Mallon Resources Corporation
999 18th Street, Suite 1700
Denver, Colorado 80202
Proxy Statement
for
Annual Meeting of Shareholders
To Be Held
Friday, May 31, 1996
General Information
This statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Mallon Resources
Corporation ("the Company") to be used at its Annual Meeting of
Shareholders (the "Meeting") to be held at the Denver Petroleum
Club, 555 17th Street, Denver, Colorado, on Friday, May 31, 1996,
at 9:00 a.m., for the purposes set forth in the accompanying
Notice of Annual Meeting of Shareholders. This statement was
sent to shareholders on or about April 30, 1996.
The shares covered by the enclosed Proxy, if such is properly
executed and received by the Board of Directors prior to the
Meeting, will be voted in favor of the proposals to be considered
at the Meeting, unless such Proxy specifies otherwise or the
authority to vote on the election of directors has been withheld.
A Proxy may be revoked at any time before it is exercised by
giving written notice to the Secretary of the Company or by
executing a Proxy bearing a later date. Shareholders may vote
their shares in person if they attend the meeting, even if they
have previously executed and returned a Proxy.
The matters to be brought before the Meeting are the election of
directors to serve for the ensuing year, and the ratification of
the selection of independent public accountants.
Only shareholders of record at the close of business on April 22,
1996, will be entitled to vote at the Meeting. On that date,
there were issued and outstanding 8,074,222 shares of the
Company's $.01 par value common stock ("Common Stock"), entitled
to one vote per share. Also outstanding were 1,100,918 shares of
the Company's $0.01 par value Series A Preferred Stock, which
carry the voting power of 1,113,173 shares of Common Stock,
except in the election of directors, where the Series A Preferred
Stock has the right to elect one director. Also outstanding were
400,000 shares of the Company's $0.01 par value Series B
Preferred Stock, which carry no voting rights except in certain
exceptional circumstances. Cumulative voting is not allowed in
the election of directors or for any other purpose. One-third of
the outstanding Common Stock will constitute a quorum for the
transaction of business at the Meeting. The vote of a majority
of a quorum is needed to pass a proposal.
At the Meeting members of senior management will speak, and there
will be a general discussion period during which shareholders
will have an opportunity to ask questions about the business of
the Company. Management knows of no other matters to be brought
before the Meeting. If other matters properly come before the
Meeting, it is the intention of the persons named in the
solicited Proxy to vote such Proxy in accordance with their
judgment. No compensation will be paid to any person in
connection with solicitation of Proxies. Brokers and others will
be reimbursed for out-of-pocket and reasonable clerical expenses
incurred in forwarding solicitation materials to beneficial
owners of the Common Stock. Special solicitation of Proxies may
in certain instances be made personally or by telephone by
officers and employees of the Company and by regular employees of
certain banking and brokerage houses. All expenses in connection
with this solicitation will be borne by the Company.
Proposal I: Election of Directors
General
The Company's Bylaws provide that the size of the Board of
Directors can be as few as three or as many as fifteen. The
number of directors may be changed from time to time by
resolution of the Board of Directors or the shareholders. The
size of the Board of Directors is presently set at seven members,
and management will nominate seven persons to the Board of
Directors. As described below, an additional member can be
elected by the holder of the Company's Series A Preferred Stock.
Directors are elected annually, for one-year terms. The Company
has no nominating or similar committee of its Board of Directors.
It is the recommendation of the Board of Directors that the seven
nominees named below be elected to the Board for the coming year,
and until their successors have been duly elected and qualified.
Unless authority is withheld, the shares represented by your
Proxy will be voted for their election. No Proxy will be voted
for more than seven nominees. An eighth director may be elected
by the holder of the Company's Series A Preferred Stock; no such
director currently sits on the Board of Directors. Unless your
Proxy withholds authority to do so, if any nominee elects not to
serve or is unable to serve for any reason, your Proxy will be
voted for an alternative nominee to be designated by the Board of
Directors to replace such nominee. The Board of Directors has no
reason to expect that any nominee will be unable to serve. There
is no arrangement between any of the nominees or officers and any
other person or persons pursuant to which he was or is to be
selected as a director, nominee or officer, nor is there any
family relationship between or among any nominees or officers.
