--------------------------------------------------------------------------------

                       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, 2002

                                       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 001-05083

                               XANSER CORPORATION
             (Exact name of registrant as specified in its charter)

           DELAWARE                                             74-1191271
(State or other jurisdiction of                               (I.R.S. Employer
Incorporation or Organization)                               Identification No.)

                          2435 North Central Expressway
                             Richardson, Texas 75080
          (Address of principal executive offices, including zip code)

                                 (972) 699-4000
              (Registrant's telephone number, including area code)

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

          Yes      X                                      No
               ---------                                      ------------

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

Class of Common Stock                              Outstanding at April 30, 2002
---------------------                              -----------------------------
     No par value                                       33,036,710 shares

--------------------------------------------------------------------------------


<PAGE>
XANSER CORPORATION AND SUBSIDIARIES


FORM 10-Q
QUARTER ENDED MARCH 31, 2002
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S>               <C>                                                                                    <C>
                                                                                                         Page No.
                           Part I. Financial Information

Item 1.           Financial Statements (Unaudited)

                  Condensed Consolidated Statements of Income - Three Months
                      Ended March 31, 2002 and 2001                                                          1

                  Condensed Consolidated Balance Sheets - March 31, 2002
                      and December 31, 2001                                                                  2

                  Condensed Consolidated Statements of Cash Flows - Three
                      Months Ended March 31, 2002 and 2001                                                   3

                  Notes to Condensed Consolidated Financial Statements                                       4

Item 2.           Management's Discussion and Analysis of
                      Financial Condition and Results of Operations                                         10

Item 3.           Quantitative and Qualitative Disclosure About Market Risk                                 14

                           Part II.  Other Information

Item 6.           Exhibits and Reports on Form 8-K                                                          14

</TABLE>


<PAGE>
XANSER CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands - Except Per Share Amounts)
(Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            Three Months Ended
                                                                                                 March 31,
                                                                                       ----------------------------
                                                                                           2002           2001
                                                                                       ------------   -------------
<S>                                                                                    <C>            <C>
Revenues:
    Services                                                                           $     26,873   $      32,884
    Products                                                                                  1,295           3,008
                                                                                       ------------   -------------
        Total revenues                                                                       28,168          35,892
                                                                                       ------------   -------------
Costs and expenses:
    Operating costs                                                                          26,504          29,280
    Cost of products sold                                                                     1,231           2,677
    Depreciation and amortization                                                               884           1,251
    General and administrative                                                                  945           1,160
                                                                                       ------------   -------------
        Total costs and expenses                                                             29,564          34,368
                                                                                       ------------   -------------

Operating income (loss)                                                                      (1,396)          1,524
Other income (expense), net                                                                     137              (7)
Interest expense                                                                               (510)           (885)
                                                                                       ------------   -------------
Income (loss) from continuing operations before
    income taxes and cumulative effect of change
    in accounting principle                                                                  (1,769)            632
Income tax benefit (expense)                                                                    855            (259)
                                                                                       ------------   -------------
Income (loss) from continuing operations
    before cumulative effect of change
    in accounting principle                                                                    (914)            373
Cumulative effect of change in accounting principle                                         (45,269)          -
                                                                                       ------------   -------------
Income (loss) from continuing operations                                                    (46,183)            373
Income from discontinued operations - businesses
    distributed to common shareholders,
    net of income taxes                                                                       -                 657
                                                                                       ------------   -------------
Net income (loss)                                                                           (46,183)          1,030

Dividends and redemption premium applicable
    to preferred stock                                                                        -                 493
                                                                                       ------------   -------------
Net income (loss) applicable to common stock                                           $    (46,183)  $         537
                                                                                       ============   =============

Earnings (loss) per common share - Basic and diluted:
    Continuing operations:
        Before cumulative effect of change in accounting principle                     $     (0.03)   $       -
        Cumulative effect of change in accounting principle                                  (1.36)           -
                                                                                       -----------    -------------
                                                                                             (1.39)           -
    Discontinued operations                                                                   -                0.02
                                                                                       ------------   -------------
                                                                                       $     (1.39)   $        0.02
                                                                                       ===========    =============
</TABLE>


            See notes to condensed consolidated financial statements.
                                        1

<PAGE>
XANSER CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                              March 31,             December 31,
                                                                                2002                    2001
                                                                          ---------------        ------------------
                                                                             (Unaudited)
            ASSETS
<S>                                                                        <C>                     <C>
Current assets:
    Cash and cash equivalents                                              $       29,161          $      29,545
    Accounts receivable, trade                                                     31,240                 37,186
    Receivable from businesses distributed to common
        shareholders                                                                7,592                 17,904
    Inventories                                                                     8,681                  8,942
    Current deferred income tax assets                                              2,300                  2,300
    Prepaid expenses and other                                                      6,422                  7,532
                                                                           --------------          -------------
        Total current assets                                                       85,396                103,409
                                                                           --------------          -------------

