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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )

Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]

Check the appropriate box:
[ ] Preliminary proxy statement.

[ ] Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2)).

[X] Definitive proxy statement.

[ ] Definitive additional materials.

[ ] Soliciting material under Rule 14a-12.

PRIZE ENERGY CORP.
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(Name of Registrant as Specified In Its Charter)

Not Applicable
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)

Payment of filing fee (check the appropriate box):
[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.

(1) Title of each class of securities to which transaction
applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.

(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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PRIZE ENERGY CORP.
3500 WILLIAM D. TATE, SUITE 200
GRAPEVINE, TEXAS 76051

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 24, 2001

To the Stockholders of PRIZE ENERGY CORP.:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Prize
Energy Corp., a Delaware corporation (formerly known as Vista Energy Resources,
Inc.) (the "Company"), will be held at the Sheraton Grand Hotel, 4440 West John
Carpenter Freeway, Irving, Texas, on Thursday, May 24, 2001, at 10:00 a.m.,
local time, for the following purposes:

1. To elect six directors of the Company for one-year terms;

2. To consider and act upon a proposal to ratify the appointment
of Ernst & Young LLP as the independent auditor of the Company
for 2001; and

3. To transact such other business as may properly come before
the meeting or any adjournment thereof.

The Board of Directors has fixed the close of business on April 19,
2001, as the record date for the meeting, and only holders of the Company's
common stock of record at such time will be entitled to vote at the meeting or
any adjournment thereof. A complete list of the stockholders entitled to vote at
the meeting will be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours for a period of 10 days
prior to the date of the meeting at the offices of the Company and at the time
and place of the meeting.

By Order of the Board of Directors,

Monica L. Griffin
Secretary

Grapevine, Texas
April 23, 2001

IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES. IF YOU DO ATTEND THE MEETING, YOU MAY WITHDRAW YOUR PROXY AND
VOTE IN PERSON.

PRIZE ENERGY CORP.
3500 WILLIAM D. TATE, SUITE 200
GRAPEVINE, TEXAS 76051

PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 24, 2001

SOLICITATION AND REVOCATION OF PROXIES

This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Prize Energy Corp., a Delaware corporation
(formerly known as Vista Energy Resources, Inc.) (the "Company"), of proxies to
be voted at the Annual Meeting of Stockholders of the Company to be held on May
24, 2001, or at any adjournment thereof (the "Annual Meeting"), for the purposes
set forth in the accompanying Notice of Annual Meeting. This Proxy Statement and
accompanying proxy were first forwarded on or about April 23, 2001, to
stockholders of record on April 19, 2001.

If the accompanying proxy is properly executed and returned, the shares
represented by the proxy will be voted at the Annual Meeting. If a stockholder
indicates in his or her proxy a choice with respect to any matter to be acted
upon, that stockholder's shares will be voted in accordance with such choice. If
no choice is indicated, such shares will be voted "FOR" (1) the election of all
of the nominees for directors listed below and (2) ratification of the
appointment of the independent auditor. A stockholder giving a proxy may revoke
it by giving written notice of revocation to the Secretary of the Company at any
time before it is voted, by executing another valid proxy bearing a later date
and delivering such proxy to the Secretary of the Company prior to or at the
Annual Meeting, or by attending the Annual Meeting and voting in person.

The expenses of this proxy solicitation, including the cost of
preparing and mailing this Proxy Statement and accompanying proxy will be borne
by the Company. Such expenses will also include the charges and expenses of
banks, brokerage firms, and other custodians, nominees or fiduciaries for
forwarding solicitation material regarding the Annual Meeting to beneficial
owners of the Company's common stock. Solicitation of proxies may be made by
mail, telephone, personal interviews or by other means by the Board of Directors
or employees of the Company who will not be additionally compensated therefore,
but who may be reimbursed for their out-of-pocket expenses in connection
therewith.

STOCKHOLDERS ENTITLED TO VOTE

Stockholders of record at the close of business on April 19, 2001 (the
"Record Date"), will be entitled to vote at the Annual Meeting. As of the Record
Date, there were issued and outstanding 12,867,405 shares of common stock, par
value $.01 per share, of the Company ("Common Stock"). Each share of Common
Stock is entitled to one vote. There is no cumulative voting with respect to the
election of directors. The presence in person or by proxy of the holders of a
majority of the shares of Common Stock issued and outstanding at the Annual
Meeting and entitled to vote will constitute a quorum for the transaction of
business. Votes withheld from nominees for directors, abstentions and broker
non-votes will be counted for purpose of determining whether a quorum has been
reached. Votes will be tabulated by an inspector of election appointed by the
Board of Directors of the Company. With regard to the election of directors,
votes may be cast in favor of or withheld from each nominee; votes that are
withheld will have no effect on the outcome of the election of directors.
Abstentions, which may be specified on all proposals except the election of
directors, will have the effect of a negative vote. Under applicable Delaware
law, a broker non-vote will have no effect on the outcome of the election of
directors or the other proposal. As of the Record Date, the Natural Gas Partners
partnerships collectively own approximately 59% of the outstanding shares of
Common Stock. If these partnerships vote "FOR" the election of all of the
nominees for directors listed below and "FOR" the other proposal, all of such
nominees will be elected and such other proposal will be approved by the
stockholders of the Company without regard to the vote of any other
stockholders.

Each of the Natural Gas Partners partnerships has indicated that it will vote
"FOR" all of such nominees and "FOR" the other proposal.

PROPOSAL ONE

ELECTION OF DIRECTORS

Stockholder action will be requested at the Annual Meeting with respect
to the re-election of each of the current members of the Board of Directors of
the Company (the "Board of Directors"). The Amended and Restated Certificate of
Incorporation of the Company provides that the Board of Directors shall consist
of not less than two nor more than 21 directors, as determined from time to time
by resolution of the Board of Directors. The number of directors is currently
fixed at six. The term of all of the members of the Board of Directors,
consisting of Philip B. Smith, Lon C. Kile, Kenneth A. Hersh, David R. Albin,
Theresa L. Killgore and James R. Latimer III, will expire at the Annual Meeting,
and the accompanying proxy solicits your vote for six directors. Four of the
current directors were elected to the Board of Directors pursuant to a Voting
and Shareholders Agreement. For a description of this Agreement, see the
discussion below under "Change in Control." Pursuant to this Agreement, Philip
B. Smith is the designee of the stockholders who are members of the Company's
management and Kenneth A. Hersh, David R. Albin and Lon C. Kile are the
designees of Natural Gas Partners V, L.P. Natural Gas Partners V, L.P. has the
right to designate one additional member of the Board and that position is
currently vacant.

