================================================================================

                       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 March 31, 1999

                                       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)

                           Texas                                 74-1764876
              (State or other jurisdiction of                 (I.R.S. Employer

               incorporation or organization)                Identification No.)

               1001 Fannin,  Suite 1600,  Houston,  Texas       77002-6714
              (Address of principal executive offices)          (Zip code)

                                   (713) 265-6000

              (Registrant's telephone number, including area code)

               1001 Fannin, Suite 1700, Houston,  Texas 77002-6714
(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 May 14,  1999,  165,913,600  shares of Common  Stock,  par value $0.10 per
share, were outstanding.

================================================================================


<PAGE>

                               OCEAN ENERGY, INC.

                                      INDEX

<TABLE>

<S>                                                                                                 <C>    

                                                                                                       Page
                                                                                                      Number

Part I.  Financial Information

    Item 1.   Unaudited Consolidated Financial Statements

                  Consolidated Statements of Operations for the Three Months

                  Ended March 31, 1999 and 1998......................................................    1

                  Consolidated Balance Sheets - March 31, 1999

                  and December 31, 1998..............................................................    2

                  Consolidated Statements of Cash Flows for the Three Months

                  Ended March 31, 1999 and 1998......................................................    3

                  Consolidated Statements of Comprehensive Income

                  for the Three Months Ended March 31, 1999 and 1998 ................................    4

                  Notes to Consolidated Financial Statements.........................................    5

    Item 2.   Management's Discussion and Analysis of Financial

              Condition and Results of Operations....................................................   15

    Item 3.   Quantitative and Qualitative Disclosures about Market Risks............................   26

Part II.  Other Information..........................................................................   27

Signatures...........................................................................................   32
</TABLE>

    On March 30, 1999, Ocean Energy, Inc., a Delaware  corporation,  merged with
and into Seagull  Energy  Corporation,  a Texas  corporation,  and the resulting
company was renamed  Ocean  Energy,  Inc. The merger was treated for  accounting
purposes  as  an  acquisition  of  Seagull  by  Ocean  in  a  purchase  business
transaction.  As such, the financial  results presented here are primarily those
of Ocean  Energy,  Inc.  on a  stand-alone  basis for the first  quarter of 1999
compared to Ocean's results in the first quarter of 1998 on a stand-alone basis.
However,  unless the  context  otherwise  requires,  the  information  set forth
outside of Part I relates to the surviving Texas corporation,  formerly known as
Seagull Energy Corporation.

                                      (i)

<PAGE>

ITEM. 1  UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                               OCEAN ENERGY, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                  (Amounts in Thousands, Except Per Share Data)
                                   (Unaudited)

<TABLE>

<S>                                                                           <C>                  <C>    

                                                                                   Three Months Ended March 31,

                                                                              ---------------------------------------
                                                                                    1999                 1998
                                                                              -----------------    ------------------

Revenues..................................................................         $  105,694          $  141,056

Costs of Operations:

   Operations and maintenance.............................................             45,160              42,652
   Depreciation, depletion and amortization...............................             58,608              72,771
   Provision loss on sale of Canadian assets..............................             28,500                   -
   General and administrative.............................................              4,576               4,296
                                                                              -----------------    ------------------
                                                                                      136,844             119,719
                                                                              -----------------    ------------------

Operating Profit (Loss)...................................................            (31,150)             21,337

Other (Income) Expense:

   Merger expense.........................................................             40,652              39,000
   Interest expense.......................................................             25,170              12,504
   Interest income and other..............................................               (483)               (486)
                                                                              -----------------    ------------------
                                                                                       65,339              51,018
                                                                              -----------------    ------------------

Loss Before Income Taxes..................................................            (96,489)            (29,681)

Income Tax Benefit........................................................            (15,438)             (1,548)
                                                                              -----------------    ------------------

Net Loss..................................................................            (81,051)            (28,133)
Preferred Stock Dividend..................................................                801                   -
                                                                              -----------------    ------------------

Net Loss Available to Common Shareholders.................................         $  (81,852)         $  (28,133)
                                                                              =================    ==================


Loss Per Share:

   Basic and Diluted......................................................         $   (0.79)          $   (0.28)
                                                                              =================    ==================

Weighted Average Number of Common Shares Outstanding:

   Basic and Diluted......................................................            103,192             100,091
                                                                              =================    ==================
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.

                                       1

<PAGE>

                               OCEAN ENERGY, INC.
                           CONSOLIDATED BALANCE SHEETS

                    (Amounts in Thousands, Except Share Data)

<TABLE>

<S>                                                                          <C>                  <C>    

                                                                                 March 31,          December 31,
                                                                                   1999                 1998

                                                                             ------------------   ------------------
                                                                                (Unaudited)

                                     ASSETS

Current Assets:

   Cash and cash equivalents............................................       $      32,790        $      10,706
   Accounts receivable, net.............................................             183,803              111,829
   Inventories..........................................................              28,943               16,802
   Prepaid expenses and other...........................................              20,061               14,444
                                                                             ------------------   ------------------
     Total Current Assets...............................................             265,597              153,781

Property, Plant and Equipment, at cost, full cost method for oil and gas:

   Evaluated oil and gas properties.....................................           3,699,580            2,759,686
   Unevaluated oil and gas properties excluded from amortization........             546,473              488,689
   Other................................................................             342,208               44,960
                                                                             ------------------   ------------------
                                                                                   4,588,261            3,293,335
Accumulated Depreciation, Depletion and Amortization....................           1,798,478            1,711,696
                                                                             ------------------   ------------------
                                                                                   2,789,783            1,581,639

Deferred Income Taxes...................................................             204,295              217,824
Other Assets............................................................              79,355               53,716
                                                                             ------------------   ------------------

Total Assets............................................................       $   3,339,030        $   2,006,960
                                                                             ==================   ==================

                      LIABILITIES AND SHAREHOLDERS' EQUITy

Current Liabilities:

   Accounts and notes payable...........................................       $     291,894        $     184,828
   Accrued interest payable.............................................              33,396               36,206
   Accrued liabilities..................................................              96,398               15,312
   Current maturities of long-term debt.................................                 836                  836
                                                                             ------------------   ------------------
     Total Current Liabilities..........................................             422,524              237,182

Long-Term Debt..........................................................           1,944,524            1,371,890
Other Noncurrent Liabilities............................................              73,878               20,945
Commitments and Contingencies...........................................

Shareholders' Equity:

   Preferred stock, $1.00 par value; authorized 50,000,000 shares; issued                                           
     50,000 shares......................................................                   1                    1
   Common stock, $.10 par value; authorized 450,000,000 shares;                                                     
     issued 166,385,878 and 101,753,646 shares, respectively............              16,639                1,018
   Additional paid-in capital...........................................           1,481,725              892,339
   Accumulated deficit..................................................            (581,966)            (500,114)
   Accumulated other comprehensive loss.................................              (9,741)             (10,720)
   Less - note receivable from employee stock ownership plan............              (2,178)                   -
   Less - notes receivable from employees relating to stock purchases...              (2,083)                   -
   Less - treasury stock, at cost; 472,278 shares.......................              (4,293)                   -
   Less - deferred compensation.........................................                   -               (5,581)
                                                                             ------------------   ------------------
     Total Shareholders' Equity.........................................             898,104              376,943
                                                                             ------------------   ------------------

Total Liabilities and Shareholders' Equity..............................       $   3,339,030        $   2,006,960
                                                                             ==================   ==================
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.

                                       2

<PAGE>

                               OCEAN ENERGY, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                            (Amounts in Thousands)
                                   (Unaudited)

<TABLE>

<S>                                                                           <C>                  <C>    

                                                                                   Three Months Ended March 31,

                                                                              ---------------------------------------
                                                                                    1999                 1998
                                                                              -----------------    ------------------
 Operating Activities:

   Net loss...............................................................         $  (81,051)         $  (28,133)
   Adjustments to reconcile net loss to net cash
     provided by operating activities:

     Depreciation, depletion and amortization.............................             58,608              72,771
     Provision for loss on sale of Canadian assets........................             28,500                   -
     Merger expenses not paid.............................................             40,652                   -
     Deferred income taxes................................................            (17,361)             (3,491)
     Other................................................................              3,309               5,446
                                                                              -----------------    ------------------
                                                                                       32,657              46,593
     Changes in operating assets and liabilities, net of acquisitions:

       Decrease in accounts receivable....................................              8,642               2,429
       Decrease in inventories, prepaid expenses and other................             20,818                   -
       Increase (decrease) in accounts and notes payable..................            (23,581)             41,167
       Increase in accrued expenses and other.............................             37,234               1,041
                                                                              -----------------    ------------------
     Net Cash Provided By Operating Activities............................             75,770              91,230
                                                                              -----------------    ------------------

 Investing Activities:

   Capital expenditures...................................................            (51,726)           (204,754)
   Acquisition costs, net of cash acquired................................             (1,841)                  -
   Proceeds from sales of property, plant and equipment...................             39,564               1,327
                                                                              -----------------    ------------------
     Net Cash Used In Investing Activities................................            (14,003)           (203,427)
                                                                              -----------------    ------------------

 Financing Activities:

   Proceeds from debt.....................................................            542,461             439,892
   Principal payments on debt ............................................           (574,983)           (326,480)
   Proceeds from sales of common stock....................................                  -               2,028
   Deferred debt issue costs..............................................             (6,370)                  -
   Other..................................................................               (791)             (1,532)
                                                                              -----------------    ------------------   

     Net Cash Provided By (Used In) Financing Activities..................            (39,683)            113,908
                                                                              -----------------    ------------------

 Increase In Cash And Cash Equivalents....................................             22,084               1,711

 Cash And Cash Equivalents At Beginning Of Period.........................             10,706              11,689
                                                                              -----------------    ------------------

 Cash And Cash Equivalents At End Of Period...............................         $   32,790          $   13,400
                                                                              =================    ==================
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.

                                       3

<PAGE>

                               OCEAN ENERGY, INC.
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                             (Amounts in Thousands)
                                   (Unaudited)

<TABLE>

<S>                                                                       <C>                  <C>    

                                                                               Three Months Ended March 31,

                                                                          ---------------------------------------
                                                                                1999                 1998
                                                                          -----------------    ------------------

Net loss...............................................................        $  (81,051)         $  (28,133)

Other comprehensive income, net of tax:

   Foreign currency translation adjustment.............................               979                 524
                                                                          -----------------    ------------------

Comprehensive loss.....................................................        $  (80,072)         $  (27,609)
                                                                          =================    ==================
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.

                                       4

<PAGE>

                               OCEAN ENERGY, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)

Note 1.       Presentation of Financial Information

     The consolidated  financial statements of Ocean Energy, Inc. ("OEI" or "the
Company"),  a Texas  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 generally accepted accounting  principles
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.

     Effective March 30, 1999, pursuant to the Agreement and Plan of Merger (the
"Merger") dated November 24, 1998, as amended,  Ocean Energy, Inc. ("Old Ocean")
was merged with and into Seagull Energy Corporation ("Seagull").  Seagull is an
international   oil  and  gas  company  engaged  primarily  in  exploration  and
development activities in the United States, Egypt, Cote d'Ivoire, Indonesia and
the Russian Republic of Tatarstan.  Seagull's other operating segment,  referred
to as ENSTAR Alaska,  operates natural gas transmission and distribution systems
which serve the greater Anchorage area. In conjunction with the Merger,  Seagull
amended its Articles of Incorporation  to change its name to Ocean Energy,  Inc.
As a result of this Merger, each outstanding share of Old Ocean common stock was
exchanged for one share of Seagull  common stock,  and as of March 30, 1999, the
stockholders of Old Ocean owned  approximately  61.5% of the outstanding  common
stock of the Company,  with the  shareholders  of Seagull  owning the  remaining
38.5%. Certain reclassifications have been made to the historical results of the
Company to conform the presentation used by the companies.

     Effective  March 27,  1998,  pursuant to the  Agreement  and Plan of Merger
dated December 22, 1997, as amended,  United  Meridian  Corporation  ("UMC") was
merged into Old Ocean (the "UMC  Merger").  As a result of the UMC Merger,  each
outstanding share of UMC common stock was converted into 1.3 shares of Old Ocean
common stock with  approximately 46 million shares issued to the shareholders of
UMC, representing  approximately 46% of all of the issued and outstanding shares
of Old Ocean. Old Ocean's shareholders  received 2.34 shares of Old Ocean shares
for each share outstanding  immediately  preceding the UMC Merger,  representing
approximately  54% of all of the then  issued and  outstanding  shares.  The UMC
Merger  was  accounted  for  as  a  pooling  of  interests.   Accordingly,   the
consolidated  financial  statements  for  periods  prior to the UMC Merger  were
restated to conform  accounting  policies and combine the historical  results of
Old  Ocean and UMC.  Merger  costs of $39  million  relating  to the UMC  Merger
consisted  primarily of investment banking and other transaction fees,  employee
severance and  relocation  costs as well as the write-off of deferred  financing
costs.

     The accompanying consolidated financial statements of the Company should be
read in conjunction with the consolidated financial statements and notes thereto
of Old Ocean and Seagull for the year ended December 31, 1998.

     Property,  Plant and Equipment - The Company  capitalizes  interest expense
and certain-employee related costs that are directly attributable to oil and gas
operations.  For the three
                                       5

<PAGE>

                               OCEAN ENERGY, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)

months ended March 31, 1999 and 1998, the Company  capitalized  interest expense
in  the  amount  of  $7  million  and  $5  million,  respectively,  and  certain
employee-related costs in the amount of $5 million and $5 million, respectively.

     Earnings Per Share - Options to purchase a weighted  average of  12,737,000
and 9,601,000  shares of common stock at prices ranging from $2.11 to $36.54 per
share were outstanding during 1999 and 1998, respectively, but were not included
in the  computation of diluted loss per share because such options would have an
antidilutive  effect on the computation of diluted loss per share. These options
expire at various dates from 1999 to 2009.

