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 September 30, 1998

                                       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 1-3939


                             KERR-McGEE CORPORATION
             (Exact Name of Registrant as Specified in its Charter)


          A Delaware Corporation                        73-0311467
      (State or Other Jurisdiction of                (I.R.S. Employer
       Incorporation or Organization)                Identification No.)

                Kerr-McGee Center, Oklahoma City, Oklahoma 73125
              (Address of Principal Executive Offices and Zip Code)

        Registrant's telephone number, including area code (405) 270-1313


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

                                    Yes X No

Number of shares of common stock, $1.00 par value, outstanding as of October 31,
1998: 47,165,448


<PAGE>

   
                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.
<TABLE>

                 KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES
                        CONSOLIDATED STATEMENT OF INCOME
                                   (UNAUDITED)
<CAPTION>

                                                               Three Months Ended             Nine Months Ended
                                                                  September 30,                 September 30,
(Millions of dollars, except per-share amounts)               1998              1997         1998              1997
                                                           -------------------------      -------------------------

<S>                                                        <C>                <C>          <C>            <C>     
Sales                                                      $ 359.5            $323.9       $1,045.0       $1,043.2
                                                           -------------------------------------------------------
Costs and Expenses
    Costs and operating expenses                             214.7             173.9          598.4          560.7
    Selling, general and administrative expenses              35.1              49.7          101.6          107.6
    Depreciation and depletion                                71.5              55.8          206.1          179.3
    Exploration, including dry holes and
        amortization of undeveloped leases                    17.3              16.2           56.5           41.7
    Taxes, other than income taxes                             4.6               4.5           14.9           16.0
    Interest and debt expense                                 13.7              10.7           43.4           33.5
                                                           -------           -------      ---------      ---------
           Total Costs and Expenses                          356.9             310.8        1,020.9          938.8
                                                           -------           -------      ---------      ---------

                                                               2.6              13.1           24.1          104.4
Other Income (Expense)                                       (27.8)             31.6           (1.9)          78.9
                                                           -------           -------      ---------      ---------

Income (Loss) from Continuing Operations
    before Income Taxes                                      (25.2)             44.7           22.2          183.3
Provision (Benefit) for Income Taxes                          (2.4)             13.4            3.1           57.2
                                                           -------           -------      ---------      ---------

Income (Loss) from Continuing Operations                     (22.8)             31.3           19.1          126.1

Income from Discontinued Operations (net of
 provision for income taxes of $121.7 and $2.4
 for the third quarter of 1998 and 1997,
 respectively, and $155.7 and $6.6 for the first
 nine months of 1998 and 1997, respectively)                 217.9               5.5          277.4           22.5
                                                           -------           -------      ---------      ---------

Net Income                                                  $195.1           $  36.8      $   296.5      $   148.6
                                                            ======           =======      =========      =========

Net Income (Loss) per Common Share
    Basic
        Continuing operations                              $  (.48)          $   .66      $     .40      $     2.64
        Discontinued operations                               4.58               .12           5.83             .47
                                                           -------           -------      ---------      ----------
           Total                                           $  4.10           $   .78      $    6.23      $     3.11
                                                           =======           =======      =========      ==========

    Diluted
        Continuing operations                              $  (.48)          $   .65      $     .40      $     2.62
        Discontinued operations                               4.57               .12           5.81             .47
                                                           -------           -------      ---------      ----------
           Total                                           $  4.09           $   .77      $    6.21      $     3.09
                                                           =======           =======      =========      ==========

The accompanying notes are an integral part of this statement.
</TABLE>

<PAGE>

<TABLE>

                 KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES
                           CONSOLIDATED BALANCE SHEET
                                   (UNAUDITED)
<CAPTION>


                                                                 September 30,      December 31,
(Millions of dollars)                                                     1998              1997
                                                               ---------------------------------

<S>                                                                  <C>               <C>
ASSETS
Current Assets
    Cash                                                             $   251.2         $   182.6
    Notes and accounts receivable                                        275.6             274.3
    Inventories                                                          234.7             172.2
    Deposits and prepaid expenses                                         37.1              59.4
                                                                     ---------         ---------
        Total Current Assets                                             798.6             688.5
                                                                     ---------         ---------

Property, Plant and Equipment                                          4,884.3           4,602.1
    Less reserves for depreciation,
        depletion and amortization                                     2,325.7           2,603.7
                                                                     ---------         ---------
                                                                       2,558.6           1,998.4
                                                                     ---------         ---------

Investments and Other Assets                                             374.2             409.2
                                                                     ---------         ---------

                                                                      $3,731.4          $3,096.1
                                                                      ========          ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
    Accounts payable                                                 $   241.2         $   247.1
    Short-term borrowings                                                    -              25.0
    Other current liabilities                                            314.5             250.9
                                                                     ---------         ---------
        Total Current Liabilities                                        555.7             523.0
                                                                     ---------         ---------