Property and equipment                                                             34,456                 33,381
Less accumulated depreciation and amortization                                     22,577                 21,995
                                                                           --------------          -------------
    Net property and equipment                                                     11,879                 11,386
                                                                           --------------          -------------

Excess of cost over fair value of net assets of
    acquired businesses                                                            13,802                 61,054
Deferred income taxes and other assets                                             14,702                 10,370
                                                                           --------------          -------------
                                                                           $      125,779          $     186,219
                                                                           ==============          =============

                     LIABILITIES AND EQUITY
Current liabilities:
    Current portion of long-term debt                                      $          773          $       2,173
    Accounts payable                                                                3,645                  6,205
    Accrued expenses                                                               12,641                 13,159
    Accrued income taxes                                                            9,528                 10,083
                                                                           --------------          -------------
        Total current liabilities                                                  26,587                 31,620
                                                                           --------------          -------------
Long-term debt, less current portion:
    Technical services                                                             18,577                 17,871
    Parent company                                                                  9,930                 19,930
                                                                           --------------          -------------
        Total long-term debt, less current portion                                 28,507                 37,801
                                                                           --------------          -------------

Other liabilities                                                                   1,274                  1,292

Commitments and contingencies

Stockholders' equity:
    Common stock, without par value                                                 4,299                  4,270
    Additional paid-in capital                                                    128,883                128,744
    Treasury stock, at cost                                                       (23,122)               (23,423)
    Retained earnings (accumulated deficit)                                       (34,262)                11,921
    Accumulated other comprehensive income (loss)                                  (6,387)                (6,006)
                                                                           --------------          -------------
           Total stockholders' equity                                              69,411                115,506
                                                                           --------------          -------------
                                                                           $      125,779          $     186,219
                                                                           ==============          =============
</TABLE>

            See notes to condensed consolidated financial statements.
                                        2

<PAGE>
XANSER CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                            Three Months Ended
                                                                                                 March 31,
                                                                                       ----------------------------
                                                                                           2002           2001
                                                                                       ------------   -------------
<S>                                                                                    <C>            <C>
Operating activities:
    Income (loss) from continuing operations                                           $    (46,183)  $         373
    Adjustments to reconcile income (loss) from continuing
        operations to net cash provided by operating activities:
           Depreciation and amortization                                                        884           1,251
           Deferred income taxes                                                               (708)             32
           Cumulative effect of change in accounting principle                               45,269            -
           Other, net                                                                            64             109
           Changes in working capital components                                              2,142          (3,311)
                                                                                       ------------   -------------
           Operating activities of continuing operations                                      1,468          (1,546)
           Operating activities of discontinued operations                                     -             32,677
                                                                                       ------------   -------------
               Net cash provided by operating activities                                      1,468          31,131
                                                                                       ------------   -------------
Investing activities:
    Capital expenditures                                                                     (1,324)           (864)
    Change in other assets, net                                                                (307)           (432)
    Investing activities of discontinued operations                                            -           (109,483)
                                                                                       ------------   -------------
           Net cash used in investing activities                                             (1,631)       (110,779)
                                                                                       ------------   -------------
Financing activities:
    Issuance of debt                                                                            851           1,198
    Payments on debt                                                                        (11,669)           (894)
    Preferred stock dividends and redemption premium paid                                      -               (493)
    Common stock issued                                                                         285              23
    Redemption of preferred stock                                                              -             (5,680)
    Decrease in receivable from businesses distributed
        to common shareholders                                                               10,312            -
    Financing activities of discontinued operations                                            -             80,863
                                                                                       ------------   -------------
           Net cash provided by (used in) financing activities                                 (221)         75,017
                                                                                       ------------   -------------
Decrease in cash and cash equivalents                                                          (384)         (4,631)
Cash and cash equivalents at beginning of period                                             29,545          20,517
                                                                                       ------------   -------------
Cash and cash equivalents at end of period                                             $     29,161   $      15,886
                                                                                       ============   =============

Supplemental cash flow information:
    Cash paid for interest                                                             $      1,326   $       1,268
                                                                                       ============   =============
    Cash paid for income taxes                                                         $        393   $         388
                                                                                       ============   =============
</TABLE>

            See notes to condensed consolidated financial statements.
                                        3