The Board of Directors has nominated Philip B. Smith, Lon C. Kile,
Kenneth A. Hersh, David R. Albin, Theresa L. Killgore and James R. Latimer III
for re-election as directors, each to hold office until the annual meeting of
stockholders in 2002 and until his or her successor is duly elected and
qualifies, or until his or her earlier death, resignation or retirement. The
persons named as proxies in the accompanying proxy, who have been designated by
the Board of Directors, intend to vote, unless otherwise instructed in such
proxy, for the election of Messrs. Smith, Kile, Hersh, Albin, Killgore and
Latimer as directors of the Company. Should any nominee named herein become
unable for any reason to stand for election as a director of the Company, it is
intended that the persons named in such proxy will vote for the election of such
other person or persons as the Board of Directors may recommend. The Company
knows of no reason why any of the nominees will be unavailable or unable to
serve.

The affirmative vote of a plurality of the shares of Common Stock
present in person or by proxy at the Annual Meeting and entitled to vote is
required for the election of directors.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE FOLLOWING
NOMINEES FOR DIRECTORS.

NOMINEES FOR DIRECTORS

PHILIP B. SMITH, age 49, has been Chairman of the Board of Directors,
Chief Executive Officer, Treasurer and a Director of the Company since February
8, 2000. He is the founder of Prize Natural Resources, Inc. (formerly known as
Prize Energy Corp.) ("Old Prize"), which became a wholly-owned subsidiary of the
Company on February 8, 2000, and has been chairman of the board of directors,
chief executive officer, treasurer and a director of Old Prize since January
1999. He was also president of Old Prize during a portion of 1999. From 1996
until 1999, he also served as a director of HS Resources, Inc. and Pioneer
Natural Resources Company and its predecessor, MESA, Inc. In 1996, Mr. Smith
founded a small independent oil and gas company, which he managed until 1999.
Mr. Smith served as president, chief executive officer and a director of Tide
West Oil Company, an independent oil and gas company ("Tide West"), from 1992
until 1996. He was president and a director of Draco Petroleum, Inc., a
wholly-owned subsidiary of Tide West, from 1991 until 1996, and of Tide West
Trading & Transport Company, a wholly-owned subsidiary of Tide West ("TWTT"),
from 1989 until 1996. From 1986 until 1991, Mr. Smith was a senior vice
president of Mega Natural Gas Company, a natural gas gathering company and the
former parent company of TWTT and its predecessor companies. Prior to that time,
he held various technical and management positions at other independent and
major oil and gas companies. He earned his M.B.A. from the University of Tulsa
and his B.S. in mechanical engineering from Oklahoma State University.

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LON C. KILE, age 45, has been President, Chief Operating Officer and a
Director of the Company since February 8, 2000. He has been president, chief
operating officer and a director of Old Prize since June 1999. From 1997 until
1999, he was executive vice president of Pioneer Natural Resources Company, an
independent oil and gas company ("Pioneer"). Mr. Kile joined Parker & Parsley
Petroleum Company, an independent oil and gas company and a predecessor to
Pioneer ("Parker & Parsley"), in 1985 and was promoted to senior vice president
in 1996. Previously, he was vice president and manager of the mid-continent
division of Parker & Parsley. Prior to that, he held the positions of vice
president - equity finance & analysis and vice president - marketing and program
administration of Parker & Parsley. Before joining Parker & Parsley, he was
employed as supervisor - senior, audit, in charge of Parker & Parsley's audit,
with Arthur Young & Co. (now Ernst & Young LLP). Mr. Kile earned his Bachelor of
Business Administration degree in accounting from Oklahoma State University.

KENNETH A. HERSH, age 37, has been a Director of the Company since
February 8, 2000. He has also been a director of Old Prize since January 1999.
From 1989 to the present, he has been a manager of the Natural Gas Partners
private equity investment funds, which were organized to make equity investments
in the oil and gas industry. Previously, he was employed by the investment
banking division of Morgan Stanley & Co. Incorporated where he was a member of
the firm's energy group specializing in oil and gas financing and acquisition
transactions. Mr. Hersh also serves as a director of Encore Acquisition Company.
Mr. Hersh earned an M.B.A. from the Stanford University Graduate School of
Business and a B.A. from Princeton University.

DAVID R. ALBIN, age 41, has been a Director of the Company since
February 8, 2000. He has also been a director of Old Prize since January 1999.
From 1988 to the present, he has been a manager of the Natural Gas Partners
private equity investment funds. Previously, he was employed as a portfolio
manager for the Bass Investment Limited Partnership, a partnership formed by the
Bass family of Fort Worth, Texas. Before joining Bass, he was a member of the
oil and gas group in Goldman, Sachs & Co.'s investment banking division. Mr.
Albin earned a B.S. in physics and an M.B.A., both from Stanford University.

THERESA L. KILLGORE, age 48, has been a Director of the Company since
August 1, 2000. Ms. Killgore is a petroleum engineer and heads her personal
investment company in Tulsa, Oklahoma. She was president and chief executive
officer of Spring Holding Company from its inception in November 1996 until its
sale to Cross Timbers Oil Company in July 1999. Spring Holding consisted of
Spring Resources, an exploitation and production company with properties in the
Arkoma Basin and the Texas Panhandle, and Mega Natural Gas, a gas
marketing/transportation company. Prior to Spring, over the past 20 years Ms.
Killgore has held various positions with several companies that have focused
their efforts on the acquisition, exploitation, and production of oil and gas
properties. Ms. Killgore earned Bachelor of Science degrees in Physics and Math
from the University of Oklahoma.

JAMES R. LATIMER III, age 55, has been a Director of the Company since
October 10, 2000. Over the past eight years, Mr. Latimer has been the chairman
and chief executive officer of Explorer Horizons, Incorporated, a privately held
exploration and production company based in Dallas, Texas. Previously, Mr.
Latimer was co-head of the regional office of what is now The Prudential Capital
Group in Dallas, Texas, which handled energy and other financing for the
Prudential Insurance Company. In addition, Mr. Latimer's prior experience has
included senior executive positions with several private energy companies,
consulting with the firm of McKinsey & Co., service as an officer in the U.S.
Army Signal Corps., and several directorships. Mr. Latimer received a B.A.
degree in economics from Yale University and an M.B.A. from Harvard University.
He is a Chartered Financial Analyst.

