SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)

     X    Quarterly Report pursuant to Section 13 or 15(d) of the Securities
    ---   Exchange Act of 1934 for the quarterly period ended March 31, 2001; or

          Transition report pursuant to Section 13 or 15(d) of the Securities
    ---   Exchange Act of 1934 for the transition period from        to        .
                                                             --------  --------

                         Commission File Number 0-18754
                                                -------

                          BLACK WARRIOR WIRELINE CORP.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


            DELAWARE                                     11-2904094
-----------------------------------------------------------------------
(State or other jurisdiction of                       (I.R.S employer
incorporation of organization)                      identification no.)


               3748 HIGHWAY 45 NORTH, COLUMBUS, MISSISSIPPI 39701
               --------------------------------------------------
               (Address of principal executive offices, zip code)


                                 (662) 329-1047
                ------------------------------------------------
                (Issuer'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 proceeding 12 months (or for such shorter period that the issuer
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

              YES        X                       NO
                   -------------                     -------------


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

         As of June 8, 2001, 12,496,408 shares of the Registrant's Common Stock,
$.0005 par value, were outstanding.

<PAGE>

                          BLACK WARRIOR WIRELINE CORP.

                          QUARTERLY REPORT ON FORM 10-Q

                                      INDEX

PART I - FINANCIAL INFORMATION

                                                                            Page
                                                                            ----

Item 1.           Financial Statements

                  Condensed Balance Sheets - March 31, 2001
                  and December 31, 2000                                       3

                  Condensed Statements of Operations -
                  Three Months Ended March 31, 2001 and
                  March 31, 2000                                              4

                  Condensed Statements of Cash Flows -
                  Three Months Ended March 31, 2001 and
                  March 31, 2000                                              5

                  Notes to Condensed Financial Statements -
                  Three Months Ended March 31, 2001 and
                  March 31, 2000                                              6


Item 2.           Management's Discussion and Analysis of
                  Financial Condition and Results of Operations               12

PART II - OTHER INFORMATION

Item 4.           Submission of Matters to a Vote of Security Holders         18


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


                                       2
<PAGE>

PART I - FINANCIAL INFORMATION
         ITEM 1.  FINANCIAL STATEMENTS

BLACK WARRIOR WIRELINE CORP.
----------------------------
CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                              MARCH 31, 2001             DECEMBER 31, 2000
                                      ASSETS                   (UNAUDITED)
<S>                                                            <C>                        <C>
Current assets:
    Cash and cash equivalents                                  $   1,244,092              $   1,373,699
    Short-term investments                                            50,000                     50,000
    Accounts receivable, less allowance for doubtful
        accounts of $413,252 and $418,252, respectively           14,276,192                 11,432,218
    Prepaid expenses                                                 528,897                    472,791
    Other receivables                                                 49,561                     45,127
    Other current assets                                             639,799                    728,247
                                                               -------------              -------------
                    Total current assets                          16,788,541                 14,102,082
Land and building, held for sale                                     250,000                    250.000
Inventories                                                        4,728,804                  4,693,906
Property, plant, and equipment, less accumulated
    depreciation of $20,460,859 and $19,007,886,
    respectively                                                  19,840,551                 19,873,844
Other assets                                                         866,247                    837,040
Goodwill, less accumulated amortization of $572,057
  and $532,777, respectively                                       3,078,823                  3,118,102
                                                               -------------              -------------
                    Total assets                               $  45,552,966              $   42,874,974
                                                               =============              =============

                   LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
    Accounts payable                                           $   4,845,100              $   4,844,870
    Accrued salaries and vacation                                    923,366                    754,591
    Accrued interest payable                                       4,028,107                  3,440,148
    Other accrued expenses                                         1,683,580                  1,162,812
    Notes payable and capital lease obligations to related
         parties                                                  21,659,185                 21,896,639
    Current maturities of long-term debt and capital
         lease obligations                                        26,265,555                 26,554,373
                                                               -------------              -------------
                    Total current liabilities                     59,404,893                 58,653,433
Deferred revenue                                                     100,000                    100,000
                                                               -------------              -------------
                                     Total liabilities            59,504,893                 58,753,433
                                                               -------------              -------------

Stockholders' deficit:
     Preferred stock, $.0005 par value, 2,500,000 shares
      authorized none issued at March 31, 2001 and
      December 31, 2000, respectively
     Common stock, $.0005 par value, 175,000,000 shares
       authorized; 12,496,408 shares issued and outstanding at
       March 31, 2001 and December 31, 2000, respectively              6,248                      6,248
     Additional paid-in capital                                   19,787,974                 19,764,891
     Accumulated deficit                                         (33,162,756)               (35,066,205)
    Treasury stock, at cost, 4,620 shares                           (583,393)                  (583,393)
                                                                ------------               ------------
    Total stockholders' deficit                                  (13,951,927)               (15,878,459)
                                                                ------------               ------------
                 Total liabilities and stockholders' deficit    $ 45,552,966               $ 42,874,974
                                                                ============               ============
</TABLE>


          See accompanying notes to the condensed financial statements.

