<PAGE>

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   Form 10-Q


(X) Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934 for the quarterly period ended June 30, 2001.

( ) Transition report pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934.


                        Commission file number 001-16009


                         SPINNAKER EXPLORATION COMPANY
             (Exact name of registrant as specified in its charter)

           DELAWARE                                    76-0560101
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)




     1200 SMITH STREET, SUITE 800
           HOUSTON, TEXAS                                 77002
(Address of principal executive offices)                (Zip Code)


                                 (713) 759-1770
              (Registrant's telephone number, including area code)


  Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes   X    No
    -----     ------

  The number of shares outstanding of the registrant's common stock, par value
$0.01 per share, on August 10, 2001 was 27,182,838.

================================================================================
<PAGE>

                         SPINNAKER EXPLORATION COMPANY
                                   FORM 10-Q
                FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2001





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

ITEM 1.   FINANCIAL STATEMENTS


  Consolidated Balance Sheets
   June 30, 2001 and December 31, 2000..........................................  3

  Consolidated Statements of Operations
   Three and Six Months Ended June 30, 2001 and 2000............................  4

  Consolidated Statements of Cash Flows
   Six Months Ended June 30, 2001 and 2000......................................  5

  Notes to Interim Consolidated Financial Statements............................  6

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS..................................  8

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK............ 14


PART II - OTHER INFORMATION

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................... 15

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K...................................... 15

SIGNATURES...................................................................... 16
</TABLE>

                                       2
<PAGE>

                         SPINNAKER EXPLORATION COMPANY
                          CONSOLIDATED BALANCE SHEETS
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


<TABLE>
<CAPTION>
                                                                                                 JUNE 30,          DECEMBER 31,
                                                                                                   2001                2000
                                                                                           -----------------   -----------------
<S>                                                                                           <C>                     <C>
                                       ASSETS                                                  (Unaudited)
CURRENT ASSETS:
 Cash and cash equivalents.................................................................   $   89,594           $  63,910
 Short-term investments....................................................................       11,799              22,387
 Accounts receivable.......................................................................       36,720              45,594
 Other.....................................................................................        1,639               6,402
                                                                                              ----------           ---------
   Total current assets....................................................................      139,752             138,293

PROPERTY AND EQUIPMENT:
 Oil and gas, on the basis of full-cost accounting:
  Proved properties........................................................................      431,563             293,002
  Unproved properties and properties under development, not being amortized................       84,418              83,165
 Other.....................................................................................        6,123               5,642
                                                                                              ----------           ---------
                                                                                                 522,104             381,809
 Less - Accumulated depreciation, depletion and amortization...............................     (118,679)            (77,428)
                                                                                              ----------           ---------
   Total property and equipment............................................................      403,425             304,381

OTHER ASSETS...............................................................................            -                  30
                                                                                              ----------           ---------
   Total assets............................................................................   $  543,177           $ 442,704
                                                                                              ==========           =========


                                 LIABILITIES AND EQUITY
CURRENT LIABILITIES:
 Accounts payable..........................................................................   $   29,694           $  28,616
 Accrued liabilities.......................................................................       50,453              35,672
                                                                                              ----------           ---------
   Total current liabilities...............................................................       80,147              64,288

DEFERRED INCOME TAXES......................................................................       37,993              17,157

COMMITMENTS AND CONTINGENCIES

EQUITY:
 Preferred stock, $0.01 par value; 10,000,000 shares authorized; no shares issued and
  outstanding at June 30, 2001 and December 31, 2000.......................................            -                   -
 Common stock, $0.01 par value; 50,000,000 shares authorized; 27,157,804 shares issued and
  27,141,676 shares outstanding at June 30, 2001; and 26,494,593 shares issued and
  26,476,817 shares outstanding at December 31, 2000.......................................          272                 265
 Additional paid-in capital................................................................      362,784             349,506
 Retained earnings.........................................................................       61,461              11,532
 Less: Treasury stock, at cost, 16,128 and 17,776 shares at June 30, 2001 and
   December 31, 2000, respectively.........................................................          (40)                (44)
 Accumulated other comprehensive income....................................................          560                   -
                                                                                              ----------           ---------
   Total equity............................................................................      425,037             361,259
                                                                                              ----------           ---------
   Total liabilities and equity............................................................   $  543,177           $ 442,704
                                                                                              ==========           =========
</TABLE>


                The accompanying notes are an integral part of
                   these consolidated financial statements.

                                       3
<PAGE>

                         SPINNAKER EXPLORATION COMPANY
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                               FOR THE THREE MONTHS                   FOR THE SIX MONTHS
                                                                   ENDED JUNE 30,                       ENDED JUNE 30,
                                                         -------------------------------       -------------------------------
                                                              2001               2000               2001               2000
                                                         ------------       ------------       ------------       ------------
<S>                                                      <C>                 <C>               <C>                <C>
REVENUES...........................................      $     59,500       $     19,145       $    126,953       $     33,012
EXPENSES:
 Lease operating expenses..........................             3,312              2,266              6,003              3,875
 Depreciation, depletion and amortization -                    20,978                                40,320
      natural gas and oil properties...............                                9,879                                17,644
 Depreciation and amortization - other.............               106                 75                202                144
 General and administrative........................             2,218              1,602              4,750              3,100
                                                         ------------       ------------       ------------       ------------
   Total expenses..................................            26,614             13,822             51,275             24,763
                                                         ------------       ------------       ------------       ------------

