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, 2001

                                       OR

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


                          Commission File Number 1-8704

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


             Delaware                                   74-1223027
  (State or other jurisdiction of           (I.R.S. Employer Identification No.)
  incorporation or organization)


1111 Fannin, Suite 1500, Houston, Texas                   77002
(Address of principal executive offices)                (Zip Code)


                                 (713) 658-4000
              (Registrant's telephone number, including area code)


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

                      Yes    X    No

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

           Class                    Outstanding at October 31, 2001
-----------------------------       -------------------------------
Common Stock, $1.00 par value                  6,098,102


                  This report contains 15 pages


<PAGE>

                HOWELL CORPORATION AND SUBSIDIARIES

                             Form 10-Q

                               INDEX



                                                                       Page No.
                                                                        ------
Part I.  Financial Information

Item 1.  Consolidated Statements of Operations --
          Three and nine months ended September 30, 2001 and 2000
          (unaudited).................................................    3

         Consolidated Balance Sheets --
           September 30, 2001 (unaudited) and December 31, 2000.......    4

         Consolidated Statements of Cash Flows --
           Nine months ended September 30, 2001 and 2000 (unaudited)..    5

         Notes to Consolidated Financial Statements (unaudited).......    6

Item 2.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations..................................   11


Part II. Other Information

Item  6. Exhibits and Reports on Form 8-K.............................   15


                                      -2-
<PAGE>

                          PART I. FINANCIAL INFORMATION
                                    (ITEM 1)

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Howell Corporation and Subsidiaries
<TABLE>
<CAPTION>
                                                      Three Months Ended   Nine Months Ended
                                                         September 30,        September 30,
                                                        2001      2000       2001      2000
                                                        ----      ----       ----      ----
                                                     (In thousands, except per share amounts)


<S>                                                 <C>        <C>        <C>        <C>
Revenues.........................................    $21,547    $21,300    $67,357    $58,365
                                                    ---------  ---------  ---------  ---------
Cost and expenses:
  Lease operating expenses.......................      9,060      7,961     27,269     22,225
  Depreciation, depletion, and amortization......      2,408      1,863      6,651      5,394
  General and administrative.....................      2,046      1,025      4,354      2,880
                                                    ---------  ---------  ---------  ---------
                                                      13,514     10,849     38,274     30,499
                                                    ---------  ---------  ---------  ---------

Operating profit.................................      8,033     10,451     29,083     27,866
                                                    ---------  ---------  ---------  ---------
Other income (expense):
  Interest expense...............................       (976)    (1,575)    (3,357)    (4,768)
  Interest income................................         19         40         62        108
  Other-net......................................        (37)         -        213          1
                                                    ---------  ---------  ---------  ---------
                                                        (994)    (1,535)    (3,082)    (4,659)
                                                    ---------  ---------  ---------  ---------

Earnings before income taxes.....................      7,039      8,916     26,001     23,207
Income tax provision.............................      2,323      3,282      8,960      8,355
                                                    ---------  ---------  ---------  ---------
Net earnings ....................................      4,716      5,634     17,041     14,852
  Less: Preferred stock dividends................       (604)      (604)    (1,811)    (1,811)
                                                    ---------  ---------  ---------  ---------
Net earnings applicable to common shares.........    $ 4,112    $ 5,030    $15,230    $13,041
                                                    =========  =========  =========  =========

Net earnings per common share - basic............    $  0.69    $  0.83    $  2.54    $  2.15
                                                    =========  =========  =========  =========
Weighted average shares outstanding - basic......      5,965      6,076      5,987      6,075
                                                    =========  =========  =========  =========

Net earnings per common share - diluted..........    $  0.55    $  0.65    $  1.98    $  1.73
                                                    =========  =========  =========  =========
Weighted average shares outstanding - diluted....      8,567      8,625      8,625      8,582
                                                    =========  =========  =========  =========

Cash dividends per common share..................    $  0.04    $  0.04    $  0.12    $  0.12
                                                    =========  =========  =========  =========
</TABLE>

See accompanying Notes to Consolidated Financial Statements.

