# United States Securities and
Exchange Commission Washington, D. C. 20549

# Form 10-Q

|(Mark one) |                                                                                                                                          
|---------- | -----------------------------------------------------------------------------------------------------------------------------------------
|[ X ]      | Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended March 31, 2004          
|[     ]    | Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934For the Transition Period from .......... to ..........

Commission File Number .......... 1-12508

MAGNUM HUNTER
RESOURCES, INC. Exact name of registrant as specified in its charter

|Nevada                                                       |  | 87-0462881                     
|------------------------------------------------------------ |  | -------------------------------
|State or other jurisdiction of incorporation or organization |  | IRS employer identification No.

600 East Las Colinas
Blvd., Suite 1100, Irving, Texas 75039Address of principal
executive offices

(972)
401-0752

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.Yes [X]    No [     ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).
Yes [ X ]    No [     ]

State the number of shares outstanding of each of the issuer's classes of common equity, as of April 28, 2004:  69,392,332.

# PART 1 
FINANCIAL INFORMATION

# Item 1. Financial Statements

# MAGNUM HUNTER RESOURCES,
INC. AND SUBSIDIARIES UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS (in thousands of
dollars)

|                                                                                | March 31,
2004 | December 31,
2003
|------------------------------------------------------------------------------- | -------------- | -----------------
|ASSETS                                                                          |                |                  
|Current Assets                                                                  |                |                  
|                                                                                |                |                  
|Cash and cash equivalents                                                       |                |                  
|Accounts receivable - trade, net of allowance of $4,338 and $4,331 respectively |                |                  
|Deferred income taxes, current                                                  |                |                  
|Deposits                                                                        |                |                  
|Other current assets                                                            |                |                  
|                                                                                |                |                  
|Total Current Assets                                                            |                |                  
|Property, Plant, and Equipment                                                  |                |                  
|Oil and gas properties, full cost method                                        |                |                  
|Unproved                                                                        |                |                  
|Proved                                                                          |                |                  
|Gas processing plants and pipelines                                             |                |                  
|Other property                                                                  |                |                  
|                                                                                |                |                  
|Total Property, Plant and Equipment                                             |                |                  
|Accumulated depreciation, depletion, amortization and impairment                |                |                  
|                                                                                |                |                  
|Net Property, Plant and Equipment                                               |                |                  
|                                                                                |                |                  
|Other Assets                                                                    |                |                  
|Deferred financing costs and other                                              |                |                  
|Goodwill                                                                        |                |                  
|                                                                                |                |                  
|Total Assets                                                                    |                |                  
|                                                                                |                |                  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                            |                |                  
|Current Liabilities                                                             |                |                  
|Trade payables and other current liabilities                                    |                |                  
|Accrued interest                                                                |                |                  
|Other accrued liabilities                                                       |                |                  
|Suspended revenue payable                                                       |                |                  
|Derivative liabilities, current                                                 |                |                  
|Current maturities of long-term debt                                            |                |                  
|                                                                                |                |                  
|Total Current Liabilities                                                       |                |                  
|Long-Term Liabilities                                                           |                |                  
|Long-term debt, less current maturities                                         |                |                  
|Asset retirement obligations                                                    |                |                  
|Derivative liabilities, non-current                                             |                |                  
|Deferred income taxes payable                                                   |                |                  
|Other non-current liabilities                                                   |                |                  
|Stockholders' Equity                                                            |                |                  
|Preferred stock - $.001 par value; 10,000,000 shares authorized, 216,000        |                |                  
|designated as Series A; 80,000 issued and outstanding, liquidation              |                |                  
|amount $0                                                                       |                |                  
|Common Stock - $.002 par value; 200,000,000 shares authorized,                  |                |                  
|73,118,486 and 71,977,759 shares issued, respectively                           |                |                  
|Additional paid-in capital                                                      |                |                  
|Accumulated other comprehensive loss                                            |                |                  
|Retained earnings                                                               |                |                  
|Common stock in deferred compensation plan, at cost (34,416 shares)             |                |                  
|Unearned common stock in KSOP, at cost (1,012,203 shares)                       |                |                  
|                                                                                |                |                  
|                                                                                |                |                  
|Treasury stock, at cost (3,942,294 shares)                                      |                |                  
|                                                                                |                |                  
|Total Stockholders' Equity                                                      |                |                  
|                                                                                |                |                  
|Total Liabilities and Stockholders' Equity                                      |                |                  
|                                                                                |                |                  

The
accompanying notes are an integral part of these condensed consolidated financial
statements.

1

# MAGNUM HUNTER
RESOURCES, INC. AND SUBSIDIARIES UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (in thousands, except
for shares and per share amounts)

|                                                                         | Three Months Ended March 31,
|------------------------------------------------------------------------ | ----------------------------
|
|Operating Revenues:                                                      |                             
|Oil and gas sales                                                        |                             
|Gas gathering, marketing and processing                                  |                             
|Oil field services                                                       |                             
|                                                                         |                             
|Total Operating Revenues                                                 |                             
|                                                                         |                             
|Operating Costs and Expenses:                                            |                             
|Oil and gas production lifting costs                                     |                             
|Production taxes and other costs                                         |                             
|Gas gathering, marketing and processing                                  |                             
|Oil field services                                                       |                             
|Depreciation, depletion, amortization and accretion                      |                             
|Gain on sale of assets                                                   |                             
|General and administrative                                               |                             
|                                                                         |                             
|Total Operating Costs and Expenses                                       |                             
|                                                                         |                             
|Operating Profit                                                         |                             
|Equity in earnings of affiliate                                          |                             
|Other income                                                             |                             
|Costs associated with early retirement of debt                           |                             
|Non-cash hedging adjustments                                             |                             
|Interest expense                                                         |                             
|                                                                         |                             
|Income Before Income Tax                                                 |                             
|Provision for income tax expense                                         |                             
|Current                                                                  |                             
|Deferred                                                                 |                             
|                                                                         |                             
|Total Provision for Income Tax Expense                                   |                             
|                                                                         |                             
|Income Before Cumulative Effect of a Change in Accounting Principle      |                             
|Cumulative effect of a change in accounting principle, net of income tax |                             
|expense of $244                                                          |                             
|                                                                         |                             
|Net Income                                                               |                             
|                                                                         |                             
|Income per Common Share - Basic                                          |                             
|Income before cumulative effect of a change in accounting principle      |                             
|Cumulative effect of a change in accounting principle                    |                             
|                                                                         |                             
|Income per Common Share - Basic                                          |                             
|                                                                         |                             
|Income per Common Share - Diluted                                        |                             
|Income before cumulative effect of a change in accounting principle      |                             
|Cumulative effect of a change in accounting principle                    |                             
|                                                                         |                             
|Income per Common Share - Diluted                                        |                             
|                                                                         |                             
|Common Shares Used in Per Share Calculation                              |                             
|Basic                                                                    |                             
|                                                                         |                             
|Diluted                                                                  |                             
|                                                                         |                             