INCOME FROM OPERATIONS.............................            32,886              5,323             75,678              8,249
OTHER INCOME (EXPENSE):
 Interest income...................................             1,249                 69              2,594                313
 Interest expense, net.............................              (102)              (153)              (258)              (237)
                                                         ------------       ------------       ------------       ------------
   Total other income (expense)....................             1,147                (84)             2,336                 76
                                                         ------------       ------------       ------------       ------------

INCOME BEFORE INCOME TAXES.........................            34,033              5,239             78,014              8,325
INCOME TAX PROVISION...............................            12,252                  -             28,085                  -
                                                         ------------       ------------       ------------       ------------
NET INCOME.........................................      $     21,781       $      5,239       $     49,929       $      8,325
                                                         ============       ============       ============       ============


NET INCOME PER COMMON SHARE:
 Basic.............................................      $       0.80       $       0.26       $       1.85       $       0.41
                                                         ============       ============       ============       ============
 Diluted...........................................      $       0.77       $       0.24       $       1.76       $       0.39
                                                         ============       ============       ============       ============


WEIGHTED AVERAGE NUMBER OF COMMON SHARES
 OUTSTANDING:
 Basic.............................................            27,132             20,521             26,953             20,469
                                                         ============       ============       ============       ============
 Diluted...........................................            28,427             21,771             28,295             21,539
                                                         ============       ============       ============       ============
</TABLE>


                The accompanying notes are an integral part of
                   these consolidated financial statements.

                                       4
<PAGE>

                         SPINNAKER EXPLORATION COMPANY
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                        FOR THE SIX MONTHS
                                                                                                           ENDED JUNE 30,
                                                                                                 ----------------------------------
                                                                                                    2001                    2000
                                                                                                 ----------               ---------
<S>                                                                                              <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income..........................................................................            $  49,929               $  8,325
 Adjustments to reconcile net income to net cash provided by (used in) operating
  activities:
  Depreciation, depletion and amortization...........................................               40,522                 17,788
  Deferred income tax expense........................................................               28,085                      -
  Other..............................................................................                  718                      -
 Change in components of working capital:
  Accounts receivable................................................................                8,874                 (8,219)
  Accounts payable and accrued liabilities...........................................               12,958                  4,158
  Other current assets and other.....................................................                4,793                    616
                                                                                                 ---------               --------
     Net cash provided by operating activities.......................................              145,879                 22,668

CASH FLOWS FROM INVESTING ACTIVITIES:
 Oil and gas properties..............................................................             (139,085)               (67,248)
 Change in property related payables.................................................                2,901                 12,016
 Purchases of other property and equipment...........................................                 (481)                  (989)
 Purchases of short-term investments.................................................              (26,655)                     -
 Sales of short-term investments.....................................................               37,243                      -
 Proceeds from sale of natural gas and oil assets....................................                    -                  1,382
                                                                                                 ---------               --------
     Net cash used in investing activities...........................................             (126,077)               (54,839)

CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from borrowings............................................................                    -                 12,000
 Proceeds from exercise of stock options.............................................                5,882                  1,111
                                                                                                 ---------               --------
     Net cash provided by financing activities.......................................                5,882                 13,111
                                                                                                 ---------               --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.................................               25,684                (19,060)
CASH AND CASH EQUIVALENTS, beginning of year.........................................               63,910                 20,452
                                                                                                 ---------               --------
CASH AND CASH EQUIVALENTS, end of period.............................................            $  89,594               $  1,392
                                                                                                 =========               ========
SUPPLEMENTAL CASH FLOW DISCLOSURES:
 Cash paid for interest, net of amounts capitalized.................................             $     147               $     69
 Cash paid for income taxes.........................................................             $       -               $      -
</TABLE>


                The accompanying notes are an integral part of
                   these consolidated financial statements.

                                       5
<PAGE>

                         SPINNAKER EXPLORATION COMPANY
         NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                 JUNE 30, 2001


1.  BASIS OF PRESENTATION

  The accompanying unaudited consolidated financial statements of Spinnaker
Exploration Company ("Spinnaker" or the "Company") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by accounting principles generally accepted in the United States for complete
financial statements. In the opinion of management, all adjustments (consisting
only of normal and recurring adjustments) necessary to present a fair statement
of the results for the periods included herein have been made and the
disclosures contained herein are adequate to make the information presented not
misleading. Interim period results are not necessarily indicative of results of
operations or cash flows for a full year. These consolidated financial
statements and the notes thereto should be read in conjunction with the
Company's Annual Report on Form 10-K for the year ended December 31, 2000.