                                       3

<PAGE>

BLACK WARRIOR WIRELINE CORP.
----------------------------
CONDENSED STATEMENTS OF OPERATIONS
For the three months ended March 31, 2001 and March 31, 2000

<TABLE>
                                                           March 31, 2001            March 31, 2000
                                                            (Unaudited)                (Unaudited)
<S>                                                        <C>                       <C>
Revenues                                                   $ 18,131,297              $  8,276,366

Operating costs                                              11,493,784                 6,733,912

Selling, general and administrative expenses                  1,889,208                 1,509,212

Depreciation and amortization                                 1,506,196                 1,299,337
                                                           ------------              ------------
       Net income (loss)  from operations                     3,242,109                (1,266,095)

Interest expense and amortization of debt discount           (1,323,957)                 (996,040)

Other income                                                     24,143                    21,806
                                                           ------------              ------------
       Income (loss) before  extraordinary gain and
       provision for income taxes                             1,942,295                (2,240,329)

Provision for income taxes                                       38,846                         -
                                                           ------------              ------------
     Income (loss) before extraordinary gain                  1,903,449                (2,240,329)

Extraordinary gain on extinguishments of debt,
       net of income taxes of $0                                      -                   899,936
                                                           ------------              ------------
Net income (loss)                                          $  1,903,449              $ (1,340,393)
                                                           ============              ============

Net income (loss) per share - basic:

              Income (loss) before extraordinary gain      $        .15  $                   (.31)

              Extraordinary gain on extinguishments of debt           -                       .12
                                                           ------------              ------------

Net income (loss) per share - basic                        $        .15               $      (.19)
                                                           ============              ============
Net income (loss) per share - diluted:

              Income (loss) before extraordinary gain$              .15              $       (.31)

         Extraordinary gain on extinguishments of debt                -                       .12
                                                           ------------              ------------

Net income (loss) per share - diluted                      $        .15              $       (.19)
                                                           ============              ============


Weighted average common shares outstanding                   12,491,788                 7,151,963

Weighted average common shares outstanding                   12,491,788                 7,151,963
    with dilutive securities
</TABLE>

          See accompanying notes to the condensed financial statements.

                                       4
<PAGE>

BLACK WARRIOR WIRELINE CORP.
----------------------------
CONDENSED STATEMENTS OF CASH FLOWS
For the three months ended March 31, 2001 and March 31, 2000

<TABLE>
<CAPTION>
                                                                                March 31, 2001        March 31, 2000
                                                                                  (Unaudited)            (Unaudited)
<S>                                                                              <C>                   <C>
Cash provided by (used in) operations:                                           $  1,993,084          $ (3,800,802)

Cash flows from investing activities:
     Acquisitions of property, plant, and equipment                                (1,419,683)             (793,193)
     Acquisition of business, net of cash acquired                                         --              (362,705)
                                                                                 ------------          ------------
Cash used in investing activities:                                                 (1,419,683)           (1,155,898)

Cash flows from financing activities:
     Debt issuance costs                                                             (172,584)           (1,050,205)
     Proceeds from bank and other borrowings                                           88,853            20,733,733
     Principal payments on long-term debt, notes payable
         and capital lease obligations                                             (1,117,902)          (17,117,036)
     Net draws (payments) on working revolver                                         498,625                     0
                                                                                 ------------          ------------
Cash (used in) provided  by financing activities:                                    (703,008)            2,566,492

Net decrease in cash and cash equivalents                                            (129,607)           (2,390,208)
Cash and cash equivalents, beginning of period                                      1,373,699             2,425,808
                                                                                 ------------          ------------
Cash and cash equivalents, end of period                                         $  1,244,092          $     35,600
                                                                                 ============          ============

Supplemental disclosure of cash flow information:
       Interest paid                                                             $    735,998          $    313,036
       Income taxes paid                                                         $          0          $          0

Supplemental disclosure of  noncash investing and financing activities:
     Stock issued to related party as consideration for
           promissory note (Note 1)                                              $          0          $  2,000,000
     Notes payable and capital lease obligations incurred
           to acquire property, plant and equipment                              $          0          $     78,501
     Stock warrants issued in conjunction with notes payable
           to related party                                                      $          0          $    143,500
     Stock issued as consideration for option to purchase
           company                                                               $          0          $     65,000
    Note payable released by related party resulting in
          an increase to additional paid-in capital                              $          0          $    300,000
</TABLE>

          See accompanying notes to the condensed financial statements.

                                       5

<PAGE>

                          BLACK WARRIOR WIRELINE CORP.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS

1.       GENERAL

         The accompanying condensed financial statements reflect all adjustments
that, in the opinion of management, are necessary for a fair presentation of the
financial position of Black Warrior Wireline Corp. (the "Company"). Such
adjustments are of a normal recurring nature. The accompanying condensed
financial statements have been prepared assuming that the Company will continue
as a going concern. The results of operations for the interim period are not
necessarily indicative of the results to be expected for the full year. The
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000
should be read in conjunction with this document.

         The Company is an oil and gas service company currently providing
various services to oil and gas well operators primarily in the continental
United States and in the Gulf of Mexico. The Company's principal lines of
business include (a) wireline services, (b) directional oil and gas well
drilling and downhole surveying services, and (c) workover services. Since
November 1996, the Company completed seven material acquisitions, the most
recent of which were the acquisition of the drilling assets of Phoenix Drilling
Services, Inc. in March 1998 and Petro Wireline in June 1998, respectively.

2000 RECAPITALIZATION

         On January 24, 2000, the Company entered into a Loan and Security
Agreement (the "Loan Agreement") with Coast Business Credit, a division of
Southern Pacific Bank ("Coast"), and an amendment thereto dated January 29,
2001. Pursuant to the Loan Agreement, the Company is enabled to make secured
borrowings in the aggregate amount of up to the lesser of $25.0 million or such
maximum aggregate amount as is available to be borrowed under a receivables loan
and two term loans described below. Of such amount, $14.5 million, based on the
lesser of 75% of the appraised net eligible forced liquidation value of the
Company's equipment or $14.5 million, is a term loan, an additional $2.0 million
is a term loan, and the balance is available to be borrowed in an amount not
exceeding 80% of the Company's eligible receivables. On February 15, 2000, the
Company borrowed an aggregate of $15.6 million pursuant to the Loan Agreement.
The proceeds were used to repay the Company's former senior secured lender in
the amount of $13.5 million, to repay other indebtedness aggregating $1.5
million, and the balance was used for general corporate purposes, including the
payment of outstanding accounts payable. In addition, commencing on December 17,
1999 and during the first quarter of 2000, the Company sold to private investors
$7.0 million principal amount of convertible promissory notes due on January 15,
2001 and warrants to purchase 28.7 million shares of Common Stock. All of the
Company's remaining indebtedness is subordinated to the indebtedness owing to
Coast.