COMPENSATION OF DIRECTORS

Directors who are not employees of the Company receive $2,500 per
meeting for their services as directors. Directors who are also employees of the
Company are not separately compensated for serving on the Board of Directors. In
addition, the Company reimburses directors for reasonable expenses incurred in
connection with attending meetings of the Board of Directors and its committees.

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MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

During 2000, the Board of Directors held two meetings. Each director
was present at 75% or more of the aggregate of the meetings of the Board of
Directors and of the committees of the Board of Directors on which he or she
served. In addition, the Board of Directors took action thirteen times during
2000 by unanimous written consent. The Board of Directors has a standing Audit
Committee and a standing Compensation Committee.

The Audit Committee is composed of Messrs. Smith, Killgore and Latimer.
Each of these individuals, other than Mr. Smith, qualifies as an "independent"
director under the current listing standards of the American Stock Exchange. The
Audit Committee has adopted a charter and it is attached to this Proxy Statement
as Exhibit A. The Audit Committee annually considers the qualifications of the
independent auditor of the Company and the independence of the auditor and makes
recommendations to the Board of Directors on the engagement of the independent
auditor. The Audit Committee has considered whether the provisions of the
services by Ernst & Young LLP as described in this Proxy Statement under the
caption "All Other Fees" under Proposal Two below is compatible with maintaining
the independence of Ernst & Young LLP. The Audit Committee also:

o reviews with management and the independent auditor the
audited financial statements of the Company, including issues
concerning accounting and auditing principles and practices
and the adequacy of the Company's internal accounting controls
that may have a significant effect on the financial
statements;

o reviews with management and the independent auditor the
interim financial statements of the Company;

o receives periodic reports from the independent auditor
regarding the auditor's independence and discusses such
reports with the independent auditor; and

o reviews with the independent auditor any difficulties the
auditor may have encountered in performing its services and
any management letter provided by the auditor and management's
response to the letter.

The Audit Committee also generally reviews the terms of material transactions
and arrangements, if any, between the Company and its directors, officers, and
principal stockholders. The Audit Committee met once during 2000. The Chairman
of the Audit Committee also met once with the independent auditor of the
Company. The Audit Committee took action once during 2000 by unanimous written
consent.

The Compensation Committee is composed of Messrs. Smith, Kile, Hersh
and Albin. The Compensation Committee (1) monitors and administers the Company's
employee benefit plans and executive compensation plans, practices and policies,
including all salaries, bonuses and fringe benefits, (2) makes changes in
existing employee benefit plans and executive compensation plans, and (3)
formulates and adopts new executive compensation plans. The Compensation
Committee met once during 2000. The Compensation Committee took action once
during 2000 by unanimous written consent.

The Company does not have a standing Nominating Committee. The
Company's Bylaws provide that nominations of candidates for election as
directors of the Company may be made at a meeting of stockholders by or at the
direction of the Board of Directors or by any stockholder entitled to vote at
such meeting who complies with the advance notice procedures set forth therein.
These procedures require any stockholder who intends to make a nomination for
director at the meeting to deliver notice of such nomination to the Secretary of
the Company not less than 60 days nor more than 90 days before the meeting. The
notice must contain all information about the proposed nominee as would be
required to be included in a proxy statement soliciting proxies for the election
of such nominee, including such nominee's written consent to serve as a director
if so elected. If the Chairman of the meeting determines that a person is not
nominated in accordance with the nomination procedure, such nomination will be
disregarded. The Company's Bylaws provide that the annual meeting of
stockholders to be held each year will be on such date and time as may be
established by the Board of Directors. The Company intends to hold the annual
meeting each year on the fourth Thursday in May.

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PROPOSAL TWO

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR

The Board of Directors has appointed Ernst & Young LLP as the
independent auditor of the Company for the fiscal year ending December 31, 2001.
A proposal will be presented at the Annual Meeting asking the stockholders to
ratify the appointment of Ernst & Young LLP as the Company's independent
auditor. If the stockholders do not ratify the appointment of Ernst & Young LLP,
the Board of Directors will reconsider the appointment. The affirmative vote of
the holders of a majority of the shares present in person or by proxy at the
Annual Meeting and entitled to vote is required for the adoption of this
proposal.

Prior to the merger of the Company with Old Prize, Arthur Andersen LLP
had been the independent accountant for the Company and Ernst & Young LLP had
been the independent accountant for Old Prize. In conjunction with the merger,
on February 8, 2000, the Board of Directors approved the engagement of Ernst &
Young LLP as the Company's independent accountant for the fiscal year ending
December 31, 2000, to replace Arthur Andersen LLP, who was dismissed as
independent accountant of the Company after completing the audit of the Company
and its subsidiaries at December 31, 1999, and for the year then ended. On
February 8, 2000, the Board of Directors also approved the engagement of Ernst &
Young LLP as independent accountant to audit Old Prize and its subsidiaries at
December 31, 1999, and for the period then ended. The audit of the Company for
the fiscal year ended December 31, 1999, was completed on February 16, 2000.

Arthur Andersen LLP's reports on the Company's financial statements for
the fiscal years ended December 31, 1999 and 1998, did not contain an adverse
opinion or disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principles.

In connection with the audits of the Company's financial statements for
the fiscal years ended December 31, 1999 and 1998, there were no disagreements
with Arthur Andersen LLP on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedures, which
disagreements, if not resolved to the satisfaction of Arthur Andersen LLP, would
have caused Arthur Andersen LLP to make reference to the subject matter of the
disagreements in connection with their report.

The Company expects that a representative of Ernst & Young LLP will be
present at the Annual Meeting. Such representative will be given the opportunity
to make a statement if he or she desires to do so and will be available to
respond to appropriate questions.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF
ERNST & YOUNG LLP AS INDEPENDENT AUDITOR FOR 2001.

AUDIT FEES

The aggregate fees billed by Ernst & Young LLP for professional
services rendered for the audit of the Company's annual financial statements for
the fiscal year ended December 31, 2000, and for the reviews of the financial
statements included in the Company's Quarterly Reports on Form 10-Q for that
fiscal year were $135,145.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES

The Company did not engage Ernst & Young LLP for professional services
relating to financial information systems design and implementation for the
fiscal year ended December 31, 2000.

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ALL OTHER FEES

The aggregate fees billed by Ernst & Young LLP for services rendered to
the Company, other than the services described above under "Audit Fees" for the
fiscal year ended December 31, 2000, were $180,420, consisting of audit related
fees of $144,155 for, among other things, work done on various registration
statements of the Company and tax fees of $36,265.