Long-Term Debt                                                           892.6             552.0
                                                                     ---------         ---------

Deferred Credits and Reserves                                            626.4             581.1
                                                                     ---------         ---------

Stockholders' Equity
    Common stock, par value $1 - 150,000,000
        shares authorized, 54,177,938 shares issued at
        9-30-98 and 54,120,747 shares issued at 12-31-97                  54.2              54.1
    Capital in excess of par value                                       348.5             345.8
    Preferred stock purchase rights                                         .5                .5
    Retained earnings                                                  1,687.8           1,455.7
    Accumulated other comprehensive income                                 1.3                .1
    Common shares in treasury, at cost - 7,012,590
        shares at 9-30-98 and 6,434,465 at 12-31-97                     (387.9)           (362.4)
    Deferred compensation                                                (47.7)            (53.8)
                                                                     ---------         ---------
        Total Stockholders' Equity                                     1,656.7           1,440.0
                                                                     ---------         ---------

                                                                      $3,731.4          $3,096.1
                                                                      ========          ========


The  "successful  efforts"  method of accounting for oil and gas exploration and
production activities has been followed in preparing this balance sheet.

The accompanying notes are an integral part of this statement.
</TABLE>


<PAGE>

<TABLE>

                 KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)
<CAPTION>


                                                                                  Nine Months Ended
                                                                                    September 30,
(Millions of dollar)                                                             1998             1997
                                                                              ------------------------

<S>                                                                            <C>              <C>
Operating Activities
Net income                                                                     $296.5           $148.6
Adjustments to reconcile to net cash
    provided by operating activities -
        Depreciation, depletion and amortization                                229.8            202.4
        Deferred income taxes                                                    12.0             22.6
        Gain on sale of discontinued coal operations                           (257.3)               -
        Loss (gain) on sale and retirement of assets                             15.8             (3.8)
        Realized gain on sale of available-for-sale securities                     -             (18.4)
        Noncash items affecting net income                                        3.0             20.1
        Other net cash provided by operating activities                        (186.5)            55.7
                                                                               ------           ------
           Net Cash Provided by Operating Activities                            113.3            427.2
                                                                              -------          -------
Investing Activities
Capital expenditures                                                           (412.7)          (253.1)
Acquisitions                                                                   (515.9)               -
Proceeds from sale of discontinued coal operations                              598.8                -
Proceeds from sale of assets                                                     47.3             27.4
Other investing activities                                                        6.2             19.0
                                                                              -------           ------
           Net Cash Used in Investing Activities                               (276.3)          (206.7)
                                                                              ------            ------
Financing Activities
Issuance of long-term debt                                                      393.1                -
Repayment of long-term debt                                                     (49.3)          (137.2)
Decrease in short-term borrowings                                               (25.0)           (16.4)
Purchase of treasury stock                                                      (25.6)           (59.5)
Dividends paid                                                                  (64.4)           (63.0)
Other financing activities                                                        2.8             10.6
                                                                              -------           ------
           Net Cash Used in Financing Activities                                231.6           (265.5)
                                                                              -------           ------

Net Increase in Cash and Cash Equivalents                                        68.6            (45.0)

Cash and Cash Equivalents at Beginning of Period                                182.6            120.9
                                                                              -------           ------

Cash and Cash Equivalents at End of Period                                     $251.2           $ 75.9
                                                                               ======           ======


The accompanying notes are an integral part of this statement.

</TABLE>

<PAGE>


                 KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1998



A.   The condensed  financial  statements  included herein have been prepared by
     the company,  without audit,  pursuant to the rules and  regulations of the
     Securities  and  Exchange  Commission  and, in the  opinion of  management,
     include all  adjustments,  consisting  only of normal  recurring  accruals,
     necessary to present  fairly the  resulting  operations  for the  indicated
     periods.  Certain information and footnote disclosures normally included in
     financial   statements  prepared  in  accordance  with  generally  accepted
     accounting principles have been condensed or omitted pursuant to such rules
     and  regulations.  Although the company  believes that the  disclosures are
     adequate to make the information presented not misleading,  it is suggested
     that these condensed  financial  statements be read in conjunction with the
     financial statements and the notes thereto included in the company's latest
     annual report on Form 10-K.

B.   In April 1998,  the  American  Institute of  Certified  Public  Accountants
     issued  Statement of Position  (SOP) No. 98-5,  "Reporting  on the Costs of
     Start-Up  Activities."  This SOP is effective for financial  statements for
     fiscal years  beginning  after December 15, 1998,  and earlier  adoption is
     permitted.  The  effect  of  adopting  SOP 98-5 is not  expected  to have a
     material impact on the company's results of operations.