To the best knowledge of the Company, none of the nominees have
been involved in any material legal proceedings during the past
five years.
Nominees
Nominees for the Board of Directors are:
<TABLE>
<CAPTION>
Period of Service
Name Age Title(s) as Director
<S> <C> <C> <C>
George O. Mallon, Jr. 51 Director, Since 1988
Chairman of the Board and
President of the Company;
Chairman of Mallon Oil Company
("Mallon Oil") and Vice Chairman
of Laguna Gold Company ("Laguna")
Kevin M. Fitzgerald 41 Director and Since 1988
Executive Vice President of the
Company; President of Mallon Oil
James A. McGowen 53 Director and Since 1988
Executive Vice President of the
Company; Chairman of Laguna
Roy K. Ross 45 Director, Executive Since 1992
Vice President and General Counsel
of the Company, Laguna, and Mallon
Oil
Frank Douglass 61 Director Since 1988
Roger R. Mitchell 62 Director Since 1990
Francis J. Reinhardt, Jr. 65 Director Since 1994
</TABLE>
Principal Occupations
A brief description of the business experience during the past
five years of each nominee for election or re-election as a
director is set forth below:
George O. Mallon, Jr., formed Mallon Oil in 1979, and was a
co-founder of Laguna in 1980. Since the formation of the Company
in December 1988, Mr. Mallon has served as its President and
Chairman. Mr. Mallon earned a BS degree in Business from the
University of Alabama in 1965, and a MBA degree from the
University of Colorado in 1977.
Kevin M. Fitzgerald joined Mallon Oil in 1983 and served as
Vice President of Engineering from 1987 through December 1988,
when he became President of that company. Mr. Fitzgerald was
Vice President, Oil and Gas Operations for the Company from 1988
through October 1990, when he was named Executive Vice President.
Mr. Fitzgerald earned a BS degree in Petroleum Engineering from
the University of Oklahoma in 1978.
James A. McGowen, a co-founder of Laguna, was President of
that company from 1984 until January 1995, when he was named
Chairman. Mr. McGowen is also an Executive Vice President and
director of the Company. Mr. McGowen earned an AB degree in
Zoology from the University of California in 1966.
Roy K. Ross joined the Company as Executive Vice President,
General Counsel and a director in October 1992. From June 1976
through September 1992, Mr. Ross was an attorney in private
practice with the Denver-based law firm of Holme Roberts & Owen.
He earned his BA degree in Economics from Michigan State
University in 1973, and his JD degree from Brigham Young
University in 1976.
Frank Douglass is a Senior Partner in the Texas law firm of
Scott, Douglass, Luton & McConnico, LLP, where he has been a
partner since 1976. Mr. Douglass earned a BBA degree from
Southwestern University in 1953 and a LL.B. degree from the
University of Texas School of Law in 1958.
Roger R. Mitchell joined the Company in January 1989 as a
Vice President with responsibility for investor relations,
broker-dealer liaison, and special marketing projects. He was
President of Mallon Securities Corporation, a limited broker-
dealer firm wholly owned by Mallon Oil, from 1982 until that firm
was dissolved in October 1990. He earned a BS degree in Business
from Indiana University in 1954 and a MBA degree from Indiana
University in 1956. In August 1991, Mr. Mitchell left the employ
of the Company to start First Federated Telepartners, a private
telecommunications business headquartered in Chicago. In
December 1992, Mr. Mitchell sold his interest in First Federated
Telepartners, and retired, although he continues to provide
consulting services to various businesses on a part-time basis.