                                      -3-
<PAGE>
CONSOLIDATED BALANCE SHEETS
Howell Corporation and Subsidiaries
<TABLE>
<CAPTION>

                                                        September 30,  December 31,
                                                            2001           2000
                                                            ----           ----
                                                        (Unaudited)

                                                    (In thousands, except share data)
<S>                                                     <C>           <C>
                   Assets
Current assets:
  Cash and cash equivalents...........................   $ 10,980     $   5,553
  Trade accounts receivable, less allowance for
    doubtful accounts of $66 in 2001 and 2000.........      9,326        12,515
  Income tax receivable...............................      1,211           705
  Deferred income taxes...............................         59            59
  Other current assets................................      2,354           750
                                                        ----------    ----------
    Total current assets..............................     23,930        19,582
                                                        ----------    ----------

Property, plant and equipment:
  Oil and gas properties, utilizing the full-cost
    method of accounting..............................    337,461       401,851
  Unproven properties.................................     20,174        20,174
  Other...............................................      4,295         3,737
  Less accumulated depreciation, depletion and
    amortization......................................   (241,610)     (320,602)
                                                        ----------    ----------
    Net property and equipment........................    120,320       105,160
                                                        ----------    ----------
Other assets..........................................        829           672
                                                        ----------    ----------
    Total assets......................................   $145,079      $125,414
                                                        ==========    ==========

    Liabilities and Shareholders' Equity

Current liabilities:
  Accounts payable....................................   $ 11,117      $ 12,880
  Accrued liabilities - oil and gas properties........      2,321         2,521
  Accrued liabilities - other.........................      3,356         2,605
  Income taxes payable................................      1,228           319
                                                        ----------    ----------
    Total current liabilities.........................     18,022        18,325
                                                        ----------    ----------
Deferred income taxes.................................      4,319           625
                                                        ----------    ----------
Other liabilities.....................................      3,968           545
                                                        ----------    ----------
Long-term debt........................................     66,000        67,000
                                                        ----------    ----------
Commitments and contingencies
Shareholders' equity:
  Preferred stock, $1 par value; 690,000 shares
    issued and outstanding, liquidation value of
    $34,500,000.......................................        690           690
  Common stock, $1 par value; 6,098,102 shares issued
    and outstanding in 2001; 5,524,907 shares issued
    and outstanding in 2000...........................      6,098         5,525
  Additional paid-in capital..........................     46,703        41,079
  Unearned compensation...............................       (903)         (209)
  Retained earnings (deficit).........................        182        (8,166)
                                                        ----------    ----------
    Total shareholders' equity........................     52,770        38,919
                                                        ----------    ----------
    Total liabilities and shareholders' equity........   $145,079      $125,414
                                                        ==========    ==========
</TABLE>


See accompanying Notes to Consolidated Financial Statements.

                                      -4-
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Howell Corporation and Subsidiaries
<TABLE>
<CAPTION>

                                                      Nine Months Ended September 30,
                                                           2001           2000
                                                           ----           ----
                                                            (In thousands)
<S>                                                     <C>           <C>
OPERATING ACTIVITIES:
Net earnings..........................................   $ 17,041      $ 14,852
Adjustments for non-cash items:
  Depreciation, depletion and amortization............      6,651         5,394
  Deferred income taxes...............................      3,694         3,103
  Other...............................................        225            52
                                                        ----------    ----------
Earnings plus non-cash operating items................     27,611        23,401
Changes in components of working capital from
  operations:
  Decrease (increase) in trade accounts receivable....      3,189          (973)
  Increase in federal income tax receivables..........       (506)            -
  Decrease (increase) in other current assets.........     (1,604)        1,688
  Increase (decrease) in accounts payable.............     (1,762)        1,986
  Increase in accrued and other liabilities...........      4,123         2,805
  Increase (decrease) in income tax payable...........        909          (140)
                                                        ----------    ----------
Cash provided by continuing operations................     31,960        28,767
Cash utilized in discontinued operations..............       (149)         (167)
                                                        ----------    ----------
Cash provided by operating activities.................     31,811        28,600
                                                        ----------    ----------
INVESTING ACTIVITIES:
Proceeds from the disposition of property.............        667         3,000
Additions to property, plant and equipment............    (22,478)      (10,740)
Other, net............................................       (157)         (142)
                                                        ----------    ----------
Cash utilized in investing activities.................    (21,968)       (7,882)
                                                        ----------    ----------
FINANCING ACTIVITIES:
Repayments under credit agreements, net...............     (1,000)      (15,000)
Cash dividends:
  Common shareholders.................................       (712)         (664)
  Preferred shareholders..............................     (1,811)       (1,811)
Stock options exercised...............................        167            17
Stock purchased and reissued restricted shares........     (1,060)            -
                                                        ----------    ----------
Cash utilized in financing activities.................     (4,416)      (17,458)
                                                        ----------    ----------

NET INCREASE IN CASH AND CASH EQUIVALENTS.............      5,427         3,260
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD........      5,553         2,112
                                                        ----------    ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD..............   $ 10,980      $  5,372
                                                        ==========    ==========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Net cash paid for:
Interest..............................................   $  3,436      $  3,447
                                                        ==========    ==========
Income taxes..........................................   $  4,868      $  5,611
                                                        ==========    ==========
</TABLE>

