<PAGE>   1
                       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 DECEMBER 31, 1997
                                       OR
            [ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                            THE EXCHANGE ACT OF 1934

                  For the transition period from _____ to _____

                         Commission file number 1-19971

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

                       UNIVERSAL SEISMIC ASSOCIATES, INC.
                    (Exact name of Registrant in its Charter)

           DELAWARE                                       76-0256086
(State or Other Jurisdiction of                (IRS Employer Identification No.)
Incorporation or Organization)

   16420 PARK TEN PLACE, SUITE 300
            HOUSTON, TEXAS                                77084-5051
(Address of Principal Executive Office)                   (Zip Code)

                                 (281) 578-8081
                          (Issuer's Telephone Number)

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

         Check whether the issuer (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 [ ]  No [X]

         State the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date. 5,234,109 shares of Common
Stock, $.0001 par value, were outstanding as of June 30, 1998.

                                    1 of 16
<PAGE>   2

               UNIVERSAL SEISMIC ASSOCIATES, INC. AND SUBSIDIARIES

                          QUARTERLY REPORT ON FORM 10-Q

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                           PAGE
                                                                                                           ----
<S>        <C>                                                                                             <C>
PART I.      FINANCIAL INFORMATION

  Item 1.  Unaudited Consolidated Financial Statements

             Consolidated Balance Sheets at December 31, 1997 and June 30, 1997..........................     3

             Consolidated Statements of Operations for the three and six months ended
               December 31, 1997 and 1996................................................................     4

             Consolidated Statements of Stockholders' Equity for the six
               months ended December 31, 1997 and the year ended June 30, 1997...........................     5

             Consolidated Statements of Cash Flows for the six  months ended
               December 31, 1997 and 1996................................................................     6

             Notes to Consolidated Financial Statements..................................................     7

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

PART II.     OTHER INFORMATION

   Item 1.  Legal Proceedings............................................................................     15

   Item 2.  Changes in Securities........................................................................     15

   Item 3.  Defaults Upon Senior Securities..............................................................     15

   Item 4.  Submission of Matters to a Vote of Security Holders..........................................     15

   Item 5.  Other Information............................................................................     15

   Item 6.  Exhibits and Reports on Form 8-K.............................................................     15
</TABLE>


                                    2 OF 16
<PAGE>   3

                                     PART I
               ITEM 1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



UNIVERSAL SEISMIC ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                           DECEMBER 31,        JUNE 30,
                                                                               1997              1997
                                                                           ------------      ------------
                  ASSETS
<S>                                                                        <C>               <C>        
Current assets:
  Cash and cash equivalents                                                $    471,307      $  1,859,677
  Accounts receivable, net                                                    5,374,283         5,579,876
  Costs and estimated earnings in excess of billings on
    uncompleted contracts                                                       115,184           702,066
  Prepaid expenses and other current assets                                     539,358           498,982
                                                                           ------------      ------------

                     Total current assets                                     6,500,132         8,640,601

Property and equipment, net:
  Seismic property and equipment                                             15,883,857        15,896,535
  Oil and gas properties, full cost method                                    8,173,927         6,881,115
                                                                           ------------      ------------

                     Total property and equipment, net                       24,057,784        22,777,650

Other assets:
  Goodwill, net                                                                 576,272           601,694
  Other                                                                         153,183           228,088
                                                                           ------------      ------------
                                                                                729,455           829,782

                     Total assets                                          $ 31,287,371      $ 32,248,033
                                                                           ============      ============

                  LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Current portion of long-term obligations                                 $ 22,193,301      $  1,423,859
  Billings in excess of costs and estimated earnings on
    uncompleted contracts                                                       374,415           499,916
  Accounts payable                                                            4,320,142         5,912,647
  Accrued and other current liabilities                                       2,075,179         2,431,164
                                                                           ------------      ------------

                     Total current liabilities                               28,963,037        10,267,586

Long-term obligations, net of current maturities                              1,775,236        16,729,140
                                                                           ------------      ------------

                    Total liabilities                                        30,738,273        26,996,726
                                                                           ------------      ------------

Commitments and contingencies

Stockholders' equity:
  Common stock, $.0001 par value; 20,000,000 shares authorized;
    5,239,109 shares issued and 5,234,109 shares outstanding
    at December 31, 1997 and June 30, 1997                                          523               523
  Additional paid in capital                                                 17,105,444        17,105,444
  Accumulated deficit                                                       (16,536,869)      (11,834,660)
  Less:  Treasury stock, at cost; 5,000 shares                                  (20,000)          (20,000)
                                                                           ------------      ------------

                    Total stockholders' equity                                  549,098         5,251,307
                                                                           ------------      ------------

                    Total liabilities and stockholders' equity             $ 31,287,371      $ 32,248,033
                                                                           ============      ============
</TABLE>


                 See accompanying notes to financial statements.


