<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 March 31, 2002.

( )    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
 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

     The number of shares outstanding of the registrant's common stock, par
value $0.01 per share, on May 13, 2002 was 33,157,113.

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

                          SPINNAKER EXPLORATION COMPANY

                                    Form 10-Q

                    For the Three Months Ended March 31, 2002


<TABLE>
<CAPTION>


                                                                                               Page
                                                                                               ----
<S>                                                                                            <C>
PART I - FINANCIAL INFORMATION

   Item 1.    Financial Statements

     Consolidated Balance Sheets
       March 31, 2002 (unaudited) and December 31, 2001..........................................3

     Consolidated Statements of Operations
       Three Months Ended March 31, 2002 and 2001 (unaudited)....................................4

     Consolidated Statements of Cash Flows
       Three Months Ended March 31, 2002 and 2001 (unaudited)....................................5

     Notes to Interim Consolidated Financial Statements (unaudited)..............................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

</TABLE>

                                       2
<PAGE>

                          SPINNAKER EXPLORATION COMPANY

                           CONSOLIDATED BALANCE SHEETS
                 (In thousands, except share and per share data)


<TABLE>
<CAPTION>



                                                                                        March 31,      December 31,
                                                                                          2002             2001
                                                                                      ------------     ------------
                                       ASSETS                                          (Unaudited)
<S>                                                                                       <C>                <C>
CURRENT ASSETS:
   Cash and cash equivalents.....................................................     $    7,193       $   14,061
   Accounts  receivable,  net of allowance for doubtful  accounts of $3,059
     at March 31, 2002 and December 31, 2001, respectively.......................         26,863           24,129
   Hedging assets................................................................          2,078           20,593
   Other.........................................................................         12,957            3,664
                                                                                      ----------       ----------
       Total current assets......................................................         49,091           62,447

PROPERTY AND EQUIPMENT:
   Oil and gas, on the basis of full-cost accounting:
     Proved properties...........................................................        627,418          575,806
     Unproved properties and properties under development, not being amortized...        124,681          102,881
   Other.........................................................................          7,839            7,245
                                                                                      ----------       ----------
                                                                                         759,938          685,932
   Less - Accumulated depreciation, depletion and amortization...................       (181,132)        (163,359)
                                                                                      ----------       ----------
       Total property and equipment..............................................        578,806          522,573

OTHER ASSETS.....................................................................          1,569            2,296
                                                                                      ----------       ----------
       Total assets..............................................................     $  629,466       $  587,316
                                                                                      ==========       ==========

                               LIABILITIES AND EQUITY

CURRENT LIABILITIES:
   Accounts payable..............................................................     $   45,890       $   32,383
   Accrued liabilities and other.................................................         43,165           50,718
   Hedging liabilities...........................................................          5,408                -
                                                                                      ----------       ----------
       Total current liabilities.................................................         94,463           83,101

LONG-TERM DEBT...................................................................         37,000                -
OTHER LIABILITIES................................................................          2,815                -
DEFERRED INCOME TAXES............................................................         47,381           45,723

COMMITMENTS AND CONTINGENCIES

EQUITY:

   Preferred stock, $0.01 par value; 10,000,000 shares authorized; no shares
     issued and outstanding at March 31, 2002 and December 31, 2001,
     respectively................................................................              -                -
   Common stock, $0.01 par value; 50,000,000 shares authorized; 27,414,181
     shares issued and 27,399,397 shares outstanding at March 31, 2002 and
     27,308,912 shares issued and 27,293,264 shares outstanding at December 31,
     2001........................................................................            274              273
   Additional paid-in capital....................................................        368,186          365,993
   Retained earnings.............................................................         83,334           77,758
   Less: Treasury stock, at cost, 14,784 and 15,648 shares at March 31, 2002 and
     December 31, 2001, respectively ............................................            (37)             (39)
   Accumulated other comprehensive income (loss) ................................         (3,950)          14,507
                                                                                      ----------       ----------
       Total equity..............................................................        447,807          458,492
                                                                                      ----------       ----------
       Total liabilities and equity..............................................     $  629,466       $  587,316
                                                                                      ==========       ==========



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

</TABLE>

                                       3
<PAGE>

                          SPINNAKER EXPLORATION COMPANY

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                       For the Three Months
                                                                                         Ended March 31,

