1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 5, 2001

REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

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PRIZE ENERGY CORP.
(Exact name of registrant as specified in its charter)

DELAWARE 75-2766114
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

3500 WILLIAM D. TATE AVE., SUITE 200
GRAPEVINE, TEXAS 76051
(817) 424-0400

(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)

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LON C. KILE
PRIZE ENERGY CORP.
3500 WILLIAM D. TATE AVE., SUITE 200
GRAPEVINE, TEXAS 76051
(817) 424-0400

(Name, address, including zip code, and telephone number,
including area code, of agent for service)

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Copies to:

ROBERT A. CURRY
CONNER & WINTERS,
A PROFESSIONAL CORPORATION
3700 FIRST PLACE TOWER
15 E. FIFTH STREET
TULSA, OKLAHOMA 74103-4344
(918) 586-5725

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after this registration statement becomes effective.

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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|

If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |X|

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|

If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_|

If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|

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CALCULATION OF REGISTRATION FEE
====================================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER SHARE OFFERING PRICE REGISTRATION FEE
--------------------------- ------------ ---------------- ---------------- ----------------

Warrants to purchase common stock............. 9,558,403 warrants N/A(1) N/A(1) N/A(1)
Common Stock, $.01 par value per share(2)..... 1,365,486 shares(3) $28.00 $38,233,608 $9,559.00
====================================================================================================================================

(1) In accordance with Rule 457(g) under the Securities Act of 1933, as
amended, no separate registration fee is payable in respect of the
warrants to purchase shares of common stock, $.01 par value per share
("Warrants").

(2) Represents the shares of common stock issuable upon the exercise of the
Warrants (seven Warrants per share of common stock).

(3) Plus such number of additional shares of common stock as may be
issuable upon exercise of the Warrants as a result of anti- dilution
adjustments in accordance with the terms of the Warrants.

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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

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EXPLANATORY NOTE

This Registration Statement contains two forms of prospectuses: (1) one
to be used in connection with offers and sales of warrants to purchase shares of
common stock by the holders of such warrants and the issuance of shares of
common stock upon the exercise of warrants by purchasers of the warrants; and
(2) the other in connection with offers and sales of common stock that may be
acquired upon the exercise of warrants to purchase shares of common stock by
certain holders thereof.

Subject to Completion, Dated July 5, 2001.

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

PRIZE ENERGY CORP.

9,558,403 WARRANTS

1,365,486 SHARES OF COMMON STOCK

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Under this prospectus, the holders of 9,558,403 warrants to purchase
1,365,486 shares of our common stock may offer and sell their warrants. In
addition, we are offering 1,365,486 shares of our common stock that are issuable
upon exercise of warrants by the purchasers of the warrants under this
prospectus. The warrants were issued pursuant to a warrant agreement dated
October 28, 1998. Each warrant entitles the holder to purchase one-seventh of a
share of common stock at a price of $4.00 per one-seventh of a share.
Accordingly, seven warrants must be exercised to acquire one share of common
stock at an aggregate exercise price of $28.00 per share. The exercise price and
the number of shares of common stock issuable upon the exercise of the warrants
are subject to adjustment in the event of stock dividends, stock splits,
reclassifications and other events.

Our common stock is traded on the American Stock Exchange under the
symbol "PRZ." Application has been made for listing the warrants on the American
Stock Exchange. The last reported sale price of our common stock on the American
Stock Exchange on July 3, 2001, was $ 19.70 per share.

SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR A DISCUSSION OF CERTAIN
MATERIAL FACTORS YOU SHOULD CONSIDER IN CONNECTION WITH AN INVESTMENT IN THE
WARRANTS OR IN OUR COMMON STOCK.

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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

The date of this prospectus is , 2001.

YOU SHOULD RELY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT
WE HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS IS AN OFFER TO SELL OR TO BUY
ONLY THE SHARES OFFERED IN THIS DOCUMENT, BUT ONLY UNDER CIRCUMSTANCES AND IN
JURISDICTIONS WHERE IT IS LAWFUL TO DO SO. THE INFORMATION CONTAINED IN THIS
PROSPECTUS IS CURRENT ONLY AS OF ITS DATE.

TABLE OF CONTENTS

PAGE

Where You Can Find More Information...............................................................................1

Information We Incorporate By Reference...........................................................................1

Prospectus Summary................................................................................................2

About Prize Energy Corp......................................................................................2

The Offering.................................................................................................4

Risk Factors......................................................................................................5

Forward-Looking Statements.......................................................................................10

Use of Proceeds..................................................................................................10

Selling Warrantholders...........................................................................................11

Description of the Warrants......................................................................................13

Description of Capital Stock.....................................................................................15

Plan of Distribution.............................................................................................18

Legal Matters....................................................................................................18

Experts..........................................................................................................19

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission a
Registration Statement on Form S-3 under the Securities Act of 1933 with respect
to the warrants and shares of common stock being offered by this prospectus.
This prospectus does not include all the information set forth in the
registration statement, and you should refer to the registration statement for
further information with respect to our company.

We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission. You may read and
copy any reports, statements and other information that we file at the
Commission's public reference rooms in Washington, D.C., New York, New York, and
Chicago, Illinois. Please call the Commission at 1-800-SEC-0330 for further
information on the public reference rooms. Our filings with the Commission are
also available to the public from commercial document retrieval services and at
the web site maintained by the Commission at http://www.sec.gov. Our reports,
proxy statements and other information filed with the Commission can also be
inspected at the American Stock Exchange, 86 Trinity Place, New York, New York
10006.

INFORMATION WE INCORPORATE BY REFERENCE

The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with them, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is an important part of this prospectus,
and the information that we file later with the Securities and Exchange
Commission will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the Securities and Exchange Commission under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 until all of the securities are
sold or until we terminate this offering:

(1) Our Annual Report on Form 10-K for the year ended December 31,
2000;

(2) Our Quarterly Report on Form 10-Q for the three months ended
March 31, 2001; and

(3) A description of our common stock contained in the
registration statement on Form 8-A filed with the Commission
on October 26, 1998, and including any amendment or report
heretofore or hereafter filed for the purpose of updating the
description of our common stock contained therein.

We will provide without charge to each person, including any beneficial
owner, to whom a copy of this prospectus is delivered, upon the written or oral
request of such person, a copy of any or all of the documents incorporated by
reference in this document, other than exhibits to the documents unless the
exhibits are specifically incorporated by reference. Requests should be made to
Secretary, Prize Energy Corp., 3500 William D. Tate Ave., Suite 200, Grapevine,
Texas 76051, (817) 424-0400.

