<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 SEPTEMBER 30, 2000 OR

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

                        Commission file number 000-27473


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

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


       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
    -----     ------

As of November 2, 2000, there were 26,275,106 shares of the registrant's common
stock, par value $0.01 per share, outstanding.


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

<PAGE>

                         SPINNAKER EXPLORATION COMPANY
                                   FORM 10-Q
             FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000



                                                        Page
                                                        ----

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

  Consolidated Balance Sheets
   December 31, 1999 and September 30, 2000............    3

  Consolidated Statements of Operations
   Three and Nine Months Ended September 30,
    1999 and 2000......................................    4

  Consolidated Statements of Cash Flows
   Nine Months Ended September 30, 1999 and 2000.......    5

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

 ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF
           OPERATIONS..................................    9

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


PART II - OTHER INFORMATION

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

SIGNATURES.............................................   16

EXHIBIT INDEX..........................................   17


                                       2
<PAGE>

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


<TABLE>
<CAPTION>
                                                                                  DECEMBER 31,        SEPTEMBER 30,
                                                                                      1999                 2000
                                                                                  ------------        -------------
                                                                                                       (UNAUDITED)
<S>                                                                               <C>                 <C>
                                     ASSETS
CURRENT ASSETS:
 Cash and cash equivalents....................................................      $ 20,452            $102,268
 Accounts receivable..........................................................        10,795              31,244
 Other........................................................................           879               4,711
                                                                                    --------            --------
     Total current assets.....................................................        32,126             138,223

PROPERTY AND EQUIPMENT:
 Oil and gas, on the basis of full-cost accounting:
  Proved properties...........................................................       141,455             245,371
  Unproved properties and properties under development, not being amortized...        40,696              60,853
 Other........................................................................         3,714               5,366
                                                                                    --------            --------
                                                                                     185,865             311,590
 Less - Accumulated depreciation, depletion and amortization..................       (28,468)            (59,180)
                                                                                    --------            --------
     Total property and equipment.............................................       157,397             252,410

OTHER ASSETS..................................................................            30                  30
                                                                                    --------            --------
     Total assets.............................................................      $189,553            $390,663
                                                                                    ========            ========

                              LIABILITIES AND EQUITY
CURRENT LIABILITIES:
 Accounts payable.............................................................      $  4,509            $ 23,207
 Accrued liabilities..........................................................         7,942              27,308
                                                                                    --------            --------
     Total current liabilities................................................        12,451              50,515

DEFERRED INCOME TAXES.........................................................             -               3,847

COMMITMENTS AND CONTINGENCIES

EQUITY:
 Preferred stock, $0.01 par value; 10,000,000 shares authorized; no shares
  issued and outstanding at December 31, 1999 and September 30, 2000..........             -                   -
 Common stock, $0.01 par value; 50,000,000 shares authorized; 20,426,192
  shares issued and 20,404,336 shares outstanding at December 31, 1999
  and 26,290,682 shares issued and 26,272,906 shares outstanding at
  September 30, 2000..........................................................           204                 263
 Additional paid-in capital...................................................       203,987             346,562
 Accumulated deficit..........................................................       (27,034)            (10,480)
 Less: Treasury stock, at cost, 21,856 and 17,776 shares at December 31, 1999
  and September 30, 2000, respectively........................................           (55)                (44)
                                                                                    --------            --------
     Total equity.............................................................       177,102             336,301
                                                                                    --------            --------
     Total liabilities and equity.............................................      $189,553            $390,663
                                                                                    ========            ========
</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 NINE MONTHS
                                                              ENDED SEPTEMBER 30,         ENDED SEPTEMBER 30,
                                                           ----------------------       -----------------------
                                                             1999           2000          1999           2000
                                                           --------       -------       --------       --------
<S>                                                        <C>            <C>           <C>            <C>
REVENUES................................................... $10,300       $29,755       $ 19,883        $62,767
EXPENSES:
 Lease operating expenses..................................   2,332         2,478          3,515          6,353
 Depreciation, depletion and amortization -
  natural gas and oil properties...........................   5,439        11,989         13,058         29,633
 Depreciation and amortization - other.....................      54            79            152            223
 General and administrative................................   1,154         1,853          3,398          4,953
 Stock appreciation rights expense.........................       -             -          1,651              -
                                                           --------       -------       --------       --------
   Total expenses..........................................   8,979        16,399         21,774         41,162
                                                           --------       -------       --------       --------
INCOME (LOSS) FROM OPERATIONS..............................   1,321        13,356         (1,891)        21,605
OTHER INCOME (EXPENSE):
 Interest income...........................................      49         1,016            134          1,329
 Interest expense..........................................  (1,453)         (377)        (3,460)          (631)
 Capitalized interest......................................     332             -            966             17
                                                           --------       -------       --------       --------
   Total other income (expense)............................  (1,072)          639         (2,360)           715
                                                           --------       -------       --------       --------
INCOME (LOSS) BEFORE INCOME TAXES..........................     249        13,995         (4,251)        22,320
 Income tax provision......................................       -         5,766              -          5,766
                                                           --------       -------       --------       --------
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF CHANGE IN
 ACCOUNTING PRINCIPLE......................................     249         8,229         (4,251)        16,554
 Cumulative effect of change in accounting principle.......       -             -           (395)             -
                                                           --------       -------       --------       --------
NET INCOME (LOSS)..........................................     249         8,229         (4,646)        16,554
ACCRUAL OF DIVIDENDS ON PREFERRED STOCK....................  (2,702)            -         (7,790)             -
                                                           --------       -------       --------       --------
NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS......... $(2,453)      $ 8,229       $(12,436)       $16,554
                                                           ========       =======       ========       ========

