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

                                  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 June 30, 2004

                                       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  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2).

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

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 July 30, 2004
---------------------                               ----------------------------
     No par value                                          31,617,254 shares

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

<PAGE>
XANSER CORPORATION AND SUBSIDIARIES


FORM 10-Q
QUARTER ENDED JUNE 30, 2004
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                                           Page No.
                           Part I. Financial Information

Item 1.           Financial Statements (Unaudited)

<S>               <C>                                                                                      <C>
                  Condensed Consolidated Statements of Income - Three and
                    Six Months Ended June 30, 2004 and 2003                                                    1

                  Condensed Consolidated Balance Sheets - June 30, 2004
                    and December 31, 2003                                                                      2

                  Condensed Consolidated Statements of Cash Flows - Six
                    Months Ended June 30, 2004 and 2003                                                        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                                   18

Item 4.           Controls and Procedures                                                                     18


                           Part II. Other Information

Item 6.           Exhibits and Reports on Form 8-K                                                            19

</TABLE>


<PAGE>
XANSER CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands - Except Per Share Amounts)
(Unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                      Three Months Ended       Six Months Ended
                                           June 30,                June 30,
                                     --------------------    --------------------
                                       2004        2003        2004        2003
                                     --------    --------    --------    --------
<S>                                  <C>         <C>         <C>         <C>
Revenues:
     Services                        $ 34,315    $ 29,980    $ 66,156    $ 58,841
     Products                           1,341       3,253       1,664       6,616
                                     --------    --------    --------    --------
         Total revenues                35,656      33,233      67,820      65,457
                                     --------    --------    --------    --------

Costs and expenses:
     Operating costs                   31,612      27,836      61,574      55,226
     Cost of products sold                744       2,886         925       5,593
     Depreciation and amortization        891       1,005       1,770       2,099
     General and administrative           792         817       1,544       1,624
                                     --------    --------    --------    --------
         Total costs and expenses      34,039      32,544      65,813      64,542
                                     --------    --------    --------    --------

Operating income                        1,617         689       2,007         915

Interest income                            31          40          65         130
Interest expense                         (238)       (391)       (477)       (750)
                                     --------    --------    --------    --------

Income before income taxes              1,410         338       1,595         295
Income tax benefit (expense)             (541)         82        (616)        268
                                     --------    --------    --------    --------

Net income                           $    869    $    420    $    979    $    563
                                     ========    ========    ========    ========

Earnings per common share - Basic
   and diluted                       $    .03    $    .01    $    .03    $    .02
                                     ========    ========    ========    ========
</TABLE>

            See notes to condensed consolidated financial statements.
                                        1

<PAGE>
XANSER CORPORATION AND SUBSIDIARIES

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

                                                                              June 30,              December 31,
                                                                                2004                    2003
                                                                          ---------------        ------------------
                                                                             (Unaudited)
            ASSETS
<S>                                                                        <C>                     <C>
Current assets:
    Cash and cash equivalents                                              $       19,486          $      21,240
    Accounts receivable, trade                                                     33,617                 31,902
    Receivable from businesses distributed to common
        stockholders                                                                7,606                  7,564
    Inventories                                                                     9,206                  8,697
    Prepaid expenses and other                                                      4,578                  4,182
                                                                           --------------          -------------
        Total current assets                                                       74,493                 73,585
                                                                           --------------          -------------

Property and equipment                                                             43,684                 42,152
Less accumulated depreciation and amortization                                     31,230                 29,879
                                                                           --------------          -------------
    Net property and equipment                                                     12,454                 12,273
                                                                           --------------          -------------

Excess of cost over fair value of net assets of
    acquired businesses                                                            13,802                 13,802
Deferred income taxes and other assets                                              5,899                  5,130
                                                                           --------------          -------------
                                                                           $      106,648          $     104,790
                                                                           ==============          =============

     LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Current portion of long-term debt                                      $        1,761          $         738
    Accounts payable                                                                4,538                  3,098
    Accrued expenses                                                               18,085                 18,255
    Accrued income taxes                                                            7,285                  7,391
                                                                           --------------          -------------
        Total current liabilities                                                  31,669                 29,482
                                                                           --------------          -------------
Long-term debt, less current portion:
    Technical services                                                             14,468                 15,457
    Parent company                                                                  5,000                  5,000
                                                                           --------------          -------------
        Total long-term debt, less current portion                                 19,468                 20,457
                                                                           --------------          -------------

Other liabilities                                                                   2,517                  2,399

Commitments and contingencies

Stockholders' equity:
    Common stock, without par value                                                 4,346                  4,333
    Additional paid-in capital                                                    126,519                126,561
    Treasury stock, at cost                                                       (26,180)               (26,267)
    Retained earnings (accumulated deficit)                                       (47,716)               (48,695)
    Accumulated other comprehensive income (loss)                                  (3,975)                (3,480)
                                                                           --------------          -------------
        Total stockholders' equity                                                 52,994                 52,452
                                                                           --------------          -------------
                                                                           $      106,648          $     104,790
                                                                           ==============          =============
</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>
                                                                                            Six Months Ended
                                                                                                 June 30,
                                                                                  ---------------------------------
                                                                                        2004              2003
                                                                                  -------------      --------------
<S>                                                                               <C>                <C>
Operating activities:
   Net income                                                                     $         979      $          563
   Adjustments to reconcile net income to net cash
     provided by operating activities:
       Depreciation and amortization                                                      1,770               2,099
       Deferred income taxes                                                               (981)             (1,589)
       Other                                                                                118                 279
       Changes in working capital components                                             (1,456)              2,863
                                                                                  -------------      --------------
         Net cash provided by operating activities                                          430               4,215
                                                                                  -------------      --------------
Investing activities:
   Capital expenditures                                                                  (2,099)             (2,232)
   Other                                                                                    178                 436
                                                                                  -------------      --------------
       Net cash used in investing activities                                             (1,921)             (1,796)
                                                                                  -------------      --------------