Francis J. Reinhardt, Jr. is with the New York investment
banking firm of Carl H. Pforzheimer & Co., where he has been a
partner since 1966. Mr. Reinhardt holds a BS degree from Seton
Hall University, and an MBA from New York University. He is a
member and past president of the National Association of
Petroleum Investment Analysts. Mr. Reinhardt is also a director
of The Exploration Company of Louisiana, a public company engaged
in the oil and gas business.
Meetings and Committees of the Board
The business and affairs of the Company are managed under the
direction of the Board of Directors. For the period April 1995
through April 1996, the Board held six formal meetings, and acted
by written consent on numerous occasions. Each director who is
standing for re-election attended all of the meetings, and
participated in all of the written consents. Directors who are
not also members of management are paid $1,000 for each meeting
they attend, but in no event less that $4,000 per year. The
compensation is paid in shares of the Company's Common Stock,
pursuant to the terms of the Company's Compensation Plan for
Outside Directors. Board members are also reimbursed for
reasonable out-of-pocket expenses incurred in connection with
attending meetings of the Board.
The Company's Board of Directors has two committees, the Audit
Committee and the Compensation Committee. The three outside
directors are the members of each committee. The Board has
assigned certain advisory authority to each committee, but the
decision-making and management responsibilities of the Company
remain with the full Board. The Audit Committee of the Board,
which held one formal meeting during the last year, is comprised
of Messrs. Douglass, Mitchell and Reinhardt. The Audit
Committee's purpose is to oversee the Company's accounting and
financial reporting policies and practices and to assist the
Board of Directors in fulfilling its fiduciary and corporate
accountability responsibilities. The Company's independent
auditors periodically meet with the Audit Committee, and have
unrestricted access directly to the Audit Committee members. The
Compensation Committee of the Board, which held one formal
meeting and acted by unanimous written consent on several
occasions during the last year, is comprised of Messrs. Mitchell,
Douglass and Reinhardt. The Compensation Committee has submitted
the report that appears below.
Compensation Committee Report
The Company's Board of Directors established the Compensation
Committee (the "Committee") to propose, subject to Board
ratification, equity and cash compensation of executive officers
and equity compensation for all employees. The Committee's
philosophy is that employee salaries (including those of
executive officers) should be near the mid-point of industry
standards and that, so long as the Company is able, employees who
perform exceptionally should be compensated at a rate higher than
the mid-point of industry standards. The Committee believes that
equity compensation -- in the form of stock options and stock
bonuses -- is an excellent incentive for all employees, including
executive officers, and serves to align the interests of the
employees, executive officers and shareholders.
Cash Compensation. As sufficient revenues to do so have become
available, beginning in 1995 the Committee has been working to
slowly bring salaries throughout the Company up to the mid-point
of comparable industry salaries. The objectives of this plan are
to: (a) establish a more equitable pay scale for employees, (b)
facilitate recruiting, and (c) reward employees for their
loyalty. The executive officers of the Company are included in
this plan in the same manner as all other employees. Each year,
employees, including the executive officers, are evaluated by
their managers (or in the case of the Chief Executive Officer, by
the Committee) and may receive salary adjustments based upon
their performance.
Equity Compensation. The Committee approves all awards made
under the Company's 1988 Equity Participation Plan (the "Plan").
All employees are eligible for awards under this Plan. The Plan
was designed to provide: (a) a method to both attract and retain
high caliber talent over the long term; (b) an opportunity for
employees to share in the long term success of the Company; (c)
an ownership interest in the Company's success; (d) recognition
of individual contributions; and (e) motivation for continued
efforts and accomplishments. In 1996, the Committee commenced a
plan by which the Chief Executive Officer and certain other
executive officers will be paid a portion of their compensation
in shares of the Company's common stock, rather than in cash.
This plan was implemented to conserve the Company's cash, yet
permit the Company to pay competitive salaries.
