
Company uses derivative financial instruments with respect to a portion of its
oil and gas production to achieve a more predictable cash flow by reducing its
exposure to price fluctuations. These transactions generally are swaps, collars
or options, and are entered into with major financial institutions or
commodities trading institutions. Derivative financial instruments are intended
to reduce the Companys exposure to declines in the market prices of
natural gas and crude oil that the Company produces and sells, and to manage
cash flow in support of the Companys annual capital expenditure budget.

Derivative
instruments designated as cash flow hedges are reflected at fair value on the
Companys Consolidated Balance Sheets. Changes in fair value, to the extent
the hedge is effective, are recognized in other comprehensive income until the
hedged item is settled and is recognized in earnings. Hedge effectiveness is
measured at least quarterly. Any ineffective portion of the derivative
instruments change in fair value is recognized immediately in revenues.

The
Company may utilize derivative financial instruments that have not been
designated as hedges under SFAS No. 133 even though they protect the Company
from changes in commodity prices. These instruments are marked to market with
the resulting changes in fair value recorded in oil and gas revenues.

The
Company may also utilize derivative financial instruments such as interest rate
swap contracts. Interest rate swap contracts are reflected at fair value on the
Companys Consolidated Balance Sheets. If the transaction qualifies as a
fair value hedge, the related portion of fixedrate debt being hedged is
reflected at an amount equal to the sum of its carrying value plus an adjustment
representing the change in its fair value attributable to the interest rate risk
being hedged. The gains or losses on the derivative financial instrument and the
hedged item, as well as the settlements on the derivative financial instrument,
are recognized currently in interest expense. The net effect of this accounting
on the Companys operating results is that interest expense on the portion
of fixedrate debt being hedged is generally recorded based on variable interest
rates.

Accounting Pronouncements  In 2001 the Financial Accounting Standards Board (FASB) issued SFAS No.
143, Accounting for Asset Retirement Obligations.This statement requires
entities to record the fair value of a liability for an asset retirement
obligation in the period in which it is incurred and a corresponding increase in
the carrying amount of the related longlived asset. The Company will be
required to adopt SFAS No. 143 effective January 1, 2003, using

7

---

Ocean
Energy, Inc.Notes to Consolidated Financial Statements(Unaudited)

the cumulative
effect approach to recognize transition amounts for asset retirement
obligations, asset retirement costs and accumulated depreciation. The Company
currently records estimated costs of dismantlement, removal, site reclamation
and similar activities as part of its depreciation, depletion and amortization
for oil and gas properties without recording a separate liability for such
amounts. The Company has not yet completed its assessment of the impact of SFAS
No. 143 on its financial condition and results of operations. It expects that
adoption of the statement will result in increases in the capitalized costs of
its oil and gas properties and in the recognition of additional liabilities
related to asset retirement obligations.

During
second quarter 2002 the FASB issued SFAS No. 145, Rescission of FASB Statements No. 4,
44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections. This statement
rescinds SFAS No. 4, Reporting Gains and Losses from Extinguishment of Debt, and requires
that all gains and losses from extinguishment of debt should be classified as
extraordinary items only if they meet the criteria in APB No. 30. Applying APB No. 30
will distinguish transactions that are part of an entitys recurring operations from
those that are unusual or infrequent or that meet the criteria for classification as an
extraordinary item. Any gain or loss on extinguishment of debt that was classified as an
extraordinary item in prior periods presented that does not meet the criteria in APB No. 30 for classification as an
extraordinary item must be reclassified. The Company will adopt the provisions related to
the rescission of SFAS No. 4 as of January 1, 2003. With the adoption of SFAS No. 145, the
classification of losses associated with extinguishments of debt that were previously
recorded as extraordinary items will likely be reclassified.

Note 2.
Acquisition and Disposition of Assets

Acquisition of Texoil, Inc.  During March 2001, the Company acquired
Texoil, Inc. (Texoil) for a cash purchase price of approximately
$115 million before assumed bank debt of $15 million. Texoil was an independent
oil and gas company engaged in exploration, development and acquisition of oil
and gas reserves in Texas and Louisiana. No goodwill was recorded in connection
with the purchase of Texoil.

Acquisition
of Texas and Louisiana Assets  During April 2001, the Company acquired
certain oil and gas assets from Ensight Resources, L.L.C. for a purchase price
of approximately $118 million. The properties are located primarily in East
Texas and North Louisiana.