                                                                                   ---------------------------
                                                                                       2002            2001
                                                                                   -----------     -----------
<S>                                                                                    <C>                <C>
REVENUES.....................................................................      $   32,600      $   67,453
EXPENSES:
   Lease operating expenses..................................................           3,409           2,691
   Depreciation, depletion and amortization - natural gas and oil properties.          17,377          19,342
   Depreciation and amortization - other.....................................             173              96
   General and administrative................................................           2,678           2,532
                                                                                   ----------      ----------
       Total expenses........................................................          23,637          24,661
                                                                                   ----------      ----------
INCOME FROM OPERATIONS.......................................................           8,963          42,792
OTHER INCOME (EXPENSE):
   Interest income...........................................................              44           1,345
   Interest expense..........................................................            (294)           (156)
                                                                                   ----------      ----------
       Total other income (expense)..........................................            (250)          1,189
                                                                                   ----------      ----------
INCOME BEFORE INCOME TAXES...................................................           8,713          43,981
INCOME TAX PROVISION.........................................................           3,137          15,833
                                                                                   ----------      ----------
NET INCOME...................................................................      $    5,576      $   28,148
                                                                                   ==========      ==========

NET INCOME PER COMMON SHARE:
   Basic.....................................................................      $     0.20      $     1.05
                                                                                   ==========      ==========
   Diluted...................................................................      $     0.20      $     1.00
                                                                                   ==========      ==========

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
   Basic.....................................................................          27,338          26,772
                                                                                   ==========      ==========
   Diluted...................................................................          28,467          28,196
                                                                                   ==========      ==========


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

</TABLE>

                                       4
<PAGE>

                          SPINNAKER EXPLORATION COMPANY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                            For the Three Months
                                                                                              Ended March 31,

                                                                                         ---------------------------
                                                                                            2002           2001
                                                                                         -----------    ------------
<S>                                                                                        <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income....................................................................        $    5,576     $   28,148
   Adjustments  to reconcile net income to net cash provided by (used in)
    operating activities:
     Depreciation, depletion and amortization....................................            17,550         19,438
     Deferred income tax expense.................................................             3,437         15,833
     Other.......................................................................               299           (362)
     Change in components of working capital:
       Accounts receivable.......................................................            (2,734)         6,625
       Accounts payable and accrued liabilities..................................            16,096         15,755
       Other current assets and other............................................            (8,227)        (2,119)
                                                                                         ----------     -----------
           Net cash provided by operating activities.............................            31,997         83,318

CASH FLOWS FROM INVESTING ACTIVITIES:
   Additions to oil and gas properties...........................................           (76,123)       (59,068)
   Purchases of other property and equipment.....................................              (594)          (345)
   Purchases of short-term investments ..........................................                 -        (26,655)
                                                                                         ----------     -----------
           Net cash used in investing activities.................................           (76,717)       (86,068)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from borrowings......................................................            37,000              -
   Proceeds from exercise of stock options.......................................               852          5,451
                                                                                         ----------     -----------
           Net cash provided by financing activities.............................            37,852          5,451
                                                                                         ----------     -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.............................            (6,868)         2,701
CASH AND CASH EQUIVALENTS, beginning of year.....................................            14,061         63,910
                                                                                         ----------     -----------
CASH AND CASH EQUIVALENTS, end of period.........................................        $    7,193     $   66,611
                                                                                         ==========     ===========



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

</TABLE>

                                       5
<PAGE>

                          SPINNAKER EXPLORATION COMPANY

         Notes to Interim Consolidated Financial Statements (Unaudited)
                                 March 31, 2002

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, 2001.

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
                                                                         March 31,
                                                                 -------------------------
                                                                    2002           2001
                                                                 ----------    -----------
<S>                                                                  <C>            <C>
Numerator:
   Net income............................................        $   5,576     $  28,148
                                                                 =========     =========

Denominator:
   Basic weighted average number of shares...............           27,338        26,772
                                                                 =========     =========
   Dilutive securities:
     Stock options.......................................            1,129         1,424
                                                                 ---------     ---------
   Diluted adjusted weighted average number of shares and
     assumed conversions.................................           28,467        28,196
                                                                 =========     =========
Net income per common share:

   Basic.................................................        $    0.20      $   1.05
                                                                 =========     =========
   Diluted...............................................        $    0.20      $   1.00
                                                                 =========     =========
</TABLE>


