<PAGE>

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


                                   FORM 10-Q


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

            For the quarterly period ended          MARCH 31, 2000
                                            -----------------------

                                      OR

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

            For the transition period from __________ to __________

                        Commission File Number  0-22258


                             AVIVA PETROLEUM INC.
            (Exact name of registrant as specified in its charter)

Texas                                                            75-1432205
(State or other jurisdiction of                                 (I.R.S. Employer
incorporation or organization)                                  Identification
                                                                Number)

8235 Douglas Avenue,                                            75225
Suite 400, Dallas, Texas                                        (Zip Code)
(Address of principal executive offices)

                                (214) 691-3464
             (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
                                                      Yes  X    No
                                                          ---      ---

Number of shares of Common Stock, no par value, outstanding at March 31, 2000,
was 46,900,132 of which 25,483,690 shares of Common Stock were represented by
Depositary Shares.  Each Depositary Share represents five shares of Common Stock
held by a Depositary.
<PAGE>

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.
-----------------------------

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
                     Condensed Consolidated Balance Sheet
                    (in thousands, except number of shares)
                                  (unaudited)
<TABLE>
<CAPTION>
                                                             March 31,                 December 31,
                                                                  2000                         1999
                                                          ------------                -------------
<S>                                                       <C>                          <C>
ASSETS

Current assets:
 Cash and cash equivalents                                $        863                $        846
 Restricted cash                                                     4                           4
 Accounts receivable                                             2,475                       1,650
 Inventories                                                       735                         724
 Prepaid expenses and other                                        168                         236
                                                          ------------                ------------
   Total current assets                                          4,245                       3,460
                                                          ------------                ------------

Property and equipment, at cost (note 3):
 Oil and gas properties and equipment
 (full cost method)                                             68,722                      68,462
 Other                                                             584                         584
                                                          ------------                ------------
                                                                69,306                      69,046
   Less accumulated depreciation,
     depletion and amortization                                (65,304)                    (65,081)
                                                          ------------                ------------
                                                                 4,002                       3,965
Other assets                                                     1,600                       1,561
                                                          ------------                ------------
                                                          $      9,847                $      8,986
                                                          ============                ============

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
 Current portion of long term debt (note 4)               $     14,495                $    14,495
 Accounts payable                                                2,843                      3,081
 Accrued liabilities                                             1,463                      1,024
                                                          ------------                -----------
   Total current liabilities                                    18,801                     18,600
                                                          ------------                -----------

Gas balancing obligations and other                              1,796                      1,869

Stockholders' deficit:
 Common stock, no par value,
  authorized 348,500,000 shares;
  issued 46,900,132 shares                                       2,345                      2,345
 Additional paid-in capital                                     34,855                     34,855
 Accumulated deficit/*/                                        (47,950)                   (48,683)
                                                          ------------                -----------
  Total stockholders' deficit                                  (10,750)                   (11,483)

Commitments and contingencies (note 5)
                                                          ------------                -----------
                                                          $      9,847                $     8,986
                                                          ============                ===========
/*/ Accumulated deficit of $70,057 was eliminated at December 31, 1992 in connection with a quasi-reorganization.
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       2
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
                Condensed Consolidated Statement of Operations
                     (in thousands, except per share data)
                                  (unaudited)

<TABLE>
<CAPTION>
                                                                                   Three Months Ended
                                                                                       March 31,

                                                                                    2000         1999
                                                                                  --------     --------
<S>                                                                               <C>          <C>
Oil and gas sales                                                                 $  2,541     $  1,184
                                                                                  --------     --------
Expense:
 Production                                                                            810          900
 Depreciation, depletion and amortization                                              235          336
 General and administrative                                                            301          359
 Recovery of losses on accounts receivable                                             (52)           -
                                                                                  --------     --------
   Total expense                                                                     1,294        1,595
                                                                                  --------     --------

Other income (expense):
 Interest and other income (expense), net                                                -           34
 Interest expense                                                                     (395)        (291)
                                                                                  --------     --------

   Total other income (expense)                                                       (395)        (257)
                                                                                  --------     --------

Earnings (loss) before income taxes                                                    852         (668)

Income taxes                                                                           119           63
                                                                                  --------     --------

     Net earnings (loss)                                                          $    733     $   (731)
                                                                                  ========     ========

Weighted average common shares outstanding                                          46,900       46,700
                                                                                  ========     ========

Basic and diluted net earnings (loss) per common share                            $   0.02     $  (0.02)
                                                                                  ========     ========
</TABLE>



See accompanying notes to condensed consolidated financial statements.