                                     3 of 16
<PAGE>   4

UNIVERSAL SEISMIC ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>

                                                            THREE MONTHS ENDED                    SIX MONTHS ENDED
                                                                DECEMBER 31,                        DECEMBER 31,
                                                       ------------------------------      ------------------------------
                                                            1997             1996             1997               1996
                                                       ------------      ------------      ------------      ------------
<S>                                                    <C>               <C>               <C>               <C>
Operating revenues:
  Data acquisition                                     $  3,772,133      $ 10,158,535      $ 12,500,153      $ 18,695,533
  Data processing                                           206,864           376,297           509,200           790,878
  Oil and gas production                                    279,329                --           431,623                --
                                                       ------------      ------------      ------------      ------------

                     Total operating revenues             4,258,326        10,534,832        13,440,976        19,486,411
                                                       ------------      ------------      ------------      ------------

Operating expenses:
  Cost of data acquisition                                4,588,486         7,435,615        13,716,038        15,521,322
  Cost of data processing                                   177,286           231,616           377,445           423,975
  Oil and gas operating                                      64,541                --           106,354              --
  Selling, general and administrative                       688,364           506,279         1,327,820         1,059,325
  Cost of aborted merger, proxy contest and
     stockholder litigation                                    --             301,230                --           301,230
  Depreciation, depletion and amortization                  868,754           774,721         1,685,048         1,535,726
                                                       ------------      ------------      ------------      ------------

                     Total operating expenses             6,387,431         9,249,461        17,212,705        18,841,578
                                                       ------------      ------------      ------------      ------------

                     Total operating income (loss)       (2,129,105)        1,285,371        (3,771,729)          644,833

Interest expense, net of capitalized interest              (537,661)         (313,833)         (943,999)         (662,043)
Other income, net                                             4,494             2,593            13,519             4,897
                                                       ------------      ------------      ------------      ------------

Net income (loss)                                      $ (2,662,272)     $    974,131      $ (4,702,209)     $    (12,313)
                                                       ============      ============      ============      ============

Basic and diluted earnings  (loss) per share           $       (.51)     $        .19      $       (.90)     $         --
                                                       ============      ============      ============      ============

Weighted average common shares outstanding                5,234,109         5,229,109         5,234,109         4,797,002
                                                       ============      ============      ============      ============
</TABLE>


                 See accompanying notes to financial statements.

                                    4 of 16
<PAGE>   5

UNIVERSAL SEISMIC ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED DECEMBER 31, 1997 AND
THE YEAR ENDED JUNE 30, 1997 (UNAUDITED)


<TABLE>
<CAPTION>
                                    COMMON STOCK               TREASURY STOCK          ADDITIONAL                      TOTAL 
                              -----------------------    -------------------------      PAID IN      ACCUMULATED   STOCKHOLDERS'
                                 SHARES       AMOUNT        SHARES        AMOUNT        CAPITAL        DEFICIT         EQUITY
                              ------------   --------    ------------   ----------    ------------  ------------    ------------
<S>                            <C>           <C>         <C>            <C>           <C>           <C>             <C>         
Balance June 30, 1996            4,278,147   $    428           5,000   $  (20,000)   $ 13,553,317  $ (6,310,497)   $  7,223,248

Net loss                                                                                              (5,524,163)     (5,524,163)

  Exercise of stock
     options                        15,000          1                                       51,249                        51,250
  Exercise of convertible
    and exchangeable notes         940,962         94                                    3,500,878                     3,500,972
                              ------------   --------    ------------   ----------    ------------  ------------    ------------
Balance June 30, 1997            5,234,109        523           5,000      (20,000)     17,105,444   (11,834,660)      5,251,307

Net loss for six months
   ended December 31, 1997                                                                            (4,702,209)     (4,702,209)
                              ------------   --------    ------------   ----------    ------------  ------------    ------------
Balance December 31, 1997        5,234,109   $    523           5,000   $  (20,000)   $ 17,105,444  $(16,536,869)   $    549,098
                              ============   ========    ============   ==========    ============  ============    ============
</TABLE>


                 See accompanying notes to financial statements.