See accompanying Notes to Consolidated Financial Statements

                                      -5-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Howell Corporation and Subsidiaries
September 30, 2001 and 2000


Note 1 - Basis of Financial Statement Preparation

The  unaudited  consolidated  financial  statements  included  herein  have been
prepared  by  Howell  Corporation  (the  "Company"),  pursuant  to the rules and
regulations  of the Securities  and Exchange  Commission and in accordance  with
generally accepted accounting principles in The United States of America. In the
opinion of management,  all adjustments  (all of which are normal and recurring)
have been made  which are  necessary  for a fair  statement  of the  results  of
operations for the three and nine months ended  September 30, 2001 and 2000. The
results of operations for the three and nine months ended September 30, 2001 are
not  necessarily  indicative  of results to be expected  for the full year.  The
accounting  policies  followed  by the  Company  are set  forth in Note 1 to the
consolidated financial statements in its Annual Report on Form 10-K for the year
ended December 31, 2000. These consolidated  financial statements should be read
in conjunction  with the financial  statements and notes thereto included in the
Company's latest Form 10-K.

Reclassifications

Certain  reclassifications  have been made to the 2000 financial presentation to
conform with the 2001 presentation.


Note 2 - New Accounting Standards

The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 133
effective  January 1, 2001.  The Company has  reviewed  all of its  contracts to
determine which, if any, contain derivatives. As of January 1, 2001, the Company
had only one derivative  contract and it was accounted for and carried at market
value.  Therefore,  upon  adoption  of SFAS No.  133,  the  Company  recorded no
transition adjustment.

On June 29,  2001,  the FASB  approved its  proposed  SFAS No. 141,  ("FAS 141")
"Business  Combinations,"  and SFAS No.  142 ("FAS  142"),  "Goodwill  and Other
Intangible Assets."

Under FAS 141,  all  business  combinations  should be  accounted  for using the
purchase  method  of  accounting;  use of  the  pooling-of-interests  method  is
prohibited.  The provisions of the statement apply to all business  combinations
initiated after June 30, 2001.

FAS 142 will apply to all acquired intangible assets whether acquired singly, as
part of a group,  or in a business  combination.  The statement  will  supersede
Accounting Principles Board,  ("APB"),  Opinion No. 17, "Intangible Assets," and
will carry  forward  provisions  in APB  Opinion  No.17  related  to  internally
developed  intangible  assets.  Adoption  of FAS  142  will  result  in  ceasing
amortization  of goodwill.  All of the  provisions  of the  statement  should be
applied in fiscal years  beginning  after  December 15, 2001 to all goodwill and
other  intangible  assets  recognized  in an  entity's  statement  of  financial
position  at  that  date,   regardless  of  when  those  assets  were  initially
recognized.

The Company does not expect the  adoption of these  standards to have a material
effect on its consolidated financial statements.

In July  2001,  the  FASB  issued  SFAS No.  143,  "Accounting  for  Obligations
Associated with the Retirement of Long-Lived  Assets." SFAS No. 143 provides the
accounting  requirements  for retirement  obligations  associated  with tangible
long-lived  assets.  SFAS No. 143 is effective for fiscal years  beginning after
June 15,  2002,  and early  adoption  is  permitted.  The  Company is  currently
assessing  the  new  standard  and  has not yet  determined  the  impact  on its
consolidated results of operations, cash flows or financial position.

                                      -6-
<PAGE>
In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." This statement  addresses  financial  accounting
and  reporting  for the  impairment  or  disposal  of  long-lived  assets.  This
statement  supersedes FASB Statement No. 121,  "Accounting for the Impairment of
Long-Lived  Assets  and  for  Long-Lived  Assets  to Be  Disposed  Of,"  and the
accounting and reporting provision of APB Opinion No. 30, "Reporting the Results
of Operations-Reporting  the Effects of Disposal of a Segment of a Business, and
Extraordinary,  Unusual and Infrequently Occurring Events and Transactions," for
the  disposal  of a "segment  of a  business"  ( as  previously  defined in that
Opinion).  This  statement  also  amends  ARB No.  51,  "Consolidated  Financial
Statements"  to eliminate the exception to  consolidation  for a subsidiary  for
which  control  is likely to be  temporary.  SFAS No. 144 is  effective  for the
fiscal years beginning after December 15, 2001, and early adoption is permitted.
The Company is currently  assessing the new standard and has not yet  determined
the impact on its consolidated  results of operations,  cash flows, or financial
position.