                                       3
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
                Condensed Consolidated Statement of Cash Flows
                                (in thousands)
                                  (unaudited)

<TABLE>
<CAPTION>
                                                                                         Three Months Ended
                                                                                              March 31,

                                                                                           2000         1999
                                                                                       --------     --------
<S>                                                                                    <C>          <C>
Net earnings (loss)                                                                    $    733     $   (731)
Adjustments to reconcile net earnings (loss) to net cash
 provided by operating activities:
   Depreciation, depletion and amortization                                                 235          336
   Changes in working capital and other                                                    (693)         423
                                                                                       --------     --------

   Net cash provided by operating activities                                                275           28
                                                                                       --------     --------

Cash flows from investing activities -
 property and equipment expenditures                                                       (260)         (74)
                                                                                       --------     --------

Cash flows from financing activities -
 principal payments on long term debt                                                         -         (150)
                                                                                       --------     --------

Effect of exchange rate changes on cash and
 cash equivalents                                                                             2          (15)
                                                                                       --------     --------

Net increase (decrease) in cash and cash equivalents                                         17         (211)
Cash and cash equivalents at beginning of the period                                        846        1,712
                                                                                       --------     --------

Cash and cash equivalents at end of the period                                         $    863     $  1,501
                                                                                       ========     ========

</TABLE>


See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
           Condensed Consolidated Statement of Stockholders' Deficit
                    (in thousands, except number of shares)
                                  (unaudited)



<TABLE>
<CAPTION>


                                     Common Stock
                                 ----------------------
                                                         Additional                         Total
                                       Number               Paid-in   Accumulated    Stockholders'
                                    of Shares    Amount     Capital       Deficit         Deficit
                                 ------------  --------  ----------  ------------  --------------
<S>                              <C>           <C>       <C>         <C>           <C>

Balances at December 31, 1999      46,900,132  $  2,345  $   34,855  $    (48,683) $      (11,483)
Net earnings                                -         -           -           733             733
                                 ------------  --------  ----------  ------------  --------------

Balances at March 31, 2000         46,900,132  $  2,345  $   34,855  $    (47,950) $      (10,750)
                                 ============  ========  ==========  ============  ==============

</TABLE>


See accompanying notes to condensed consolidated financial statements.

                                       5
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                  (unaudited)

1.   General

     The condensed consolidated financial statements of Aviva Petroleum Inc. and
     subsidiaries (the "Company" or "Aviva") included herein have been prepared
     by the Company without audit, pursuant to the rules and regulations of the
     Securities and Exchange Commission. Certain information and footnote
     disclosures normally included in financial statements prepared in
     accordance with generally accepted accounting principles have been
     condensed or omitted pursuant to such rules and regulations, although the
     Company believes that the disclosures contained herein are adequate to make
     the information presented not misleading. These condensed consolidated
     financial statements should be read in conjunction with the Company's prior
     audited yearly financial statements and the notes thereto, included in the
     Company's latest annual report on Form 10-K.

     In the opinion of the Company, all adjustments, consisting of normal
     recurring accruals, necessary to present fairly the information in the
     accompanying financial statements have been included. The results of
     operations for such interim periods are not necessarily indicative of the
     results for the full year.

     The Company's condensed consolidated financial statements have been
     presented on a going concern basis which contemplates the realization of
     assets and the satisfaction of liabilities in the normal course of
     business. As discussed in note 2 below, there is substantial doubt about
     the Company's ability to continue as a going concern. The condensed
     consolidated financial statements do not include any adjustments relating
     to the recoverability and classification of asset carrying amounts or the
     amount and classification of liabilities that might result should the
     Company be unable to continue as a going concern.