<PAGE>
XANSER CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements
(Unaudited)
--------------------------------------------------------------------------------


1.   SIGNIFICANT ACCOUNTING POLICIES

     The condensed  consolidated  financial  statements  include the accounts of
     Xanser Corporation (the "Company") and its subsidiaries.  On June 29, 2001,
     the Company  distributed its Pipeline,  Terminaling  and Product  Marketing
     businesses (the  "Distribution")  to its  stockholders in the form of a new
     limited  liability  company,  Kaneb  Services  LLC.  As  a  result  of  the
     Distribution,  the accompanying condensed consolidated financial statements
     reflect the operations of the Pipeline,  Terminaling and Product  Marketing
     businesses  of  the  Company  prior  to  June  29,  2001  as  "Discontinued
     operations  -  businesses   distributed   to  common   shareholders".   All
     significant  intercompany  transactions  and  balances  are  eliminated  in
     consolidation.

     The unaudited condensed  consolidated  financial  statements of the Company
     for the  three  month  periods  ended  March 31,  2002 and 2001,  have been
     prepared in accordance with accounting principles generally accepted in the
     United States of America.  Significant  accounting policies followed by the
     Company are disclosed in the notes to the consolidated financial statements
     included  in the  Company's  Annual  Report on Form 10-K for the year ended
     December  31,  2001.  In the  opinion  of  the  Company's  management,  the
     accompanying condensed consolidated financial statements contain all of the
     adjustments,  consisting of normal recurring accruals, necessary to present
     fairly  the  consolidated   financial  position  of  the  Company  and  its
     consolidated subsidiaries at March 31, 2002 and the consolidated results of
     their  operations  and cash flows for the periods  ended March 31, 2002 and
     2001.  Operating  results for the three months ended March 31, 2002 are not
     necessarily  indicative  of the results  that may be expected  for the year
     ending December 31, 2002.


2.   COMPREHENSIVE INCOME

     Comprehensive  income  (loss) for the three months ended March 31, 2002 and
     2001 is as follows:
<TABLE>
<CAPTION>
                                                                                       Three Months Ended
                                                                                            March 31,
                                                                                ---------------------------------
                                                                                    2002                2001
                                                                                -------------      --------------
                                                                                      (in thousands)
<S>                                                                             <C>                <C>
     Net income (loss)                                                          $     (46,183)     $        1,030
     Other comprehensive income (loss)
        - foreign currency translation adjustment                                        (381)               (871)
                                                                                -------------      --------------
     Comprehensive income (loss)                                                $     (46,564)     $          159
                                                                                =============      ==============

</TABLE>


3.   EARNINGS PER SHARE

     The following is a reconciliation  of Basic and Diluted earnings (loss) per
     share from  continuing  operations  before  cumulative  effect of change in
     accounting principle (in thousands, except for per share amounts):
<TABLE>
<CAPTION>
                                                                                    Weighted
                                                                                     Average
                                                                    Net              Common            Per Share
                                                                  Income             Shares             Amount
                                                             ---------------     ---------------   ----------------
       Three Months Ended March 31, 2002
       ---------------------------------
<S>        <C>                                               <C>                 <C>               <C>
           Basic earnings per share -
              Income (loss) from continuing
              operations applicable to common
              stock before cumulative effect
              of change in accounting principle              $          (914)             33,332   $           (.03)
                                                                                                   ================
           Effect of dilutive securities                                 -                   -
                                                             ---------------     ---------------
           Diluted earnings per share -
              Income (loss) from continuing operations
              applicable to common stock before cumulative
              effect of change in accounting principle       $          (914)             33,332   $           (.03)
                                                             ===============     ===============   ================

       Three Months Ended March 31, 2001
       ---------------------------------
           Income from continuing operations                 $           373
           Dividends and redemption premium
              applicable to preferred stock                             (493)
                                                             ---------------
           Basic earnings per share -
              Income (loss) from continuing
                operations applicable to
                common stock                                            (120)             31,744   $           -
                                                                                                   ================
           Effect of dilutive securities                                 -                   -
                                                             ---------------     ---------------
           Diluted earnings per share -
              Income (loss) applicable to
              common stock                                   $          (120)             31,744   $           -
                                                             ===============     ===============   ================
</TABLE>


     As a result of the losses from continuing  operations  applicable to common
     stock for the periods ended March 31, 2002 and 2001,  all stock options and
     the Company's 8.75% convertible  subordinated debentures were excluded from
     the computation of diluted  earnings per share for both periods because the
     effects would be anti-dilutive.