                                    5 of 16
<PAGE>   6

UNIVERSAL SEISMIC ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                           SIX MONTHS ENDED DECEMBER 31,
                                                                           ------------------------------
                                                                               1997              1996
                                                                           ------------      ------------
<S>                                                                        <C>               <C>
Cash flows from operating activities:
  Net income (loss)                                                        $ (4,702,209)     $    (12,313)
  Adjustments to reconcile net (loss) to net cash (used in)
    provided by operating activities:
        Depreciation, depletion and amortization                              1,685,048         1,535,726
        Loss on disposal of assets                                              507,864                --
        Changes in operating assets and liabilities:
           Accounts receivable, net                                             205,593           520,806
           Costs and estimated earnings in excess of billings
             on uncompleted contracts                                           586,882         1,349,434
           Prepaid expenses and other current assets                            435,743           354,569
           Accounts payable                                                  (1,592,505)        2,315,014
           Billings in excess of costs and estimated earnings
             on uncompleted contracts                                          (125,501)       (1,796,871)
           Accrued and other current liabilities                              1,898,398          (269,143)
           Other assets                                                          15,632             9,779
                                                                           ------------      ------------
              Net cash (used in) provided by operating activities            (1,085,055)        4,007,001
                                                                           ------------      ------------

Cash flows from investing activities:
  Capital expenditures                                                       (2,850,608)       (4,467,139)
  Proceeds from sale of assets                                                1,168,088           680,625
  Proceeds from receivable from stockholder                                          --            28,440
                                                                           ------------      ------------
              Net cash (used in) investing activities                        (1,682,520)       (3,758,074)
                                                                           ------------      ------------

Cash flows from financing activities:
  Proceeds from debt and obligations                                         11,379,287        16,796,639
  Payments on debt and obligations                                          (10,000,082)      (16,710,967)
  Proceeds from issuance of common stock, net                                        --            38,750
                                                                           ------------      ------------
               Net cash provided by financing activities                      1,379,205           124,422
                                                                           ------------      ------------

Net (decrease) increase in cash and cash equivalents                         (1,388,370)          373,349
Cash and cash equivalents at beginning of period                              1,859,677           982,431
                                                                           ------------      ------------
Cash and cash equivalents at end of period                                 $    471,307      $  1,355,780
                                                                           ------------      ------------
Supplemental disclosures:
  Cash paid for interest                                                        558,392           730,658
  Equipment acquired in exchange for note payable                             1,918,193                --
  Prepaid expenses financed by notes payable                                    263,757           214,505
  Conversion of long-term obligations to common stock                                --         3,500,972
  Stockholder litigation settlement financed by note payable                  1,880,000                --
</TABLE>

                 See accompanying notes to financial statements.

                                    6 of 16
<PAGE>   7

               UNIVERSAL SEISMIC ASSOCIATES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.       GENERAL

         The consolidated financial statements of Universal Seismic Associates,
         Inc. and Subsidiaries (the "Company") included herein have been
         prepared by the Company, without audit, pursuant to the rules and
         regulations of the Securities and Exchange Commission. Certain
         information and footnote disclosures normally included in financial
         statements prepared in accordance with generally accepted accounting
         principles have been condensed or omitted pursuant to such rules and
         regulations, although the Company believes that the disclosures are
         adequate to make the information presented not misleading. These
         financial statements should be read in conjunction with the
         consolidated financial statements and the notes thereto included in the
         Company's amended Annual Report on Form 10-KSB/A filed with the 
         Securities and Exchange Commission for the year ended June 30, 1997. 
         In the opinion of the Company, all adjustments, consisting only of 
         normal recurring adjustments, necessary to present fairly the 
         financial position as of December 31, 1997, the results of operations
         for the three and six-month periods ended December 31, 1997 and 1996,
         statement of stockholders' equity for the six months ended 
         December 31, 1997 and statements of cash flows for the six-month 
         periods ended December 31, 1997 and 1996, have been included.

         The interim results are not necessarily indicative of results of
         operations for the full fiscal year ending June 30, 1998.