The
accompanying notes are an integral part of these condensed consolidated financial
statements.

2

# MAGNUM HUNTER
RESOURCES, INC. AND SUBSIDIARIES UNAUDITED CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOME FOR THE THREE MONTHS
ENDED MARCH 31, 2004 (in thousands)

|                                                         | Preferred
Stock | Common
Stock | Treasury
Stock | Additional
Paid in
Capital | Retained
Earnings | Deferred
Compensation | Unearned
Shares in
KSOP | Accumulated
Other
Comprehensive
Income (Loss) | Total
Stockholders
Equity | Total
Comprehensive
Income
(Loss)
|-------------------------------------------------------- | --------------- | ------------ | -------------- | -------------------------- | ----------------- | --------------------- | ----------------------- | --------------------------------------------- | ------------------------- | ---------------------------------
|Balance at December 31, 2003                             |                 |              | $              | 1                          |                   | $                     | 144                     |                                               | $                         | (25,040                          
|                                                         |                 |              |                |                            |                   |                       |                         |                                               |                           |                                  
|Issuance of 1,141 shares of common stock pursuant to     |                 |             
|employee stock option plan                               |                 |              |                |                            |                   |                       | 2                       |                                               |                           |                                  
|                                                         |                 |              |                |                            |                   |                       |                         |                                               |                           |                                  
|Deferred tax benefit on exercise of employee stock       |                 |             
|options                                                  |                 |              |                |                            |                   |                       |                         |                                               |                           |                                  
|Stock compensation                                       |                 |              |                |                            |                   |                       |                         |                                               |                           |                                  
|Net Income                                               |                 |              |                |                            |                   |                       |                         |                                               |                           |                                  
|Reclassification adjustment related to derivative        |                 |             
|contracts, net of income tax expense of $2,579           |                 |              |                |                            |                   |                       |                         |                                               |                           |                                  
|                                                         |                 |              |                |                            |                   |                       |                         |                                               |                           |                                  
|Change in fair value of outstanding hedge positions, net |                 |             
|of income tax benefit of $5,987                          |                 |              |                |                            |                   |                       |                         |                                               |                           |                                  
|                                                         |                 |              |                |                            |                   |                       |                         |                                               |                           |                                  
|Amortization of purchased hedge positions, net of income |                 |             
|tax benefit of $75                                       |                 |              |                |                            |                   |                       |                         |                                               |                           |                                  
|                                                         |                 |              |                |                            |                   |                       |                         |                                               |                           |                                  
|Balance at March 31, 2004                                |                 |              | $              | 1                          |                   | $                     | 146                     |                                               | $                         | (25,040                          
|                                                         |                 |              |                |                            |                   |                       |                         |                                               |                           |                                  
|                                                         |                 |              |                |                            |                   |                       |                         |                                               |                           |                                  

The
accompanying notes are an integral part of these condensed consolidated financial
statements.

3

# MAGNUM HUNTER
RESOURCES, INC. AND SUBSIDIARIES UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)

|                                                                              | For the Three Months Ended
|----------------------------------------------------------------------------- | --------------------------
|
|
|CASH FLOW FROM OPERATING ACTIVITIES:                                          |                           
|Net Income                                                                    |                           
|Adjustments to reconcile net income to cash provided by operating activities: |                           
|Cumulative effect of a change in accounting principle                         |                           
|Depreciation, depletion, amortization and accretion                           |                           
|Amortization of deferred financing costs                                      |                           
|Costs associated with early retirement of debt                                |                           
|Deferred income taxes                                                         |                           
|Equity in income of unconsolidated affiliate                                  |                           
|Gain on sale of assets                                                        |                           
|Minority interest in consolidated subsidiary                                  |                           
|Non-cash hedging adjustments                                                  |                           
|Stock compensation                                                            |                           
|Changes in certain assets and liabilities, net of the effect of acquisitions: |                           
|                                                                              |                           
|Accounts and notes receivable                                                 |                           
|Deposits and other current assets                                             |                           
|Accounts payable and accrued liabilities                                      |                           
|Payment (refund) of income taxes                                              |                           
|                                                                              |                           
|Net Cash Provided by Operating Activities                                     |                           
|                                                                              |                           
|CASH FLOWS FROM INVESTING ACTIVITIES:                                         |                           
|Proceeds from sale of assets, net of purchase price adjustments               |                           
|Additions to property and equipment                                           |                           
|Property sales price adjustments                                              |                           
|Distribution from unconsolidated affiliate                                    |                           
|Investment in unconsolidated affiliate                                        |                           
|                                                                              |                           
|Net Cash Used in Investing Activities                                         |                           
|                                                                              |                           
|CASH FLOWS FROM FINANCING ACTIVITIES:                                         |                           
|Proceeds from issuance of debt                                                |                           
|Redemption of notes payable                                                   |                           
|Fees paid related to financing activities                                     |                           
|Payments of principal on debt and production payment                          |                           
|Loan made to KSOP                                                             |                           
|Proceeds from issuance of common stock                                        |                           
|Purchase of common stock for deferred compensation plan                       |                           
|Purchase of treasury stock                                                    |                           
|Increase in restricted cash for payment of notes payable                      |                           
|                                                                              |                           
|Net Cash Used in Financing Activities                                         |                           
|                                                                              |                           
|NET (DECREASE) INCREASE  IN CASH AND CASH EQUIVALENTS                         |                           
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                              |                           
|                                                                              |                           
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                                    |                           
|                                                                              |                           
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                             |                           
|Cash paid for interest                                                        |                           
|                                                                              |                           
|Cash paid (refunded) for income taxes                                         |                           
|                                                                              |                           
|Non-cash accruals for employee incentives                                     |                           
|                                                                              |                           
|                                                                              |                           

The
accompanying notes are an integral part of these condensed consolidated financial
statements.