4.   CONTINGENCIES

     The Company has contingent  liabilities  resulting from litigation,  claims
     and  commitments  incident to the ordinary  course of business.  Management
     believes that the ultimate resolution of such contingencies will not have a
     materially   adverse  effect  on  the  financial  position  or  results  of
     operations of the Company.


5.   BUSINESS SEGMENT DATA

     The Company provides  technical  services to an  international  client base
     that includes refineries, chemical plants, pipelines, offshore drilling and
     production  platforms,  steel mills, food and drink processing  facilities,
     power generation, and other process industries. Additionally, the Company's
     information  technology  services  segment  provides  consulting  services,
     hardware  sales and other related  information  management  and  processing
     services primarily to insurance and financial institutions,  the government
     and  healthcare  sectors.   General  corporate  includes  compensation  and
     benefits paid to officers and employees of the Company, insurance premiums,
     general and administrative  costs, tax and financial reporting costs, legal
     and audit fees not  reasonably  allocable  to specific  business  segments.
     General corporate assets include cash,  deferred taxes and other assets not
     related to its segments.

     The Company measures segment profit as operating  income.  Total assets are
     those  assets,  including  the excess of cost over fair  value of  acquired
     businesses, controlled by each reportable segment. Business segment data is
     as follows:

<TABLE>
<CAPTION>
                                                                                       Three Months Ended
                                                                                            March 31,
                                                                                ---------------------------------
                                                                                    2002                2001
                                                                                -------------      --------------
                                                                                         (in thousands)
<S>                                                                             <C>                        <C>
     Business segment revenues:
        Technical services                                                      $      20,469              24,561
        Information technology services                                                 7,699              11,331
                                                                                -------------      --------------
                                                                                $      28,168      $       35,892
                                                                                =============      ==============
     Technical services segment revenues:
        Underpressure services                                                  $       9,964      $        9,544
        Turnaround services                                                             8,596              12,502
        Other services                                                                  1,909               2,515
                                                                                -------------      --------------
                                                                                $      20,469      $       24,561
                                                                                =============      ==============
     Business segment profit (loss):
        Technical services                                                      $         213      $        1,313
        Information technology services                                                  (664)              1,371
        General corporate                                                                (945)             (1,160)
                                                                                -------------      --------------
            Operating income (loss)                                                    (1,396)              1,524
        Other income (expense), net                                                       137                  (7)
        Interest expense                                                                 (510)               (885)
                                                                                -------------      --------------
     Income (loss) from continuing operations
        before income taxes and cumulative effect of
        change in accounting principle                                          $      (1,769)     $          632
                                                                                =============      ==============
</TABLE>

<TABLE>
<CAPTION>

                                                                                  March 31,         December 31,
                                                                                    2002                2001
                                                                              ----------------   ------------------
                                                                                          (in thousands)
<S>                                                                             <C>                <C>
     Total assets:
        Technical services                                                      $      63,637      $     102,147
        Information technology services                                                24,284             30,877
        General corporate                                                              37,858             53,195
                                                                                -------------      -------------
                                                                                $     125,779      $     186,219
                                                                                =============      =============
</TABLE>


6.   DISCONTINUED OPERATIONS - BUSINESSES DISTRIBUTED
     TO COMMON SHAREHOLDERS

     The  results  of  operations  for the  Pipeline,  Terminaling  and  Product
     Marketing  businesses prior to the Distribution  (See Note 1) are reflected
     in the accompanying condensed consolidated  statements of income as "Income
     from   discontinued   operations   -  businesses   distributed   to  common
     shareholders".  The  Pipeline  and  Terminaling  operations  are  conducted
     through Kaneb Pipe Line Partners,  L.P. ("KPP"), in which the Company owned
     an effective 2% general partner  interest and 25% limited partner  interest
     prior  to  the  Distribution.   A  summary  of  operating  results  of  the
     discontinued  operations included in the Company's  condensed  consolidated
     financial statements for the three months ended March 31, 2001 is presented
     below (in thousands):

     Revenues:
        Pipeline and terminaling services                        $       48,069
        Product marketing services                                       88,352
                                                                 --------------
                                                                 $      136,421
                                                                 ==============
     Operating profit (loss):
        Pipeline and terminaling services                        $       18,294
        Product marketing services                                         (775)
        Distribution expenses                                              (250)
                                                                 --------------
                                                                 $       17,269
                                                                 ==============
        Income before income taxes, interest of outside
            non-controlling partners in KPP's net
            income and extraordinary item                        $       12,432
        Income taxes                                                     (1,258)
        Interest of outside non-controlling partners
            in KPP's net income                                          (9,658)
        Extraordinary loss on KPP debt extinguishment,
            net of income taxes and interest of outside
            non-controlling partners in KPP's net income                   (859)
                                                                 --------------
        Income from discontinued operations,
            net of income taxes                                  $          657
                                                                 ==============