2.       LIQUIDITY AND OPERATING LOSSES

         The accompanying consolidated financial statements have been prepared
         assuming that the Company will continue as a going concern. As more
         fully explained below, the Company has incurred continuing losses from
         operations of $4,239,383 and $429,877 for the years ended June 30, 1997
         and 1996, respectively, and these losses have continued during the
         six months ended December 31, 1997 with operating losses of
         $2,129,105 and $3,771,729 for the three and six month periods ended
         December 31, 1997, respectively. In addition, the Company had an
         accumulated deficit and a net working capital deficiency of 
         $16,536,869 and $22,462,905, respectively, as of December 31, 1997.
         All debt due the Company's major debtholder, RIMCO (defined below), 
         has been classified as current maturities as of December 31, 1997.

         As of December 31, 1997, the Company had a cash balance of $471,307. If
         losses from operations continue (as is anticipated), the Company
         believes this cash, along with anticipated cash flow from its seismic
         and exploration and production operations and funds available under its
         credit facilities, will not be adequate for its overall working capital
         requirements. The Company believes that it could generate substantial
         cash flow from its oil and gas properties if it had sufficient funding
         for its drilling program. Future cash flows are subject to a number of
         uncertainties, particularly the condition of the oil and gas industry
         and related seismic activity in the Company's markets. Liquidity of the



                                    7 of 16
<PAGE>   8

         Company should be considered in light of the significant fluctuations
         in demand that may be experienced by seismic data acquisition
         contractors and exploration and production owners as rapid changes in
         oil and gas producers' expectations and budgets occur. These
         fluctuations can rapidly impact the Company's liquidity as supply and
         demand factors directly affect utilization and contract revenues, which
         are primary determinants of cash flow from the Company's operations.

         As of December 31, 1997, the Company was in default on certain
         covenants of its financing agreements with RIMCO Partners, L.P., RIMCO
         Partners II, L.P., RIMCO Partners III, L.P. and RIMCO Partners IV, L.P.
         (collectively, "RIMCO"). RIMCO has waived such defaults and principal
         and interest payment covenants through July 1, 1998. The Company is
         negotiating an extension of this waiver and a debt-to-equity exchange
         with RIMCO whereby the indebtedness to RIMCO, including accrued
         interest, would be converted into equity and subordinated debt. In the
         original agreement with RIMCO, which was executed on February 9, 1998
         and expired on June 1, 1998, $15,000,000 was to be converted into
         common stock of the Company and the balance into convertible
         subordinated notes. The shares to be issued in the conversion were to
         be tied to the average price of the Company's common stock for the
         30-day period prior to receiving stockholder approval. As of June 30,
         1998, the Company was indebted to RIMCO under the various financing
         agreements for $22,168,899 principal and $1,896,450 accrued interest.
         Until such time as the Company and RIMCO are able to consummate the
         debt-to-equity exchange, all RIMCO debt has been classified as current
         maturities.

         The above factors raise substantial doubt about the Company's ability
         to continue as a going concern. The financial statements do not include
         any adjustments relating to the recoverability and classification of
         assets carrying amounts or the amount and classification of liabilities
         that might result should the Company be unable to continue as a going
         concern.

3.       RESTATEMENT AND RECLASSIFICATIONS

         In its June 30, 1997 Form 10-KSB/A, the Company restated and
         reclassified its financial statements for the fiscal years ended June
         30, 1997 and 1996. In addition, unaudited quarterly financial data for
         fiscal 1997 and 1996 have also been restated and reclassified. Except
         as otherwise stated herein, all information presented in this Report on
         Form 10-Q includes all such restatements and reclassifications as they
         apply to the fiscal 1997 period.

         In February 1998, the Company's independent accountants (Coopers &
         Lybrand L.L.P.), who had issued opinions on the financial statements
         for the years ended June 30, 1997 and 1996, resigned and stated that
         their opinions with respect to the financial statements for those years
         should no longer be relied upon. In March 1998, the Company engaged
         Arthur Andersen LLP as its independent public accountants to perform
         the necessary audits to issue new auditors' reports on the financial
         statements for fiscal 1997 and 1996.