Financing activities:
   Issuance of debt                                                                       1,225                 273
   Payments on debt                                                                      (1,390)             (6,542)
   Common stock issued and other                                                             58                 (16)
   Increase in receivable from businesses
     distributed to common stockholders                                                     (42)                (89)
                                                                                  -------------      --------------
       Net cash used in financing activities                                               (149)             (6,374)
                                                                                  -------------      --------------

Effect of exchange rate changes on cash                                                    (114)                312
                                                                                  -------------      --------------
Decrease in cash and cash equivalents                                                    (1,754)             (3,643)
Cash and cash equivalents at beginning of period                                         21,240              25,624
                                                                                  -------------      --------------
Cash and cash equivalents at end of period                                        $      19,486      $       21,981
                                                                                  =============      ==============
Supplemental cash flow information:
   Cash paid for interest                                                         $         458      $          964
                                                                                  =============      ==============
   Cash paid for income taxes                                                     $       1,630      $          214
                                                                                  =============      ==============

</TABLE>

            See notes to condensed consolidated financial statements.
                                        3

<PAGE>
XANSER CORPORATION AND SUBSIDIARIES

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


1.   GENERAL AND SIGNIFICANT ACCOUNTING POLICIES

     The condensed  consolidated  financial  statements  include the accounts of
     Xanser Corporation  ("Parent Company") and its subsidiaries  (collectively,
     the "Company").  All significant intercompany transactions and balances are
     eliminated in consolidation. The unaudited condensed consolidated financial
     statements  of the Company for the three and six month  periods  ended June
     30,  2004 and  2003  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, 2003. 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 at June 30, 2004, and the consolidated results of income and
     cash flows for the periods ended June 30, 2004 and 2003.  Operating results
     for the  three  and six  months  ended  June 30,  2004 are not  necessarily
     indicative of the results that may be expected for the year ending December
     31,  2004.   Certain  prior  year  financial   statement  items  have  been
     reclassified to conform with the June 30, 2004 presentation.

     On November 27, 2000, the Board of Directors of the Company  authorized the
     distribution of its pipeline,  terminaling and product marketing businesses
     (the  "Distribution")  to its  stockholders  in the  form of a new  limited
     liability  company,  Kaneb  Services  LLC ("KSL").  On June 29,  2001,  the
     Distribution was completed,  with each shareholder of the Company receiving
     one common share of KSL for each three shares of the Company's common stock
     held on June 20, 2001, the record date for the  Distribution,  resulting in
     the  distribution  of 10.85  million  KSL common  shares.  Pursuant  to the
     Distribution,  the Company  entered  into an agreement  (the  "Distribution
     Agreement") with KSL, whereby,  KSL is obligated to pay the Company amounts
     equal to certain  expenses and tax  liabilities  incurred by the Company in
     connection with the Distribution.  The Distribution Agreement also requires
     KSL to pay the  Company  an  amount  calculated  based  on any  income  tax
     liability of the Company that, in the sole judgement of the Company, (i) is
     attributable  to  increases  in income tax from past years  arising  out of
     adjustments  required by federal and state tax  authorities,  to the extent
     that such increases are properly  allocable to the  businesses  that became
     part of KSL, or (ii) is  attributable  to the  distribution of KSL's common
     shares and the  operations of KSL's  businesses  prior to the  Distribution
     date. In the event of an examination of the Company by federal or state tax
     authorities, the Company will have unfettered control over the examination,
     administrative  appeal,  settlement  or  litigation  that may be  involved,
     notwithstanding  that KSL has agreed to pay any additional tax. At June 30,
     2004, $6.5 million was recorded as receivable  from businesses  distributed
     to common  stockholders  pursuant  to the  provisions  of the  Distribution
     Agreement.

     In December of 2002,  the Financial  Accounting  Standards  Board  ("FASB")
     issued  Statement  of  Financial  Accounting  Standards  ("SFAS")  No. 148,
     "Accounting for Stock-Based  Compensation-Transition  and Disclosure." SFAS
     No. 148,  which amends SFAS No. 123,  provides for  alternative  methods of
     transition  for a  voluntary  change  to the fair  value  based  method  of
     accounting for stock-based  employee  compensation and requires  additional
     disclosures in annual and interim financial statements regarding the method
     of accounting for stock-based  employee  compensation and the effect of the
     method used on financial results. In accordance with the provisions of SFAS
     No. 123, the Company applies APB Opinion 25 and related  interpretations in
     accounting for its stock option plans and, accordingly,  does not recognize
     compensation  cost  based on the fair value of the  options  granted at the
     grant date as  prescribed  by SFAS 123. The  Black-Scholes  option  pricing
     model has been used to estimate the value of stock options issued.

     The  following  illustrates  the effect on net income and basic and diluted
     earnings per share if the fair value based method had been applied:
<TABLE>
<CAPTION>

                                                          Three Months Ended                 Six Months Ended
                                                               June 30,                          June 30,
                                                     -----------------------------    -----------------------------
                                                          2004            2003             2004           2003
                                                     -------------   -------------    -------------  --------------
                                                                (in thousands - except per share amounts)

<S>                                                  <C>             <C>              <C>            <C>
     Reported net income                             $         869   $         420    $         979  $          563

     Stock-based employee compensation
         expense determined under the fair
         value based method, net of income
         taxes                                                 (21)            (38)             (36)            (59)
                                                     -------------   -------------    -------------  --------------
     Pro forma net income                            $         848   $         382    $         943  $          504
                                                     =============   =============    =============  ==============
     Earnings per share:
        As reported - basic and diluted              $         .03   $         .01    $         .03  $          .02
                                                     =============   =============    =============  ==============
        Pro forma - basic and diluted                $         .03   $         .01    $         .03  $          .02
                                                     =============   =============    =============  ==============
</TABLE>