4

# MAGNUM HUNTER
RESOURCES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the Three Months
Ended March 31, 2004 and 2003

# NOTE 1 
MANAGEMENTS REPRESENTATION

In this quarterly report on Form
10-Q, the words Magnum Hunter, company, we,
our, and us refer to Magnum Hunter Resources, Inc. and its
consolidated subsidiaries unless otherwise stated or the context otherwise requires. The
condensed consolidated balance sheet of Magnum Hunter Resources, Inc. and subsidiaries as
of March 31, 2004, the condensed consolidated statements of income for the three months
ended March 31, 2004 and 2003, the condensed consolidated statement of stockholders
equity and comprehensive income for the three months ended March 31, 2004, and the
condensed consolidated statements of cash flows for the three months ended March 31, 2004
and 2003, are unaudited. In the opinion of management, all necessary adjustments (which
include only normal recurring adjustments) have been made to present fairly the financial
position at March 31, 2004, and the results of operations, changes in stockholders
equity and comprehensive income and cash flows for the three month periods ended March 31,
2004 and 2003.

Certain information and footnote
disclosures normally included in financial statements prepared in accordance with
accounting principles generally accepted in the United States of America have been
condensed or omitted. It is suggested that these condensed financial statements be read in
conjunction with the financial statements and notes thereto included in our December 31,
2003 annual report and in our Form 10-K. The results of operations for the three-month
period ended March 31, 2004, are not necessarily indicative of the operating results that
will occur for the full year.

The accompanying condensed
consolidated financial statements include the accounts of the company and our
subsidiaries. All significant intercompany transactions and balances have been eliminated
in consolidation. Certain items have been reclassified to conform with the current
presentation.

Magnum Hunter is a holding company
with no significant assets or operations other than our investments in our subsidiaries.
The wholly-owned subsidiaries of the company, except for Canvasback Energy, Inc., Redhead
Energy Inc. and Metrix Networks, Inc., an 80% owned subsidiary of the company,
collectively referred to as Canvasback, are direct guarantors of each of our 9.6% Senior
Notes, our Senior Bank Credit Facility (Facility) and our Floating Rate
Convertible Senior Notes (Convertible Notes), and have fully and
unconditionally guaranteed these obligations on a joint and several basis. The guarantors
comprise all of our direct and indirect subsidiaries (other than Canvasback), and we have
presented separate condensed consolidating financial statements and other disclosures
concerning the guarantors and Canvasback (See Note 10). Except for Canvasback, there is no
restriction on the ability of consolidated or unconsolidated subsidiaries to transfer
funds to the company in the form of loans or advances.

# NOTE 2  NEW
ACCOUNTING STANDARDS

The Financial Accounting Standards
Board (FASB) is currently evaluating an issue involving the classification of
mineral rights. In June 2001, FASB issued Statement of Financial Accounting Standards
(SFAS) No. 141, Business Combinations, which requires the purchase
method of accounting for business combinations initiated after June 30, 2001 and
eliminates the pooling-of-interests method. In July 2001, the FASB also issued SFAS No.
142, Goodwill and Other Intangible Assets, which discontinues the practice of
amortizing goodwill and indefinite lived intangible assets and initiates an annual review
of impairment. Intangible assets with a determinable useful life will continue to be
amortized over that period. The amortization provisions apply to goodwill and intangible
assets acquired after June 30, 2001. SFAS No. 141 and 142 clarify that more assets should
be distinguished and classified between tangible and intangible. We did not change or
reclassify contractual mineral rights included in proved and unproved oil and gas
properties on our balance sheet upon adoption of SFAS No. 142. We believe the treatment of
such mineral rights as tangible assets under the full cost method of accounting for oil
and gas properties is appropriate. An issue has been raised regarding whether these
mineral rights should be classified as tangible or

5

# MAGNUM HUNTER
RESOURCES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) For the Three Months
Ended March 31, 2004 and 2003

intangible assets. If it is
determined that reclassification is necessary, we will reduce our proven properties by
$408.1 million, decrease unproved properties by $94.4 million and report intangible
mineral rights related to proved properties of $408.1 million and intangible mineral
rights related to unproved properties of $94.4 million at December 31, 2003. At March 31,
2004, we will reduce our proven properties by $428.7 million, reduce our unproved
properties by $77.6 million, and report intangible mineral rights related to proved
properties of $428.7 million and intangible mineral rights related to unproved properties
of $77.6 million. These reclassifications represent the cost of acquiring proved and
unproved mineral rights from the effective date of June 30, 2001. The provisions of SFAS
No. 141 and SFAS No. 142 impact only the balance sheet and any associated footnote
disclosures. Any reclassifications potentially required would not impact our cash flows or
results of operations.

# NOTE 3 
STOCK-BASED COMPENSATION

Beginning June 1, 2003, and effective
January 1, 2003, we began expensing the fair market value of stock options newly granted,
modified or settled pursuant to SFAS No. 123, Accounting for Stock-Based
Compensation, and as allowed under the prospective method of SFAS No. 148,
Accounting for Stock-Based Compensation  Transition and Disclosure, an
amendment to SFAS No. 123. The fair value of each option granted after December 31,
2002, is estimated on the grant date, using the Black-Scholes option-pricing model. For
the three months ended March 31, 2004, we recorded pre-tax stock compensation expense of
$41 thousand, which is reflected in our general and administrative expenses. We recorded
no stock compensation for the three months ended March 31, 2003. For options granted prior
to January 1, 2003, we continue to use the intrinsic method under APB No. 25,
Accounting for Stock Issued to Employees and Related Interpretations, whereby
no compensation expense is recognized for stock options granted with an exercise price
equal to the market value of our stock on the grant date.

