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MALLON RESOURCES REPORTS THIRD QUARTER AND YEAR-TO-DATE RESULTS

 DENVER, Nov. 16 /PRNewswire/ -- Mallon Resources Corp. (NASDAQ-NMS: MLRC) announced its third quarter and year-to-date results. The company also released pro forma figures that include its recent acquisition of producing oil and gas properties from Pennzoil Exploration and Production Co. from Jan. 1, 1993, the effective date of the acquisition.
 MALLON RESOURCES CORP.
 Pro Forma
 3rd Quarter 3rd Quarter 3rd Quarter
 1992 1993 1993
 Revenue $471,756 $321,354 $1,295,057
 Net earnings (loss)
 before pro forma
 income tax (55,492) (186,912) 175,943
 Net earnings (loss) (55,492) (186,912) 107,325
 Net earnings per share (0.01) (0.03) 0.01
 Cash flow provided by (used in)
 operating activities before
 adjustments for non-cash
 items and financing costs (12,278) (64,991) 642,364
 Weighted average shares
 outstanding 4,750,909 5,532,162 8,265,749
 Pro forma
 9-months 9-months 9-months
 1992 1993 1993
 Revenue $1,465,631 $1,194,574 $4,531,959
 Net earnings (loss)
 before pro forma
 income tax (307,279) (462,686) 582,884
 Net earnings (loss) (307,279) (462,686) 355,884
 Net earnings per share (0.03) (0.09) 0.05
 Cash flow provided by (used in)
 operating activities before
 adjustments for non-cash
 items and financing costs 9,897 (100,337) 2,317,233
 Weighted average shares
 outstanding 4,750,909 5,153,113 7,889,700
 The Pennzoil properties, acquired on Sept. 30, 1993, at a cost of $21.4 million, were financed by $12 million from Enron Reserve Acquisition Corp., a $7.3 million note to Pennzoil, and $2.1 million in cash and adjustments. Mallon has accounted for the acquisition by treating the net revenue generated by the properties between Jan. 1 and Sept. 30 as a reduction in the purchase price for the properties. This accounting treatment will permit Mallon to record lower DD&A expenses in the future, due to the lower recorded cost basis for the acquired property. The pro forma presentation recognizes the actual revenues and expenses attributable to the Pennzoil properties during the January through September time period.
 The Pennzoil acquisition has dramatically transformed Mallon Resources Corp., increasing its proved oil reserves by 325 percent (from 337,000 barrels to 1,439,000 barrels) and its proved gas reserves by 250 percent (from 10.9 Bcf to 38.0 Bcf). Benefits of the acquisition are reflected in the pro forma figures shown. George Mallon, chairman, observed, "The most noteworthy of the numbers we have reported are those in the pro forma column, because they should be indicative of the company's future. The Pennzoil acquisition has already had a tremendous affect on the company. Driven by the impact of the acquisition, beginning with fourth quarter 1993, the company will begin experiencing financial results as satisfying as those shown in the pro form presentation."
 The impact of the Pennzoil acquisition is reflected by the following comparisons: the company's net loss for third quarter 1993 was $186,912; on a pro forma basis its net income for the same period was $107,325, an improvement of $294,237. The net loss for the first nine months of 1993 was $462,686; on a pro forma basis its net income for the same period was $355,884, an improvement of $818,570.
 Mallon's third quarter 1993 cash flow was a negative $64,991, and on a pro forma basis for the same period was a positive $642,364. These numbers were derived by adding to the company's net loss or net income figures DD&A expense ($89,836 for the actual third quarter, and $304,336 pro forma) and non-cash compensation expenses ($32,085 for both presentations). In addition, for the pro forma cash flow presentation, $68,618 of non-cash pro forma income tax expense and $130,000 of non- cash pro forma financing costs were restored. Using the same methodology, the company's cash flow provided by operating activities for the nine months ended Sept. 30, 1993, was a negative $100,337 (actual) and a positive $2,317,233 (pro forma). In preparing the pro forma information, no financing expense attributable to the $7.3 million Pennzoil note was considered, because the proceeds from a planned private placement of company common stock are intended to retire that note.
 Mallon Resources Corp.'s oil and gas operations, located primarily in the western United States, are conducted by its wholly owned subsidiary, Mallon Oil Co. Through its subsidiary, Mallon Minerals Corp., the company controls 46,000 acres of gold and silver concession acreage in Costa Rica. Mallon is headquartered in Denver. The company's common stock is listed on the NASDAQ's National Market System under the trading symbol "MLRC."
 -0- 11/16/93
 /CONTACT: Anne Doremus at Catalyst Communications, 510-838-7127, for Mallon Resources/
 (MLRC)


CO: Mallon Resources Corp. ST: Colorado IN: OIL SU: ERN

TM-RB -- SF003 -- 5149 11/16/93 14:01 EST
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Date:Nov 16, 1993
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