2.   COMPREHENSIVE INCOME

     Comprehensive  income for the three and six months  ended June 30, 2004 and
     2003 is as follows:
<TABLE>
<CAPTION>

                                                          Three Months Ended                Six Months Ended
                                                                  June 30,                      June 30,
                                                     -----------------------------    -----------------------------
                                                          2004            2003             2004           2003
                                                     -------------   -------------    -------------  --------------
                                                                             (in thousands)
<S>                                                  <C>             <C>              <C>            <C>
     Net income                                      $         869   $         420    $         979  $          563
     Foreign currency translation
        adjustment                                            (157)            987             (495)            963
                                                     -------------   -------------    -------------  --------------
     Comprehensive income                            $         712   $       1,407    $         484  $        1,526
                                                     =============   =============    =============  ==============
</TABLE>

     At June 30, 2004 and  December 31, 2003,  accumulated  other  comprehensive
     income  (loss)   consisted  of  cumulative   gains  from  foreign  currency
     translation adjustments of $1.0 million and $1.5 million, respectively, and
     cumulative   losses  from  minimum   pension   liability   adjustments  for
     subsidiaries of $5.0 million and $5.0 million, respectively.


3.   EARNINGS PER SHARE

     The following is a  reconciliation  of basic and diluted earnings per share
     (in thousands, except for per share amounts):
<TABLE>
<CAPTION>

                                                                                    Weighted
                                                                                     Average
                                                                                     Common            Per-Share
                                                                Net Income           Shares             Amount
                                                             ---------------     ---------------   ----------------
<S>                                                          <C>                 <C>               <C>
     Three Months Ended June 30, 2004
     --------------------------------
         Basic earnings per share -
           Net income                                        $           869              32,035   $            .03
                                                                                                   ================

         Effect of dilutive securities                                  -                  1,096
                                                             ---------------     ---------------

         Diluted earnings per share -
           Net income                                        $           869              33,131   $            .03
                                                             ===============     ===============   ================
     Three Months Ended June 30, 2003
     --------------------------------
         Basic earnings per share -
           Net income                                        $           420              31,998   $            .01
                                                                                                   ================

         Effect of dilutive securities                                  -                    810
                                                             ---------------     ---------------
         Diluted earnings per share -
           Net income                                        $           420              32,808   $            .01
                                                             ===============     ===============   ================

</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                                                                    Weighted
                                                                                     Average
                                                                                     Common            Per-Share
                                                                Net Income           Shares             Amount
                                                             ---------------     ---------------   ----------------

<S>                                                          <C>                 <C>               <C>
     Six Months Ended June 30, 2004
     ------------------------------
         Basic earnings per share -
           Net income                                        $           979              32,026   $            .03
                                                                                                   ================

         Effect of dilutive securities                                  -                  1,076
                                                             ---------------     ---------------
         Diluted earnings per share -
           Net income                                        $           979              33,102   $            .03
                                                             ===============     ===============   ================

     Six Months Ended June 30, 2003
     ------------------------------
         Basic earnings per share -
           Net income                                        $           563              31,998   $            .02
                                                                                                   ================

         Effect of dilutive securities                                  -                    722
                                                             ---------------     ---------------
         Diluted earnings per share -
           Net income                                        $           563              32,720   $            .02
                                                             ===============     ===============   ================
</TABLE>

     The Company's 8.75% convertible  subordinated debentures were excluded from
     the  computation of diluted  earnings per share for the three and six month
     periods  ended  June 30,  2004 and 2003,  because  the  effects  of assumed
     conversion  would be  anti-dilutive.  Options to purchase  76,000 shares of
     common stock at a weighted  average price of $2.68 were outstanding for the
     three and six month periods  ended June 30, 2004,  but were not included in
     the computation of diluted earnings per share because the options' exercise
     prices were greater  than the average  market  prices of the common  stock.
     Options to  purchase  1,406,661  and  1,468,728  shares of common  stock at
     weighted average prices of $2.45 and $2.43, respectively,  were outstanding
     for the three and six  month  periods  ended  June 30,  2003,  but were not
     included  in the  computation  of diluted  earnings  per share  because the
     options' exercise prices were greater than the average market prices of the
     common stock.


4.   CONTINGENCIES

     The Company has contingent  liabilities  resulting from litigation,  claims
     and  commitments  incident to the ordinary  course of business.  Management
     believes,  after consulting with counsel,  that the ultimate  resolution of
     such  contingencies  will  not  have a  materially  adverse  effect  on the
     financial position or results of operations or liquidity 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 to healthcare, governmental, insurance and financial institutions.
     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 the
     Company's segments.

     The Company measures segment profit as operating  income.  Total assets are
     those  assets,  including  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                Six Months Ended
                                                              June 30,                         June 30,
                                                     -----------------------------    -----------------------------
                                                          2004           2003              2004           2003
                                                     -------------   -------------    -------------  --------------
                                                                             (in thousands)
<S>                                                  <C>             <C>              <C>            <C>
     Business segment revenues:
        Technical services                           $      29,758   $      25,111    $      56,740  $       48,119
        Information technology services                      5,898           8,122           11,080          17,338
                                                     -------------   -------------    -------------  --------------
                                                     $      35,656   $      33,233    $      67,820  $       65,457
                                                     =============   =============    =============  ==============
     Technical services segment revenues:
        Underpressure services                       $      11,266   $      10,463    $      22,751  $       21,278
        Turnaround services                                 15,474          12,280           28,348          22,220
        Other services                                       3,018           2,368            5,641           4,621
                                                     -------------   -------------    -------------  --------------
                                                     $      29,758   $      25,111    $      56,740  $       48,119
                                                     =============   =============    =============  ==============
     Business segment profit:
        Technical services                           $       2,115   $       1,957    $       3,255  $        3,298
        Information technology services                        294            (451)             296            (759)
        General corporate                                     (792)           (817)          (1,544)         (1,624)
                                                     -------------   -------------    -------------  --------------
           Operating income                                  1,617             689            2,007             915
        Interest income                                         31              40               65             130
        Interest expense                                      (238)           (391)            (477)           (750)
                                                     -------------   -------------    -------------  --------------
        Income before income taxes                   $       1,410   $         338    $       1,595  $          295
                                                     =============   =============    =============  ==============