         As a result of a comprehensive review begun by the Company in December
         1997, and the audits performed by new independent public accountants,
         it was determined that certain adjustments and reclassifications were
         necessary to fairly state the financial statements for

                                    8 of 16
<PAGE>   9

         the years ended June 30, 1997 and 1996 and all respective quarterly
         data. These adjustments principally relate to the timing for
         recognition of contract revenue and associated costs under percentage
         of completion accounting and to certain costs which were expensed as
         cost of data acquisition but should have been recorded as capitalized
         oil and gas properties. In addition, it was determined that the gain on
         the sale of oil and gas properties previously reported of $559,461 in
         fiscal 1997, should not have been recognized in income but instead
         recorded as a reduction of oil and gas properties in accordance with
         full cost accounting. The following is a summary of the adjustments and
         the related impact on the statement of operations for the three and
         six-month periods ended December 31, 1996:

<TABLE>
<CAPTION>
                                                                              RESTATEMENTS FOR PERIODS
                                                                              ENDED DECEMBER 31, 1996
                                                                           ------------------------------
                                                                              THREE               SIX
                                                                              MONTHS             MONTHS
                                                                           ------------      ------------
<S>                                                                                 <C>               <C>
          Data acquisition revenues                                        $    (40,322)     $  1,503,653
          Cost of data acquisition                                              298,170          (939,756)
          Gain on sale of oil and gas property                                       --          (559,461)
          Interest expense                                                       18,042            36,084
                                                                           ------------      ------------
              Net adjustments                                                   275,890            40,520

          Net income (loss) previously reported                                 698,241           (52,833)
                                                                           ------------      ------------
          Restated net income (loss) for periods                           $    974,131      $    (12,313)
                                                                           ============      ============
</TABLE>


         The net financial impact of these adjustments increases net income for
         the three months ended December 31, 1996 by $275,980 to $974,131 and 
         decreases the net loss for the six months ended December 31, 1996 by 
         $40,520 to $12,313.

4.       DEBT AND FINANCING ARRANGEMENTS

         A summary of the Company's debt and obligations at the respective dates
         is presented below:

<TABLE>
<CAPTION>
                                                                           DECEMBER 31,        JUNE 30,
                                                                                1997             1997
                                                                           ------------      ------------
<S>                                                                        <C>               <C>
          Notes and obligations due RIMCO                                  $ 20,807,900      $ 16,108,995
          Operating lease for equipment not
            expected to be utilized in the future                               815,529           929,191
          Other notes payable                                                 2,345,108         1,114,813
                                                                           ------------      ------------
                                                                             23,968,537        18,152,999
          Less current maturities                                           (22,193,301)       (1,423,859)
                                                                           ------------      ------------

                Total long-term debt                                       $  1,775,236      $ 16,729,140
                                                                           ============      ============
</TABLE>


                                    9 of 16
<PAGE>   10

         On November 3, 1997, the Company entered into two additional financing
         agreements with RIMCO for $2,144,000 and $1,730,383, respectively,
         under revolving credit facilities and issued 12% Senior Secured General
         Obligation Notes with interest payable monthly and principal due
         December 1, 1999. As of December 31, 1997, the Company had borrowed
         $1,494,000 under the first facility which was used for working capital
         and $1,090,383 under the second facility used to expand the Company's
         oil and gas exploration activities and the notes are secured by the
         Company's oil and gas properties.

         RIMCO has waived defaults under the covenants in its various financing
         agreements until July 1, 1998. (See Note 2 to the Consolidated
         Financial Statements for further discussion.)

5.       EARNINGS (LOSS) PER SHARE

         In February 1997, the Financial Accounting Standards Board issued
         Statement of Financial Accounting Standards No. 128, Earnings Per Share
         ("SFAS 128"). SFAS 128 requires presentation of "basic" and "diluted"
         earnings per share. SFAS 128 is effective for financial statements
         issued for periods ending after December 15, 1997 and requires
         restatement of all prior period earnings per share amounts. The Company
         has adopted SFAS 128 and has applied the provisions of the statement to
         current and prior periods. While the Company has outstanding stock
         options and warrants, these are not included in the computation of
         diluted earnings (loss) per share because to do so would be
         anti-dilutive. Earnings (loss) per share under SFAS 128 is the same as
         has been reported under the previously required accounting standards.

6.       COMMITMENTS AND CONTINGENCIES

         The Company is involved in various claims and legal actions arising in
         the ordinary course of business. In the opinion of management, the
         ultimate disposition of these matters will not have a material adverse
         effect on the Company's consolidated financial position. The resolution
         in any reporting period of one or more of these matters in a manner
         adverse to the Company could have a material impact on the Company's
         results of operations and cash flows for that period.