         During the first quarter of 2000, the Company executed a Compromise
Agreement With Release with Bendover Company ("Bendover") whereby Bendover
agreed to return to the Company promissory notes aggregating $2,000,000
principal amount and receive in exchange 2,666,667 shares of the Company's
common stock and a promissory note in the principal amount of $1,182,890 due on
January 15, 2001, bearing interest at 10% per annum. On January 15, 2001, the
note was extended to June 15, 2001, bearing interest at 20% per annum, with 10%
per annum interest paid monthly and the balance paid on maturity of the note.

                                       6
<PAGE>

2.       EARNINGS PER SHARE

The calculation of basic and diluted earning per share ("EPS") is as follows:

<TABLE>
<CAPTION>

                                              For the Three Months                        For the Three Months
                                              Ended March 31, 2001                        Ended March 31, 2000
                                --------------------------------------------     -------------------------------------
                                    Income           Shares         Per Share      Loss          Shares        Per Share
                                   Numerator       Denominator       Amount      Numerator     Denominator      Amount
                                   ---------       -----------       ------      ---------     -----------      ------
<S>                               <C>               <C>          <C>            <C>             <C>          <C>
Net income (loss)                 $1,903,449                                      $(1,340,393)
                                  ===========                                     ============
BASIC EPS
Income (loss) available
    to common
    shareholders                  $1,903,449        12,491,788   $     0.15       $(1,340,393)  7,151,963     $   (0.19)
                                  ----------        ----------   ----------       -----------   ---------     ---------

EFFECT OF DILUTIVE SECURITIES
Stock warrants
Stock options
Convertible debt securities
                                  ----------        ----------   ----------       -----------   ---------     ---------

DILUTED EPS
Income (loss) available
    to common shareholders      $        0.15       12,491,788   $     0.15     $(1,340,393)     7,151,963    $  (0.19)
                                  ----------        ----------   ----------       -----------   ----------    ---------
</TABLE>


         Options and warrants to purchase 78,015,078 and 63,531,394 shares of
common stock at prices ranging from $0.75 to $7.50 in 2001 and $0.75 to $8.01 in
2000 were outstanding during the three months ended March 31, 2001 and 2000,
respectively, but were not included in the computation of diluted EPS because
the effect would be anti-dilutive (see Note 7.).

          Convertible debt instruments which would result in the issuance of
32,866,667 and 35,200,000 shares of common stock, if the conversion features
were exercised, were outstanding during the three months ended March 31, 2001
and 2000, respectively, but were not included in the computation of the diluted
EPS because the effect would be anti-dilutive. The conversion price of these
instruments is $0.75 per share as of March 31, 2001 (see Note 7).

3.       INVENTORIES

         Inventories consist of tool components, subassemblies, and expendable
parts and supplies used in all segments of the Company's operations. Inventories
are classified as a long-term asset rather than a current asset as is consistent
with industry practice.

4.       COMMITMENTS AND CONTINGENCIES

         The Company is a defendant in various legal actions in the ordinary
course of business. Management does not believe the ultimate outcome of these
actions will have a materially adverse effect on the financial position, results
of operations or cash flows of the Company.

                                       7
<PAGE>

5.     SEGMENT AND RELATED INFORMATION

       At March 31, 2001, the Company is organized into, and manages its
business based on the performance of, four business units. The business units
have separate management teams and infrastructures that offer different oil and
gas well services. The business units have been aggregated into three reportable
segments: wireline, directional drilling, and workover and completion since the
long-term financial performance of these reportable segments is affected by
similar economic conditions.

       WIRELINE - This segment consists of two business units that perform
various procedures to evaluate and modify downhole conditions at different
stages of the process of drilling and completing oil and gas wells as well as
various times thereafter until the well is depleted and abandoned. This segment
engages in onshore and offshore servicing, as well as other oil and gas well
service activities including renting and repairing equipment. The principal
markets for this segment include all major oil and gas producing regions of the
United States. Major customers of this segment for the quarter ended March 31,
2001 included Burlington Resources, Chevron, Apache Corporation and Pioneer
Natural Resources.

       DIRECTIONAL DRILLING - This segment performs procedures to enter
hydrocarbon producing zones directionally, using specialized drilling equipment,
and expand the area of interface of hydrocarbons and thereby greatly enhancing
recoverability. It also engages in oil and gas well downhole surveying
activities. The principal markets for this segment include all major oil and gas
producing regions of the United States. Major customers of this segment for the
quarter ended March 31, 2001 included Texaco E&P, Union Pacific and Clayton
Williams Energy.

       WORKOVER AND COMPLETION - This segment consists of a business unit which
provides services performed on wells when originally completed or on wells
previously placed in production and requiring additional work to restore or
increase production. The principal market for this segment is the Black Warrior
Basin of Alabama. The major customer of this segment for the quarter ended March
31, 2001 was Energen Corporation.