Note 3.
Supplemental Disclosures of Cash Flow Information

Supplemental
disclosures of cash flow information (stated in thousands) are as follows:

|                                 | Six Months Ended June 30,
|-------------------------------- | -------------------------
|                                
|
|                                
|Cash paid during the period for: |                          
|Interest                         |                          
|Income taxes                     |                          

8

---

Ocean
Energy, Inc.Notes to Consolidated Financial Statements(Unaudited)

Note 4.
Financial Instruments

The
Company has the following volumes under derivative contracts related to its oil
and gas producing activities:

|                           |  |  | Weighted        
|-------------------------- |  |  | ----------------
|
|                          
|Crude Oil:                 |  |  |                 
|July  December 2002       |  |  | Collar          
|January  December 2003    |  |  | 3way Collar (1)
|                           |  | 
|Natural Gas:               |  | 
|July  October 2002        |  |  | Collar          
|July  December 2002       |  |  | Collar          
|January  December 2003    |  |  | 3way Collar (1)
|                           |  | 
|Gas Swap of Related Trust: |  | 
|July  December 2002       |  |  | Swap            
|January  December 2003    |  |  | Swap            
|January  December 2004    |  |  | Swap            
|January  December 2005    |  |  | Swap            

(1)A 3way collar combines a sold call, a purchased put and a
sold put. The purchased put and sold put establish a floating minimum price
(floating floor) and the sold call establishes a maximum price
(ceiling price) the Company will receive for the volumes under
contract.

The
change in fair value of derivative financial instruments included in oil and gas revenues
comprises the following (amounts in thousands):

|                                                | Three Months | Six Months
|----------------------------------------------- | ------------ | ----------
|
|                                               
|
|                                               
|Financial derivative settlements transferred    |              |           
|from other comprehensive income                 |              |           
|Net change in fair market value of options      |              |           
|Ineffective portion of derivative               |              |           
|financial instruments                           |              |           
|                                               
|Increase (decrease) in revenues from derivative |              |           
|financial instruments qualifying as cash        |              |           
|flow hedges                                     |              |           
|Decrease in revenues from other oil and gas     |              |           
|derivative financial instruments                |              |           
|                                               
|Increase (decrease) in revenues from oil and    |              |           
|gas derivative financial instruments            |              |           
|                                               

9

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Ocean
Energy, Inc.Notes to Consolidated Financial Statements(Unaudited)

Approximately $4 million of net deferred losses included in accumulated
other comprehensive income at June 30, 2002 will be reversed during the next 12
months as the forecasted transactions actually occur. All forecasted
transactions currently being hedged are expected to occur by December 2005.

The
Company has also entered into interest rate swap agreements relating to its 7 5/8%
senior notes due July 2005 and its 7 7/8% senior notes due August 2003. Under the
terms of the agreements, the counterparties pay the Company a weighted average
fixed annual rate of 7.74% on total notional amounts of $225 million, and the
Company pays the counterparties a variable annual rate equal to the sixmonth
LIBOR rate on the respective settlement dates plus a weighted average rate of
2.73%. At June 30, 2002 the sixmonth LIBOR rate was 1.95%. The swap agreements
remain in effect through the maturity dates of the respective notes. The swap
agreements have been designated as fair value hedges pursuant to SFAS No. 133.
Interest expense for the sixmonth period ended June 30, 2002 was reduced by
approximately $3 million as a result of the interest rate swaps.

Note 5. Debt

During
second quarter 2002, the Company entered into a fouryear $1 billion Revolving
Credit Agreement (the credit facility) due May 2006. The credit
facility replaced the Companys previous $500 million facility which was
scheduled to mature in March 2004. The Companys obligations under the
credit facility are unsecured. The credit facility was used to repay existing
indebtedness under the previous facility, and additional borrowings
will be used for working capital and general corporate purposes as needed. The
credit facility bears interest, at the Companys option, at LIBOR or prime
rates plus applicable margins ranging from zero to 1.7% or at a competitive bid.
As of June 30, 2002, borrowings outstanding against the credit facility totaled
$150 million, and letters of credit totaled $31 million, leaving $819 million of available credit.

During
second quarter 2001, the Company repurchased on the open market approximately
$22 million of its 8 3/8% senior subordinated notes due July 2008 and $25 million
of its 8 7/8% senior subordinated notes due July 2007. In connection with the
repurchase, the Company recorded an aftertax extraordinary loss of approximately $2.6 million, or ($0.01) per diluted
share. The extraordinary loss was net of a current tax benefit of approximately $1.4
million. The repurchase of these notes was funded with available cash balances and
borrowings under the Companys then existing credit facility.

Note 6.
Lease Commitments

The
Company has been a party to a lease agreement in which the lessor agreed to
construct and lease to the Company an undivided 20% interest in a spar that would be used in the development
of the Boomvang field in the Gulf of Mexico. The Boomvang spar was completed and
installed in June 2002. In accordance with the terms of the constructionperiod
lease, the Company arranged for the sale of the lessors 20% interest in the
spar to a thirdparty purchaser.

10

---

Ocean
Energy, Inc.Notes to Consolidated Financial Statements(Unaudited)

The Company has entered into a 20year operating lease with the purchaser with future cash payments under the operating
lease totaling $2 million, $3 million, $4 million, $4 million and $4 million for
the years 2003, 2004, 2005, 2006 and 2007, respectively, and $75 million total
for all years thereafter. The operating lease contains various options whereby
the Company may purchase the lessors interest in the spar.

Note 7.
Subsequent Event

On
July 15, 2002, pursuant to call provisions, the Company repurchased all of the remaining outstanding balance,
approximately $175 million, of its 8 7/8% senior subordinated notes due July 2007.
In connection with the repurchase, the Company will record an aftertax
extraordinary loss of approximately $6.5 million during third quarter 2002. The extraordinary loss
is net of a current tax benefit of approximately $3.5 million. The repurchase of
these notes was funded with borrowings under the Companys existing credit
facility.