     In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
     "Accounting for Derivative  Instruments and Hedging  Activities."  The SFAS
     establishes   accounting  and  reporting  standards  requiring  that  every
     derivative  instrument  be recorded in the balance sheet as either an asset
     or liability  measured at its fair value. The SFAS requires that changes in
     the  derivative's  fair value be  recognized  currently in earnings  unless
     specific  hedge  accounting  criteria are met.  Accounting  for  qualifying
     hedges allows a derivative's  gains and losses to offset related results on
     the hedged item in the income statement, and requires a company to formally
     document,  designate  and assess the  effectiveness  of  transactions  that
     receive  hedge  accounting.  SFAS No. 133 is  effective  for  fiscal  years
     beginning after June 15, 1999, and early adoption is permitted.  The effect
     of adopting  SFAS No. 133 has not been  determined,  but is not expected to
     have a material impact on the company's results of operations.

C.   Income (loss) from  continuing  operations  for purposes of computing  both
     basic earnings per share and diluted earnings per share was $(22.8) million
     and $31.3  million for the three months ended  September 30, 1998 and 1997,
     respectively,  and $19.1  million  and $126.1  million  for the nine months
     ended September 30, 1998 and 1997,  respectively.  A reconciliation  of the
     average shares  outstanding used to compute basic earnings per share to the
     shares used to compute diluted earnings per share is presented below:
<TABLE>
<CAPTION>

                                                              Three Months Ended           Nine Months Ended
                                                                 September 30,               September 30,
     (Millions of shares)                                   1998              1997        1998            1997
                                                            ----------------------        --------------------

     <S>                                                    <C>               <C>         <C>             <C> 
     Averages shares outstanding - basic                    47.4              47.6        47.6            47.8
     Dilutive effect of stock options                          -                .2          .1              .2
                                                            ----             -----       -----            ----
     Average shares outstanding assuming dilution           47.4              47.8        47.7            48.0
                                                            ====              ====        ====            ====

</TABLE>


D.   Net cash provided by operating activities reflects cash payments for income
     taxes and interest as follows:

                                                     Nine Months Ended
                                                       September 30,
     (Millions of dollars)                         1998             1997
                                                   ---------------------
     Income taxes                                $121.5            $14.8
     Interest                                      36.4             36.9


E.   The company  committed to formal plans for the sale of its coal  operations
     in the second quarter of 1998; therefore, coal operations are reported as a
     discontinued operation.  During the third quarter of 1998, the company sold
     Kerr-McGee  Coal  Corporation  that  held the  Jacobs  Ranch  surface  mine
     operation in Wyoming to Kennecott  Energy and Coal Company for $400 million
     cash.  During the second quarter of 1998, the company sold its Galatia Mine
     in the  Illinois  Basin to the  American  Coal  Company for $200 million in
     cash.  For the nine months ended  September  30, 1998,  the two  negotiated
     sales  resulted  in a gain of $257.3  million  ($5.39  per  diluted  common
     share),  net of  provision  for income  taxes of $149.1  million.  The 1998
     third-quarter  gain  totaled  $215.6  million  ($4.54  per  share),  net of
     provision for income taxes of $121.3 million.  The net proceeds received by
     the  company  will be used  to  reduce  outstanding  debt  and for  general
     corporate purposes.

     Revenues applicable to the discontinued operation totaled $13.9 million and
     $78.3  million  for the three  months  ended  September  30, 1998 and 1997,
     respectively, and $174 million and $238.7 million for the nine months ended
     September 30, 1998 and 1997, respectively.

F.   During the third quarter of 1998 and 1997,  comprehensive income was $197.9
     million  and  $32.5  million,  respectively.  For  the  nine  months  ended
     September 30, 1998 and 1997,  comprehensive  income was $299.8  million and
     $137.1 million, respectively.

     The company held U.S. government obligations considered to be available for
     sale at  September  30,  1998,  and  December  31,  1997.  These  financial
     instruments  are carried in the  Consolidated  Balance Sheet at fair value,
     which  is based on  quoted  market  prices  and  approximated  cost at both
     September 30, 1998,  and December 31, 1997.  The company held no securities
     classified as held to maturity or trading during the respective periods.

     During 1997, the company sold equity securities  considered to be available
     for sale. Proceeds from the sale during the 1997 third quarter totaled $8.7
     million,  resulting in a realized gain of $7.7 million before income taxes.
     Proceeds  from the sale for the first  nine  months of 1997  totaled  $21.1
     million, resulting in a realized gain of $18.4 million before income taxes.
     The average cost of the securities was used in computing the realized gain.
     During the first nine months of 1997, the company  donated 50,000 shares of
     its available-for-sale securities to the Kerr-McGee Foundation Corporation,
     a  tax-exempt  entity  whose  purpose is to  contribute  to  not-for-profit
     organizations. The fair value of these donated shares totaled $3.2 million,
     which includes appreciation of $2.8 million before income taxes.