       The accounting policies of the reportable segments are the same as those
described in Note 2 of the Company's Annual Report of Form 10-K for the fiscal
year ended December 31, 2000. The Company evaluates the performance of its
operating segments based on earnings before interest, taxes, depreciation, and
amortization (EBITDA), which is derived from revenues less operating expenses
and selling, general, and administrative expenses. Segment information for the
three months ended March 31, 2001 and 2000 is as follows:

                                       8
<PAGE>


 Three months ended March 31, 2001

<TABLE>
<CAPTION>
                                                                 WORKOVER
                                                 DIRECTIONAL       AND
                                    WIRELINE      DRILLING      COMPLETION     TOTAL
                                    --------      --------      ----------     -----
<S>                               <C>           <C>           <C>           <C>
 Segment revenues                 $ 9,910,682   $ 7,904,502   $   316,113   $18,131,297
 Segment EBITDA                   $ 3,737,500   $ 1,436,315   $    36,067   $ 5,209,882


Three months ended March 31, 2000
                                                                  WORKOVER
                                                 DIRECTIONAL         AND
                                    WIRELINE      DRILLING       COMPLETION     TOTAL
                                    --------      --------       ----------     -----
Segment revenues                  $ 4,353,486   $3,626,146    $  296,734    $8,276,366
Segment EBITDA                    $   439,650   $  186,915    $   25,876    $  652,441
</TABLE>

The Company has certain expenses that are not allocated to the individual
operating segments. A reconciliation of total segment EBITDA to loss from
operations for the three months ended March 31, 2001 and 2000 is presented as
follows:

Three months ended March 31:

                                             2001                  2000

Total segment EBITDA                   $  5,209,882           $    652,441
Depreciation and amortization            (1,506,196)            (1,299,337)
Unallocated corporate expense              (461,577)              (619,199)
                                       ------------           ------------
     Income (Loss) from operations     $  3,242,109           $ (1,266,095)
                                       ============           ============

6.       RELATED PARTY TRANSACTIONS

         On June 17, 1999, the Company sold approximately $329,000 of trade
accounts receivable, which was fully reserved due to the customer declaring
bankruptcy, to RJ Air, LLC, an entity affiliated with a member of the Company's
Board of Directors, for $200,000. As of March 31, 2001, the Company has
collected $100,000 of the sale price and the remaining $100,000 is included in
deferred revenue on the balance sheet.

         During 2000, the Company entered into three capital leases totalling
$918,000 with MWD Technology Company ("MWD"). The principal owners of MWD
include employees of the Company. There was $596,749 outstanding on these leases
as of March 31, 2001. The leases have a stated interest rate of 52.72% and
expire in December 2001.

         On November 20, 2000, the Company entered into a capital lease
agreement for approximately $539,000 with Big Foot Tool Rental Service, LLC,
which is partially owned by an officer and an employee of the Company. There was
$449,546 outstanding on this lease as of March 31, 2001. The interest rate is
14.88% and the lease agreement expires in December 2002.

                                        9
<PAGE>

         During the first quarter of 2000, Hub, Inc. purchased a note payable to
Fleet Capital Corporation ("Fleet") of approximately $800,000 for $500,000. In
connection with this transaction, Fleet released the Company from all
indebtedness to Fleet. Hub, Inc. agreed to cancel the note in exchange for a
payment of $500,000. A board member of the Company is a principal in Hub, Inc.

7.       ISSUANCE OF COMMON STOCK

         During the first quarter of 2000, the Company executed a Compromise
Agreement With Release with Bendover Company whereby Bendover agreed to return
to the Company promissory notes aggregating $2,000,000 principal amount and
receive in exchange 2,666,667 shares of the Company's common stock and a
promissory note in the principal amount of $1,182,890 due on January 15, 2001,
bearing interest at 10% per annum. The maturity of the promissory note was
subsequently extended to June 15, 2001 at an interest rate of 20% per annum with
10% per annum paid monthly and the balance deferred until maturity.

         The Company has outstanding at March 31, 2001 common stock purchase
warrants, options and convertible debt securities entitled to purchase or to be
converted into an aggregate 115,971,220 shares of the Company's common stock at
exercise and conversion prices ranging from $0.75 to $7.50. Accordingly, if all
such securities were exercised or converted, the 12,496,408 shares of Common
Stock issued and outstanding on March 31, 2001, would represent 9.9% of the
shares outstanding on a fully diluted basis.

8.       EXTRAORDINARY GAIN ON EXTINGUISHMENT OF DEBT

         During the first two quarters of 2000, the Company executed agreements
with certain of its vendors to discount the outstanding obligations due to these
vendors. The agreements provided for a decrease in the outstanding obligations
of $968,576 for the year ended December 31, 2000. Accordingly, the Company has
recognized an extraordinary gain on extinguishments of debt of $899,936, net of
income taxes of $0, for the quarter ended March 31, 2000. An additional $300,000
of related party debt was waived and recorded as an increase in additional
paid-in capital in 2000 (see Note 6).

9.       POTENTIAL DEFAULTS UPON SENIOR SECURITIES

           The Company is obligated to fulfill various affirmative and negative
covenants contained in its Loan Agreement with Coast. The affirmative covenants
include requirements to comply with various financial covenants, maintain
insurance coverage, apply 30% of the proceeds from the sale of equity securities
to the repayment of principal of the term loans, provide written reports to
Coast, and provide Coast with access to the collateral for the indebtedness. The
financial covenants, as amended in January 2001, require the Company to have a
tangible net worth as defined in the Loan Agreement of $5.0 million on September
30, 2000 and increasing quarterly thereafter by 80% of the Company's net income
for the quarter and by at least $1.0 million on June 30, 2001 and have a debt
service coverage ratio of 1.0 to 1.0 through September 30, 2000 and thereafter
of 1.25 to 1.00 quarterly. The Company's reporting obligations include, among
others, an obligation to provide to Coast within 90 days following the end of
each fiscal year annual financial statements containing an unqualified opinion
and certified by an independent certified public accountant acceptable to Coast
as well as provide quarterly financial statements to Coast within 45 days
following the end of the quarter. The Company was delayed in providing its
financial statements for 2000 to Coast beyond