11

---

Ocean
Energy, Inc.

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

The
following discussion is intended to assist in understanding the Companys
financial position, results of operations and cash flows for each of the periods
indicated.

The
Companys accompanying unaudited consolidated financial statements and
notes thereto and the consolidated financial statements and notes thereto
included in the Annual Report on Form 10K for the year ended December 31, 2001
contain detailed information that should be referred to in conjunction with the
following discussion. The Companys Annual Report on Form 10K for the year ended December
31, 2001 also includes a discussion of the Companys critical accounting
policies and contractual obligations and other commercial commitments.

Results of
Operations

During
second quarter 2002 the Company has benefited from rising commodity prices and a
growing production base. Average realized prices, excluding the impact of
financial derivatives, have increased approximately 21% for crude oil and 33%
for natural gas from first quarter 2002. Average daily production for second
quarter 2002 was 152,000 BOE per day, a 6% increase from first quarter 2002. The
higher volumes were attributable to new deepwater production in the Gulf of
Mexico and continued success of the Zafiro field exploitation initiatives in
Equatorial Guinea.

On
a yearoveryear basis, however, commodity prices have not returned to the
levels experienced during the first six months of 2001. Lower commodity prices
during the first half of 2002, particularly for natural gas, have significantly impacted the Companys
results of operations.

Oil and Gas
Operations(Amounts in Thousands)

|                                         | Three Months Ended | Six Months Ended
|---------------------------------------- | ------------------ | ----------------
|
|                                        
|
|                                        
|Revenues:                                |                    |                 
|Oil and NGL                              |                    |                 
|Natural gas                              |                    |                 
|                                        
|                                         |                    |                 
|                                        
|Operating expenses                       |                    |                 
|Depreciation, depletion and amortization |                    |                 
|                                        
|Operating profit                         |                    |                 
|Corporate                                |                    |                 
|                                        
|Total operating profit                   |                    |                 
|                                        

Oil
Revenues  Revenues from sales of crude oil increased $10 million, or
6%, to $167 million for second quarter 2002 compared to $157 million for second
quarter 2001. The change in revenues included:

12

---

Ocean
Energy, Inc.

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

- A reduction in revenues of approximately $13 million due to the decline in crude
oil prices. The average realized price for oil, excluding the impact of
financial derivatives, decreased 7% to $22.09 for second quarter 2002 compared to
$23.76 for second quarter 2001.

- An increase in revenues of approximately $11 million due to increases in
production. For second quarter 2002, average daily oil production was 83 MBbl,
an increase of 6% from second quarter 2001. Higher production volumes were
attributable to the development of deepwater Gulf of Mexico properties and
continued exploitation of the Zafiro field in Equatorial Guinea.

- A positive net quarteroverquarter change of approximately $12 million relating
to the Companys use of derivative financial instruments to reduce its
exposure to declines in crude oil prices. The effect of derivative financial
instruments on oil revenues was a decrease of less than $1 million for second
quarter 2002 as compared to a decrease of $13 million for second quarter 2001.

For
the six months ended June 30, 2002, oil revenues increased $7 million, or 2%, to $295
million as compared to $288 million for the six months ended June 30, 2001. The change in
revenues included:

- A reduction in revenues of approximately $49 million due to the decline in crude
oil prices. The average realized price for oil, excluding the impact of
financial derivatives, decreased 14% to $20.28 for the first six months of 2002
compared to $23.64 for the same period in 2001.

- An increase in revenues of approximately $24 million due to increases in
production. Average daily oil production increased 7% to 80 MBbl for the first
six months of 2002 as compared to 75 MBbl for the same period in 2001. Higher
production volumes were attributable to the development of deepwater Gulf of
Mexico properties and continued exploitation of the Zafiro field in Equatorial
Guinea.

- A positive net yearoveryear change of approximately $32 million relating to
the Companys use of derivative financial instruments to reduce its
exposure to declines in crude oil prices. The effect of derivative financial
instruments on oil revenues was an increase of less than $1 million for the
first six months of 2002 as compared to a decrease of $32 million for the first
six months of 2001.

Gas
Revenues  Revenues from sales of natural gas decreased $78 million, or
39%, to $121 million for second quarter 2002 as compared to $199 million for
second quarter 2001. The change in revenues included:

13

---

Ocean
Energy, Inc.

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

- A reduction in revenues of approximately $50 million due to the decline in gas
prices. The average realized price for natural gas, excluding the impact of
financial derivatives, declined 29% to $3.20 per Mcf for second quarter 2002 as
compared to $4.53 for second quarter 2001.

- A decrease in revenues of approximately $25 million due to decreases in
production. Average daily production for second quarter 2002 totaled 412 MMcf, a
decrease of 13% from second quarter 2001 volumes of 472 MMcf. The production
decline was due primarily to the curtailment of drilling expenditures beginning
the second quarter of 2001 in response to high drilling costs in North America
and declining market prices of natural gas.