3.   Credit Facility

     On December 28, 2001, the Company replaced its $75.0 million credit
facility with an unsecured $200.0 million credit facility ("Credit Facility")
with a group of seven banks. The three-year facility has an initial borrowing
base of $125.0 million that is re-determined on or about April 30 and September
30 each year. The banks and Spinnaker also have the option to request one
additional re-determination each year. 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%
per annum. The commitment fee rate ranges from 0.3% to 0.5%, depending on the
borrowing base usage. The Credit Facility contains various covenants and
restrictive provisions. At March 31, 2002, the Company was in compliance with
the covenants and restrictive provisions and had outstanding borrowings under
the Credit Facility of $37.0 million. On April 3, 2002, the Company repaid its
outstanding borrowings of $37.0 million with a portion of the proceeds from a
public offering of 5,750,000 shares of its common stock, par value $0.01 per
share ("Common Stock").

4.   Equity Offering

     On April 3, 2002, the Company completed a public offering of 5,750,000
shares of Common Stock at $41.50 per share, including the over-allotment option
consisting of 750,000 shares. After payment of underwriting discounts and
commissions, the

                                       6
<PAGE>

Company received net proceeds of $227.9 million. The March 31, 2002 financial
statements do not reflect the closing of the offering. On April 3, 2002, the
Company used a portion of the proceeds from the offering to repay outstanding
borrowings of $37.0 million. The remainder of the net proceeds are invested in
short-term high quality investments and will be used to fund a portion of the
costs to develop the Company's deep water oil discovery at Green Canyon Blocks
338/339 ("Front Runner"), to fund a portion of exploration and other development
activities and for general corporate purposes, including possible acquisitions
of properties or seismic data.

5.   Derivatives and Hedging

     The Company enters into New York Mercantile Exchange ("NYMEX") related swap
contracts and collar arrangements from time to time. 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. Some of the master agreements
require the Company to make margin payments to counterparties when net exposure
exceeds a certain threshold. As of May 13, 2002, Spinnaker's commodity price
risk management positions in fixed price natural gas swap contracts were as
follows:

                                  Average Daily            Weighted Average
         Period                   Volume (MMBtu)           Price (Per MMBtu)
--------------------------      --------------------     ----------------------

Second Quarter 2002.......             93,407                   $ 3.20
Third Quarter 2002........             80,000                   $ 3.37
Fourth Quarter 2002.......             86,685                   $ 3.64
Full Year 2003............             40,000                   $ 3.44

     On January 1, 2001, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 133, as amended, "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 statement of operations and requires a company to
formally document, designate and assess the effectiveness of transactions that
qualify for hedge accounting.

     Based upon the Company's assessment of its derivative contracts at March
31, 2002, it reported a net liability of $6.1 million. The components of the net
liability include a current asset of $2.1 million, a current liability of $5.4
million and a noncurrent liability of $2.8 million. The Company also reported a
loss in accumulated other comprehensive income (loss) of $4.0 million, net of
income taxes of $2.1 million. The ineffective component of the derivatives
recognized in earnings was less than $0.1 million in the first quarter of 2002.
Using natural gas forward prices as of May 10, 2002, the Company would have
reported a net liability of $18.3 million.

     In connection with monthly settlements, the Company recognized net hedging
gains of $8.3 million in revenues in the first quarter of 2002. Based on future
natural gas prices as of March 31, 2002, the Company would reclassify a net loss
of $3.3 million from accumulated other comprehensive income (loss) to earnings
within the next twelve months. The amounts ultimately reclassified into earnings
will vary due to changes in the fair value of the open derivative contracts
prior to settlement.

6.   Comprehensive Income

     Comprehensive income was $1.6 million in the first quarter of 2002. The
following represents components of the Company's comprehensive income (in
thousands):

                                       7
<PAGE>

<TABLE>
<CAPTION>


                                                                                               Three Months Ended
                                                                                                   March 31,
                                                                                          -----------------------------
                                                                                             2002             2001
                                                                                          ------------     ------------
<S>                                                                                            <C>              <C>
Net income...........................................................................     $    5,576       $   28,148
Other comprehensive income (loss), net of tax:
   Cumulative effect of accounting change for derivative financial instruments.......              -           27,125
   Net change in fair value of derivative financial instruments......................         (9,116)          (6,763)
   Financial derivative settlements taken to income, net of tax......................          5,167          (16,600)
                                                                                          ----------       ----------
Comprehensive income.................................................................     $    1,627       $   31,910
                                                                                          ==========       ==========
</TABLE>