                                       10
<PAGE>

the 90 days as well as the first quarter 2000 financial statements beyond the 45
days. In addition, the auditors opinion on the Company's financial statements
for the year ended December 31, 2000 contains an additional explanatory
paragraph regarding the assumption made in preparing those financial statements
that the Company will continue as a going concern. There can be no assurance
that Coast may not treat the auditor's report on the Company's December 31, 2000
financial statements containing the explanatory paragraph as a qualified opinion
or the delay in providing the financial statements as an event of default under
the Loan Agreement and claim that the Company is in violation of its reporting
obligations to Coast under the Loan Agreement. The Company has not obtained a
waiver from Coast with respect to any of the foregoing. Under such
circumstances, Coast may claim it is entitled to accelerate the maturity of all
of the indebtedness of the Company owing to it. Because of the foregoing, all of
the Company's indebtedness has been classified on its balance sheet as current.

                                       11
<PAGE>


        ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS

                  The Company's results of operations are affected primarily by
the extent of utilization and rates paid for its services and equipment. The
energy services sector is completely dependent upon the upstream spending of the
exploration and production side of the industry. Much of the activity increase
from the exploration and production side of the industry during the latter half
of 1999 was in the area of infield recovery of properties shut-in as a result of
depressed commodity prices. These infield recovery efforts were those that would
provide the least capital expenditure, least risk of capital and would result in
a more rapid improvement of cash flow streams due to higher commodity pricing.
With the increase of commodity prices that occurred since the beginning of 2000
and anticipated continued price stability along with the Company's debt
refinancing, the Company believes it is positioned to experience an increase in
demand for its services due in large part to the broad base of services offered.
There can be no assurance that the Company will continue to experience any
material increase in the demand for and utilization of its services and its
revenues.

         Management may in the future seek to raise additional capital, which
may be either debt or equity capital or a combination thereof or enter into
another material transaction involving the Company, including a possible sale of
the Company. As of June 1, 2001, no specific plans or proposals have been made
with regard to any additional financing or any other transaction. The Company
may engage in other material corporate transactions. The Company retained Growth
Capital Partners, L.P. ("GCP") as its financial advisor in connection with
examining various alternative means to maximize shareholder value including a
possible merger, sale of assets or other business combination involving the
Company or a possible private placement of equity and/or equity-related
securities. In the last quarter of 2000 and the first quarter of 2001, the
Company and GPC on the Company's behalf explored the possibilities of the
Company entering into a business combination or other material transaction.
While information was provided to prospective acquirors and discussions held, no
agreements or agreements in principal were entered into as a consequence of
those activities and the Company is not engaged in any negotiations at June 1,
2001 that may lead to its acquisition or other material transaction. The Company
believes that at that time its operating results had not shown sufficient
improvement for a sufficient period of time to enable the Company to realize an
acceptable price in such a transaction. Nevertheless, subject to the Company's
operating results continuing at recent levels, the Company may again at a future
date seek to pursue a transaction leading to the possible acquisition of the
Company or a sale of some or all its assets. Any such transaction would be
dependent upon the ability of the Company to realize an acceptable price. There
can be no assurance that the Company will seek to enter into such a transaction
and no representation is made as to the terms on which any such a transaction
may be entered into or that such a transaction will occur. In the event the
Company should seek or be required to raise additional equity capital, there can
be no assurance that such a transaction will not dilute the interests of the
Company's existing security holders. Fluctuations in interest rates may
adversely affect the Company's ability to raise capital.


                                       12
<PAGE>

RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THREE
MONTHS ENDED MARCH 31, 2000

         The following table sets forth the Company's revenues from its three
principal lines of business for the three months ended March 31, 2001 and 2000
respectively:

                                            Three Months Ended
                                        -------------------------
                                           3/31/01       3/31/00
                                           -------       -------

Wireline                                $ 9,910,682   $ 4,353,486
Directional Drilling                      7,904,502     3,626,146
Workover and Completion                     316,113       296,734
                                        -----------   -----------
                                        $18,131,297   $ 8,276,366

         Total revenues increased by approximately $9.9 million to approximately
$18.1 million for the three months ended March 31, 2001 as compared to total
revenues of approximately $8.3 million for the three months ended March 31,
2000. Wireline services revenues increased by approximately $5.6 million in 2001
primarily due to the increased demand for the Company's services. Directional
drilling revenues increased by approximately $4.3 million as a consequence of
the general level of oil and natural gas well drilling activity which improved
dramatically in the latter half of 2000.

         Operating costs increased by approximately $4.8 million for the three
months ended March 31, 2001, as compared to the same period of 2000. Operating
costs were 63.4% of revenues for the three months ended March 31, 2001 as
compared with 81.4% of revenues in the same period in 2000. The increase in
operating costs was primarily the result of the higher overall level of
activities in the three months ended March 31, 2001 compared with 2000. The
decrease in operating costs as a percentage of revenues was primarily because of
increasing billing rates and equipment utilization. Salaries and benefits
increased by $2.1 million for the three months ended March 31, 2001, as compared
to the same period in 2000, while the total number of employees increased from
266 at March 31, 2000 to 352 at March 31, 2001. The increase in salaries and
benefits is primarily due to the increase in the number of employees, which is
reflective of the overall level of activities.

         Selling, general and administrative expenses increased by approximately
$380,000 to $1.9 million in the three months ended March 31, 2001 from $1.5
million in the three months ended March 31, 2000. As a percentage of revenues,
selling, general and administrative expenses decreased to 10.4% in the three
months ended March 31, 2001 from 18.2% in 2000, primarily as a result of
increased revenue levels.