G.   Investments  in equity  affiliates  totaled $254.4 million at September 30,
     1998,  and $272.9  million at December 31, 1997.  An equity loss related to
     the investments is included in Other Income in the  Consolidated  Statement
     of Income and totaled  $24.6  million for the three months ended  September
     30,  1998,  compared  with income of $6.7 million for the same 1997 period.
     For the first nine  months of 1998,  equity  loss  totaled  $12.6  million,
     compared with income of $22.8 million for the same 1997 period. The loss in
     both 1998 periods includes an after-tax  charge of $27.1 million  resulting
     from  the  company's  interest  in a  noncash  charge  taken  by an  equity
     affiliate.

H.   On October 14, 1998,  the company and Oryx Energy  Company  (Oryx)  entered
     into an  Agreement  and Plan of Merger under which Oryx will be merged with
     and into the  company.  Each share of Oryx common  stock will be  converted
     into 0.369 shares of the company's  common stock. The merger is intended to
     be accounted for as a pooling of interest and to be tax-free to the holders
     of Oryx  common  stock.  The merger is subject  to  shareholder  approvals,
     expiration  of the  Hart-Scott-Rodino  waiting  period and other  customary
     closing conditions and regulatory approvals.

I.   CONTINGENCIES

     WEST CHICAGO -

     In 1973, a wholly owned subsidiary, Kerr-McGee Chemical Corporation, closed
     the facility  located in West Chicago,  Illinois,  that  processed  thorium
     ores.  Kerr-McGee Chemical  Corporation now operates as Kerr-McGee Chemical
     LLC  (Chemical).   Operations   resulted  in  some  low-level   radioactive
     contamination  at the site  and,  in 1979,  Chemical  filed a plan with the
     Nuclear Regulatory  Commission (NRC) to decommission the facility.  The NRC
     transferred  jurisdiction of this site to the State of Illinois (the State)
     in 1990.  The  following  discusses the current  status of various  matters
     associated with the West Chicago site.

     Closed Facility - In 1994,  Chemical,  the City of West Chicago (the City),
     and the State reached agreement on the initial phase of the decommissioning
     plan for the closed West  Chicago  facility,  and Chemical  began  shipping
     material from the site to a licensed permanent disposal facility.

     In February  1997,  Chemical  executed an agreement with the City as to the
     terms and  conditions  for  completing  the final phase of  decommissioning
     work. The State indicated approval of this agreement and has issued license
     amendments  authorizing much of the work.  Chemical expects the majority of
     the work to be completed within six years.

     In 1992, the State enacted legislation imposing an annual storage fee equal
     to $2 per cubic foot of byproduct  material located at the closed facility.
     The  storage fee cannot  exceed $26  million per year,  and any storage fee
     payments  must be  reimbursed  to  Chemical  as  decommissioning  costs are
     incurred.  Chemical  has been fully  reimbursed  for all storage  fees paid
     pursuant to this legislation.  In June 1997, the legislation was amended to
     provide  that  future  storage  fee  obligations  are to be offset  against
     decommissioning costs incurred but not yet reimbursed.

     Offsite Areas - The U.S.  Environmental  Protection Agency (EPA) has listed
     four areas in the  vicinity of the West  Chicago  facility on the  National
     Priority List that the EPA promulgates under authority of the Comprehensive
     Environmental  Response,  Compensation,  and  Liability Act of 1980 and has
     designated Chemical as a potentially responsible party in these four areas.
     The EPA issued  unilateral  administrative  orders  for two of these  areas
     (referred to as the residential areas and Reed-Keppler Park), which require
     Chemical to conduct removal actions to excavate contaminated soils and ship
     the soils  elsewhere  for  disposal.  Without  waiving any of its rights or
     defenses, Chemical has begun the cleanup of these two sites.

     Judicial  Proceedings  - In December  1996, a lawsuit was filed against the
     company and Chemical in Illinois state court on behalf of a purported class
     of present and former West Chicago residents. The lawsuit seeks damages for
     alleged  diminution in property values and the  establishment  of a medical
     monitoring  fund to benefit  those  allegedly  exposed  to  thorium  wastes
     originating from the former facility. The case was removed to federal court
     and is being vigorously defended.

     Government  Reimbursement - Pursuant to Title X of the Energy Policy Act of
     1992 (Title X), the United  States  Department  of Energy is  obligated  to
     reimburse  Chemical  for  certain  decommissioning  and  cleanup  costs  in
     recognition  of the  fact  that  much  of  the  facility's  production  was
     dedicated to United  States  government  contracts.  Title X was amended in
     1996 to  increase  the amount  authorized  to $65  million  plus  inflation
     adjustments.  Through  October  31,  1998,  Chemical  has  been  reimbursed
     approximately $54 million under Title X.