- A negative net quarter-over-quarter change of approximately $3 million relating
to the Companys use of derivative financial instruments to reduce its
exposure to declines in natural gas prices. The effect of derivative financial
instruments on natural gas revenues was an increase of $1 million for second
quarter 2002 as compared to an increase of $4 million for second quarter 2001.

Revenues from sales of natural gas decreased $258 million, or 55%, to $213
million for the six months ended June 30, 2002, from $471 million for the six
months ended June 30, 2001. The change in revenues included:

- A reduction in revenues of approximately $214 million due to the decline in gas
prices. The average realized price for natural gas, excluding the impact of
financial derivatives, decreased 51% to $2.81 per Mcf for the first six months of
2002 as compared to $5.75 for the first six months of 2001.

- A decrease in revenues of approximately $51 million due to an 11% decrease in
production. Average daily natural gas production for the first six months of
2002 was 403 MMcf as compared to 451 MMcf per day for the first six months of
2001. The production decline was due primarily to the curtailment of drilling
expenditures beginning second quarter 2001 in response to high drilling costs in
North America and declining market prices of natural gas.

- A positive net yearoveryear change of approximately $7 million relating to the
Companys use of derivative financial instruments to reduce its exposure to
declines in natural gas prices. The effect of derivative financial instruments
on natural gas revenues was an increase of $8 million for the first six months
of 2002 as compared to an increase of less than $1 million for the first six
months of 2001.

14

---

Ocean
Energy, Inc.

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

Operating Data

|                                                | Three Months EndedJune 30, | Six Months EndedJune 30,
|----------------------------------------------- | -------------------------- | ------------------------
|                                               
|
|                                               
|Net Daily Oil and NGL Production (Bbl):         |                            |                         
|Domestic                                        |                            |                         
|Equatorial Guinea                               |                            |                         
|Egypt                                           |                            |                         
|Other International                             |                            |                         
|                                               
|Total                                           |                            |                         
|                                               
|Average Oil and NGL Prices ($ per Bbl)*:        |                            |                         
|Domestic                                        |                            |                         
|Equatorial Guinea                               |                            |                         
|Egypt                                           |                            |                         
|Other International                             |                            |                         
|Weighted Average                                |                            |                         
|Average Oil and NGL Prices Including the Impact |                            |                         
|of Financial Derivatives ($ per Bbl)            |                            |                         
|                                                |                            |                         
|Net Daily Natural Gas Production (Mcf):         |                            |                         
|Domestic                                        |                            |                         
|International                                   |                            |                         
|                                               
|Total                                           |                            |                         
|                                               
|Average Natural Gas Prices ($ per Mcf)*:        |                            |                         
|Domestic                                        |                            |                         
|International                                   |                            |                         
|Weighted Average                                |                            |                         
|Average Natural Gas Prices Including the Impact |                            |                         
|of Financial Derivatives ($ per Mcf)            |                            |                         
|                                                |                            |                         
|Wells Drilled:                                  |                            |                         
|Gross                                           |                            |                         
|Net                                             |                            |                         
|Success Rate                                    |                            |                         

* All
price information excludes the impact of financial derivatives, unless otherwise
stated.

Average
daily production was 152,000 BOE per day for second quarter 2002 and 147,000 BOE
per day for the first six months of 2002. Production from the Boomvang field in
the Gulf of Mexico began in June 2002. At the nearby Nansen facility, the
Company completed two natural gas wells including a subsea tieback of its
initial Navajo discovery. With additional development of the Nansen and Boomvang
fields and continued exploitation in the Zafiro field in Equatorial Guinea, the
Company anticipates increasing production volumes throughout the year, net of
anticipated declines in areas where the Company has reduced its budgeted capital
expenditures, such as in the U.S. Onshore and Gulf of Mexico shelf properties.

15

---

Ocean
Energy, Inc.

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

Operating
Expenses  Total operating expenses increased $6 million, or 8%, to $85
million for second quarter 2002 as compared to $79 million for second quarter
2001. The increase was due to lease operating expenses associated with
increasing deepwater production, including lease expense related to the Nansen
spar, and increased workover expense, offset by a reduction in production taxes
which have declined as a result of commodity price declines. Operating expenses
per BOE increased 12% to $6.15 per BOE for second quarter 2002 compared to $5.50
per BOE for second quarter 2001 primarily due to the increase in lease operating
and workover expenses and to a 3% quarteroverquarter decline in production
volumes. A portion of lease operating expenses is fixed and should decline on a
per BOE basis as production increases.

Total
operating expenses increased $8 million, or 5%, to $161 million for the first
six months of 2002 compared to $153 million for the comparable 2001 period.
Operating expenses per BOE have increased 7% to $6.02 per BOE for the first six
months of 2002 compared to $5.63 per BOE for the comparable 2001 period. These
increases were also due to lease operating expenses associated with increasing
deepwater production and increased workover expense offset by a reduction in
production taxes.

Depreciation,
Depletion and Amortization Expense  Total depreciation, depletion and
amortization (DD&A) expense for oil and gas operations decreased 5%, or $5
million, to $87 million for second quarter 2002 as compared to $92 million for
second quarter 2001. DD&A expense decreased 2%, or $4 million, to $168
million for the first six months of 2002 as compared to $172 million for the same
period in 2001. These decreases were primarily due to a decline in production.

