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

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


                                    FORM 10-Q


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

                  For the quarterly period ended June 30, 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 July 31, 2001
-----------------------------                    ------------------------------
Common Stock, $1.00 par value                              6,097,352


                          This report contains 15 pages

<PAGE>


                       HOWELL CORPORATION AND SUBSIDIARIES

                                    Form 10-Q

                                      INDEX



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

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

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

        Condensed Consolidated Statements of Cash Flows --
         Six months ended June 30, 2001 and 2000 (unaudited)...........    5

        Notes to Condensed 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   Six Months Ended
                                                           June 30,             June 30,
                                                        2001      2000       2001      2000
                                                        ----      ----       ----      ----
                                                     (In thousands, except per share amounts)


<S>                                                 <C>        <C>        <C>        <C>
Revenues.........................................    $22,839    $18,789    $45,810    $37,065
                                                    ---------  ---------  ---------  ---------
Cost and expenses:
  Lease operating expenses.......................      9,507      7,452     18,209     14,264
  Depreciation, depletion, and amortization......      2,201      1,780      4,243      3,531
  General and administrative.....................      1,216        748      2,308      1,855
                                                    ---------  ---------  ---------  ---------
                                                      12,924      9,980     24,760     19,650
                                                    ---------  ---------  ---------  ---------

Operating profit.................................      9,915      8,809     21,050     17,415
                                                    ---------  ---------  ---------  ---------
Other income (expense):
  Interest expense...............................     (1,121)    (1,526)    (2,381)    (3,193)
  Interest income................................         18         22         43         68
  Other-net......................................          1          1        250          1
                                                    ---------  ---------  ---------  ---------
                                                      (1,102)    (1,503)    (2,088)    (3,124)
                                                    ---------  ---------  ---------  ---------

Earnings  before income taxes....................      8,813      7,306     18,962     14,291
Income tax provision.............................      3,085      2,628      6,637      5,073
                                                    ---------  ---------  ---------  ---------
Net earnings ....................................      5,728      4,678     12,325      9,218
  Less: Preferred stock dividends................       (604)      (604)    (1,208)    (1,208)
                                                    ---------  ---------  ---------  ---------
Net earnings applicable to common shares.........    $ 5,124    $ 4,074    $11,117    $ 8,010
                                                    =========  =========  =========  =========

Net earnings per common share - basic............    $  0.86    $  0.67    $  1.85    $  1.32
                                                    =========  =========  =========  =========
Weighted average shares outstanding - basic......      5,971      6,076      5,998      6,074
                                                    =========  =========  =========  =========

Net earnings per common share - diluted..........    $  0.66    $  0.55    $  1.43    $  1.08
                                                    =========  =========  =========  =========
Weighted average shares outstanding - diluted....      8,659      8,580      8,641      8,554
                                                    =========  =========  =========  =========

Cash dividends per common share..................    $  0.04    $  0.04    $  0.08    $  0.08
                                                    =========  =========  =========  =========
</TABLE>

See accompanying Notes to Consolidated Financial Statements.

                                      -3-
<PAGE>

CONSOLIDATED BALANCE SHEETS
Howell Corporation and Subsidiaries
<TABLE>
<CAPTION>

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

                                                   (In thousands, except share data)
<S>                                                     <C>         <C>
                   Assets
Current assets:
  Cash and cash equivalents...........................   $  5,300    $  5,553
  Trade accounts receivable, less allowance for
    doubtful accounts of $66 in 2001 and 2000.........     10,099      12,515
  Income tax receivable...............................        990         705
  Deferred income taxes...............................         59          59
  Other current assets................................      1,341         750
                                                        ----------  ----------
    Total current assets..............................     17,789      19,582
                                                        ----------  ----------

Property, plant and equipment:
  Oil and gas properties, utilizing the full-cost
    method of accounting..............................    333,245     401,851
  Unproven properties.................................     20,174      20,174
  Other...............................................      4,280       3,737
  Less accumulated depreciation, depletion and
    amortization......................................   (239,203)   (320,602)
                                                        ----------  ----------
    Net property and equipment........................    118,496     105,160
                                                        ----------  ----------
Other assets..........................................        616         672
                                                        ----------  ----------
    Total assets......................................   $136,901    $125,414
                                                        ==========  ==========