7.   New Accounting Principle

     In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 143, "Accounting for Asset Retirement Obligations." SFAS No. 143 requires
that the fair value of a liability for an asset retirement obligation be
recognized in the period in which it is incurred with the associated asset
retirement costs being capitalized as a part of the carrying amount of the
long-lived asset. SFAS No. 143 also includes disclosure requirements that
provide a description of asset retirement obligations and reconciliation of
changes in the components of those obligations. The Company currently records
its plugging and abandonment costs, net of salvage value, with respect to its
natural gas and oil properties as additional depreciation, depletion and
amortization expense ("DD&A") using the units-of-production method. This
statement will require the Company to recognize a liability for the fair value
of its plugging and abandonment liability, excluding salvage value, with the
associated costs as part of its natural gas and oil property balance. The
Company is evaluating the future financial effects of adopting SFAS No. 143 and
expects to adopt the standard effective January 1, 2003.

                                       8
<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;

     .    delays in anticipated start-up dates;

     .    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;

     .    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
quarterly report 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 provide assurance that
future results will meet its 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, 2001.

Critical Accounting Policies

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Significant estimates include DD&A of proved natural gas and oil properties.
Natural gas and oil reserve

                                       9

<PAGE>

estimates, which are the basis for unit-of-production DD&A and the full cost
ceiling test, are inherently imprecise and are expected to change as future
information becomes available. The Company's critical accounting policies are as
follows:

   Natural Gas and Oil Properties

     The Company uses the full cost method of accounting for its investment in
natural gas and oil properties. Under this method, all acquisition, exploration
and development costs, including certain related employee costs, incurred for
the purpose of exploring for and developing natural gas and oil are capitalized.
Such amounts include the cost of drilling and equipping productive wells, dry
hole costs, lease acquisition costs, delay rentals and costs related to such
activities. Exclusive of field-level costs, Spinnaker capitalized $1.5 million
and $1.1 million of general and administrative costs in the first quarter of
2002 and 2001, respectively. These capitalized costs are directly related to
exploration and development activities and include salaries, employee benefits,
costs of consulting services and other related expenses. Costs associated with
production and general corporate activities are expensed in the period incurred.
Sales of natural gas and oil properties, whether or not being amortized
currently, are accounted for as adjustments of capitalized costs, with no gain
or loss recognized, unless such adjustments would significantly alter the
relationship between capitalized costs and proved reserves of natural gas and
oil.

     The Company computes the provision for DD&A of natural gas and oil
properties using the unit-of-production method based upon production and
estimates of proved reserve quantities. Unevaluated costs and related carrying
costs are excluded from the amortization base until the properties associated
with these costs are evaluated. In addition to costs associated with evaluated
properties, the amortization base includes estimated future development costs
and dismantlement, restoration and abandonment costs, net of estimated salvage
values. Certain future development costs may be excluded from amortization when
incurred in connection with major development projects expected to entail
significant costs to ascertain the quantities of proved reserves attributable to
the properties under development. The amounts that may be excluded are
applicable portions of the costs that relate to the major development project
and have not previously been included in the amortization base and the estimated
future expenditures associated with the development project. Such costs may be
excluded from costs to be amortized until the earlier determination of whether
additional reserves are proved or impairment occurs. The Company has excluded
from amortization a portion of the estimated future expenditures associated with
common development costs on its deep water discovery at Front Runner based on
existing proved reserves to total proved reserves expected to be established
upon completion of the deep water project.

     Capitalized costs of natural gas and oil properties, net of accumulated
DD&A and related deferred taxes, are limited to the estimated future net cash
flows from proved natural gas and oil reserves, including the effects of hedging
activities, discounted at 10%, plus the lower of cost or fair value of unproved
properties, as adjusted for related income tax effects (the full cost ceiling).
If capitalized costs exceed the full cost ceiling, the excess is charged to
write-down of natural gas and oil properties in the quarter in which the excess
occurs. Given the volatility of natural gas and oil prices, it is reasonably
possible that the Company's estimate of discounted future net cash flows from
proved natural gas and oil reserves will change in the near term. If natural gas
and oil prices decline, even if for only a short period of time, or if the
Company has downward revisions to its estimated proved reserves, it is possible
that write-downs of natural gas and oil properties could occur in the future.