On
a BOE basis, DD&A expense decreased 2% to $6.27 per BOE for second quarter
2002 as compared to $6.42 per BOE for second quarter 2001. This decrease was due
primarily to mix of production. DD&A was $6.31 per BOE for the first six
months of 2002 as compared to $6.34 per BOE for the comparable period in 2001.

Corporate

Corporate
expenditures comprise general and administrative expenses and DD&A expense
for nonoil and gas assets.

General
and Administrative Expenses  General and administrative expenses
increased $1 million, or 13%, to $9 million for second quarter 2002 compared to
$8 million for second quarter 2001. General and administrative expenses
increased $4 million, or 27%, to $19 million for the six months ended June 30,
2002 from $15 million for the same period in 2001. The increases were due
primarily to increases in employeerelated costs, insurance and transportation
expenses.

DD&A
 DD&A expense for nonoil and gas assets was approximately $5
million and $4 million for the first six months of 2002 and 2001, respectively.

16

---

Ocean
Energy, Inc.

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

Other

Interest
Expense  Interest expense for second quarter 2002 decreased $2
million, or 12%, to $15 million from $17 million for second quarter 2001. This
decrease is primarily the result of a $2 million reduction due to interest rate
swaps and an increase in the amount of interest capitalized ($12 million for
second quarter 2002 as compared to $10 million for second quarter 2001) offset
by additional interest expense related to increased borrowing activity.

Interest
expense decreased $5 million, or 15%, to $29 million for the first six months of
2002 from $34 million in the comparable 2001 period. This decrease is primarily
the result of a $3 million reduction due to interest rate swaps and an increase
in the amount of interest capitalized ($25 million for the first six months of
2002 as compared to $20 million for the first six months of 2001) offset by
additional interest expense related to increased borrowing activity.

Income
Tax Expense  Income tax expense of $56 million was recognized for the
six months ended June 30, 2002 compared to income tax expense of $173 million
for the six months ended June 30, 2001. The effective income tax rates were
approximately 45% and 46% for the first six months of 2002 and 2001,
respectively.

Liquidity and
Capital Resources

Liquidity
 The Companys primary sources of liquidity are its cash on hand,
cash flow from operations and available borrowing capacity under its credit
facility. During second quarter 2002 the Company entered into a fouryear $1
billion Revolving Credit Agreement (the credit facility) due May
2006. The credit facility replaced the Companys previous $500 million
facility which was scheduled to mature in March 2004. The Companys
obligations under the credit facility are unsecured. The credit facility was
used to repay existing indebtedness under the previous facility and additional
borrowings will be used for working capital and general corporate purposes as
needed. The credit facility bears interest, at the Companys option, at
LIBOR or prime rates plus applicable margins ranging from zero to 1.7% or at a
competitive bid. As of June 30, 2002, borrowings outstanding against the credit
facility totaled $150 million, and letters of credit totaled $31 million, leaving $819 million of available credit. The
Companys longterm debt totaled $1.4 billion and its debt to total
capitalization ratio was 48% at June 30, 2002.

Debt
Repurchases  The Company from time to time takes advantage of
favorable market conditions and repurchases some of its higher interest rate
debt. On July 15, 2002, pursuant to call provisions, the Company repurchased
all of the remaining outstanding balance, approximately $175 million, of its 8 7/8% senior subordinated notes due July 2007.
In connection with the repurchase, the Company will record an aftertax
extraordinary loss of approximately $6.5 million during third quarter 2002. The extraordinary loss
is net of a current tax benefit of approximately $3.5 million. The repurchase of
these notes was funded with borrowings under the Companys credit facility.

17

---

Ocean
Energy, Inc.

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

During
second quarter 2001, the Company repurchased on the open market approximately
$22 million of its 8 3/8% senior subordinated notes due July 2008 and $25 million of its 8 7/8% senior
subordinated notes due July 2007. In connection with the repurchase,
the Company recorded an aftertax extraordinary loss of approximately $2.6
million, or ($0.01) per diluted share. The repurchase of these notes was funded
with available cash balances and borrowings under the Companys then existing credit facility.

Operating
Lease  The Company has been a party to a lease agreement in which the
lessor agreed to construct and lease to the Company an undivided 20% interest in
a spar that would be used in
the development of the Boomvang field in the Gulf of Mexico. The Boomvang spar
was completed and installed in June 2002. In accordance with the terms of the
constructionperiod lease, the Company arranged for the sale of the
lessors 20% interest in the spar to a thirdparty purchaser. The Company has
entered into a 20year operating lease with the purchaser with future cash
payments under the operating lease totaling $2 million, $3 million, $4 million,
$4 million and $4 million for the years 2003, 2004, 2005, 2006 and 2007,
respectively, and $75 million total for all years thereafter. The operating
lease contains various options whereby the Company may purchase the
lessors interest in the spar.