PRINCIPAL STOCKHOLDERS AND
SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth certain information as of April 19,
2001, regarding the ownership of Common Stock by the following:

o all persons known by the Company to be beneficial owners of
more than five percent of such stock,

o each director and nominee for director of the Company,

o each of the executive officers of the Company named in the
Summary Compensation Table below, and

o all executive officers and directors of the Company as a
group.

Shares of Common Stock which were not outstanding but which could be acquired by
a person upon exercise of an option or warrant within 60 days of April 19, 2001,
are deemed outstanding for the purpose of computing the percentage of
outstanding shares of Common Stock beneficially owned by that person. These
shares, however, are not deemed to be outstanding for the purpose of computing
the percentage of outstanding shares of Common Stock beneficially owned by any
other person. Unless otherwise noted, the persons named below have sole voting
and investment power with respect to the shares indicated as beneficially owned
by them.

SHARES
BENEFICIALLY PERCENTAGE
NAME OF OWNER OR IDENTITY OF GROUP OWNED OF CLASS
------------ ----------

Natural Gas Partners V, L.P. ................................. 7,326,821 56.94%
125 E. John Carpenter Freeway, Suite 600
Irving, Texas 75062

Natural Gas Partners III, L.P. ............................... 625,025(1) 4.67%
125 E. John Carpenter Freeway, Suite 600
Irving, Texas 75062

Natural Gas Partners II, L.P. ................................ 457,302(2) 3.46%
125 E. John Carpenter Freeway, Suite 600
Irving, Texas 75062

Philip B. Smith .............................................. 1,471,045(3)(4) 10.65%
20 E. 5th Street, Suite 1400
Tulsa, Oklahoma 74103

Lon C. Kile .................................................. 578,618(5) 4.32%

Kenneth A. Hersh ............................................. 8,429,448(6) 61.36%
125 E. John Carpenter Freeway, Suite 600
Irving, Texas 75062

David R. Albin ............................................... 8,409,148(6) 61.21%
100 N. Guadalupe, Suite 205
Santa Fe, New Mexico 87501

David R. Massengill .......................................... 267,852(7) 2.04%

Theresa L. Killgore .......................................... -- --

James R. Latimer III ......................................... -- --

All executive officers and
directors as a group (7 persons) ........................... 10,746,963(4)(8) 69.39%

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- ----------
* Less than one percent.

(1) Includes 503,120 shares issuable upon exercise of stock warrants
currently exercisable at an exercise price of $28.00 per share.

(2) Includes 368,109 shares issuable upon exercise of stock warrants
currently exercisable at an exercise price of $28.00 per share.

(3) Includes 946,520 shares issuable upon exercise of stock options
currently exercisable at an exercise price of $7.84 per share.

(4) Includes (a) 84,134 shares held by the Scott C. Smith Irrevocable
Trust, of which Mr. Smith is the trustee, and (b) 84,134 shares held by
the Laura E. Smith Irrevocable Trust, of which Mr. Smith is the
trustee.

(5) Includes 535,702 shares issuable upon exercise of stock options
currently exercisable at an exercise price of $7.84 per share.

(6) Includes, as to Mr. Hersh, and represents as to Mr. Albin, shares
beneficially owned by Natural Gas Partners II, L.P. ("NGP II"), Natural
Gas Partners III, L.P. ("NGP III") and Natural Gas Partners V, L.P.
("NGP V"). Messrs. Hersh and Albin serve as directors of the Company
and constitute (a) two of the four managing members of each entity that
serves as the ultimate general partner of NGP II and NGP III and (b)
two of the three managing members of the entity that serves as the
ultimate general partner of NGP V. They also own interests in these
Natural Gas Partners partnerships. Accordingly, they may be deemed to
beneficially own, or otherwise control, the voting of all or some
portion of the shares owned by NGP II, NGP III and NGP V. Messrs. Hersh
and Albin disclaim beneficial ownership of these shares.

(7) Represents shares issuable upon exercise of stock options currently
exercisable at an exercise price of $7.84 per share.

(8) Includes 1,750,074 shares issuable upon exercise of stock options
currently exercisable at an exercise price of $7.84 per share. Also
includes shares beneficially owned by NGP II, NGP III and NGP V.
Messrs. Hersh and Albin disclaim beneficial ownership of shares
beneficially owned by NGP II, NGP III and NGP V.

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CHANGE IN CONTROL

On February 8, 2000, a change in control of the Company occurred as a
result of the consummation of the merger (the "Merger") of PEC Acquisition
Corp., a wholly-owned subsidiary of the Company, with and into Old Prize, with
Old Prize as the surviving corporation. Old Prize is now a wholly-owned
subsidiary of the Company. Pursuant to the Merger, each issued and outstanding
share of Old Prize common stock was converted into 1,665.187 shares of the
Company's Common Stock and each issued and outstanding share of Old Prize
convertible preferred stock was converted into 1,665.187 shares of the Company's
convertible preferred stock. After the Merger, former Old Prize stockholders
collectively owned approximately 84% of the Company's outstanding Common Stock,
assuming conversion of the Company's convertible preferred stock. The Old Prize
stockholders were NGP V, Philip B. Smith, Scott C. Smith Irrevocable Trust,
Laura E. Smith Irrevocable Trust, Lon C. Kile, Monica L. Griffin and Pioneer
Natural Resources USA, Inc., a wholly-owned subsidiary of Pioneer ("Pioneer
USA"). The Merger also accelerated the vesting of outstanding options to
purchase shares of Common Stock under a former stock option plan. For accounting
purposes, the Merger was treated as an acquisition of the Company by Old Prize.

Upon completion of the Merger, on February 8, 2000, each of the executive
officers and directors of the Company resigned, except for David R. Albin and
Kenneth A. Hersh, who continued to serve as directors of the Company following
the Merger. The Board of Directors then appointed Philip B. Smith, Lon C. Kile,
Scott D. Sheffield and Mark L. Withrow to fill vacancies on the Board of
Directors. The Board of Directors also appointed the executive officers of Old
Prize to serve as the executive officers of the Company. Pursuant to the Voting
and Shareholders Agreement discussed below, Mr. Smith was the designee of the
stockholders who are members of the Company's management; Messrs. Hersh, Albin
and Kile were the designees of NGP V; and Messrs. Sheffield and Withrow were the
designees of Pioneer USA. Messrs. Sheffield and Withrow resigned as directors of
the Company, effective as of March 31, 2000. See "Certain Transactions."