7.       SHAREHOLDER LITIGATION

         The Company was involved in an aborted merger earlier in fiscal 1997
         that led to a proxy fight with a group of shareholders that styled
         themselves "The Universal Seismic Stockholders' Protective Committee"
         (the "Stockholders' Committee"). The proxy fight was resolved at the
         reconvened Annual Meeting of Shareholders on February 11, 1997, at
         which time management's slate of directors was reelected and all of the
         Stockholders' Committee's proposals were defeated.

         Thereafter, Michael T. Kanarellis, one of the members of the
         Stockholders' Committee, submitted letters to various members of the
         Audit Committee of the Company, alleging that "the Company's financial
         statements for the fiscal year ended June 30, 1996 and the fiscal
         quarters ended September 30, 1996 and December 31, 1996 were false and
         materially misstated" and alleging certain specific items of
         misstatement. The 


                                    10 of 16
<PAGE>   11

         Stockholders' committee also filed a suit against the Company and its
         directors styled "The Universal Seismic Associates, Inc. Stockholders'
         Protective Committee, Michael T. Kanarellis, and Robert J. Kecseg Vs.
         Michael J. Pawelek, Ronald L. England, Calvin G. Cobb, Gary Milavec,
         Steven Oakes, Rick Trapp, RIMCO Associates, L.P., Resource Investors
         Management Company, L.P. and Universal Seismic Associates, Inc.", in
         the United States District Court (the "Court") in Delaware. All parties
         entered into a Stipulation of Settlement which was tendered to the
         Court on August 7, 1997, whereby RIMCO agreed to purchase all of the
         shares of the Company's common stock owned by the Stockholders'
         Committee for an aggregate purchase price of $650,000, or $3.17 per
         share. Also in connection with the settlement, RIMCO entered into a
         $2,000,000 loan agreement with the Company, with the proceeds being
         used to fund the immediate costs of settlement and to pay other
         expenses associated with the lawsuit. The settlement was approved by
         the Court on October 1, 1997, at which time the Court entered judgment
         dismissing all claims with prejudice. The Company believes that it will
         recover a substantial portion of its costs of settlement and expenses
         associated with the lawsuit from its directors' and officers' liability
         insurance carrier. As of January 30, 1998, the Company had received a
         settlement of $1,245,000 and is pursuing additional recovery.


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

SIX MONTHS ENDED DECEMBER 31, 1997 COMPARED TO SIX MONTHS ENDED DECEMBER 31,
1996

OPERATING REVENUES AND EXPENSES

         Operating Revenues. Overall operating revenues for the six-month period
were down $6.0 million, or 31%, from the comparable period in fiscal 1997. This
decrease was primarily due to interruptions in South Texas due to restrictions
during hunting season, preparation and delays in South Louisiana and fewer crews
under contract. Data processing revenues were down from $790,878 to $509,200, or
36%, as a result of fewer jobs being processed. Oil and gas operations began
initial production in May and June, 1997. Oil and gas sales of $431,623 for the
six-month period ended December 31, 1997, averaged approximately $72,000 per
month with increased sales expected as additional production comes on stream. It
should be noted that substantially all of the Company's oil and gas revenue
comes from natural gas sales. The Company does expect oil and gas revenues to
increase in fiscal 1998 over fiscal 1997, although such increase is likely to be
limited because the Company currently lacks sufficient financial resources to
fully develop its oil and gas properties.

         Operating Expenses. Overall costs were down slightly in the period from
$18.8 million to $17.2 million, or 9%, reflecting a decrease in the data
acquisition group of 8% from $15.5 million to $13.7 million. However, this group
continued to experience negative margins due to weather and seasonal
restrictions.

          Selling, General and Administrative Expenses. These expenses increased
to $1.3 million from $1.1 million, or 25% due to increased consulting expenses
and additional accounting expenses.


                                    11 of 16
<PAGE>   12

         Depreciation, Depletion and Amortization. Depreciation, depletion and
amortization (DD&A) was up approximately $149,000 or 9.7% over the same period
in fiscal 1997, reflecting , in part, the first DD&A expense from the oil and
gas operations of $119,852 for the six months ended December 31, 1997.

         Interest Expense. Interest expense was up 43% or $281,956 over the same
period in fiscal 1997. This was primarily due to increased debt outstanding for
financing the oil and gas operations and working capital needs.