Bonus Compensation. The Company maintains what it informally
calls its "Royalty Pool." This pool is an amount of cash
measured by the Company's sales of production. Quarterly, the
money accumulated in the pool is paid out as cash bonuses to the
employees of the Company. The Chief Executive Officer proposes
the amounts to be paid to each employee, including himself, based
upon his judgment of their relative contributions to the success
of the Company over the quarter for which the bonus is being
paid. His determinations are subject to the approval of the
Committee.
Chief Executive Officer. For years, at his election, Mr.
Mallon's compensation from the Company was substantially below
the compensation levels of chief executive officers of other,
comparable, companies. During this time, Mr. Mallon also made
himself ineligible to participate in the Company's Equity
Participation Plan and other benefit plans. In late 1995, the
Committee reworked Mr. Mallon's compensation arrangements with
the Company to bring his compensation package closer to industry
standards. An employment contract covering these matters is
currently being negotiated.
Respectfully submitted,
The Compensation Committee
Frank Douglass
Roger R. Mitchell
Francis J. Reinhardt, Jr.
- - The report of the Compensation 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 or under the Securities Act of 1934,
except to the extent that the Company specifically incorporates
this report by reference.
Executive Compensation
The following table summarizes certain information regarding
compensation paid by the Company for services rendered for the
year ended December 31, 1995 to the Company's chief executive
officer and each other executive officer whose total annual
salary and bonus, or annual salary and deferred compensation,
exceeded $100,000 for such year.
<TABLE>
<CAPTION>
Annual Compensation
Name and Principal Position Year Salary Bonus Other
<S> <C> <C> <C> <C>
George O. Mallon, Jr.
CEO 1993 $106,320 $7,560 $1,680
1994 $105,053 $9,500 $2,942
1995 $106,635 $10,440 $1,365
</TABLE>
1988 Equity Participation Plan. Under the Mallon Resources
Corporation 1988 Equity Participation Plan (the "Equity Plan"),
shares of Common Stock have been reserved for issuance for
various compensation purposes. The Equity Plan is administered
by a committee, currently comprised of Messrs. Mitchell,
Reinhardt and Douglass, none of whom are eligible to participate
in the Equity Plan. The terms of any awards made under the
Equity Plan are within the broad discretion of the committee.
Through December 31, 1995, options covering a total of 494,445
shares of common stock have been awarded under the Equity Plan.
Of these, options covering 188,638 shares have been exercised,
options covering 31,560 shares have expired. At December 31,
1995, the following options were issued and outstanding under the
Equity Plan:
<TABLE>
<CAPTION>
Number of Per Share Currently
Shares Exercise Price Exercisable
<S> <C> <C>
153,047 $0.01 yes
39,000 $0.01 no
82,200 $0.01 no (1)
</TABLE>
(1) These options do not vest until the Common Stock has traded
at not less than certain benchmark prices ($8.00, $10.00, and
$12.00) for at least 120 consecutive trading days.
Employee Profit-Sharing and Thrift Plan. The Company established
the Mallon Resources Corporation 401(k) Profit Sharing Plan (the
"401(k) Plan") effective January 1, 1989. The Company and its
affiliates will match an employee's contribution to the 401(k)
Plan in an amount up to 25% of his or her eligible monthly
contributions. The Company may also contribute additional
amounts at the discretion of the Compensation Committee of the
Board of Directors, contingent upon realization of earnings by
the Company which, in the sole discretion of the Board of
Directors, are adequate to justify a corporate contribution. The
401(k) Plan is open to all full time employees of the Company.
Matching contributions made to the 401(k) Plan by the Company are
fully vested; discretionary contributions will become fully
vested upon an employee (1) earning at least six years of vested
service, (2) acquiring a disability, or (3) death. Contributions
made by the Company in 1994 are included in the "All Other
Compensation" column of the Summary Compensation Table.