</TABLE>

<TABLE>
<CAPTION>
                                                                                         June 30,      December 31,
                                                                                           2004           2003
                                                                                      ------------- -----------------
                                                                                             (in thousands)
<S>                                                                                   <C>            <C>
     Total assets:
        Technical services                                                            $      67,307  $       66,117
        Information technology services                                                      12,346          14,902
        General corporate                                                                    26,995          23,771
                                                                                      -------------  --------------
                                                                                      $     106,648  $      104,790
                                                                                      =============  ==============
</TABLE>


6.   RECENT ACCOUNTING PRONOUNCEMENTS

     In December of 2003, SFAS No. 132 (revised),  "Employers' Disclosures about
     Pensions  and Other  Postretirement  Benefits",  was  issued.  SFAS No. 132
     (revised) prescribes  employers'  disclosures about pension plans and other
     postretirement  benefit  plans,  but does not  change  the  measurement  or
     recognition of those plans.  SFAS No. 132 (revised) retains and revises the
     disclosure requirements contained in the original SFAS No. 132 and requires
     additional disclosures about the assets,  obligations,  cash flows, and net
     periodic   benefit  cost  of  defined   benefit  pension  plans  and  other
     postretirement  benefit plans.  SFAS No. 132 (revised),  which applies to a
     defined benefits pension plan of a foreign subsidiary of the Company,  must
     be adopted by the Company in the fiscal year ending December 31, 2004.

     In December 2003, the FASB issued  Interpretation  No. 46 (revised December
     2003), "Consolidation of Variable Interest Entities (FIN 46R), primarily to
     clarify the required accounting for interests in variable interest entities
     (VIEs). This standard replaces FASB Interpretation No. 46, Consolidation of
     Variable  Interest  Entities,  which was issued in January  2003 to address
     certain  situations  in which a company  should  include  in its  financial
     statements the assets,  liabilities and activities of another  entity.  For
     the Company,  application  of FIN 46R is required for  interests in certain
     VIEs that are commonly referred to as special-purpose entities, or SPEs, as
     of December  31, 2003,  and for  interests in all other types of VIEs as of
     March 31, 2004.  The  application of FIN 46R did not have any impact on the
     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.

     Overview

     The Company,  formed in 1953,  conducts  its  principal  businesses  in two
     industry segments, technical services and information technology services.

     The Company's  technical services business,  which is conducted through its
     Furmanite group of subsidiaries,  offers specialized  technical services to
     an international  base of clients located in the United States,  Europe and
     Asia-Pacific  regions.  The technical  services  business  provides on-line
     repairs of leaks in valves,  pipes and other  components of piping  systems
     and related  equipment,  typically in the  flow-process  industries.  Other
     services provided include on-site machining,  bolting and valve testing and
     repair on such systems and equipment.  In addition,  the division  provides
     hot  tapping,  fugitive  emissions  monitoring,  passive  fire  protection,
     concrete repair and heat exchanger repair.

     The Company's  information  technology services business,  Xtria,  provides
     services and related products to the healthcare industry, the financial and
     insurance  industries,  and various  governmental  agencies.  The segment's
     primary business is information technology services,  including application
     software, hardware, web hosted data processing,  networking, consulting and
     support services.

     Consolidated Results of Operations
<TABLE>
<CAPTION>

                                                       Three Months Ended                  Six Months Ended
                                                            June 30,                           June 30,
                                                 -------------------------------    -------------------------------
                                                     2004              2003             2004              2003
                                                 -------------    --------------    -------------   ---------------
                                                             (in thousands - except per share amounts)

<S>                                              <C>              <C>               <C>             <C>
     Revenues                                    $      35,656    $       33,233    $      67,820   $        65,457
                                                 =============    ==============    =============   ===============
     Operating income                            $       1,617    $          689    $       2,007   $           915
                                                 =============    ==============    =============   ===============

     Net income                                  $         869    $          420    $         979   $           563
                                                 =============    ==============    =============   ===============
     Earnings per common share
        - basic and diluted                      $         .03    $         .01     $         .03   $          .02
                                                 =============    =============     =============   ==============
     Capital expenditures                        $       1,122    $        1,004    $       2,099   $         2,232
                                                 =============    ==============    =============   ===============
</TABLE>

     For the three months ended June 30, 2004,  consolidated  revenues increased
     by $2.4  million,  or 7%, when  compared to the same 2003 period,  due to a
     $4.6 million increase in revenues from the technical services business (see
     "Technical Services" below), partially offset by a $2.2 million decrease in
     revenues  from the  information  technology  services  business,  primarily
     related to non-performing  operations closed in late 2003 (see "Information
     Technology  Services" below).  Consolidated  operating income for the three
     months  ended  June 30,  2004  increased  by $0.9  million,  or 135%,  when
     compared  to the  same  2003  period,  due to a $0.7  million  increase  in
     operating income from the information  technology  services  business and a
     $0.2  million  increase in  operating  income from the  technical  services
     business.  Net income for the three months ended June 30, 2004 increased by
     $0.4 million,  or 107%,  when  compared to the same 2003 period,  as higher
     operating income and lower interest expense (see "Interest  Expense" below)
     more than offset a reduction in income tax benefits recognized (see "Income
     Taxes" below).