     OTHER MATTERS

     The plants and facilities of the company and its  subsidiaries  are subject
     to  various  environmental  laws  and  regulations.   The  company  or  its
     subsidiaries  have been  notified that they may be  responsible  in varying
     degrees for a portion of the costs to clean up certain waste disposal sites
     and former plant sites.  As of September 30, 1998,  the company's  estimate
     for the cost to investigate and/or remediate all presently identified sites
     of  former  or  current  operations,  based on  currently  known  facts and
     circumstances,  totaled $217 million,  which  includes $136 million for the
     former West Chicago  facility and $9 million for the residential  areas and
     Reed-Keppler  Park.  Reserves have been established based on this estimate.
     Expenditures  are  reduced  by  the  amounts   recovered  under  government
     programs.  Expenditures from inception through September 30, 1998,  totaled
     $501 million for currently known sites.

     In addition to the environmental issues previously  discussed,  the company
     or its subsidiaries are also a party to a number of other legal proceedings
     pending in various  courts or agencies in which the company or a subsidiary
     appears as  plaintiff or  defendant.  The  ultimate  costs to  decommission
     presently  known sites are  difficult  to estimate  because of the numerous
     contingencies,  including  continually  changing laws and regulations,  the
     nature of the company's  businesses and pending legal  proceedings.  Actual
     costs could differ from those  currently  estimated as information  becomes
     available  for  sites  that  are  not  now  included  in  the  reserve,  if
     contamination  is not as expected,  or field  conditions or other variables
     differ significantly from those that are now assumed.  Therefore, it is not
     possible  to  reliably   estimate  the  amount  or  timing  of  all  future
     expenditures relating to environmental and other contingencies. The company
     provides for costs related to contingencies when a loss is probable and the
     amount  is  reasonably  estimable.   Although  management  believes,  after
     consultation  with  general  counsel,  that  adequate  reserves  have  been
     provided for all known contingencies,  the ultimate cost will depend on the
     resolution of the above-noted uncertainties. Therefore, it is possible that
     additional reserves could be required in the future.

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

Comparison of 1998 Results with 1997 Results

CONSOLIDATED OPERATIONS

Third-quarter  1998 net  income  totaled  $195.1  million,  compared  with $36.8
million for the same 1997 period.  Loss from continuing  operations for the 1998
third quarter totaled $22.8 million,  compared with 1997 third-quarter income of
$31.3 million.  Excluding special items,  income from continuing  operations for
the 1998 third  quarter  totaled $2 million,  compared with $34.5 million in the
third  quarter of 1997.  Net income  for the first nine  months of 1998  totaled
$296.5  million,  compared with $148.6 million in the same 1997 period.  For the
first nine  months of 1998,  income from  continuing  operations  totaled  $19.1
million,  compared with $126.1 million a year earlier.  Excluding special items,
income  from  continuing  operations  was $32.2  million,  compared  with $116.5
million in 1997.

Operating profit declined 45% and 44% in the third quarter and nine months ended
September 30, 1998,  respectively,  compared with the same 1997 periods.  Higher
chemical  operating  profit in both 1998  periods,  compared  with the same 1997
periods,  was more than offset by lower  operating  profit from  exploration and
production.  The decline for both  periods was due  primarily to lower crude oil
and natural gas sales prices, higher depreciation and depletion expense,  higher
exploration  expense  and higher  titanium  dioxide  pigment  production  costs,
partially  offset  by higher  crude oil and  natural  gas sales  volumes,  lower
operating  expenses,  higher  pigment  sales prices and income from the European
pigment operations acquired in the first quarter of 1998.

The income tax benefit was $2.4  million  for the 1998 third  quarter,  compared
with a provision of $13.4 million for the 1997 period.  The benefit for the 1998
third  quarter  included  a special  tax item of $6.5  million  relating  to the
enactment of a lower tax rate in the United Kingdom. Excluding the effect of the
rate change and the tax benefit on the special  items,  the  third-quarter  1998
provision for income taxes was $6.3 million, compared with $15.9 million for the
1997 period.  The decrease was due to lower pretax income,  partially  offset by
higher  effective  tax rate.  The provision for income taxes for the nine months
ended  September  30,  1998,  included  tax  benefits of $11.1  million and $6.5
million  resulting from an income tax settlement and the United Kingdom tax rate
change, respectively.  Excluding these special tax benefits and the tax benefits
on the special  items,  the provision for income taxes was $22.6 million for the
first nine months of 1998,  compared with $52.1 million for the 1997 period. The
decrease was due to lower pretax income,  partially  offset by higher  effective
tax rate.

<PAGE>

SEGMENT OPERATIONS

Following is a summary of sales and  operating  profit and a discussion of major
factors  influencing the results of each of the company's  business segments for
the third quarter and first nine months of 1998,  compared with the same periods
last year.