Note 3 - Financial Instruments and Hedging Activities

In order to mitigate the effects of future price fluctuations,  the Company from
time to time uses limited programs to hedge its production.  Futures and options
contracts are used as the hedging tools.

During the second quarter of 2001, the Company  purchased a put option  covering
4,000  barrels of oil per day for calendar  months June through  December  2001,
allowing  it to  benefit  should the NYMEX  price for oil fall below  $23.40 per
barrel.  The premium  paid was $0.4 million and the market value of the position
and its carrying  value at September  30, 2001,  was $0.5  million.  The Company
recognizes changes in the market value of this derivative instrument in earnings
for the period.

During the fourth quarter of 2000, the Company  purchased a put option  covering
7,500 MMBTU per day for NYMEX  contract  months  March  through  December  2001,
allowing  it to  benefit  should the NYMEX  price for gas fall  below  $3.50 per
MMBTU.  The premium  paid was $0.3  million and the market value of the position
and its carrying  value at September  30, 2001,  was $0.9  million.  The Company
recognizes changes in the market value of this derivative instrument in earnings
for the period.

The Company had entered into two hedging  programs for the year 2000.  The first
program  was a purchase  of a put option  and a sale of a call  option  covering
1,700 barrels of oil per day  effective  January 1, 2000,  through  December 31,
2000. The strike prices were $17.25 per barrel for the put option and $22.00 per
barrel for the call  option.  The second  program was a purchase of a put option
and a sale of a call  option  covering  1,800  barrels of oil per day  effective
January 1, 2000,  through  December 31, 2000.  The strike prices were $18.50 per
barrel for the put option  and  $26.00  per  barrel  for the call  option.  Each
program  provided for monthly  settlements  and was based on monthly average oil
prices. There were no premiums associated with either program.  During the three
and nine months ended  September 30, 2000, the strike prices of the call options
were  exceeded,  resulting  in a reduction  of revenues of $2.4 million and $5.4
million,  respectively,  from what  would  have  been  received  had no  hedging
programs been in place.  Without the options the average price per barrel of oil
for the three and nine months ended  September  30, 2000,  would have  increased
from $26.24 to $29.77 and from $24.97 to $27.67, respectively.

Prior to the adoption of SFAS No. 133, changes in the market value of the hedges
were deferred until the gain or loss was recognized on the hedged transactions.

Note 4 - Accumulated Depreciation, Depletion and Amortization

The Company's  depletion rate for the three and nine months ended  September 30,
2001, was $2.58 and $2.46 per equivalent barrel, respectively,  versus a rate of
$2.20 and $2.16, respectively, for the same periods ended September 30, 2000.

                                      -7-
<PAGE>
Note 5 - Acquisitions & Dispositions

On October  18,  2001,  the Company  entered a Purchase  and Sale  Agreement  to
acquire an  additional  interest  in the Elk Basin  Field for $26  million.  The
purchase will be financed through the Company's existing credit facility.  After
the purchase,  the Company will own approximately 64% of the working interest in
the field. The purchase is expected to close during November 2001.

On February 28, 2001, the Company announced that it traded certain producing oil
and gas properties in a tax-free,  like-kind exchange.  The Company assigned all
of its working  interest  in Main Pass  Blocks 64 and 65 in  exchange  for a 26%
working  interest  in the Salt  Creek  Field  Light Oil Unit  located in Natrona
County,  Wyoming. The Company also paid $7.6 million as part of the transaction.
The trade did not  materially  affect the  Company's  reserve  base.  This trade
concluded the  Company's  operations in the offshore area of the Gulf of Mexico.
The Company  now owns a 98%  working  interest in the Salt Creek Field Light Oil
Unit, the largest producing unit in the field. In addition, the Company received
16,900 undeveloped net acres in the Big Horn Basin of Wyoming and a cash payment
of $0.3 million in exchange for acreage in the Wind River Basin of Wyoming.

On February  28,  2000,  the Company  sold its 46%  interest in Genesis  Energy,
L.L.C. for $3.0 million. The proceeds from the sale were used to reduce debt and
no gain or loss was  recognized on the sale.  There were no pre-tax  earnings or
losses  attributable to the Company's  interest in Genesis during the first nine
months of 2000.