Prepaid
Commodity Transactions  In 1999 and 2000, the Company entered into two standard prepaid commodity
transactions, one for crude oil and one for natural gas. The prepaid crude oil sales
contract provides that the Company deliver approximately 5.6 MBbl per day of crude oil
for the period February 2000 through May 2003. In exchange for the crude oil to be
provided, the Company received an advance payment of approximately $100 million. The
prepaid natural gas sales contract is a marketsensitive contract which, as amended,
provides that the Company deliver 53,500 MMBtu per day of natural gas for 2003 and 55,600
MMBtu per day for 2004. In exchange for the natural gas to be provided, the Company
received an advance payment of approximately $75 million.

The
obligations associated with the future delivery of the crude oil and natural gas have
been recorded as deferred revenue in the Companys accompanying Consolidated Balance
Sheet, and the remaining unamortized balance was approximately $101 million as of June
30, 2002. The prepaid proceeds were shown as a component of cash flows from financing
activities in the Companys Consolidated Statements of Cash Flows in the years in which
they were received. The contracts are being amortized into revenue as scheduled
deliveries of natural gas and crude oil are made.

These
transactions are reflected in Note 11 to the Companys Consolidated Financial
Statements, as well as in Managements Discussion and Analysis, included in the Companys
Annual Report on Form 10K for the year ended December 31, 2001.

18

---

Ocean
Energy, Inc.

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

Capital
Expenditures(Amounts in Thousands)

|                           | Three Months Ended | Six Months Ended
|-------------------------- | ------------------ | ----------------
|
|                          
|
|                          
|Oil and Gas Operations:    |                    |                 
|Leasehold acquisitions     |                    |                 
|Exploration costs          |                    |                 
|Development costs          |                    |                 
|                          
|                           |                    |                 
|Other                      |                    |                 
|                          
|Total Capital Expenditures |                    |                 
|                          
|Acquisitions               |                    |                 
|                          

Acquisitions
for the first six months of 2001 totaled $303 million and included the purchase
of all outstanding shares of stock of Texoil, Inc., an independent oil and gas
company, for a cash purchase price of approximately $115 million plus assumed
bank debt of $15 million. The Company also purchased oil and gas assets located
primarily in East Texas and North Louisiana from Ensight Resources, L.L.C. for a
purchase price of approximately $118 million. In addition, the Company
recognized a deferred tax liability of approximately $50 million due to the
excess of book over tax basis of the oil and gas properties acquired in the
purchase of Texoil.

The
Company makes, and will continue to make, substantial capital expenditures for
the acquisition, exploration, development, production and abandonment of its
crude oil and natural gas reserves. The Company has historically funded its
expenditures through cash flows from operating activities, bank borrowings,
sales of equity and debt securities, sales of nonstrategic crude oil and
natural gas properties, sales of partial interests in exploration concessions
and project finance borrowings.

The
Companys capital expenditure budget for the year 2002 was approximately
$650 million. In July 2002 the Companys Board of Directors approved a $100 million
increase in the capital budget, increasing it to a total of $750 million for the
year 2002. The Company expects to fund its expenditures from cash flows from
operations based on anticipated commodity prices subject to change if market
conditions shift or new opportunities are identified. The revised 2002 capital
expenditure budget was developed using certain assumed price levels for the
sales of crude oil and natural gas. Changes in commodity prices could impact the
Companys cash flow from operations and funds available for reinvestment.
For example, shortfalls in estimated cash flows from operations could result in
the reduction of the Companys capital spending program, increases in
borrowing under the credit facility or divestments of properties. The Company
will continue to evaluate its level of capital spending for the remainder of the
year based upon drilling results, commodity prices and cash flows from
operations.

Dividends
 On June 25, 2002, the Companys Board of Directors announced a
quarterly common stock dividend of four cents per share payable on July 25,
2002. The amount of future dividends on OEI common stock will be determined on a
quarterly basis by the Companys

19

---

Ocean
Energy, Inc.

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

Board of Directors and will depend on earnings, financial condition, capital
requirements and other factors.

Accounting Pronouncements

In 2001 the Financial Accounting Standards Board (FASB) issued SFAS No.
143, Accounting for Asset Retirement Obligations.This statement requires
entities to record the fair value of a liability for an asset retirement
obligation in the period in which it is incurred and a corresponding increase in
the carrying amount of the related longlived asset. The Company will be
required to adopt SFAS No. 143 effective January 1, 2003, using the cumulative
effect approach to recognize transition amounts for asset retirement
obligations, asset retirement costs and accumulated depreciation. The Company
currently records estimated costs of dismantlement, removal, site reclamation
and similar activities as part of its depreciation, depletion and amortization
for oil and gas properties without recording a separate liability for such
amounts. The Company has not yet completed its assessment of the impact of SFAS
No. 143 on its financial condition and results of operations. It expects that
adoption of the statement will result in increases in the capitalized costs of
its oil and gas properties and in the recognition of additional liabilities
related to asset retirement obligations.