2.   Liquidity

     During the last quarter of calendar year 1997 and throughout calendar year
     1998, world oil prices declined dramatically. This decline in oil prices
     was particularly severe in Colombia. Colombian oil prices, during the 24-
     month period ended December 31, 1998, fell from a high of $22.71 per barrel
     in January 1997 to $7.50 per barrel in December 1998. Whereas the sale
     price for crude oil from the Santana contract averaged $19.82 per barrel in
     1996 and $17.39 per barrel in 1997, the sale price averaged $10.31 per
     barrel during calendar year 1998 and $15.57 per barrel during calendar year
     1999.

     Those price declines materially and adversely affected the results of
     operations and the financial position of the Company. During the years
     ended December 31, 1999, 1998 and 1997, the Company reported net losses of
     $0.4 million, $17.1 million and $22.5 million, respectively, and declining
     amounts of net cash provided by (used in) operating activities of $(0.5)
     million, $(0.05) million and $1.7 million, respectively. The Company's
     stockholders' deficit was approximately $10.8 million as of March 31, 2000.

     Although world oil prices recovered during the latter part of 1999, and the
     Company's Colombian oil price averaged $28.13 per barrel during the first
     quarter of 2000, the Company remains highly leveraged with $14.5 million in
     current debt as of March 31, 2000, pursuant to bank credit facilities
     formerly with ING (U.S.) Capital Corporation ("ING Capital") and the U.S.
     Overseas Private Investment Corporation ("OPIC"), as more fully described
     in note 4. On May 1, 2000, ING Capital and OPIC sold their entire interests
     in the bank credit facilities to Crosby Capital, L.L.C., a Texas limited
     liability company based in Houston, Texas.

                                       6
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
             Notes to Condensed Consolidated Financial Statements
                            (unaudited) (continued)

     The Company is not in compliance with various covenants under the credit
     facilities nor is it in compliance with the minimum escrow balance required
     thereunder. As a result, the new lenders have the right to accelerate
     payment on the debt and, therefore, the Company has classified all long-
     term debt as current in the March 31, 2000 condensed consolidated balance
     sheet. Furthermore, the Company was unable to pay the principal payment of
     $5.7 million due on April 30, 1999, and subsequent monthly principal
     payments of $281,250 (an aggregate of $8.8 million through March 31, 2000).
     The Company did pay $150,000 of principal during the second quarter of 1999
     and all of the interest through June 30, 1999; however, interest due
     subsequent to this date in the amount of $1.3 million has not been paid.
     Assuming no change in its capital structure, the Company will not have the
     financial resources to pay the $9.9 million of principal and interest which
     is in arrears and future minimum monthly principal payments of $281,250 due
     through December 31, 2001.

     The Company's management had been in more or less continuous discussions
     with the Company's former lenders regarding a restructuring of its debt for
     more than two years. During that period, the Company attempted to negotiate
     several transactions and had engaged financial advisers to locate equity
     investors to participate in recapitalization and debt restructuring
     transactions. Except for the Garnet merger in October 1998, none of such
     proposals came to fruition, primarily because of the inability of equity
     participants, former lenders and the Company to agree on financial terms.

     Management of the Company is in discussions with the Company's new lenders
     concerning a restructuring of the Company. Such a restructuring may involve
     the sale of a substantial portion of the Company's oil and gas assets and a
     significant reduction of the Company's outstanding debt. While management
     is optimistic that a restructuring can be achieved that will provide the
     Company with the liquidity necessary to continue operations, there can be
     no assurance that this will be the case.

     Although management of the Company is pursuing the restructuring
     assiduously, its ability to effect such a restructuring is dependent upon
     the Company being able to reach an agreement with the new lenders, a matter
     that is beyond the control of the Company. The new lenders may not agree to
     a restructuring of the Company's debt or may insist on financial terms that
     are viewed by the Company's board of directors as inconsistent with
     continued operations. If the Company is unable to consummate a
     restructuring, then, in the absence of another business transaction, the
     Company cannot achieve compliance with or make payments required by the
     credit facilities. Accordingly, the new lenders could accelerate all
     amounts outstanding and attempt to realize upon the collateral securing the
     debt. As a result of this uncertainty, management believes there is
     substantial doubt about the Company's ability to continue as a going
     concern.