    Liabilities and Shareholders' Equity

Current liabilities:
  Accounts payable....................................   $ 13,042    $ 12,880
  Accrued liabilities - oil and gas properties........      2,823       2,521
  Accrued liabilities - other.........................      2,727       2,605
  Income taxes payable................................        417         319
                                                        ----------  ----------
    Total current liabilities.........................     19,009      18,325
                                                        ----------  ----------
Deferred income taxes.................................      2,616         625
                                                        ----------  ----------
Other liabilities.....................................        459         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; 6,096,252 shares issued
    and outstanding in 2001; 5,524,907 shares issued
    and outstanding in 2002...........................      6,096       5,525
  Additional paid-in capital..........................     46,696      41,079
  Unearned compensation...............................       (978)       (209)
  Retained deficit....................................     (3,687)     (8,166)
                                                        ----------  ----------
    Total shareholders' equity........................     48,817      38,919
                                                        ----------  ----------
    Total liabilities and shareholders' equity........   $136,901    $125,414
                                                        ==========  ==========
</TABLE>

See accompanying Notes to Consolidated Financial Statements.

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

                                                       Six Months Ended June 30,
                                                           2001         2000
                                                           ----         ----
                                                            (In thousands)
<S>                                                     <C>         <C>
OPERATING ACTIVITIES:
Net earnings from operations..........................   $ 12,325    $  9,218
Adjustments for non-cash items:
  Depreciation, depletion and amortization............      4,243       3,531
  Deferred income taxes...............................      1,991       2,061
  Other...............................................        150          35
                                                        ----------  ----------
Earnings from continuing operations plus non-cash
  operating items.....................................     18,709      14,845
Changes in components of working capital from
  operations:
  Decrease in trade accounts receivable...............      2,416          49
  Increase in federal income tax receivables..........       (285)          -
  Decrease (increase) in other current assets.........       (591)      2,137
  Increase in accounts payable........................        162         103
  Increase in accrued and other liabilities...........        410         426
  Increase (decrease) in income tax payable...........         98         (72)
                                                        ----------  ----------
Cash provided by continuing operations................     20,919      17,488
Cash utilized in discontinued operations..............        (72)       (118)
                                                        ----------  ----------
Cash provided by operating activities.................     20,847      17,370
                                                        ----------  ----------
INVESTING ACTIVITIES:
Proceeds from the disposition of property.............        667       3,000
Additions to property, plant and equipment............    (18,246)     (6,611)
Other, net............................................         56          64
                                                        ----------  ----------
Cash utilized in investing activities.................    (17,523)     (3,547)
                                                        ----------  ----------
FINANCING ACTIVITIES:
Repayments under credit agreements, net...............     (1,000)    (14,000)
Cash dividends:
  Common shareholders.................................       (467)       (442)
  Preferred shareholders..............................     (1,208)     (1,208)
Stock options exercised...............................        158           3
Stock purchased and reissued restricted shares........     (1,060)          -
                                                        ----------  ----------
Cash utilized in financing activities.................     (3,577)    (15,647)
                                                        ----------  ----------

NET DECREASE IN CASH AND CASH EQUIVALENTS.............       (253)     (1,824)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD........      5,553       2,112
                                                        ----------  ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD..............   $  5,300    $    288
                                                        ==========  ==========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Net cash paid for:
Interest..............................................   $  2,258    $  2,808
                                                        ==========  ==========
Income taxes..........................................   $  4,838    $  3,091
                                                        ==========  ==========
</TABLE>

See accompanying Notes to Consolidated Financial Statements

                                      -5-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Howell Corporation and Subsidiaries
June 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 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
six months ended June 30, 2001 and 2000. The results of operations for the three
and six months ended June 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, no transition  adjustment was
recorded by the Company.

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  will  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.


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 June  30,  2001,  was  $0.4  million.  The  Company
recognizes changes in the market value of this derivative instrument in earnings
for the period.