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

     Regulation  - The  Company  operates  in Alaska  through a division  of the
Company  and a  wholly-owned  subsidiary  (collectively  referred  to  herein as
"ENSTAR  Alaska").  ENSTAR  Alaska is subject to regulation by the Alaska Public
Utilities  Commission,  which has jurisdiction over, among other things,  rates,
accounting  procedures and standards of service.  The Company follows  Financial
Accounting  Standards Board ("FASB") Statement of Financial Accounting Standards
("SFAS") No. 71 for ENSTAR Alaska; however, the provisions of SFAS No. 71 do not
materially impact the Company's operating results.

     Accounting  Pronouncements  - In June 1998,  the FASB  issued SFAS No. 133,
Accounting for Derivative  Instruments  and Hedging  Activities.  This statement
establishes   standards  of  accounting   for  and   disclosures  of  derivative
instruments and hedging activities. This statement is effective for fiscal years
beginning  after June 15, 1999. The Company has not yet determined the impact of
this statement on the Company's financial condition or results of operations.

Note 2.       Acquisition and Disposition of Assets

     Merger - On March 30,  1999,  the  shareholders  approved  the Merger.  The
Merger has been accounted for as a purchase under generally accepted  accounting
principles.  Because Old Ocean  stockholders  own a majority of the  outstanding
shares of common stock of the merged  company,  the accounting  treatment of the
Merger reflects Old Ocean acquiring Seagull in a "reverse  purchase." Under this
method of accounting,  the merged company's historical results for periods prior
to the Merger are the same as Old Ocean's historical results. At the date of the
Merger,  assets  and  liabilities  of Old Ocean were  recorded  based upon their
historical  costs,  and the assets and  liabilities  of Seagull were recorded at
their estimated fair market values.

                                       6

<PAGE>

                               OCEAN ENERGY, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)

      The following is a calculation of purchase price:
<TABLE>

<S>                                                                                   <C>    

     Calculation of purchase price (in thousands, except per share data):

       Shares of common stock  issued..............................................               64,630
       Average of OEI stock price three days before and after the                                           
          merger announcement......................................................     $           9.09
                                                                                      ----------------------
       Fair value of stock issued..................................................     $        587,484
       Add: Merger costs...........................................................               64,054
                                                                                      ----------------------
       Purchase Price..............................................................     $        651,538
                                                                                      ======================
</TABLE>

     Capitalized merger costs consisted  primarily of severance costs of Seagull
($22 million),  value of Seagull stock options  maintained by OEI ($17 million),
investment   banking  fees  ($10  million),   and  other  transaction  fees  and
professional expenses ($15 million). In addition, merger expenses of $41 million
were  expensed  in the first  quarter  of 1999 and  consisted  primarily  of Old
Ocean's  severance costs ($21 million),  the write-off of certain costs relating
to Old Ocean's  information  technology  system ($14  million) and  compensation
expense related to the vesting of Old Ocean's restricted stock ($6 million).

     The  allocation of purchase  price to specific  assets and  liabilities  is
based on certain  estimates  of fair  values and costs which will be adjusted to
actual amounts as determined. Such adjustments are not expected to be material.

     The following  table presents the unaudited pro forma results (in thousands
except per share  data) of the  Company as though  the  Merger had  occurred  on
January 1, 1998:

                         Unaudited Pro Forma Information

<TABLE>

<S>                                                                     <C>                       <C>    

                                                                               Three Months Ended March 31,

                                                                        --------------------------------------------
                                                                                 1999                   1998
                                                                        -----------------------   ------------------
Revenues .........................................................       $      201,460             $     260,413
Net loss available to common shareholders.........................       $      (46,952)            $     (19,797)
Basic and diluted loss per share .................................       $        (0.28)            $       (0.12)
</TABLE>

The above pro forma amounts have been determined as follows:

     The income statements for 1999 and 1998 are a result of combining the three
month income  statement  of Old Ocean with the three month  income  statement of
Seagull  adjusted  for 1) certain  costs that  Seagull  had  expensed  under the
successful efforts method of accounting that are capitalized under the full cost
method of accounting;  2) depreciation,  depletion and  amortization  expense of
Seagull calculated in accordance with the full cost method of accounting applied
to the adjusted  basis of the properties  acquired using the purchase  method of
accounting;  3) decreased  interest  expense  resulting from the  revaluation of
Seagull debt under the purchase method of accounting,  including the elimination
of amortization of historical debt issuance costs; and 4) the related income tax
effects of these  adjustments  based on the  applicable  statutory  tax rate. It
should be noted that the pro forma net loss for the three months ended March 31,
1999 and 1998, does not include  impairments of oil and gas properties that were
recorded by the

                                       7

<PAGE>

                               OCEAN ENERGY, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)

companies  in the  second  and  fourth  quarters  of 1998 and  does not  include
expensed merger costs relating to the Merger.

     Disposition  of Oil and  Gas  Assets  -  During  March  1999,  the  Company
completed sales of its interests in certain non-core U.S. onshore assets located
primarily in the  MidContinent,  Permian  Basin and Rocky  Mountain  regions and
realized  proceeds of $40 million from the sale.  The proceeds  were used to pay
down amounts outstanding under the Company's existing credit facilities.

     On April 15, 1999, the Company completed a sale of its Canadian oil and gas
assets,  realizing net proceeds of $63 million which were used to repay existing
long-term  debt.  A loss of $28.5  million on the sale was provided for at March
31, 1999. The Canadian  assets  disposed of contributed  revenue of $6.2 million
and  $4.3  million  for  the  three  months  ended  March  31,  1999  and  1998,
respectively,  and had  operating  profit  (loss)  of  $1.7  million,  prior  to
recording the provision for loss on the sale, and $(0.7) million,  respectively.
After  recording the provision for loss on the sale,  the Canadian  assets had a
net book value of approximately $40.7 million at March 31, 1999.

Note 3.       Supplemental Disclosures of Cash Flow Information

<TABLE>

<S>                                                                <C>                         <C>    

                                                                     Three Months Ended March 31,

                                                                   -------------------------------
                                                                       1999               1998
                                                                   ------------       ------------
                                                                       (amounts in thousands)

Cash paid during the period for:

  Interest..................................................        $  36,254           $ 11,423
  Income taxes..............................................        $   1,131           $    663
</TABLE>

     As  discussed in Note 2, the Merger was  completed  through the issuance of
common stock. Therefore,  the Merger increased property,  plant and equipment by
$1.3 billion,  working capital by $686 million,  debt by $563 million and equity
by $595 million  through a non-cash  transaction  that was not  reflected in the
statement of cash flows. However, $1.8 million of acquisition costs reflected in
"investing  activities"  in the  statement  of cash  flows  represents  the cash
expenses  paid in  connection  with the Merger,  less the cash of Seagull on the
date of the Merger.

Note 4.       Financial Instruments

         The  Company  hedges  certain of its  production  through  master  swap
agreements ("Swap  Agreements") which provide for separate contracts tied to the
NYMEX light sweet crude oil and natural gas futures contracts.  In addition, the
Company  occasionally  engages in combined contracts that have agreed-upon price
floors and ceilings ("Collars"). Natural gas Collars outstanding at December 31,
1998 were  cancelled in January 1999,  resulting in net proceeds of $6.9 million
which will be recognized in income as the hedged volumes are produced. Oil and
gas  revenues  have been  increased  by $2 million  and $5 million for the three
months  ended  March  31,  1999  and  1998,  respectively,  as a  result  of the
derivative contracts.
                                       8

<PAGE>

                               OCEAN ENERGY, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)



     Currently,  the Company  has  entered  into  various  derivative  financial
instruments  for gas and oil  production  throughout  the  remainder of 1999. In
connection  with these  transactions,  the  Company  recorded a decrease  in oil
revenues  of $7  million  during  the  first  quarter  of 1999.  The  derivative
financial  instruments  for gas and oil  production  discussed in the  preceding
sentence  were  cancelled in April 1999 and replaced  with  Collars.  At May 14,
1999,  Collars are in place for portions of the Company's oil production for the
remainder  of 1999 at floors of $12.00 and $15.00  per  barrel and  ceilings  of
$15.00,  $18.85 and $19.00 per  barrel.  In  addition,  Collars are in place for
portions of the  Company's  gas  production  through  October 1999 at a floor of
$2.15 per MMBtu and a ceiling of $2.45 per  MMBtu.  While  derivative  financial
instruments  are  intended to reduce the  Company's  exposure to declines in the
market  price  of  natural  gas  and  crude  oil,  these  derivative   financial
instruments   will   significantly    limit   the   Company's   loss/gain   from
decrease\increases  in the market price of natural gas and crude oil below/above
the  floors/ceilings  noted above.  As a result,  gains and losses on derivative
financial  instruments  are generally  offset by similar changes in the realized
price of natural  gas and crude  oil.  Gains and  losses  from  these  financial
instruments  are  recognized in revenues for the periods to which the derivative
financial instruments relate.

Note 5.        Debt

<TABLE>

<S>                                                              <C>                           <C>    

                                                                      March 31, 1999             December 31, 1998
                                                                 -------------------------     -----------------------
Credit Facility (average interest rate of 6.2%), due 2004...           $    585,000                  $          -
OEI credit facility (average interest rate of 7.0%).........                      -                       357,000
13 1/2% senior notes, due 2004..............................                    245                           245
8 1/4% senior notes, due 2018...............................                125,000                       125,000
7 5/8% senior notes, due 2005...............................                125,000                       125,000
10 3/8% senior subordinated notes, due 2005.................                150,000                       150,000
9 3/4% senior subordinated notes, due 2006..................                159,340                       159,318
8 7/8% senior subordinated notes, due 2007..................                199,719                       199,711
8 3/8% senior subordinated notes, due 2008..................                250,000                       250,000
7 7/8% senior notes, due 2003...............................                 98,250                             -
7 1/2% senior notes, due 2027...............................                124,500                             -
8 5/8% senior subordinated notes, due 2005..................                 99,500                             -
Monetary production payment, due 2000.......................                 20,362                             -
Other.......................................................                  8,444                         6,452
                                                                 -------------------------     -----------------------
                                                                          1,945,360                     1,372,726
Less:    current maturities.................................                   (836)                         (836)
                                                                 -------------------------     -----------------------
                                                                       $  1,944,524                  $  1,371,890
                                                                 =========================     =======================
</TABLE>

     Concurrently  with the closing of the Merger on March 30, 1999, the Company
entered into an $800 million  credit  facility  (the  "Credit  Facility")  which
combined  the existing  credit  facilities  of both Old Ocean and  Seagull.  The
Credit Facility  consists of a $500 million five-year  revolving  facility and a
renewable $300 million 364-day facility.  The Credit Facility bears interest, at
the  Company's  option,  at a  competitive  bid or  LIBOR or  prime  rates  plus
applicable margins ranging from zero to 1.7%. Financing fees of approximately $6
million  were  incurred  related to the 

                                       9

<PAGE>

                               OCEAN ENERGY, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)

Credit Facility. As of March 31, 1999, borrowings outstanding against the Credit
Facility totaled $585 million, leaving $186 million of available credit.

     The Credit Facility contains certain  covenants and restrictive  provisions
including  limitations  on the  incurrence  of  additional  debt and  payment of
dividends  and the  maintenance  of  certain  financial  ratios.  Under the most
restrictive  of these  provisions,  approximately  $38 million was available for
payment of cash  dividends on common stock or to  repurchase  common stock as of
March 31, 1999.

     As a result of the Merger,  the  liabilities  of both Seagull and Old Ocean
became the liabilities of the Company.  Accordingly, the financial statements of
the Company  include an aggregate of  approximately  $563 million of outstanding
Seagull  debt as of March 31,  1999.  As  discussed  above,  Seagull's  existing
revolving  credit  facility was replaced by the Credit  Facility.  The remaining
Seagull debt was recorded at a discount as follows: the 7 1/2% Senior Notes at a
discount of $26  million,  the 7 7/8% Senior  Notes at a discount of $2 million,
and the 8 5/8% Senior Subordinated Notes at a discount of $1 million.

Note 6.       Segment Information

     As a result of the Merger, the Company now has two reportable segments. The
reportable  segments  consist of the  Company's oil and gas  operations  and the
Company's Alaska transmission and distribution operations. Information about the
Company's  operations  by business  segment for the three months ended March 31,
1999 and 1998 is set forth below (stated in thousands):

<TABLE>

<S>                                                                      <C>                       <C>    

                                                                                   Three Months Ended March 31,

                                                                         -------------------------------------------------
                                                                                 1999                       1998
                                                                         ---------------------     -----------------------
Revenues:

  Oil and gas operations..........................................         $      105,694             $         141,056
                                                                         =====================     =======================

Operating profit (loss):

  Oil and gas operations..........................................         $      (25,137)            $          26,678
  Corporate.......................................................                 (6,013)                       (5,341)
                                                                         ---------------------     -----------------------
                                                                           $      (31,150)            $          21,337
                                                                         =====================     =======================

                                                                           March 31, 1999            December 31, 1998
                                                                         ---------------------     -----------------------
Total assets:

  Oil and gas operations..........................................         $    2,902,932             $       1,982,274
  ENSTAR Alaska (1)...............................................                312,143                             -
  Corporate.......................................................                123,955                        24,686
                                                                         ---------------------     -----------------------
                                                                           $    3,339,030             $       2,006,960
                                                                         =====================     =======================
</TABLE>

(1)  As discussed in Note 1, the Company's Alaska  transmission and distribution
     operations were acquired as a result of the Merger on March 30, 1999.



                                       10

<PAGE>

                               OCEAN ENERGY, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)

Note 7.       Supplemental Guarantor Information

     Ocean Energy, Inc., a Louisiana corporation and wholly-owned  subsidiary of
the Company ("Ocean  Louisiana"),  has  unconditionally  guaranteed the full and
prompt  performance of the Company's  obligations under certain of the notes and
related  indentures,  including the payment of  principal,  premium (if any) and
interest. None of the referenced indentures place significant  restrictions on a
wholly-owned  subsidiary's ability to make distributions to the parent. In order
to provide  meaningful  financial  data relating to the guarantor  (i.e.,  Ocean
Louisiana on an unconsolidated  basis),  the following  condensed  consolidating
financial information has been provided following the policies set forth below:

1)   Investments  in  subsidiaries  are accounted for by the Company on the cost
     basis.  Earnings of subsidiaries are therefore not reflected in the related
     investment accounts.