During
second quarter 2002 the FASB issued SFAS No. 145, Rescission of FASB Statements No. 4,
44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections. This statement
rescinds SFAS No. 4, Reporting Gains and Losses from Extinguishment of Debt, and requires
that all gains and losses from extinguishment of debt should be classified as
extraordinary items only if they meet the criteria in APB No. 30. Applying APB No. 30
will distinguish transactions that are part of an entity's recurring operations from
those that are unusual or infrequent or that meet the criteria for classification as an
extraordinary item. Any gain or loss on extinguishment of debt that was classified as an
extraordinary item in prior periods presented that does not meet the criteria in APB No. 30 for classification as an
extraordinary item must be reclassified. The Company will adopt the provisions related to
the rescission of SFAS No. 4 as of January 1, 2003. With the adoption of SFAS No. 145, the
classification of losses associated with extinguishments of debt that were previously
recorded as extraordinary items will likely be reclassified.

Environmental

Compliance
with applicable environmental and safety regulations by the Company has not
required any significant capital expenditures or materially affected its
business or earnings. The Company believes it is in substantial compliance with
environmental and safety regulations and foresees no material expenditures in
the future; however, the Company is unable to predict the impact that compliance
with future regulations may have on capital expenditures, earnings and
competitive position.

20

---

Ocean
Energy, Inc.

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

Defined Terms

Oil,
condensate and natural gas liquids (NGL) are stated in barrels
(Bbl) or thousand barrels (MBbl). Natural gas is stated
herein in billion cubic feet (Bcf), million cubic feet
(MMcf) or thousand cubic feet (Mcf). Oil, condensate and
NGL are converted to gas at a ratio of one barrel of liquids per six Mcf of gas.
MMBOE, MBOE and BOE represent one million barrels, one thousand barrels and one
barrel of oil equivalent, respectively, with six Mcf of gas converted to one
barrel of liquid. MMBtu represents one million British Thermal Units.

ForwardLooking
Statements May Prove Inaccurate

This
document 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, and information that is based on managements belief
and assumptions based on currently available information. All statements other
than statements of historical fact included in this document are forwardlooking
statements. When used in this document, words such as anticipate,
believe, estimate, expect,
forecast, intend, project and similar
expressions serve to identify forwardlooking statements. Although we believe
that the expectations reflected in our forwardlooking statements are
reasonable, we can give no assurance that these expectations will prove correct.
Our forwardlooking statements are subject to risks, uncertainties and
assumptions. Should one of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, our actual results may vary materially
from those expected. Among the key factors that may have a direct bearing on our
results of operations and financial condition are:

- competitive practices in the oil and gas industry;
- geological,  mechanical  and  economic  risk  inherent in the drilling and  operation of  exploratory  and
         development wells;
- risk of noncash  writedown of unproved  property  costs in countries  where proved  reserves have not yet
         been established;
- risk of noncash  writedown  of proved  property  costs due to declines in prices,  downward  revisions in
         reserves or significant increases in finding and development costs;
- volatility of energy commodity prices,  generally,  and fluctuations in the commodity prices for crude oil
         and natural gas that have not been properly hedged;
- general economic and capital markets conditions, including fluctuations in interest rates;
- the  impact  of  current  and  future  laws  and  governmental  regulations,   particularly  environmental
         regulations, affecting the energy industry in general, and our oil and gas operations, in particular;
- environmental liabilities that are not covered by insurance or indemnity;
- the  political  and  economic  climate  in the  foreign  jurisdictions  in  which we  conduct  oil and gas
         operations, including potential adverse results of military or terrorist actions in those areas; and
- the effect on our results of operations  and financial  condition  associated  with  implementing  various
         accounting rules and regulations.

21

---

# Ocean
Energy, Inc.

Item 3.
Quantitative and Qualitative Disclosures About Market Risks

The
Company experiences market risk primarily in the area of commodity prices. To
mitigate a portion of its exposure to fluctuations in commodity prices, the
Company has entered into various oil and gas derivative financial instruments
for its oil and gas production. (See Notes 1 and 4 to the Companys
Consolidated Financial Statements for a discussion of activities involving
derivative financial instruments during 2002.) To calculate the potential effect
of the derivatives contracts on future revenues, the Company applied the average
NYMEX oil and gas strip prices as of June 30, 2002 to the quantity of the
Companys oil and gas production covered by those derivative contracts as
of that date. The following table shows the estimated potential effects of the
derivative financial instruments on future revenues (in millions):

|                          | Estimated | Estimated Increase In | Estimated Decrease In
|------------------------- | --------- | --------------------- | ---------------------
|
|
|                         
|Oil collars               |           |                       | $                    
|Gas collars               |           |                       | $                    
|Gas swap of related trust |           |                       | $                    

# Part II.
Other Information

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

At
the Annual Meeting of Stockholders of the Company held on May 14, 2002, the
stockholders elected certain directors to serve until the 2005 Annual Meeting of
Stockholders, and ratified the appointment of KPMG LLP as independent auditors
of the Company for the fiscal year ended December 31, 2002.

