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): April 17, 2000
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 April 17, 2000, the text of which follows:
Denver, Colorado -- Mallon Resources Corporation (Nasdaq: "MLRC") today
reported that the Government of Costa Rica has issued a Resolution, signed by
the President of the country and its Minister of the Environment, by which
Mallon has been awarded a concession to explore for oil and natural gas on
approximately 2.3 million acres in the northeast quadrant of Costa Rica. The
concession acreage is contained in six large contiguous onshore acreage
blocks. Mallon must complete an environmental assessment of its proposed
operations within the next four months, and expects to sign final contracts
thereafter.
George O. Mallon, Jr., Chairman, said, "We are pleased to have been
awarded this important concession. We have enjoyed a close working
relationship with Costa Rica for many years, during which we have developed a
considerable data base and working knowledge of the country's geology and
hydrocarbon potential. This concession creates an attractive opportunity for
our company. The vast concession acreage covers approximately 60% of the
entire San Carlos and Limon North Basins, where we have access to existing
good quality seismic data available from the government. During the course of
the bidding process, we identified several target structures at modest depths,
which we believe can be drilled without requiring additional seismic
delineation. Our first drilling will likely be on a large structure that has
1,500 feet of relief. With attractive targets and Costa Rica's long history
of political stability, we are confident that Mallon will be able to find
industry partners to join us in our exploration efforts."
Mr. Mallon continued, "We believe that our concession area contains all
the necessary elements of a successful exploration play - source rock,
reservoir rock, traps, and seals. Our concession overlies two known source
rocks, one of which is time equivalent to the source rock found in the great
Venezuelan fields and displays similar high organic values. We also believe
that our reservoir rock is part of an extensive carbonate reef system. The
structures we have identified are characterized by broad structural closures,
fault closures and stratigraphic traps. Active oil seeps also exist on our
concession acreage, and one of the seeps is in close proximity to the targets
we have already identified. In addition, a nearby stratigraphic test
contained live oil, giving us encouragement for finding economic
hydrocarbons."
The Costa Rican concession will be subject to a royalty schedule and work
program. The royalty payable to the Government will range from 1% to 15%,
depending on daily production. The minimum rate of 1% will apply to daily
production of 20 barrels or less. The maximum rate of 15% will apply to daily
production of 1,001 barrels or more. The work program will require the
expenditure of $8.8 million (including the drilling of six wells) over a
three-year period, with a possible extension of three more years. In the
event of a commercial discovery, Mallon will have a production period of 20
years plus any unused exploration period years.
Mr. Mallon concluded, "We are very grateful that the people and
Government of Costa Rica have entrusted us with this important opportunity.
Working together with Minister Elizabeth Odio Benito and Costa Rica's
Direccion General de Hidrocarburos, we will be taking the important first
steps toward President Miguel Angel Rodriguez's goal of establishing Costa
Rica's energy independence."
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 affect 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."
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
April 18, 2000 By: __/s/ Roy K. Ross_____________________
Roy K. Ross, Executive Vice President