2)   Certain  reclassifications  were  made  to  conform  all of  the  financial
     information  to the financial  presentation  on a consolidated  basis.  The
     principal  eliminating  entries  eliminate  investments in subsidiaries and
     intercompany balances.

                                       11
<PAGE>

                               OCEAN ENERGY, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)


          Supplemental Condensed Consolidating Statements of Operations
               For the Three Months Ended March 31, 1999 and 1998

                             (Amounts in Thousands)

<TABLE>

<S>                                  <C>                  <C>                   <C>                  <C>    

                                                 Unconsolidated

                                     --------------------------------------------------------------
                                                               Guarantor          Non-Guarantor      Consolidated           

1999                                        OEI               Subsidiary           Subsidiaries          OEI
                                     ------------------   --------------------  -------------------  ------------------
Revenues...........................    $           -        $      48,800         $      56,894        $     105,694
Costs of Operations:
   Operations and maintenance......                -               24,469                20,691               45,160
   Depreciation, depletion and                                                                                         
     amortization..................                -               30,328                28,280               58,608
   Provision for loss on sale of
     Canadian assets ..............                -                    -                28,500               28,500
   General and administrative......                -                4,330                   246                4,576
                                     ------------------   --------------------  -------------------  ------------------
Operating Loss.....................                -              (10,327)              (20,823)             (31,150)
Merger Expense.....................                -               40,652                     -               40,652
Interest Expense...................           14,484               12,477                (1,791)              25,170
Interest Income and Other..........               (1)              (3,487)                3,005                 (483)
                                     ------------------   --------------------  -------------------  ------------------
Loss Before Taxes..................          (14,483)             (59,969)              (22,037)             (96,489)
Income Tax Provision (Benefit).....          (27,716)               9,041                 3,237              (15,438)
                                     ------------------   --------------------  -------------------  ------------------
Net Income (Loss)..................    $      13,233        $     (69,010)        $     (25,274)       $     (81,051)
                                     ==================   ====================  ===================  ==================

1998

Revenues...........................    $           -        $      83,495         $      57,561        $     141,056
Costs of Operations:
   Operations and maintenance......                -               27,455                15,197               42,652
   Depreciation, depletion and                                                                                         
     amortization..................                -               36,817                35,954               72,771
   General and administrative......                -                4,041                   255                4,296
                                     ------------------   --------------------  -------------------  ------------------
Operating Profit                                   -               15,182                 6,155               21,337
Merger Expense.....................                -               39,000                     -               39,000
Interest Expense...................            4,029               10,549                (2,074)              12,504
Interest Income and Other..........                -                  116                  (602)                (486)
                                     ------------------   --------------------  -------------------  ------------------
Income (Loss) Before Taxes.........           (4,029)             (34,483)                8,831              (29,681)
Income Tax Provision (Benefit).....          (21,822)              19,768                   506               (1,548)
                                     ------------------   --------------------  -------------------  ------------------
Net Income (Loss)..................    $      17,793        $     (54,251)        $       8,325        $     (28,133)
                                     ==================   ====================  ===================  ==================
</TABLE>

                                       12

<PAGE>

                               OCEAN ENERGY, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)

               Supplemental Condensed Consolidating Balance Sheets
                     At March 31, 1999 and December 31, 1998

                             (Amounts in Thousands)

<TABLE>

<S>                             <C>              <C>               <C>               <C>              <C>    

                                                 Unconsolidated

                                --------------------------------------------------
                                                   Guarantor       Non-Guarantor     Eliminating       Consolidated

March 31, 1999                       OEI           Subsidiary       Subsidiaries       Entries             OEI
                                --------------   ---------------   ---------------  ---------------   ---------------
ASSETS

Current Assets................    $       535      $    49,248       $   215,814      $         -       $   265,597
Intercompany Investments......      2,746,861          173,435        (1,331,617)      (1,588,679)                -
Property, Plant and Equipment,                                                                                       
   Net........................         10,148          622,797         2,156,838                -         2,789,783
Other Assets..................        113,272          196,484           (26,106)               -           283,650
                                --------------   ---------------   ---------------  ---------------   ---------------
Total Assets..................    $ 2,870,816      $ 1,041,964       $ 1,014,929      $(1,588,679)      $ 3,339,030
                                ==============   ===============   ===============  ===============   ===============

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities...........    $   114,984      $   209,874       $    97,666      $         -       $   422,524
Long-Term Debt................      1,623,676          313,240             7,608                -         1,944,524
Other Liabilities.............         14,406           14,454            45,018                -            73,878
Shareholders' Equity..........      1,117,750          504,396           864,637       (1,588,679)          898,104
                                --------------   ---------------   ---------------  ---------------   ---------------
Total Liabilities and                                                                                                
   Shareholders' Equity.......    $ 2,870,816      $ 1,041,964       $ 1,014,929      $(1,588,679)      $ 3,339,030
                                ==============   ===============   ===============  ===============   ===============

December 31, 1998

ASSETS

Current Assets................    $         -      $    49,680       $   104,101      $         -       $   153,781
Intercompany Investments......      1,645,933          174,608          (410,255)      (1,410,286)                -
Property, Plant and Equipment,                                                                                       
   Net........................              -          674,598           907,041                -         1,581,639
Other Assets..................         24,686          214,868            31,986                -           271,540
                                --------------   ---------------   ---------------  ---------------   ---------------
Total Assets..................    $ 1,670,619      $ 1,113,754       $   632,873      $(1,410,286)      $ 2,006,960
                                ==============   ===============   ===============  ===============   ===============

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities...........    $    31,271      $   187,878       $    18,033      $         -       $   237,182
Long-Term Debt................      1,009,274          357,000             5,616                -         1,371,890
Other Liabilities.............              -              981            19,964                -            20,945
Shareholders' Equity..........        630,074          567,895           589,260       (1,410,286)          376,943
                                --------------   ---------------   ---------------  ---------------   ---------------
Total Liabilities and                                                                                                
   Shareholders' Equity.......    $ 1,670,619      $ 1,113,754       $   632,873      $(1,410,286)      $ 2,006,960
                                ==============   ===============   ===============  ===============   ===============
</TABLE>

                                       13

<PAGE>

                               OCEAN ENERGY, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)

          Supplemental Condensed Consolidating Statements of Cash Flows
               For the Three Months Ended March 31, 1999 and 1998

                             (Amounts in Thousands)

<TABLE>

<S>                                  <C>                  <C>                 <C>                 <C>    

                                                             Unconsolidated

                                     ----------------------------------------------------------
                                                             Guarantor         Non-Guarantor         Consolidated                 

1999                                        OEI              Subsidiary         Subsidiaries             OEI
                                     ------------------   -----------------   -----------------   ------------------
Cash Flows from Operating                                                                                           
   Activities:                                                                                                      
   Net Income (Loss)...............    $      13,233        $     (69,010)      $     (26,274)      $     (81,051)
   Adjustments to reconcile net                                                                                     
     income (loss) to net cash from                                                                                 
     operating activities..........          (27,262)              69,613              71,357             113,708
   Changes in assets and liabilities          14,793               34,908              (6,588)             43,113
                                     ------------------   -----------------   -----------------   ------------------
Net Cash Provided By                                                                                       
   Operating Activities............              764               35,511              39,495              75,770
Cash Flows Used in Investing                                                                                        
   Activities......................                -               (9,124)             (4,879)            (14,003)
Cash Flows Used In                                                                                    
   Financing Activities............             (764)             (26,387)            (12,532)            (39,683)
                                     ------------------   -----------------   -----------------   ------------------
Net Increase in Cash and                                                                                 
   Cash Equivalents................                -                    -              22,084              22,084
Cash and Cash Equivalents:                                                                         
   Beginning of Period.............                -                    -              10,706              10,706
                                     ------------------   -----------------   -----------------   ------------------
   End of Period...................    $           -        $           -       $      32,790       $      32,790
                                     ==================   =================   =================   ==================

1998

Cash Flows from Operating                                                                                           
   Activities:                                                                                                      
   Net Income (Loss)...............    $      17,793        $     (54,251)      $       8,325       $     (28,133)
   Adjustments to reconcile net income                                                                             
     (loss) to net cash from                                                                                        
     operating activities..........          (21,684)              61,830              34,580              74,726
   Changes in assets and liabilities           3,863               64,288             (23,514)             44,637
                                     ------------------   -----------------   -----------------   ------------------
Net Cash Provided By (Used In)                                                                                      
   Operating Activities............              (28)              71,867              19,391              91,230
Cash Flows Used in Investing                                                                                        
   Activities......................                -             (133,882)            (69,545)           (203,427)
Cash Flows Provided By Financing                                                                                    
   Activities......................               28               68,702              45,178             113,908
                                     ------------------   -----------------   -----------------   ------------------
Net Increase (Decrease) in Cash and                                                                                 
   Cash Equivalents................                -                6,687              (4,976)              1,711
Cash and Cash Equivalents:

   Beginning of Period.............                2                2,653               9,034              11,689
                                     ------------------   -----------------   -----------------   ------------------
   End of Period...................    $           2        $       9,340       $       4,058       $      13,400
                                     ==================   =================   =================   ==================
</TABLE>

                                       14

<PAGE>

                               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 the
quarters ended March 31, 1999 and 1998.

     As discussed in Note 1, effective March 30, 1999, Ocean Energy,  Inc. ("Old
Ocean") was merged with and into  Seagull  Energy  Corporation  ("Seagull").  In
conjunction  with the Merger,  Seagull amended its Articles of  Incorporation to
change its name to Ocean  Energy,  Inc. In addition,  effective  March 27, 1998,
United  Meridian  Corporation  ("UMC") was merged into Old Ocean ("UMC Merger").
The UMC Merger was  accounted for as a pooling of  interests.  Accordingly,  the
consolidated  financial  statements  for  periods  prior to the UMC Merger  were
restated to conform  accounting  policies and combine the historical  results of
Old Ocean and UMC.

     The Company's  accompanying unaudited consolidated financial statements and
the notes thereto and the  consolidated  financial  statements and notes thereto
included in the Annual Reports on Form 10-K for the year ended December 31, 1998
of Old Ocean and Seagull contain detailed information that should be referred to
in conjunction with the following discussion.

                              Results Of Operations

                             Consolidated Highlights
                              (Amounts in Thousands)

<TABLE>

<S>                                                                         <C>                   <C>    
                                                                                Three Months Ended March 31,

                                                                            ---------------------------------------
                                                                                  1999                 1998
                                                                            -----------------     ----------------
Revenues:

   Oil and gas operations .............................................       $   105,694           $   141,056
                                                                            =================     ================

Operating profit (loss):

   Oil and gas operations .............................................           (25,137)               26,678
   Corporate...........................................................            (6,013)               (5,341)
                                                                            -----------------     ----------------
                                                                              $   (31,150)          $    21,337
                                                                            =================     ================

Net loss...............................................................       $   (81,051)          $   (28,133)
Net cash provided by operating activities before
   changes in operating assets and liabilities.........................       $    32,657           $    46,593
Net cash provided by operating activities..............................       $    75,770           $    91,230
</TABLE>

     Revenues decreased $35.4 million and the Company incurred an operating loss
of $31.2 million for the first  quarter of 1999 compared to operating  profit of
$21.3 million for the first quarter of 1998  primarily due to lower realized oil
and gas  prices  and the  loss on sale of  Canadian  assets  of  $28.5  million,
partially  offset  by an  increase  in  production  for the  quarter.  Net  loss
increased  from $28.1 million for the first quarter of 1998 to $81.1 million for
the same  period in 1999 due to these same  factors  and an increase in interest
expense, partially offset by an increase in income tax benefit.


                                       15

<PAGE>

                               OCEAN ENERGY, INC.


                             Oil And Gas Operations
                             (Amounts in Thousands)

<TABLE>

<S>                                                                        <C>                      <C>    

                                                                                  Three Months Ended March 31,  

                                                                           -------------------------------------------
                                                                                  1999                    1998
                                                                           --------------------     ------------------
Revenues:

  Natural gas.........................................................       $     47,024              $    57,651
  Oil and NGLs........................................................             58,670                   83,405
                                                                           --------------------     ------------------
                                                                                  105,694                  141,056
                                                                           --------------------     ------------------

Operations and maintenance............................................             45,160                   42,652
Depreciation, depletion and amortization..............................             57,171                   71,726
Provision for loss on sale of Canadian assets.........................             28,500                        -
                                                                           --------------------     ------------------
  Operating profit (loss).............................................       $    (25,137)             $    26,678
                                                                           ====================     ==================
</TABLE>

     Revenues - The Company's  total revenues  decreased  approximately  25%, to
$105.7  million for the three months ended March 31, 1999,  from $141.1  million
for the  comparable  period in 1998.  The  decrease  in oil and gas  revenues is
primarily attributable to lower realized oil and gas prices, partially offset by
a 2% increase in production for the first quarter of 1999. Production levels for
the three  months  ended March 31,  1999,  increased  to 116.8 MBOE per day from
114.4 MBOE per day for the comparable period in 1998.

     Oil revenues  decreased  $24.7  million,  or 30%, to $58.7  million for the
three months ended March 31, 1999, from $83.4 million for the three months ended
March 31, 1998. This decrease is the result of the precipitous  decline in world
crude oil prices  experienced  in 1998,  partially  offset by a 6%  increase  in
production  for the first quarter of 1999.  The average  realized  price for oil
decreased  33% to $10.04 in the first  quarter of 1999 compared to $15.09 in the
same period in 1998.  Daily oil production  increased to 64,933 Bbl in the first
quarter  of 1999 as  compared  to 61,401  Bbl for the same  period in 1998.  The
production  increase was due primarily to increased  production in Cote d'Ivoire
and Equatorial Guinea.

     Natural gas revenues decreased $10.7 million,  or 18%, to $47.0 million for
the three months ended March 31, 1999,  from $57.7  million for the three months
ended March 31,  1998,  primarily  due to the decline in gas prices along with a
slight reduction in domestic production.  The average realized price for natural
gas  decreased  16% to $1.68 per Mcf in the first quarter of 1999 as compared to
$2.01 in the first quarter of 1998. Natural gas production for the first quarter
of 1999 was 27,989  MMcf,  a decrease of 2% over 1998  volumes due  primarily to
natural production declines in North America.