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, included or
incorporated by reference in this prospectus. You should read this prospectus
together with additional information described under the heading "Where You Can
Find More Information." Unless the context otherwise requires, references in
this prospectus to "Prize," "we," "us" and "our" refer to Prize Energy Corp.

ABOUT PRIZE ENERGY CORP.

GENERAL

We are a mid-size public independent oil and gas company engaged
primarily in the acquisition, enhancement and exploitation of producing oil and
gas properties. We currently own oil and gas properties in three core operating
areas which are principally located in the Permian Basin of West Texas and
Southeastern New Mexico, the onshore Gulf Coast area of Texas and Louisiana and
the Mid-Continent area of Oklahoma and the Texas Panhandle. Over 80% of our oil
and gas property base is located in Texas.

We began operations in January 1999 as a privately-held company and
have grown rapidly through the acquisition of producing oil and gas properties
and the acquisition of Vista Energy Resources, Inc. In June 1999, we completed
the acquisition of significant producing oil and gas properties from Pioneer
Natural Resources USA, Inc. for $239 million. On February 8, 2000, we completed
the acquisition of Vista Energy Resources pursuant to a reverse merger. The
Vista merger, deemed a reverse acquisition of Vista by the former Prize,
resulted in our becoming a publicly-traded company on the American Stock
Exchange. On February 28, 2001, we acquired oil and gas properties from Apache
Corporation for $65 million.

Set forth below is a brief summary of our historical total proved oil
and gas reserve base at December 31, 2000, and our pro forma total proved oil
and gas reserve base at December 31, 2000, after giving effect to the
acquisition of the oil and gas properties from Apache Corporation.

Historical Pro forma
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Total Proved Reserves:
Natural gas.......................... 298 Bcf 321 Bcf
Oil and liquids...................... 49 MMBbl 58 MMBbl
Oil equivalent....................... 99 MMBOE 112 MMBOE
Natural gas equivalent............... 593 Bcfe 669 Bcfe
Reserve Mix............................... 50% oil and liquids 52% oil and liquids
50% natural gas 48% natural gas
Proved Reserve Value NPV-10 (1)........... $1.7 billion $1.8 billion
Reserve to Production Ratio (2)........... 13 years 13 years

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(1) The present value of pre-tax future net revenues discounted at 10% per
annum assuming unescalated prices of $26.12 per Bbl of oil, $14.91 per
Bbl of NGL and $9.41 per Mcf of natural gas. On December 31, 2000,
NYMEX prices were $26.80 per Bbl for West Texas Intermediate crude oil
and $9.78 per MMBtu for natural gas.

(2) Represents proved reserves at December 31, 2000, divided by production
for the year ended December 31, 2000.

Our principal executive offices are located at 3500 William D. Tate
Ave., Suite 200, Grapevine, Texas 76051, and our telephone number is (817)
424-0400.

BUSINESS STRATEGY

The primary objective of our business strategy is to increase our net
asset value per share by increasing oil and natural gas reserves, production,
cash flow and net income through the acquisition, exploitation and enhancement
of producing oil and gas properties and by maintaining a low operating and
corporate cost structure. Management believes the following components of this
strategy will allow us to achieve our objective.

o Geographic Concentration. We focus our activities in the core
areas where our management, technical staff and field
operations teams have significant prior experience.
Substantially all of our properties are located in these core
operating areas where we can better achieve economies of
scale.

o Acquisition of Producing Properties. We focus on acquiring
producing reserves with a production history of at least three
to five years in order to reduce the risks inherent in
estimating the remaining oil and natural gas reserves and the
future production profile.

o Aggressive Value Enhancement. We seek to purchase oil and gas
properties that we will operate and that have potential for
development and operational improvements. We undertake an
extensive well-by-well operational study of acquired
properties in order to identify value enhancement
opportunities such as development drilling, recompletions,
workovers and cost reductions. These activities can increase
cash flow and, in some cases, add incremental reserves.

o Low Cost Operating Structure. We pursue a low cost operating
strategy at both the field and corporate levels.

o Financial Flexibility. We seek to maintain financial
flexibility in order to be able to take advantage of strategic
acquisition opportunities and protect against price declines.
As a result of our strategy of acquisition, exploitation and
enhancement, our debt levels will vary from time to time. Over
the long-term, management believes that an appropriate target
debt level is 50% of oil and natural gas reserve value, given
historical price levels. Management may seek to further reduce
oil and gas reserve, price and financial risks by:

o diversifying our property holdings and avoiding concentrating
a large value in any single property; and

o using commodity price hedges, interest rate swaps and other
financial strategies.

THE OFFERING

Securities Offered................................... The selling warrantholders are offering 9,558,403
warrants and we are offering 1,365,486 shares of our
common stock issuable upon exercise of the warrants by
the purchasers thereof. No fractional shares of common
stock will be issued upon exercise of the warrants.
Instead, at the time of exercise, we will pay to the holder
of the warrant an amount in cash equal to the then current
market value of any fractional share.

Expiration of Warrants............................... The warrants will expire on November 1, 2002.

Exercise of Warrants................................. The warrants became exercisable on October 28, 1998.
Each warrant entitles its holder to purchase
one-seventh of a share of our common stock at an
exercise price of $4.00 per one-seventh of a
share. ACCORDINGLY, SEVEN WARRANTS MUST BE
EXERCISED TO PURCHASE ONE WHOLE SHARE OF OUR COMMON
STOCK AT AN AGGREGATE EXERCISE PRICE OF $28.00
PER SHARE. If certain events listed in the
warrant agreement dated October 28, 1998, occur,
we may adjust the number of shares of common stock
for which, and the price per share at which, a
warrant is exercisable.

Listing of Common Stock.............................. Our common stock is listed on the American Stock
Exchange under the symbol "PRZ."

Listing of Warrants.................................. Application has been made for listing the warrants on the
American Stock Exchange.

Use of Proceeds...................................... We will not receive any proceeds from the sale of the
warrants. To the extent that any warrants are exercised,
we will receive the exercise price for the common stock
we issue. We intend to use the net proceeds, if any,
received by us from the exercise of the warrants for
general corporate and working capital purposes.

RISK FACTORS

You should carefully consider the following risk factors, in addition
to the other information set forth in this prospectus, before deciding to
purchase any warrants or shares of our common stock. Each of these risk factors
could adversely affect our business, operating results and financial condition,
as well as adversely affect the value of an investment in the warrants or common
stock.

RISKS RELATING TO THE OIL AND GAS INDUSTRY

A DECREASE IN OIL AND NATURAL GAS PRICES WILL ADVERSELY AFFECT OUR FINANCIAL
RESULTS.