                                      -6-
<PAGE>
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 June  30,  2001,  was  $0.6  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.  Prior to the
adoption of SFAS No. 133,  changes in the market value of the  derivatives  were
deferred  until  the gain or loss was  recognized  on the  hedged  transactions.
During the three and six months  ended June 30, 2000,  the strike  prices of the
call options were exceeded, resulting in a reduction of revenues of $1.5 million
and $3.0  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 six months  ended June 30, 2000,  would have  increased
from $24.30 to $26.54 and from $24.31 to $26.58, respectively.


Note 4 - Accumulated Depreciation, Depletion and Amortization

The Company's  depletion  rate for the three and six months ended June 30, 2001,
was $2.38 and $2.39 per equivalent barrel, respectively,  versus a rate of $2.15
and $2.14, respectively, for the same periods ended June 30, 2000.


Note 5 - Acquisitions & Dispositions

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  entered into a Purchase and Sale Agreement to
sell 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  attributable to the Company's  interest in
Genesis during the first six 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.

                                      -7-
<PAGE>
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 set for trial in the fourth quarter of 2001. 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 (Loss) 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 June 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.          -       388,265           -
Dividends on convertible preferred stock..  $ 603,750     2,300,000      $ 0.26


             Computation of Diluted Earnings per Share

                                             Earnings       Common
                                            Available       Shares      Per Share
                                           -----------   -----------   -----------
                                           $5,124,250     5,971,030      $ 0.86
Common stock options and restricted stock.          -       388,265           -
                                           -----------   -----------   -----------
                                           $5,124,250     6,359,295      $ 0.81    Dilutive
Dividends on convertible preferred stock..    603,750     2,300,000           -
                                           -----------   -----------   -----------
                                           $5,728,000     8,659,295      $ 0.66    Dilutive
                                           ===========   ===========   ===========
</TABLE>

Note:  Because EPS  decreases  from $0.86 to $0.81 when common stock options and
restricted  stock are included in the computation and because EPS decreases from
$0.81  to  $0.66  when   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 $0.66.

<TABLE>
<CAPTION>

Three Months Ended June 30, 2000
                                                                        Earnings
                                                          Increase in      per
                                            Increase in    Number of   Incremental
                                             Earnings       Shares        Share
                                           -----------   -----------   -----------
<S>                                        <C>           <C>           <C>         <C>
Common stock options......................          -       203,836           -
Dividends on convertible preferred stock..  $ 603,750     2,300,000      $ 0.26


             Computation of Diluted Earnings per Share

                                             Earnings       Common
                                            Available       Shares      Per Share
                                           -----------   -----------   -----------
                                           $4,074,250     6,075,961      $ 0.67
Common stock options......................          -       203,836           -
                                           -----------   -----------   -----------
                                           $4,074,250     6,279,797      $ 0.65    Dilutive
Dividends on convertible preferred stock..    603,750     2,300,000           -
                                           -----------   -----------   -----------
                                           $4,678,000     8,579,797      $ 0.55    Dilutive
                                           ===========   ===========   ===========
</TABLE>

Note:  Because EPS  decreases  from $0.67 to $0.65 when common stock options are
included in the  computation  and because EPS decreases from $0.65 to $0.55 when
convertible preferred shares are included in the computation, those common stock
options and convertible preferred shares are dilutive. Therefore, diluted EPS is
reported as $0.55.

                                      -9-
<page>
<TABLE>
<CAPTION>
Six Months Ended June 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.           -      342,318           -
Dividends on convertible preferred stock.. $ 1,207,500    2,300,000      $ 0.53


                   Computation of Diluted Earnings per Share

                                              Earnings      Common
                                             Available      Shares      Per Share
                                           ------------  -----------   -----------
                                           $11,117,500    5,998,391      $ 1.85
Common stock options and restricted stock.          -       342,318           -
                                           ------------  -----------   -----------
                                           $11,117,500    6,340,709      $ 1.75    Dilutive
Dividends on convertible preferred stock..   1,207,500    2,300,000           -
                                           ------------  -----------   -----------
                                           $12,325,000    8,640,709      $ 1.43    Dilutive
                                           ============  ===========   ===========
</TABLE>

Note:  Because EPS  decreases  from $1.85 to $1.75 when common stock options and
restricted  stock are included in the computation and because EPS decreases from
$1.75  to  $1.43  when   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 $1.43.