BASIC INCOME (LOSS) PER COMMON SHARE:
 Income (loss) before cumulative effect of change in
  accounting principle..................................... $ (0.48)      $  0.35       $  (2.70)       $  0.77
 Cumulative effect of change in accounting principle.......       -             -          (0.09)             -
                                                           --------       -------       --------       --------
NET INCOME (LOSS) PER COMMON SHARE......................... $ (0.48)      $  0.35       $  (2.79)       $  0.77
                                                           ========       =======       ========       ========

DILUTED INCOME (LOSS) PER COMMON SHARE:
 Income (loss) before cumulative effect of change in
  accounting principle..................................... $ (0.48)      $  0.33       $  (2.70)       $  0.73
 Cumulative effect of change in accounting principle.......       -             -          (0.09)             -
                                                           --------       -------       --------       --------
NET INCOME (LOSS) PER COMMON SHARE......................... $ (0.48)      $  0.33       $  (2.79)       $  0.73
                                                           ========       =======       ========       ========

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
 Basic.....................................................   5,145        23,414          4,461         21,458
                                                           ========       =======       ========       ========
 Diluted...................................................   5,145        24,917          4,461         22,715
                                                           ========       =======       ========       ========
</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 NINE MONTHS
                                                                     ENDED SEPTEMBER 30,
                                                                  ------------------------
                                                                    1999            2000
                                                                  --------       ---------
<S>                                                               <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income (loss)............................................... $ (4,646)      $  16,554
 Adjustments to reconcile net income (loss) to net cash provided
 by (used in) operating activities:
  Depreciation, depletion and amortization.......................   13,210          29,856
  Deferred income tax provision..................................        -           5,766
  Stock appreciation rights expense..............................    1,651               -
  Cumulative effect of change in accounting principle............      395               -
 Change in components of working capital:
  Accounts receivable............................................   (3,383)        (16,315)
  Accounts payable and accrued liabilities.......................    9,145          18,669
  Other current assets and other.................................     (923)         (3,702)
                                                                  --------       ---------
     Net cash provided by operating activities...................   15,449          50,828

CASH FLOWS FROM INVESTING ACTIVITIES:
 Oil and gas properties..........................................  (56,297)       (128,733)
 Change in property related payables.............................  (10,129)         19,375
 Proceeds from sale of pipeline..................................        -           1,382
 Purchases of other property and equipment.......................     (801)         (1,652)
                                                                  --------       ---------
     Net cash used in investing activities.......................  (67,227)       (109,628)

CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from borrowings........................................   53,000          17,000
 Payments on borrowings..........................................        -         (17,000)
 Proceeds from issuance of common stock..........................        -         138,936
 Common stock issuance costs.....................................        -            (517)
 Proceeds from exercise of stock options.........................                    2,197
                                                                  --------       ---------
     Net cash provided by financing activities...................   53,000         140,616
                                                                  --------       ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS........................    1,222          81,816
CASH AND CASH EQUIVALENTS, beginning of year.....................    2,141          20,452
                                                                  --------       ---------
CASH AND CASH EQUIVALENTS, end of period......................... $  3,363       $ 102,268
                                                                  ========       =========
SUPPLEMENTAL CASH FLOW DISCLOSURES:
 Cash paid for interest, net of amounts capitalized..............   $2,072            $339
 Cash paid for income taxes......................................        -               -

SUPPLEMENTAL NON-CASH INVESTING ACTIVITIES:
 Issuance of common stock for amended seismic data rights........   $2,900            $  -
</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)
                               SEPTEMBER 30, 2000


1.  BASIS OF PRESENTATION

  The accompanying unaudited consolidated financial statements of Spinnaker
Exploration Company (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 generally
accepted accounting principles 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, 1999.