Our revenues, profitability and future growth depend substantially upon
the prevailing market prices of oil and natural gas. While current oil and
natural gas prices are at favorably high price levels, oil and natural gas
prices and markets have been, and are likely to continue to be, extremely
volatile. A decrease in oil and natural gas prices will not only reduce revenues
and profits, but will also reduce the quantities of reserves that are
commercially recoverable and may result in charges to earnings for impairment of
the value of these assets. If oil and natural gas pricing conditions decline
significantly for extended periods of time in the future, we might not be able
to generate enough cash flow from operations to meet our obligations and make
planned capital expenditures. Oil and natural gas prices are subject to wide
fluctuations in response to relatively minor changes in the supply of and demand
for oil and natural gas, market uncertainty and a variety of additional factors
that are beyond our control.

ESTIMATES OF OUR PROVED RESERVES MAY MATERIALLY CHANGE DUE TO NUMEROUS
UNCERTAINTIES INHERENT IN ESTIMATING OIL AND NATURAL GAS RESERVES.

The oil and natural gas reserve data included or incorporated by
reference in this prospectus represent only estimates of management. There are
many uncertainties inherent in estimating quantities of proved reserves and
their values. The process of estimating oil and natural gas reserves requires
interpretations of available technical data and various assumptions, including
assumptions relating to economic factors. Any significant inaccuracies in these
interpretations or assumptions could materially affect the estimated quantities
and present value of reserves included or incorporated by reference in this
prospectus. The accuracy of any reserve estimate is a function of the quality of
available data, engineering and geological interpretations and judgment and the
assumptions used regarding quantities of recoverable oil and natural gas
reserves and prices for oil and natural gas. Actual prices, production,
development expenditures, operating expenses and quantities of recoverable oil
and natural gas reserves will vary from those assumed in our estimates, and
these variances may be significant. Any significant variance from the
assumptions used could result in the actual quantity of our reserves and future
net cash flow being materially different from the estimates in our reserve
reports. In addition, results of drilling, testing and production and changes in
oil and natural gas prices after the date of the estimate may result in
substantial upward or downward revisions.

WE MAY NOT BE ABLE TO REPLACE RESERVES.

If we are not successful in our acquisition, enhancement and
exploitation activities, our reserves and revenues will decline over time. These
activities will require significant expenditures. If our cash flow from
operations is not sufficient for this purpose, we may not be able to obtain the
necessary funds to maintain or expand our oil and natural gas reserves. The
inability to replace reserves could reduce the amount of credit available to us
since the maximum amount of borrowing capacity available under our revolving
credit facility is based, at least in part, on the estimated quantities of our
proved reserves.

THE SUCCESS OF FUTURE ACQUISITIONS IS UNCERTAIN.

Our failure to successfully complete acquisitions could have a material
adverse effect on our future results of operations and financial condition.
There can be no assurance that our completed acquisitions will be successful. We
expect to continue to evaluate and pursue acquisition opportunities available on
terms management considers favorable. The successful acquisition of producing
properties involves an assessment of recoverable reserves, future oil and
natural gas prices, operating costs, potential environmental and other
liabilities and other factors beyond our control. This assessment is necessarily
inexact and its accuracy is inherently uncertain. In connection with an
assessment, we will perform a review of the subject properties we believe to be
generally consistent with industry practices. This review, however, will not
reveal all existing or potential problems, nor will it permit us to become
sufficiently familiar with the properties to assess fully their deficiencies and
capabilities. Inspections may not be performed on every well, and structural and
environmental problems are not necessarily observable even when an inspection is
undertaken. We may in many cases assume pre-closing liabilities, including
environmental liabilities, and will likely acquire interests in properties on an
"as is" basis.

OUR OIL AND NATURAL GAS OPERATIONS ARE SUBJECT TO OPERATIONAL RISKS.

Our oil and natural gas operations are subject to risks and
uncertainties associated with the drilling for and production and transportation
of oil and natural gas, all of which can affect our operating results. Our
operations may be materially curtailed, delayed or canceled as a result of
numerous factors, including:

o accidents;

o title problems;

o weather conditions;

o shortages or delays in the delivery of equipment; and

o compliance with governmental regulations.

COSTS TO COMPLY WITH ENVIRONMENTAL LAWS ARE SIGNIFICANT.

Environmental and other governmental laws have increased the costs to
plan, design, drill, install, operate and abandon oil and natural gas wells and
related facilities. We may expend significant financial and managerial resources
to comply with environmental laws, although, to date, our expenditures for
environmental compliance have been immaterial. Increasingly strict environmental
laws and enforcement policies, and claims for damages to property, employees,
other persons and the environment resulting from our operations, could cause us
to incur substantial costs and liabilities.

MARKETABILITY OF OUR OIL AND NATURAL GAS PRODUCTION MAY BE AFFECTED BY FACTORS
BEYOND OUR CONTROL.

The marketability of our production depends in part upon the
availability, proximity and capacity of natural gas gathering systems, pipelines
and processing facilities. Most of our natural gas is delivered through
gathering systems and pipelines that are not owned by us. Federal and state
regulation of oil and natural gas production and transportation, tax and energy
policies, changes in supply and demand and general economic conditions all could
adversely affect our ability to produce and market our oil and natural gas.

WE WILL CONTINUE TO FACE STRONG COMPETITIVE INDUSTRY CONDITIONS WHICH MAY
NEGATIVELY AFFECT OUR OPERATIONS.

There is strong competition in all aspects of the oil and gas industry.
We must compete with a substantial number of other oil and gas companies in all
aspects of our operations. Many of our competitors have substantially greater
financial, managerial, technical and other resources than we do, which may
adversely affect our ability to compete with these companies.

SOME LOSSES MAY NOT BE INSURED AND COULD MATERIALLY ADVERSELY AFFECT OUR
OPERATIONS.

Our operations are subject to the hazards and risks inherent in the oil
and gas industry, including the risks of fire, explosions, blow-outs, pipe
failure, abnormally pressured formations and environmental accidents such as oil
spills, gas leaks, salt water spills and leaks, ruptures or discharges of toxic
gases. We will carry insurance against some, but not all, of the hazards
associated with our business. This is our standard practice and we believe that
this is standard practice in our industry. Because of this practice, however, we
may be subject to substantial liability or losses that are not insured.

RISKS RELATING TO AN INVESTMENT IN PRIZE

WE MAY NOT BE ABLE TO MEET OUR CAPITAL REQUIREMENTS.