<TABLE>
<CAPTION>
Six Months Ended June 30, 2000
                                                                        Earnings
                                                          Increase in      per
                                            Increase in    Number of   Incremental
                                             Earnings       Shares        Share
                                           ------------  -----------   -----------
<S>                                        <C>           <C>           <C>         <C>
Options...................................           -      179,964           -
Dividends on convertible preferred stock.. $ 1,207,500    2,300,000      $ 0.53


                   Computation of Diluted Earnings per Share

                                              Earnings      Common
                                             Available      Shares      Per Share
                                           ------------  -----------   -----------
                                           $ 8,010,500    6,074,059      $ 1.32
Common stock options and restricted stock.          -       179,964           -
                                           ------------  -----------   -----------
                                           $ 8,010,500    6,254,023      $ 1.28    Dilutive
Dividends on convertible preferred stock..   1,207,500    2,300,000           -
                                           ------------  -----------   -----------
                                           $ 9,218,000    8,554,023      $ 1.08    Dilutive
                                           ============  ===========   ===========
</TABLE>

Note:  Because EPS  decreases  from $1.32 to $1.28 when common stock options are
included in the  computation  and because EPS decreases from $1.28 to $1.08 when
convertible preferred shares are included in the computation, those common stock
options and convertible preferred shares are dilutive. Therefore, diluted EPS is
reported as $1.08.

                                      -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 six  months  ended  June 30,  2001 and 2000,  are
discussed below.
<TABLE>
<CAPTION>

Oil and Gas Production

                                                      Three Months Ended   Six Months Ended
                                                           June 30,            June 30,
                                                        2001      2000      2001      2000
                                                        ----      ----      ----      ----
                                                   (In thousands, except operating information)
<S>                                                 <C>        <C>        <C>        <C>
Revenues:
Sales of oil and natural gas.....................    $22,137    $18,733    $44,795    $36,940
Other............................................        702         56      1,015        125
                                                    ---------  ---------  ---------  ---------
     Total revenues..............................     22,839     18,789     45,810     37,065

Operating expenses...............................     12,924      9,980     24,760     19,650
                                                    ---------  ---------  ---------  ---------
Operating profit.................................    $ 9,915    $ 8,809    $21,050    $17,415
                                                    =========  =========  =========  =========

Operating information:
Average net daily production:
    Oil (Bbls)...................................      8,174      7,250      7,942      7,184
    NGL (Bbls)...................................        380        426        376        443
    Natural gas (Mcf)............................      8,081      7,404      7,583      7,602
    Equivalent (Bbls)............................      9,901      8,910      9,582      8,894

Average sales prices:
    Oil (per Bbl)................................    $ 24.92    $ 24.30    $ 25.18    $ 24.31
    NGL (per Bbl)................................    $ 22.74    $ 17.52    $ 24.43    $ 19.27
    Natural gas (per Mcf)........................    $  3.82    $  3.00    $  5.05    $  2.60
</TABLE>


Revenues for the three months ended June 30, 2001,  increased  $4.1 million when
compared  to the  three  months  ended  June 30,  2000,  primarily  due to a 13%
increase in oil production and a 9% increase in gas production, partially offset
by an 11% decrease in NGL production.  A 27% increase in the average natural gas
price and a 30%  increase  in the  average  NGL price  also  contributed  to the
increased revenues. The increase in other revenues was primarily due to the $0.5
million increase in the market value of the commodity  contracts.  See Note 3 of
Notes to the Consolidated Financial Statements.

For the six months ended June 30, 2001, revenues increased $8.7 million from the
same period in 2000.  The change was  primarily due to a 94% increase in average
gas prices and a 27%  increase  in average NGL  prices.  An 11%  increase in oil
production,  partially  offset  by  a  15%  decrease  in  NGL  production,  also
contributed to the increased revenues. Other revenues increased primarily due to
the $0.5 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.