3.   Property and Equipment

     Internal general and administrative costs directly associated with oil and
     gas property acquisition, exploration and development activities have been
     capitalized in accordance with the accounting policies of the Company. Such
     costs totaled $15,000 for the three months ended March 31, 2000 and $9,000
     for the three months ended March 31, 1999.

                                       7
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
             Notes to Condensed Consolidated Financial Statements
                            (unaudited) (continued)

     Unevaluated oil and gas properties totaling $576,000 and $553,000 at March
     31, 2000 and December 31, 1999, respectively, have been excluded from costs
     subject to depletion. The Company capitalized interest costs of $16,000 and
     $12,000 for the three-month periods ended March 31, 2000 and 1999,
     respectively, on these properties.

4.   Long Term Debt

     On October 28, 1998, concurrently with the consummation of the merger with
     Garnet Resources Corporation ("Garnet Merger"), Neo Energy, Inc., an
     indirect subsidiary of the Company, and the Company entered into a Restated
     Credit Agreement with ING Capital. ING Capital, Chase and OPIC also entered
     into a Joint Finance and Intercreditor Agreement (the "Intercreditor
     Agreement") with the Company. ING Capital agreed to loan Neo Energy, Inc.
     an additional $800,000, bringing the total outstanding balance due ING
     Capital to $9,000,000. The outstanding balance due to Chase was paid down
     to $6,000,000 from the $6,350,000 balance owed by Garnet prior to the
     merger.

     The Chase loan was unconditionally guaranteed by OPIC. On September 1,
     1999, the Chase loan was assigned and transferred to OPIC pursuant to this
     guarantee.

     The ING Capital loan and the OPIC loan (the "Bank Credit Facilities") are
     guaranteed by the Company and its material domestic subsidiaries. Both
     loans are also secured by the Company's consolidated interest in the
     Santana contract and related assets in Colombia, a first mortgage on the
     United States oil and gas properties of the Company and its subsidiaries, a
     lien on accounts receivable of the Company and its subsidiaries, and a
     pledge of the capital stock of the Company's subsidiaries.

     Borrowings under the ING Capital loan bear interest at the prime rate (as
     defined in the Restated Credit Agreement) plus 3% per annum. Borrowings
     under the OPIC loan bear interest at 10.27% per annum.

     Borrowings under the Bank Credit Facilities are payable as follows:
     $5,700,000 in April 1999, and thereafter $281,250 per month until final
     maturity on December 31, 2001. The terms of the Bank Credit Facilities,
     among other things, prohibit the Company from merging with another company
     or paying dividends, limit additional indebtedness, general and
     administrative expense, sales of assets and investments and require the
     maintenance of certain minimum financial ratios. As of March 31, 2000, the
     Company is not in compliance with various covenants under the Bank Credit
     Facilities. Moreover, the Company did not pay the $5,700,000 principal
     payment that was due April 30, 1999, and subsequent monthly principal
     payments of $281,250. As a result, the lenders have the right to accelerate
     payment on the debt and, therefore, the Company has classified all long-
     term debt as current in the March 31, 2000 condensed consolidated balance
     sheet.

     The Company is also required to maintain an escrow account pursuant
     to the Bank Credit Facilities. On March 31, 1999 and thereafter, the escrow
     account must contain the total of the following for the next succeeding
     three-month period: (i) the amount of the minimum monthly principal
     payments (as defined in the loan documents), plus (ii) the interest
     payments due on the combined loans, plus (iii) the amount of all fees due
     under the loan documents and under the Intercreditor Agreement. The Company
     is not in compliance with the requirements of the escrow account.

                                       8
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
             Notes to Condensed Consolidated Financial Statements
                            (unaudited) (continued)

     On May 1, 2000, ING Capital and OPIC sold their entire interests in the
     Bank Credit Facilities to Crosby Capital LLC. See note 2 for information
     regarding management's attempts to restructure the debt.