We will need to continue to make substantial capital expenditures for
the acquisition, enhancement, exploitation and production of oil and natural gas
reserves. At March 31, 2001, we had cash reserves of $14.4 million and working
capital of $24.5 million. Without successful enhancement, exploitation or
acquisition activities, our reserves and revenues will decline over time. We
currently anticipate that our oil and natural gas capital expenditures will be
approximately $60 million for enhancement, exploitation and drilling activity in
2001. We intend to finance our capital expenditures, other than significant
acquisitions, from internally generated funds provided by operations. The timing
of most of our capital expenditures is discretionary, with no long-term capital
commitments. Consequently, we have a significant degree of flexibility to adjust
the amounts of our capital expenditures as circumstances may warrant. However,
in the long term, if our cash flow from operations and availability under
existing credit facilities are not sufficient to satisfy capital expenditure
requirements, there can be no assurance that additional debt or equity financing
will be available to allow us to fund our continued growth.

OUR SIGNIFICANT INDEBTEDNESS COULD HAVE IMPORTANT CONSEQUENCES TO YOU.

We currently have a substantial amount of indebtedness. At December 31,
2000, our total long term debt outstanding was approximately $214.3 million and
our long term debt to total capitalization ratio was approximately 66 percent.
As of March 31, 2001, our total long-term debt outstanding had increased to $281
million, principally due to the acquisition of oil and natural gas properties
from Apache Corporation. We may incur additional indebtedness under our credit
facility. Our significant indebtedness could have important consequences to you.
For example:

o our ability to obtain any necessary financing in the future
for working capital, capital expenditures, acquisitions, debt
service requirements or other purposes may be limited;

o a portion of our cash flow from operations must be utilized
for the payment of interest on our indebtedness and will not
be available for financing capital expenditures or other
purposes;

o our level of indebtedness and the covenants governing our
current indebtedness could limit our flexibility in planning
for, or reacting to, changes in our business because certain
financing options may be limited or prohibited;

o we are more highly leveraged than some of our competitors,
which may place us at a competitive disadvantage;

o our level of indebtedness may make us more vulnerable during
periods of low oil and natural gas prices or in the event of a
downturn in our business because of our fixed debt service
obligations;

o the terms of our credit facility will require us to make
interest and principal payments and to maintain stated
financial covenants; and

o if the requirements of our credit facility are not satisfied,
the lenders under this facility would be entitled to
accelerate the payment of all outstanding indebtedness under
the facility and, in such event, we cannot assure you that we
would have sufficient funds available or could obtain the
financing required to meet our obligations.

OUR HEDGING ACTIVITIES COULD RESULT IN LOSSES.

We currently use, and intend in the future to use, energy swap
arrangements and derivatives for hedging purposes to reduce sensitivity to oil
and natural gas price volatility. If our oil and natural gas reserves are not
produced at the rates we estimated due to inaccuracies in the reserve estimation
process, operational difficulties or regulatory limitations, we will be required
to satisfy obligations we may have under fixed price sales and hedging contracts
on potentially unfavorable terms without the ability to hedge that risk through
sales of comparable quantities of our own production. Further, the terms under
which we enter into fixed price sales and hedging contracts are based on
assumptions and estimates of numerous factors such as costs of production and
pipeline and other transportation costs to delivery points. Substantial
variations between the assumptions and estimates used and actual results
experienced could materially adversely affect anticipated profit margins and our
ability to manage the risks associated with fluctuations in oil and natural gas
prices. Fixed price sales and hedging contracts also limit the benefits we will
realize if actual prices rise above the contract prices. In addition, fixed
price sales and hedging contracts are subject to the risk that the counter-party
may prove unable or unwilling to perform its obligations under those contracts.
Any significant nonperformance could have a material adverse effect on our
future results of operations and financial condition. Based on futures prices as
of March 31, 2001, the fair market value of unrealized losses resulting from our
crude oil and natural gas hedging instruments was approximately $27.6 million.

OUR SUCCESS DEPENDS ON KEY MEMBERS OF OUR MANAGEMENT.

Philip B. Smith, Lon C. Kile and D. Richard Massengill are critical to
our success. We do not have employment contracts with any of these individuals
which would require them to remain employed with us for any period of time. Loss
of the services of any of these individuals could have a material adverse effect
on our operations.

OWNERSHIP OF OUR OUTSTANDING COMMON STOCK IS CONCENTRATED IN A SMALL NUMBER OF
STOCKHOLDERS.

Our directors, executive officers and principal stockholders, and
certain of their affiliates, beneficially own approximately 63% of our
outstanding common stock. One of our stockholders, Natural Gas Partners V, L.P.,
beneficially owns approximately 57% of our outstanding shares of common stock.
Accordingly, these stockholders, as a group, and Natural Gas Partners V, by
itself, will be able to control the outcome of stockholder votes, including
votes concerning the election of directors, the adoption or amendment of
provisions in our certificate of incorporation or bylaws and the approval of
mergers and other significant corporate transactions. The existence of these
levels of ownership concentrated in a few persons makes it unlikely that any
other holder of our common stock will be able to affect the management or
direction of Prize. These factors may also have the effect of delaying

or preventing a change in the management or voting control of Prize, including
transactions that otherwise could involve payment of a premium over prevailing
market prices to holders of our common stock.

FUTURE SALES OF COMMON STOCK MAY RESULT IN A DECREASE IN VALUE TO EXISTING
STOCKHOLDERS.

Sales of a substantial number of shares of our common stock, or the
perception that such sales could occur, could adversely affect the market price
of our common stock and could impair our ability to raise capital through the
sale of common stock.

THE ABILITY OF OUR BOARD OF DIRECTORS TO ISSUE PREFERRED STOCK AND PROVISIONS OF
DELAWARE LAW MAY DISCOURAGE CHANGE OF CONTROL TRANSACTIONS.

Our certificate of incorporation authorizes our board of directors to
issue up to 10 million shares of preferred stock without stockholder approval
and to set the rights, preferences and other designations, including voting
rights, of those shares as the board of directors may determine. These
provisions, alone or in combination with each other, may discourage transactions
involving actual or potential changes of control of management, including
transactions in which you might otherwise receive a premium over prevailing
market prices for your shares of common stock. We are also subject to provisions
of the Delaware General Corporation Law that may make some business combinations
more difficult.

THERE HAS BEEN NO PRIOR PUBLIC MARKET FOR THE WARRANTS.