Votes
cast were as follows:

|                                          | For | Against | Abstained
|----------------------------------------- | --- | ------- | ---------
|                                         
|Election as a Director of the Company of: |     |         |          
|Thomas D. Clark, Jr.                      |     |         |          
|Peter J. Fluor                            |     |         |          
|Robert L. Howard                          |     |         |          
|Charles F. Mitchell, M. D.                |     |         |          
|Ratify Appointment of KPMG LLP as         |     |        
|Independent Auditors for 2002             |     |         |          

22

---

# Ocean
Energy, Inc.

Item 6.
Exhibits and Reports on Form 8K

(a) Exhibits:

|4.1 |  | Revolving
Credit Agreement dated as of May 31, 2002, by and among Ocean Energy, Inc., a Delaware
corporation, as borrower, JPMorgan Chase Bank, as a lender, administrative agent, and
auction administrative agent, Bank One, NA and Fleet National Bank, as lenders and
syndication agents, BNP Paribas and Wells Fargo Bank Texas, N.A., as lenders and
documentation agents, Bank of America, N.A., Bank of Montreal, The Bank of Nova Scotia,
and Deutsche Bank AG New York Branch, as lenders and managing agents, and the other
lenders signatory thereto (as incorporated by reference to Exhibit 99.1 to the Companys
Current Report on Form 8K, as filed with the SEC on June 3, 2002).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.2 |  | Guaranty
Agreement dated as of May 31, 2002 by and among Ocean Energy, Inc., a Louisiana
corporation, as guarantor, JPMorgan Chase Bank, as administrative agent and auction
administrative agent, Bank One, N.A. and Fleet National Bank, as syndication agents, BNP
Paribas and Wells Fargo Bank Texas, N.A., as documentation agents, and Bank of America,
N.A., Bank of Montreal, The Bank of Nova Scotia and Deutsche Bank AG New York Branch, as
managing agents (as incorporated by reference to Exhibit 99.2 to the Companys Current
Report on Form 8K, as filed with the SEC on June 3, 2002.)
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*#10.1 |  | Ocean
Energy, Inc. Directors Compensation Plan (as amended and restated effective July 1, 2002,)
filed herewith.
|------ |  | ----------------------------------------------------------------------------------------------------------------

|*#10.2 |  | First Amendment to Ocean
Energy, Inc. Executive Supplemental Retirement Plan effective July 18, 2002, filed herewith.
|------ |  | ---------------------------------------------------------------------------------------------------------------------

*  Filed
herewith.

#  Identifies
management contracts and compensatory plans or arrangements.

(b) Reports on
Form 8K:

On
June 3, 2002, the Company filed a Current Report on Form 8K dated May 31, 2002
concerning the Companys replacement of its existing $500 million facility
scheduled to mature in March 2004 with a new fouryear $1 billion Revolving
Credit Agreement. The items reported in such Current Report were Item 5 (Other
Events) and Item 7 (Financial Statements and Exhibits).

23

---

# Ocean
Energy, Inc.

# 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.

| | Ocean Energy, Inc.
| | ------------------

| | By:  
/s/ William L. Transier       William L. Transier 
       Executive Vice President and       Chief Financial Officer
       (Principal Financial Officer)
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Date: July 30, 2002
| | -------------------

| | By:  
/s/ Robert L. Thompson       Robert L. Thompson 
       Vice President and Controller
       (Principal Accounting Officer)
| | ---------------------------------------------------------------------------------------------------------------------------------

| | Date: July 30, 2002
| | -------------------

24

---

# Ocean
Energy, Inc.

INDEX TO
EXHIBITS

(a) Exhibits:

|4.1 |  | Revolving
Credit Agreement dated as of May 31, 2002, by and among Ocean Energy, Inc., a Delaware
corporation, as borrower, JPMorgan Chase Bank, as a lender, administrative agent, and
auction administrative agent, Bank One, NA and Fleet National Bank, as lenders and
syndication agents, BNP Paribas and Wells Fargo Bank Texas, N.A., as lenders and
documentation agents, Bank of America, N.A., Bank of Montreal, The Bank of Nova Scotia,
and Deutsche Bank AG New York Branch, as lenders and managing agents, and the other
lenders signatory thereto (as incorporated by reference to Exhibit 99.1 to the Companys
Current Report on Form 8K, as filed with the SEC on June 3, 2002).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.2 |  | Guaranty
Agreement dated as of May 31, 2002 by and among Ocean Energy, Inc., a Louisiana
corporation, as guarantor, JPMorgan Chase Bank, as administrative agent and auction
administrative agent, Bank One, N.A. and Fleet National Bank, as syndication agents, BNP
Paribas and Wells Fargo Bank Texas, N.A., as documentation agents, and Bank of America,
N.A., Bank of Montreal, The Bank of Nova Scotia and Deutsche Bank AG New York Branch, as
managing agents (as incorporated by reference to Exhibit 99.2 to the Companys Current
Report on Form 8K, as filed with the SEC on June 3, 2002.)
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*#10.1 |  | Ocean
Energy, Inc. Directors Compensation Plan (as amended and restated effective July 1, 2002,)
filed herewith.
|------ |  | ----------------------------------------------------------------------------------------------------------------

|*#10.2 |  | First Amendment to Ocean
Energy, Inc. Executive Supplemental Retirement Plan effective July 18, 2002, filed herewith.
|------ |  | ---------------------------------------------------------------------------------------------------------------------

*  Filed
herewith.

#  Identifies
management contracts and compensatory plans or arrangements.

25

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