5.   Commitments and Contingencies

     The Company is engaged in ongoing operations on the Santana contract in
     Colombia. The contract obligations have been met; however, the Company
     plans to recomplete certain existing wells and engage in various other
     projects. The Company's current share of the estimated future costs of
     these activities is approximately $0.6 million at March 31, 2000. Any
     substantial increase in the amount of the above referenced expenditures
     could adversely affect the Company's ability to meet these obligations.

     The Company expects to fund these activities using existing cash and cash
     provided from operations. Risks that could adversely affect funding of such
     activities include, among others, acceleration of payment of the Company's
     long term debt, delays in obtaining the required environmental approvals
     and permits, cost overruns, failure to produce the reserves as projected or
     a decline in the sales price of oil. Depending on the results of future
     exploration and development activities, substantial expenditures which have
     not been included in the Company's cash flow projections may be required.
     Failure to fund certain expenditures could result in the forfeiture of all
     or part of the Company's interest in this contract.

     On August 3, 1998, leftist Colombian guerrillas inflicted significant
     damage on the Company's oil processing and storage facilities at the Mary
     field, and to a lesser extent, at the Linda facilities. Since that time the
     Company has been subject to lesser attacks on its pipelines and equipment
     resulting in only minor interruptions of oil sales. The Colombian army
     guards the Company's operations; however, there can be no assurance that
     the Company's operations will not be the target of additional guerrilla
     attacks in the future. The damages resulting from the above referenced
     attacks were covered by insurance. There can be no assurance that such
     coverage will remain available or affordable.

     Under the terms of the contracts with Ecopetrol, a minimum of 25% of all
     revenues from oil sold to Ecopetrol is paid in Colombian pesos which may
     only be utilized in Colombia. To date, the Company has experienced no
     difficulty in repatriating the remaining 75% of such payments, which are
     payable in U.S. dollars.

     Activities of the Company with respect to the exploration, development and
     production of oil and natural gas are subject to stringent foreign,
     federal, state and local environmental laws and regulations, including but
     not limited to the Oil Pollution Act of 1990, the Outer Continental Shelf
     Lands Act, the Federal Water Pollution Control Act, the Resource
     Conservation and Recovery Act and the Comprehensive Environmental Response,
     Compensation, and Liability Act. Such laws and regulations have increased
     the cost of planning, designing, drilling, operating and abandoning wells.
     In most instances, the statutory and regulatory requirements relate to air
     and water pollution control procedures and the handling and disposal of
     drilling and production wastes. Although the Company believes that
     compliance with environmental laws and regulations will not have a material
     adverse effect on the Company's future operations or earnings, risks of
     substantial costs and liabilities are inherent in oil and gas operations
     and there can be no assurance that significant costs and liabilities,
     including civil or criminal penalties for violations of environmental laws
     and regulations, will not be incurred. Moreover, it is possible that other
     developments, such as

                                       9
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
             Notes to Condensed Consolidated Financial Statements
                            (unaudited) (continued)

     stricter environmental laws and regulations or claims for damages to
     property or persons resulting from the Company's operations, could result
     in substantial costs and liabilities. For additional discussions on the
     applicability of environmental laws and regulations and other risks that
     may affect the Company's operations, see the Company's latest annual report
     on Form 10-K.

     The Company is involved in certain litigation involving its oil and gas
     activities, but unrelated to environmental contamination issues. Management
     of the Company believes that these litigation matters will not have any
     material adverse effect on the Company's financial condition or results of
     operations.