2. CREDIT FACILITY

  On July 20, 2000, the Company entered into a credit agreement whereby TD
Securities (USA) Inc. ("TDSI") and Credit Suisse First Boston ("CSFB") agreed to
provide the Company with a $75.0 million credit facility ("Credit Facility")
with an initial borrowing base of $40.0 million and an original term of 364
days. The current borrowing base is $30.0 million. The Credit Facility replaced
the $25.0 million Amended and Restated 364-Day Credit Agreement ("Amended and
Restated Credit Agreement") scheduled to mature in October 2000. At
September 30, 2000, the Company had no outstanding borrowings under the Credit
Facility.

3. EARNINGS PER SHARE

  Basic and diluted net income (loss) per share is computed based on the
following information (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                                THREE MONTHS ENDED         NINE MONTHS ENDED
                                                                   SEPTEMBER 30,             SEPTEMBER 30,
                                                                ------------------      ---------------------
<S>                                                             <C>        <C>          <C>          <C>
                                                                   1999      2000          1999        2000
                                                                --------   -------       --------    --------

Numerator:
 Net income (loss) available to common stockholders.........     $(2,453)  $ 8,229       $(12,436)    $16,554
                                                                 =======   =======       ========     =======

Denominator:
 Basic weighted average number of shares....................       5,145    23,414          4,461      21,458
                                                                 =======   =======       ========     =======
 Dilutive securities:
  Stock options.............................................           -     1,503              -       1,257
                                                                 -------   -------       --------     -------
 Diluted adjusted weighted average number of shares and
  assumed conversions.......................................       5,145    24,917          4,461      22,715
                                                                 =======   =======       ========     =======
</TABLE>

                                       6
<PAGE>

<TABLE>
<CAPTION>
                                                                        THREE MONTHS ENDED        NINE MONTHS ENDED
                                                                           SEPTEMBER 30,            SEPTEMBER 30,
                                                                      ---------------------     ---------------------
                                                                         1999        2000         1999        2000
                                                                      ---------    --------     --------    ---------
<S>                                                                   <C>           <C>         <C>         <C>
Net income (loss) per common share:
 Basic:
  Income (loss) before cumulative effect of change in
   accounting principle.........................................       $(0.48)       $0.35       $(2.70)       $0.77
  Cumulative effect of change in accounting principle...........            -            -        (0.09)           -
                                                                       ------        -----       ------        -----
 Net income (loss) per common share.............................       $(0.48)       $0.35       $(2.79)       $0.77
                                                                       ======        =====       ======        =====

 Diluted:
  Income (loss) before cumulative effect of change in
   accounting principle.........................................       $(0.48)       $0.33       $(2.70)       $0.73
  Cumulative effect of change in accounting principle...........            -            -        (0.09)           -
                                                                       ------        -----       ------        -----
 Net income (loss) per common share.............................       $(0.48)       $0.33       $(2.79)       $0.73
                                                                       ======        =====       ======        =====
</TABLE>


4.  COMMON STOCK OFFERINGS

  On August 16, 2000, the Company completed its public offering of 5,600,000
shares of common stock ("Common Stock") at $26.25 per share. After payment of
underwriting discounts and commissions, the Company received net proceeds of
$138.9 million. With a portion of the proceeds, the Company retired all then
outstanding debt of $17.0 million.

  On September 28, 1999, the Company priced its initial public offering of
8,000,000 shares of Common Stock at $14.50 per share. After payment of
underwriting discounts and commissions, the Company received net proceeds of
$108.7 million on October 4, 1999. With a portion of the proceeds, the Company
retired all then outstanding debt of $72.0 million. The Company used the
remaining net proceeds after offering costs to fund exploration and development
activities. In connection with the initial public offering, the Company
converted all outstanding Series A Convertible Preferred Stock, par value $0.01
per share ("Preferred Stock"), into shares of Common Stock, and certain
stockholders reinvested preferred dividends payable of $16.3 million into shares
of Common Stock.

