SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of The Securities
Act of 1934
Date of Report (date of earliest event reported): November 14, 1997
Mallon Resources Corporation
(exact name of registrant as specified in its charter)
Colorado 0-17267 84-1095959
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
999 18th Street, Suite 1700, Denver, Colorado 80202
(address of principal executive offices) (zip code)
Registrant's telephone number, including area code (303) 293-2333
not applicable
(former name or former address, if changed since last report)
Item 5. Other Events
Mallon Resources Corporation (the "Company") issued the following
press release, dated November 14, 1997, the text of which
follows:
Mallon Resources Corporation today reported a net loss for
third quarter 1997 of $248,000 on revenues of $2,030,000,
compared to a net loss for third quarter 1996 of $233,000 on
revenues of $1,668,000. After payment of preferred dividends,
the net loss attributable to common shareholders for third
quarter 1997 was $278,000 ($0.06 per share) compared to a net
loss attributable to common shareholders for third quarter 1996
of $327,000 ($0.16 per share). Total revenues for third quarter
1997 rose by $362,000 or 22% over third quarter 1996. Oil and
gas sales increased 58% to $1,995,000 in third quarter 1997 from
$1,263,000 in third quarter 1996. Earnings before income taxes,
interest expense, depreciation, depletion and amortization,
impairment, and extraordinary loss (EBITDA) was $677,000 ($0.14
per share) compared to $516,000 ($0.25 per share) for third
quarter 1996. During third quarter 1996, the Company recognized
a gain of $329,000 ($0.16 per share) from the sale of 400,000 of
its shares of Laguna Gold Company common stock. Excluding this
item, EBITDA for third quarter 1996 would have been $0.09 per
share. Weighted average shares outstanding for third quarter
1997 were 4,695,000 compared to 2,084,000 for third quarter 1996.
The 125% increase in shares outstanding was primarily
attributable to the Company's October 1996 public sale of 2.3
million shares.
For the first nine months of 1997, after payment of
preferred dividends and preferred stock conversion inducement,
Mallon reported a net loss attributable to common shareholders of
$1,275,000 ($0.28 per share), compared to a net loss attributable
to common shareholders of $1,601,000 ($0.79 per share) during the
first nine months of 1996. For the first nine months of 1997,
EBITDA was $1,595,000 ($0.35 per share) compared to $1,209,000
($0.59 per share) in 1996. Weighted average shares outstanding
for the nine months ended September 30, 1997 were 4,576,000
compared to 2,032,000 for the nine months ended September 30,
1996.
The Company's average daily production for third quarter
1997 was 1,587 BOE, a 50% increase over its calendar 1996 average
of 1,060 BOE per day.
During third quarter 1997, the Company drilled six wells,
all of which were completed. The Company also recompleted five
wells, all of which are on production. The Company expects to
drill a total of 31 wells and recomplete 26 wells during 1997.
In October, the Company completed a gas sweetening plant in
the East Blanco Field, which is currently processing
approximately 6 million cubic feet of gas per day. The Company
is modifying the plant to increase its capacity to approximately
9.5 million cubic feet of gas per day.
The Company also reported that it has placed three
significant new Bone Spring Formation oil wells on production in
the Quail Ridge area of Lea County, in southeast New Mexico.
The Mallon 33 Fed #4 was drilled to 10,300 feet and has been
completed at approximately 9,675 feet, with a flowing initial
daily production rate of 210 barrels of oil, and 220 mcf of gas.
Mallon operates this well with an approximate 61.75% working
interest.
The Mallon 34 Fed #16 was drilled to 10,300 feet, has been
completed at approximately 10,150 feet, and is on pump with an
initial daily production rate of 95 barrels of oil, and 130 mcf
of gas. Mallon operates this well with an approximate 84%
working interest.
The Mallon State #1 was recompleted in the Bone Spring
Formation at approximately 9,500 feet. The initial flowing daily
production rate from this recompletion was 355 barrels of oil and
490 mcf of gas. Mallon operates this well with an approximate
75% working interest.
The beneficial financial effects of these wells will begin
to be seen in the fourth quarter.
Mallon's consolidated financial statements include the
consolidation of its 56.25% owned Laguna Gold Company, which has
an unfavorable impact on reported results. The table below
includes selected Mallon results, excluding Laguna's impact,
which better reflect the Company's oil and gas operations.
EBITDA without Laguna was $0.16 per share for third quarter 1997
and $0.43 per share for the nine months ended September 30, 1997.
<TABLE>
<CAPTION>
(In thousands, except per unit data) For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1997 1996 1997 1996
<C> <S> <S> <S> <S>
Selected Consolidated Results:
Revenues $2,030 $1,668 $ 5,928 $ 4,532
Costs and expenses 2,390 1,940 7,072 5,784
Net loss (248) (233) (717) (1,320)
Net loss attributable to common
shareholders (278) (327) (1,275) (1,601)
Net loss per share attributable to
common shareholders (0.06) (0.16) (0.28) (0.79)
EBITDA* 677 516 1,595 1,209
EBITDA per share 0.14 0.25 0.35 0.59
Weighted average shares outstanding 4,695 2,084 4,576 2,032
Selected Results Without Laguna Gold Company:
Revenues $2,012 $1,598 $ 5,850 $ 4,445
Costs and expenses 2,142 1,632 6,093 5,065
Net loss (130) (34) (243) (780)
Net loss attributable to common
shareholders (160) (128) (801) (1,061)
Net loss per share attributable to
common shareholders (0.03) (0.06) (0.18) (0.52)
EBITDA* 738 691 1,961 1,690
EBITDA per share 0.16 0.33 0.43 0.83
Weighted average shares outstanding 4,695 2,084 4,576 2,032
Selected Operating Data:
Net Production
Oil (Mbbls) 50 44 131 135
Gas (Mmcf) 575 234 1,553 934
MBOE 146 83 390 291
Average realized sales price
Oil (Mbbls) $19.08 $17.70 $20.15 $17.21
Gas (Mmcf) $1.81 $2.07 $2.04 $1.90
BOE $13.66 $15.22 $14.89 $14.08
</TABLE>
* EBITDA is earnings before income taxes, interest expense,
depreciation, depletion and amortization, impairment, and
extraordinary loss. EBITDA is a financial measure commonly used
in the Company's industry. It should not be considered in
isolation or as a substitute for net income, cash flow provided
by operating activities or other income and cash flow data
prepared in accordance with generally accepted accounting
principles or as a measure of a company's profitability or
liquidity.
Mallon Resources Corporation is a Denver, Colorado, based
oil and gas exploration and production company operating
primarily in the Delaware and San Juan Basins of New Mexico.
Mallon's Common Stock is quoted on the Nasdaq National Market
tier of the Nasdaq Stock Market under the symbol "MLRC."
Signatures
Pursuant to the requirements of the Securities Exchange act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
Mallon Resources Corporation
November 20, 1997 __/s/ Roy K. Ross________________
Roy K. Ross, Executive Vice President