     The costs associated with unevaluated leasehold acreage, unamortized
seismic data, wells currently drilling and capitalized interest are not
initially included in the amortization base. Leasehold costs are either
transferred to the amortization base with the costs of drilling the related well
or are assessed quarterly for possible impairment or reduction in value.
Leasehold costs are transferred to the amortization base if a reduction in value
has occurred.

     In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." SFAS No. 143 requires that the fair value of a
liability for an asset retirement obligation be recognized in the period in
which it is incurred with the associated asset retirement costs being
capitalized as a part of the carrying amount of the long-lived asset. SFAS No.
143 also includes disclosure requirements that provide a description of asset
retirement obligations and reconciliation of changes in the components of those
obligations. The Company currently records its plugging and abandonment costs,
net of salvage value, with respect to its natural gas and oil properties as
additional DD&A expense using the units-of-production method. This statement
will require the Company to recognize a liability for the fair value of its
plugging and abandonment liability, excluding salvage value, with the associated
costs as part of its natural gas and oil property balance. The Company is
evaluating the future financial effects of adopting SFAS No. 143 and expects to
adopt the standard effective January 1, 2003.

Overview

     Financial and operational results in the first quarter of 2002 compared to
the same period in 2001 included:

                                       10
<PAGE>

     .    Production of 9.8 billion cubic feet gas equivalent ("Bcfe"), down
          21%.

     .    Revenues of $32.6 million, down 52%.

     .    Income from operations of $9.0 million, down 79%.

     .    Net income of $5.6 million, or $.20 per diluted share, down 80%.

     .    Cash flows from operating activities, before working capital changes,
          of $26.9 million, down 57%.

     Spinnaker's results of operations and financial position were significantly
impacted by lower natural gas production and prices in the first quarter of
2002. Natural gas revenues decreased $58.4 million in the first quarter of 2002.
Of the total decrease in natural gas revenues, $24.9 million was attributable to
a decrease in natural gas production volumes of 2.6 Bcf and $33.5 million was
due to lower average natural gas prices, excluding the effects of hedging
activities. The Company had $7.2 million in cash and cash equivalents and
outstanding borrowings of $37.0 million at March 31, 2002.

     On April 3, 2002, the Company completed a public offering of 5,750,000
shares of Common Stock at $41.50 per share, including the over-allotment option
consisting of 750,000 shares. After payment of underwriting discounts and
commissions, the Company received net proceeds of $227.9 million. On April 3,
2002, the Company used a portion of the proceeds from the offering to repay
outstanding borrowings of $37.0 million. The remainder of the net proceeds is
invested in short-term high quality investments and will be used to fund a
portion of the costs to develop the Company's deep water oil discovery at Front
Runner, to fund a portion of exploration and other development activities and
for general corporate purposes, including possible acquisitions of properties or
seismic data.

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>
                                                                          For the Three Months Ended
                                                                                  March 31,
                                                                       -------------------------------
                                                                           2002              2001
                                                                       ------------    ---------------
<S>                                                                    <C>             <C>
Production:
   Natural gas (MMcf)..........................................              9,345          11,969
   Oil and condensate (MBbls)..................................                 73              77
     Total (MMcfe).............................................              9,785          12,430

Revenues (in thousands):
   Natural gas.................................................            $23,020        $ 81,455
   Oil and condensate..........................................              1,367           2,163
   Net hedging income (loss)...................................              8,258         (16,600)
   Other.......................................................                (45)            435
                                                                           -------        --------
     Total.....................................................            $32,600        $ 67,453

Average sales price per unit:
   Natural gas revenues from production (per Mcf).....................     $  2.46        $   6.81
   Effects of hedging activities (per Mcf)............................        0.89           (1.39)
                                                                          --------        --------
     Average price (per Mcf)..........................................     $  3.35        $   5.42

   Oil and condensate revenues from production (per Bbl)..............     $ 18.60        $  28.18
   Effects of hedging activities (per Bbl)............................          -               -
                                                                          --------        --------
     Average price (per Bbl)..........................................     $ 18.60        $  28.18

   Total revenues from production (per Mcfe)..........................     $  2.49        $   6.73
   Effects of hedging activities (per Mcfe)...........................        0.85           (1.34)
                                                                          --------        --------
     Total average price (per Mcfe)...................................     $  3.34        $   5.39

Expenses (per Mcfe):
   Lease operating expenses....................................            $  0.35        $   0.22
   Depreciation, depletion and amortization - natural gas and oil
     properties................................................            $  1.78        $   1.56

Income from operations (in thousands)..........................            $ 5,576        $ 42,792
</TABLE>
                                       11
<PAGE>

  Three Months Ended March 31, 2002 as Compared to the Three Months Ended March
31, 2001

     Revenues, including the effects of hedging activities, decreased $34.9
million in the first quarter of 2002 compared to the first quarter of 2001.
Excluding the effects of hedging activities, natural gas revenues decreased
$58.4 million and oil and condensate revenues decreased $0.8 million. Revenues
from natural gas hedging activities improved by $24.3 million in the first
quarter of 2002 compared to the first quarter of 2001.

