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): September 16, 1999
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)
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Item 5. Other Events
Mallon Resources Corporation (the "Company") issued the following press
release, dated August 16, 1999, the text of which follows:
Mallon Resources Corporation (Nasdaq: "MLRC") today announced that it
has begun a multi-year natural gas development program in the San Juan Basin
of northwestern New Mexico. Mallon has identified the potential for more than
300 billion recoverable cubic feet of natural gas net to its interest on its
East Blanco and La Jara Canyon acreage blocks in the Ojo Alamo, San Jose,
Nacimiento and Pictured Cliffs formations. This undeveloped gas potential
equals more than 3.3 times the Company's 1998 year-end proved reserves.
Speaking at the Dain Rauscher Wessels 1999 Energy Conference, George
Mallon, Chairman of the Company, said that the development program could
result in the drilling of up to 250 new wells in the San Juan Basin. Mallon
expects to drill or recomplete 30 wells during the balance of 1999, and at
least 59 wells during 2000. Last week, Mallon reported the closing of $65.5
million of debt financings to fund the commencement of this program.
Mr. Mallon stated, "The completion of our new financing marks a turning
point for Mallon Resources. We now have the financial, operating and
management resources to launch a large scale, yet relatively low risk, natural
gas development program that has the potential to dramatically increase our
reserves, asset value, production and cash flow over the next several years.
We are embarking on one of the most exciting periods in the Company's
history."
Also at the conference, Kevin Fitzgerald, Chief Operating Officer, said,
"We've already moved rigs onto our East Blanco and La Jara Canyon acreage.
Our program is designed to quickly add production from the Ojo Alamo and San
Jose formations. Because of our previous work, only modest additional
expenditures will be required to increase our gas plant capacity to handle
more than triple our current average daily production."
Mr. Fitzgerald also disclosed that, during 2000, Mallon plans to assess
the commercial potential of its extensive coalbed methane resources in the San
Juan Basin. A number of wells on Mallon acreage demonstrate that the
Fruitland Coal formation is present over a large portion of the Company's
68,000 acres. Desorption data and isopach mapping suggest that the Company's
coalbed acreage could contain up to 400 billion cubic feet of natural gas in
place. Mr. Fitzgerald said, "Recent developments in coalbed completion
techniques used by other companies in fields adjacent to our East Blanco
acreage have served to make our Fruitland Coal an attractive target. If the
results of our study program are favorable, coalbed methane could become
another major development project for the Company."
The foregoing information contains forward-looking statements and
forecasts, the realization of which cannot be assured. Actual results may
differ significantly from those forecast. Inaccurate geologic and engineering
interpretations, the volatility of commodity prices, unbudgeted cost
increases, unforeseen delays in operations, and operations that prove less
successful than anticipated are risks that can significantly effect Mallon's
operations. These and other risk factors that affect Mallon's business are
discussed in Mallon's Annual Report.
Mallon Resources Corporation is a Denver 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."
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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
September 22, 1999 By: __/s/ Roy K. Ross____________________
Roy K. Ross, Executive Vice President