     For the quarters  ended March 31, 1999 and 1998,  oil and gas revenues have
been  increased  by $2  million  and  $5  million,  as a  result  of  derivative
contracts.  In addition,  the  Company's oil revenues for the first quarter  of 
1999 were also affected by a $7 million loss in derivative activities.

                                       16

<PAGE>

                               OCEAN ENERGY, INC.

                    Exploration And Production Operating Data

<TABLE>

<S>                           <C>                     <C>                  <C>                     <C>    

                                                          Three Months Ended March 31,

                              --------------------------------------------------------------------------------------
                                        Net Daily Production                              Unit Price
                                   1999                     1998                 1999                    1998
                              ----------------        -----------------    -----------------       -----------------

Gas Sales (1):

  Domestic..............               251.5                    272.6          $   1.69                $   2.10
  Canada (2)............                36.0                     25.1          $   1.54                $   1.31
  Cote d'Ivoire.........                23.5                     20.4          $   1.83                $   1.71
                              ----------------        ----------------- 
Total...................               311.0                    318.1          $   1.68                $   2.01
                              ================        =================

 Oil and NGL Sales(1):

  Domestic..............              39,811                   42,401          $   9.42                $  15.34
  Canada (2)............               1,233                    1,189          $  11.10                $  12.88
  Cote d'Ivoire.........               4,489                    2,322          $   9.88                $  15.67
  Equatorial Guinea.....              19,400                   15,489          $  11.28                $  14.52
                              ----------------        -----------------
Total...................              64,933                   61,401          $  10.04                $  15.09
                              ================        =================
</TABLE>

(1) Natural gas is stated in MMcf and $ per Mcf.  Oil and NGLs are stated in Bbl
    and $ per  Bbl.  
(2) The Company's Canadian operations were sold April 15, 1999.

     Operations and Maintenance  Costs - Total operations and maintenance  costs
increased $2.5 million, or 6%, to $45.2 million for the three months ended March
31, 1999 from $42.7  million  for the  comparable  1998  period.  This  increase
primarily  results from  fluctuations in normal  operating  expenses,  including
operating  expenses  associated  with increased  production from new facilities.
Production and operating costs remained relatively flat at $4.30 per BOE for the
quarter ended March 31, 1999,  compared to $4.14 per BOE in the comparable  1998
period.

     Depreciation,  Depletion and Amortization Expense - Depreciation, depletion
and  amortization  (DD&A) expense  related to oil and gas  operations  decreased
$14.5  million,  or 20%, to $57.2  million for the three  months ended March 31,
1999,  from $71.7 million for the comparable  1998 period.  DD&A for Oil and Gas
Operations  decreased  $1.53 per BOE,  or 22%,  to $5.44 per BOE for the quarter
ended March 31, 1999,  from $6.97 per BOE for the comparable  1998 period.  This
variance is primarily  attributable to the effect of the non-cash impairments of
oil and gas properties recognized by the Company in 1998.

                                      Other

     General and Administrative  Expenses - General and administrative  expenses
remained  relatively  constant at $4.6  million for the three months ended March
31, 1999 versus $4.3 million in the comparable 1998 period.

     Interest  Expense - Interest and debt expense  increased  $12.7  million to
$25.2  million for the three months  ended March 31, 1999 from $12.5  million in
the comparable 1998 period. This increase is primarily the result of an increase
in debt levels in the first quarter of 1999  resulting  from the higher  capital
spending  program  throughout  1998.  Interest expense for the remainder of 1999
will  continue  to be  higher  than  1998  levels  due to the  inclusion  of the
outstanding debt of

                                       17

<PAGE>

                               OCEAN ENERGY, INC.

Seagull of  approximately  $563 million in the Company's  financial  statements.
However, proceeds from the expected sales of certain non-core oil and gas assets
during the remainder of 1999 will be used to repay existing long-term debt.

     Merger Expense - Merger expenses of $41 million  associated with the Merger
between Old Ocean and Seagull have been  recorded in the first  quarter of 1999.
Merger expenses of $39 million associated with the March 1998 merger between Old
Ocean and UMC were recorded in the first quarter of 1998.

     Income Tax Benefit - An income tax benefit of $15.4 million was  recognized
for the three months ended March 31, 1999, compared to a benefit of $1.5 million
for the  three  months  ended  March  31,1998.  Consistent  with  SFAS No.  109,
Accounting  for Income Taxes,  the deferred  income tax provision or benefit was
derived  primarily  from changes in deferred  income tax assets and  liabilities
recorded on the balance sheet.  The Company  currently  believes that it is more
likely than not that the net deferred  tax asset will be realized.  This will be
evaluated  again during  integration  of the operations of Old Ocean and Seagull
and as assets sales take place.

                          Unaudited Pro Forma Condensed
                      Combined Financial and Operating Data

     The  following  table  sets forth  summary  unaudited  pro forma  condensed
combined  financial and operating data which are presented to give effect to the
Merger as if it had  occurred as of January 1, 1998.  The  information  does not
purport to be indicative of actual results, if the Merger had been in effect for
the periods indicated,  or of future results. The information was prepared based
on the following assumptions:

     The income statements for 1999 and 1998 are a result of combining the three
month income  statement  of Old Ocean with the three month  income  statement of
Seagull  adjusted  for 1) certain  costs that  Seagull  had  expensed  under the
successful efforts method of accounting that are capitalized under the full cost
method of accounting;  2) depreciation,  depletion and  amortization  expense of
Seagull calculated in accordance with the full cost method of accounting applied
to the adjusted  basis of the properties  acquired using the purchase  method of
accounting;  3) decreased  interest  expense  resulting from the  revaluation of
Seagull debt under the purchase method of accounting,  including the elimination
of amortization of historical debt issuance costs; and 4) the related income tax
effects of these  adjustments  based on the  applicable  statutory  tax rate. It
should be noted that the pro forma net loss for the three months ended March 31,
1998,  does not  include the  impairments  of oil and gas  properties  that were
recorded by the companies in the second and fourth quarters of 1998 and does not
include expensed merger costs relating to the Merger.  The allocation of purhase
price to specific assets and  liabilities is based on certain  estimates of fair
values and costs which will be adjusted to actual amounts as  determined.  Such
adjustments are not expected to be material.

                                       18

<PAGE>

                               OCEAN ENERGY, INC.

                         Unaudited Pro Forma Information
                  (Amounts in Thousands, Except Per Unit Data)

<TABLE>

<S>                                                                         <C>                     <C>    

                                                                                   Three Months Ended March 31,

                                                                            -------------------------------------------
                                                                                   1999                    1998
                                                                            ------------------- --- -------------------
Unaudited Pro Forma Condensed Combined Statements of Income:
Revenues:

   Oil and gas operations..............................................       $    162,799            $    228,537
   Alaska transmission and distribution................................             38,661                  31,876
                                                                            -------------------     -------------------
                                                                                   201,460                 260,413
                                                                            -------------------     -------------------
Cost of operations:

   Operations and maintenance..........................................             70,978                  78,046
   ENSTAR Alaska cost of gas sold......................................             17,852                  14,763
   Depreciation, depletion and amortization............................             93,258                 114,172
   Provision for loss on sale of Canadian assets.......................             28,500                       -
   General and administrative..........................................              8,867                   7,680
                                                                            -------------------     -------------------
                                                                                   219,455                 214,661
                                                                            -------------------     -------------------
Operating profit (loss)................................................            (17,995)                 45,752

Other (income) expense:

   Merger expenses (1).................................................                  -                  39,000
   Interest expense....................................................             35,375                  20,896
   Interest income and other...........................................             (5,517)                 (1,018)
                                                                            -------------------     -------------------
                                                                                    29,858                  58,878
                                                                            -------------------     -------------------
Loss before income taxes...............................................            (47,853)                (13,126)

Income tax expense (benefit)...........................................             (1,702)                  6,671
                                                                            -------------------     -------------------

Net loss...............................................................            (46,151)                (19,797)
Preferred stock dividend...............................................                801                       -
                                                                            -------------------     -------------------
Net loss available to common shareholders..............................       $    (46,952)           $    (19,797)
                                                                            ===================     ===================

Loss per common share:

   Basic and Diluted...................................................       $      (0.28)           $      (0.12)
                                                                            ===================     ===================

Weighted average number of common shares outstanding:

   Basic and Diluted...................................................            165,914                 163,113
                                                                            ===================     ===================

Capital Expenditures:

   Oil and gas operations..............................................       $     78,341            $    257,636
   ENSTAR Alaska ......................................................              1,698                   1,539
   Corporate...........................................................              3,877                   3,713
                                                                            -------------------     -------------------
   Total (2)...........................................................       $     83,916            $    262,888
                                                                            ===================     ===================
</TABLE>

(1) Excludes  approximately  $41  million  of merger  expenses  recorded  in the
    quarter ended March 31, 1999.  During 1998, the Company recorded $39 million
    in merger expenses  related to the UMC Merger,  which was accounted for as a
    pooling transaction.

(2) Includes  capitalized  interest of $9 million and $7 million  and   certain 
    employee-related costs of $6 million and $7 million respectively.

                                       19

<PAGE>

                               OCEAN ENERGY, INC.

                         Unaudited Pro Forma Information
                  (Amounts in Thousands, Except Per Unit Data)

<TABLE>

<S>                                                                         <C>                     <C>    

                                                                                   Three Months Ended March 31,

                                                                            -------------------------------------------
                                                                                   1999                    1998
                                                                            ------------------- --- -------------------
Operations Data:
Oil and gas operations

   Net daily natural gas production (MMcf):

     Domestic..........................................................              510.9                   564.3
     Canada (1)........................................................               35.9                    25.1
     Cote d'Ivoire.....................................................               33.2                    30.8
     Other international...............................................                8.4                    12.3
                                                                            -------------------     -------------------
           Total.......................................................              588.4                   632.5
                                                                            ===================     ===================

   Average natural gas prices ($ per Mcf):

     Domestic..........................................................       $       1.64            $       2.06
     Canada (1)........................................................       $       1.54            $       1.31
     Cote d'Ivoire.....................................................       $       1.73            $       1.64
     Other international...............................................       $       2.28            $       2.74
     Weighted average..................................................       $       1.65            $       2.02

   Net daily oil and NGL production (Bbl):

     Domestic..........................................................             43,907                  47,454
     Canada (1)........................................................              1,233                   1,189
     Egypt.............................................................             10,131                  10,504
     Cote d'Ivoire.....................................................              5,474                   3,422
     Russia............................................................              4,190                   3,993
     Equatoral Guinea..................................................             19,400                  15,489
     Other international...............................................                 54                     286
                                                                            -------------------     -------------------
        Total..........................................................             84,389                  82,337
                                                                            ===================     ===================

   Net daily production (MBOE):........................................              182.5                   187.8
                                                                            ===================     ===================

   Average oil and NGL prices ($ per Bbl):

     Domestic..........................................................       $       9.44            $      15.15
     Canada (1)........................................................       $      11.10            $      12.84
     Egypt.............................................................       $      10.91            $      13.16
     Cote d'Ivoire.....................................................       $      10.00            $      13.92
     Russia............................................................       $       6.64            $      11.62
     Equatorial Guinea.................................................       $      11.28            $      14.52
     Other international...............................................       $      14.22            $      17.61
         Total.........................................................       $       9.96            $      14.53

Average costs ($ per BOE):

   Production and operating costs......................................       $       4.00            $       4.30
   General and administrative expenses.................................               0.54                    0.45
   Interest expense....................................................               2.09                    1.17
                                                                            -------------------     -------------------
         Cash costs                                                                   6.63                    5.92
   Depletion, depreciation and amortizaton.............................               5.55                    6.63
                                                                            -------------------     -------------------
          All-in costs                                                        $      12.18            $      12.55
                                                                            ===================     ===================
</TABLE>

(1) The Company's Canadian operations were sold April 15, 1999.

                                       20

<PAGE>

                               OCEAN ENERGY, INC.

                         Unaudited Pro Forma Information
                  (Amounts in Thousands, Except Per Unit Data)

<TABLE>

<S>                                                                         <C>                     <C> 
                                                                                   Three Months Ended March 31,
                                                                                   1999                    1998

                                                                            ------------------- --- -------------------
ENSTAR Alaska  Operating Data: (1)

   Degree days (2).....................................................              4,516                   3,697
   Sales and transport volumes (MMcf)..................................             16,417                  13,622
   Sales and transport margin per MMcf.................................       $       1.27            $       1.26
</TABLE>

(1)  This segment's business is seasonal with approximately 65% - 70% of its 
     sales made in the first and fourth quarters of each year.
(2)  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.

                         Liquidity And Capital Resources

     Liquidity - Concurrently  with the closing of the Merger on March 30, 1999,
the Company entered into an $800 million credit facility (the "Credit Facility")
which combined the existing credit facilities of both Old Ocean and Seagull. The
Credit Facility  consists of a $500 million five-year  revolving  facility and a
renewable $300 million 364-day facility.  The Credit Facility bears interest, at
the  Company's  option,  at a  competitive  bid or  LIBOR or  prime  rates  plus
applicable margins ranging from zero to 1.7%. Financing fees of approximately $6
million  were  incurred  related to the Credit  Facility.  As of March 31, 1999,
borrowings  outstanding against the facility totaled $585 million,  leaving $186
million of available credit.

     The Company's  debt to total  capitalization  ratio has decreased to 68% at
March 31,  1999,  from 78% at December  31,  1998.  The Company  plans to pursue
additional  property  sales in 1999, the proceeds from which will be used to pay
down amounts outstanding under the Credit Facility.

     The  ability of the  Company to satisfy its  obligations  and fund  planned
capital expenditures will be dependent upon its future performance.  Such future
performance is subject to many conditions that are beyond the Company's control,
particularly oil and gas prices,  and the Company's ability to obtain additional
debt and equity financing, if necessary.  The Company currently expects that its
cash flow from  operations and  availability  under the Credit  Facility will be
adequate to execute its 1999 business plan.  However,  no assurance can be given
that the Company will not experience  liquidity problems from time to time or on
a long-term  basis. If the Company's cash flow from operations and  availability
under the Credit  Facility are not sufficient to satisfy its cash  requirements,
there can be no  assurance  that  additional  debt or equity  financing  will be
available to meet its requirements.