Note 6 - Litigation

Howell Pipeline Texas, Inc. v. Exxon Pipeline Company,  125th Judicial District,
District  Court of Harris  County,  Texas,  Cause No. 1999 - 32526.  On June 25,
1999,  Howell  Pipeline  Texas,  Inc.  ("HPTex")  sued  Exxon  Pipeline  Company
("Exxon") for failure to pay rent for the use of certain crude oil storage tanks
("Tanks").  Exxon notified HPTex of its intention to cancel a lease on the Tanks
effective  March 31,  1996.  Exxon  stopped  paying  rent but did not vacate the
premises after notification of the lease cancellation.  Exxon continued to store
crude oil and hydrostatic test water for an additional  eighteen  months.  HPTex
claims Exxon owes in excess of $2 million in rent plus  interest and  attorney's
fees.

Exxon filed a  counterclaim  against  HPTex in which Exxon  claims that HPTex is
responsible for the removal costs associated with certain contents of the Tanks.
Exxon  claims it "has  incurred  actual  damages  in an amount  not to exceed $2
million."

This  matter is  currently  being tried and a decision  is  expected  soon.  The
Company  believes  that the ultimate  resolution  of this matter will not have a
material adverse effect on its results of operations, financial position or cash
flows.

There are various lawsuits and claims arising in the ordinary course of business
against the Company,  none of which,  in the opinion of management,  will have a
material adverse effect on the Company.


Note 7 - Earnings per Share

Prior year's  earnings per share  ("EPS") have been  restated to reflect the 10%
stock dividend declared and issued in the first quarter of 2001.

Basic EPS  amounts are  calculated  using the  average  number of common  shares
outstanding  during each period less the  average  number of  restricted  shares
outstanding  during each  period.  Diluted EPS  assumes  conversion  of dilutive
convertible  preferred  stock and exercise of all stock  options and  restricted
stock having  exercise  prices less than the average  market price of the common
stock using the treasury stock method.

                                      -8-
<PAGE>
The tables below present the  reconciliation  of the numerators and denominators
in  calculating  diluted EPS from  operations  in accordance  with  Statement of
Financial Accounting Standards No. 128.
<TABLE>
<CAPTION>
Three Months Ended September 30, 2001
                                                                        Earnings
                                                          Increase in      per
                                            Increase in    Number of   Incremental
                                             Earnings       Shares        Share
                                           -----------   -----------   -----------
<S>                                        <C>           <C>           <C>         <C>
Common stock options and restricted stock.          -       302,937           -
Dividends on convertible preferred stock..  $ 603,750     2,300,000      $ 0.26


             Computation of Diluted Earnings per Share

                                             Earnings       Common
                                            Available       Shares      Per Share
                                           -----------   -----------   -----------
                                           $4,112,250     5,964,535      $ 0.69
Common stock options and restricted stock.          -       302,937           -
                                           -----------   -----------   -----------
                                           $4,112,250     6,267,472      $ 0.66    Dilutive
Dividends on convertible preferred stock..    603,750     2,300,000           -
                                           -----------   -----------   -----------
                                           $4,716,000     8,567,472      $ 0.55    Dilutive
                                           ===========   ===========   ===========
</TABLE>

Note:  Because EPS  decreases  from $0.69 to $0.66 when common stock options and
restricted  stock are included in the computation and because EPS decreases from
$0.66 to  $0.55  when the  convertible  preferred  shares  are  included  in the
computation,  those  common  stock  options,  restricted  stock and  convertible
preferred shares are dilutive. Therefore, diluted EPS is reported as $0.55.

<TABLE>
<CAPTION>

Three Months Ended September 30, 2000
                                                                        Earnings
                                                          Increase in      per
                                            Increase in    Number of   Incremental
                                             Earnings       Shares        Share
                                           -----------   -----------   -----------
<S>                                        <C>           <C>           <C>         <C>
Common stock options......................          -       249,330           -
Dividends on convertible preferred stock..  $ 603,750     2,300,000      $ 0.26


             Computation of Diluted Earnings per Share

                                             Earnings       Common
                                            Available       Shares      Per Share
                                           -----------   -----------   -----------
                                           $5,030,250     6,075,909      $ 0.83
Common stock options......................          -       249,330           -
                                           -----------   -----------   -----------
                                           $5,030,250     6,325,239      $ 0.80    Dilutive
Dividends on convertible preferred stock..    603,750     2,300,000           -
                                           -----------   -----------   -----------
                                           $5,634,000     8,625,239      $ 0.65    Dilutive
                                           ===========   ===========   ===========
</TABLE>

Note:  Because  diluted  EPS  decreases  from $0.83 to $0.65 when  common  stock
options and convertible preferred shares are included in the computation,  those
common stock options and convertible  preferred shares are dilutive.  Therefore,
diluted EPS is reported as $0.65.