     In  March  of 2001,  a  wholly-owned  subsidiary  of KPP  entered  into two
     contracts  for the purpose of locking in interest  rates on $100 million of
     anticipated ten-year public debt offerings. As the interest rate locks were
     not  designated  as hedging  instruments  pursuant to the  requirements  of
     Statement of Financial  Accounting Standards ("SFAS") No. 133, increases or
     decreases  in the fair value of the  contracts  were  recognized  by KPP in
     results of operations on a current  basis.  On May 22, 2001,  the contracts
     were settled resulting in an aggregate gain to KPP of $3.8 million.


7.   ADOPTION OF RECENT ACCOUNTING PRONOUNCEMENTS

     Effective January 1, 2002, the Company adopted SFAS No. 142,  "Goodwill and
     Other  Intangible  Assets",  which eliminates the amortization for goodwill
     (excess of cost over fair value of net assets of acquired  businesses)  and
     other  intangible  assets  with  indefinite  lives.  Under  SFAS  No.  142,
     intangible  assets with lives  restricted by  contractual,  legal, or other
     means will continue to be amortized  over their useful  lives.  As of March
     31, 2002,  the Company had no  intangible  assets  subject to  amortization
     under SFAS No. 142.  Goodwill  and other  intangible  assets not subject to
     amortization  are tested for  impairment  annually  or more  frequently  if
     events  or  changes  in  circumstances  indicate  that the  asset  might be
     impaired.  SFAS No. 142 requires a two-step process for testing impairment.
     First,  the fair value of each  reporting  unit is compared to its carrying
     value to  determine  whether an  indication  of  impairment  exists.  If an
     impairment  is  indicated,  then  second,  the  implied  fair  value of the
     reporting unit's goodwill is determined by allocating the unit's fair value
     to its  assets  and  liabilities  (including  any  unrecognized  intangible
     assets)  as  if  the  reporting  unit  had  been  acquired  in  a  business
     combination.  The amount of  impairment  for goodwill and other  intangible
     assets is  measured  as the excess of its  carrying  value over its implied
     fair value.  Based on  valuations  and analysis  performed  by  independent
     valuation  consultants  and the Company in the first  quarter of 2002,  the
     Company determined that the carrying value of its goodwill exceeded implied
     fair value, and therefore,  the Company  recorded a non-cash charge,  after
     income  taxes,  of $45.3  million as the  cumulative  effect of a change in
     accounting  principle.  No  impairment  charge  was  appropriate  under the
     previous  goodwill  impairment  standard (SFAS No. 121), which was based on
     undiscounted cash flows.

     The changes in the carrying amount of excess of cost over fair value of net
     assets of acquired  businesses for the three months ended March 31, 2002 is
     as follows (in thousands):

     Excess of cost over fair value of net assets of acquired
        businesses at December 31, 2001                           $      61,054
     Cumulative effect of change in accounting principle                (47,252)
                                                                  -------------
     Excess of cost over fair value of net assets of acquired
        businesses at March 31, 2002                              $      13,802
                                                                  =============

     The pro forma effects of the adoption of SFAS No. 142 on income (loss) from
     continuing  operations  is as  follows  (in  thousands  - except  per share
     amounts):

<TABLE>
<CAPTION>
                                                                                       Three Months Ended
                                                                                            March 31,
                                                                                ---------------------------------
                                                                                    2002                2001
                                                                                -------------      --------------
<S>                                                                             <C>                <C>
     Reported income (loss) from continuing operations                          $     (46,183)     $          373
     Amortization of excess of cost over fair value of
        net assets of acquired businesses, net of income taxes                           -                    542
     Cumulative effect of change in accounting principle                               45,269                -
                                                                                -------------      --------------
     Adjusted income (loss) from continuing operations                          $        (914)     $          915
                                                                                =============      ==============

     Reported basic and diluted earnings (loss) per common
        share from continuing operations                                        $       (1.39)     $         -
     Amortization of excess of cost over fair value of
        net assets of acquired businesses, net of income taxes                            -                  0.01
     Cumulative effect of change in accounting principle                                 1.36                -
                                                                                -------------      --------------
     Adjusted basic and diluted earnings (loss) per common
        share from continuing operations                                        $       (0.03)     $         0.01
                                                                                =============      ==============

</TABLE>

     Additionally,  effective  January 1, 2002, the Company adopted SFAS No. 144
     "Accounting  for the  Impairment or Disposal of Long-Lived  Assets",  which
     addresses financial accounting and reporting for the impairment or disposal
     of long-lived  assets.  The adoption of SFAS No. 144, which superceded SFAS
     No.  121,  did not have a  material  impact on the  condensed  consolidated
     financial statements of the Company.