                                       10
<PAGE>

                     AVIVA PETROLEUM INC. AND SUBSIDIARIES
             Notes to Condensed Consolidated Financial Statements
                            (unaudited) (continued)

6.   Segment Information

     The following is a summary of segment information of the Company as of and
     for the three-month periods ended March 31, 2000 and 1999 (in thousands):
<TABLE>
<CAPTION>

                                                United
                                                States   Colombia    Total
                                                -------  ---------  --------
<S>                                             <C>      <C>        <C>
     2000
     ----
     Oil and gas sales                          $  397     $2,144   $ 2,541
                                                ------     ------   -------

     Expense:
      Production                                   262        548       810
      Depreciation, depletion and amortization      39        196       235
      General and administrative                   290         11       301
      Recovery of losses on accounts receivable    (52)         -       (52)
                                                ------     ------   -------
                                                   539        755     1,294
                                                ------     ------   -------

     Interest and other income (expense), net       11        (11)        -
     Interest expense                             (114)      (281)     (395)
                                                ------     ------   -------

     Earnings (loss) before income taxes          (245)     1,097       852
     Income taxes                                    -        119       119
                                                ------     ------   -------

     Net earnings (loss)                        $ (245)    $  978   $   733
                                                ======     ======   =======

     Total assets                               $2,217     $7,630   $ 9,847
                                                ======     ======   =======



     1999
     ----
     Oil and gas sales                          $  237     $  947   $ 1,184
                                                ------     ------   -------

     Expense:
      Production                                   292        608       900
      Depreciation, depletion and amortization      45        291       336
      General and administrative                   342         17       359
                                                ------     ------   -------
                                                   679        916     1,595
                                                ------     ------   -------

     Interest and other income (expense), net      132        (98)       34
     Interest expense                              (80)      (211)     (291)
                                                ------     ------   -------

     Loss before income taxes                     (390)      (278)     (668)
     Income taxes                                    -         63        63
                                                ------     ------   -------

     Net loss                                   $ (390)    $ (341)  $  (731)
                                                ======     ======   =======

     Total assets                               $1,763     $8,856   $10,619
                                                ======     ======   =======
</TABLE>

                                       11
<PAGE>

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

Results of Operations
---------------------

Three Months Ended March 31, 2000 compared to Three Months Ended March 31, 1999
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                United States       Colombia
                                Oil        Gas        Oil       Total
                              -------    -------    -------    -------
<S>                           <C>        <C>        <C>        <C>
       (Thousands)

       Revenue - 1999         $   168    $    69    $   947    $ 1,184

       Volume variance            (25)       (57)      (248)      (330)

       Price variance             235          7      1,445      1,687
                              -------    -------    -------    -------

       Revenue - 2000         $   378    $    19    $ 2,144    $ 2,541
                              =======    =======    =======    =======
</TABLE>

Colombian oil volumes were 76,000 barrels in the first quarter of 2000, a
decrease of 27,000 barrels as compared to the first quarter of 1999. Such
decrease is due to normal production declines.

U.S. oil volumes were 14,000 barrels in 2000, down approximately 2,000 barrels
from 1999.  Such decrease is due to normal production declines.  U.S. gas
volumes before gas balancing adjustments were 7,000 thousand cubic feet (MCF) in
2000, down 29,000 MCF from 1999.  Such decrease is due to a significant decline
in production from the Main Pass 41 field which may be approaching the end of
its economic life.

Colombian oil prices averaged $28.13 per barrel during the first quarter of
2000.  The average price for the same period of 1999 was $9.18 per barrel.  The
Company's average U.S. oil price increased to $27.62 per barrel in 2000, up from
$10.49 per barrel in 1999.  In 2000 prices have been higher than in the first
quarter of 1999 due to an increase in world oil prices.  U.S. gas prices
averaged $2.86 per MCF in 2000 compared to $1.91 per MCF in 1999.

Operating costs decreased approximately 10%, or $90,000, primarily due to
continuing cost reductions in Colombia achieved after the Company merged with
Garnet Resources Corporation and took over operatorship of the Colombian
properties.

Depreciation, depletion and amortization decreased by 30%, or $101,000,
primarily due to a decrease in the amount of oil produced.

General and administrative expenses decreased $58,000 mainly due to a $36,000
decrease in legal and consulting fees and an $8,000 decrease in public ownership
costs.

Interest expense increased $104,000 in the first quarter of 2000, primarily as a
result of higher interest rates.

Income taxes were $56,000 higher in 2000 principally as a result of Colombian
"remittance" tax calculated on higher levels of commercial income.