     Production decreased approximately 2.6 Bcfe in the first quarter of 2002
compared to the first quarter of 2001. Average daily production in the first
quarter of 2002 was 109 million cubic feet gas equivalent ("MMcfe") compared to
138 MMcfe in the same period of 2001. Natural gas revenues decreased $58.4
million in the first quarter of 2002. Of the total decrease in natural gas
revenues, $24.9 million was attributable to a decrease in natural gas production
volumes of 2.6 Bcf and $33.5 million was due to lower average natural gas
prices, excluding the effects of hedging activities. Oil and condensate revenues
decreased $0.8 million. Of the total decrease in oil and condensate revenues,
$0.3 million was attributable to a decrease in oil and condensate production
volumes of 4 thousand barrels ("MBbls") and $0.5 million was due to lower
average oil and condensate prices. The rapid production declines of certain
producing wells and less than anticipated results from workovers resulted in
lower production in the first quarter of 2002 compared to the first quarter of
2001.

     Lease operating expenses increased $0.7 million in the first quarter of
2002 compared to the first quarter of 2001. Of the total increase in lease
operating expenses, approximately $0.5 million was attributable to wells on new
blocks that commenced production subsequent to March 31, 2001. Lease operating
expenses per Mcfe included $0.09 per Mcfe related to workover activities in the
first quarter of 2002.

     DD&A decreased $1.9 million in the first quarter of 2002 compared to the
first quarter of 2001. Of the total decrease in DD&A, $4.1 million related to
lower production volumes of 2.6 Bcfe, offset in part by $2.2 million related to
an increase in the DD&A rate in the first quarter of 2002 compared to the first
quarter of 2001.

     General and administrative expenses increased approximately $0.1 million in
the first quarter of 2002 compared to the first quarter of 2001. The increase in
general and administrative expenses was primarily due to higher
employment-related costs resulting from the Company's recent growth.

     Interest income decreased $1.3 million in the first quarter of 2002
compared to the first quarter of 2001 primarily due to lower average cash and
cash equivalent balances and lower interest rates in the first quarter of 2002.
Interest expense increased $0.1 million in the first quarter of 2002 compared to
the first quarter of 2001 primarily due to outstanding borrowings of $37.0
million in the first quarter of 2002. On April 3, 2002, the Company repaid all
of its outstanding borrowings under the Credit Facility with a portion of the
proceeds from the public offering of 5,750,000 shares of Common Stock.

     Income tax provision decreased $12.7 million in the first quarter of 2002
compared to the first quarter of 2001 and primarily relates to lower earnings.
Income taxes were accrued at a 36% effective tax rate in the first quarter of
2002 and 2001.

     The Company recognized net income of $5.6 million, or $0.20 per basic share
and $0.20 per diluted share, in the first quarter of 2002 compared to net income
of $28.1 million, or $1.05 per basic share and $1.00 per diluted share, in the
first quarter of 2001.

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 2001 were
$288.8 million. Spinnaker has capital expenditure plans for 2002 totaling
approximately $300 million. During 2001, Spinnaker participated in a significant
deep water oil discovery, Front Runner, with a 25% non-operator working
interest. The Company participated in six consecutive successful wells and
sidetracks in testing the reservoirs on these blocks. Spinnaker has incurred
capital expenditures associated with Front Runner of approximately $35 million
through March 31, 2002 and expects to incur an aggregate of approximately $105
million in future development costs during the remainder of 2002 and 2003. The
2002 capital expenditure plans include approximately $35 million related to the
Front Runner production facilities. The Company is considering various financing
alternatives for the cost of these facilities, including a lease.

                                       12
<PAGE>

     Natural gas and oil prices have a significant impact on the Company's cash
flows available for capital expenditures and its ability to borrow and raise
additional capital. The amount the Company can borrow under its 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. Additionally, the rapid production
declines of certain producing wells and less than anticipated results from
workovers resulted in lower production in the first quarter of 2002 compared to
the prior quarter.