Laguna Gold Equity Participation Plan. Laguna Gold Company
maintains an Equity Participation Plan that is substantially
similar to the Company's Equity Plan. In 1995, in anticipation
of the time when Laguna will no longer be a wholly-owned
subsidiary of the Company, and in connection with the hiring of a
new president of Laguna, options to purchase shares of Laguna's
common stock were issued to four employees of Laguna, including
George O. Mallon, Jr., as reflected in the following table:
<TABLE>
<CAPTION>
Number of Per Share Currently
Optionholder Shares Exercise Price Exercisable
<S> <C> <C> <C>
George O. Mallon, Jr. 540,000 $0.01 yes
Other Laguna Employees 607,500 $0.01 yes
Other Laguna Employees 472,500 $0.01 no
</TABLE>
At the time these options were issued, there was no trading
market for shares of Laguna Gold Company stock, and that
continues to be the case. The value of these options is thus
extremely speculative. The shares under option represent 9% of
Laguna Gold Company's outstanding common stock.
Certain Relationships and Related Transactions
The Huxford Field, in which the Company has working interests, is
operated by Smackco Ltd., a company that is owned by Thomas E.
McMillan, who owns, beneficially, in excess of 5% of the
Company's outstanding common stock. The Company believes that
the rates charged by Smackco are within industry standards.
Mallon Oil serves as operator of certain oil and gas properties
in which some of the officers and directors of the Company have
working interests. Such individuals pay their pro-rata share of
all costs relating to the properties, on the same basis as other
unaffiliated interest owners.
During the year ended December 31, 1995, the Company paid $31,000
of legal fees to the law firm of Scott, Douglass, Luton &
McConnico, LLP, of which Mr. Douglass is a senior partner.
During the year ended December 31, 1995, the Company paid
$200,000 of consulting and other fees to the investment banking
firm of Carl H. Pforzheimer & Co., of which Mr. Reinhardt is a
partner.
In February 1995, the Company entered into a Loan Agreement
establishing a $2.5 million line of credit facility pursuant to
which it can borrow funds from three entities, two of which are
affiliates of Robert J. Monroe, an individual who owns,
beneficially, in excess of 5% of the Company's outstanding common
stock. The line of credit was retired in August 1995.
Proposal II: Ratification of Selection of Auditors
The Board of Directors has appointed Price Waterhouse LLP as the
Company's independent accountants for the year ending December
31, 1995. In the absence of a contrary direction by the
shareholders, the shares represented by the proxies will be voted
for the ratification of this appointment. This ratification will
require the affirmative vote of at least a majority of the votes
cast on the resolution at the Meeting.
A representative of the independent accountants for the current
year is expected to be present at the Meeting with the
opportunity to make a statement if he so desires. Such
representative is expected to be available to respond to
appropriate questions.
Services provided by Price Waterhouse LLP for the fiscal year
ended December 31, 1994, included examination of annual financial
statements, assistance and consultation regarding filings of
reports with the Securities and Exchange Commission, preparation
of tax returns and consultation in connection with various
accounting and tax matters.
The Board of Directors recommends a vote FOR the proposal to
ratify the selection of
Price Waterhouse LLP as independent accountants.
Additional Information
Stock Ownership
The following table sets forth information concerning the
beneficial ownership of the Company's Common Stock as of April
22, 1996, by (i) each shareholder known by the Company to own of
record or beneficially more than 5% of the Company's outstanding
Common Stock; (ii) the Company's chief executive officer (Mr.
Mallon); (iii) each of the Company's Directors and nominees, and
(iv) all Directors and Officers as a group.