We anticipate that the warrants will be listed for trading on the
American Stock Exchange, and while the warrants have identical terms as the
2,252,670 outstanding public warrants of the Company that are listed and
publicly traded on the American Stock Exchange (which warrants are exercisable
for an aggregate of 321,810 shares of our common stock (seven warrants per
share) at an aggregate exercise price of $28.00 per share), there is no
assurance that an active trading market for the warrants will develop or, if
developed, that it will be sustained. If an active market for the warrants does
not develop, the market price and liquidity of the warrants may be adversely
affected.

PRICES OF OUR COMMON STOCK AND WARRANTS MAY FLUCTUATE SIGNIFICANTLY; THERE IS NO
ASSURANCE THE WARRANTS WILL BE "IN-THE-MONEY."

The market prices of our common stock and warrants may fluctuate
significantly. A number of factors could affect the prices of our securities,
including:

o our operating and financial performance and prospects;

o changes in revenue or earnings estimates or publication of
research reports by analysts;

o general market conditions, including fluctuations in commodity
prices;

o the operating and stock performance of other comparable
companies;

o strategic actions by our competitors; and

o economic, legal and regulatory factors.

performance of the particular companies. These broad market fluctuations could
adversely affect the prices of our common stock and warrants.

It is possible that the price of our common stock may not reach a price
level that will result in the warrants becoming "in-the-money" for any purchaser
of the warrants prior to the expiration of the warrants on November 1, 2002. As
to any purchaser of warrants under this prospectus, the warrants will become
"in-the-money" only if the market price of our common stock exceeds the sum of
$28.00 PLUS the purchaser's cost of acquiring seven warrants.

FORWARD-LOOKING STATEMENTS

This document includes and incorporates by reference "forward-looking
statements" as defined by the Securities and Exchange Commission. These
statements concern our plans, expectations and objectives for future operations.
All statements, other than statements of historical facts, included or
incorporated in this prospectus that address activities, events or developments
that we expect, believe or anticipate will or may occur in the future are
forward-looking statements. The words "believe," "plan," "intend," "anticipate,"
"estimate," "project" and similar expressions are also intended to identify
forward-looking statements. These forward-looking statements include, among
others, such things as:

o reserve estimates, including estimates of future net revenues
associated with the reserves and the present value of the
estimated future net revenues;

o future production of oil and natural gas;

o future acquisition of oil and natural gas producing
properties;

o future enhancement, exploitation and drilling activity and
other capital expenditures;

o future financial performance; and

o business strategies and expansion and growth of our business
and operations.

These forward-looking statements are based on assumptions which we
believe are reasonable based on our expectations and projections about future
events and industry conditions and trends affecting our business at the time
such statements were made. However, whether actual results and developments will
conform to our expectations and predictions is subject to a number of risks and
uncertainties which could cause actual results to differ from those contained in
the forward-looking statements, including those factors discussed under "Risk
Factors" on pages 5 - 10 of this prospectus. Consequently, we cannot assure you
that the actual results or developments anticipated by us will be realized or,
even if substantially realized, that they will have the anticipated consequences
to or effects on us or our business or operations. We assume no obligation to
publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.

USE OF PROCEEDS

We will not receive any proceeds from the sale of the warrants. To the
extent any holders exercise their warrants, we will receive the aggregate
exercise price for the shares of common stock issued, which currently is based
on $28.00 per whole share of common stock. We intend to use the net proceeds, if
any, received from the exercise of the warrants for general corporate and
working capital purposes. However, there is no assurance that any warrants will
be exercised.

SELLING WARRANTHOLDERS

The following table sets forth information as of June 29, 2001, with
respect to the selling warrantholders, the number of shares of our common stock
and warrants beneficially owned by them and the number of warrants that they may
offer under this prospectus. Because the selling warrantholders may sell all,
some or none of their warrants, and because the selling warrantholders may elect
to exercise their warrants or acquire additional shares of our common stock in
the public market, we cannot estimate the number of shares or warrants that will
be beneficially owned by them after completion of this offering.

The number of shares of our common stock outstanding used in
calculating the percentage for each person listed includes the shares of common
stock which could be acquired by that person upon the exercise of any warrant
(all of which are currently exercisable) but excludes such shares of common
stock which could be so acquired by any other person. The percent of beneficial
ownership is based on 12,865,113 shares of our common stock outstanding as of
June 29, 2001.

Securities Beneficially Owned Prior to Offering
-----------------------------------------------
Number of
Name of Number of Number of Warrants
Selling Warrantholder Shares (1) Warrants Percent Offered
- --------------------- ---------- -------- ------- ---------

Natural Gas Partners III, L.P. (2).. 503,120 3,521,841 3.76% 3,521,841
Natural Gas Partners II, L.P. (2)... 368,108 2,576,760 2.78% 2,576,760
C. Randall Hill (3)................. 171,759 632,838 1.33% 632,838
Steven D. Gray (3).................. 172,559 632,838 1.33% 632,838
R. Cory Richards (3)................ 105,183 352,919 * 352,919
Thomas O. Hicks..................... 63,421(4) 185,746 * 185,746
Sam R. Brock........................ 25,892 181,250 * 181,250
Darrell M. Dillard.................. 25,897 181,250 * 181,250
Robert R. Donnelly.................. 25,892 181,250 * 181,250
Wayne M. Whitaker................... 52,969 181,250 * 181,250
Marilyn D. Wade..................... 20,500 143,500 * 143,500
John Q. Adams (3)................... 18,125 126,875 * 126,875
John R. Muse........................ 17,688 123,822 * 123,822
Jack D. Furst....................... 32,277 123,822 * 123,822
Warren L. Gray...................... 16,134 61,899 * 61,899
TOH, Jr. Ventures, Ltd.............. 15,853 46,431 * 46,431
Mack H. Hicks 1984 Trust............ 15,853 46,431 * 46,431
John A. Hicks 1984 Trust............ 15,853 46,431 * 46,431
Robert B. Hicks 1984 Trust.......... 15,853 46,431 * 46,431

Lawrence D. Stuart, Jr.............. 4,426 30,987 * 30,987
R. Scott Cohen...................... 11,997 24,774 * 24,774
D. Keith Mills...................... 3,066 21,464 * 21,464
John Dollahan....................... 6,601 16,824 * 16,824
Leonard S. Gallegos................. 9,262 16,824 * 16,824
Russell Wickman (3)................. 2,403 16,824 * 16,824
Jerred G. Blanchard, Jr............. 1,767 12,374 * 12,374
John P. Lewis....................... 1,767 12,374 * 12,374
Kaitrin Roberts Trust............... 589 4,125 * 4,125
John Roberts Trust.................. 589 4,125 * 4,125
Kara Roberts Trust.................. 589 4,124 * 4,124

- ----------

*Less than 1%

(1) Includes the shares of common stock issuable upon the exercise of the
warrants (seven warrants per share of common stock).