                                      -11-
<page>
Operating expenses increased $2.9 million during the second quarter of 2001 when
compared to the same period in 2000.  The primary  reason for the  increase  was
related to an increase in production  levels and an increase in prices  received
(a $1.6 million increase in lease operating  expense, a $0.4 million increase in
production and severance  taxes,  and a $0.4 million  increase in  depreciation,
depletion  and  amortization  expense).   General  and  administrative  expenses
increased $0.5 million  primarily due to a reduction in overhead  charges billed
as a result of the trade of Main Pass  properties.  An increase in salaries  and
benefits also contributed to higher operating expenses.

For the six months  ended  June 30,  2001,  operating  expenses  increased  $5.1
million  from the same period in 2000.  The primary  reason for the increase was
related to an increase in production  levels and an increase in prices  received
(a $3.1 million increase in lease operating  expense, a $0.8 million increase in
production and severance  taxes,  and a $0.7 million  increase in  depreciation,
depletion  and  amortization  expense).   General  and  administrative  expenses
increased $0.5 million  primarily due to a reduction in overhead  charges billed
as a result of the trade of Main Pass. An increase in salaries and benefits also
contributed to higher operating expenses.

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 June 30, 2001,  was $0.4 million.  There was no effect
on earnings during the second quarter of 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 June 30, 2001, was $0.6 million.  The change in market
value  resulted in earnings of $0.5  million and $0.4  million for the three and
six months ended June 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 six months ended June 30, 2000,  the strike  prices of the call options were
exceeded, resulting in a reduction of revenues of $1.5 million and $3.0 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
six months ended June 30, 2000,  would have  increased from $24.30 to $26.54 and
from $24.31 to $26.58, respectively.

The Company's  operating  profit increased $1.1 million and $3.6 million for the
three and six months ended June 30, 2001, respectively, from the same periods of
2000.  The increase is primarily  due to increased  energy  prices and increased
production.

Interest Expense

Interest  expense for the three and six months  ended June 30,  2001,  decreased
$0.4 million and $0.8 million, respectively,  from the 2000 levels. The decrease
was primarily a result of decreased average debt outstanding of $3.0 million and
$7.0 million for the three and six months ended June 30, 2001, respectively. The
primary  reason for the  decrease in average debt was due to an increase in cash
flow primarily as a result of increased  revenues from higher  commodity  prices
and increased production.  Lower interest rates also contributed to the decrease
in interest expense.

                                      -12-
<PAGE>
Provision for Income Taxes

The  Company's  effective  tax rate for the three months ended June 30, 2001 and
2000 was 35% and 36%,  respectively.  For the six months ended June 30, 2001 and
2000 the effective tax rate was 35% 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 from discontinued operations during the first six
months of 2000.


LIQUIDITY AND CAPITAL RESOURCES

Cash provided by continuing operations,  before working capital changes, for the
six months  ended June 30,  2001,  was $18.7  million.  This  compares  to $14.8
million for the same period during 2000.  The Company's  debt  decreased by $1.0
million  during  the first six months of 2001  while  there was a $14.0  million
decrease during the first six months of 2000.  Capital  expenditures for the six
months ended June 30, 2001, were $18.2 million  compared to $6.6 million for the
2000 period.

The Company's total debt, all long-term, at June 30, 2001, was $66.0 million. At
June 30,  2001,  the  Company's  borrowing  base  under the terms of its  Credit
Facility was $100.0 million.

During the first six months of 2001,  the Company paid common  dividends of $0.5
million and preferred dividends of $1.2 million.

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.


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.  With the strong  rebound of oil
prices,  Company  personnel and  consultants  are now studying the properties to
determine the  feasibility of such a project.  It is expected that over the next
six months management will decide whether to implement the CO2 flood project.


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.

                                      -13-
<PAGE>
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

            10.1 First Amendment to the December 1, 1998,  Amended and  Restated
            Credit Agreement.

        (b) Reports on Form 8-K

            A report on Form 8-K was filed on January 30, 2001, announcing  that
            the Board of Directors of Howell Corporation authorized a 10% common
            stock dividend.

            A report on Form 8-K was filed on February 28, 2001, announcing that
            it traded producing oil and gas properties in a  tax-free, like-kind
            exchange.

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

                                      -15-