         Depreciation and amortization increased from approximately $1.3 million
in the three months ended March 31, 2000, or 15.7% of revenues, to approximately
$1.5 million in 2001 or 8.3% of revenues, primarily because of the capital
expenditures made in the third and fourth quarters of 2000.

         Interest expense and amortization of debt discount increased by
approximately $328,000 for the three months ended March 31, 2001 as compared to
the same periods in 2000. This was directly related to the increased amounts of
indebtedness outstanding in 2001. See "Note 6 of Notes to Consolidated Financial
Statements" in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2000.

                                       13
<PAGE>

         During the first quarter of 2000, the Company executed agreements with
certain of its vendors to discount the outstanding obligations due to these
vendors. The agreements provided for a decrease in the outstanding obligations
of $899,936. Accordingly, the Company recognized an extraordinary gain on
extinguishments of debt of $899,936, net of income taxes of $0.

         The Company's net income for the quarter ended March 31, 2001 was $1.9
million, after a provision for income taxes of $39,000, compared with a net loss
of $1.3 million for the quarter ended March 31, 2000. The improvement in
operating results for the quarter ended March 31, 2001 was the result of
increased revenues and the increase in demand for the Company's services that
commenced in the latter half of 2000. The Company's net loss in 2000 was
primarily attributable to the reduced demand for the Company's services in the
first half of 2000.

LIQUIDITY AND CAPITAL RESOURCES

         Cash provided by the Company's operating activities was approximately
$2.0 million for the three months ended March 31, 2001 as compared to cash used
of $3.8 million for the same period in 2000. Investing activities used cash of
$1.4 million during the three months ended March 31, 2001 for the acquisition of
property, plant and equipment. During the three months ended March 31, 2000,
investing activities used cash of approximately $1.2 million for the acquisition
of property, plant and equipment and businesses, net of cash acquired. Financing
activities used cash of approximately $1.1 million for principal payments on
debt and capital lease obligations offset by the proceeds from bank and other
borrowings of approximately $89,000 and net draws on working capital revolving
loan of approximately $499,000 during the three months ended March 31, 2001. For
the same period in 2000 financing activities provided net cash of approximately
$20.7 million from the proceeds from bank and other borrowings offset by
principal payments on bank and other borrowings and capital lease obligations
and net payments on the working capital revolving loan of $17.1 million and $1.1
million of costs related to debt issuances.

         Cash at March 31, 2001 was $1.2 million as compared with cash at March
31, 2000 of approximately $36,000.

         The Company's outstanding indebtedness includes primarily senior
secured indebtedness aggregating approximately $20.1 million at March 31, 2001,
owed to Coast, other indebtedness of approximately $8.6 million, and $19.2
million owed to St. James Capital Partners, L.P. ("SJCP") and its affiliates.

         At March 31, 2001, on the basis of its balance sheet at that date, the
Company had approximately $47.9 million of current indebtedness. Of this
indebtedness, the Company intends to seek to extend the maturity of
approximately $26.8 million of indebtedness, including any deferred excess cash
flow payments owing to Coast due through March 31, 2001, into 2002 and to seek,
through obtaining any required waivers or other accommodations of any covenant
defaults under loan documents, to repay an aggregate of $3 million in 2001 and
$17.4 million in 2002 and thereafter. The Company will also seek to defer
payment of the excess cash flow payments accruing for the period January 1, 2001
through June 30, 2001. If the Company is unable to obtain the required
extensions and waivers, it will seek to refinance approximately $20.3 million of
indebtedness. There can be no assurance that the Company will be successful in
extending the maturity or refinancing any part or all of its indebtedness. The
inability of the Company to obtain extensions of the due dates of principal
payments or to repay or refinance this indebtedness could cause, under the terms
of such debt agreements and the cross default provisions of other debt

                                       14
<PAGE>

agreements, virtually all the outstanding indebtedness to be accelerated and
declared immediately due and payable. Defaults in the repayment of this
indebtedness, either at maturity or by acceleration of the due date, could lead
the creditors to foreclose on substantially all of the Company's assets.

         Under the Loan Agreement with Coast, the Company is enabled to make
secured borrowings in the aggregate amount of up to the lesser of $25.0 million
or such maximum aggregate amount as is available to be borrowed under a
receivables loan and two term loans described below. Of such amount, $14.5
million, based on the lesser of 75% of the appraised net eligible forced
liquidation value of the Company's equipment or $14.5 million, is a term loan
(the "Equipment Loan"), an additional $2.0 million is a term loan (the
"Installment Loan"), and the balance is available to be borrowed in an amount
not exceeding 80% of the Company's eligible receivables (the "Receivables
Loan"). The Equipment Loan is repayable commencing on August 30, 2000 in monthly
installments over a term of six years, with interest only payable monthly prior
to August 1, 2000. The Equipment Loan further requires that the Company make
additional monthly principal payments of 50% of its excess cash flow during the
preceding month during the period ending February 28, 2001, and thereafter
additional monthly principal payments of 40% of its excess cash flow during the
preceding month. In January 2001, Coast agreed to defer until June 30, 2001 the
excess cash flow payments otherwise due for the months of August 2000 through
June 2001. At December 31, 2000 and March 31, 2001, the deferred excess cash
flow payment due on or before June 30, 2001 amounted to $1.0 million and $2.5
million, respectively. Excess cash flow is defined to be the Company's net
income before income taxes, depreciation and amortization during a month minus
the sum of principal and interest payments made and taxes paid in cash
("EBITDA"). The Installment Loan is repayable in monthly installments over four
years commencing March 31, 2000, and, after the Equipment Loan is paid in full,
is also repayable out of excess cash flow as provided above. Under the January
2001 amendments to the Loan Agreement, if assets or ownership interests in the
Company are not sold on or before June 30, 2001 to pay all obligations owing to
Coast on or before June 30, 2001, then St. James is required to make an
additional equity investment in the Company sufficient to pay to Coast the
excess cash flow payments deferred for the months of August 2000 through June
2001 and the failure of St. James to make such investment is an event of default
under the Loan Agreement.