In conjunction with the Merger, on February 8, 2000, the existing
Voting and Shareholders Agreement between Old Prize, NGP V, Pioneer USA and the
other stockholders of Old Prize was terminated and the Company entered into an
agreement with Pioneer USA, NGP II, NGP III, NGP V and certain management
stockholders, having substantially the same terms and conditions as the prior
agreement. On March 31, 2000, Pioneer USA relinquished all of its rights under
the Voting and Shareholders Agreement, including its right to designate two
members of the Board of Directors. See "Certain Transactions."

Under the terms of the new Voting and Shareholders Agreement and as a
result of Pioneer USA's relinquishment of its rights under this agreement, the
remaining parties to the agreement have the following rights to nominate and
elect members of the Board of Directors:

o Stockholders who are members of the Company's management may
designate one member; and

o NGP V may designate up to four members.

The provisions of the Voting and Shareholders Agreement described above
regarding election of directors terminates as to:

o any single Company management member on the first to occur of
the termination of that person's employment by the Company,
the death of that person and the date on which that person
transfers Company securities in violation of the transfer
restrictions provided for in the agreement; and

o all parties to the agreement on June 29, 2009.

8
11

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth certain information with respect to the
compensation of the Company's Chief Executive Officer and each of the Company's
other executive officers whose compensation, based on salary and bonus earned
during 2000, exceeded $100,000, for services in all capacities to the Company
and its subsidiaries during each of the Company's last three fiscal years. None
of the executive officers shown were employed by the Company during 1998.

LONG-TERM COMPENSATION
------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------------- ---------------------- ---------
SECURITIES
RESTRICTED UNDERLYING LONG-TERM
OTHER ANNUAL STOCK OPTIONS/ INCENTIVE ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARD(S) SARS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($)(1) ($) (#) ($) ($)(2)
- ------------------------- ------- ------- ------- ------------ ---------- --------- --------- ------------

Philip B. Smith ............ 2000 140,000 94,500 -0- -0- -0- -0- 10,500
Chairman and 1999 72,000 47,250 -0- -0- 946,520(3) -0- 10,500
Chief Executive Officer

Lon C. Kile(4) ............. 2000 225,000 151,875 -0- -0- -0- -0- 10,500
President and Chief 1999 114,000 75,938 -0- -0- 535,702(3) -0- 10,500
Operating Officer

D. Richard Massengill(5) ... 2000 175,000 118,125 -0- -0- -0- -0- 10,500
Vice President 1999 62,500 32,813 -0- -0- 267,852(3) -0- 10,500

- ----------
(1) Does not include the value of perquisites and other personal benefits
because the aggregate amount of such compensation, if any, does not
exceed the lesser of $50,000 or 10% of the total amount of annual
salary and bonus for any named individual.

(2) Represents Company contributions to the Company's 401(k) Plan.

(3) Represents shares of Common Stock underlying options granted during
1999 after giving effect to the Merger.

(4) Mr. Kile joined the Company in June 1999.

(5) Mr. Massengill joined the Company in July 1999.

9
12

OPTION/SAR GRANTS IN LAST FISCAL YEAR

The following table sets forth certain information with respect to
options granted, if any, to the named executive officers of the Company during
2000. The Company has never granted any stock appreciation rights.

INDIVIDUAL GRANTS
- --------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/ POTENTIAL REALIZABLE VALUE
UNDERLYING SARS AT ASSUMED ANNUAL RATES
OPTIONS/ GRANTED TO OF STOCK PRICE APPRECIATION
SARS EMPLOYEES EXERCISE OR FOR OPTION TERM
GRANTED IN FISCAL BASE PRICE EXPIRATION ---------------------------
NAME (#) YEAR ($/SH) DATE 5%($) 10%($)
- ----------------------------- ---------- ---------- ----------- ---------- -------- ---------

Philip B. Smith.............. -0- -0- -0- -0- -0- -0-
Lon C. Kile.................. -0- -0- -0- -0- -0- -0-
D. Richard Massengill........ -0- -0- -0- -0- -0- -0-

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES

The following table sets forth certain information with respect to
options exercised by the named executive officers of the Company during 2000,
and the number and value of unexercised options held by such executive officers
at the end of the year. The Company has never granted any stock appreciation
rights.

VALUE OF UNEXERCISED
SHARES NUMBER OF SECURITIES IN-THE-MONEY
ACQUIRED UNDERLYING UNEXERCISED OPTIONS/SARS AT FY-END
ON VALUE OPTIONS/SARS AT FY-END(#)(1) ($)(2)
EXERCISE REALIZED ---------------------------- -----------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------- -------- -------- ----------- ------------- ----------- -------------

Philip B. Smith.......... -0- -0- 946,520 -0- $ 12,219,573 -0-
Lon C. Kile.............. -0- -0- 535,702 -0- 6,915,913 -0-
D. Richard Massengill.... -0- -0- 267,852 -0- 3,457,969 -0-

- ----------

(1) Represents shares of Common Stock underlying options after giving
effect to the Merger. All of the options were previously granted in
1999 and became fully exercisable as a result of the change in control
resulting from the Merger.

(2) Represents the difference between the year-end closing price of the
Common Stock on the American Stock Exchange of $20.75 per share and the
exercise price per share, multiplied by the number of shares subject to
options.

EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
AGREEMENTS

The Company has not entered into any employment agreements with its
executive officers.

10
13

In connection with the Merger, on October 8, 1999, the Company entered
into Termination and Consulting Agreements with each of C. Randall Hill, the
Company's then Chairman and Chief Executive Officer, Steven D. Gray, the
Company's then President, and R. Cory Richards, the Company's then Executive
Vice President. Under these agreements, each executive officer received a cash
severance payment in the amount of $333,333 following completion of the Merger.
Each executive officer also agreed, as may be requested by the Company, to
provide consulting services to the Company at a monthly compensation equal to
his current monthly compensation at the time he entered into the agreement. The
monthly compensation of each of Messrs. Hill and Gray at that time was $13,750.
Mr. Richards' monthly compensation at that time was $11,459. Under these
agreements, the consulting services terminated on February 28, 2000.

REPORT ON EXECUTIVE COMPENSATION

As members of the Board of Directors, it is our responsibility to review
and set the compensation levels of the Company's executive officers, evaluate
the performance of management and consider management succession and related
matters. In addition, we administer any annual or long-term incentive
compensation plans of the Company.