<TABLE>
<CAPTION>

                                                   Three Months Ended                  Nine Months Ended
                                                      September 30,                      September 30,
(Millions of dollars)                              1998             1997              1998              1997
                                                 ------------------------         --------------------------

<S>                                              <C>               <C>            <C>               <C>
Sales
     Exploration and production                  $109.2            $131.6         $  350.5          $  478.4
     Chemicals                                    250.3             192.2            694.3             564.6
                                                 ------            ------         --------          --------
                                                  359.5             323.8          1,044.8           1,043.0
     All other                                        -                .1               .2                .2
                                                 ------            ------         ---------         --------
         Total Sales                             $359.5            $323.9         $1,045.0          $1,043.2
                                                 ======            ======         ========          ========

Operating Profit
     Exploration and production                  $  2.1            $ 31.4         $   22.9          $  131.9
     Chemicals                                     29.1              24.9             85.8              61.8
                                                 ------            ------         --------          --------
         Total Operating Profit                    31.2              56.3            108.7             193.7

Other Expense                                     (56.4)            (11.6)           (86.5)            (10.4)
                                                 ------            ------         --------          --------

Income (Loss) from Continuing Operations
     before Income Taxes                          (25.2)             44.7             22.2             183.3

Provision (Benefit) for Income Taxes               (2.4)             13.4              3.1              57.2
                                                 ------            ------         --------          --------
Income (Loss) from Continuing Operations          (22.8)             31.3             19.1             126.1

Discontinued Operations, Net of
     Income Taxes                                 217.9               5.5            277.4              22.5
                                                 ------            ------         --------          --------

Net Income                                       $195.1            $ 36.8         $  296.5          $  148.6
                                                 ======            ======         ========          ========
</TABLE>


Exploration and Production -

Operating  profit for the third quarter of 1998 was $2.1 million,  compared with
$31.4  million  for the same 1997  period.  Operating  profit for the first nine
months of 1998 and 1997 was $22.9 million and $131.9 million,  respectively. The
decrease in operating  profit for both periods was due  primarily to lower crude
oil and natural gas sales prices,  higher depreciation and depletion expense and
higher exploration expense, partially offset by higher crude oil and natural gas
sales volumes and lower operating expense.  The higher volumes in the 1998 third
quarter and first nine months of 1998 were due  primarily to the  second-quarter
1998 acquisition of Gulf Canada Resources  Limited's North Sea assets and higher
production  from  Indonesia,   partially  offset  by  production   interruptions
associated with Gulf of Mexico storms.

Revenues  were $109.2  million and $131.6  million  for the three  months  ended
September 30, 1998 and 1997, respectively, and $350.5 million and $478.4 million
for the first nine months of 1998 and 1997,  respectively.  The following  table
shows the  company's  average crude oil and natural gas sales volumes and prices
for both the third quarter and first nine months of 1998 and 1997.

<PAGE>

<TABLE>
<CAPTION>

                                            Three Months Ended                           Nine Months Ended
                                               September 30,         Increase              September 30,         Increase
                                             1998         1997      (Decrease)           1998         1997      (Decrease)
                                         -------------------------------------        ------------------------------------

<S>                                        <C>          <C>             <C>            <C>          <C>
Crude oil sales
     (thousands of bbls/day)
         United States                       20.0         23.4          (15)             22.2         24.6          (10)
         North Sea                           34.9         23.3           50              31.5         23.9           32
         China                                8.5          8.8           (3)              8.4          8.6           (2)
         Other                                3.2           .3           NM               2.7           .1           NM
                                           ------       ------                         ------       ------             
              Total proprietary sales        66.6         55.8           19              64.8         57.2           13
         Proportionate interest in
              equity affiliate's sales        6.8          7.2           (6)              7.0          7.3           (4)
                                           ------       ------                         ------       ------              
                  Total                      73.4         63.0           17              71.8         64.5           11
                                           ======       ======                         ======       ======             

Average crude oil sales price
     (per barrel)
         United States                     $11.23       $17.77          (37)           $12.25       $18.73          (35)
         North Sea                          11.44        17.63          (35)            12.40        18.88          (34)
         China                              10.65        17.21          (38)            11.95        17.83          (33)
         Other                              12.33        17.86          (31)            12.76        17.86          (29)
              Average                       11.32        17.63          (36)            12.30        18.66          (34)

Natural gas sold
     (MMCF/day)
         United States                        163          138           18               166          161            3
         North Sea                             34           28           21                34           30           13
                                           ------       ------                         ------       ------             
              Total proprietary sales         197          166           19               200          191            5
         Proportionate interest in
              equity affiliate's sales         61           60            2                62           59            5
                                           ------       ------                         ------       ------             
                  Total                       258          226           14               262          250            5
                                           ======       ======                         ======       ======             