(2) David R. Albin and Kenneth A. Hersh, each a director of Prize,
constitute two of the four managing members of each entity that serves
as the ultimate general partner of Natural Gas Partners II, L.P. and
Natural Gas Partners III, L.P. They each also own interests in these
Natural Gas Partners partnerships.

(3) Prior to the consummation of our acquisition of Vista Energy Resources,
Inc. on February 8, 2000, these individuals served Vista Energy
Resources in the following capacities:

Name Position
- ---- --------

C. Randall Hill Chief Executive Officer, Chief Financial Officer and
Chairman of the Board

Steven D. Gray President, Chief Operating Officer and Director

R. Cory Richards Executive Vice President, Exploration Manager and
Secretary

John Q. Adams Director

Russell Wickman Land Manager

(4) Excludes 9,220 outstanding shares and 6,633 shares issuable upon the
exercise of the warrants held by each of TOH, Jr. Ventures, Ltd., the
Mack H. Hicks 1984 Trust, John A. Hicks 1984 Trust and Robert B. Hicks
1984 Trust. Mr. Hicks serves as President of the general partner of
TOH, Jr. Ventures, Ltd., and as trustee of each of the trusts. Mr.
Hicks disclaims beneficial ownership of such shares.

On October 28, 1998, Vista Energy Resources, Inc. acquired Midland
Resources, Inc. pursuant to a merger. In connection with the merger transaction,
Vista entered into separate exchange agreements with each of Sam R. Brock,
Darrell M. Dillard, Robert R. Donnelly, Wayne M. Whitaker, Marilyn D. Wade and
John Q. Adams (collectively, the "Midland Affiliates") to exchange their
outstanding options to purchase common stock of Midland Resources for the
warrants listed in the table above. Prior to Vista's acquisition of Midland
Resources, Messrs. Brock, Dillard, Donnelly and Whitaker were members of the
board of directors of Midland Resources; Mr. Adams was an advisory director of
Midland Resources; and Ms. Wade was the corporate secretary of Midland
Resources. In addition, Vista entered into separate exchange agreements with the
holders of all the outstanding limited partnership interests in Vista Resources
Partners, L.P. ("Vista L.P.") and the holders of all the outstanding shares of
common stock of the general partner of Vista L.P. to exchange such partnership
interests and shares of common stock for shares of Vista common stock and the
warrants listed in the table above for each person listed other than the Midland
Affiliates. We assumed all obligations with respect to the outstanding warrants
and the warrant agreement in connection with our acquisition of Vista on
February 8, 2000, pursuant to a merger. Except as noted above or in the
footnotes to the above table, none of the selling warrantholders has, or within
the past three years has had, a position, office or material relationship with
us or any of our predecessors or affiliates.

DESCRIPTION OF THE WARRANTS

The warrants were issued pursuant to a warrant agreement dated October
28, 1998, between Prize and American Stock Transfer & Trust Company, as warrant
agent, in private transactions that were not subject to the registration
requirements of the Securities Act. The following is a summary of the material
provisions of the warrant agreement. This summary does not purport to be
complete and is qualified in its entirety by reference to the warrant agreement
and the warrants, including the definitions of terms in the warrant agreement.

EXERCISE PRICE: $4.00 PER WARRANT--$28.00 PER SHARE OF COMMON STOCK (SEVEN
WARRANTS PER SHARE)

Each warrant, when exercised by its holder, will entitle the holder to
receive one-seventh of a share of our common stock at an exercise price of $4.00
per one-seventh of a share. ACCORDINGLY, SEVEN WARRANTS MUST BE EXERCISED TO
PURCHASE ONE SHARE OF OUR COMMON STOCK AT AN AGGREGATE EXERCISE PRICE OF $28.00.
The exercise price and the number of shares of common stock issuable upon
exercise of a warrant are both subject to adjustment as described later in this
section.

EXPIRATION DATE: NOVEMBER 1, 2002

The warrants became exercisable on October 28, 1998. Unless exercised,
the warrants will expire on November 1, 2002.

EXERCISE AND PAYMENT PROCEDURES

Holders may exercise the warrants by surrendering to American Stock
Transfer & Trust Company, the warrant agent, the warrant certificates evidencing
the warrants to be exercised, along with the accompanying election to purchase
form, properly completed and executed, and the payment of the exercise price.
Holders may choose to pay the exercise price in the form of cash or by certified
or official bank check or bank draft or money order payable to the order of
Prize. Upon surrender of the warrant certificate and payment of the exercise
price, the warrant agent will deliver or cause to be delivered, to or upon the
written order of the holder, stock certificates representing the number of whole
shares of common stock or other securities or property to which such holder is
entitled under the warrants and the warrant agreement. The warrant agent will
also deliver, if applicable, any cash payment to adjust for fractional shares of
common stock issuable upon the exercise. If less than all of the warrants
evidenced by a warrant certificate are exercised, the warrant agent will issue a
new warrant certificate.

FRACTIONAL SHARES WILL NOT BE ISSUED

We will not issue any fractional shares of common stock upon exercise
of the warrants. When the holder exercises the warrant, we will pay to the
holder an amount in cash equal to the current market value of the fractional
share.

WARRANT HOLDERS DO NOT HAVE COMMON STOCKHOLDER RIGHTS

The holders of the warrants will have no right to vote on matters we
submit to our stockholders and will have no right to receive dividends.

THE EXERCISE PRICE IS SUBJECT TO ADJUSTMENT

The exercise price and number of shares of common stock that can be
purchased by exercising warrants will be subject to adjustment in certain
events, including:

o the payment by us of dividends or other distributions on our
common stock in shares of our common stock;

o the subdivision, split, combination or reclassification of our
common stock;

o the issuance to all or substantially all the holders of our
common stock of rights, options or warrants entitling them,
for a period expiring within 45 days after the record date to
subscribe for or purchase our common stock, or securities
convertible into or exchangeable for our common stock, at a
price, or having a conversion or exchange price, per share of
less than 95% of the then "current market price" per share of
common stock on the record date for such event; and

o the distribution to all or substantially all the holders of
our common stock of any debt securities or assets (other than
cash dividends, dividends or distributions of our common stock
referred to in the bullet points above and dividends on our
common stock payable at the option of the holder in cash or
shares of our common stock), securities of any class (other
than common stock or securities exchangeable for or
convertible into common stock), or rights, options or warrants
or exchangeable or convertible securities containing the right
to subscribe for or purchase common stock (other than those
referred to in the bullet point above).

