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): March 4, 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)
Item 5. Other Events
Mallon Resources Corporation (the "Company") issued the following
press release, dated March 4, 1999, the text of which follows:
Denver, Colorado -- Mallon Resources Corporation (Nasdaq:
"MLRC") reported today that the Company's proved oil and gas
reserves as of December 31, 1998, were 91.7 billion cubic feet of
natural gas equivalents (BCFE), a 58% increase over the 58.2 BCFE
reported at year-end 1997. Natural gas represented 92% of the
Company's year-end 1998 reserves.
George O. Mallon, Jr., Chairman of the Company, said, "We
are pleased with the significant increase in our year-end
reserves, which represents well over five times our production
during the year. We are particularly pleased with the growth
considering the difficult industry environment and the impact of
sharply lower oil and gas prices on reserves for the entire
industry. The fact that almost all of the reserve additions came
from development drilling and recompletions is especially
gratifying."
Despite the dramatic increase in reserve quantities, the
discounted present value of Mallon's reserves, calculated under
Securities and Exchange Commission regulations ("SEC PV-10
Value") as of December 31, 1998, was $43.3 million, a 10%
decline from $47.9 million at year-end 1997. The decline
reflected the mandated use of year-end prices for calculating
cash flows from future production. The prices used in this
calculation for year-end 1998 were $1.43 per mcf of gas and
$10.03 per barrel of oil, compared to 1997 year-end prices of
$1.95 per mcf of gas (a 27% decline) and $16.14 per barrel of oil
(a 38% decline).
Mr. Mallon noted, "The mandated use of such depressed
prices had a significant negative effect on our SEC PV-10 Value
and reduced our reported reserves. We believe that the true
value and quantity of our reserves, which have grown by 138%
since year-end 1996, are significantly understated.
Notwithstanding the current poor oil and gas market conditions,
we believe that we will continue to register above average
reserve growth over the next several years."
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 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 the Company's
operations. These and other risk factors that affect the
Company's business are discussed in the Company's Annual Report.
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
March 9, 1999 By: _/s/ Roy K. Ross_____________________
Roy K. Ross, Executive Vice President