The Board of Directors considers information with respect to the
reasonableness of compensation paid to executive officers of the Company, as
well as all employees of the Company and its subsidiaries in managerial
positions. The Board of Directors also takes into account how compensation
compares to compensation paid by competitors in the Company's industry as well
as the performance of the Company.

The Company's executive compensation policy is designed to attract,
motivate, reward and retain the key executive talent necessary to achieve the
Company's business objectives and contribute to the long-term success of the
Company. In order to meet these goals, the Company's compensation policy for its
executive officers focuses primarily on determining appropriate salary levels
and providing long-term stock-based incentives. To a lesser extent, the
Company's compensation policy also contemplates performance-based cash bonuses.
The executive compensation program for 2000 consisted of two elements: base
salary and cash bonuses.

Base Salary. Base salary for executive officers is determined principally
by competitive factors and the marketplace. In determining its recommendations
for adjustments to the base salaries of officers, including the Chief Executive
Officer, for 2000, the Company focused primarily on the scope of each officer's
responsibilities, each officer's contributions to the Company's success in
moving toward its long-term goals during the year, the Company's assessment of
the quality of services rendered by the officer, comparison with compensation
for officers of comparable companies and an appraisal of the Company's financial
position.

Annual Incentive Bonus. The compensation policy of the Company is that a
part of the annual compensation of each officer should be related to and
contingent upon the performance of the Company, as well as the individual
contribution of each officer. In addition, the Board of Directors has reviewed
compensation information for executives of companies comparable to the Company
in an effort to ensure that the Company's bonuses are competitive. As a result
of the Company's strong financial performance for 2000, the executive officers,
including the Chief Executive Officer, were awarded cash bonuses for 2000.

Equity Compensation. The grant of stock options to executive officers
generally constitutes an important element of long-term compensation for
executive officers. If granted, stock options increase management's equity
ownership in the Company with the goal of ensuring that the interests of
management remain closely aligned with those of the Company's stockholders. The
Board of Directors believes that stock options in the Company provide a direct
link between executive compensation and stockholder value. By attaching vesting
requirements, stock options can also create an incentive for executive officers
to remain with the Company for the long-term. Because each of the executive
officers currently has a significant number of stock options, none of the
executive officers of the Company were granted additional stock options during
2000.

11
14

The members of the Committee believe that linking executive compensation
to corporate performance results is a better alignment of compensation with
corporate goals and stockholder interests. As performance goals are met or
exceeded, resulting in increased value to stockholders, executive officers are
to be rewarded commensurately. The members of the Committee believe that
compensation levels during 2000 adequately reflect the compensation goals and
practices of the Company.

COMPENSATION COMMITTEE

David R. Albin
Kenneth A. Hersh
Philip B. Smith
Lon C. Kile

The Report on Executive Compensation shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 2000, Kenneth A. Hersh, David R. Albin, and Philip B. Smith and
Lon C. Kile, executive officers of the company, served as members of the
Compensation Committee of the Board of Directors. Messrs. Hersh and Albin
constitute (a) two of the four managing members of each entity that serves as
the ultimate general partner of NGP II and NGP III and (b) two of the three
managing members of the entity that serves as the ultimate general partner of
NGP V. They also own interests in these Natural Gas Partners partnerships. NGP V
is a more than 5% stockholder of the Company. For information with respect to
transactions involving such persons, Old Prize and the Company, see "Certain
Transactions."

12
15

PERFORMANCE GRAPH

The following graph compares the yearly percentage change in the
cumulative total stockholder return on the Company's Common Stock during the
period commencing October 29, 1998 (the date on which the Company's Common Stock
began trading publicly), and ending on December 31, 2000, with the cumulative
total return on the American Stock Exchange Market Value Index and the Dow
Jones-Secondary Oil Index. The comparison assumes $100 was invested on October
29, 1998, in the Company's Common Stock and in each of the foregoing indices and
assumes reinvestment of dividends.

[GRAPH]

10/29/1998 12/98 12/99 12/00 3/01
---------- -------- -------- -------- --------

PRIZE ENERGY CORP $ 100.00 $ 68.00 $ 64.00 $ 94.86 $ 93.26
AMEX MARKET VALUE INDEX $ 100.00 $ 109.68 $ 140.12 $ 143.97 $ 140.88
DOW JONES OIL COMPANIES-SECONDARY INDEX $ 100.00 $ 89.85 $ 101.58 $ 162.33 $ 152.78

- ----------
Source: Research Data Group

The above performance graph shall not be deemed incorporated by reference
by any general statement incorporating by reference this Proxy Statement into
any filing under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee oversees the Company's financial reporting process on
behalf of the Board of Directors. Management has the primary responsibility for
the financial statements and the reporting process including the systems of
internal controls. In fulfilling its oversight responsibilities, the Committee
reviewed the audited financial statements in the Annual Report on Form 10-K for
the year ended December 31, 2000, with management including a discussion of the
quality, not just the acceptability, of the accounting principles, the
reasonableness of significant judgments, and the clarity of disclosures in the
financial statements.

13
16

The Committee reviewed with the independent auditors, who are responsible
for expressing an opinion on the conformity of those audited financial
statements with generally accepted accounting principles, their judgments as to
the quality, not just the acceptability, of the Company's accounting principles
and such other matters as are required to be discussed with the Committee under
generally accepted auditing standards. In addition, the Committee has discussed
with the independent auditors the auditor's independence from management and the
Company including the matters in the written disclosures required by the
Independence Standards Board and considered the compatibility of nonaudit
services with the auditors' independence.

The Committee discussed with the Company's independent auditors the
overall scope and plans for their respective audits. The Committee meets with
the independent auditors, with and without management present, to discuss the
results of their examinations, their evaluations of the Company's internal
controls, and the overall quality of the Company's financial reporting.

In reliance on the reviews and discussions referred to above, the
Committee recommended to the Board of Directors (and the Board has approved)
that the audited financial statements be included in the Company's Annual Report
on Form 10-K for the year ended December 31, 2000, for filing with the
Securities and Exchange Commission. The Committee and the Board have also
recommended, subject to stockholder approval, the selection of Ernst & Young LLP
as the Company's independent auditors for 2001.

AUDIT COMMITTEE

Philip B. Smith
Theresa L. Killgore
James R. Latimer III

The Report of the Audit Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.