2. EARNINGS PER SHARE

  The basic and diluted net income per common share calculations are based on
the following information (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                                          THREE MONTHS ENDED          SIX MONTHS ENDED
                                                                               JUNE 30,                   JUNE 30,
                                                                      -----------------------      -----------------------
                                                                        2001           2000          2001           2000
                                                                      ---------      --------      --------      ---------
<S>                                                                   <C>             <C>          <C>           <C>
Numerator:
 Net income.....................................................        $21,781       $ 5,239       $49,929        $ 8,325
                                                                        =======       =======       =======        =======
Denominator:
 Basic weighted average number of shares........................         27,132        20,521        26,953         20,469
                                                                        =======       =======       =======        =======
 Dilutive securities:
  Stock options.................................................          1,295         1,250         1,342          1,070
                                                                        -------       -------       -------        -------
 Diluted adjusted weighted average number of shares and assumed
  conversions...................................................         28,427        21,771        28,295         21,539
                                                                        =======       =======       =======        =======

Net income per common share:
 Basic..........................................................        $  0.80       $  0.26       $  1.85        $  0.41
                                                                        =======       =======       =======        =======
 Diluted........................................................        $  0.77       $  0.24       $  1.76        $  0.39
                                                                        =======       =======       =======        =======
</TABLE>

3. CREDIT FACILITY

  On July 18, 2001, the Company renewed its existing $75.0 million credit
facility ("Credit Facility") on an unsecured basis for another 364-day term. The
Company's borrowing base is currently set at a nominal $30.0 million in order to
minimize fees associated with this commitment. The borrowing base is
redetermined no more than once during any six-month period. The Credit Facility
contains various covenants and restrictive provisions. It also requires the
Company to maintain certain financial covenants, including the ratio of
consolidated current assets to consolidated current liabilities, other than debt
and hedging-related liabilities, as of the end of each fiscal quarter so that it
is not less than 1.00 to 1.00 and the ratio of EBITDAX, as defined, to
consolidated interest expense so that it is not less than 3.0 to 1.0 for any
period of four consecutive fiscal quarters. At June 30, 2001, the Company had no
outstanding borrowings under the Credit Facility.

                                       6
<PAGE>

4. DERIVATIVES AND HEDGING

  In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities." SFAS No. 133 established
accounting and reporting standards requiring that all derivative instruments be
recorded in the balance sheet as either an asset or liability measured at its
fair value. SFAS No. 133 requires that changes in a derivative's fair value be
realized currently in earnings unless specific hedge accounting criteria are
met. Accounting for qualifying hedges allows derivative gains and losses to
offset related results on the hedged item in the income statement and requires a
company to formally document, designate and assess the effectiveness of
transactions that qualify for hedge accounting. The Company adopted SFAS No. 133
on January 1, 2001.

  Based upon the Company's assessment of its derivative contracts at January 1,
2001, it recorded (i) a net current liability of $41.7 million, representing the
fair market value of all derivatives on that date and (ii) a reduction of equity
through accumulated other comprehensive income of $27.1 million, representing
the intrinsic and time value components of the derivatives as of January 1,
2001, net of income taxes of $14.6 million.

  Based upon the Company's assessment of its derivative contracts at June 30,
2001, it reported (i) a net current asset of $0.9 million and (ii) accumulated
other comprehensive income of $0.6 million, net of income taxes of $0.3 million.
The time value component of the derivatives recognized in earnings was a loss of
$0.4 million in the second quarter of 2001 and zero in the first six months of
2001. In connection with monthly settlements, the Company recognized net hedging
losses of $2.1 million and $18.7 million in the second quarter and first six
months of 2001, respectively.

  Historically, Spinnaker has utilized collar arrangements to reduce its
exposure to fluctuations in natural gas and oil prices. As of June 30, 2001, the
Company's natural gas collar arrangements for July through November 2001
included daily volumes of 50,000 MMBtus at an average New York Mercantile
Exchange ("NYMEX") floor price of $3.00 per MMBtu and ceiling price of $4.72 per
MMBtu. Subsequent to June 30, 2001, the Company's collar arrangements for July
and August settled within the NYMEX floor and ceiling prices.

   In August 2001, the Company terminated all of its open natural gas collar
arrangements and simultaneously executed natural gas swap contracts. Spinnaker
used its net proceeds from these transactions to increase the weighted average
swap prices as described below. The early termination and settlement of the
aforementioned collar arrangements do not impact earnings.

   Swap contracts reduce the Company's exposure to fluctuations in natural gas
prices and achieve a more predictable cash flow for the volumes hedged. The
Company's natural gas swap contracts on average daily volumes are as follows:

   .  50,000 MMBtus at a weighted average price of $3.31 per MMBtu in the third
      quarter of 2001 (September only);

   .  39,891 MMBtus at a weighted average price of $3.35 per MMBtu in the fourth
      quarter of 2001; and

   .  20,000 MMBtus at an average price of $3.58 per MMBtu in 2002.

5. COMPREHENSIVE INCOME

  Comprehensive income was $27.0 million and $58.9 million in the second quarter
and first six months of 2001, respectively. Comprehensive income includes
accumulated other comprehensive income of $5.2 million and $9.0 million related
to derivatives and hedging activities in the second quarter and first six months
of 2001, respectively.

                                       7
<PAGE>

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

             Cautionary Statement About Forward-Looking Statements

  Some of the information in this Quarterly Report on Form 10-Q contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The forward-
looking statements speak only as of the date made, and the Company undertakes no
obligation to update such forward-looking statements. These forward-looking
statements may be identified by the use of the words "believe," "expect,"
"anticipate," "will," "contemplate," "would" and similar expressions that
contemplate future events. These future events include the following matters:

  .  financial position;
  .  business strategy;
  .  budgets;
  .  amount, nature and timing of capital expenditures, including future
     development costs;
  .  drilling of wells;
  .  natural gas and oil reserves;
  .  timing and amount of future production of natural gas and oil;
  .  operating costs and other expenses;
  .  cash flow and anticipated liquidity;
  .  prospect development and property acquisitions; and
  .  marketing of natural gas and oil.