  The initial public offering closed on October 4, 1999 and is not reflected in
the accompanying consolidated financial statements for the nine months ended
September 30, 1999. The following pro forma financial information for the nine
months ended September 30, 1999 assumes the completion of the initial public
offering, the conversion of each share of Preferred Stock into two shares of
Common Stock, the reinvestment of Preferred Stock dividends into shares of
Common Stock and the retirement of all outstanding debt as if each event
occurred on January 1, 1999 (in thousands, except per share data).

<TABLE>
<CAPTION>
                                                                                  NINE MONTHS
                                                                                     ENDED
                                                                              SEPTEMBER 30, 1999
                                                                              ------------------
<S>                                                                           <C>
Pro forma net loss......................................................            $(2,681)
                                                                                    =======
Pro forma basic and diluted loss per common share:
 Loss before cumulative effect of change in accounting principle........            $ (0.12)
 Cumulative effect of change in accounting principle....................              (0.02)
                                                                                    -------
  Pro forma net loss per common share...................................            $ (0.14)
                                                                                    =======
Pro forma weighted average number of common shares outstanding -
 basic and diluted......................................................             19,110
                                                                                    =======
</TABLE>

                                       7
<PAGE>

5.  CHANGE IN ACCOUNTING PRINCIPLE

  On April 3, 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-5 ("SOP 98-5"), "Reporting on the Costs of
Start-Up Activities," which requires that costs for start-up activities and
organization costs be expensed as incurred and not capitalized as had previously
been allowed. SOP 98-5 was effective for financial statements for fiscal years
beginning after 1998. The Company adopted this policy in the first quarter of
1999 and recorded a charge related to this accounting change of $395,000 in
conjunction with the write-off of previously capitalized organization costs
incurred by the Company in its initial formation.

6.  NEW ACCOUNTING PRINCIPLE

  In June 1998, the Financial Accounting Standards Board 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 recognized
currently in earnings unless specific hedge accounting criteria are met.
Accounting for qualifying hedges allows a derivative's gain 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. SFAS No. 133 was originally
effective for fiscal years beginning after June 15, 1999; however, SFAS No. 137,
"Accounting for Derivative Instruments and Hedging Activities-Deferral of the
Effective Date of FASB Statement No. 133-An Amendment of FASB Statement No. 133"
extended implementation to fiscal years beginning after June 15, 2000. Early
adoption is permitted. The Company plans to adopt SFAS No. 133 on January 1,
2001.

  The Company currently utilizes collar arrangements to reduce its exposure to
fluctuations in natural gas and oil prices and to achieve a more predictable
cash flow. Based upon the Company's assessment of its derivative contracts, if
the Company had adopted SFAS No. 133 on October 1, 2000, it would have recorded
(i) a current liability of approximately $21.6 million, representing the fair
market value of all derivatives on that date, (ii) a reduction of equity through
other comprehensive income of approximately $17.1 million, representing the
intrinsic value of the cash flow hedges using NYMEX natural gas and oil prices
as of September 29, 2000, and (iii) the cumulative effect of a change in
accounting principle of $4.5 million, representing the time value component of
the derivatives as of September 29, 2000. As the derivatives settle each month,
the current liability is adjusted to reflect the current fair market value, the
monthly settlement is recorded to revenues with the related adjustment to other
comprehensive income, and the change in the time value component of the hedge is
recorded as non-operating income (loss).

                                       8
<PAGE>

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

                   Forward-Looking Statements and Assumptions

  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, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. The forward-looking statements speak only as of the date made. 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;
     .  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, but not limited to, the risks described in the
Company's Annual Report on Form 10-K for the year ended December 31, 1999. These
factors, risks and uncertainties include, among others:

     .  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.

                                       9
<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.

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                      NINE MONTHS ENDED
                                                             SEPTEMBER 30,                            SEPTEMBER 30,
                                                 ----------------------------------        -----------------------------------
<S>                                              <C>                 <C>                   <C>                 <C>
                                                      1999                2000                  1999                2000
                                                 --------------      --------------        ---------------     ---------------

Production:
 Natural gas (MMcf)...........................            3,190               7,729                  7,447              18,008
 Oil and condensate (MBbls)...................               75                  50                    124                 149
  Total (MMcfe)...............................            3,637               8,029                  8,189              18,901

Revenues (in thousands):
 Natural gas..................................          $ 8,767             $35,043                $17,629             $67,702
 Oil and condensate...........................            1,533               1,475                  2,254               4,231
 Hedging losses...............................                -              (6,763)                     -              (9,166)
                                                 --------------      --------------        ---------------     ---------------
  Total.......................................          $10,300             $29,755                $19,883             $62,767

