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): August 13, 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 August 13, 1998, the text of which follows:
Denver, Colorado - August 13, 1998 -- Mallon Resources
Corporation (Nasdaq: "MLRC") today reported its second quarter
operating results. Average daily production for the quarter ended
June 30, 1998 was 2,791 barrels of oil equivalent ("BOE"), an 83%
increase over second quarter 1997's average daily production of
1,527 BOE and a 1% increase over first quarter 1998's average daily
production of 2,767 BOE. Second quarter 1998 production was
constrained by wells shut-in or on restricted production awaiting
the completion of the Company's San Juan Basin gas plant expansion,
which occurred at the end of the second quarter. During second
quarter 1998, Mallon drilled and completed 13 wells and recompleted
12 wells, compared to a total during second quarter 1997 of 6 wells
drilled and 3 wells recompleted. Mallon currently has a $36.6
million capital budget for 1998, and plans to drill approximately
60 wells and recomplete approximately 30 wells during the year.
Mallon reported a net loss for second quarter 1998 of $157,000
on revenues of $2,927,000, compared to a net loss for second
quarter 1997 of $239,000 on revenues of $1,842,000. The net loss
attributable to common shareholders for second quarter 1998 was
$187,000 ($0.03 per basic share) compared to a net loss
attributable to common shareholders for second quarter 1997 of
$672,000 ($0.14 per basic share). Total revenues for second
quarter 1998 increased by $1,085,000 (59%) compared to second
quarter 1997 and decreased by $198,000 (6%) compared to first
quarter 1998. The average oil price realized per barrel for second
quarter 1998 was $13.21, a 32% decrease from the second quarter
1997 average of $19.32 and a 7% decrease from the first quarter
1998 average of $14.26. The average gas price realized per Mcf for
second quarter 1998 was $1.82, a 5% increase from the second
quarter 1997 average of $1.74 and a 6% decrease from the first
quarter 1998 average of $1.93. Operating cash flow for second
quarter 1998 was $1,056,000, up 115% from $491,000 for second
quarter 1997 and down 20% from $1,318,000 for first quarter 1998.
For the first six months of 1998, Mallon reported a net loss
attributable to common shareholders of $173,000 ($0.02 per basic
share) on revenues of $6,052,000, compared to a net loss
attributable to common shareholders of $997,000 ($0.22 per basic
share) on revenues of $3,839,000 for the first half of 1997. Cash
flow from operations increased to $2,374,000 in the first half of
1998 from $1,084,000 in the first half of 1997.
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>
(In thousands, except per unit data) For the Three Months For the Six Months
(Unaudited) Ended June 30, Ended June 30,
1998 1997 1998 1997
<T> <C> <C> <C> <C>
Selected Results:
Revenues $ 2,927 $ 1,842 $ 6,052 $ 3,839
Costs and expenses 3,084 1,892 6,165 3,952
Net loss (157) (239) (113) (469)
Net loss attributable to common shareholders (187) (672) (173) (997)
Basic net loss per share attributable to common
shareholders (0.03) (0.14) (0.02) (0.22)
EBITDA (A) 1,198 373 2,504 868
EBITDA per basic share 0.17 0.08 0.36 0.19
Cash flow (B) 1,056 491 2,374 1,084
Cash flow per basic share 0.15 0.11 0.34 0.24
Basic weighted average shares outstanding (C) 7,010 4,642 7,004 4,515
Other Operating Data:
Net Production
Oil (MBbls) 61 44 129 81
Gas (MMcf) 1,160 567 2,246 978
MBOE 254 139 503 244
Mmcfe 1,526 831 3,020 1,464
Average realized sales price
Oil ($/Bbl) $13.21 $19.32 $13.77 $20.81
Gas ($/Mcf) $1.82 $1.74 $1.87 $2.17
BOE ($/BOE) $11.47 $13.23 $11.89 $15.62
Mcfe ($/Mcfe) $1.91 $2.21 $1.98 $2.60
</TABLE>
(A)
(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
August 26, 1998 By: __/s/ Roy K. Ross________________
Roy K. Ross, Executive Vice President