     For the six months ended June 30, 2004,  consolidated revenues increased by
     $2.4 million,  or 4%, when compared to the same 2003 period, due to an $8.6
     million  increase in revenues  from the  technical  services  business (see
     "Technical Services" below), partially offset by a $6.3 million decrease in
     revenues  from the  information  technology  services  business,  primarily
     related to non-performing  operations closed in late 2003 (see "Information
     Technology  Services"  below).  Consolidated  operating  income for the six
     months  ended  June 30,  2004  increased  by $1.1  million,  or 119%,  when
     compared  to the  same  2003  period,  due to a $1.1  million  increase  in
     operating income from the information  technology  services  business.  Net
     income for the six months ended June 30, 2004 increased by $0.4 million, or
     74%, when compared to the same 2003 period,  as higher operating income and
     lower interest  expense (see "Interest  Expense"  below) more than offset a
     reduction in income tax benefits recognized (see "Income Taxes" below).

     Technical Services
<TABLE>
<CAPTION>
                                                        Three Months Ended                Six Months Ended
                                                            June 30,                          June 30,
                                                   ---------------------------      ------------------------------
                                                      2004             2003             2004            2003
                                                   -----------     -----------      -------------   --------------
                                                                          (in thousands)

<S>                                                <C>             <C>              <C>             <C>
     Revenues:
         United States                             $     6,945     $     5,841      $      14,152   $       11,954
         Europe                                         18,301          15,627             34,191           29,495
         Asia-Pacific                                    4,512           3,643              8,397            6,670
                                                   -----------     -----------      -------------   --------------
              Total Revenues                       $    29,758     $    25,111      $      56,740   $       48,119
                                                   ===========     ===========      =============   ==============

     Operating income:
         United States                             $      (121)    $      (513)     $         (14)  $         (383)
         Europe                                          2,071           2,152              3,098            3,727
         Asia-Pacific                                      689             491              1,213              837
         Headquarters                                     (524)           (173)            (1,042)            (883)
                                                   -----------     -----------      -------------   --------------
              Total operating income               $     2,115     $     1,957      $       3,255   $        3,298
                                                   ===========     ===========      =============   ==============
     Capital expenditures                          $       690     $       550      $       1,537   $        1,159
                                                   ===========     ===========      =============   ==============
</TABLE>

     For the three  months  ended  June 30,  2004,  revenues  for the  technical
     services business  increased by $4.6 million,  or 19%, when compared to the
     same 2003  period.  In the United  States,  second  quarter  2004  revenues
     increased by $1.1 million,  or 19%, when compared to the second  quarter of
     2003, due to increases in underpressure, turnaround and other process plant
     services.  In  Europe,  second  quarter  2004  revenues  increased  by $2.7
     million, or 17%, when compared to the same 2003 period, due to increases in
     turnaround and other process plant services and favorable  foreign currency
     exchange rates, partially offset by decreases in underpressure services and
     product sales. In Asia-Pacific,  second quarter 2004 revenues  increased by
     $0.9 million,  or 24%, when compared to the corresponding  2003 period, due
     to increases in  underpressure  services  and product  sales and  favorable
     foreign currency exchange rates.

     For the three  months  ended June 30, 2004,  technical  services  operating
     income  increased by $0.2  million,  or 8%, when  compared to the same 2003
     period. In the United States,  second quarter 2004 operating loss decreased
     by $0.4 million,  or 76%, when compared to the same period in 2003,  due to
     the higher revenue levels. In Europe, operating income for the three months
     ended June 30, 2004 decreased by $0.1 million,  or 4%, when compared to the
     same 2003 period,  due to a lower  operating  margin service mix and higher
     general and administrative costs, which more than offset the higher overall
     revenues.  In Asia-Pacific,  second quarter 2004 operating income increased
     by $0.2 million,  or 40%, when compared to second  quarter of 2003,  due to
     the higher revenues.

     For the six months ended June 30, 2004, revenues for the technical services
     business increased by $8.6 million,  or 18%, when compared to the same 2003
     period.  In the United  States,  revenues for the six months ended June 30,
     2004 increased by $2.2 million,  or 18%, when compared to the corresponding
     2003  period,  due to  increases  in  turnaround,  underpressure  and other
     process plant services.  In Europe,  revenues increased by $4.7 million, or
     16%,  when  compared to the six month period  ended June 30,  2003,  due to
     increases in  turnaround  and other  process  plant  services and favorable
     foreign  currency   exchange  rates,   partially  offset  by  decreases  in
     underpressure services and product sales. In Asia-Pacific, revenues for the
     six months ended June 30, 2004  increased  by $1.7  million,  or 26%,  when
     compared to 2003, due to increases in underpressure and turnaround services
     and favorable foreign currency exchange rates.

     For the six months ended June 30, 2004, technical services operating income
     was flat, when compared to the same 2003 period. In the United States,  the
     operating  loss for the six months  ended June 30, 2004  decreased  by $0.4
     million,  or 96%, when compared to the same 2003 period,  due to the higher
     revenues.  In Europe,  operating income decreased by $0.6 million,  or 17%,
     when  compared  to the six  months  ended  June  30,  2003,  due to a lower
     operating margin service mix and higher general and  administrative  costs,
     which more than  offset the higher  revenues.  In  Asia-Pacific,  operating
     income for the six months ended June 30, 2004 increased by $0.4 million, or
     45%, when  compared to 2003,  due to higher  revenues and higher  operating
     margins, partially offset by increases in general and administrative costs.

     Information Technology Services

<TABLE>
<CAPTION>
                                                     Three Months Ended                  Six Months Ended
                                                            June 30,                           June 30,
                                                   ---------------------------      ------------------------------
                                                      2004             2003             2004            2003
                                                   -----------     -----------      -------------   --------------
                                                                          (in thousands)


<S>                                                <C>             <C>              <C>             <C>
    Revenues                                      $      5,898     $     8,122      $      11,080   $       17,338
                                                  ============     ===========      =============   ==============

    Operating income (loss)                       $        294     $      (451)     $         296   $         (759)
                                                  ============     ===========      =============   ==============

     Capital expenditures                         $        432     $       454      $         562   $        1,073
                                                  ============     ===========      =============   ==============
</TABLE>

     For the  three and six  month  periods  ended  June 30,  2004,  information
     technology revenues decreased by $2.2 million, or 27%, and $6.3 million, or
     36%, when compared to the same 2003 periods, due primarily to the Company's
     strategic decision to close non-performing operations in the fourth quarter
     of 2003. The businesses closed included communications-related installation
     services  operations and low margin government services and equipment sales
     operations.