<PAGE>
XANSER CORPORATION AND SUBSIDIARIES

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

     This  discussion   should  be  read  in  conjunction   with  the  condensed
     consolidated financial statements of Xanser Corporation (the "Company") and
     notes thereto included elsewhere in this report.

     Operating Results:

     Technical Services

     This   business   segment   provides   specialized   services,    including
     underpressure  leak  sealing,  on-site  machining,  safety and relief valve
     testing  and  repair,   passive  fire  protection  and  fugitive  emissions
     inspections to the process and power industry worldwide.
<TABLE>
<CAPTION>
                                                                                       Three Months Ended
                                                                                            March 31,
                                                                                ---------------------------------
                                                                                    2002                2001
                                                                                -------------      --------------
                                                                                         (in thousands)
<S>                                                                             <C>                <C>
    Revenues:
        United States                                                           $       7,252      $        9,734
        Europe                                                                         10,637              11,732
        Asia-Pacific                                                                    2,580               3,095
                                                                                -------------      --------------
            Total Revenues                                                      $      20,469      $       24,561
                                                                                =============      ==============

     Operating income (loss):
        United States                                                           $        (135)     $          611
        Europe                                                                            666               1,511
        Asia-Pacific                                                                      123                 157
        Headquarters                                                                     (441)               (966)
                                                                                -------------      --------------
               Total operating income                                           $         213      $        1,313
                                                                                =============      ==============
     Capital expenditures,
        excluding acquisitions                                                  $         631      $          805
                                                                                =============      ==============
</TABLE>

     For the three  months  ended March 31, 2002,  revenues  from the  technical
     services business  decreased by $4.1 million,  or 17%, when compared to the
     same  2001  period,  due to the  impact  of the  economic  downturn  on its
     business.  In the United States,  first quarter revenues  decreased by $2.5
     million,  or 25%,  compared to the same period in 2001, due to decreases in
     turnaround  services.  In Europe,  first quarter revenues decreased by $1.1
     million,  or 9%, when compared to the same 2001 period, due to decreases in
     turnaround  services and foreign currency exchange  differences,  partially
     offset by  increases  in leak  sealing  services.  In  Asia-Pacific,  first
     quarter revenues  decreased by $0.5 million,  or 17%,  compared to the same
     2001  period,  due to  decreases  in  product  sales,  partially  offset by
     increases in underpressure and turnaround services.

     Overall,  technical services operating income decreased by $1.1 million, or
     84%,  for the three  months  ended  March 31,  2002,  compared to the three
     months  ended  March 31,  2001.  In the  United  States,  operating  income
     decreased by $0.7 million,  compared to the same period in 2001,  primarily
     due to lower revenues, partially offset by a slight decrease in general and
     administrative costs. In Europe, operating income declined $0.8 million due
     to overall lower revenues and foreign currency exchange differences.

     Headquarters  costs for the three months ended March 31, 2001 includes $0.5
     million  amortization  related  to excess  of cost  over fair  value of net
     assets of acquired  businesses.  In the first quarter of 2002,  the Company
     adopted  Statement  of  Financial  Accounting  Standards  "(SFAS")  No. 142
     "Goodwill and Other Intangible Assets" which eliminates the amortization of
     goodwill and other  intangible  assets with indefinite lives (see Note 7 to
     condensed consolidated financial statements).


     Information Technology Services

     The information  technology  services group provides  knowledge  management
     services to the commercial (financial and insurance),  government (federal,
     state,  county and  local) and  healthcare  sectors.  The group  focuses on
     evaluating  customer's  people  (employees  and  customers),  processes and
     technology to develop solutions that helps them achieve better outcomes and
     results.  Services are tailored to the specific  needs of the customers and
     include  consulting,  design,  development,   integration  of  third  party
     hardware,  maintenance,  training and customer service of custom technology
     solutions.