                                      -9-
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended September 30, 2001
                                                                        Earnings
                                                          Increase in      per
                                            Increase in    Number of   Incremental
                                             Earnings       Shares        Share
                                           ------------  -----------   -----------
<S>                                        <C>           <C>           <C>         <C>
Common stock options and restricted stock.           -      338,322           -
Dividends on convertible preferred stock.. $ 1,811,250    2,300,000      $ 0.79


                   Computation of Diluted Earnings per Share

                                              Earnings      Common
                                             Available      Shares      Per Share
                                           ------------  -----------   -----------
                                           $15,229,750    5,986,982      $ 2.54
Common stock options and restricted stock.           -      338,322           -
                                           ------------  -----------   -----------
                                           $15,229,750    6,325,304      $ 2.41    Dilutive
Dividends on convertible preferred stock..   1,811,250    2,300,000           -
                                           ------------  -----------   -----------
                                           $17,041,000    8,625,304      $ 1.98    Dilutive
                                           ============  ===========   ===========
</TABLE>


Note:  Because EPS  decreases  from $2.54 to $2.41 when common stock options and
restricted  stock are included in the computation and because EPS decreases from
$2.41 to  $1.98  when the  convertible  preferred  shares  are  included  in the
computation,  those  common  stock  options,  restricted  stock and  convertible
preferred shares are dilutive. Therefore, diluted EPS is reported as $1.98.


<TABLE>
<CAPTION>
Nine Months Ended September 30, 2000
                                                                        Earnings
                                                          Increase in      per
                                            Increase in    Number of   Incremental
                                             Earnings       Shares        Share
                                           ------------  -----------   -----------
<S>                                        <C>           <C>           <C>         <C>
Options...................................           -      207,010           -
Dividends on convertible preferred stock.. $ 1,811,250    2,300,000      $ 0.79


                   Computation of Diluted Earnings per Share

                                              Earnings      Common
                                             Available      Shares      Per Share
                                           ------------  -----------   -----------
                                           $13,040,750    6,074,681      $ 2.15
Common stock options and restricted stock.           -      207,010           -
                                           ------------  -----------   -----------
                                           $13,040,750    6,281,691      $ 2.08    Dilutive
Dividends on convertible preferred stock..   1,811,250    2,300,000           -
                                           ------------  -----------   -----------
                                           $14,852,000    8,581,691      $ 1.73    Dilutive
                                           ============  ===========   ===========
</TABLE>


Note:  Because  diluted  EPS  decreases  from $2.15 to $1.73 when  common  stock
options and convertible preferred shares are included in the computation,  those
common stock options and convertible  preferred shares are dilutive.  Therefore,
diluted EPS from continuing operations is reported as $1.73.

                                      -10-
<PAGE>

                          PART I. FINANCIAL INFORMATION
                                    (ITEM 2)

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

The following is a discussion of the Company's financial  condition,  results of
operations, capital resources and liquidity. This discussion and analysis should
be read in conjunction with the Consolidated Financial Statements of the Company
and the notes thereto.


RESULTS OF OPERATIONS

The Company's  principal business segment is oil and gas production.  Results of
operations for the three and nine months ended  September 30, 2001 and 2000, are
discussed below.

<TABLE>
<CAPTION>

Oil and Gas Production

                                                      Three Months Ended   Nine Months Ended
                                                         September 30,       September 30,
                                                        2001      2000      2001      2000
                                                        ----      ----      ----      ----
                                                   (In thousands, except operating information)
<S>                                                 <C>        <C>        <C>        <C>
Revenues:
Sales of oil and natural gas.....................    $20,634    $21,240    $65,429    $58,180
Other............................................        913         60      1,928        185
                                                    ---------  ---------  ---------  ---------
     Total revenues..............................     21,547     21,300     67,357     58,365

Operating expenses...............................     13,514     10,849     38,274     30,499
                                                    ---------  ---------  ---------  ---------
Operating profit.................................    $ 8,033    $10,451    $29,083    $27,866
                                                    =========  =========  =========  =========

Operating information:
Average net daily production:
    Oil (Bbls)...................................      8,299      7,431      8,062      7,267
    NGL (Bbls)...................................        276        334        342        406
    Natural gas (Mcf)............................      7,985      7,896      7,718      7,700
    Equivalent (Bbls)............................      9,906      9,081      9,690      8,956

Average sales prices (includes effect of hedge
    accounting):
    Oil (per Bbl)................................    $ 24.48    $ 26.24    $ 24.94    $ 24.97
    NGL (per Bbl)................................    $ 15.82    $ 22.82    $ 22.09    $ 20.25
    Natural gas (per Mcf)........................    $  2.10    $  3.58    $  4.02    $  2.94
</TABLE>