         Income Taxes. At the current time the Company has significant net
operating loss carryforwards of approximately $14,145,000 available to offset
future federal taxable income which will expire if not used in fiscal years 2007
through 2012. Therefore, no income tax provision has been reflected in the
accompanying financial statements.

         Net Loss. The Company reported a net loss of $4.7 million for the 1998
fiscal six-month period which was compared to an insignificant loss for the same
period in fiscal 1997. The major reasons for the loss are significantly lower
gross margins for the data acquisition activities combined with higher indirect
overhead and interest expense. Sales in the data acquisition unit were also down
significantly as backlog was not replaced as rapidly as contracts were
completed. The Company is attempting to improve its marketing efforts in the
data acquisition unit, improving crew management and efficiency of its crews to
improve overall margins. Even with these improvements, it is expected that the
Company will continue to incur operating losses in the near term.

THREE MONTHS ENDED DECEMBER 31, 1997 COMPARED TO THREE MONTHS ENDED DECEMBER 31,
1996

OPERATING REVENUES AND EXPENSES

         Operating Revenues. Operating revenues for the three months ended
December 31, 1997 were down 62% to $4.3 million, reflecting a steep decline in
data acquisition revenues due to the Company being unable to generate new
contracts in this area of operations. Data processing revenues were also down in
the period from $376,297 to $201,864, a 46% decline, due to fewer data
processing jobs. Oil and gas revenues of $279,329 are being reported for the
first time in the quarter ended December 31, 1997 at an average monthly rate of
approximately $93,000. Substantially all revenues of the oil and gas operations
come from natural gas sales.

         Operating Expenses. Overall operating expenses decreased by 31%,
substantially due to a 38% decline in cost of data acquisition offset by higher
selling, general and administrative and depreciation, depletion and amortization
expense. Idle crews due to insufficient work continue to prevent the data
acquisition group from generating positive margins.

         Selling, General and Administrative Expenses. Selling, general and
administrative expenses were up for the quarter over the prior period by 26%,
from $506,279 to $688,364, reflecting, in part, increased legal and accounting
expenses.


                                    12 of 16
<PAGE>   13

         Depreciation, Depletion and Amortization. Depreciation, depletion and
amortization (DD&A) was up 12% from $774,721 in the prior quarter to $868,754.
This is due, in part, to DD&A for the oil and gas operations of $70,178 for the
three months ended December 31, 1997.

         Interest Expense. Interest expense increased by approximately 71% from
$313,833 to $537,661. This increase is due to additional borrowings for
financing oil and gas operations and for working capital needs.

         Income Taxes. At the current time the Company has significant net
operating loss carryforwards of approximately $14,145,000 available to offset
future federal taxable income which will expire if not used in fiscal years 2007
through 2012. Therefore, no income tax provision has been reflected in the
accompanying financial statements.

         Net Loss. The Company reported a net loss of $2,662,272 for the current
three-month period ended December 31, 1997, compared with a profit of $974,131
in the same period in fiscal 1997. The current period loss is primarily due to
losses in the data acquisition group where revenues were down 62% due to slowing
of available contract projects. Higher selling, general and administrative
expense due, in part, to increased consulting expenses and higher salary
expenses as a result of management changes and DD&A expense also contributed to
the overall loss for the period.

LIQUIDITY AND CAPITAL RESOURCES

         For the six months ended December 31, 1997, cash and cash equivalents
decreased by $1,388,370 to $471,307. Cash used by investing activities of
$1,682,520 includes investments in oil and gas properties of $2,733,808, $27,800
for data processing equipment and upgrades, with the balance of $89,000 used for
miscellaneous data acquisition equipment, less $1,168,088 received from the sale
of interest in two of the Company's oil and gas properties.

         In August 1997, the Company borrowed an additional $2,000,000 from
RIMCO. The proceeds were utilized to fund the shareholder litigation settlement
and legal and accounting fees incurred as a result of such litigation. The
Company expects to recover a substantial portion of its costs of the settlement
and expenses associated with the lawsuit from its directors' and officers'
liability insurance carrier. As of January 30, 1998, the Company had received a
settlement of $1,245,000 and is pursuing additional recovery.

         The Company's accounts payable balance decreased by $1,592,505 during
the six-month period ended December 31, 1997. Accounts receivable (net)
decreased slightly by $205,593 during the period. The Company had approximately
$1,523,000 of receivables over 90 days old as of December 31, 1997 for which
adequate reserves have been made.