<TABLE>
<CAPTION>
Number of Percent
Name and Address (1) Shares Owned
<S> <C> <C>
George O. Mallon, Jr. 1,249,024 (2,3) 15.4%
James A. McGowen 58,185 (3,4) 0.7%
Kevin M. Fitzgerald 109,739 (3) 1.3%
Roy K. Ross 22,201 (3) 0.3%
Roger R. Mitchell 191,031 2.4%
Frank Douglass 31,703 0.4%
Francis J. Reinhardt, Jr. 110,566 (5) 1.4%
Larry Abrams 565,118 7.0%
Thomas B. McMillan, Jr. 465,859 (6) 5.8%
John Simmet Estate 597,660 (7) 7.4%
Bank of America NT&SA 1,113,173 (8) 12.1%
Robert J. Monroe 548,645 (9) 6.7%
All Officers and Directors
as a Group (8 persons) 1,781,876 (3) 21.6%
</TABLE>_____________
(1) The address of Messrs. Mallon, Fitzgerald, McGowen and Ross
is 999 18th Street, Suite 1700, Denver, Colorado 80202. The
address of Mr. Mitchell is 3421 Cottonwood Drive, Durham, North
Carolina 27707. The address of Mr. Douglass is 901 Main Street,
Suite 2800, Dallas, Texas 75202-3776. The address of Mr. Abrams
is 24 Park Central South, New York, New York 10019. The address
of Mr. McMillan is PO Box 809, Brewton, Alabama 36427. The
address of the John Simmet Estate is PO Box 9, Newport, Minnesota
55055. The address of Mr. Monroe is 228 St. Charles Avenue, New
Orleans, Louisiana 70130. The address Bank of America NT&SA is
555 California Street, San Francisco, California 94104.
(2) Includes 8,666 shares owned by Mr. Mallon's wife. A trust
created for the benefit of Mr. Mallon's children owns shares that
are not included, as Mr. Mallon has no voting or other control
over the shares in the trust.
(3) Includes shares that could be acquired upon the exercise of
immediately exercisable stock options.
(4) A trust created for the benefit of Mr. McGowen's children
owns shares that are not included, as Mr. McGowen has no voting
or other control over the shares in the trust.
(5) Includes 12,175 shares of the Company's Series B Preferred
Stock, which are currently convertible into 28,647 shares of
Common Stock. Does not include 20,000 shares owned by children
for which beneficial ownership is disclaimed.
(6) Includes 27,398 shares owned by Mr. McMillan's children.
(7) Includes 60,021 shares owned by Simcote Inc., and 240,000
shares held by Red Rock Ventures, Inc., both of which are owned
by the Simmet Estate.
(8) Consists of shares of Common Stock issuable to Bank of
America NT&SA upon the conversion of its 1,100,918 shares of
Series A Preferred Stock, which are convertible at any time. The
"Percent Owned" calculation for Bank of America NT&SA assumes
that such a conversion is made; all other "Percent Owned"
calculations ignore the potential effect of the conversion of
Bank of America NT&SA's Series A Preferred Stock. Bank of
America NT&SA owns 100% of the outstanding shares of Series A
Preferred Stock, which carry a voting power equal to 1,113,173
shares of Common Stock and the right to elect one director.
(9) Consists of the following amounts: 17,000 shares owned
directly; 54,000 shares of Common Stock and 30,000 shares of
Series B Preferred Stock convertible into 70,587 shares of Common
Stock owned by a foundation of which Mr. Monroe is president and
a director; 281,000 shares of Common Stock and 15,000 shares of
Series B Preferred Stock convertible into 35,293 shares of Common
Stock owned by an estate of which Mr. Monroe is the executor; and
79,000 shares of Common Stock and 5,000 shares of Series B
Preferred Stock convertible into 11,765 shares of Common Stock
owned by a company of which the estate is the sole shareholder.
The "Percent Owned" calculation for Mr. Monroe assumes that all
outstanding Series B Preferred Stock has been converted; all
other "Percent Owned" calculations ignore the potential effect of
the conversion of the Series B Preferred Stock.
Annual Report and Financial Statements
You are referred to the Company's Annual Report to Shareholders
for the year ended December 31, 1995, enclosed herewith for your
information. The Annual Report is not incorporated in the Proxy
Statement and is not to be considered part of the soliciting
material.
Submission of Shareholder Proposals
Proposals intended for inclusion in next year's Proxy Statement
should be sent to the Secretary of the Company at 999 18th
Street, Suite 1700, Denver, Colorado 80202, and must be received
by March 1, 1997.