If we had recorded stock option
expense under the fair value provisions of SFAS No. 123 for all prior and current grants,
our net income and EPS would have been as shown in the below pro forma tables (in
thousands):

|                                                            | Three Months Ended March 31,
|----------------------------------------------------------- | ----------------------------
|
|Net income, as reported                                     |                             
|Total Stock-based employee compensation expense             |                             
|included in reported net income, net of income taxes of $16 |                             
|Deduct: Total stock-based employee compensation             |                             
|determined under fair value-based method for all            |                             
|awards, net of income taxes of $423 and $409                |                             
|                                                            |                             
|                                                            |                             
|Pro forma net income                                        |                             
|                                                            |                             
|Earnings per share:                                         |                             
|Basic - as reported                                         |                             
|                                                            |                             
|Basic - pro forma                                           |                             
|                                                            |                             
|Diluted - as reported                                       |                             
|                                                            |                             
|Diluted - pro forma                                         |                             
|                                                            |                             

Exposure Draft No. 1102-100,
Share-Based Payment, an amendment of FASB Statements No. 123 and 95,  issued
by the FASB on March 31, 2004, may impact our future accounting for stock-based
compensation. If we are required to adopt this amendment in its current form, we would be
required to discontinue the prospective method of expensing stock options which we
currently follow. Under this proposed literature, we would be required to expense all
unvested grants which would result in higher compensation costs.

# NOTE 4  GOODWILL

In June 2001, SFAS No. 141
Business Combinations and SFAS No. 142, Goodwill and Other Intangible
Assets, were issued to be effective for fiscal years beginning after December 15,
2001. Under these statements, goodwill is no longer amortized, but is subject to annual
impairment tests. We completed our annual test as of December 31, 2003 and found no
impairment. There were no changes to the carrying value of goodwill during the three
months ended March 31, 2004.

6

# MAGNUM HUNTER
RESOURCES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) For the Three Months
Ended March 31, 2004 and 2003

Our goodwill results from our merger
with Prize Energy Corp., (Prize), which was completed on March 15, 2002, and
the purchase price allocation was finalized as of June 30, 2003. The goodwill has been
fully allocated to our Exploration and Production segment.

# NOTE 5  ASSET
RETIREMENT OBLIGATIONS

Our asset retirement obligations
include plugging, abandonment, decommission and remediation costs, which are included in
developed oil and gas properties, production and distribution facilities and natural gas
processing plants.

The following is a reconciliation of
the asset retirement obligation liability at March 31, 2004 (in thousands):

|Balance at January 1, 2004          |  |  | $ | 32,489 |  
|----------------------------------- |  |  | - | ------ | -
|Liabilities incurred                |  |  |   | 1,262  |  
|Liabilities settled                 |  |  |   | (163   | )
|Liabilities sold                    |  |  |   | (45    | )
|Accretion expense                   |  |  |   | 697    |  
|Change in retirement cost estimates |  |  |   | 114    |  
|                                    |  | 
|Balance at March 31, 2004           |  |  | $ | 34,354 |  
|                                    |  | 

# NOTE 6  EARNINGS
PER SHARE INFORMATION

The following is a reconciliation of
the basic and diluted earnings per share computations (in thousands, except for per share
amounts):

|                                            | Three Months Ended
|------------------------------------------- | ------------------
|
|
|Basic EPS                                   |                   
|Income available to common stockholders     |                   
|                                            |                   
|                                            |                   
|Effect of Dilutive Securities               |                   
|Warrants                                    |                   
|Options                                     |                   
|                                            |                   
|Diluted EPS                                 |                   
|Income available to common stockholders and |                   
|assumed conversions                         |                   
|                                            |                   

At March 31, 2004, warrants
representing 7,228,457 shares of common stock and options representing 5,600,287 shares of
common stock were outstanding. At March 31, 2003, warrants representing 7,873,206 shares
of common stock and options representing 5,976,866 shares of common stock were
outstanding. For the three month period ended March 31, 2004, 7,228,457 shares of stock
representing warrants, and 45,000 shares of stock representing options, respectively, were
excluded from the diluted earnings per share calculations because the exercise price
exceeded the average market price of our stock for these periods. For the three month
period ended March 31, 2003, 7,873,206 shares of stock representing warrants and 3,130,100
shares of stock representing options, were excluded from the diluted earnings per share
calculations because the exercise price exceeded the average market price of our stock for
these periods.

7

# MAGNUM HUNTER
RESOURCES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) For the Three Months
Ended March 31, 2004 and 2003

# NOTE 7  DEBT

Notes payable and long-term debt at
March 31, 2004 and December 31, 2003 consisted of the following (in thousands):

|                                                         | March 31,
2004 | December 31,
2003
|-------------------------------------------------------- | -------------- | -----------------
|Long-Term Debt:                                          |                |                  
|Bank debt under revolving credit agreements, due         |                |                  
|May 2, 2007, 3.09% at March 31, 2004                     |                |                  
|Capital lease obligations                                |                |                  
|9.6% Senior unsecured notes, due March 15, 2012          |                |                  
|Floating rate convertible senior notes, due December 15, |                |                  
|2023, 1.11% at March 31, 2004                            |                |                  
|Production payment liability, non-recourse               |                |                  
|                                                         |                |                  
|                                                         |                |                  
|Less:  Current portion of capital lease obligations      |                |                  
|                                                         |                |                  
|Total Long-Term Debt                                     |                |                  
|                                                         |                |                  

We have a Facility which provides for
total borrowings of $500 million, on which our borrowing base was limited to $255 million
at March 31, 2004. The level of the borrowing base is dependent on the valuation of the
assets pledged, which are primarily oil and gas reserve values.