  Numerous important factors, risks and uncertainties may affect the Company's
operating results, including:

  .  the risks associated with exploration;
  .  the ability to find, acquire, market, develop and produce new properties;
  .  natural gas and oil price volatility;
  .  uncertainties in the estimation of proved reserves and in the projection
     of future rates of production and timing of development expenditures;
  .  operating hazards attendant to the natural gas and oil business;
  .  downhole drilling and completion risks that are generally not recoverable
     from third parties or insurance;
  .  potential mechanical failure or under-performance of significant wells;
  .  climatic conditions;
  .  availability and cost of material and equipment;
  .  delays in anticipated start-up dates;
  .  actions or inactions of third-party operators of the Company's properties;
  .  the ability to find and retain skilled personnel;
  .  availability of capital;
  .  the strength and financial resources of competitors;
  .  regulatory developments;
  .  environmental risks; and
  .  general economic conditions.

  Any of the factors listed above and other factors contained in this Form 10-Q
could cause the Company's actual results to differ materially from the results
implied by these or any other forward-looking statements made by the Company or
on its behalf. The Company cannot assure you that future results will meet
expectations. You should pay particular attention to the risk factors and
cautionary statements described in the Company's Annual Report on Form 10-K for
the year ended December 31, 2000.

                                       8
<PAGE>

GENERAL

  Spinnaker is an independent energy company engaged in the exploration,
development and production of natural gas and oil in the U.S. Gulf of Mexico.
The Company's operating results depend substantially on the success of its
exploratory drilling program and the price of natural gas and oil. Revenues,
profitability and future growth rates also substantially depend on factors
beyond the Company's control, such as economic, political and regulatory
developments and competition from other sources of energy. The energy markets
historically have been very volatile, and natural gas and oil prices may
fluctuate widely in the future. Sustained periods of low prices for natural gas
and oil could materially and adversely affect the Company's financial position,
its results of operations, the quantities of natural gas and oil reserves that
it can economically produce and its access to capital.

OVERVIEW

  Performance highlights for the three and six months ended June 30, 2001
included the following:

 Three Months Ended June 30, 2001 as Compared to the Three Months Ended June 30,
 2000

  .  Production of 13.6 billion cubic feet gas equivalent ("Bcfe"), up 127
     percent;
  .  Revenues of $59.5 million, up 211 percent;
  .  Income from operations of $32.9 million, up 518 percent;
  .  Net income of $21.8 million, up 316 percent; and
  .  Net cash flow from operations, before working capital changes, of
     $56.2 million, up 270 percent.

 Six Months Ended June 30, 2001 as Compared to the Six Months Ended June 30,
 2000

  .  Production of 26.0 Bcfe, up 139 percent;
  .  Revenues of $127.0 million, up 285 percent;
  .  Income from operations of $75.7 million, up 817 percent;
  .  Net income of $49.9 million, up 500 percent; and
  .  Net cash flow from operations, before working capital changes, of
     $119.3 million, up 357 percent.

  Spinnaker's results of operations and financial position were significantly
impacted by increased natural gas production and prices in the first six months
of 2001. Natural gas revenues increased $108.9 million and natural gas
production volumes increased 14.8 Bcf, contributing $77.4 million of the
increase in natural gas revenues. This volume increase was primarily due to
wells on five new blocks which commenced production subsequent to the second
quarter of 2000. Average natural gas price increases contributed $31.5 million
of the increase in natural gas revenues.

  The Company had $101.4 million in cash, cash equivalents and short-term
investments at June 30, 2001. In addition, the Company had no debt at June 30,
2001.

                                       9
<PAGE>

RESULTS OF OPERATIONS

  The following table sets forth certain operating information with respect to
the natural gas and oil operations of the Company:

<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED                  SIX MONTHS ENDED
                                                                       JUNE 30,                          JUNE 30,
                                                            -----------------------------       -----------------------------
                                                                2001              2000              2001              2000
                                                            -----------       -----------       -----------       -----------
<S>                                                         <C>               <C>               <C>               <C>
PRODUCTION:
 Natural gas (MMcf)...................................         13,120             5,723            25,089            10,279
 Oil and condensate (MBbls)...........................             72                41               149                99
  Total (MMcfe).......................................         13,553             5,968            25,983            10,872

REVENUES (IN THOUSANDS):
 Natural gas..........................................        $60,094           $20,920          $141,549           $32,659
 Oil and condensate...................................          1,924             1,136             4,087             2,756
 Net hedging losses...................................         (2,083)           (2,911)          (18,683)           (2,403)
 Other................................................           (435)                -                 -                 -
                                                              -------           -------          --------           -------
  Total...............................................        $59,500           $19,145          $126,953           $33,012

AVERAGE SALES PRICE PER UNIT:
 Natural gas revenues from production (per Mcf).......        $  4.58           $  3.66          $   5.64           $  3.18
 Effects of hedging activities (per Mcf)..............          (0.16)            (0.45)            (0.74)            (0.17)
                                                              -------           -------          --------           -------
  Average price (per Mcf).............................        $  4.42           $  3.21          $   4.90           $  3.01