     Effects  of  Leverage  -  The  Company  has  outstanding   indebtedness  of
approximately  $1.9  billion  as of  March  31,  1999.  The  Company's  level of
indebtedness has several important effects on its future  operations,  including
(i) a substantial  portion of the Company's  cash flow from

                                       21

<PAGE>

                               OCEAN ENERGY, INC.

operations must be dedicated to the payment of interest on its  indebtedness and
will not be available for other  purposes,  (ii) the covenants  contained in the
various  indentures  require the Company to meet certain  financial  tests,  and
contain other restrictions that limit the Company's ability to borrow additional
funds or to  dispose  of assets and may  affect  the  Company's  flexibility  in
planning  for, and  reacting to,  changes in its  business,  including  possible
acquisition  activities  and (iii) the  Company's  ability to obtain  additional
financing in the future for working capital, expenditures, acquisitions, general
corporate  or other  purposes  may be  impaired.  None of the  indentures  place
significant  restrictions  on  a  wholly-owned   subsidiary's  ability  to  make
distributions to the parent company.

     The Company  believes it is  currently  in  compliance  with all  covenants
contained in the respective indentures.

                              Capital Expenditures
                             (Amounts in Thousands)

<TABLE>

<S>                                                                       <C>                     <C>    

                                                                                 Three Months Ended March 31,

                                                                          -------------------------------------------
                                                                                1999                     1998
                                                                          ------------------       ------------------
Oil and Gas Operations:

  Leasehold acquisitions.............................................        $     3,899               $    8,807
  Exploration costs..................................................              8,991                   86,949
  Development costs..................................................             36,019                  107,671
                                                                          ------------------       ------------------
                                                                                  48,909                  203,427
Corporate............................................................              2,817                    1,327
                                                                          ------------------       ------------------
                                                                          $       51,726               $  204,754
                                                                          ==================       ==================
</TABLE>

     The  Company's  capital  expenditure  budget  for  1999 is  expected  to be
approximately $350-400 million (excluding proved property acquisitions).  Actual
capital spending may vary from the capital  expenditure budget. The Company will
evaluate its level of capital  spending  throughout the year based upon drilling
results, commodity prices, cash flows from operations and property acquisitions.

     The  Company  makes,  and  will  continue  to  make,   substantial  capital
expenditures  for the  acquisition,  exploration,  development,  production  and
abandonment  of its oil and natural gas reserves.  The Company has  historically
funded  its  expenditures  from  cash  flows  from  operating  activities,  bank
borrowings,  sales of equity and debt securities, sales of non-strategic oil and
natural gas properties,  sales of partial  interests in exploration  concessions
and project  finance  borrowings.  The Company  intends to finance  1999 capital
expenditures primarily with funds provided by operations.

Accounting Pronouncements

     In June 1998,  the FASB  issued  SFAS No. 133,  Accounting  for  Derivative
Instruments  and Hedging  Activities.  This statement  establishes  standards of
accounting for and disclosures of derivative instruments and hedging activities.
This statement is effective for fiscal years  beginning after June 15, 1999. The
Company has not yet  determined  the impact of this  statement on the  Company's
financial condition or results of operations.


                                       22

<PAGE>

                               OCEAN ENERGY, INC.


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.

Year 2000

     Historically,  most computer systems  (including  microprocessors  embedded
into field equipment and other  machinery)  utilized  software that recognized a
calendar year by its last two digits.  Beginning in the year 2000, these systems
will  require  modification  to  distinguish  twenty-first  century  dates  from
twentieth century dates ("Year 2000 issues").

     Accordingly,  the Company has initiated a comprehensive plan to address the
Year 2000 issues  associated  with its  operations  and business (the "Year 2000
plan").  The  Company's  Board of Directors has been briefed about the Year 2000
problem  generally  and as it may affect the  Company.  The Board has  created a
committee consisting of senior executives and a representative from the Board to
oversee the adoption and  implementation  of the Year 2000 plan  covering all of
the Company's  business  units.  The plan has been developed with an aim towards
taking reasonable steps to prevent the Company's mission-critical functions from
being impaired due to the Year 2000 problem.

     The plan includes  several  phases - (i) assessment of all of the Company's
systems and technology;  (ii)  implementation and testing of modifications to or
replacements of existing systems and technology, both financial and operational;
(iii)  communication  with key business partners regarding Year 2000 issues; and
(iv) contingency planning.

     In planning and developing the project, the Company has considered both its
information  technology  ("IT")  and its  non-IT  systems.  The  term  "computer
equipment  and  software"  includes  systems that are commonly  thought of as IT
systems,  including  accounting,  data processing,  telephone systems,  scanning
equipment,  and  other  miscellaneous  systems.  Non-IT  systems  include  alarm
systems,  fax machines,  monitors for field operations,  and other miscellaneous
systems.  Both IT and non-IT  systems may  contain  embedded  technology,  which
complicates the Company's Year 2000 identification, assessment, remediation, and
testing efforts.  In those cases where the Company has identified  equipment and
software that is not Year 2000 ready, the Company is in the process of replacing
or  upgrading  such  items so they will  calculate  dates  correctly  in the new
century.  Furthermore,  as new  equipment  and  software  are  purchased  in the
ordinary  course of business,  the Company  ensures that such purchases are Year
2000 ready.

     During 1997, the Company  utilized both internal and external  resources to
test,  reprogram  or replace  many of its IT systems,  primarily  financial  and
operational software, for necessary

                                       23

<PAGE>

                               OCEAN ENERGY, INC.

modifications  identified in its assessment of Year 2000 issues.  As of the date
of this filing,  the Company  estimates that  approximately 90% of its Year 2000
plan related to these IT systems has been  implemented and anticipates  that the
remainder  of the  plan,  including  any  necessary  remedial  action,  will  be
completed  by June 30, 1999,  except for the reserves  system which is scheduled
for the  third  quarter  of 1999.  During  September  1998,  the  Company  began
utilizing  internal and external resources to evaluate its vulnerability to Year
2000 issues related to its non-IT systems,  primarily field operational  systems
and equipment.

     The  Company  has  employed  outside  engineering  firms to  inventory  and
evaluate  embedded  chips in control,  metering  and  monitoring  devices on the
Company's  producing  properties.  Such devices are extensively used in offshore
operations. While some remedial work has been required, it was not extensive and
is essentially complete.

     The Company has also initiated  formal  communications  with all of its key
business  partners to determine the extent to which the Company is vulnerable to
those third parties'  potential failure to remediate their own Year 2000 issues.
Key business partners were identified in four categories of companies including:
(a) major vendors and contractors  (including banks and other financial  service
companies);  (b) major  customers;  (c) utility  companies;  and (d) third party
operators  of major  oil and gas  properties.  Questionnaires  were  sent to the
Company's  key  business  partners  to confirm  their Year 2000  activities  and
follow-up letters, telephone calls, and meetings are being used, as appropriate,
to obtain additional information.

     During the fourth quarter of 1998, the Company began developing contingency
plans for its financial and operational systems. The Company's contingency plans
are  being  designed  to  minimize  the  disruptions  or other  adverse  effects
resulting  from Year 2000  incompatibilities  regarding  these  systems,  and to
facilitate the early  identification  and remediation of Year 2000 problems that
first manifest themselves after January 1, 2000.

     The  failure  to  correct a material  Year 2000  issue  could  result in an
interruption in, or a failure of, certain normal business activities,  resulting
in a material, adverse affect on the Company's results of operations,  liquidity
and financial position. The Company's remediation efforts are expected to reduce
significantly  the Company's level of uncertainty about Year 2000 compliance and
the possibility of interruptions of normal operations.  However, there can be no
guarantee that other companies'  systems,  on which the Company's  systems rely,
will be timely converted,  or that a failure to convert by another company, or a
conversion that is  incompatible  with the Company's  systems,  would not have a
material  adverse  effect  on the  Company.  Disruptions  to  the  oil  and  gas
transportation  networks  controlled  by  third-party  carriers  could result in
reduced production volumes delivered to market.

     In addition, risks associated with foreign operations may increase with the
uncertainty of Year 2000 compliance by foreign  governments and their supporting
infrastructures.  The Company's  Year 2000 task force members have been asked to
investigate  the  compliance  activities  of certain  third  parties and foreign
governments  to determine  the risks to the Company.  This  investigation  is in
progress.

                                       24

<PAGE>

                               OCEAN ENERGY, INC.


     In a recent Securities and Exchange  Commission release regarding Year 2000
disclosures, the Securities and Exchange Commission stated that public companies
must disclose the most reasonably likely worst case Year 2000 scenario. Analysis
of the most  reasonably  likely worst case Year 2000  scenarios  the Company may
face  leads  to  contemplation  of the  following  possibilities  which,  though
unlikely in some or many cases,  must be included in any  consideration of worst
cases: widespread failure of electrical,  gas, and similar supplies by utilities
serving the Company domestically and internationally;  widespread  disruption of
the services of communications common carriers domestically and internationally;
similar  disruption to means and modes of transportation for the Company and its
employees, contractors,  suppliers, and customers; significant disruption to the
Company's ability to gain access to, and remain working in, office buildings and
other  facilities;   the  failure  of  substantial   numbers  of  the  Company's
mission-critical information (computer) hardware and software systems, including
both internal  business  systems and systems (such as those with embedded chips)
controlling  operational  facilities  such as onshore and  offshore  oil and gas
rigs, oil and gas pipelines and gas plants domestically and internationally, the
effects of which would have a cumulative material adverse impact on the Company.
Among other things,  the Company could face  substantial  claims by customers or
loss of revenues due to service interruptions,  inability to fulfill contractual
obligations, inability to account for certain revenues or obligations or to bill
customers  accurately and on a timely basis, and increased  expenses  associated
with  litigation,   stabilization  of  operations   following   mission-critical
failures,  and the  execution  of  contingency  plans.  the  Company  could also
experience  an inability by customers,  traders,  and others to pay, on a timely
basis or at all, obligations owed to the Company. Under these circumstances, the
adverse  effect on the Company,  and the  diminution of the Company's  revenues,
would be  material,  although  not  quantifiable  at this time.  Further in this
scenario,  the  cumulative  effect of these  failures  could have a  substantial
adverse effect on the economy,  domestically  and  internationally.  The adverse
effect on the Company,  and the  diminution  of the Company's  revenues,  from a
domestic  or global  recession  or  depression  is also  likely to be  material,
although not quantifiable at this time.

     The total costs for the Year 2000 compliance review, evaluation, assessment
and  remediation  efforts are not expected to be in excess of $1.0  million.  Of
this amount, approximately $545,000 had been incurred as of March 31, 1999.

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. 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 means one million  British Thermal Units. A British
Thermal Unit is the quantity of heat  required to raise the  temperature  of one
pound of water by one degree Fahrenheit.


                                       25

<PAGE>

                               OCEAN ENERGY, INC.


Forward-Looking Statements May Prove Inaccurate

     This document  includes  forward-looking  statements  within the meaning of
Section  27A of  the  Securities  Act of  1933,  Section  21E of the  Securities
Exchange Act of 1934 and the Private  Securities  Litigation Reform Act of 1995.
All  statements  other than  statements  of  historical  fact  included  in this
document,  including,  without  limitation,  statements  regarding the financial
position,  business strategy,  production and reserve growth and other plans and
objectives  for  the  future  operations  of  the  Company  are  forward-looking
statements.

     Although the Company  believes  that such  forward-looking  statements  are
based on reasonable assumptions,  it can give no assurance that its expectations
will in fact  occur.  Important  factors  could cause  actual  results to differ
materially  from  those  in  the  forward-looking  statements.   Forward-looking
statements  are  subject  to risks and  uncertainties  and  include  information
concerning  cost savings from the Merger,  integration  of the businesses of Old
Ocean and Seagull,  general  economic  conditions and possible or assumed future
results of operations of the Company,  estimates of oil and gas  production  and
reserves,  drilling plans, future cash flows,  anticipated capital expenditures,
the  Company's  realization  of its  deferred  tax  assets,  the level of future
expenditures for  environmental  costs, and management's  strategies,  plans and
objectives as set forth herein.

     When used in this document, the words "believes," "expects," "anticipates,"
"intends" or similar  expressions are intended to identify such  forward-looking
statements.  The following  important  factors,  in addition to those  discussed
elsewhere  in this  document  could  affect  the  future  results  of the energy
industry  in general and could cause  those  results to differ  materially  from
those expressed in such forward-looking statements:

- Risks  incident to the drilling and  operation of oil and gas wells;

- Future production and development costs; 

- The effect of existing and future laws and regulatory  actions;

- The political and economic climate in the foreign jurisdictions in which
  the Company conducts oil and gas operations;

- The effect of changes in commodity prices, hedging activities and conditions
  in the capital markets; and

- Competition from others in the energy industry.

Item 3.       Quantitative and Qualitative Disclosures About Market Risks.

     Currently,  the Company  has  entered  into  various  derivative  financial
instruments  for gas and oil  production  throughout  the  remainder of 1999. In
connection  with these  transactions,  the  Company  recorded a decrease  in oil
revenues  of $7  million  during  the  first  quarter  of 1999.  The  derivative
financial  instruments  for gas and oil  production  discussed in the  preceding
sentence  were  cancelled in April 1999 and replaced  with  Collars.  At May 14,
1999,  Collars are in place for portions of the Company's oil production for the
remainder  of 1999 at floors of $12.00 and $15.00  per  barrel and  ceilings  of
$15.00,  $18.85 and $19.00 per  barrel.  In  addition,  Collars are in place for
portions of the  Company's  gas  production  through  October 1999 at a floor of
$2.15 per

                                       26

<PAGE>

                               OCEAN ENERGY, INC.

MMBtu and a ceiling of $2.45 per MMBtu. While derivative  financial  instruments
are intended to reduce the Company's exposure to declines in the market price of
natural  gas  and  crude  oil,  these  derivative  financial   instruments  will
significantly  limit the  Company's  loss/gain  from  decrease/increases  in the
market price of natural gas and crude oil below/above the floors/ceilings  noted
above.. As a result,  gains and losses on derivative  financial  instruments are
generally  offset by similar  changes in the  realized  price of natural gas and
crude oil. Gains and losses from these  financial  instruments are recognized in
revenues for the periods to which the derivative financial instruments relate.