Compliance with Securities Transaction Reporting Requirements
Pursuant to Section 16(a) of the Securities Exchange Act 1934,
certain individuals and entities are required to periodically
file reports with the Securities and Exchange Commission in which
they disclose information concerning their transactions involving
the Company's securities. To the Company's knowledge, based
solely on review of copies of such reports submitted to the
Company, during the year ended December 31, 1995, no individual
or entity known to the Company to be subject to the reporting
requirements of Section 16(a) failed to satisfy those
requirements in a timely fashion.
Comparative Performance Graph
The following line graph reflects the performance of (i) the
Company's Common Stock, (ii) the NASDAQ Stock Market Total Return
Index (U.S. Companies), and (iii) the Standard Industrial
Classification ("SIC") Index for SIC Code 131 (which includes all
crude petroleum and natural gas companies). The graph assumes
$100 was invested on December 31, 1990 in the Company's Common
Stock and in each of the other indices. The graph also assumes
the reinvestment of all dividends. Stock price performance shown
on the graph is not necessarily indicative of future price
performance.
<TABLE>
<CAPTION>
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
Measurement period
(Fiscal year Covered) Mallon Nasdaq SIC
Resources Market Index
Corporation Index Code
<S> <C> <C> <C>
Measurement PT-
12/31/90 $100.00 $100.00 $100.00
FYE 12/31/91 $ 54.55 $104.41 $128.38
FYE 12/31/92 $200.00 $ 99.14 $129.64
FYE 12/31/93 $145.45 $118.12 $155.50
FYE 12/31/94 $ 72.73 $123.79 $163.26
FYE 12/31/95 $ 54.55 $136.14 $211.77
</TABLE>
This Proxy Statement has been sent
by order of the Board of Directors.
/s/ Carolena F. Chapman
Dated: April 26, 1996 Carolena F. Chapman, Secretary
PROXY Mallon Resources Corporation PROXY
999 18th Street, Suite 1700
Denver, Colorado 80202
PROXY CARD
Annual Meeting of Shareholders - May 31, 1996
The undersigned shareholder of Mallon Resources Corporation
(the "Company") acknowledges receipt of notice of the Company's
Annual Meeting of Shareholders to be held in Denver, Colorado, on
Friday, May 31, 1996, and hereby appoints George O. Mallon, III
and Carol Naranjo, or either of them, with the power of
substitution, as attorneys and proxies to represent and vote, as
designated below, all the shares of the Company's Common Stock
held of record by the undersigned on April 22, 1996, at the
Annual Meeting, or any adjournment thereof, as follows:
I. ELECTION OF DIRECTORS:
[ ] FOR ALL NOMINEES LISTED BELOW (Except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY to vote for all nominees below
George O. Mallon, Jr. Kevin M. Fitzgerald James A. McGowen
Roy K. Ross Roger R. Mitchell Frank Douglass Frances J.
Reinhardt, Jr.
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, draw a line through that nominee's name).
II. Proposal to ratify the selection of Price Waterhouse LLP as
the Company's independent auditors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
III. In their discretion, the Proxies are authorized to vote
upon such other business as may properly come before the meeting.
This Proxy when properly executed and delivered will be
voted in the manner directed herein by the undersigned
shareholder. If no direction is given, this proxy will be voted
FOR all proposals.
Dated __________________, 1996
Please sign below exactly as your name appears on the stock
certificate(s). When shares are held as joint tenants, both
should 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 president or
other authorized officer. If a partnership, please sign in
partnership name by authorized person.
_________________________________
Signature
_________________________________
Signature (if held jointly)
_________________________________
Printed name, as it appears on stock certificate(s)
_________________________________
Printed name of joint tenant, as it appears on stock
certificate(s)
PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY CARD PROMPTLY,
USING THE ENCLOSED ENVELOPE