     On April 3, 2002, the Company completed a public offering of 5,750,000
shares of Common Stock at $41.50 per share, including the over-allotment option
consisting of 750,000 shares. After payment of underwriting discounts and
commissions, the Company received net proceeds of $227.9 million. On April 3,
2002, the Company used a portion of the proceeds from the offering to repay
outstanding borrowings of $37.0 million. The remainder of the net proceeds is
invested in short-term high quality investments and will be used to fund a
portion of the costs to develop the Company's deep water oil discovery at Front
Runner, to fund a portion of exploration and other development activities and
for general corporate purposes, including possible acquisitions of properties or
seismic data.

     While the Company believes that proceeds from the Common Stock offering,
working capital, cash flows from operations and available borrowings under its
Credit Facility will be sufficient to meet its capital requirements in the next
twelve months, additional debt or equity 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.

     Spinnaker has an effective shelf registration statement relating to the
potential public offer and sale by the Company or certain affiliates of up to
$61.3 million of any combination of debt securities, preferred stock, common
stock, warrants, stock purchase contracts and trust preferred securities from
time to time or when financing needs arise. The registration statement does not
provide assurance that the Company will or could sell any such securities.

     Cash and cash equivalents decreased $6.9 million to $7.2 million at March
31, 2002 from $14.1 million at December 31, 2001. The decrease in cash and cash
equivalents resulted from $76.7 million used in investing activities, offset in
part by $32.0 million provided by operating activities and $37.8 million
provided by financing activities.

   Operating Activities

     Net cash provided by operating activities in the first quarter of 2002
decreased 62% to $32.0 million primarily as a result of lower natural gas
production and prices. Cash flow from operations is dependent upon 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
are expected to increase the Company's average daily production in the second
half of 2002.

     The Company sells its natural gas and oil production under fixed or
floating market price contracts. Spinnaker enters into hedging arrangements from
time to time to reduce its exposure to fluctuations in natural gas and oil
prices and achieve more predictable cash flow. However, these contracts also
limit the benefits the Company would realize if prices increase. See "Item 3A.
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, other current assets,
accounts payable and accrued liabilities. The increase in accounts receivable of
$2.7 million was primarily due to an increase in joint interest billings
relating to drilling activities operated by the Company. The increase in other
current assets of $9.3 million was primarily related to higher lease sale
deposits of $5.1 million and increased cash calls of $2.4 million on properties
where the Company is not operator. The net increase in accounts payable and
accrued liabilities of $6.0 million was primarily due to costs associated with
increased drilling and development activities in the first quarter of 2002.

   Investing Activities

     Net cash used in investing activities in the first quarter of 2002
decreased 11% to $76.7 million. Net oil and gas property capital expenditures
were $76.1 million. Additionally, other property and equipment capital
expenditures were $0.6 million.

     The Company drilled six wells in the first quarter of 2002, five of which
were successful. In 2001, the Company drilled 35 wells, 19 of which were
successful. Since inception and through March 31, 2002, the Company has drilled
100 wells, 61 of which were successful, representing a success rate of 61%.

                                       13
<PAGE>

     The Company has capital expenditure plans for 2002 totaling approximately
$300 million, primarily for costs related to exploration and development
programs. The 2002 budget includes development costs that are contingent on the
success of exploratory drilling. The Company does not anticipate any significant
abandonment or dismantlement costs in 2002. Actual levels of capital
expenditures may vary due to many factors, including drilling results, natural
gas and oil prices, the availability of capital, industry conditions,
acquisitions, decisions of operators and other prospect owners and the prices of
drilling rig dayrates and other oilfield goods and services.

   Financing Activities

     Net cash provided by financing activities of $37.8 million in the first
quarter of 2002 included proceeds from borrowings under the Credit Facility of
$37.0 million. On December 28, 2001, the Company completed an unsecured $200.0
million Credit Facility with a group of seven banks. The three-year facility has
an initial borrowing base of $125.0 million that is re-determined on or about
April 30 and September 30 each year. The banks and Spinnaker also have the
option to request one additional re-determination each year. 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% per annum. The commitment fee rate ranges from 0.3% to
0.5%, depending on the borrowing base usage. The Credit Facility contains
various covenants and restrictive provisions. At March 31, 2002, the Company was
in compliance with the covenants and restrictive provisions and had outstanding
borrowings under the Credit Facility of $37.0 million. On April 3, 2002, the
Company repaid its outstanding borrowings of $37.0 million with a portion of the
proceeds from the public offering of 5,750,000 shares of its Common Stock. As of
May 13, 2002, the Company had no outstanding borrowings under the Credit
Facility.