Revenues for the three months ended  September 30, 2001,  increased $0.2 million
when  compared to the three months ended  September  30, 2000.  The increase was
primarily due to other revenues  resulting  from a $0.7 million  increase in the
market value of the commodity contracts.  Oil and natural gas revenues decreased
primarily due to a 41% decrease in average natural gas prices, a 31% decrease in
average NGL prices and a 7% decrease  in average oil prices.  A 12%  increase in
average daily oil  production  partially  offset the decrease in oil and natural
gas prices. See Note 3 of Notes to the Consolidated Financial Statements for the
discussion of the effects of the derivative instruments.

                                      -11-
<PAGE>
For the nine months ended  September 30, 2001,  revenues  increased $9.0 million
from the same period in 2000.  The change was primarily due to a 37% increase in
average gas prices and a 9% increase in average NGL prices.  An 11%  increase in
oil  production,  partially  offset by a 16%  decrease in NGL  production,  also
contributed to the increased revenues. Other revenues increased primarily due to
the $1.1 million  increase in the market value of the commodity  contracts and a
$0.3  million  increase in sales of  purchased  gas.  See Note 3 of Notes to the
Consolidated Financial Statements.

Operating  expenses increased $2.7 million during the third quarter of 2001 when
compared to the same period in 2000.  The primary  reason for the  increase  was
related to an  increase in oil  production  levels (a $1.1  million  increase in
lease operating expense, and a $0.5 million increase in depreciation,  depletion
and amortization  expense).  General and administrative  expenses increased $1.0
million  primarily  due to higher  benefit  costs and a  reduction  in  overhead
charges billed as a result of the trade of Main Pass properties.

For the nine months ended September 30, 2001,  operating expenses increased $7.8
million  from the same period in 2000.  The primary  reason for the increase was
related to an  increase in oil  production  levels and an increase in gas prices
received (a $4.3 million  increase in lease  operating  expense,  a $1.2 million
increase in depreciation,  depletion and amortization expense and a $0.7 million
increase in production and severance taxes). General and administrative expenses
increased $1.5 million  primarily due to higher benefit costs and a reduction in
overhead charges billed as a result of the trade of Main Pass properties.

During the second quarter of 2001, the Company  purchased a put option  covering
4,000  barrels of oil per day for calendar  months June through  December  2001,
allowing  it to  benefit  should the NYMEX  price for oil fall below  $23.40 per
barrel.  The premium  paid was $0.4 million and the market value of the position
and its carrying  value at September 30, 2001,  was $0.5 million.  The change in
market value  resulted in earnings of $0.1 million for the three and nine months
ended September 30, 2001.

During the fourth quarter of 2000, the Company  purchased a put option  covering
7,500 MMBTU per day for NYMEX  contract  months  March  through  December  2001,
allowing  it to  benefit  should the NYMEX  price for gas fall  below  $3.50 per
MMBTU.  The premium  paid was $0.3  million and the market value of the position
and its carrying  value at September 30, 2001,  was $0.9 million.  The change in
market value resulted in earnings of $0.6 million and $1.0 million for the three
and nine months ended September 30, 2001, respectively.

The Company had entered into two hedging  programs for the year 2000.  The first
program  was a purchase  of a put option  and a sale of a call  option  covering
1,700 barrels of oil per day  effective  January 1, 2000,  through  December 31,
2000. The strike prices were $17.25 per barrel for the put option and $22.00 per
barrel for the call  option.  The second  program was a purchase of a put option
and a sale of a call  option  covering  1,800  barrels of oil per day  effective
January 1, 2000,  through  December 31, 2000.  The strike prices were $18.50 per
barrel for the put option  and  $26.00  per  barrel  for the call  option.  Each
program  provided for monthly  settlements  and was based on monthly average oil
prices. There were no premiums associated with either program.  During the three
and nine months ended  September 30, 2000, the strike prices of the call options
were  exceeded,  resulting  in a reduction  of revenues of $2.4 million and $5.4
million,  respectively,  from what  would  have  been  received  had no  hedging
programs been in place.  Without the options the average price per barrel of oil
for the three and nine months ended  September  30, 2000,  would have  increased
from $26.24 to $29.77 and from $24.97 to $27.67, respectively.

The Company's operating profit decreased $2.4 million and increased $1.2 million
for the three and nine months  ended  September  30,  2001,  respectively,  when
compared to the same periods in 2000.  The changes are primarily due to changing
energy prices and production in the respective periods.