On April 30, 2004, we amended our
Facility to receive a more favorable rate structure and to increase the borrowing base by
$20 million, up to $275 million. We also extended the expiration date of the Facility by
one year, resulting in a new maturity date of May 2, 2007.

On a semi-annual basis, our borrowing
base under our Facility is redetermined by the financial institutions who have committed
to the company based on their review of our proved oil and gas reserves and other assets.
If the outstanding senior bank debt exceeds the redetermined borrowing base, the company
must repay the excess. As a result of the redetermination completed on April 30, 2004, our
borrowing base has been increased by $20 million. The next redetermination date will have
an effective date of June 30, 2004 and will have a completion date of no later than
November 10, 2004.

# NOTE 8  HEDGING

We were obligated to eleven crude oil
derivatives and thirteen natural gas derivatives on March 31, 2004. All outstanding
derivatives qualify for cash flow hedge accounting treatment as defined within SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities, which
requires derivative assets and liabilities to be recorded at their fair value on the
balance sheet with an offset for the effective portion of the hedge to other comprehensive
income. Hedge ineffectiveness on cash-flow hedges is recorded in earnings.

At March 31, 2004, the fair value of
the companys derivatives were as follows (in thousands):

|Derivative Liabilities       |  |  |   |        | 
|---------------------------- |  |  | - | ------ | 
|Natural gas collars          |  |  | $ | 24,668 | 
|Crude oil collars            |  |  |   | 7,449  | 
|                             |  | 
|Total derivative liabilities |  |  | $ | 32,117 | 
|                             |  | 

Of the $32.1 million derivative
liability, $27.1 million is classified as a current liability on our condensed
consolidated balance sheet at March 31, 2004.

8

# MAGNUM HUNTER
RESOURCES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) For the Three Months
Ended March 31, 2004 and 2003

For the three month period ended
March 31, 2004, the consolidated statement of income includes a non-cash hedging
adjustment gain of $94 thousand, made up of a hedging ineffectiveness loss of $104
thousand related to the crude oil and natural gas derivatives and a non-cash gain of $198
thousand related to the amortization of hedge contracts acquired in the Prize merger. The
remaining amortization amount relating to hedge contracts acquired in the Prize merger
that will be reclassified into the consolidated statement of income in 2004 is a $594
thousand gain. It is estimated at this time that $16.2 million, net of income tax, of
other comprehensive loss will be reclassified into the consolidated statement of income
during the next 12 months.

# NOTE 9  SEGMENT
DATA

We have three reportable segments.
The Exploration and Production segment is engaged in exploratory and developmental
drilling and acquisition, production, and sale of crude oil, condensate, and natural gas.
The Gas Gathering, Marketing and Processing segment is engaged in the gathering and
compression of natural gas from the wellhead, the purchase and resale of natural gas that
it gathers, and the processing of natural gas liquids. The Oil Field Services segment is
engaged in the managing and operation of producing oil and gas properties for interest
owners.

Our reportable segments are strategic
business units that offer different products and services. They are managed separately
because each business requires different technology and marketing strategies. The
Exploration and Production segment has six geographic areas that are aggregated. The Gas
Gathering, Marketing and Processing segment includes the activities of the three gathering
systems and four natural gas liquids processing plants in two geographic areas that are
aggregated. The Oil Field Services segment has six geographic areas that are aggregated.
The reason for aggregating the segments, in each case, is due to the similarity in nature
of the products, the production processes, the type of customers, the method of
distribution, and the regulatory environments.

The accounting policies of the
segments are the same as those for the company as a whole. We evaluate performance based
on profit or loss from operations before income taxes. The accounting for intersegment
sales and transfers is done as if the sales or transfers were to third parties  that
is, at current market prices.

Segment data for the periods ended
March 31, 2004 and 2003 follows (in thousands):

|Three Months Ended March 31, 2004:    | Exploration &
Production | Gas Gathering,
Marketing &
Processing | Oil Field
Services | All Other | Elimination | Consolidated
|------------------------------------- | ------------------------ | ------------------------------------- | ------------------ | --------- | ----------- | ------------
|Revenue from external customers       |                          |                                       | $                  | 88,817    |             | $           
|Intersegment revenues                 |                          |                                       |                    | 410       |             |             
|Depreciation, depletion, amortization |                          |                                      
|and accretion                         |                          |                                       |                    | 24,564    |             |             
|Segment profit (loss)                 |                          |                                       |                    | 42,860    |             |             
|Interest expense                      |                          |                                       |                    |           |             |             
|Other income                          |                          |                                       |                    |           |             |             
|                                      |                          |                                       |                    |           |             |             
|Income before income taxes            |                          |                                       |                    |           |             |             
|Provision for income tax expense      |                          |                                       |                    |           |             |             
|                                      |                          |                                       |                    |           |             |             
|Net income                            |                          |                                       |                    |           |             |             
|                                      |                          |                                       |                    |           |             |             

9

# MAGNUM HUNTER
RESOURCES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) For the Three Months
Ended March 31, 2004 and 2003

|Three Months Ended March 31, 2003:    | Exploration &
Production | Gas Gathering,
Marketing &
Processing | Oil Field
Services | All Other | Elimination | Consolidated
|------------------------------------- | ------------------------ | ------------------------------------- | ------------------ | --------- | ----------- | ------------
|Revenue from external customers       |                          |                                       | $                  | 69,590    |             | $           
|Intersegment revenues                 |                          |                                       |                    | 400       |             |             
|Depreciation, depletion and           |                          |                                      
|amortization and accretion            |                          |                                       |                    | 20,597    |             |             
|Segment profit (loss)                 |                          |                                       |                    | 26,868    |             |             
|Equity in earnings of affiliates      |                          |                                       |                    |           |             |             
|Interest expense                      |                          |                                       |                    |           |             |             
|Costs relating to early retirement of |                          |                                      
|debt                                  |                          |                                       |                    |           |             |             
|Other income                          |                          |                                       |                    |           |             |             
|                                      |                          |                                       |                    |           |             |             
|Income before income taxes            |                          |                                       |                    |           |             |             
|Provision for income tax expense      |                          |                                       |                    |           |             |             
|Cumulative effect of a change in      |                          |                                      
|accounting principle                  |                          |                                       |                    |           |             |             
|                                      |                          |                                       |                    |           |             |             
|Net income                            |                          |                                       |                    |           |             |             
|                                      |                          |                                       |                    |           |             |             