<TABLE>
<CAPTION>
                                                                                       Three Months Ended
                                                                                            March 31,
                                                                                ---------------------------------
                                                                                    2002                2001
                                                                                -------------      --------------
                                                                                         (in thousands)

<S>                                                                             <C>                <C>
     Revenues                                                                   $       7,699      $       11,331
                                                                                =============      ==============
     Operating income                                                           $        (664)     $        1,371
                                                                                =============      ==============
     Capital expenditures,
        excluding acquisitions                                                  $         693      $           59
                                                                                =============      ==============
</TABLE>

     For the three  months  ended March 31,  2002,  revenues  decreased  by $3.6
     million,  or 32%,  when  compared  to the same  2001  period,  due to lower
     service revenues and equipment sales.  Service revenues decreased primarily
     due to  lower  voice  and  data  service  revenues  from a large  customer,
     partially offset by an overall increase in other service revenues. Revenues
     from  equipment  sales,  furnished  at the request of  selected  customers,
     decreased  due to normal  fluctuations  in  customer  needs.  For the three
     months ended March 31, 2002,  operating  income  decreased by $2.0 million,
     when compared to the same 2001 period,  due to lower  overall  revenues and
     planned investments in management, marketing and product development costs.

     Information technology services operating income for the three months ended
     March 31, 2001 includes $0.1 million amortization related to excess of cost
     over fair value of net assets of acquired businesses.  In the first quarter
     of 2002, the Company adopted SFAS No. 142 which eliminates the amortization
     of goodwill and other  intangible  assets with indefinite lives (see Note 7
     to condensed consolidated financial statements).


     Interest Expense

     Interest  expense  decreased by $0.4 million in the first  quarter of 2002,
     compared to the same period in 2001, due to overall lower levels of average
     borrowings combined with lower interest rates on borrowings.


     Liquidity and Capital Resources

     During  the first  three  months of 2002,  the  Company's  working  capital
     requirements  for operations and capital  expenditures  were funded through
     the use of existing cash and internally generated funds.

     Cash provided by (used in) operating activities from continuing  operations
     was $1.5  million and ($1.5)  million for the three  months ended March 31,
     2002 and 2001,  respectively.  The $3.0 million  increase was due to normal
     changes in working  capital  components  resulting  from the timing of cash
     receipts and  disbursements,  partially offset by decreases in revenues and
     operating income.

     Capital  expenditures from continuing  operations were $1.3 million for the
     three months  ended March 31,  2002,  compared to $0.9 million for the same
     2001 period. The Company expects to fund maintenance  capital  expenditures
     with existing cash and anticipated cash flows from operations.

     On  March 1,  2002,  the  Company  purchased  $10.0  million  of its  8.75%
     subordinated  debentures  at par value,  which  satisfies  its sinking fund
     requirements on these subordinated debentures through 2007.

     On March 30, 2001, the Company's  Series A Preferred Stock was redeemed for
     cash at the stated  redemption price of $10.67 per share,  plus accrued and
     unpaid  dividends,  for a total cost of  approximately  $6.1  million.  The
     redemption  cost  included a $0.4  million  redemption  premium,  which was
     recognized  as dividends  and  redemption  premium  applicable to preferred
     stock in the first quarter of 2001.

     Additional information related to the sources and uses of cash is presented
     in the condensed consolidated financial statements included in this report.

     Information   regarding  the  Company's  Critical  Accounting  Policies  is
     included in Item 7 of the Company's Annual Report on Form 10-K for the year
     ended December 31, 2001.

     Recent Accounting Pronouncement

     The  FASB  has  issued  SFAS  No.  143  "Accounting  for  Asset  Retirement
     Obligations",  which  establishes  requirements for the removal-type  costs
     associated with asset retirements.  The Company is currently  assessing the
     impact of SFAS No. 143, which must be adopted in the first quarter of 2003.



<PAGE>
XANSER CORPORATION AND SUBSIDIARIES


--------------------------------------------------------------------------------

Item 3.  Quantitative and Qualitative Disclosure About Market Risk

     The principal market risks (i.e., the risk of loss arising from the adverse
     changes in market  rates and  prices) to which the  Company is exposed  are
     interest  rates  on the  Company's  debt  and  investment  portfolios.  The
     Company's investment  portfolio consists of cash equivalents;  accordingly,
     the carrying amounts approximate fair value. The Company's  investments are
     not material to its financial  position or performance.  Assuming  variable
     rate debt of $17.1  million at March 31,  2002,  a one percent  increase in
     interest rates would increase annual net interest  expense by approximately
     $0.2 million.


                           Part II - Other Information

Item 6.  Exhibits and Reports on Form 8-K

     (a)  Exhibits.

          3.1  Restated  Certificate of Incorporation  of the Registrant,  dated
               September  26, 1979,  filed as Exhibit 3.1 of the exhibits to the
               Registrant's  Registration  Statement on Form S-16, which exhibit
               is hereby incorporated by reference.