Average natural gas sales price
     (per MCF)
         United States                      $2.02        $2.42          (17)            $2.16        $2.45          (12)
         North Sea                           2.20         2.25           (2)             2.49         2.52           (1)
              Average                       $2.05        $2.39          (14)            $2.22        $2.47          (10)

</TABLE>

<PAGE>


Chemicals -

Third-quarter  1998  operating  profit was $29.1  million on  revenues of $250.3
million,  compared  with 1997  operating  profit of $24.9 million on revenues of
$192.2 million. For the first nine months of 1998 and 1997, operating profit was
$85.8 million and $61.8 million, respectively, on revenues of $694.3 million and
$564.6 million, respectively.  Revenues for both periods increased due to higher
pigment  sales  prices  and  volumes  resulting  from  the  first-quarter   1998
acquisition of the European pigment  operations.  Operating profit for both 1998
periods increased  primarily due to higher revenues,  partially offset by higher
production costs for pigments and lower results from electrolytic products.

Other Expenses -

Other  expense for the third quarter and the first nine months of 1998 and 1997,
were as follows:
<TABLE>
<CAPTION>

                                                              Three Months Ended             Nine Months Ended
                                                                  September 30,                  September 30,
                                                              1998            1997           1998           1997
                                                            ----------------------        ----------------------

<S>                                                          <C>            <C>             <C>            <C>  
Other expense excluding special items                        $26.3          $  7.4          $57.3          $27.5
Special items -
     Equity affiliate's noncash charge                        27.1              -            27.1              -
     Loss on sale of assets                                      -              -            18.6              -
     Restructuring                                             3.0              -             3.0              -
     Net environmental provision                                 -            19.5             .4           19.5
     Gains on sales of equity securities                         -            (7.7)             -          (18.4)
     Settlements with insurance carriers                         -              -            (9.8)         (12.2)
     Interest income on income tax settlements                   -              -           (12.6)             -
     Deferred gain on sale of soda products facility             -           (10.0)             -          (10.0)
     Other                                                       -             2.4            2.5            4.0
                                                             -----          ------         ------         ------
Other expense                                                $56.4           $11.6          $86.5          $10.4
                                                             =====           =====          =====          =====
</TABLE>

Excluding  special  items,  other  expense for the third  quarter 1998 was $26.3
million,  up from $7.4 million in 1997,  due primarily to lower equity income of
$4.3  million and 1998  foreign  currency  transaction  losses of $8.4  million,
compared with 1997 gains of $3.5 million.  All other expense,  excluding special
items,  for the  first  nine  months of 1998 was $57.3  million,  up from  $27.5
million,  due  primarily to 1998  foreign  currency  transaction  losses of $8.7
million,  compared with 1997 gains of $3.8 million,  lower equity income of $8.3
million and higher net interest expense of $6.9 million.

Financial Condition

At September 30, 1998,  the company's  net working  capital  position was $242.9
million,  compared with $165.5  million at December 31, 1997.  The current ratio
was 1.4 to 1 at September 30, 1998,  compared with 1.3 to 1 at both December 31,
1997,  and September 30, 1997.  The company's  percentage of total debt to total
capitalization was 35% at September 30, 1998,  compared with 29% at December 31,
1997, and 27% at September 30, 1997. Debt less cash to total  capitalization was
28% at  September  30, 1998,  compared  with 22% at December 31, 1997 and 24% at
September 30, 1997.

On August 24, 1998, Kerr-McGee Pigment N.V., a wholly owned subsidiary,  entered
into an  overdraft  credit  agreement  with KBC Bank N.V.  to  provide up to 500
million  Belgian francs or equivalent  foreign  currency at varying  rates.  The
credit facility may also be used for short-term  straight  loans.  The agreement
provides the credit until further notice and the company is the guarantor of the
agreement.  A total of $5.4 million U.S. equivalent had been borrowed under this
agreement as of September 30, 1998.

The company had unused lines of credit and revolving  credit  facilities of $657
million at September 30, 1998. Of this amount, $380 million and $140 million can
be used to support  commercial  paper  borrowings of  Kerr-McGee  Credit LLC and
Kerr-McGee Oil (U.K.) PLC, respectively.

Cash  capital  expenditures  for  the  first  nine  months  of  1998,  excluding
acquisitions,  totaled $412.7 million, compared with $253.1 million for the same
period last year.  Exploration and production  expenditures,  principally in the
North  Sea,  Gulf of Mexico  and  offshore  China,  were 80% of the 1998  total.
Chemical expenditures were 16% of the 1998 amount.  Management  anticipates that
the cash  requirements  for the  next  several  years  can be  provided  through
internally generated funds and selective short-term and/or long-term borrowings.