     For the  three and six  month  periods  ended  June 30,  2004,  information
     technology  services  operating  income  increased by $0.7 million and $1.1
     million,  respectively,  when compared to the same 2003 periods,  primarily
     due to lower general and administrative costs, combined with the effects of
     closing the non-performing operations in late 2003.

     Interest Expense

     Interest expense decreased by $0.2 million and $0.3 million,  respectively,
     during the three and six month periods  ended June 30, 2004,  when compared
     to the same 2003 periods.  The second quarter decrease was due to decreases
     in technical  services debt (see  "Liquidity  and Capital  Resources")  and
     lower interest rates on variable debt borrowings.  The decrease in interest
     expense for the six months ended June 30, 2004,  when  compared to the same
     2003 period,  was due to  reductions  in both Parent  Company and technical
     services debt (see  "Liquidity and Capital  Resources")  and lower interest
     rates on variable rate borrowings.

     Income Taxes

     Prior to December 31, 2003, the Company recognized a full federal and state
     income  tax  expense  or  benefit  for  income or losses  generated  by its
     domestic operations.  Federal and state benefits recorded for the three and
     six month  periods  ended June 30, 2003  aggregated  $0.6  million and $1.2
     million,  respectively.  During the fourth  quarter of 2003,  the  Company,
     pursuant to an evaluation  performed in accordance  with the  provisions of
     Statement of Financial  Accounting  Standards  ("SFAS") No. 109 "Accounting
     for Income  Taxes",  recorded a full  valuation  allowance for deferred tax
     assets   arising  from  prior  years'  tax  losses  (net   operating   loss
     carryforwards)  that are available to offset future  taxable  income.  As a
     result,  all domestic  federal and state income taxes recorded in the first
     half of 2004 are fully  offset by a  corresponding  reduction  in valuation
     allowance.

     Liquidity and Capital Resources

     Cash provided by operating activities was $0.4 million and $4.2 million for
     the six month periods ended June 30, 2004 and 2003, respectively.  The 2004
     decrease,  when  compared to the same 2003  period,  was due  primarily  to
     normal changes in working capital  components  resulting from the timing of
     cash receipts and  disbursements,  partially offset by the overall increase
     in net income.  During the six months  ended June 30, 2004,  the  Company's
     working capital  requirements for operations and capital  expenditures were
     funded through the use of internally generated funds.

     Capital  expenditures  were $2.1 million and $2.2 million for the six month
     periods ended June 30, 2004 and 2003,  respectively.  Consolidated  capital
     expenditures  for the year 2004  have been  budgeted  at $3  million  to $4
     million,  depending  on the  economic  environment  and  the  needs  of the
     business. Future capital expenditures, however, will depend on many factors
     beyond  the  Company's  control,  including  demand  for  services  in  the
     technical  services and information  technology  services  businesses,  and
     local, state and federal government regulations.  No assurance can be given
     that required  capital  expenditures  will not exceed  anticipated  amounts
     during 2004 or thereafter.  Capital expenditures  (excluding  acquisitions)
     during  the  year  are  expected  to  be  funded  from  existing  cash  and
     anticipated cash flows from operations.

     At June 30, 2004,  $14.6 million was  outstanding  under a $25 million bank
     loan agreement  that provides  working  capital for the technical  services
     segment and is without recourse to the Parent Company. Borrowings under the
     loan  agreement  bear  interest  at the option of the  borrower at variable
     rates  (2.98% at June 30,  2004),  based on either  the LIBOR rate or prime
     rate,  have a  commitment  fee on the unused  portion of the  facility  and
     contain  certain  financial and  operational  covenants with respect to the
     technical  services  group,  including  percentage  of tangible  assets and
     revenues  related to  certain  geographical  areas,  ratios of debt to cash
     flow, as defined in the loan agreement,  and cash flow to fixed charges and
     capital expenditures.  At June 30, 2004, the Company was in compliance with
     all covenants. The loan agreement matures in January 2009 and is secured by
     substantially all of the tangible assets of the technical services group.

     The  Parent   Company's  8.75%   subordinated   debentures   ($5.0  million
     outstanding at June 30, 2004) are convertible  into shares of the Company's
     common stock at the conversion  price of $5.26 per share.  On September 30,
     2003, the Company purchased $4.9 million of subordinated  debentures at par
     value, plus accrued interest.

     The following  schedule sets forth, by period, the Company's debt repayment
     obligations  and  material  contractual  commitments  at December 31, 2003.
     There were no material changes to the Company's  schedule of debt repayment
     obligations and material contractual  commitments from December 31, 2003 to
     June 30, 2004.
<TABLE>
<CAPTION>

                                                         Less than                                        After
                                           Total          1 year       1 -3 years    4 -5 years          5 years
                                         ----------    ----------      ----------    -----------     --------------
                                                                    (in thousands)
<S>                                      <C>           <C>             <C>           <C>             <C>
     Debt:
        Technical services credit
           facility                      $   14,296    $       12      $      -      $       -       $       14,284
        Parent company convertible
           subordinated debentures            5,000           -               -             5,000             -
        Other                                   301           100              201           -                -
                                         ----------    ----------      -----------   ------------    --------------
                                             19,597           112              201          5,000            14,284

        Capital leases                        1,598           626              722            250             -
                                         ----------    ----------      -----------   ------------    --------------

           Debt subtotal                     21,195           738              923          5,250            14,284
                                         ----------    ----------      -----------   ------------    --------------
     Other contractual commitments:
        Operating leases                     10,477         3,326            4,311          1,367             1,473
                                         ----------    ----------      -----------   ------------    --------------
           Total                         $   31,672    $    4,064      $     5,234   $      6,617    $       15,757
                                         ==========    ==========      ===========   ============    ==============
</TABLE>

     A foreign subsidiary of the Company has certain future funding requirements
     regarding a defined  benefits  pension  plan, as set forth in Note 3 to the
     Company's  Consolidated  Financial  Statements  included  in the  Company's
     Annual Report on Form 10-K for the year ended December 31, 2003.