# NOTE 10  CONDENSED
CONSOLIDATING FINANCIAL STATEMENTS

The company and its wholly-owned
subsidiaries, except Canvasback, are direct guarantors of our 9.6% Senior Notes,
Convertible Notes and Facility and have fully and unconditionally guaranteed these
obligations on a joint and several basis. In addition to not being a guarantor of the
companys 9.6% Senior Notes, Convertible Notes and Facility, Canvasback cannot be
included in determining compliance with certain financial covenants under the
companys Facility. We have concluded that separate financial statements related to
the guarantors are not included because management has determined that they are not
material to investors. Condensed consolidating balance sheets for Magnum Hunter Resources,
Inc. and subsidiaries as of March 31, 2004 and December 31, 2003 and condensed
consolidating statements of operations and cash flows for the three month periods ended
March 31, 2004 and 2003, were as follows:

10

# MAGNUM HUNTER
RESOURCES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) For the Three Months
Ended March 31, 2004 and 2003

# Magnum Hunter
Resources, Inc. and Subsidiaries Condensed Consolidating Balance Sheets

|As of March 31, 2004                      
|------------------------------------------
|
|ASSETS                                    
|Current assets                            
|Property and equipment                    
|(using full cost accounting)              
|Investment in subsidiaries                
|(equity method)                           
|Investment in Parent                      
|Other assets                              
|                                          
|Total assets                              
|                                          
|LIABILITIES AND STOCKHOLDERS'             
|EQUITY                                    
|Current liabilities                       
|Long-term liabilities                     
|Stockholders' equity                      
|                                          
|Total liabilities and stockholders' equity
|                                          

|As of December 31, 2003                   
|------------------------------------------
|
|ASSETS                                    
|Current assets                            
|Property and equipment                    
|(using full cost accounting)              
|Investment in subsidiaries                
|(equity method)                           
|Investment in Parent                      
|Other assets                              
|                                          
|Total assets                              
|                                          
|LIABILITIES AND STOCKHOLDERS'             
|EQUITY                                    
|Current liabilities                       
|Long-term liabilities                     
|Stockholders' equity                      
|                                          
|Total liabilities and stockholders' equity
|                                          

11

# MAGNUM HUNTER
RESOURCES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) For the Three Months
Ended March 31, 2004 and 2003

# Magnum Hunter Resources,
Inc. and Subsidiaries Condensed Consolidating Statement of Operations

|For the Three Months Ended March 31, 2004   
|--------------------------------------------
|
|Revenues                                    
|Expenses                                    
|                                            
|Income (loss) before equity in net losses of
|subsidiary                                  
|Equity in net losses of subsidiary          
|                                            
|Income (loss) before income taxes           
|Income tax (expense) benefit                
|                                            
|Net income (loss)                           
|                                            

|For the Three Months Ended March 31, 2003         
|--------------------------------------------------
|
|Revenues                                          
|Expenses                                          
|                                                  
|Income before equity in net earnings of subsidiary
|Equity in net earnings (losses) of subsidiary .   
|                                                  
|Income before income taxes                        
|Income tax expense                                
|                                                  
|Income before cumulative change                   
|Cumulative change                                 
|                                                  
|Net income                                        
|                                                  

# Magnum Hunter
Resources, Inc. and Subsidiaries Condensed Consolidating Statements of Cash Flows

|For the Three Months Ended March 31, 2004
|-----------------------------------------
|
|Cash flow from operating activities      
|Cash flow from investing activities      
|Cash flow from financing activities      
|                                         
|Net decrease in cash                     
|Cash at beginning of period              
|                                         
|Cash at end of period                    
|                                         

|For the Three Months Ended March 31, 2003
|-----------------------------------------
|
|Cash flow from operating activities      
|Cash flow from investing activities      
|Cash flow from financing activities      
|                                         
|Net increase in cash                     
|Cash at beginning of period              
|                                         
|Cash at end of period                    
|                                         

12

# MAGNUM HUNTER
RESOURCES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) For the Three Months
Ended March 31, 2004 and 2003

# Item 2.
Managements Discussion and Analysis of Financial Condition and Results of Operation

# Results of Operations

The following discussion and analysis
should be read in conjunction with our consolidated financial statements and the notes
associated with them contained in our Form 10-K for the year ended December 31, 2003. This
discussion should not be construed to imply that the results discussed herein will
necessarily continue into the future or that any conclusion reached herein will
necessarily be indicative of actual operating results in the future. Such discussion
represents only the best present assessment by our management.

There have been no changes to our
critical accounting policies for the three-month period ended March 31, 2004. Exposure
Draft No. 1102-100, Share-Based Payment, an amendment of FASB Statements No. 123 and
95,  issued by the FASB on March 31, 2004, may impact our future accounting for
stock-based compensation. If we are required to adopt this amendment in its current form,
we would be required to discontinue the prospective method of expensing stock options
which we currently follow. Under this proposed literature, we would be required to expense
all unvested grants which would result in higher compensation costs. In June 2003,
effective January 1, 2003, we began expensing stock-based compensation pursuant to SFAS
No. 123, Accounting for Stock-Based Compensation, as allowed under the
prospective method of SFAS No. 148, Accounting for Stock-Based Compensation 
Transition and Disclosure, an amendment to SFAS No. 123. Under these statements, all
stock options granted, modified or settled after December 31, 2002 will be expensed based
on their fair values determined by the Black-Scholes option-pricing model. For a
discussion of our other critical accounting policies, refer to our Form 10-K for the
period ended December 31, 2003.