Interest Expense

Interest  expense  for the three  and nine  months  ended  September  30,  2001,
decreased $0.6 million and $1.4 million, respectively, from the 2000 levels. The
decrease was  primarily  the result of a decrease in average  interest  rates of
3.4%  and  1.9%  for the  three  and  nine  months  ended  September  30,  2001,
respectively.  A decrease in average debt  outstanding  of $1.5 million and $5.5
million for the three and nine months ended  September  30, 2001,  respectively,
also contributed to the decrease.

                                      -12-
<PAGE>
Provision for Income Taxes

The Company's  effective tax rate for the three months ended  September 30, 2001
and 2000 was 33.0% and 36.8%, respectively.  For the nine months ended September
30, 2001 and 2000 the effective tax rate was 34.5% and 36%, respectively.


RESULTS FROM DISCONTINUED OPERATIONS

The Company sold its interest in Genesis Energy, L.L.C. during the first quarter
of 2000 for $3.0  million.  The proceeds from the sale were used to reduce debt.
There were no pre-tax  earnings or losses from  discontinued  operations  during
2000.


LIQUIDITY AND CAPITAL RESOURCES

Cash provided by operations, before working capital changes, for the nine months
ended September 30, 2001, was $27.6 million.  This compares to $23.4 million for
the same period during 2000. The Company's debt decreased by $1.0 million during
the first nine months of 2001 while there was a $15.0  million  decrease  during
the first nine months of 2000.  Capital  expenditures  for the nine months ended
September 30, 2001,  were $22.5  million  compared to $10.7 million for the 2000
period.

Effective July 26, 2001, the Credit  Facility was  renegotiated  to, among other
things,  extend the termination  date to July 26, 2004, and lower interest rates
25 basis points.

The  Company's  total debt,  all  long-term,  at September  30, 2001,  was $66.0
million.  At September 30, 2001, the Company's borrowing base under the terms of
its Credit Facility was $115.0 million. The banks have made commitments totaling
$100.0  million  under the  facility and the Company has the right to borrow the
lesser of the borrowing base or the total of those commitments. The Company also
has the right to seek increased commitments from the banks that are party to the
facility or to bring in additional banks.

During the first nine months of 2001, the Company paid common  dividends of $0.7
million and preferred dividends of $1.8 million.

The closing of the acquisition of the additional interest in the Elk Basin field
during  November 2001,  will be funded  through cash and the Company's  existing
credit facility.

UNPROVEN PROPERTIES

The Company  acquired  significant oil and gas properties from Amoco  Production
Company  in 1997.  A portion of the  acquisition  cost was  allocated  to an oil
property that is a potential CO2 flood candidate.  In light of the unusually low
oil price  environment for nearly two years following the  acquisition,  limited
evaluation work was done during that period.  Company  personnel and consultants
are now studying the properties to determine the  feasibility of such a project.
It is expected that over the next three months management will decide whether to
implement the CO2 flood project.

                                      -13-
<PAGE>
FORWARD-LOOKING STATEMENTS

Statements  contained in this Report and other materials filed or to be filed by
the Company with the Securities and Exchange  Commission (as well as information
included in oral or other written  statements  made or to be made by the Company
or its  representatives)  that are  forward-looking in nature are intended to be
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended,  relating to matters such as  anticipated  operating  and  financial
performance, business prospects, developments and results of the Company. Actual
performance,  prospects, developments and results may differ materially from any
or  all  anticipated  results  due  to  economic  conditions  and  other  risks,
uncertainties  and  circumstances  partly or totally  outside the control of the
Company,  including rates of inflation, oil and natural gas prices,  uncertainty
of  reserve  estimates,  rates and timing of future  production  of oil and gas,
exploratory and development  activities,  acquisition  risks, and changes in the
level and timing of future costs and expenses  related to drilling and operating
activities.

Words  such as  "anticipated",  "expect",  "estimate",  "project",  and  similar
expressions are intended to identify forward-looking statements.

                                      -14-
<PAGE>



                      PART II. OTHER INFORMATION

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

        (a) Exhibits

            None.

        (b) Reports on Form 8-K

            A report on Form 8-K was filed on October 23, 2001,  announcing that
            the Company had executed a Purchase and Sale  Agreement  to  acquire
            an additional interest in the Elk Basin field for $26.0 million.


                                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.

                                   Howell Corporation
                                   (Registrant)



Date:  October 31, 2001            /s/  Allyn R. Skelton, II
                                   -------------------------
                                   Allyn R. Skelton, II
                                   Vice President & Chief Financial Officer
                                   (Principal Financial and Accounting Officer)




                                      -15-