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

     Off-Balance Sheet Transactions

     The Company was not a party to any off-balance  sheet  transactions at June
     30, 2004.

     Critical Accounting Policies and Estimates

     The  preparation of the Company's  financial  statements in conformity with
     accounting  principles  generally  accepted in the United States of America
     requires  management  to make  estimates  and  assumptions  that affect the
     reported  amounts of assets and  liabilities  and disclosures of contingent
     assets and  liabilities  at the date of the  financial  statements  and the
     reported  amounts of revenues and  expenses  during the  reporting  period.
     Actual results could differ from those estimates.  Significant policies are
     presented  in the Notes to the  Consolidated  Financial  Statements  of the
     Company's Annual Report on Form 10-K for the year ended December 31, 2003.

     Critical  accounting  policies  are those  that are most  important  to the
     portrayal of the Company's  financial  position and results of  operations.
     These policies require  management's most difficult,  subjective or complex
     judgments, often employing the use of estimates about the effect of matters
     that are  inherently  uncertain.  The Company's  most  critical  accounting
     policies pertain to revenue  recognition,  the impairment of excess of cost
     over fair value of net assets of acquired businesses and income taxes.

     The Company's  information  technology  services  segment  includes revenue
     recognized  under  arrangements  with its customers that require the use of
     significant judgments and estimates by management.  The accounting policies
     for revenue  recognition in the  information  technology  services  segment
     comply  with  AICPA  Statement  of  Position  No.  97-2  "Software  Revenue
     Recognition".  SOP No. 97-2 requires  revenue to be  recognized  only after
     software  is  delivered,  all  significant  obligations  of the Company are
     fulfilled, and all significant  uncertainties regarding customer acceptance
     have  expired.  SOP No.  97-2 also  requires  the  unbundling  of  multiple
     elements and the  allocation  of pricing to each element  based upon vendor
     specific  objective  evidence of fair value.  In addition,  the information
     technology  services  segment's  revenues under long-term service contracts
     are  accounted  for  using  a  proportional  performance  method  or  on  a
     straight-line   basis  in  accordance  with  the  Securities  and  Exchange
     Commission's Staff Accounting Bulletin ("SAB") No. 101 "Revenue Recognition
     in Financial Statements", as amended by SAB No. 104.

     The Company  follows the  provisions  of 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 June 30, 2004, 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 assets  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 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 the Company at  December  31, 2003 (the last annual
     evaluation date), no impairment charge was required.  Future evaluations of
     the fair value of goodwill  and other  intangible  assets are  dependent on
     many factors, several of which are out of the Company's control,  including
     the demand  for  services  provided.  To the  extent  that such  factors or
     conditions  change,  it is possible  that future  impairments  could occur,
     which  could have a material  effect on the  results of  operations  of the
     Company.

     At June 30, 2004, the Company had a significant  amount of net deferred tax
     assets,  which consisted  principally of net operating loss  carryforwards,
     alternative  minimum tax credit  carryforwards  and  temporary  differences
     resulting from  differences in the tax and book basis of certain assets and
     liabilities.  The net operating loss carryforwards available as of December
     31, 2003 expire, if unused, as follows:  $1.2 million in 2006; $3.0 million
     in 2007;  $13.4 million in 2022; and $9.6 million in 2023. The  alternative
     minimum  tax  credit  carryforwards  have  no  expiration  date.  Based  on
     evaluations performed by the Company pursuant to SFAS No. 109 in the fourth
     quarter of 2003, a full,  non-cash,  valuation  allowance was provided with
     respect  to the  Company's  domestic  federal  and state net  deferred  tax
     assets.  The  utilization  of net  operating  loss  carryforwards  could be
     subject to limitation in the event of a change in ownership,  as defined in
     the tax laws.

<PAGE>

XANSER CORPORATION AND SUBSIDIARIES


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

Item 3. Quantitative and Qualitative Disclosure About Market Risk

The principal market risks pursuant to this Item (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 and
fluctuations in foreign currency.

The Company  centrally  manages its debt and investment  portfolios  considering
investment  opportunities  and risks,  tax  consequences  and overall  financing
strategies.  The Company's  investment  portfolio  consists of cash equivalents;
accordingly,   the  carrying  amounts  approximate  fair  value.  The  Company's
investments  are not material to the financial  position or  performance  of the
Company.  Assuming  variable  rate debt of $14.8 million at June 30, 2004, a one
percent  increase in interest rates would increase  annual  interest  expense by
approximately $0.1 million.

A  significant  portion  of  the  technical  services  business  is  exposed  to
fluctuations in foreign currency  exchange rates. See  "Management's  Discussion
and  Analysis  of  Financial  Condition  and Results of  Operations  - Technical
Services."


Item 4. Controls and Procedures

The Company's principal executive officer and principal financial officer, after
evaluating,  as of June 30, 2004, the effectiveness of the Company's  disclosure
controls and  procedures  (as defined in Rules  13a-15(e)  and  15d-15(e) of the
Securities  Exchange Act of 1934),  have  concluded  that, as of such date,  the
Company's  disclosure  controls and  procedures  are  adequate and  effective to
ensure that material  information  relating to the Company and its  consolidated
subsidiaries would be made known to them by others within those entities.

During  the  quarter  ended  June 30,  2004,  there  have been no changes in the
Company's  internal  controls  over  financial  reporting  that have  materially
affected, or are reasonably likely to materially affect, those internal controls
subsequent to the date of the  evaluation.  As a result,  no corrective  actions
were required or undertaken.