     The Company also evaluated the potential  effect that  reasonably  possible
near term changes in interest rates may have on the Company's  Credit  Facility.
The Credit Facility represents  approximately 30% of the Company's total debt as
of March 31, 1999 and is the only  floating  rate debt.  Based upon an analysis,
utilizing the actual  interest  rates in effect and balances  outstanding  as of
March 31, 1999 and  assuming a 10%  increase in interest  rates,  the  potential
increase in annual interest expense is approximately $3.5 million.

                           Part II. Other Information

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

     On March 30, 1999, the shareholders approved a merger of Ocean Energy, Inc.
with and into Seagull Energy  Corporation and elected certain  directors.  Votes

were cast as follows:

<TABLE>

<S>                                             <C>                 <C>               <C>                <C>    

                                                                                         Broker

                                                     For               Against          Non-Votes         Abstained

                                                ---------------     --------------    --------------     -------------
Ratification of the Agreement and Plan of                                                                             
   Merger between Seagull and OEI.........        44,408,585            8,815,291                 -          193,931
Election as a Director of the Company of:

   J. Evans Attwell.......................        49,852,075                    -                 -        3,565,732
   John B. Brock..........................        49,984,447                    -                 -        3,433,360
   Milton Carroll.........................        49,981,813                    -                 -        3,435,994
   Thomas D. Clark, Jr....................        49,976,281                    -                 -        3,441,526
   James L. Dunlap........................        49,980,683                    -                 -        3,437,124
   James C. Flores........................        49,970,597                    -                 -        3,447,210
   Peter J. Fluor.........................        49,992,945                    -                 -        3,424,862
   Barry J. Galt..........................        49,957,732                    -                 -        3,460,075
   James T. Hackett.......................        49,983,771                    -                 -        3,434,036
   Robert L. Howard.......................        49,981,097                    -                 -        3,436,710
   Elvis L. Mason.........................        49,979,881                    -                 -        3,437,926
   Charles F. Mitchell....................        49,972,865                    -                 -        3,444,942
   David K. Newbigging....................        49,984,669                    -                 -        3,433,138
   Dee S. Osborne.........................        49,990,337                    -                 -        3,427,470
   R.A. Walker............................        49,988,939                    -                 -        3,428,868
</TABLE>


                                       27

<PAGE>

                               OCEAN ENERGY, INC.

Item 6.       EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits:

*4.1 Revolving Credit Agreement,  dated as of March 30, 1999, among the Company,
     Chase Bank of Texas, National Association ("Chase Texas") (Individually and
     as Administrative  Agent), The Chase Manhattan Bank ("Chase Manhattan") (as
     Auction  Administrative  Agent), Bank of America National Trust and Savings
     Association  ("Bank of America")  (Individually and as Syndication  Agent),
     Bank One Texas,  N. A.  ("Bank  One")  (Individually  and as  Documentation
     Agent),   Societe   Generale,   Southwest   Agency   ("Societe   Generale")
     (Individually  and as Managing Agent),  the Bank of Montreal  (Individually
     and as Managing Agent), and the other Banks signatory thereto.

*4.2 364-Day Credit  Agreement,  dated as of March 30, 1999,  among the Company,
     Chase Texas (Individually and as Administrative Agent), Chase Manhattan (as
     Auction  Administrative  Agent),  Bank  of  America  (Individually  and  as
     Syndication  Agent),  Bank One (Individually  and as Documentation  Agent),
     Societe Generale (Individually and as Managing Agent), the Bank of Montreal
     (Individually  and as  Managing  Agent),  and  the  other  Banks  signatory
     thereto.

*4.3 Indenture,  dated  as of  July 8,  1998,  among  Ocean  Energy,  Inc.,  its
     Subsidiary Guarantors,  and U.S. Bank Trust National Association,  relating
     to the 8 3/8%  Series A Senior  Subordinated  Notes due 2008 and the 8 3/8%
     Series B Senior  Subordinated Notes due 2008 (the Indenture is incorporated
     by  reference  to Exhibit  10.22 to the Form 10-Q for the period ended June
     30, 1998 of Ocean Energy,  Inc.  (Registration  No. 0-25058) filed with the
     Securities  and Exchange  Commission  ("SEC") on August 14, 1998; the First
     Supplemental Indenture, dated March 30, 1999, is filed herewith).

*4.4 Indenture,  dated  as of  July 8,  1998,  among  Ocean  Energy,  Inc.,  its
     Subsidiary  Guarantors,  and Norwest Bank Minnesota,  National  Association
     (Norwest  Bank) as Trustee,  relating  to the 7 5/8% Senior  Notes due 2005
     (the  Indenture is  incorporated  by reference to Exhibit 10.23 to the Form
     10-Q for the period ended June 30, 1998 of Ocean Energy, Inc. (Registration
     No. 0-25058) filed with the SEC on August 14, 1998; the First  Supplemental
     Indenture, dated March 30, 1999, is filed herewith).

*4.5 Indenture,  dated  as of  July 8,  1998,  among  Ocean  Energy,  Inc.,  its
     Subsidiary Guarantors,  and Norwest Bank as Trustee, relating to the 8 1/4%
     Senior  Notes due 2018 (the  Indenture  is  incorporated  by  reference  to
     Exhibit  10.24 to the Form 10-Q for the period ended June 30, 1998 of Ocean
     Energy,  Inc.  (Registration  No. 0-25058) filed with the SEC on August 14,
     1998;  the First  Supplemental  Indenture,  dated March 30, 1999,  is filed
     herewith).

*4.6 Indenture,  dated  as of  July 2,  1997,  among  Ocean  Energy,  Inc.,  the
     Subsidiary  Guarantors  Named  Therein  and  State  Street  Bank and  Trust
     Company,  as Trustee,  relating to the 8 7/8% Senior Subordinated Notes due
     2007 (the  Indenture  is  incorporated  by  reference to Exhibit 4.1 to the
     Registration  Statement on Form S-4 (No.  333-32715) of Ocean Energy,  Inc.
     filed with the SEC on August 1,  1997;  the First  Supplemental  Indenture,
     dated as of March 27, 1998, is  incorporated  by reference to Exhibit 10.11
     to the Form 8-K of Ocean Energy, Inc. (Registration No. 0-25058) filed with
     the SEC on March 31, 1998; the Second Supplemental  Indenture,  dated as of
     March 30, 1999 is filed herewith).

*4.7 Indenture,  dated as of September 26, 1996, among Ocean Energy, Inc. (f/k/a
     Flores & Rucks,  Inc.),  the Subsidiary  Guarantors Named Therein and Fleet
     National Bank, as Trustee, relating to the 9 3/4% Senior Subordinated Notes
     Due 2006 (the Indenture is  incorporated by reference to Exhibit 4.1 to the
     Quarterly  Report on Form 10-Q for the quarter ended  September 30, 1996 of
     Ocean Energy,  Inc.  (Registration  No.  0-25058);  the First  Supplemental
     Indenture,  dated as of March 27,  1998,  is  incorporated  by reference to
     Exhibit  10.10  to the Form 8-K of Ocean  Energy,  Inc.  (Registration  No.
     0-25058)  filed with the SEC on March 31,  1998;  the  Second  Supplemental
     Indenture, dated March 30, 1999, is filed herewith).


                                      28

<PAGE>

                               OCEAN ENERGY, INC.

*4.8 Indenture,  dated as of October 30,  1995,  among  Ocean  Energy,  Inc.,  a
     Delaware corporation  (successor by merger to United Meridian Corporation),
     Ocean  Energy,  Inc., a Louisiana  corporation  (successor by merger to UMC
     Petroleum  Corporation)  and Bank of Montreal  Trust  Company,  as Trustee,
     relating to the 10 3/8% Senior  Subordinated  Notes Due 2005 (the Indenture
     is incorporated by reference to Exhibit 4.20 to UMC's Annual Report on Form
     10-K  for  the  year  ended  December  31,  1995;  the  First  Supplemental
     Indenture,  dated as of November 4, 1997, is  incorporated  by reference to
     Exhibit 4.11 to the Form 10-Q for the quarter  ended  September 30, 1998 of
     Ocean Energy,  Inc.  (Registration  No. 0-25058);  the Second  Supplemental
     Indenture,  dated as of March 27,  1998,  is  incorporated  by reference to
     Exhibit  10.12  to the Form 8-K of Ocean  Energy,  Inc.  (Registration  No.
     0-25058) filed with the SEC on March 31, 1998; the Third Supplemental
     Indenture, dated March 30, 1999, is filed herewith).

*4.9 Indenture,  dated as of December 1, 1994,  among Ocean Energy,  Inc. (f/k/a
     Flores & Rucks, Inc.), the Subsidiary  Guarantors Named Therein and Shawmut
     Bank Connecticut, National Association, as Trustee, relating to the 13 1/2%
     Senior  Notes Due 2004,  (the  Indenture  is  incorporated  by reference to
     Exhibit 4.1 to the Annual  Report on Form 10-K for the year ended  December
     31,  1994 of Ocean  Energy,  Inc.  (Registration  No.  0-25058);  the First
     Supplemental Indenture,  dated as of September 19, 1996, is incorporated by
     reference  to  Exhibit  4.1  to  the  Form  8-K  of  Ocean   Energy,   Inc.
     (Registration  No.  0-25058)  filed with the SEC on October 10,  1996;  the
     Second Supplemental  Indenture,  dated as of July 14, 1997, is incorporated
     by  reference to Exhibit 4.1 to the  Quarterly  Report on Form 10-Q for the
     quarter ended September 30, 1997 of Ocean Energy,  Inc.  (Registration  No.
     0-25058); the Third Supplemental Indenture,  dated as of March 27, 1998, is
     incorporated  by reference to Exhibit 10.9 to the Form 8-K of Ocean Energy,
     Inc.  (Registration  No. 0-25058) filed with the SEC on March 31, 1998; the
     Fourth Supplemental Indenture, dated March 30, 1999, is filed herewith).

*4.10First  Supplemental  Indenture,  date as of March 30,  1999,  to the Senior
     Indenture,  dated as of  September  1, 1997,  relating to the 7 1/2% Senior
     Notes Due 2027.

*4.11First  Supplemental  Indenture,  date as of March 30,  1999,  to the Senior
     Indenture,  dated as of July 15, 1993,  relating to the 7 7/8% Senior Notes
     Due 2003.

*4.12First  Supplemental  Indenture,  date as of March 30,  1999,  to the Senior
     Subordinated  Indenture,  dated as of July 15, 1993, relating to the 8 5/8%
     Senior Subordinated Notes Due 2005.

4.13 Amendment No. 2 to Amended and Restated Rights Agreement, dated as of March
     10, 1999, by and between the Company and BankBoston,  N.A. (incorporated by
     reference to Exhibit 4.1 to the Company's  Current Report on Form 8-K filed
     with the Securities and Exchange Commission on March 12, 1999).

#10.1 Employment Agreement, dated as of March 27, 1998, among Ocean Energy, Inc.
     and John B. Brock,  as amended (the Agreement is  incorporated by reference
     to Exhibit 10.1 to the Form 8-K of Ocean  Energy,  Inc.  (Registration  No.
     0-25058) filed with the SEC on March 31, 1998;  Amendment No.1, dated as of
     November 24, 1998,  is  incorporated  by reference to Exhibit  10.33 to the
     Annual  Report on Form 10-K for the year ended  December 31, 1998, of Ocean
     Energy, Inc. (Registration No. 0-25058).

#10.2 Employment Agreement, dated as of March 27, 1998, among Ocean Energy, Inc.
     and James C. Flores, as amended (the Agreement is incorporated by reference
     to Exhibit 10.2 to the Form 8-K of Ocean  Energy,  Inc.  (Registration  No.
     0-25058) filed with the SEC on March 31, 1998;  Amendment No.1, dated as of
     November 24, 1998,  is  incorporated  by reference to Exhibit  10.34 to the
     Annual  Report on Form 10-K for the year ended  December 31, 1998, of Ocean
     Energy, Inc. (Registration No. 0-25058).

*#10.3 UMC 1987  Nonqualified  Stock  Option  Plan,  as  amended,  (the  Plan is
     incorporated  herein by  
                                       29

<PAGE>

                               OCEAN ENERGY, INC.

     reference  to Exhibit  10.3 to UMC's Form S-1 (No.
     33-63532)  filed with the SEC on May 28, 1993; the Third  Amendment,  dated
     November 16, 1993, is  incorporated  herein by reference to Exhibit 10.4 to
     UMC's  1993 Form  10-K  filed  with the SEC on March 7,  1994;  the  Fourth
     Amendment,  dated April 6, 1994,  is  incorporated  by reference to Exhibit
     10.6 to UMC's  1994 Form 10-K  filed  with the SEC on March 10,  1995;  the
     Fifth  Amendment,  dated November 19, 1997, is incorporated by reference to
     Exhibit  4.7 to  UMC's  Form  S-3  (No.  333-42467)  filed  with the SEC on
     December  17,  1997);  the Sixth  Amendment,  dated  March 27,  1998 (filed
     herewith); the Seventh Amendment, dated February 1, 1999 (filed herewith).


*#10.4 UMC 1994 Employee Nonqualified Stock Option Plan, as amended (the Plan is
     incorporated by reference to Exhibit 4.14 to UMC's Form S-8 (No.  33-79160)
     filed with the SEC on May 19, 1994; the First Amendment, dated November 16,
     1994, is incorporated by reference to Exhibit 4.11.1 to UMC's Form S-8 (No.
     33-86480)  filed with the SEC on November 18, 1994;  the Second  Amendment,
     dated May 22, 1996, is  incorporated by reference to Exhibit 4.3.2 to UMC's
     Form S-8 (No.  333-05401)  filed  with the SEC on June 6,  1996;  the Third
     Amendment, dated November 13, 1996, is incorporated by reference to Exhibit
     4.3.3 to UMC's Form S-8 (No. 333-28017) filed with the SEC on May 29, 1997;
     the  Fourth  Amendment,  dated  May 29,  1997,  is  incorporated  herein by
     reference to Exhibit 4.3.4 to UMC's Form S-8 (No. 333-28017) filed with the
     SEC on May 29, 1997;  the Fifth  Amendment,  dated  November  19, 1997,  is
     incorporated by reference to Exhibit 4.8 to UMC's Form S-3 (No.  333-42467)
     filed with the SEC on December 17, 1997; the Sixth  Amendment,  dated March
     27, 1998 is filed herewith).