 Oil and condensate revenues from production
    (per Bbl).........................................        $ 26.62           $ 27.76          $  27.42           $ 27.86
 Effects of hedging activities (per Bbl)..............              -             (9.34)                -             (7.28)
                                                              -------           -------          --------           -------
  Average price (per Bbl).............................        $ 26.62           $ 18.42          $  27.42           $ 20.58

 Total revenues from production (per Mcfe)............        $  4.58           $  3.70          $   5.61           $  3.26
 Effects of hedging activities (per Mcfe).............          (0.16)            (0.49)            (0.72)            (0.22)
                                                              -------           -------          --------           -------
  Total average price (per Mcfe)......................        $  4.42           $  3.21          $   4.89           $  3.04


EXPENSES (PER MCFE):
 Lease operating expenses.............................        $  0.24           $  0.38          $   0.23           $  0.36
 Depreciation, depletion and amortization - natural
  gas and oil properties..............................           1.55              1.66              1.55              1.62

INCOME FROM OPERATIONS (IN THOUSANDS).................        $32,886           $ 5,323          $ 75,678           $ 8,249
</TABLE>

 Three Months Ended June 30, 2001 as Compared to the Three Months Ended June 30,
 2000

  Production increased approximately 7.6 Bcfe in the second quarter of 2001
compared to the second quarter of 2000. Average daily production was 149 million
cubic feet gas equivalent ("MMcfe") in the second quarter of 2001 compared to
average daily production of 65 MMcfe in the same period of 2000.

  Revenues increased $40.4 million and income from operations increased $27.6
million in the second quarter of 2001 compared to the second quarter of 2000.
Excluding the effects of hedging activities, natural gas revenues increased
$39.2 million and oil and condensate revenues increased $0.8 million in the
second quarter of 2001 compared to the same period in 2000. Net losses
associated with natural gas and oil hedging activities decreased $0.4 million in
the second quarter of 2001 compared to the same period in 2000.

  Natural gas production volumes increased 7.4 Bcf, contributing $34.1 million
of the increase in natural gas revenues, excluding the effects of hedging
activities. Average natural gas price increases contributed $5.1 million of the
increase in natural gas revenues. Oil and condensate production volumes
increased approximately 31 thousand barrels ("MBbls"), contributing $0.9 million
of the increase in oil and condensate revenues, offset in part by $0.1 million
attributable to the decrease in average oil and condensate prices in the second
quarter of 2001 when compared to the same period in 2000. The natural gas and
oil volume increases were primarily due to wells on five new blocks which
commenced production subsequent to the second quarter of 2000.

                                       10
<PAGE>

  Lease operating expenses increased $1.0 million in the second quarter of 2001
compared to the second quarter of 2000. Of the total increase in lease operating
expenses, $0.7 million was attributable to wells on five new blocks which
commenced production subsequent to the second quarter of 2000, and $0.5 million
was attributable to increased activity on producing blocks, offset in part by
$0.2 million due to decreased workover expenses in the second quarter of 2001
compared to the same period in 2000. The lease operating expense rate
decreased approximately 36% to $0.24 per thousand cubic feet gas equivalent
("Mcfe") in the second quarter of 2001 compared to the same period in 2000
primarily due to reduced workover activities as well as continued efficiencies
gained in core operating areas.

  Depreciation, depletion and amortization ("DD&A") increased $11.1 million in
the second quarter of 2001 compared to the second quarter of 2000. The increase
in DD&A was primarily attributable to the 7.6 Bcfe increase in production
volumes in the second quarter of 2001, contributing $12.6 million of the
increase in DD&A, offset in part by $1.5 million related to a decrease in the
DD&A rate.

  General and administrative expenses increased $0.6 million in the second
quarter of 2001 compared to the second quarter of 2000. The increase in general
and administrative expenses was primarily due to increased employment-related
costs associated with personnel additions subsequent to the second quarter of
2000.

  Interest income increased $1.2 million in the second quarter of 2001 compared
to the second quarter of 2000 primarily due to investment income associated with
proceeds from the Company's public offering of Common Stock completed on August
16, 2000.

  An income tax provision of $12.3 million was recorded in the second quarter of
2001. No income tax provision was recorded in the second quarter of 2000 due to
the availability of net operating loss carryforwards not previously benefited
that offset estimated taxable income in 2000.

  The Company recognized net income of $21.8 million, or $0.80 per basic share
and $0.77 per diluted share, in the second quarter of 2001 compared to net
income of $5.2 million, or $0.26 per basic share and $0.24 per diluted share, in
the second quarter of 2000.

 Six Months Ended June 30, 2001 as Compared to the Six Months Ended June 30,
 2000

  Production increased approximately 15.1 Bcfe in the first six months of 2001
compared to the first six months of 2000. Average daily production was 144 MMcfe
in the first six months of 2001 compared to average daily production of 60 MMcfe
in the first six months of 2000.