Average sales price per unit:
 Natural gas revenues from production
  (per Mcf)...................................          $  2.75             $  4.53                $  2.37             $  3.76
 Effects of hedging activities
  (per Mcf)...................................                -               (0.80)                     -               (0.44)
                                                 --------------      --------------        ---------------     ---------------
  Average price (per Mcf).....................          $  2.75             $  3.73                $  2.37             $  3.32

 Oil and condensate revenues from
  production (per Bbl)........................          $ 20.57             $ 29.61                $ 18.24             $ 28.44
 Effects of hedging activities (per Bbl)......                -              (11.65)                     -               (8.74)
                                                 --------------      --------------        ---------------     ---------------
  Average price (per Bbl).....................          $ 20.57             $ 17.96                $ 18.24             $ 19.70

 Total revenues from production (per Mcfe)....          $  2.83             $  4.55                $  2.43             $  3.81
 Effects of hedging activities (per Mcfe).....                -               (0.84)                     -               (0.49)
                                                 --------------      --------------        ---------------     ---------------
  Total average price (per Mcfe)..............          $  2.83             $  3.71                $  2.43             $  3.32


Expenses (per Mcfe):
 Lease operating expenses.....................          $  0.64             $  0.31                $  0.43             $  0.34
 Depreciation, depletion and amortization
  - natural gas and oil properties............             1.50                1.49                   1.59                1.57


Income (loss) from operations (in thousands)..          $ 1,321             $13,356                $(1,891)            $21,605
</TABLE>


Three Months Ended September 30, 2000 Compared to the Three Months Ended
September 30, 1999

  Production increased approximately 4.4 billion cubic feet equivalent ("Bcfe")
in the third quarter of 2000 compared to the third quarter of 1999. The daily
production rate at the end of September 2000 was approximately 125,000 million
cubic feet equivalent ("Mcfe") as compared to rates of approximately 74,000 Mcfe
at the end of June 2000, approximately 53,000 Mcfe at the end of December 1999
and approximately 55,000 Mcfe at the end of September 1999.

                                       10
<PAGE>

  Natural gas and oil revenues, including the effects of hedging activities,
increased $19.4 million and income from operations increased $12.0 million
during the third quarter of 2000 compared to the third quarter of 1999.
Excluding the effects of hedging activities, natural gas revenues increased
$26.3 million and oil and condensate revenues decreased $0.1 million in the
third quarter of 2000 compared to the third quarter of 1999. The Company entered
into hedging arrangements beginning in the fourth quarter of 1999. Net natural
gas and oil hedging losses were $6.8 million in the third quarter of 2000.
Natural gas production volumes increased 4.5 Bcf, primarily due to wells on six
new blocks which commenced production after the third quarter of 1999,
contributing $23.4 million of the increase in natural gas revenues. Average
natural gas prices increased, contributing $2.9 million of the increase in
natural gas revenues. Oil and condensate production volumes decreased 0.1 Bcfe,
primarily due to one well which began producing water after the third quarter of
1999, contributing $0.2 million of the decrease in oil and condensate revenues.
Average oil and condensate prices increased, offsetting $0.1 million of the
decrease resulting from lower production volumes.

  Lease operating expenses increased $0.1 million in the third quarter of 2000
compared to the third quarter of 1999. Of the total increase in lease operating
expenses, $1.3 million was attributable to wells on six new blocks which
commenced production after the third quarter of 1999, offset in part by $1.2
million primarily related to major workover activities during the third quarter
of 1999. The decrease in the lease operating expense rate per Mcfe was primarily
due to less workover activity in the third quarter of 2000 compared to the third
quarter of 1999.

  General and administrative expenses increased $0.7 million in the third
quarter of 2000 compared to the third quarter of 1999. The increase in general
and administrative expenses was primarily due to employment-related costs of
$0.3 million associated with personnel additions after the third quarter of 1999
and $0.2 million related to the Company's listing with the New York Stock
Exchange in July 2000.

  Depreciation, depletion and amortization increased $6.6 million in the third
quarter of 2000 compared to the third quarter of 1999. The increase in
depreciation, depletion and amortization was primarily attributable to a
substantial increase in production volumes in the third quarter of 2000.

