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 11, 1998
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 11, 1998, the text of which follows:
Denver, Colorado - November 11, 1998 -- Mallon Resources
Corporation (Nasdaq: "MLRC") today reported its third quarter
operating results. Average daily production for the quarter ended
September 30, 1998 was 23.0 million cubic feet of natural gas
equivalents ("MMcfe"), a 142% increase over third quarter 1997's
average daily production of 9.5 MMcfe and a 37% increase over second
quarter 1998's average daily production of 16.8 MMcfe. During third
quarter 1998, Mallon drilled 13 wells, completed 11 wells and
recompleted 14 wells, compared to a total during third quarter 1997
of 7 wells drilled, 6 wells completed and 6 wells recompleted.
Kevin M. Fitzgerald, Executive Vice President, said, "Our
third quarter production increased significantly, even though our
gas sweetening plant was not fully operational for three weeks
during the quarter. Despite the higher production, our earnings and
cash flow were adversely affected primarily by depressed oil and gas
prices and secondarily by slightly higher lease operating
expenses."
Mallon reported a net loss for third quarter 1998 of $232,000
on revenues of $3,636,000, compared to a net loss for third quarter
1997 of $248,000 on revenues of $2,014,000. The net loss
attributable to common shareholders for third quarter 1998 was
$262,000 ($0.04 per basic share) compared to a net loss attributable
to common shareholders for third quarter 1997 of $278,000 ($0.06 per
basic share). Total revenues for third quarter 1998 increased by
$1,622,000 (81%) compared to third quarter 1997 and by $709,000
(24%) compared to second quarter 1998. The average oil price
realized per barrel for third quarter 1998 was $12.69, a 33%
decrease from the third quarter 1997 average of $19.08, and a 4%
decrease from the second quarter 1998 average of $13.21. The
average gas price realized per Mcf for third quarter 1998 was $1.64,
a 9% decrease from the third quarter 1997 average of $1.81 and a 10%
decrease from the second quarter 1998 average of $1.82. Operating
cash flow for third quarter 1998 was $1,231,000, up 90% from
$648,000 for third quarter 1997 and up 17% from $1,056,000 for
second quarter 1998.
For the first nine months of 1998, Mallon reported a net loss
attributable to common shareholders of $435,000 ($0.06 per basic
share) on revenues of $9,688,000, compared to a net loss
attributable to common shareholders of $1,275,000 ($0.28 per basic
share) on revenues of $5,853,000 for the first nine months of 1997.
Cash flow from operations increased to $3,605,000 in the first nine
months of 1998 from $1,732,000 in the first nine months of 1997.
George O. Mallon, Jr., Chairman of the Board and President,
stated, "Despite the difficult industry environment, we continue to
enjoy excellent success in developing our low risk, multi-pay
properties in New Mexico, particularly in the East Blanco area,
where we are in the midst of an aggressive drilling and recompletion
program. We recently acquired additional acreage that tripled our
position to 62,000 acres in East Blanco, and we expect to begin
drilling the new acreage by December.
The preceding information contains forward-looking statements,
the realization of which cannot be assured. Actual results may
differ significantly from those forecast. The Company and its
operations are subject to numerous risks and uncertainties. Among
these are risks related to the oil and gas business generally
(including operating risks and hazards and the regulations imposed
thereon), risks and uncertainties related to the volatility of the
prices of oil and gas, uncertainties related to the estimation of
reserves of oil and gas and the value of such reserves,
uncertainties relating to geologic models and evaluations, the
effects of competition and extensive environmental regulation, and
other factors, many of which are necessarily beyond the Company's
control. These and other risk factors that affect the Company's
business are discussed in the Company's 1997 Annual Report.
SELECTED FINANCIAL AND OPERATING DATA
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
(In thousands, except per unit data) Ended September 30, Ended September 30,
(Unaudited) 1998 1997 1998 1997
<S> <C> <C> <C> <C>
Selected Results:
Revenues $ 3,636 $ 2,014 $ 9,688 $ 5,853
Costs and expenses 3,868 2,142 10,033 6,094
Net loss (232) (248) (345) (717)
Net loss attributable to common shareholders (262) (278) (435) (1,275)
Basic net loss per share attributable to
common shareholders (0.04) (0.06) (0.06) (0.28)
EBITDA (A) 1,535 621 4,039 1,489
EBITDA per basic share 0.22 0.13 0.58 0.33
Cash flow (B) 1,231 648 3,605 1,732
Cash flow per basic share 0.18 0.14 0.51 0.38
Basic weighted average shares outstanding (C) 7,025 4,695 7,012 4,576
Other Operating Data:
Net Production
Oil (MBbls) 51 50 180 131
Gas (MMcf) 1,810 575 4,056 1,553
MBOE 353 146 856 390
MMcfe 2,116 875 5,136 2,339
Average realized sales price
Oil ($/Bbl) $12.69 $19.08 $13.46 $20.15
Gas ($/Mcf) $1.64 $1.81 $1.77 $2.04
BOE ($/BOE) $10.25 $13.66 $11.22 $14.89
Mcfe ($/Mcfe) $1.71 $2.28 $1.87 $2.48
</TABLE>
(A) EBITDA is earnings before income taxes, interest expense,
depreciation, depletion, amortization and impairment.
(B) Cash flow from operating activities before working capital
adjustments.
(C) Because the Company is in a loss position, all common stock
equivalents are anti-dilutive. Therefore, only basic share and
per share information has been presented.
Mallon Resources Corporation is a Denver, Colorado based oil
and gas exploration and production company operating primarily in
the San Juan and Delaware Basins of New Mexico. Mallon's common
stock is quoted on Nasdaq 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 30, 1998 __/s/ Roy K. Ross_____________________
Roy K. Ross, Executive Vice President