  Revenues increased $93.9 million and income from operations increased $67.4
million in the first six months of 2001 compared to the first six months of
2000. Excluding the effects of hedging activities, natural gas revenues
increased $108.9 million and oil and condensate revenues increased $1.3 million
in the first six months of 2001 compared to the same period in 2000. Net losses
associated with natural gas and oil hedging activities increased $16.3 million
in the first six months of 2001 compared to the same period in 2000.

  Natural gas production volumes increased 14.8 Bcf, contributing $77.4 million
of the increase in natural gas revenues, excluding the effects of hedging
activities. Average natural gas price increases contributed $31.5 million of the
increase in natural gas revenues. Oil and condensate production volumes
increased approximately 50 MBbls, contributing $1.4 million of the increase in
oil and condensate revenues, offset in part by $0.1 million attributable to the
decrease in average oil and condensate prices in the first six months of 2001
compared to the same period in 2000. The natural gas and oil volume increases
were primarily due to wells on five new blocks which commenced production
subsequent to the second quarter of 2000.

  Lease operating expenses increased $2.1 million in the first six months of
2001 compared to the first six months of 2000. Of the total increase in lease
operating expenses, $1.8 million was attributable to wells on five new blocks
which commenced production subsequent to the second quarter of 2000, and $0.4
million was attributable to increased activity on producing blocks, offset in
part by $0.1 million due to decreased workover expenses in the first six months
of 2001 compared to the same period in 2000. The lease operating expense rate
decreased approximately 35% to $0.23 per Mcfe in the first six months of 2001
compared to the same period in 2000 primarily due to reduced workover activities
as well as continued efficiencies gained in core operating areas.

                                       11
<PAGE>

  DD&A increased $22.7 million in the first six months of 2001 compared to the
first six months of 2000. The increase in DD&A was primarily attributable to the
15.1 Bcfe increase in production volumes in the first six months of 2001,
contributing $24.5 million of the increase in DD&A, offset in part by $1.8
million related to a decrease in the DD&A rate.

  General and administrative expenses increased $1.7 million in the first six
months of 2001 compared to the first six months of 2000. The increase in general
and administrative expenses was primarily due to increased employment-related
costs associated with personnel additions subsequent to the first six months of
2000, including increased payroll taxes associated with stock option exercises
during the first six months of 2001.

  Interest income increased $2.3 million in the first six months of 2001
compared to the first six months of 2000 primarily due to investment income
associated with proceeds from the Company's public offering of Common Stock
completed on August 16, 2000.

  An income tax provision of $28.1 million was recorded in the first six months
of 2001. No income tax provision was recorded in the first six months of 2000
due to the availability of net operating loss carryforwards not previously
benefited that offset estimated taxable income in 2000.

  The Company recognized net income of $49.9 million, or $1.85 per basic share
and $1.76 per diluted share, in the first six months of 2001 compared to net
income of $8.3 million, or $0.41 per basic share and $0.39 per diluted share, in
the first six months of 2000.

LIQUIDITY AND CAPITAL RESOURCES

  The Company has experienced and expects to continue to experience substantial
capital requirements, primarily due to its active exploration and development
programs in the Gulf of Mexico. Capital expenditures in 1999, 2000 and the first
six months of 2001 were $85.1 million, $163.7 million and $136.7 million,
respectively. Spinnaker has capital expenditure plans for 2001 totaling
approximately $260 million. While the Company believes that working capital,
cash flows from operations and available borrowings under its $75.0 million
Credit Facility will be sufficient to meet its capital requirements through the
end of 2001, additional financing may be required in the future to fund its
growth and exploration and development programs. In the event additional capital
resources are unavailable, the Company may curtail its drilling, development and
other activities or be forced to sell some of its assets on an untimely or
unfavorable basis.

  Cash and cash equivalents increased $25.7 million to $89.6 million at June 30,
2001 from $63.9 million at December 31, 2000. The Company also has $11.8 million
of highly liquid investments in commercial paper that have maturity dates
greater than three months. The increase in cash and cash equivalents resulted
from $145.9 million provided by operating activities and $5.9 million provided
by financing activities, offset in part by $126.1 million used in investing
activities.

  The Company has a $75.0 million Credit Facility with two banks that expires in
July 2002. Spinnaker and the banks have agreed to a nominal $30.0 million
borrowing base in order to minimize fees associated with the commitment. The
Company believes this borrowing base is adequate given the Company's cash and
cash equivalents, short-term investments and cash flow from operations.
Management believes that the borrowing base can be increased substantially based
on current natural gas and oil reserves and current commodity prices.

OPERATING ACTIVITIES

  Net cash of $145.9 million was provided by operating activities in the first
six months of 2001, primarily as a result of increases in natural gas production
and prices. Cash flow from operations will depend on the Company's ability to
increase production through its exploration and development programs and the
prices of natural gas and oil. The Company has made significant investments to
expand its operations in the Gulf of Mexico. These investments have resulted in
an increase in the Company's daily production. The Company expects higher
production during the remainder of 2001 as recent discoveries commence
production. However, the Company can provide no assurance that production
volumes and pricing in 2001 will achieve expectations.

  The Company sells its natural gas and oil production under price sensitive or
market price contracts. From time to time, the Company enters into hedging
arrangements to reduce exposure to fluctuations in natural gas and oil prices.

                                       12
<PAGE>

However, these contracts also limit the benefits the Company would realize if
prices increase. See "Item 3. Quantitative and Qualitative Disclosures About
Market Risk."