  Interest income in the third quarter of 2000 increased $1.0 million primarily
due to investment income associated with investing proceeds from the Company's
public offering of Common Stock completed on August 16, 2000. Interest expense,
net of capitalized interest, decreased $0.7 million in the third quarter of 2000
compared to the third quarter of 1999. The Company had substantially less
outstanding borrowings during the third quarter of 2000 compared to outstanding
borrowings of $72.0 million at September 30, 1999. The Company used $17.0
million of the proceeds from the August 2000 Common Stock offering to repay all
outstanding indebtedness. At September 30, 2000, the Company had no outstanding
borrowings.

  An income tax provision of $5.8 million was recorded during the third quarter
of 2000 based on the Company's evaluation of its tax position and the need to
begin recording deferred taxes. No income tax provision was recorded during 1999
given the expectation of operating losses for the year.

  The Company recognized net income of $8.2 million, or $0.35 per basic share
and $0.33 per diluted share in the third quarter of 2000 compared to net income
of $0.2 million in the third quarter of 1999. After dividends of $2.7 million on
Preferred Stock that is no longer outstanding, the Company recognized a net loss
available to common stockholders of $2.5 million, or a loss of $0.48 per basic
and diluted share, in the third quarter of 1999.

Nine Months Ended September 30, 2000 Compared to the Nine Months Ended September
30, 1999

  Production increased approximately 10.7 Bcfe in the first nine months of 2000
compared to the first nine months of 1999. Natural gas and oil revenues,
including the effects of hedging activities, increased $42.9 million and income
from operations increased $23.5 million in the first nine months of 2000
compared to the same period in 1999. Excluding the effects of hedging
activities, natural gas revenues increased $50.1 million and oil and condensate
revenues increased $2.0 million in the first nine months of 2000 compared to the
same period in 1999. Net natural gas and oil hedging losses were $9.2 million in
the first nine months of 2000. Natural gas production volumes increased 10.6
Bcf, primarily due to wells on six new blocks which commenced production after
the third quarter of 1999, contributing $43.1 million of the increase in natural
gas revenues. Average natural gas prices increased, contributing $7.0 million of
the increase in natural gas revenues. Oil and condensate production volumes
increased 0.1 Bcfe, primarily due to wells on five new blocks which commenced
production after the third quarter of 1999, contributing $1.2 million of the
increase in oil and condensate revenues. Average oil and condensate prices
increased, contributing $0.8 million of the increase in oil and condensate
revenues.

                                       11
<PAGE>

  Lease operating expenses increased $2.8 million in the first nine months of
2000 compared to the same period in 1999. Of the total increase in lease
operating expenses, $2.1 million was attributable to wells on new blocks which
commenced production after the third quarter of 1999. The Company had workover
activities of $0.9 million on four wells in the first nine months of 2000. The
decrease in the lease operating expense rate per Mcfe was primarily due to the
substantial increase in production and less workover activity in the first nine
months of 2000 compared to the same period in 1999.

  General and administrative expenses increased $1.6 million in the first nine
months of 2000 compared to the same period in 1999. The increase in general and
administrative expenses was primarily due to employment-related costs associated
with personnel additions after the third quarter of 1999.

  Depreciation, depletion and amortization increased $16.6 million in the first
nine months of 2000 compared to the same period in 1999. Of the total increase
in depreciation, depletion and amortization, $17.1 million was attributable to a
substantial increase in production volumes, partially offset by a reduction of
$0.5 million resulting from a decrease in the depletion rate from the first nine
months in 1999.

  Interest income in the first nine months of 2000 increased $1.2 million
primarily due to investment income associated with investing proceeds from the
Company's public offering of Common Stock completed on August 16, 2000. Interest
expense, net of capitalized interest, decreased $1.9 million in the first nine
months of 2000 compared to the same period in 1999. The Company had
substantially less outstanding borrowings during the first nine months of 2000
compared to outstanding borrowings of $72.0 million at September 30, 1999. The
Company used $17.0 million of the proceeds from the August 2000 Common Stock
offering to repay all outstanding indebtedness. At September 30, 2000, the
Company had no outstanding borrowings.

  An income tax provision of $5.8 million was recorded during the first nine
months of 2000 based on the Company's evaluation of its tax position and the
need to begin recording deferred taxes. No income tax provision was recorded
during 1999 given the expectation of operating losses for the year.

  The Company recognized net income of $16.6 million, or $0.77 per basic share
and $0.73 per diluted share, in the first nine months of 2000 compared to a net
loss of $4.6 million in the same period in 1999. After dividends of $7.8 million
on Preferred Stock that is no longer outstanding, the Company recognized a net
loss available to common stockholders of $12.4 million, or a loss of $2.79 per
basic and diluted share, in the first nine months of 1999.