<PAGE>
XANSER CORPORATION AND SUBSIDIARIES


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

                           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.

          31.1 Certification of Chief Executive Officer, Pursuant to Section 302
               of the Sarbanes-Oxley Act of 2002, dated August 6, 2004.

          31.2 Certification of Chief Financial Officer, Pursuant to Section 302
               of the Sarbanes-Oxley Act of 2002, dated August 6, 2004.

          32.1 Certification  of Chief  Executive  Officer,  Pursuant to Section
               906(a) of the Sarbanes-Oxley Act of 2002, dated August 6, 2004.

          32.2 Certification  of Chief  Financial  Officer,  Pursuant to Section
               906(a) of the Sarbanes-Oxley Act of 2002, dated August 6, 2004.


     (b)  Reports on Form 8-K

          Current Report on Form 8-K, filed May 4, 2004.

          Current Report on Form 8-K, filed June 29, 2004.


                                    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, thereunto duly authorized.



                                         XANSER CORPORATION
                                         (Registrant)


Date:  August 6, 2004                          //s// MICHAEL R. BAKKE
                                         --------------------------------------
                                         Michael R. Bakke
                                         Controller and Chief Accounting Officer
                                         (Duly Authorized Officer)


<PAGE>
                                                                    Exhibit 31.1



                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER
            PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002



I, John R. Barnes, Chief Executive Officer of Xanser Corporation certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Xanser Corporation;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this quarterly report is being prepared;

     b)   [intentionally omitted pursuant to SEC Release No. 34-47986];

     c)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this quarterly  report our conclusions
          about the effectiveness of the disclosure controls and procedures,  as
          of the end of the period cover by this quarterly report, based on such
          evaluation; and

     d)   disclosed  in this  quarterly  report any  change in the  registrant's
          internal  control over financial  reporting  that occurred  during the
          registrant's most recent fiscal quarter that has materially  affected,
          or  is  reasonably  likely  to  materially  affect,  the  registrant's
          internal control over financial reporting; and

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

     a)   all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.



Date: August 6, 2004


                                              //s//  JOHN R. BARNES
                                        ----------------------------------------
                                        John R. Barnes
                                        President and Chief Executive Officer


<PAGE>
                                                                    Exhibit 31.2



                    CERTIFICATION OF CHIEF FINANCIAL OFFICER
            PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002



I, Howard C. Wadsworth,  Chief Financial Officer of Xanser  Corporation  certify
that:

1.   I have reviewed this quarterly report on Form 10-Q of Xanser Corporation;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this quarterly report is being prepared;

     b)   [intentionally omitted pursuant to SEC Release No. 34-47986];

     c)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this quarterly  report our conclusions
          about the effectiveness of the disclosure controls and procedures,  as
          of the end of the period cover by this quarterly report, based on such
          evaluation; and

     d)   disclosed  in this  quarterly  report any  change in the  registrant's
          internal  control over financial  reporting  that occurred  during the
          registrant's most recent fiscal quarter that has materially  affected,
          or  is  reasonably  likely  to  materially  affect,  the  registrant's
          internal control over financial reporting; and

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

     a)   all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.


Date: August 6, 2004

                                              //s// HOWARD C. WADSWORTH
                                         ---------------------------------------
                                         Howard C. Wadsworth
                                         Vice President, Treasurer and Secretary
                                         (Chief Financial Officer)



<PAGE>
                                                                    Exhibit 32.1



                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER
          PURSUANT TO SECTION 906(A) OF THE SARBANES-OXLEY ACT OF 2002



     The undersigned,  being the Chief Executive  Officer of Xanser  Corporation
(the "Company") hereby certifies that, to his knowledge, the Company's Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 2004, filed with the
United States  Securities and Exchange  Commission  pursuant to Section 13(a) or
15(d) of the Securities  Exchange Act of 1934 (15 U.S.C.  78m or 78o(d)),  fully
complies  with the  requirements  of  Section  13(a) or 15(d) of the  Securities
Exchange Act of 1934 and that  information  contained in such  Quarterly  Report
fairly presents,  in all material respects,  the financial condition and results
of operations of the Company.

     This written  statement is being  furnished to the  Securities and Exchange
Commission  as an exhibit to such Form 10-Q.  A signed  original of this written
statement  required by Section 906 has been provided to Xanser  Corporation  and
will be retained by Xanser  Corporation  and  furnished  to the  Securities  and
Exchange Commission or its staff upon request.

Date: August 6, 2004


                                              //s//  JOHN R. BARNES
                                        ----------------------------------------
                                        John R. Barnes
                                        President and Chief Executive Officer


<PAGE>
                                                                    Exhibit 32.2


                    CERTIFICATION OF CHIEF FINANCIAL OFFICER
          PURSUANT TO SECTION 906(A) OF THE SARBANES-OXLEY ACT OF 2002


     The undersigned,  being the Chief Financial  Officer of Xanser  Corporation
(the "Company") hereby certifies that, to his knowledge, the Company's Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 2004, filed with the
United States  Securities and Exchange  Commission  pursuant to Section 13(a) or
15(d) of the Securities  Exchange Act of 1934 (15 U.S.C.  78m or 78o(d)),  fully
complies  with the  requirements  of  Section  13(a) or 15(d) of the  Securities
Exchange Act of 1934 and that  information  contained in such  Quarterly  Report
fairly presents,  in all material respects,  the financial condition and results
of operations of the Company.

     This written  statement is being  furnished to the  Securities and Exchange
Commission  as an exhibit to such Form 10-Q.  A signed  original of this written
statement  required by Section 906 has been provided to Xanser  Corporation  and
will be retained by Xanser  Corporation  and  furnished  to the  Securities  and
Exchange Commission or its staff upon request.

Date: August 6, 2004

                                              //s// HOWARD C. WADSWORTH
                                         ---------------------------------------
                                         Howard C. Wadsworth
                                         Vice President, Treasurer and Secretary
                                         (Chief Financial Officer)