On July 14, 1998,  the  company's  Board of Directors  authorized  management to
purchase from time to time company stock of up to $300 million, or approximately
11% of the outstanding shares at the then current market price. During the third
quarter 1998, the company purchased approximately 580,000 shares of its stock at
a cost of $25.6  million.  The stock  repurchase  program was suspended when the
company began merger discussions with Oryx Energy Company. Year 2000 Program

In 1996, the company  established a formal Year 2000 Program (Program) to assess
and  correct   Year  2000   problems   in  both   information   technology   and
non-information  technology  systems.  The Program is  organized  into two major
areas:  business  systems and facilities  integrity.  Business  systems  include
replacement  and upgrade of computer  hardware  and  software,  including  major
business applications, such as purchasing,  inventory,  engineering,  financial,
human resources, etc. Facilities integrity encompasses telecommunications, plant
process  controls,  instrumentation  and  embedded  chip  systems  as well as an
assessment of third-party Year 2000 readiness.

The company's Program generally covers the following phases:

         (1) Identification  and evaluation of systems that need  to be modified
             or replaced.

         (2) Remediation work to modify existing systems or install new systems.

         (3) Testing and validation of systems and applications.

As of September  30, 1998,  the company had completed  approximately  95% of the
planned work on the business systems,  with all phases scheduled to be completed
by year-end  1998.  Most of these  projects are system  replacements  to improve
business  functionality  and have not been undertaken as the sole result of Year
2000 issues.

As of September  30, 1998,  the company had completed  approximately  60% of the
work on facilities integrity. Domestic sites are expected to be completed in the
first quarter 1999,  and foreign sites are expected to be completed in the third
quarter 1999.

An integral  part of the Program is  communication  with third parties to assess
the extent and status of their Year 2000  efforts.  Formal  communications  have
been initiated  with critical  suppliers to determine  whether their  operations
and/or the  products  and  services  provided to the  company  will be Year 2000
compliant.  In addition,  the company has  contacted  key  customers  requesting
information  regarding  their  own Year 2000  compliance  efforts.  The  company
continues to evaluate responses and make additional inquiries as needed.

As of September  30, 1998,  inception to date program  expenditures  totaled $38
million,  which includes $12 million spent in the first nine months of 1998. The
total capital and operating  costs to achieve Year 2000  readiness are estimated
to be $45  million  over the  three-year  period,  which is not  material to the
company's consolidated financial position,  results of operations or cash flows.
Program  expenditures  are  provided  through  internally  generated  funds  and
selective short-term and/or long-term borrowings.

The company is developing  contingency plans in the unlikely event that portions
of the Program are  inadequate.  Manual  systems and other  procedures are being
considered to accommodate significant disruptions that could be caused by system
failures.  When  possible,  alternative  providers are being  identified  should
certain  critical  suppliers  become  unable to provide an  acceptable  level of
service to the  company.  Contingency  plans  should be  completed by the end of
third quarter 1999.

The failure to correct a material Year 2000 problem could result in  disruptions
to some aspects of the company's normal business activities or operations.  Such
failures could have a material effect on the company's results of operations and
cash flows in a particular  quarter or annual period.  Management  believes that
the  Program  is  comprehensive  and  reduces  Year 2000 risks  associated  with
internal systems to a manageable  level.  Regardless of management's  efforts to
assess and verify  readiness,  there can be no assurance that all other entities
affecting  the  company  will be Year 2000  compliant.  As reported  herein,  to
address these concerns,  contingency plans are being developed. However, failure
by a third party to remediate  Year 2000 issues in a timely  manner could have a
material  effect on the  company's  results  of  operations  and cash flows in a
particular  quarter or annual period.  Failure of a critical operating or safety
component,  or failure by a key third party supplier or customer are believed to
be the most  reasonably  likely  worst  case  scenarios  that  could  impact the
company.

<PAGE>


                           Forward-Looking Information

This report contains certain  forward-looking  statements,  particularly as they
relate to the company's  Year 2000  readiness,  which are based on  management's
current views and assumptions regarding future events and financial performance.
These  statements  are  qualified by  reference to the section  "Forward-Looking
Information"  contained in Part I of the company's  Form 10-K for the year ended
December 31, 1997.


                           PART II - OTHER INFORMATION

Item 1.    Legal Proceedings.

           None

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

      (a)  Exhibits -

           27.0   Financial Data Schedule

      (b)  Reports on Form 8-K

           Current  report on Form 8-K dated October 14, 1998 (filed October 19,
           1998),  reporting under Item 5, Other Events,  information related to
           the Agreement and Plan of Merger with Oryx Energy Company.




                                    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.


                             KERR-McGEE CORPORATION


Date  November 6, 1998                       By: (Deborah A. Kitchens)         
      ----------------                       -----------------------------------
                                                  Deborah A. Kitchens
                                                   Vice President and Controller
                                                    and Chief Accounting Officer