"Current market price" means, so long as our common stock is listed on
a national securities exchange, the average of the daily last reported sale
prices over 15 consecutive trading days commencing 20 trading days immediately
before the date of determination. If our common stock is not listed on a
national securities exchange, then "current market price" means the average of
the mean between the closing bid and closing asked prices in the
over-the-counter market as reported by Nasdaq or, if not so reported, then by
The National Quotation Bureau, Inc. or an equivalent reporting service, for the
15 consecutive trading days commencing 20 trading days immediately before the
date of determination.

In case of any (a) sale of all or substantially all of our properties
and assets, (b) merger or consolidation of our company with any other
corporation or entity, or (c) capital reorganization, each warrant shall
thereafter be exercisable for the right to receive the kind and amount of shares
of stock or other securities or property to which such holder would have been
entitled as a result of such sale, merger, consolidation or reorganization had
the warrants been exercised immediately prior to the sale, merger, consolidation
or reorganization. In addition, the corporation or other entity formed by or
surviving any such merger or consolidation (if other than Prize), or to which
such sale shall have been made, will assume our obligations under the warrant
agreement and the warrants.

WE HAVE RESERVED SUFFICIENT SHARES

We have authorized and reserved for issuance the number of shares of
our common stock that will be issuable upon the exercise of all outstanding
warrants. These shares of common stock, when paid for and issued upon

exercise of the warrants, will be duly and validly issued, fully paid and
nonassessable, free of preemptive rights and free from all taxes, liens, charges
and security interests.

WE MAY AMEND THE WARRANT AGREEMENT

From time to time, we and the warrant agent, without consent of the
holders of the warrants, may amend or supplement the warrant agreement in order
to:

o cure any ambiguity;

o correct or supplement any provision of the agreement which may
be defective or inconsistent with any other provisions; or

o make any other provisions in regard to matters or questions
arising under the agreement deemed necessary or desirable that
do not adversely affect the rights of any holder.

ADDITIONAL OUTSTANDING WARRANTS

Public Warrants. As of the date of this prospectus, we have outstanding
2,252,670 common stock purchase warrants that are currently exercisable to
purchase an aggregate of 321,810 shares of common stock and are publicly traded
on the American Stock Exchange under the symbol "PRZ.WS." The terms of the
publicly traded warrants are identical to those of the warrants being offered
under this prospectus. Each of these public warrants is exercisable to purchase
one-seventh of a share of common stock at an exercise price of $4.00 per
one-seventh of a share. Accordingly, seven warrants must be exercised to
purchase one share of common stock at an aggregate exercise price of $28.00 per
share. The exercise price and the number of shares of common stock issuable upon
exercise of one of these public warrants are subject to adjustment under the
circumstances noted above under "--The Exercise Price is Subject to Adjustment."
These publicly traded warrants expire on November 1, 2002.

Private Warrants. As of the date of this prospectus, we also have
outstanding 160,000 common stock purchase warrants that are currently
exercisable to purchase an aggregate of 22,856 shares common stock at aggregate
exercise prices ranging from $20.13 to $28.00 per share and that have expiration
dates ranging from October 22, 2001, to June 29, 2002.

DESCRIPTION OF CAPITAL STOCK

Our authorized capital stock consists of (a) 50,000,000 shares of
common stock, having a par value of $.01 per share, and (b) 10,000,000 shares of
preferred stock, having a par value of $.01 per share. As of June 29, 2001,
12,865,113 shares of common stock and no shares of preferred stock were
outstanding.

COMMON STOCK

The holders of our common stock are entitled to one vote for each share
held of record on all matters submitted to a vote of stockholders, including the
election of directors.

Subject to preferences that may be applicable to any outstanding series
of preferred stock, holders of our common stock are entitled to receive ratably
dividends as they may be declared by our board of directors out of funds legally
available for the payment of dividends. The provisions of our revolving credit
agreement currently prohibit us from paying dividends on our common stock.

In the event of our liquidation or dissolution, holders of our common
stock are entitled to share ratably in all assets remaining after payment of all
liabilities and provision for the liquidation preference of any series of
preferred stock we have outstanding at the time of liquidation or dissolution.

Holders of common stock have no preemptive rights and have no rights to
convert their shares of common stock into any other securities. All of our
outstanding shares of common stock are, and any shares of common stock issued
upon exercise of the warrants will be, fully paid and nonassessable.

Our common stock is listed and traded on the American Stock Exchange
under the symbol "PRZ."

PREFERRED STOCK

Our board of directors has the authority, without further action by our
stockholders, to issue shares of preferred stock from time to time in one or
more series and to fix the related number of shares and the designations, voting
powers, preferences, optional and other special rights, and restrictions or
qualifications of that preferred stock. The rights, preferences, privileges and
restrictions or qualifications of different series of preferred stock may differ
with respect to dividend rates, amounts payable on liquidation, voting rights,
conversion rights, redemption provisions, sinking fund provisions and other
matters. Any preferred stock may rank senior to the common stock for the payment
of dividends or amounts upon liquidation, dissolution or winding up. In
addition, shares of preferred stock may have class or series voting rights. The
issuance of preferred stock could:

o decrease the amount of earnings and assets available for
distribution to holders of our common stock;

o adversely affect the rights and powers, including voting
rights, of holders of our common stock; and

o have the effect of delaying, deferring or preventing a change
in control of our company.

VOTING AND SHAREHOLDERS AGREEMENT

We are a party to a voting and shareholders agreement with Natural Gas
Partners II, L.P., Natural Gas Partners III, L.P., Natural Gas Partners V, L.P.
and some of our management stockholders. Under the terms of the agreement as in
effect, specified parties to the agreement have the following rights to nominate
and elect directors to our Board:

o stockholders who are members of our management may designate
one member; and

o Natural Gas Partners V, L.P. may designate up to four members.

The provisions of the voting and shareholders agreement regarding the
election of directors terminates as to:

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

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

REGISTRATION RIGHTS

We have entered into registration rights agreements with holders of up
to 8,779,357 shares of our common stock and holders of outstanding warrants to
purchase 1,687,296 shares of our common stock. The registration rights generally
entitle the parties to demand, piggyback and shelf registration rights, subject
to limitations specified in the agreements. The registration rights agreements
also contain customary provisions regarding the payment of expenses by us and
mutual indemnification agreements between us and the security holders who are
parties to the agreements for securities law violations.

ANTI-TAKE-OVER EFFECTS OF DELAWARE LAW AND BYLAW PROVISIONS

Delaware law and our bylaws contain provisions that might be
characterized as anti-takeover provisions. These provisions may make it more
difficult to acquire control of us or remove our management.