Subsequent to our merger with Prize
Energy Corp. (Prize) in March 2002, we have sold non-strategic oil and gas
reserves for total proceeds of approximately $113.6 million, net of purchase price
adjustments. Almost all of the properties sold were acquired in the Prize merger, and the
proceeds have been used to reduce our overall indebtedness and fund our capital
expenditure program. The impact of these non-strategic divestitures are described below in
our results of operations.

Throughout this document, we make
statements that are classified as forward-looking. Please refer to the
Forward-Looking Statements section of this document for an explanation of
these types of assertions.

Our results of operations have been
significantly affected by our past success in acquiring oil and gas properties at or near
the bottom of the commodity price cycles and our ability to maintain or increase oil and
natural gas production through our exploration and exploitation activities. Fluctuations
in oil and gas prices and commodity hedging activities have also significantly affected
the results of operations.

The following table sets forth
certain information with respect to our business segments:

|                                                               | Three Months Ended
March 31,
|-------------------------------------------------------------- | ----------------------------
|
|
|Reported Production:                                           |                             
|Oil (Mbbls)                                                    |                             
|Gas (Mmcf)                                                     |                             
|Oil and Gas (Mmcfe)                                            |                             
|Equivalent Daily Rate (Mmcfe per day)                          |                             
|Average Sale Prices (after hedging)                            |                             
|Oil (per Bbl)                                                  |                             
|Gas (per Mcf)                                                  |                             
|Oil and Gas (per Mcfe)                                         |                             
|Effect of hedging activities (per Mcfe)                        |                             
|Lease Operating Expense (per Mcfe)                             |                             
|Lifting costs                                                  |                             
|Production tax and other costs                                 |                             
|Gross margin (per Mcfe)                                        |                             
|Depreciation, depletion, amortization and accretion (per Mcfe) |                             
|Segment profit (thousands)                                     |                             

13

|                                                   | Three Months Ended
March 31
|-------------------------------------------------- | ---------------------------
|
|Gas Gathering, Marketing and Processing Operations |                            
|Throughput Volumes (Mcf per day)                   |                            
|Gathering                                          |                            
|Processing                                         |                            
|Gross margin (thousands)                           |                            
|Gathering (per Mcf throughput)                     |                            
|Processing (per Mcf throughput)                    |                            
|Segment profit (thousands)                         |                            
|Oil Field Management Services                      |                            
|Segment profit (thousands)                         |                            

# Period to Period
Comparison

# For the Three Months
Ended March 31, 2004 and 2003

We reported net income of $19.3
million for the three months ended March 31, 2004, as compared to net income of $8 million
for the same period in 2003, an increase of 141%. Total operating revenues increased 25%
to $100.4 million in 2004 from $80.1 million in 2003. Operating profit increased 57% to
$40.6 million in 2004 from $25.9 million in 2003, and net income before income taxes
increased 155% to $31.3 million in 2004 from $12.3 million in 2003. The growth in
operating revenues and operating profit was generated across all of our business segments,
but especially in our exploration and production segment, principally the result of lower
hedging losses in the 2004 period compared to the 2003 period due to the roll-off of older
commodity hedging contracts. We recorded $1.9 million in costs associated with early
retirement of debt in the 2003 period versus none in the 2004 period due to the redemption
of $30 million of our 10% Senior Notes during January 2003. The growth in pretax income
was additionally impacted by a 23% reduction in interest expense which declined to $9.7
million in the 2004 period from $12.6 million in the 2003 period, principally due to the
redemption of all of our remaining 10% Senior Notes during the year 2003. We recorded a
157% increase in income tax expense to $12 million ($11.6 million of which was deferred)
for the three months in 2004 versus $4.7 million for the same period in 2003, due to the
increase in pre-tax income. Basic and diluted earnings per share were $0.28 in the 2004
period versus basic and diluted earnings per share of $0.12 in the 2003 period, an
increase of 134%. The increase in net income was the primary factor causing the increase
in basic and diluted earnings per share. Common shares used in the basic and diluted
earnings per share calculation increased by 1% and 3%, respectively, in the 2004 period
compared to the 2003 period, principally due to the exercise of employee stock options and warrants and
the 66% increase in the average market price of our common stock in the 2004 period
compared to the 2003 period, resulting in a higher calculated number of diluted shares
outstanding in the 2004 period.

14

Exploration and
Production Operations:

For the three months ended March 31,
2004, we reported oil production of approximately 940 thousand barrels and gas production
of approximately 11.9 billion cubic feet, which represents a decrease of 2% in oil
produced and an increase of 5% in gas produced from the comparable period in 2003. Our
reported equivalent daily rate of production, on a million cubic feet per day basis (Mmcfe
per day), increased 1% to 192.4 Mmcfe per day in the 2004 period from 189.6 Mmcfe per day
in the 2003 period. Our production was impacted by the sale of non-strategic oil and gas
properties which occurred after the Prize acquisition. These non-strategic property sales
continued into March 2004. The impact of these property sales on reported production was a
decrease of 6.7 Mmcfe per day in the three month period in 2004 compared to the similar
period in 2003. Removing the effect of sold properties from both the 2004 and 2003
periods, our daily equivalent production grew 5.2% in the 2004 period compared to the 2003
period. Production for the three months of 2004 was also impacted by start-up delays,
mechanical problems, and weather down time, primarily in our offshore Gulf of Mexico
region. We estimate that the total production lost to these causes was approximately 15.2
Mmcfe per day (14.9 Mmcfe per day offshore). Of the total, 7.5 Mmcfe per day was due to
production start-up delays, 5.9 Mmcfe per day was due to mechanical problems, and 1.8
Mmcfe per day was due to weather down time. We expect that most of the 15.2 Mmcfe per day
will be restored to production sometime during the second quarter of 2004.