LIQUIDITY AND CAPITAL RESOURCES

  The Company has experienced and expects to continue to experience substantial
working capital requirements, primarily due to its active exploration and
development programs. While the Company believes that working capital, cash
flows from operations and borrowings under its 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 $81.8 million to $102.3 million at
September 30, 2000 from $20.5 million at December 31, 1999. The increase
resulted from $140.6 million provided by financing activities and $50.8 million
provided by operating activities, offset in part by $109.6 million used in
investing activities.

 Operating Activities

  The Company intends to use cash and cash flows from operations to fund a
portion of its future lease acquisition, exploration and development activities.
Net cash of $50.8 million was provided by operating activities in the first nine
months of 2000, primarily as a result of a substantial increase 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 to approximately 125,000 Mcfe at the end of
September 2000 from approximately 53,000 Mcfe at the end of December 1999. The
Company expects higher production and cash flow during the remainder of 2000 as
recent

                                       12
<PAGE>

discoveries commence production. However, the Company can provide no assurance
that production volumes and pricing in the remainder of 2000 will achieve
expectations.

  The Company currently sells most of its natural gas and oil production under
price sensitive or market price contracts. To reduce exposure to fluctuations in
natural gas and oil prices, the Company enters into hedging arrangements.
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 and payable as well as accrued
liabilities. The $20.4 million increase in accounts receivable was primarily due
to a $11.2 million increase in accrued natural gas and oil revenues resulting
primarily from an increase in production and prices in September 2000 compared
to December 1999 and a $5.9 million increase in joint interest billings
associated with additional 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 third quarter of
2000.

 Investing Activities

  Net cash of $109.6 million used in investing activities in the first nine
months of 2000 included net oil and gas property capital expenditures of $109.3
million and purchases of other property and equipment of $1.7 million. In
addition, the Company received net proceeds of $1.4 million from the sale of a
pipeline. The Company drilled 21 exploratory wells in the first nine months of
2000, nine of which were successful. In 1999, the Company drilled 12 exploratory
wells, eight of which were successful.

  The 2000 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 through 2000. The Company has capital expenditure plans for
the remainder of 2000 totaling approximately $42 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, industry conditions, decisions of operators
and other prospect owners and the prices of drilling rig dayrates and other
oilfield goods and services.

 Financing Activities

  Net cash of $140.6 million was provided by financing activities during the
first nine months of 2000. The Company received proceeds of $138.9 million from
the sale of Common Stock to the public, proceeds from borrowings of $17.0
million and proceeds of $2.2 million from stock option exercises, offset in part
by payments on borrowings of $17.0 million and public offering costs of $0.5
million.

  On August 16, 2000, the Company completed its public offering of 5,600,000
shares of Common Stock at $26.25 per share. After payment of underwriting
discounts and commissions, the Company received net proceeds of $138.9 million.
With a portion of the proceeds, the Company retired all then outstanding debt of
$17.0 million.

  The Company is a party to a credit agreement that provides it with a $75.0
million Credit Facility with an initial borrowing base of $40.0 million and an
original term of 364 days. The current borrowing base is $30.0 million. At
September 30, 2000, the Company had no outstanding borrowings under the Credit
Facility. The Credit Facility is secured by substantially all of the Company's
assets, including its interests in natural gas and oil properties. 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 will be 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.

  The Credit Facility contains covenants and restrictive provisions, including
the following limitations, subject to some exceptions, where the Company:

 .  may not incur any other indebtedness from borrowings other than indebtedness
   of up to $1.0 million;
 .  may not incur any liens upon properties or assets other than permitted liens
   securing indebtedness of up to $1.0 million and other liens in the ordinary
   course of business;

                                       13
<PAGE>

 .  may not enter into any amalgamation, demerger or merger;
 .  may not dispose of all or substantially all of its property, business or
   assets;
 .  may not dispose of any properties valued in the borrowing base except some
   interests in natural gas and oil properties included in the borrowing base in
   an aggregate amount not to exceed $500,000;
 .  may not make or pay any dividend, distribution or payment in respect of
   capital stock nor purchase, redeem, retire or permit any reduction or
   retirement of capital stock;
 .  must maintain the ratio of consolidated current assets as of the end of each
   fiscal quarter to consolidated current liabilities other than debt under the
   Credit Facility as of the end of such fiscal quarter so that it is not less
   than 1.00 to 1.00;
 .  must ensure that the ratio of EBITDAX, as defined, to consolidated interest
   expense is not less than 5.0 to 1.0 for any period of four consecutive fiscal
   quarters (to be annualized for periods ending subsequent to June 30, 2001),
   and
 .  may not enter into any hedging agreement unless the Company meets specified
   requirements including limits on the aggregate amounts maturing in any month
   under any floor hedging contracts and under any forward sales transactions,
   and at no time can any hedging agreement of any nature contain a term to put
   up money or other assets against the event of its nonperformance exceeding
   $5.0 million in the aggregate.