         The Loan Agreement ceases to be in effect on February 28, 2003,
provided, however, the Loan Agreement will automatically renew for additional
terms of one year unless either party elects not to renew the term. In the event
the Loan Agreement is not renewed on February 28, 2003, or at the end of any
renewal term thereafter, all borrowings then outstanding under the Loan
Agreement are then due and payable.

         On February 15, 2000, the Company borrowed an aggregate of $15.6
million pursuant to the Loan Agreement. The proceeds were used to repay the
Company's former senior secured lender in the amount of $13.5 million, to repay
other indebtedness aggregating $1.5 million, and the balance was used for
general corporate purposes, including the payment of outstanding accounts
payable.

         The Equipment Loan and the Installment Loan bear interest at the prime
rate, as defined, plus 2% per annum, and the Receivables Loan bears interest at
the prime rate, as defined, plus 1% per annum. The Company's obligations under
the Loan Agreement are collateralized by a senior lien and security interest in
substantially all of the Company's assets. Principal and interest under the Loan
Agreement has been guaranteed, subject to certain limitations, by St. James,
principal stockholders of the Company, and Charles Underbrink, a partner of St.
James and a Director of the Company. In addition, St. James has guaranteed all
of the Company's contractual obligations under

                                       15
<PAGE>

the Loan Agreement, subject to certain limitations. As amended in January 2001,
the guaranty of St. James is backed by a collateral of deposit in the amount of
$8.2 million. Loans under the Loan Agreement were subject to the fulfillment of
a number of closing conditions and continue to be subject to the continuing
accuracy of the Company's representations and warranties and its compliance with
the covenants in the Loan Agreement.

         By virtue of its guarantees, in the event of a default under the
Company's loan agreement with Coast, Coast may seek to collect from St. James,
as well as Mr. Underbrink, the outstanding principal and interest on the
Company's obligation to Coast. Without the continued improvement in the
Company's revenues, the Company may be substantially dependent upon the
continuing support of St. James during 2001 to fund its ongoing obligations,
including its obligations to Coast.

         Events of default under the Loan Agreement include (i) any warranty,
representation, statement, report or certificate delivered to Coast by the
Company being untrue or misleading, (ii) the failure of the Company to pay when
due any loans under the Loan Agreement or any other monetary obligation under
the Loan Agreement, (iii) the total of the Company's loans outstanding exceeding
the Company's maximum borrowing limit under the Loan Agreement, (iv) the breach
of various covenants and obligations of the Company under the Loan Agreement,
(v) the insolvency or business failure of the Company or the commencement of any
reorganization or bankruptcy proceedings, (vi) a change of control of the
Company without Coast's consent, (vii) the inability of the Company to pay its
debts as they come due, (viii) the failure of St. James to make an additional
equity investment in the Company at June 30, 2001, if required, and (ix) certain
other events. Upon such an event of default, Coast may cease making loans to the
Company and accelerate the due date of all indebtedness outstanding under the
Loan Agreement.

         The Company is obligated to fulfill various affirmative and negative
covenants contained in the Loan Agreement. The affirmative covenants include
requirements to comply with various financial covenants, maintain insurance
coverage, apply 30% of the proceeds from the sale of equity securities to the
repayment of principal of the term loans, provide written reports to Coast, and
provide Coast with access to the collateral for the indebtedness. The financial
covenants, as amended in January 2001, require the Company to have a tangible
net worth as defined in the Loan Agreement of $5.0 million on September 30, 2000
and increasing quarterly thereafter by 80% of the Company's net income for the
quarter and by at least $1.0 million on June 30, 2001 and have a debt service
coverage ratio of 1.0 to 1.0 through September 30, 2000 and thereafter of 1.25
to 1.00 quarterly. The Company's reporting obligations include, among others, an
obligation to provide to Coast annual financial statements within 90 days of
year-end containing an unqualified opinion and certified by an independent
certified public accountant acceptable to Coast. Negative covenants prohibit the
Company, without Coast's consent, from merging or consolidating with another
entity; acquiring assets, subject to certain exceptions; entering into any other
transaction outside the ordinary course of business; selling any assets except
in the ordinary course of business; restrictions on the disposition of
inventory; loaning money, subject to certain exceptions; incurring indebtedness
outside the ordinary course of business which has a material adverse effect on
the Company; paying or declaring any dividend or making any other distributions;
or a change in the Company's capital structure that has a material adverse
effect on it.

         At the closing of its initial borrowings, the Company paid a loan fee
of 2% of the maximum amount able to be borrowed under the Loan Agreement and is
obligated to pay an annual fee of 0.5% of such amount. In addition, the Company
is obligated to pay a facility fee of $15,000 each quarter and an unused
facility fee of 0.375% of the undrawn portion of the maximum amount able to be
borrowed. In the event of the sale or transfer of substantially all the assets
or ownership

                                       16
<PAGE>

interests in the Company prior to February 28, 2003, Coast is entitled to a
success fee of $250,000. In the event the Loan Agreement is terminated by the
Company, including a termination as a result of the sale of substantially all
the Company's assets or a controlling interest in the Company with the
indebtedness to Coast repaid, Coast is entitled to a fee of $500,000.