CERTAIN TRANSACTIONS

Conversion of Convertible Preferred Stock and Repurchase of Common Stock.
On March 31, 2000, Pioneer USA converted all of the 3,984,197 shares of Series A
6% Convertible Preferred Stock of the Company owned by it into 3,984,197 shares
of Common Stock. Immediately after such conversion, the Company purchased
1,346,482 of the newly-issued shares of Common Stock from Pioneer USA for cash
consideration of approximately $18.2 million. Immediately prior to the
conversion of the preferred stock on March 31, 2000, the Company paid Pioneer
USA $458,514 as a dividend on the preferred stock. In conjunction with these
transactions, Pioneer USA relinquished all of its rights under the Voting and
Shareholders Agreement, including its right to designate two members of the
Company's Board of Directors. Accordingly, Scott D. Sheffield and Mark L.
Withrow, Pioneer USA's previous designees on the Board of Directors, resigned as
directors of the Company, effective as of March 31, 2000. Pioneer USA and the
Company also agreed to terminate the Joint Participation Agreement discussed
below as of March 31, 2000.

Merger. For details with respect to the merger of the Company with Old
Prize, including the Voting and Shareholders Agreement entered into in
connection therewith, see "Change in Control."

At the time of the Merger, each of David R. Albin and Kenneth A. Hersh
was a director of Old Prize and also a director of the Company. In addition,
Messrs. Albin and Hersh are principal managers of, and own interests in, NGP II
and NGP III, which entities owned approximately 52% of the Company's outstanding
common stock prior to the Merger. Messrs. Albin and Hersh are also principal
managers of, and own interests in, NGP V, which owned approximately 60% of

14
17

Old Prize's outstanding shares of capital stock (common stock and convertible
preferred stock, combined) prior to the Merger. The terms of and consideration
paid in connection with the Merger was determined through arms-length
negotiations between the executive management of Old Prize and a special
committee of the Board of Directors.

As part of the Merger, the Company committed to indemnify the former
officers and directors of the Company and has purchased officers and directors
insurance for such former officers and directors at a total cost of $20,000.

Joint Participation Agreement. On June 29, 1999, Old Prize and Pioneer
USA entered into a Joint Participation Agreement. On February 8, 2000, Old Prize
assigned to the Company all of its rights and the Company assumed all of its
obligations under the Joint Participation Agreement. As discussed above, the
Joint Participation Agreement was terminated on March 31, 2000. Under the Joint
Participation Agreement, the Company was obligated to notify Pioneer USA of
certain opportunities to acquire oil and gas interests or securities of a
company that was engaged in the acquisition, exploitation, exploration and
development of oil and gas. In addition, the Company was obligated to notify
Pioneer USA of any decision by the Board of Directors to sell to any
unaffiliated third party direct property interests in an exploration project or
equity ownership interests in an entity owned or controlled by the Company that
owned such an exploration project, in either case, for the purpose of financing
such exploration project. Pursuant to the terms of the Joint Participation
Agreement, Pioneer USA had the right to participate, up to 50%, in any
acquisition opportunity or exploration project described above.

Registration Rights Agreement. Upon completion of the Merger, the Company
entered into a Registration Rights Agreement with NGP II, NGP III, NGP V,
Pioneer USA, certain holders of shares of Common Stock and various holders of
the Company's outstanding warrants to purchase Common Stock. The Registration
Rights Agreement entitles the parties to certain demand, piggyback and shelf
registration rights with respect to their shares of Common Stock and provides
for the payment of the expenses of registration by the Company. In addition, the
Registration Rights Agreement grants Pioneer USA the right to include
registrable securities in the first underwritten offering of Common Stock
commenced after the Merger to the extent of the lesser of:

o shares with a value of $50 million; or

o 50% of the total number of shares to be sold in the offering,
plus 50% of any over-allotment for that offering.

On September 26, 2000, the Company completed an underwritten public
offering of its Common Stock in which NGP II, NGP III and Pioneer USA were
selling stockholders. The expenses of the offering, including those of the
selling stockholders other than the underwriting discount, were paid by the
Company in accordance with the terms of the Registration Rights Agreement.

Amendment to Confidentiality and Non-Compete Agreements. In connection
with the Merger, the Company amended its confidentiality and non-compete
agreements with each of C. Randall Hill and Steven D. Gray, former executive
officers and directors of the Company, to terminate the non-competition
provisions of those agreements, effective upon completion of the Merger.

Advisory Services and Indemnification Agreement. Old Prize entered into
an Advisory Services and Indemnification Agreement, dated as of January 25,
1999, as amended, with NGP V, currently a more than 5% stockholder of the
Company. Kenneth A. Hersh and David R. Albin, representatives of NGP V, also
serve as directors of the Company. Under the terms of the agreement, Old Prize
agreed to pay NGP V $150,000 per year, and reimburse NGP V for various expenses,
in consideration for certain consulting and financial advisory services provided
by NGP V and its representatives. Following the Merger, the agreement was
continued with the Company. Prior to the Merger, the Company had a similar
Advisory Services Agreement with NGP II and NGP III, each a more than 5%
stockholder of the Company, except that the annual fee was $75,000. Kenneth A.
Hersh and David R. Albin are also representatives of NGP II and NGP III. This
agreement was terminated upon completion of the Merger.

15
18

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and executive officers, and persons who own
more than 10% of the Common Stock, to report their initial ownership of the
Common Stock and any subsequent changes in that ownership to the SEC and the
American Stock Exchange, and to furnish the Company with a copy of each such
report. SEC regulations impose specific due dates for such reports, and the
Company is required to disclose in this Proxy Statement any failure to file by
these dates during and with respect to 2000.

To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and representations that no other reports were
required, during and with respect to 2000, all Section 16(a) filing requirements
applicable to its officers, directors and more than 10% stockholders were
complied with.

OTHER MATTERS

MATTERS WHICH MAY COME BEFORE THE ANNUAL MEETING

The Board of Directors knows of no matters other than those described in
this Proxy Statement which will be brought before the Annual Meeting for a vote
of the stockholders. If any other matter properly comes before the Annual
Meeting for a vote of the stockholders, the persons named in the accompanying
proxy will vote thereon in accordance with their best judgment. The Company's
Bylaws require that, for business to be properly brought before a meeting of
stockholders by a stockholder, notice must be received by the Secretary of the
Company not less than 60 days nor more than 90 days before the meeting. The
notice must contain a brief description of the business proposed to be brought
before the meeting and other information specified in the Company's Bylaws. If
the Chairman of the meeting determines that such business was not brought before
the meeting in accordance with such procedures, such business will not be
transacted.