Delaware Business Combination Statute. We are subject to the provisions
of Section 203 of the Delaware General Corporation Law. In general, Section 203
prohibits a publicly held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years after
the date that person became an interested stockholder unless the business
combination or the transaction in which that person became an interested
stockholder is approved in a prescribed manner. Generally, a "business
combination" includes a merger, asset or stock sale, or other transaction
resulting in a financial benefit to the stockholder. Generally, an "interested
stockholder" is a person who, together with affiliates and associates, owns, or
owned within the prior three years, 15% or more of the corporation's voting
stock. This provision may delay, defer or prevent a change in our control
without the stockholders taking further action.

Special Authorization by Board of Directors. Our bylaws provide that an
affirmative vote of 70% of all directors then serving on our board of directors
is required for certain actions, including any action to approve, agree or
consent to any agreement or transaction resulting in a merger, consolidation,
liquidation, dissolution or disposition of properties having a value of $100
million or more. These special authorization requirements of our bylaws may be
amended only by the affirmative vote of at least 70% of all directors then
serving on our board of directors or by the unanimous written consent of all of
our directors.

Removal of Directors and Filling Vacancies. Our certificate of
incorporation provides that our directors may be removed only for cause by the
affirmative vote of the holders of a majority of the outstanding shares of our
capital stock entitled to vote. In addition, under the certificate of
incorporation any vacancy on our board of directors, however occurring,
including a vacancy resulting from an enlargement of the board, may be filled
only by vote of a majority of the remaining directors then in office. The likely
effect of the limitations on the removal of directors and filling of vacancies
is an increase in the time required for the stockholders to change the
composition of our board of directors.

Advance Notification of Stockholder Nominations and Proposals. Our
bylaws establish advance notice procedures for any proposals for nomination of
candidates for election to our board of directors, other than nominations made
by or at the direction of our board of directors, or for any matters to be acted
upon by stockholders at an annual meeting of stockholders. Our bylaws further
provide that special meetings of the stockholders may be called only be the
chairman of the board of directors, the president or secretary of Prize or the
holders of a majority of the outstanding shares of capital stock entitled to
vote. The forgoing provisions could have the effect of delaying until the next
stockholders' meeting stockholder actions that are favored by the holders of a
majority of our outstanding voting securities.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock and publicly
traded warrants, and warrant agent for the warrants offered hereby, is American
Stock Transfer & Trust Company.

PLAN OF DISTRIBUTION

DISTRIBUTION OF WARRANTS

The selling warrantholders may, from time to time, sell the warrants to
purchasers directly. Alternatively, the selling warrantholders may, from time to
time, offer to sell the warrants to or through underwriters, broker-dealers or
agents, who may receive compensation in the form of underwriting discounts,
concessions or commissions from the selling warrantholders or the purchasers of
warrants. The selling warrantholders and any underwriters, broker- dealers or
agents that participate in the distribution of the warrants may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933. Any profit on
the sale of warrants by them, and any discounts, commissions, concessions or
other compensation received by any of them, may be deemed to be underwriting
discounts and commissions under the Securities Act of 1933.

The selling warrantholders may offer and sell the warrants under this
prospectus from time to time in one or more transactions. These sales may be at
fixed prices, at prevailing market prices at the time of sale, at varying prices
determined at the time of sale or at negotiated prices. A selling warrantholder
will determine these prices either alone or by agreement with underwriters and
dealers who may receive fees or commissions in connection with sales. The
selling warrantholders may use any of the following methods when selling
warrants, which may involve crosses or block transactions:

o sales on any national securities exchange or quotation service
on which the warrants may be listed or quoted at the time of
sale;

o sales in the over-the-counter market;

o transactions otherwise than on an exchange or in the
over-the-counter market; or

o sales through the writing of options.

If required, a prospectus supplement will be distributed at the time a
particular offering of warrants is made. The supplement will set forth the
aggregate amount and type of warrants offered and the terms of the offering.
Terms listed may include the name or names of any underwriters, broker-dealers
or agents, any discounts, commissions and other terms constituting compensation
from the selling warrantholders and any discounts, commissions or concessions
allowed or reallowed or paid to broker-dealers.

DISTRIBUTION OF COMMON STOCK

All of the shares of our common stock offered hereby will be sold, if
at all, by us directly to the holders of the warrants in connection with their
exercise.

LISTING OF THE COMMON STOCK AND THE WARRANTS ON THE AMERICAN STOCK EXCHANGE

Our common stock, including the common stock issuable upon exercise of
the warrants, is listed on the American Stock Exchange. In addition, we have
applied for listing of the warrants on the American Stock Exchange. Even if the
warrants are listed on the American Stock Exchange, we cannot provide you any
assurance that any liquid trading market will develop for the warrants or, if
developed, that it will be sustained.

LEGAL MATTERS

Certain legal matters with respect to the warrants and the shares of
our common stock offered by this prospectus will be passed upon for us by Conner
& Winters, A Professional Corporation, Tulsa, Oklahoma.

EXPERTS

The consolidated financial statements of Prize Energy Corp. for the
year ended December 31, 2000, and the 1998 statement of revenues and direct
operating expenses for the producing properties acquired by Prize Energy Corp.
from Pioneer Natural Resources USA, Inc. appearing in Prize Energy Corp.'s
Annual Report on Form 10-K for the year ended December 31, 2000, have been
audited by Ernst & Young, LLP, independent auditors, as set forth in their
reports thereon included therein and incorporated herein by reference. Such
financial statements are incorporated herein by reference in reliance upon such
reports given on the authority of such firm as experts in accounting and
auditing.

Approximately 75% of the estimated quantities of our proved oil and
natural gas reserves and related calculations prepared by us as of December 31,
2000, and incorporated by reference in this prospectus, has been audited by
Netherland, Sewell & Associates, Inc. and is incorporated herein in reliance
upon the firm's authority as experts in petroleum engineering.

Subject to Completion, Dated July 5, 2001.

Prize Energy Corp.

286,461 Shares of Common Stock

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

Up to 286,461 shares of our common stock may be offered and sold from
time to time by the selling stockholders named on page 11 of this prospectus.
The shares of common stock may be acquired by the selling stockholders upon the
exercise of outstanding warrants to purchase shares of common stock. We will not
receive any of the proceeds from the sale of these shares.

Our common stock is traded on the American Stock Exchange under the
symbol "PRZ." The last reported sale price of our common stock on the American
Stock Exchange on July 3, 2001, was $19.70 per share.