         The Company's reporting obligations include, among others, an
obligation to provide to Coast within 90 days following the end of each fiscal
year annual financial statements containing an unqualified opinion and certified
by an independent certified public accountant acceptable to Coast as well
quarterly financial statements within 45 days of the end of the quarter.. The
Company did not provide the financial statements for 2000 or for the first
quarter 2001 in a timely manner and has neither sought nor received from Coast a
waiver of this breach. Negative covenants prohibit the Company, without Coast's
consent, from merging or consolidating with another entity; acquiring assets,
subject to certain exceptions; entering into any other transaction outside the
ordinary course of business; selling any assets except in the ordinary course of
business; restrictions on the disposition of inventory; loaning money, subject
to certain exceptions; incurring indebtedness outside the ordinary course of
business which has a material adverse effect on the Company; paying or declaring
any dividend or making any other distributions; or a change in the Company's
capital structure that has a material adverse effect on it.

INFLATION

         The Company's revenues have been and are expected to continue to be
affected by fluctuations in the prices for oil and gas. Inflationary pressures
did not have a significant effect on the Company's operations in the three
months ended March 31, 2001.

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

         With the exception of historical matters, the matters discussed in this
Report are "forward-looking statements" as defined under the Securities Exchange
Act of 1934, as amended, that involve risks and uncertainties. The Company
intends that the forward-looking statements herein be covered by the safe-harbor
provisions for forward-looking statements contained in the Securities Exchange
Act of 1934, as amended, and this statement is included for the purpose of
complying with these safe-harbor provisions. Forward-looking statements include,
but are not limited to, the matters described herein, including Management's
Discussion and Analysis of Financial Condition and Results of Operations. Such
forward-looking statements relate to the Company's ability, to generate revenues
and attain and maintain profitability and cash flow, the improvement in,
stability and level of prices for oil and natural gas, pricing in the oil and
gas services industry and the willingness of customers to commit for oil and
natural gas well services, the ability of the Company to implement any of the
possible alternative means to maximize shareholder value in conjunction with its
agreement retaining Growth Capital Partners, including any possible merger, sale
of assets or other business combination transaction involving the Company or
raising additional debt or equity capital, to maintain, implement and, if
appropriate, expand its cost-cutting program instituted in 1998, the ability of
the Company to compete in the premium services market, the ability of the
Company to meet or refinance its debt obligations as they come due or to obtain
extensions of the maturity dates for the payment of principal, the ability of
the Company to re-deploy its equipment among regional operations as required,
the ability of the Company to provide services using state of the art tooling,
the ability of the Company to raise additional capital to meet its requirements
and to

                                       17
<PAGE>

obtain additional financing when required, and its ability to maintain
compliance with the covenants of its various loan documents and other agreements
pursuant to which securities have been issued. The inability of the Company to
meet these objectives or the consequences on the Company from adverse
developments in general economic conditions, adverse developments in the oil and
gas industry, declines and fluctuations in the prices for oil and natural gas
and the absence of any material decline in those prices, and other factors could
have a material adverse effect on the Company. The Company cautions readers that
the various risk factors referred to above could cause the Company's operating
results, and financial condition to differ materially from those expressed in
any forward-looking statements made by the Company and could adversely affect
the Company's financial condition and its ability to pursue its business
strategy and plans. The Company cautions readers that various risk factors
described in the Company's Annual Report on Form 10-K for the year ended
December 31, 2000 could cause the Company's operating results to differ
materially from those expressed in any forward-looking statements made by the
Company and could adversely affect the Company's financial condition and its
ability to pursue its business strategy. Readers should refer to the Annual
Report on Form 10-K and the risk factors discussed therein.

PART II - OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders.

         On February 9, 2001, at an annual meeting, the stockholders of the
Company approved the adoption of the following proposals:

         The election of William L. Jenkins, Charles E. Underbrink, John L.
Thompson and Alan W. Mann as directors of the Company to hold office until the
next Annual Meeting of Stockholders and until their successors are elected and
qualified.

                                           Votes For        Votes Withheld
                                           ---------        --------------
             William L. Jenkins           10,609,048           102,867
             Charles E. Underbrink        10,676,576           35,339
             John L. Thompson             10,676,576           35,339
             Alan W. Mann                 10,676,576           35,339

         A proposal to approve an amendment to the Company's 1997 Omnibus
Incentive Plan to increase the number of shares reserved for the grant of
options thereunder from 600,000 shares to 1,000,000 shares was approved by the
following vote:

         For 9,264,012;   Against 66,581;  Abstain 56,035;   Not Voted 1,325,287

         A proposal to approve an amendment to the Company's 1997 Non-Employee
Stock Option Plan to increase the number of shares reserved for the grant of
options thereunder from 100,000 shares to 300,000 shares was approved by the
following vote:

         For 9,254,733;   Against 75,860;  Abstain 56,035;   Not Voted 1,325,287

                                       18
<PAGE>

         A proposal to approve the adoption of the Company's 2000 Stock
Incentive Plan pursuant to which 17,500,000 shares will be reserved for the
grant of options thereunder was approved by the following vote:

         For 9,198,261;   Against 67,307;  Abstain 121,060;  Not Voted 1,325,287

         A proposal to amend the Certificate of Incorporation of the Company to
increase the authorized shares of Common Stock, par value $.0005 per share, from
12,500,000 shares to 175,000,000 shares was approved by the following vote:

         For 10,642,127;   Against 55,238;  Abstain 14,550;   Not Voted 0



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

                           None

(b)      Reports on Form 8-K

                           None

                                       19
<PAGE>

                                   SIGNATURES

         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.

                                           BLACK WARRIOR WIRELINE CORP.
                                           ----------------------------
                                                   (Registrant)


Date:  June 8,  2001                         /S/  William L. Jenkins
                                        ----------------------------------------
                                                  William L. Jenkins
                                      President and Chief Executive Officer

                                            /S/   Ronald Whitter
                                      ------------------------------------------
                                                  Ronald Whitter
                                      Principal Financial and Accounting Officer

                                       20