#10.5Amendment  to UMC 1994  Non-Qualified  Stock  Option  Agreement  for Former
     Employees of General  Atlantic  Resources,  Inc. dated as of April 16, 1996
     among UMC and Donald D. Wolf (incorporated by reference to Exhibit 10.22 to
     UMC's  Form 10-Q for the period  ended  September  30,  1996 filed with the
     Securities and Exchange Commission on August 8, 1996).

*#10.6 UMC 1994 Outside  Directors'  Nonqualified  Stock Option Plan, as amended
     (the Plan is incorporated herein by reference to Exhibit 4.15 to UMC's Form
     S-8 (No. 33-79160) filed with the SEC on May 19, 1994; the First Amendment,
     dated May 22, 1996, is  incorporated by reference to Exhibit 4.4.1 to UMC's
     Form S-8 (No.  333-05401)  filed with the SEC on June 6,  1996;  the Second
     Amendment,  dated November 13, 1996, is incorporated herein by reference to
     Exhibit 4.4 to UMC's Form S-8 (No. 333-28017) filed with the SEC on May 29,
     1997;  the Third  Amendment,  dated November 19, 1997, is  incorporated  by
     reference to Exhibit 4.9 to UMC's Form S-3 (No.  333-42467)  filed with the
     SEC on December 17, 1997); Fourth Amendment,  dated March 27, 1998 is filed
     herewith).

*#10.7 UMC Petroleum Corporation  Supplemental Benefit Plan effective January 1,
     1994,  approved  by the Board of  Directors  on March 29, 1994 (the Plan is
     incorporated  by reference  to Exhibit  10.10 to UMC's 1994 Form 10-K filed
     with the SEC on March 10, 1995; the Second  Amendment  dated March 30, 1999
     is filed herewith).

*#10.8 1994 Long-Term  Incentive Plan (the Plan, as amended,  is incorporated by
     reference to Exhibit 10.3 to Amendment No. 2 to the Registration  Statement
     on Form S-1 (No. 33-84308) of Ocean Energy, Inc. (Registration No. 0-25058)
     filed with the SEC on October 31, 1994); the Second Amendment,  dated March
     27, 1998 is filed herewith).

*#10.9 1996  Long-Term  Incentive  Plan,  as amended (the Plan,  as amended,  is
     incorporated  by reference to Exhibit 99.1 to the Form S-8 (No.  333-45117)
     of Ocean Energy,  Inc.  (Registration  No.  0-25058)  filed with the SEC on
     January 29,  1998);  the Second  Amendment,  dated March 27, 1998, is filed
     herewith).

#10.10  Long-Term  Incentive  Plan  for  Non-Executive   Employees,  as  amended
     (incorporated by reference to Exhibit 99.1 to the Form S-8 (No.  333-45119)
     of Ocean Energy,  Inc.  (Registration  No.  0-25058)  filed with the SEC on
     January 29, 1998;  Amendment  No. 2,  incorporated  by reference to Exhibit
     99.2 to the Form S-8 (No. 333-49185) of Ocean Energy,  Inc., filed with the
     SEC on April 1,  1998;  
                                       30

<PAGE>

                               OCEAN ENERGY, INC.

     Amendment  No.  3,  dated  as of May 20,  1998,  is
     incorporated  by  reference to Exhibit  10.46 to the Annual  Report on Form
     10-K  for  the  year  ended  December  31,  1998,  of  Ocean  Energy,  Inc.
     (Registration No. 0-25058).

#10.11 1998 Long-Term Incentive Plan, incorporated by reference to Appendix E to
     Ocean  Energy,   Inc.'s  Joint  Proxy  Statement  Prospectus  on  Form  S-4
     (333-43933) filed with the SEC on January 9, 1998.

#10.12 Ocean Energy,  Inc. Deferred  Compensation Plan incorporated by reference
     to  Exhibit  10.24 to the Annual  Report on Form  10-K for the year  ended 
     December 31, 1997 of Ocean Energy, Inc. (Registration No. 0-25058).

#10.13 Severance  Protection  Agreement,  dated as of December 20, 1997,  by and
     between United  Meridian  Corporation,  UMC Petroleum  Corporation  and the
     Executives  named  therein  incorporated  by  reference  to Exhibit 10.1 to
     United   Meridian's  Form  8-K  filed  with  the  Securities  and  Exchange
     Commission on December 23, 1997;  Amendment  No. 1 to Severance  Protection
     Agreement,  dated as of November 24, 1998 by and between Ocean Energy, Inc.
     and Jonathan M. Clarkson,  as incorporated by reference to Exhibit 10.36 to
     the Annual  Report on Form 10-K for the year ended  December 31,  1998,  of
     Ocean Energy, Inc. (Registration No. 0-25058).

*10.14  The  Fifth  Amendment  to  the  Seagull  Energy  Corporation  Management
     Stability Plan dated March 29, 1999.

*#10.15 Amendment to  Employment  Agreement by and between the Company and James
     T. Hackett dated November 24, 1998.

*#10.16  Amendment to  Employment  and  Consulting  Agreement by and between the
     Company and Barry J. Galt dated November 24, 1998.

*#10.17 Ocean Energy,  Inc. 1999 Change of Control Severance Plan dated February
     8, 1999; the First Amendment dated March 29, 1999.

#10.18 Form of  Employment  Agreement  among the Company and certain  executive
     officers and  directors  (incorporated  by  reference  to Exhibit  10.21 to
     Annual Report on Form 10-K of Ocean Energy, Inc. (Registration No. 0-25058)
     filed with the SEC on February 20, 1998).

*#10.19 Form  of  Indemnification  Agreements  among  the  Company  and  certain
     executive officers and directors .

*27.1 Financial Data Schedule.

27.2 Restated  Financial  Data  Schedule  for the year ended  December  31, 1998
     (incorporated  by  reference  to the  Annual  Report  on Form 10-K of Ocean
     Energy, Inc.  (Registration No. 0-25058) filed with the SEC on February 16,
     1999).

27.3 Restated  Financial Data Schedule for the years ended December 31, 1997 and
     1996  and the  quarterly  periods  in the  year  ended  December  31,  1997
     (incorporated  by reference  to Exhibit 27.1 to the Current  Report on Form
     8-K of Ocean Energy, Inc.  (Registration No. 0-25058) filed with the SEC on
     May 6, 1998).

27.4 Restated  Financial  Data  Schedule  for the  quarter  ended March 31, 1998
     (incorporated  by  reference  to  Exhibit  27.1 to the  Form  10-Q of Ocean
     Energy,  Inc.  (Registration  No.  0-25058)  filed  with the SEC on May 15,
     1998).

27.5 Restated  Financial  Data  Schedule  for the  quarter  ended June 30,  1998
     (incorporated  by  reference  to  Exhibit  27.1 to the  Form  10-Q of Ocean
     Energy,  Inc.  (Registration  No. 0-25058) filed with the SEC 

                                       31

<PAGE>

                               OCEAN ENERGY, INC.

     on August 14, 1998).

27.6 Restated  Financial Data Schedule for the quarter ended  September 30, 1998
     (incorporated  by  reference  to  Exhibit  27.1 to the  Form  10-Q of Ocean
     Energy, Inc.  (Registration No. 0-25058) filed with the SEC on November 16,
     1998).

*    Filed herewith.

#    Identifies management contracts and compensatory plans or arrangements.

(b)  Reports on Form 8-K: On March 12, 1999,  the Company filed a Current Report
     on Form 8-K  dated  March  10,  1999  with  respect  to the  Amendment  and
     Restatement of the Seagull Energy Corporation  Rights Agreement.  The items
     reported  in such  Current  Report  were Item 5 (Other  Events)  and Item 7
     (Financial Statements and Exhibits).  On April 8, 1999, the Company filed a
     Current Report on Form 8-K dated March 30, 1999 with respect to the Merger.
     The items  reported  in such  Current  Report were Item 2  (Acquisition  or
     Disposition of Assets) and Item 7 (Financial Statements and Exhibits).
     On May 4, 1999,  the Company filed a Current Report on Form 8-K dated April
     26, 1999 with respect to the appointment of auditors.  The item reported in
     such Current Report was Item 5 (Other Events).

                                   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 Corporation

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

                            Date:    May 17, 1999         

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

                            Date:   May 17, 1999

                                       32

<PAGE>

                                  Exhibit Index

<TABLE>

<S>                                                                                  <C>    

                                                                                      Page
                                                                                     Number

*4.1 Revolving Credit Agreement,  dated as of March 30, 1999, among the Company,
     Chase Bank of Texas, National Association ("Chase Texas") (Individually and
     as Administrative  Agent), The Chase Manhattan Bank ("Chase Manhattan") (as
     Auction  Administrative  Agent), Bank of America National Trust and Savings
     Association  ("Bank of America")  (Individually and as Syndication  Agent),
     Bank One Texas,  N. A.  ("Bank  One")  (Individually  and as  Documentation
     Agent),   Societe   Generale,   Southwest   Agency   ("Societe   Generale")
     (Individually  and as Managing Agent),  the Bank of Montreal  (Individually
     and as Managing Agent), and the other Banks signatory thereto.

*4.2 364-Day Credit  Agreement,  dated as of March 30, 1999,  among the Company,
     Chase Texas (Individually and as Administrative Agent), Chase Manhattan (as
     Auction  Administrative  Agent),  Bank  of  America  (Individually  and  as
     Syndication  Agent),  Bank One (Individually  and as Documentation  Agent),
     Societe Generale (Individually and as Managing Agent), the Bank of Montreal
     (Individually  and as  Managing  Agent),  and  the  other  Banks  signatory
     thereto.

*4.3 Indenture,  dated  as of  July 8,  1998,  among  Ocean  Energy,  Inc.,  its
     Subsidiary Guarantors,  and U.S. Bank Trust National Association,  relating
     to the 8 3/8%  Series A Senior  Subordinated  Notes due 2008 and the 8 3/8%
     Series B Senior  Subordinated Notes due 2008 (the Indenture is incorporated
     by  reference  to Exhibit  10.22 to the Form 10-Q for the period ended June
     30, 1998 of Ocean Energy,  Inc.  (Registration  No. 0-25058) filed with the
     Securities  and Exchange  Commission  ("SEC") on August 14, 1998; the First
     Supplemental Indenture, dated March 30, 1999, is filed herewith).

*4.4 Indenture,  dated  as of  July 8,  1998,  among  Ocean  Energy,  Inc.,  its
     Subsidiary  Guarantors,  and Norwest Bank Minnesota,  National  Association
     (Norwest  Bank) as Trustee,  relating  to the 7 5/8% Senior  Notes due 2005
     (the  Indenture is  incorporated  by reference to Exhibit 10.23 to the Form
     10-Q for the period ended June 30, 1998 of Ocean Energy, Inc. (Registration
     No. 0-25058) filed with the SEC on August 14, 1998; the First  Supplemental
     Indenture, dated March 30, 1999, is filed herewith).

*4.5 Indenture,  dated  as of  July 8,  1998,  among  Ocean  Energy,  Inc.,  its
     Subsidiary Guarantors,  and Norwest Bank as Trustee, relating to the 8 1/4%
     Senior  Notes due 2018 (the  Indenture  is  incorporated  by  reference  to
     Exhibit  10.24 to the Form 10-Q for the period ended June 30, 1998 of Ocean
     Energy,  Inc.  (Registration  No. 0-25058) filed with the SEC on August 14,
     1998;  the First  Supplemental  Indenture,  dated March 30, 1999,  is filed
     herewith).

*4.6 Indenture,  dated  as of  July 2,  1997,  among  Ocean  Energy,  Inc.,  the
     Subsidiary  Guarantors  Named  Therein  and  State  Street  Bank and  Trust
     Company,  as Trustee,  relating to the 8 7/8% Senior Subordinated Notes due
     2007 (the  Indenture  is  incorporated  by  reference to Exhibit 4.1 to the
     Registration  Statement on Form S-4 (No.  333-32715) of Ocean Energy,  Inc.
     filed with the SEC on August 1,  1997;  the First  Supplemental  Indenture,
     dated as of March 27, 1998, is  incorporated  by reference to Exhibit 10.11
     to the Form 8-K of Ocean Energy, Inc. (Registration No. 0-25058) filed with
     the SEC on March 31, 1998; the Second Supplemental  Indenture,  dated as of
     March 30, 1999 is filed herewith).

*4.7 Indenture,  dated as of September 26, 1996, among Ocean Energy, Inc. (f/k/a
     Flores & Rucks,  Inc.),  the Subsidiary  Guarantors Named Therein and Fleet
     National Bank, as Trustee, relating to the 9 3/4% Senior Subordinated Notes
     Due 2006 (the Indenture is  incorporated by reference to Exhibit 4.1 to the
     Quarterly  Report on Form 10-Q for the quarter ended  September 30, 1996 of
     Ocean Energy,  Inc.  (Registration  No.  0-25058);  the First  Supplemental
     Indenture,  dated as of March 27,  1998,  is  incorporated  by reference to
     Exhibit  10.10  to the Form 8-K of Ocean  Energy,  Inc.  (Registration  No.
     0-25058)  filed with the SEC on March 31,  1998;  the  Second  Supplemental
     Indenture, dated March 30, 1999, is filed herewith).