  The Company's cash flow from operations also depends on its ability to manage
working capital, including accounts receivable, accounts payable and accrued
liabilities. The decrease in accounts receivable of $8.9 million was primarily
due to a decrease in accrued natural gas and oil revenues of $13.9 million
largely as a result of a decrease in natural gas prices since December 2000,
partially offset by an increase in joint interest billings and other receivables
of $5.0 million due to higher activity levels associated with wells operated by
the Company. The increases in accounts payable and accrued liabilities were
primarily due to costs associated with increased drilling and development
activities during the first six months of 2001 compared to the end of 2000.

INVESTING ACTIVITIES

  Net cash of $126.1 million used in investing activities in the first six
months of 2001 included net oil and gas property capital expenditures of $136.2
million and purchases of other property and equipment of $0.5 million. The
Company also purchased short-term investments of $26.6 million and sold short-
term investments of $37.2 million.

  The Company drilled 19 exploratory wells in the first six months of 2001, 13
of which were successful. In 2000, the Company drilled 28 exploratory wells, 16
of which were successful. Since inception, the Company has drilled 78
exploratory wells, 50 of which were successful, representing a success rate of
approximately 64%.

  The 2001 budget includes development costs that are contingent on the success
of future exploratory drilling. The Company does not anticipate that budgeted
leasehold acquisition activities will include the acquisition of producing
properties. The Company does not anticipate any significant abandonment or
dismantlement costs in 2001. Spinnaker has capital expenditure plans for 2001
totaling approximately $260 million, primarily for costs related to exploration
and development programs. Actual levels of capital expenditures may vary
significantly due to many factors, including drilling results, natural gas and
oil prices, the availability of capital, industry conditions, decisions of
operators and other prospect owners and the prices of drilling rig day rates and
other oilfield goods and services.

FINANCING ACTIVITIES

  Net cash of $5.9 million was provided by financing activities in the first six
months of 2001. These proceeds related to stock option exercises.

  On July 18, 2001, the Company renewed its existing $75.0 million Credit
Facility on an unsecured basis for another 364-day term. The Company's borrowing
base is currently set at a nominal $30.0 million in order to minimize fees
associated with this commitment. The borrowing base is redetermined no more than
once during any six-month period. At June 30, 2001, the Company had no
outstanding borrowings under the Credit Facility. The Company has the option to
elect to use a base interest rate as described below or the LIBOR rate plus, for
each such rate, a spread based on the percent of the borrowing base used at that
time. The base interest rate under the Credit Facility is a fluctuating rate of
interest equal to the higher of either the Toronto-Dominion Bank's base rate for
dollar advances made in the United States or the Federal Funds Rate plus 0.5
percent per annum. At June 30, 2001, the Company had no outstanding borrowings
under the Credit Facility.

  The Credit Facility contains various covenants and restrictive provisions. It
also requires the Company to maintain certain financial covenants, including the
ratio of consolidated current assets to consolidated current liabilities, other
than debt and hedging-related liabilities, as of the end of each fiscal quarter
so that it is not less than 1.00 to 1.00 and the ratio of EBITDAX, as defined,
to consolidated interest expense so that it is not less than 3.0 to 1.0 for any
period of four consecutive fiscal quarters.

                                       13
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 Interest Rate Risk

  The Company is exposed to changes in interest rates. Changes in interest rates
affect the interest earned on the Company's cash, cash equivalents and short-
term investments and the interest rate paid on borrowings under the Credit
Facility. Under its current policies, the Company does not use interest rate
derivative instruments to manage exposure to interest rate changes.

 Commodity Price Risk

  The Company's revenues, profitability and future growth depend substantially
on prevailing prices for natural gas and oil. Prices also affect the amount of
cash flow available for capital expenditures and the Company's ability to borrow
and raise additional capital. Lower prices may also reduce the amount of natural
gas and oil that the Company can economically produce. The Company sells its
natural gas and oil production under price sensitive or market price contracts.
From time to time, Spinnaker enters into hedging arrangements to reduce exposure
to fluctuations in natural gas and oil prices and to achieve more predictable
cash flow.  However, these contracts also limit the benefits the Company would
realize if prices increase. These financial arrangements are placed with major
financial institutions the Company believes represent minimum credit risks.
Under its current hedging practice, the Company does not hedge more than 50
percent of its production quantities without the prior approval of the risk
management committee.

  Historically, Spinnaker has utilized collar arrangements to reduce its
exposure to fluctuations in natural gas and oil prices. As of June 30, 2001, the
Company's natural gas collar arrangements for July through November 2001
included daily volumes of 50,000 MMBtus at an average NYMEX floor price of $3.00
per MMBtu and ceiling price of $4.72 per MMBtu. Collar arrangements settle based
on the reported settlement price on the NYMEX for the last trading day each
month for natural gas. In a collar transaction, the counterparty is required to
make a payment to the Company if the settlement price for any settlement period
is below the floor price for the transaction, and the Company is required to
make a payment to the counterparty if the settlement price for any settlement
period is above the ceiling price for the transaction. The Company recognizes
gains and losses in revenues when the related production occurs. Subsequent to
June 30, 2001, the Company's collar arrangements for July and August settled
within the NYMEX floor and ceiling prices.