Item 3A.  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 cash and cash equivalents and the interest
rate paid on borrowings under the Credit Facility. The Company does not
currently use interest rate derivative instruments to manage exposure to
interest rate changes, but may do so in the future.

   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 fixed or floating market
price contracts. Spinnaker enters into hedging arrangements from time to time to
reduce its 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 take the
form of swap contracts or costless collars and are placed with major trading
counterparties the Company believes represent minimum credit risks. Spinnaker
cannot provide assurance that these trading counterparties will not become
credit risks in the future. Under its current hedging practice, the Company
generally does not hedge more than 66 2/3% of its estimated twelve-month
production quantities without the prior approval of the risk management
committee of the board of directors.

     The Company enters into NYMEX related swap contracts and collar
arrangements from time to time. 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. Some of the master agreements require the Company to make margin payments
to counterparties when net exposure exceeds a certain threshold. As of May 13,
2002 Spinnaker's commodity price risk management positions in fixed price
natural gas swap contracts were as follows:

                                       14
<PAGE>

                                    Average Daily       Weighted Average
             Period                 Volume (MMBtu)      Price (Per MMBtu)
------------------------------  --------------------- ----------------------

Second Quarter 2002...........         93,407              $ 3.20
Third Quarter 2002............         80,000              $ 3.37
Fourth Quarter 2002...........         86,685              $ 3.64
Full Year 2003................         40,000              $ 3.44

     Based upon the Company's assessment of its derivative contracts at March
31, 2002, it reported a net liability of $6.1 million. The components of the net
liability include a current asset of $2.1 million, a current liability of $5.4
million and a noncurrent liability of $2.8 million. The Company also reported a
loss in accumulated other comprehensive income (loss) of $4.0 million, net of
income taxes of $2.1 million. The ineffective component of the derivatives
recognized in earnings was less than $0.1 million in the first quarter of 2002.
Using natural gas forward prices as of May 10, 2002, the Company would have
reported a net liability of $18.3 million.

     In connection with monthly settlements, the Company recognized net hedging
gains of $8.3 million in revenues in the first quarter of 2002. Based on future
natural gas prices as of March 31, 2002, the Company would reclassify a net loss
of $3.3 million from accumulated other comprehensive income (loss) to earnings
within the next twelve months. The amounts ultimately reclassified into earnings
will vary due to changes in the fair value of the open derivative contracts
prior to settlement.

                           PART II - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

     (a)  Exhibits

          12.1 - Calculation of Ratios of Earnings to Fixed Charges and Combined
                 Fixed Charges and Preferred Dividends

     (b)  Reports on Form 8-K

          1)   A Current Report on Form 8-K dated and filed on January 22, 2002
               reported an update of the Company's commodity price risk
               management positions.

          2)   A Current Report on Form 8-K dated and filed on March 22, 2002
               reported an update of the Company's operations activities and
               commodity price risk management positions.

          3)   A Current Report on Form 8-K dated March 27, 2002 and filed on
               March 28, 2002 reported that the Company entered into an
               underwriting agreement on March 27, 2002 in connection with the
               issuance and sale by the Company of up to 5,750,000 shares of
               Common Stock.

          4)   A Current Report on Form 8-K dated April 5, 2002 and filed on
               April 11, 2002 reported that the Company decided to dismiss
               Arthur Andersen LLP as its independent public accountants and
               engaged KPMG LLP to serve as its independent public accountants
               for 2002.

                                       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:        May 13, 2002             By:        /s/ ROBERT M. SNELL
       --------------------------           ----------------------------------
                                                    Robert M. Snell
                                            Vice President, Chief Financial
                                                 Officer and Secretary

Date:        May 13, 2002             By:       /s/ JEFFREY C. ZARUBA
       --------------------------           ----------------------------------
                                                   Jeffrey C. Zaruba
                                            Vice President, Treasurer and
                                                 Assistant Secretary

                                       16
<PAGE>

                                  EXHIBIT INDEX

 Exhibit
 Number                 Description
 ------
 12.1 -   Calculation of Ratios of Earnings to Fixed Charges and Combined Fixed
          Charges and Preferred Dividends

                                       17