PROPOSALS OF STOCKHOLDERS

Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934,
proposals of stockholders intended to be presented at the Company's 2002 Annual
Meeting of Stockholders must be received at the principal executive offices of
the Company, 3500 William D. Tate, Suite 200, Grapevine, Texas 76051, on or
before December 24, 2001, to be considered for inclusion in the Company's proxy
statement and accompanying proxy for that meeting.

In accordance with the Company's Bylaws, any stockholder who intends to
present a proposal at the Company's 2002 Annual Meeting of Stockholders and has
not sought inclusion of the proposal in the Company's proxy statement and
accompanying proxy pursuant to Rule 14a-8, must provide the Company with notice
of such proposal no later than March 25, 2002, in order for such proposal to be
properly brought before the meeting.

By Order of the Board of Directors,

Monica L. Griffin
Secretary

Grapevine, Texas
April 23, 2001

16
19

EXHIBIT A

PRIZE ENERGY CORP.

CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS

PURPOSE. The Audit Committee is appointed by the Board to assist the
Board in monitoring (a) the integrity of the financial statements of the
Company, and (b) the independence and performance of the Company's internal, if
any, and external auditors.

COMPOSITION AND INDEPENDENCE. There shall be not less than three (3)
members of the Audit Committee. The members of the Audit Committee shall meet
the independence, financial literacy and experience requirements of the American
Stock Exchange. The members of the Audit Committee shall be appointed by the
Board.

AUTHORITY. The Audit Committee shall have the authority to retain
special legal, accounting or other consultants to advise the Committee. The
Audit Committee may request any officer or employee of the Company or the
Company's outside counsel or independent auditor to attend a meeting of the
Committee or to meet with any members of, or consultants to, the Committee.

REPORTS. The Audit Committee shall make regular reports to the Board.

FUNCTIONS. The Audit Committee shall perform the following functions.
These functions are set forth as a guide with the understanding that the Audit
Committee may diverge from this guide as appropriate given the circumstances.

1. Review and reassess the adequacy of this Charter annually and
recommend any proposed changes to the Board for approval.

2. Review the annual audited financial statements with management,
including major issues regarding accounting and auditing principles and
practices as well as the adequacy of internal controls that could significantly
affect the Company's financial statements.

3. Review an analysis prepared by management and the independent
auditor of significant financial reporting issues and judgments made in
connection with the preparation of the Company's financial statements.

4. Review with management and the independent auditor the Company's
quarterly financial statements prior to the filing of its Form 10-Q. The
Chairman of the Audit Committee may represent the entire Audit Committee, either
in person or by telephone conference call, for purposes of this review.

5. Meet periodically with management to review the Company's major
financial risk exposures and the steps management has taken to monitor and
control such exposures.

6. Review major changes to the Company's auditing and accounting
principles and practices as suggested by the independent auditor, internal
auditors, if any, or management.

7. Recommend to the Board the appointment of the independent auditor,
which firm is ultimately accountable to the Audit Committee and the Board.

A-1
20

8. Approve the fees to be paid to the independent auditor.

9. Receive periodic reports from the independent auditor regarding the
auditor's independence consistent with Independence Standards Board Standard 1,
discuss such reports with the auditor, and if so determined by the Audit
Committee, recommend that the Board take appropriate action to oversee the
independence of the auditor.

10. Evaluate together with the Board the performance of the independent
auditor and, if so determined by the Audit Committee, recommend that the Board
replace the independent auditor.

11. Meet with the independent auditor prior to the audit to review the
planning and staffing of the audit.

12. Obtain from the independent auditor assurance that Section 10A
(Audit Requirements) of the Securities Exchange Act of 1934 has not been
implicated.

13. Discuss with the independent auditor the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the conduct of
the audit.

14. Review with the independent auditor any problems or difficulties
the auditor may have encountered and any management letter provided by the
auditor and the Company's response to that letter. Such review should include
any difficulties encountered in the course of the audit work, including any
restrictions on the scope of activities or access to required information.

15. Prepare the report required by the rules of the Securities and
Exchange Commission to be included in the Company's annual proxy statement.

16. Review with the Company's counsel legal matters that may have a
material impact on the financial statements.

17. Meet at least annually with the chief financial officer, the senior
internal auditing executive, if any, and the independent auditor in separate
executive sessions.

While the Audit Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Audit Committee to plan or conduct audits or
to determine that the Company's financial statements are complete and accurate
and are in accordance with generally accepted accounting principles. This is the
responsibility of management and the independent auditor. Nor is it the duty of
the Audit Committee to conduct investigations, to resolve disagreements, if any,
between management and the independent auditor or to assure compliance with laws
and regulations and the Company's Code of Conduct.

A-2
21

PRIZE ENERGY CORP.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 24, 2001

The undersigned hereby appoints Philip B. Smith and Lon C. Kile, and each
of them, with full power of substitution, as proxies to represent and vote all
of the shares of Common Stock the undersigned is entitled to vote at the Annual
Meeting of Stockholders of Prize Energy Corp. to be held on the 24th day of May,
2001, at 10:00 a.m., local time, at the Sheraton Grand Hotel, 4440 West John
Carpenter Freeway, Irving, Texas, and at any and all adjournments thereof, on
all matters coming before said meeting.

PLEASE MARK, SIGN AND DATE THE PROXY ON THE OTHER SIDE
AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.

(CONTINUED ON OTHER SIDE)

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE Please mark
MANNER DIRECTED HEREIN BY THE STOCKHOLDER. IF NO your votes as [X]
DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" in this example.
PROPOSALS 1 and 2.

THE BOARD RECOMMENDS A VOTE FOR PROPOSALS 1 and 2.

1. Election of Directors.

Nominees: Philip B. Smith, Lon C. Kile, Kenneth A. Hersh, David R. Albin,
Theresa L. Killgore and James R. Latimer III

[ ] FOR [ ] WITHHELD

INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided.

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

2. Ratification of Ernst & Young LLP as independent auditor of the Company for
2001.

[ ] FOR [ ] AGAINST [ ]ABSTAIN

3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting and any and all adjournments
thereof.

-----------------------------------------
Signature

-----------------------------------------
Signature if held jointly

DATE , 2001
------------------------------

Please sign exactly as name appears
herein, date and return promptly. When
shares are held by joint tenants, both
must sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as such.
If a corporation, please sign in full
corporate name by duly authorized officer
and give title of officer. If a
partnership, please sign in partnership
name by authorized person and give title
or capacity of person signing.