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 and cash equivalents and the
interest rate paid on borrowings under the credit agreement. 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. The amount the Company can borrow under the Credit
Facility is subject to periodic re-determination based in part on changing
expectations of future prices. Lower prices may also reduce the amount of
natural gas and oil that the Company can economically produce. The Company
currently sells most of its natural gas and oil production under price sensitive
or market price contracts. To reduce exposure to fluctuations in natural gas and
oil prices and to achieve more predictable cash flow, the Company entered into
hedging arrangements beginning in the fourth quarter of 1999. However, these
contracts also limit the benefits the Company would realize if prices increase.
These financial arrangements take the form of costless collars and 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. The daily production rates at the end of September 2000
were approximately 122,000 Mcf of natural gas and approximately 600 barrels of
oil and condensate. The Company has entered into the following collar
arrangements. One MMBtu approximates one Mcf of gas.

<TABLE>
<CAPTION>
                                           Gas Collars                                     Oil Collars
                           ------------------------------------------      -----------------------------------------
                             Average        Average         Average         Average         Average        Average
                              Daily          NYMEX           NYMEX           Daily           NYMEX          NYMEX
                              Volume         Floor          Ceiling         Volume           Floor         Ceiling
      Time Period            (MMBtu)      Price/MMBtu     Price/MMBtu        (Bbl)         Price/Bbl      Price/Bbl
------------------------   ---------      -----------     -----------      --------        ---------      ----------
<S>                        <C>            <C>             <C>              <C>             <C>            <C>
Third Quarter 2000           50,000          $2.63           $2.96            600            $18.61          $21.03
Fourth Quarter 2000 (1)      50,000           2.95            3.43            600             22.11           25.15
First Quarter 2001           50,000           2.95            3.43              -                 -               -
Second Quarter 2001          53,297           2.99            4.64              -                 -               -
Third Quarter 2001           50,000           3.00            4.72              -                 -               -
Fourth Quarter 2001 (2)      50,000           3.00            4.72              -                 -               -
------------------------
</TABLE>

                                       14
<PAGE>

(1) Collar arrangements through November 30, 2000 for oil.
(2) Collar arrangements through November 30, 2001 for natural gas.

  The Company settles collar arrangements based on the average of the reported
settlement prices on the NYMEX for the last three trading days for natural gas
and the average of the daily reported settlement prices on the NYMEX for the
entire trading month for oil. 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. These
transactions are designated as hedges and accounted for on the accrual basis
with realized gains and losses recognized in revenues when the related
production occurs. The Company recognized net hedging losses of $9.2 million
during the first nine months of 2000.

  The fair market value of all derivatives on September 30, 2000 was a liability
of approximately $21.6 million. The estimated intrinsic value of the open collar
arrangements as of September 30, 2000 is equal to an unrealized loss of
approximately $8.7 million for the fourth quarter of 2000 and an unrealized loss
of approximately $8.4 million in 2001 using NYMEX natural gas and oil prices as
of September 29, 2000.


                          PART II - OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

       10.4.1  -   First Amendment to Second Amended and Restated Credit
                   Agreement dated as of September 30, 2000

       27      -   Financial Data Schedule

(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

Date:      November 2, 2000           By:   /s/    JAMES M. ALEXANDER
        ---------------------         -----------------------------------------
                                                   James M. Alexander
                                            Vice President, Chief Financial
                                                 Officer and Secretary


Date:      November 2, 2000           By:   /s/    JEFFREY C. ZARUBA
        ---------------------         -----------------------------------------
                                                   Jeffrey C. Zaruba
                                                       Treasurer

                                       16
<PAGE>

                                 EXHIBIT INDEX



     EXHIBIT
     NUMBER                   Description
     ------                   -----------


   10.4.1  -   First Amendment to Second Amended and Restated Credit Agreement
               dated as of September 30, 2000

   27      -   Financial Data Schedule




                                       17