         On November 3, 1997, the Company entered into two additional financing
agreements with RIMCO for $2,144,000 and $1,730,383, respectively, under
revolving credit facilities and issued 12% Senior Secured General Obligation
Notes with interest payable monthly and principal due December 1, 1999. As of
December 31, 1997, the Company had borrowed $1,494,000 under the first facility
which was used for working capital and $1,090,383 under the second facility used


                                    13 of 16
<PAGE>   14

to expand the Company's oil and gas exploration activities and the notes are
secured by the Company's oil and gas properties.

         The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As more fully
explained below, the Company has incurred continuing losses from operations of
$4,239,383 and $429,877 for the years ended June 30, 1997 and 1996,
respectively, and these losses have continued during the six-month period ended
December 31, 1997, with operating losses of $2,129,105 and $3,771,729 for
the three and six-month periods ended December 31, 1997, respectively. In
addition, the Company had an accumulated deficit and a net working capital 
deficiency of $16,536,869 and $22,462,905, respectively, as of December 31, 
1997. All debt due the Company's major debtholder, RIMCO, has been classified
as current maturities as of December 31, 1997.

         As of December 31, 1997, the Company had a cash balance of $471,307. If
losses from operations continue (as is anticipated), the Company believes this
cash, along with anticipated cash flow from its seismic and exploration and
production operations and funds available under its credit facilities, will not
be adequate for its overall working capital requirements. The Company believes
that it could generate substantial cash flow from its oil and gas properties if
it had sufficient funding for its drilling program. Future cash flows are
subject to a number of uncertainties, particularly the condition of the oil and
gas industry and related seismic activity in the Company's markets. Liquidity of
the Company should be considered in light of the significant fluctuations in
demand that may be experienced by changes in gas producers' expectations and
budgets occur. These fluctuations can rapidly impact the Company's liquidity as
supply and demand factors directly affect utilization and contract revenues,
which are primary determinants of cash flow from the Company's operations.

         Reference is made to Note 2 to the Consolidated Financial Statements
for further discussion of defaults under the RIMCO financing agreements.

SUBSEQUENT EVENTS

         Reference is made to Note 2 and Note 3 to the Consolidated Financial
Statements for a discussion relating to subsequent events regarding liquidity
and continuing operating losses and the restatement and reclassification of the
financial statements.


                                    14 of 16
<PAGE>   15
                                        
                                    PART II
                               OTHER INFORMATION

ITEM 1.       LEGAL PROCEEDINGS

              None

ITEM 2.       CHANGES IN SECURITIES

              None

ITEM 3.       DEFAULT UPON SENIOR SECURITIES

              As of December 31, 1997, the Company was in default on certain
covenants of its RIMCO financing agreements and RIMCO has waived such defaults
and principal and interest payment covenants through July 1, 1998. The Company
is negotiating an extension of this waiver and a debt-to-equity exchange with
RIMCO whereby the indebtedness to RIMCO, including accrued interest, would be
converted into equity and subordinated debt. In a proposed agreement with RIMCO,
which was executed on February 9, 1998 and expired on June 1, 1998, $15,000,000
was to be converted into common stock of the Company and the balance into
convertible subordinated notes. The shares to be issued in the conversion were
to be tied to the average price of the Company's common stock for the 30-day
period prior to receiving stockholder approval. As of June 30, 1998, the Company
was indebted to RIMCO under the various financing agreements for $22,168,899
principal and $1,896,450 accrued interest.

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

              None

ITEM 5.       OTHER INFORMATION

              On November 11, 1997, the Company announced that Joe T. Rye was
appointed President and Chief Executive Officer on an interim basis succeeding
Michael J. Pawelek, who will serve as Executive Vice President of the Company
and President of the Company's oil and gas subsidiary, UNEXCO, Inc. Also
appointed by the Board was Stephen H. Wood as Vice President - Seismic
Operations.

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K

              None


                                    15 of 16
<PAGE>   16

                                   SIGNATURES


         In accordance with the requirements of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                   UNIVERSAL  SEISMIC  ASSOCIATES, INC.





                                   /s/ JOE T. RYE
DATE: JULY 23, 1998                PRESIDENT/CHIEF EXECUTIVE OFFICER


                                    16 of 16

<PAGE>   17
                                Index to Exhibit

          Item
          ----

          Ex-27              Financial Data Schedule