  In August 2001, the Company terminated all of its open natural gas collar
arrangements and simultaneously executed natural gas swap contracts. Spinnaker
used its net proceeds from these transactions to increase the weighted average
swap prices as described below. The early termination and settlement of the
aforementioned collar arrangements do not impact earnings.

  Swap contracts reduce the Company's exposure to fluctuations in natural gas
prices and achieve a more predictable cash flow for the volumes hedged. The
Company's natural gas swap contracts on average daily volumes are as
follows:

   .  50,000 MMBtus at a weighted average price of $3.31 per MMBtu in the third
      quarter of 2001 (September only);

   .  39,891 MMBtus at a weighted average price of $3.35 per MMBtu in the fourth
      quarter of 2001; and

   .  20,000 MMBtus at an average price of $3.58 per MMBtu in 2002.

The Company's swap contracts will settle based on the reported settlement price
on the NYMEX for the last trading day of each month for natural gas. In a swap
transaction, the counterparty is required to make a payment to the Company for
the difference between the fixed price and the settlement price if the
settlement price is below the fixed price. The Company is required to make a
payment to the counterparty for the difference between the fixed price and the
settlement price if the settlement price is above the fixed price.

  In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 established accounting and
reporting standards requiring that all derivative instruments be recorded in the
balance sheet as either an asset or liability measured at its fair value. SFAS
No. 133 requires that changes in a derivative's fair value be realized currently
in earnings unless specific hedge accounting criteria are met. Accounting for
qualifying hedges allows derivative gains and losses to offset related results
on the hedged item in the income statement and requires a company to formally
document, designate and assess the effectiveness of transactions that qualify
for hedge accounting. The Company adopted SFAS No. 133 on January 1, 2001.

  Based upon the Company's assessment of its derivative contracts at January 1,
2001, it recorded (i) a net current liability of $41.7 million, representing the
fair market value of all derivatives on that date and (ii) a reduction of equity
through accumulated other comprehensive income of $27.1 million, representing
the intrinsic and time value components of the derivatives as of January 1,
2001, net of income taxes of $14.6 million.

  Based upon the Company's assessment of its derivative contracts at June 30,
2001, it reported (i) a net current asset of $0.9 million and (ii) accumulated
other comprehensive income of $0.6 million, net of income taxes of $0.3 million.
The time value component of the derivatives recognized in earnings was a loss of
$0.4 million in the second quarter of 2001 and zero in the first six months of
2001. In connection with monthly settlements, the Company recognized net hedging
losses of $2.1 million and $18.7 million in the second quarter and first six
months of 2001, respectively.

                                       14
<PAGE>

                          PART II - OTHER INFORMATION

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

  The Company held its 2001 Annual Meeting of Stockholders on Tuesday, May 8,
2001. The meeting was held to elect seven directors to serve until the 2002
Annual Meeting of Stockholders, to approve the Spinnaker Exploration Company
2001 Stock Incentive Plan and to ratify the selection of Arthur Andersen LLP as
independent public accountants of the Company for the fiscal year ending
December 31, 2001.

  The results of the voting related to the election of the nominees for director
were as follows:

<TABLE>
<CAPTION>
                                                 Against or
           Name                    For            Withheld
---------------------------   --------------   --------------
<S>                           <C>              <C>
Roger L. Jarvis............     22,876,581        2,799,058
Sheldon R. Erikson.........     25,426,123          249,516
Jeffrey A. Harris..........     24,052,032        1,623,607
Michael E. McMahon.........     25,426,633          249,006
Michael G. Morris..........     25,427,433          248,206
Howard H. Newman...........     24,546,432        1,129,207
Michael E. Wiley...........     25,427,433          248,206
</TABLE>

  Stockholders voted 18,279,883 shares "for" and 5,840,761 votes "against" the
proposal to approve the Spinnaker Exploration Company 2001 Stock Incentive Plan,
with 3,260 shares abstaining and 1,551,735 broker non-votes. Stockholders voted
25,469,346 shares "for" and 205,498 shares "against" the proposal to ratify
the selection of Arthur Andersen LLP as independent public accountants of the
Company for the fiscal year ending December 31, 2001, with 795 votes abstaining.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

          10.4.2 Second Amendment to Second Amended and Restated Credit
          Agreement dated July 18, 2001

     (b)  Reports on Form 8-K

          None.

                                       15
<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.

                                       SPINNAKER EXPLORATION COMPANY

<TABLE>
<CAPTION>
<S>                                               <C>
Date:         August 13, 2001                     By:             /s/  ROBERT M. SNELL
       ----------------------------                      -------------------------------------
                                                                     Robert M. Snell
                                                             Vice President, Chief Financial
                                                                  Officer and Secretary

Date:          August 13, 2001                     By:            /s/  JEFFREY C. ZARUBA
       ----------------------------                      -------------------------------------
                                                                    Jeffrey C. Zaruba
                                                              Vice President, Treasurer and
                                                                   Assistant Secretary
</TABLE>

                                       16
<PAGE>

                                 EXHIBIT INDEX



     EXHIBIT
     NUMBER                   DESCRIPTION
     ------                   -----------


   10.4.2  -   Second Amendment to Second Amended and Restated Credit Agreement
               dated as of July 18, 2001

                                       17