          3.2  Certificate   of  Amendment  to  the  Restated   Certificate   of
               Incorporation  of the Registrant,  dated April 30, 1981, filed as
               Exhibit 3.2 of the exhibits to the Registrant's  Annual Report on
               Form 10-K ("Form  10-K") for the year ended  December  31,  1981,
               which exhibit is hereby incorporated by reference.

          3.3  Certificate   of  Amendment  to  the  Restated   Certificate   of
               Incorporation  of the  Registrant,  dated May 28, 1985,  filed as
               Exhibit 4.1 of the exhibits to the Registrant's  Quarterly Report
               on Form 10-Q ("Form  10-Q") for the quarter  ended June 30, 1985,
               which exhibit is hereby incorporated by reference.

          3.4  Certificate   of  Amendment  to  the  Restated   Certificate   of
               Incorporation of the Registrant,  dated September 17, 1985, filed
               as Exhibit 4.1 of the exhibits to the Registrant's  Form 10-Q for
               the quarter  ended  September  30, 1985,  which exhibit is hereby
               incorporated by reference.

          3.5  Certificate   of  Amendment  to  the  Restated   Certificate   of
               Incorporation  of the Registrant,  dated July 10, 1990,  filed as
               Exhibit 3.5 of the exhibits to the Registrant's Form 10-K for the
               year  ended   December   31,  1990,   which   exhibit  is  hereby
               incorporated by reference.

          3.6  Certificate   of  Amendment  to  the  Restated   Certificate   of
               Incorporation of the Registrant,  dated September 21, 1990, filed
               as Exhibit 3.5 of the exhibits to the Registrant's  Form 10-Q for
               the quarter  ended  September  30, 1990,  which exhibit is hereby
               incorporated by reference.

          3.7  Certificate   of  Amendment  to  the  Restated   Certificate   of
               Incorporation  of the Registrant,  dated August 8, 2001, filed as
               Exhibit 3.1 to the Registrant's  Current Report on Form 8-K filed
               on August  22,  2001,  which  exhibit is hereby  incorporated  by
               reference.

          3.8  By-laws of the  Registrant,  filed as exhibit 3.7 to Registrant's
               Form 10-K for the year ended December 31, 1998,  which exhibit is
               hereby incorporated by reference.

          4.1  Certificate of Designation related to the Registrant's Adjustable
               Rate Cumulative  Class A Preferred  Stock,  filed as Exhibit 4 of
               the exhibits to the Registrant's  Form 10-Q for the quarter ended
               September  30,  1983,  which  exhibit is hereby  incorporated  by
               reference.

          4.2  Certificate of Designation, Preferences and Rights related to the
               Registrant's Series B Junior Participating Preferred Stock, filed
               as  Exhibit  4.2 to the  Registrant's  10-K  for the  year  ended
               December  31,  1998,  which  exhibit  is  incorporated  herein by
               reference.

          4.3  Certificate of Designation related to the Registrant's Adjustable
               Rate Cumulative  Class A Preferred  Stock,  Series C, dated April
               23, 1991,  filed as Exhibit 4.4 of the  exhibits to  Registrant's
               Form 10-K for the year ended December 31, 1991,  which exhibit is
               hereby incorporated by reference.

          4.4  Certificate of Designation related to the Registrant's Adjustable
               Rate Cumulative Class A Preferred Stock, Series F, dated June 12,
               1997,  filed as Exhibit 4.4 of the Exhibits to Registrant's  Form
               10-K for the year  ended  December  31,  1997,  which  exhibit is
               hereby incorporated by reference.

          4.5  Indenture  between  Moran  Energy Inc.  ("Moran")  and First City
               National Bank of Houston ("First City"),  dated January 15, 1984,
               under  which  Moran  issued the 8 3/4%  Convertible  Subordinated
               Debentures due 2008, filed as Exhibit 4.1 to Moran's Registration
               Statement on Form S-3 (SEC File No.  2-81227),  which  exhibit is
               hereby incorporated by reference.

          4.6  First  Supplemental  Indenture  between the  Registrant and First
               City,  dated as of March 20,  1984,  under  which the  Registrant
               assumed  obligations  under the  Indenture  listed as Exhibit 4.5
               above, filed as Exhibit 4.7 of the Registrant's Form 10-K for the
               year  ended   December   31,  1983,   which   exhibit  is  hereby
               incorporated by reference.

     (b)  Reports on Form 8-K

          None.



                                    Signature


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.



                                        XANSER CORPORATION
                                        (Registrant)


Date:  May 15, 2002                               //s//
                                        ---------------------------------------
                                        Michael R. Bakke
                                        Controller