</TABLE>

<PAGE>

                                  Exhibit Index

<TABLE>

<S>                                                                                  <C>    

                                                                                      Page
                                                                                     Number

*4.8 Indenture,  dated as of October 30,  1995,  among  Ocean  Energy,  Inc.,  a
     Delaware corporation  (successor by merger to United Meridian Corporation),
     Ocean  Energy,  Inc., a Louisiana  corporation  (successor by merger to UMC
     Petroleum  Corporation)  and Bank of Montreal  Trust  Company,  as Trustee,
     relating to the 10 3/8% Senior  Subordinated  Notes Due 2005 (the Indenture
     is incorporated by reference to Exhibit 4.20 to UMC's Annual Report on Form
     10-K  for  the  year  ended  December  31,  1995;  the  First  Supplemental
     Indenture,  dated as of November 4, 1997, is  incorporated  by reference to
     Exhibit 4.11 to the Form 10-Q for the quarter  ended  September 30, 1998 of
     Ocean Energy,  Inc.  (Registration  No. 0-25058);  the Second  Supplemental
     Indenture,  dated as of March 27,  1998,  is  incorporated  by reference to
     Exhibit  10.12  to the Form 8-K of Ocean  Energy,  Inc.  (Registration  No.
     0-25058)  filed  with the SEC on March 31,  1998;  the  Third  Supplemental
     Indenture, dated March 30, 1999, is filed herewith).

*4.9 Indenture,  dated as of December 1, 1994,  among Ocean Energy,  Inc. (f/k/a
     Flores & Rucks, Inc.), the Subsidiary  Guarantors Named Therein and Shawmut
     Bank Connecticut, National Association, as Trustee, relating to the 13 1/2%
     Senior  Notes Due 2004,  (the  Indenture  is  incorporated  by reference to
     Exhibit 4.1 to the Annual  Report on Form 10-K for the year ended  December
     31,  1994 of Ocean  Energy,  Inc.  (Registration  No.  0-25058);  the First
     Supplemental Indenture,  dated as of September 19, 1996, is incorporated by
     reference  to  Exhibit  4.1  to  the  Form  8-K  of  Ocean   Energy,   Inc.
     (Registration  No.  0-25058)  filed with the SEC on October 10,  1996;  the
     Second Supplemental  Indenture,  dated as of July 14, 1997, is incorporated
     by  reference to Exhibit 4.1 to the  Quarterly  Report on Form 10-Q for the
     quarter ended September 30, 1997 of Ocean Energy,  Inc.  (Registration  No.
     0-25058); the Third Supplemental Indenture,  dated as of March 27, 1998, is
     incorporated  by reference to Exhibit 10.9 to the Form 8-K of Ocean Energy,
     Inc.  (Registration  No. 0-25058) filed with the SEC on March 31, 1998; the
     Fourth Supplemental Indenture, dated March 30, 1999, is filed herewith).

*4.10First  Supplemental  Indenture,  date as of March 30,  1999,  to the Senior
     Indenture,  dated as of  September  1, 1997,  relating to the 7 1/2% Senior
     Notes Due 2027.

*4.11First  Supplemental  Indenture,  date as of March 30,  1999,  to the Senior
     Indenture,  dated as of July 15, 1993,  relating to the 7 7/8% Senior Notes
     Due 2003.

*4.12First  Supplemental  Indenture,  date as of March 30,  1999,  to the Senior
     Subordinated  Indenture,  dated as of July 15, 1993, relating to the 8 5/8%
     Senior Subordinated Notes Due 2005.

4.13 Amendment No. 2 to Amended and Restated Rights Agreement, dated as of March
     10, 1999, by and between the Company and BankBoston,  N.A. (incorporated by
     reference to Exhibit 4.1 to the Company's  Current Report on Form 8-K filed
     with the Securities and Exchange Commission on March 12, 1999).

#10.1 Employment Agreement, dated as of March 27, 1998, among Ocean Energy, Inc.
     and John B. Brock,  as amended (the Agreement is  incorporated by reference
     to Exhibit 10.1 to the Form 8-K of Ocean  Energy,  Inc.  (Registration  No.
     0-25058) filed with the SEC on March 31, 1998;  Amendment No.1, dated as of
     November 24, 1998,  is  incorporated  by reference to Exhibit  10.33 to the
     Annual  Report on Form 10-K for the year ended  December 31, 1998, of Ocean
     Energy, Inc. (Registration No. 0-25058).

#10.2 Employment Agreement, dated as of March 27, 1998, among Ocean Energy, Inc.
     and James C. Flores, as amended (the Agreement is incorporated by reference
     to Exhibit 10.2 to the Form 8-K of Ocean  Energy,  Inc.  (Registration  No.
     0-25058) filed with the SEC on March 31, 1998;  Amendment No.1, dated as of
     November 24, 1998,  is  incorporated  by reference to Exhibit  10.34 to the
     Annual  Report on Form 10-K for the year ended  December 31, 1998, of Ocean
     Energy, Inc. (Registration No. 0-25058).

</TABLE>
<PAGE>

                                  Exhibit Index

<TABLE>

<S>                                                                                  <C>    

                                                                                      Page
                                                                                     Number

*#10.3 UMC 1987  Nonqualified  Stock  Option  Plan,  as  amended,  (the  Plan is
     incorporated  herein by  reference  to Exhibit  10.3 to UMC's Form S-1 (No.
     33-63532)  filed with the SEC on May 28, 1993; the Third  Amendment,  dated
     November 16, 1993, is  incorporated  herein by reference to Exhibit 10.4 to
     UMC's  1993 Form  10-K  filed  with the SEC on March 7,  1994;  the  Fourth
     Amendment,  dated April 6, 1994,  is  incorporated  by reference to Exhibit
     10.6 to UMC's  1994 Form 10-K  filed  with the SEC on March 10,  1995;  the
     Fifth  Amendment,  dated November 19, 1997, is incorporated by reference to
     Exhibit  4.7 to  UMC's  Form  S-3  (No.  333-42467)  filed  with the SEC on
     December  17,  1997);  the Sixth  Amendment,  dated  March 27,  1998 (filed
     herewith); the Seventh Amendment, dated February 1, 1999 (filed herewith).

*#10.4 UMC 1994 Employee Nonqualified Stock Option Plan, as amended (the Plan is
     incorporated by reference to Exhibit 4.14 to UMC's Form S-8 (No.  33-79160)
     filed with the SEC on May 19, 1994; the First Amendment, dated November 16,
     1994, is incorporated by reference to Exhibit 4.11.1 to UMC's Form S-8 (No.
     33-86480)  filed with the SEC on November 18, 1994;  the Second  Amendment,
     dated May 22, 1996, is  incorporated by reference to Exhibit 4.3.2 to UMC's
     Form S-8 (No.  333-05401)  filed  with the SEC on June 6,  1996;  the Third
     Amendment, dated November 13, 1996, is incorporated by reference to Exhibit
     4.3.3 to UMC's Form S-8 (No. 333-28017) filed with the SEC on May 29, 1997;
     the  Fourth  Amendment,  dated  May 29,  1997,  is  incorporated  herein by
     reference to Exhibit 4.3.4 to UMC's Form S-8 (No. 333-28017) filed with the
     SEC on May 29, 1997;  the Fifth  Amendment,  dated  November  19, 1997,  is
     incorporated by reference to Exhibit 4.8 to UMC's Form S-3 (No.  333-42467)
     filed with the SEC on December 17, 1997; the Sixth  Amendment,  dated March
     27, 1998 is filed herewith).

#10.5Amendment  to UMC 1994  Non-Qualified  Stock  Option  Agreement  for Former
     Employees of General  Atlantic  Resources,  Inc. dated as of April 16, 1996
     among UMC and Donald D. Wolf (incorporated by reference to Exhibit 10.22 to
     UMC's  Form 10-Q for the period  ended  September  30,  1996 filed with the
     Securities and Exchange Commission on August 8, 1996).

*#10.6 UMC 1994 Outside  Directors'  Nonqualified  Stock Option Plan, as amended
     (the Plan is incorporated herein by reference to Exhibit 4.15 to UMC's Form
     S-8 (No. 33-79160) filed with the SEC on May 19, 1994; the First Amendment,
     dated May 22, 1996, is  incorporated by reference to Exhibit 4.4.1 to UMC's
     Form S-8 (No.  333-05401)  filed with the SEC on June 6,  1996;  the Second
     Amendment,  dated November 13, 1996, is incorporated herein by reference to
     Exhibit 4.4 to UMC's Form S-8 (No. 333-28017) filed with the SEC on May 29,
     1997;  the Third  Amendment,  dated November 19, 1997, is  incorporated  by
     reference to Exhibit 4.9 to UMC's Form S-3 (No.  333-42467)  filed with the
     SEC on December 17, 1997); Fourth Amendment,  dated March 27, 1998 is filed
     herewith).

*#10.7 UMC Petroleum Corporation  Supplemental Benefit Plan effective January 1,
     1994,  approved  by the Board of  Directors  on March 29, 1994 (the Plan is
     incorporated  by reference  to Exhibit  10.10 to UMC's 1994 Form 10-K filed
     with the SEC on March 10, 1995; the Second  Amendment  dated March 30, 1999
     is filed herewith).

*#10.8 1994 Long-Term  Incentive Plan (the Plan, as amended,  is incorporated by
     reference to Exhibit 10.3 to Amendment No. 2 to the Registration  Statement
     on Form S-1 (No. 33-84308) of Ocean Energy, Inc. (Registration No. 0-25058)
     filed with the SEC on October 31, 1994); the Second Amendment,  dated March
     27, 1998 is filed herewith).

*#10.9 1996  Long-Term  Incentive  Plan,  as amended (the Plan,  as amended,  is
     incorporated  by reference to Exhibit 99.1 to the Form S-8 (No.  333-45117)
     of Ocean Energy,  Inc.  (Registration  No.  0-25058)  filed with the SEC on
     January 29,  1998);  the Second  Amendment,  dated March 27, 1998, is filed
     herewith).

</TABLE>
<PAGE>

                                  Exhibit Index

<TABLE>

<S>                                                                                  <C>    

                                                                                      Page
                                                                                     Number

#10.10  Long-Term  Incentive  Plan  for  Non-Executive   Employees,  as  amended
     (incorporated by reference to Exhibit 99.1 to the Form S-8 (No.  333-45119)
     of Ocean Energy,  Inc.  (Registration  No.  0-25058)  filed with the SEC on
     January 29, 1998;  Amendment  No. 2,  incorporated  by reference to Exhibit
     99.2 to the Form S-8 (No. 333-49185) of Ocean Energy,  Inc., filed with the
     SEC on April 1,  1998;  Amendment  No.  3,  dated  as of May 20,  1998,  is
     incorporated  by  reference to Exhibit  10.46 to the Annual  Report on Form
     10-K  for  the  year  ended  December  31,  1998,  of  Ocean  Energy,  Inc.

     (Registration No. 0-25058).

#10.11 1998 Long-Term Incentive Plan, incorporated by reference to Appendix E to
     Ocean  Energy,   Inc.'s  Joint  Proxy  Statement  Prospectus  on  Form  S-4

     (333-43933) filed with the SEC on January 9, 1998.

#10.12 Ocean Energy,  Inc. Deferred  Compensation Plan incorporated by reference
     to  Exhibit  10.24 to the  Annual  Report on Form  10-K for the year  ended
     December 31, 1997 of Ocean Energy, Inc. (Registration No. 0-25058).

#10.13 Severance  Protection  Agreement,  dated as of December 20, 1997,  by and
     between United  Meridian  Corporation,  UMC Petroleum  Corporation  and the
     Executives  named  therein  incorporated  by  reference  to Exhibit 10.1 to
     United   Meridian's  Form  8-K  filed  with  the  Securities  and  Exchange
     Commission on December 23, 1997;  Amendment  No. 1 to Severance  Protection
     Agreement,  dated as of November 24, 1998 by and between Ocean Energy, Inc.
     and Jonathan M. Clarkson,  as incorporated by reference to Exhibit 10.36 to
     the Annual  Report on Form 10-K for the year ended  December 31,  1998,  of
     Ocean Energy, Inc. (Registration No. 0-25058).

*10.14  The  Fifth  Amendment  to  the  Seagull  Energy  Corporation  Management
     Stability Plan dated March 29, 1999.

*#10.15 Amendment to  Employment  Agreement by and between the Company and James
     T. Hackett dated November 24, 1998.

*#10.16  Amendment to  Employment  and  Consulting  Agreement by and between the
     Company and Barry J. Galt dated November 24, 1998.

*#10.17 Ocean Energy,  Inc. 1999 Change of Control Severance Plan dated February
     8, 1999; the First Amendment dated March 29, 1999.

#10.18 Form of  Employment  Agreement  among the Company and certain  executive
     officers and  directors  (incorporated  by  reference  to Exhibit  10.21 to
     Annual Report on Form 10-K of Ocean Energy, Inc. (Registration No. 0-25058)
     filed with the SEC on February 20, 1998).

*#10.19 Form  of  Indemnification  Agreements  among  the  Company  and  certain
     executive officers and directors .
</TABLE>

<PAGE>

                                  Exhibit Index

<TABLE>

<S>                                                                                  <C>    

                                                                                      Page
                                                                                     Number

*27.1 Financial Data Schedule.

27.2 Restated  Financial  Data  Schedule  for the year ended  December  31, 1998
     (incorporated  by  reference  to the  Annual  Report  on Form 10-K of Ocean
     Energy, Inc.  (Registration No. 0-25058) filed with the SEC on February 16,
     1999).

27.3 Restated  Financial Data Schedule for the years ended December 31, 1997 and
     1996  and the  quarterly  periods  in the  year  ended  December  31,  1997
     (incorporated  by reference  to Exhibit 27.1 to the Current  Report on Form
     8-K of Ocean Energy, Inc.  (Registration No. 0-25058) filed with the SEC on
     May 6, 1998).

27.4 Restated  Financial  Data  Schedule  for the  quarter  ended March 31, 1998
     (incorporated  by  reference  to  Exhibit  27.1 to the  Form  10-Q of Ocean
     Energy,  Inc.  (Registration  No.  0-25058)  filed  with the SEC on May 15,
     1998).

27.5 Restated  Financial  Data  Schedule  for the  quarter  ended June 30,  1998
     (incorporated  by  reference  to  Exhibit  27.1 to the  Form  10-Q of Ocean
     Energy,  Inc.  (Registration  No. 0-25058) filed with the SEC on August 14,
     1998).

27.6 Restated  Financial Data Schedule for the quarter ended  September 30, 1998
     (incorporated  by  reference  to  Exhibit  27.1 to the  Form  10-Q of Ocean
     Energy, Inc.  (Registration No. 0-25058) filed with the SEC on November 16,
     1998).

</TABLE>

*    Filed herewith.

#    Identifies management contracts and compensatory plans or arrangements.