New Accounting Pronouncements
-----------------------------

The Company is assessing the reporting and disclosure requirements of SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities.  This
statement establishes accounting and reporting standards for derivative
instruments and hedging activities and will require the Company to recognize all
derivatives on its balance sheet at fair value.  If the derivative is a hedge,
depending

                                       12
<PAGE>

on the nature of the hedge, changes in the fair value of the derivatives will
either be offset against the change in fair value of the hedged item through
earnings, or recognized in other comprehensive income until the hedged item is
recognized in earnings. The Company expects to adopt SFAS No. 133 in the first
quarter of fiscal 2001 and does not anticipate that the adoption will have a
material effect on the Company's results of operations or financial position.

In March 2000, the FASB issued Interpretation No. 44, Accounting for Certain
Transactions Involving Stock Compensation: An Interpretation of APB Opinion No.
25.  Among other issues, Interpretation No. 44 clarifies the application of
Accounting Principals Board Opinion No. 25 (APB No. 25) regarding (a) the
definition of employee for purposes of applying APB No. 25, (b) the criteria for
determining whether a plan qualifies as a noncompensatory plan, (c) the
accounting consequences of various modifications to the terms of a previously
fixed stock option or award, and (d) the accounting for an exchange of stock
compensation awards in a business combination.  The provisions of Interpretation
No. 44 affecting the Company are to be applied on a prospective basis effective
July 1, 2000.

Liquidity and Capital Resources
-------------------------------

During the last quarter of calendar year 1997 and throughout calendar year 1998,
world oil prices declined dramatically.  This decline in oil prices was
particularly severe in Colombia.  Colombian oil prices, during the 24-month
period ended December 31, 1998, fell from a high of $22.71 per barrel in January
1997 to $7.50 per barrel in December 1998.  Whereas the sale price for crude oil
from the Santana contract averaged $19.82 per barrel in 1996 and $17.39 per
barrel in 1997, the sale price averaged $10.31 per barrel during calendar year
1998 and $15.57 per barrel during calendar year 1999.

Those price declines materially and adversely affected the results of operations
and the financial position of the Company.  During the years ended December 31,
1999, 1998 and 1997, the Company reported net losses of $0.4 million, $17.1
million and $22.5 million, respectively, and declining amounts of net cash
provided by (used in) operating activities of $(0.5) million, $(0.05) million
and $1.7 million, respectively. The Company's stockholders' deficit was
approximately $10.8 million as of March 31, 2000.

Although world oil prices recovered during the latter part of 1999, and the
Company's Colombian oil price averaged $28.13 per barrel during the first
quarter of 2000, the Company remains highly leveraged with $14.5 million in
current debt as of March 31, 2000, pursuant to bank credit facilities formerly
with ING (U.S.) Capital Corporation ("ING Capital") and the U.S. Overseas
Private Investment Corporation ("OPIC"), as more fully described in note 4 to
the condensed consolidated financial statements contained elsewhere herein.  On
May 1, 2000, ING Capital and OPIC sold their entire interests in the bank credit
facilities to Crosby Capital, L.L.C., a Texas limited liability company based in
Houston, Texas.

The Company is not in compliance with various covenants under the credit
facilities nor is it in compliance with the minimum escrow balance required
thereunder.  As a result, the new lenders have the right to accelerate payment
on the debt and, therefore, the Company has classified all long-term debt as
current in the March 31, 2000 condensed consolidated balance sheet.
Furthermore, the Company was unable to pay the principal payment of $5.7 million
due on April 30, 1999, and subsequent monthly principal payments of $281,250 (an
aggregate of $8.8 million through March 31, 2000).  The Company did pay $150,000
of principal during the second quarter of 1999 and all of the interest through
June 30, 1999; however, interest due subsequent to this date in the amount of
$1.3 million has not been paid.  Assuming no change in its capital structure,
the Company will not have the financial resources to pay the $9.9 million of
principal and interest which is in arrears and future minimum monthly principal
payments of $281,250 due through December 31, 2001.

                                       13
<PAGE>

The Company's management had been in more or less continuous discussions with
the Company's former lenders regarding a restructuring of its debt for more than
two years.  During that period, the Company attempted to negotiate several
transactions and had engaged financial advisers to locate equity investors to
participate in recapitalization and debt restructuring transactions.  Except for
the Garnet merger in October 1998, none of such proposals came to fruition,
primarily because of the inability of equity participants, former lenders and
the Company to agree on financial terms.

Management of the Company is in discussions with the Company's new lenders
concerning a restructuring of the Company.  Such a restructuring may involve the
sale of a substantial portion of the Company's oil and gas assets and a
significant reduction of the Company's outstanding debt. While management is
optimistic that a restructuring can be achieved that will provide the Company
with the liquidity necessary to continue operations, there can be no assurance
that this will be the case.

Although management of the Company is pursuing the restructuring assiduously,
its ability to effect such a restructuring is dependent upon the Company being
able to reach an agreement with the new lenders, a matter that is beyond the
control of the Company.  The new lenders may not agree to a restructuring of the
Company's debt or may insist on financial terms that are viewed by the Company's
board of directors as inconsistent with continued operations.  If the Company is
unable to consummate a restructuring, then, in the absence of another business
transaction, the Company cannot achieve compliance with or make payments
required by the credit facilities.  Accordingly, the new lenders could
accelerate all amounts outstanding and attempt to realize upon the collateral
securing the debt.  As a result of this uncertainty, management believes there
is substantial doubt about the Company's ability to continue as a going concern.

With the exception of historical information, the matters discussed in this
quarterly report contain forward-looking statements that involve risks and
uncertainties.  Although the Company believes that its expectations are based on
reasonable assumptions, it can give no assurance that its goals will be
achieved.  Important factors that could cause actual results to differ
materially from those in the forward-looking statements herein include, among
other things, general economic conditions, volatility of oil and gas prices, the
impact of possible geopolitical occurrences world-wide and in Colombia,
imprecision of reserve estimates, changes in laws and regulations, unforeseen
engineering and mechanical or technological difficulties in drilling, working-
over and operating wells during the periods covered by the forward-looking
statements, as well as other factors described in the Company's annual report on
Form 10-K.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk
-------------------------------------------------------------------

The Company is exposed to market risk from changes in interest rates on debt and
changes in commodity prices.

The Company's exposure to interest rate risk relates to variable rate loans that
are benchmarked to LIBOR interest rates.  The Company does not use derivative
financial instruments to manage overall borrowing costs or reduce exposure to
adverse fluctuations in interest rates.  The impact on the Company's results of
operations of a one-point interest rate change on the outstanding balance of the
variable rate debt as of March 31, 2000 would be $145,000 per year.

The Company produces and sells crude oil and natural gas.  These commodities are
sold based on market prices established with the buyers.  The Company does not
use financial instruments to hedge commodity prices.

                                       14
<PAGE>

PART II - OTHER INFORMATION

Item 3.  Defaults Upon Senior Securities
----------------------------------------

The Company is in default with respect to its credit facilities.  For more
information see notes 2 and 4 to the condensed consolidated financial statements
and Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources, as set forth elsewhere
herein.


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

a) Exhibits
-----------

27.1 Financial Data Schedule.

b) Reports on Form 8-K
----------------------

The Company did not file any Current Reports on Form 8-K during or subsequent to
the end of the first quarter of 2000.

                                       15
<PAGE>

                                  SIGNATURES
                                  ----------

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

                                     AVIVA PETROLEUM INC.



Date:  May 10, 2000                  /s/ Ronald Suttill
                                     ------------------
                                     Ronald Suttill
                                     President and Chief Executive Officer




                                     /s/  James L. Busby
                                     -------------------
                                     James L. Busby
                                     Secretary, Treasurer and Chief
                                     Financial Officer (Principal Financial
                                     and Accounting Officer)

                                       16
<PAGE>

                               INDEX TO EXHIBITS


Exhibit
Number    Description of Exhibit
-------   ----------------------

   27.1   Financial Data Schedule.

                                       17