Oil revenues increased 8% to $28.3
million in the first quarter of 2004 compared to $26.2 million for the same period in
2003. The oil price received, after hedging effects, was $30.06 per Bbl in the 2004 period
compared to $27.39 per Bbl in the 2003 period, an increase of 10%. The price received for
oil before the effect of hedging was $33.59 per Bbl in the 2004 period versus $32.46 per
Bbl in the 2003 period, an increase of 3%. Gas revenues increased 39% to $60.3 million in
the first quarter of 2004 versus $43.4 million for the same period in 2003. The gas price
received, after hedging effects, was $5.08 per Mcf in the 2004 period compared to $3.83
per Mcf for the same period in 2003, an increase of 33%. The price received for gas before
the effect of hedging was $5.37 per Mcf in the 2004 period versus $6.05 per Mcf in the
2003 period, a decline of 11%. We realized a $6.8 million loss from hedging activities in
the 2004 period versus a loss of $30 million in the 2003 period, an improvement of $23.2
million, due to the expiration of older commodity hedging contracts. The hedge loss per
equivalent unit produced was $0.39 per Mcfe in the 2004 period versus $1.76 per Mcfe in
the 2003 period, a decline of 78% in the realized loss. The price received per equivalent
unit produced before the effect of hedging was $5.45 per Mcfe in the 2004 period versus
$5.84 in the 2003 period, a decline of 7%, primarily due to the decline in the pre-hedge
price received for natural gas. Total oil and gas revenues increased 28% to $88.8 million
in 2004 from $69.6 million in 2003. The increase in oil and gas revenues is attributable
to the $23.2 million decrease in hedge losses in the 2004 period versus the 2003 period,
offset by the 7% decline in the pre-hedge price received per equivalent unit produced.

From time to time, we enter into
various commodity hedging contracts in order to reduce our exposure to the possibility of
declining oil and gas prices, which provides a base level of cash flow to fund capital
expenditures. During the 2004 period, hedging decreased the average price we received for
oil by $3.53 per Bbl and decreased the average price we received for gas by $0.29 per Mcf.
During the first quarter of 2004, we had approximately 85 Mmcf/day of gas hedged through
cost-less collars with a weighted average floor price of $3.76 per Mmbtu and a weighted
average ceiling price of $5.78 per Mmbtu. Approximately 65% of first quarter 2004 natural
gas production was hedged. On the crude side, we had approximately 8,500 Bbls/day hedged
through cost-less collars with a weighted average floor price of $24.71 per Bbl and a
weighted average ceiling price of $31.02 per Bbl. Approximately 82% of first quarter 2004
crude oil production was hedged. For the remainder of 2004, we have approximately 85
Mmcf/day hedged through cost-less collars with a weighted average floor price of $3.76 per
Mmbtu and a weighted average ceiling price of $5.78 per Mmbtu. In addition, for the
remainder of 2004, we have approximately 5,000 Bbls/day of crude oil production hedged
through cost-less collars with a weighted average floor price of $23.40 per Bbl and a
weighted average ceiling price of $29.20 per Bbl.

Lease operating expense consists of
lifting costs and production taxes and other costs. For the 2004 period, lifting costs
were $13 million versus $12.9 million in the 2003 period, an increase of 1%. Production
taxes and other costs declined 9% to $8.4 million in the 2004 period from $9.2 million in
the 2003 period. The increase in lifting costs was primarily attributable to higher
production levels in the 2004 period compared to the 2003 period. For the 2004 period,
lifting costs, on a unit of production basis, were $0.74 per Mcfe as compared to $0.76 per
Mcfe in the 2003 period, a decrease of 3%. Production taxes and other costs were $0.48 per
Mcfe produced in the 2004 period compared to $0.54 per Mcfe produced in the 2003 period, a
decrease of 11%. The decrease in production taxes per Mcfe produced was caused by the
decrease in natural gas prices received before hedging effects during the 2004 period
compared to the 2003 period as well as by the recovery of production taxes on certain gas
wells qualifying for lower tax rates in the State of Texas.

15

Our gross margin realized from
exploration and production operations (oil and gas revenues less lease operating expenses)
for the 2004 period was $67.4 million, or $3.84 per Mcfe, compared to $47.5 million, or
$2.78 per Mcfe in the 2003 period, an increase of 38% on a per unit of production basis,
as a result of a 24% increase in hedge adjusted revenue per Mcfe produced and 6% decrease
in lease operating expense per Mcfe produced.

Depreciation, depletion, amortization
and accretion of oil and gas properties was $24.6 million in the 2004 period versus $20.6
million in the 2003 period, an increase of 19%. The 2004 period included accretion expense
related to asset retirement obligations of $698 thousand ($0.04 per Mcfe) compared to $639
thousand ($0.04 per Mcfe) in the 2003 period. On a unit of production basis, depreciation
and depletion expense (excluding accretion expense) was $1.36 per Mcfe produced in the
2004 period versus $1.17 per Mcfe produced in the 2003 period. This 17% increase in the
equivalent unit cost per Mcfe produced was due primarily to an increase in development
costs and shorter reserve life properties associated with our activities in the Gulf of
Mexico.

Segment profit for exploration and
production operations was $42.9 million for the three months ended March 31, 2004, versus
$26.9 million for the same period in 2003, an increase of 60%, principally due to higher
realized crude oil and natural gas prices and lower lease operating expenses, partially
offset by higher depreciation, depletion, amortization and accretion expense.

16

Gathering, Marketing and
Processing Operations:

For the three months ended March 31,
2004, our gas gathering system throughput was 15.1 Mmcf/day versus 15.5 Mmcf/day for the
same period in 2003, a decrease of 3%, due to normal production declines. Gas processing
throughput was 25.7 Mmcf/day in 2004 versus 22.8 Mmcf/day in 2003, an increase of 13%, due
primarily to the partial shutdown of one processing plant for most of one month in the
2003 period for scheduled maintenance on a products pipeline.

Revenues from gas gathering,
marketing and processing increased 2% to $9.5 million in the 2004 period versus $9.4
million in the 2003 period. Operating costs for the gas gathering, marketing and
processing segment were essentially flat at $6.6 million in the 2004 period and $6.5
million in the 2003 period. The revenue increase was the result of higher natural gas
liquids prices and the effect of the processing plant shutdown in 2003.

The gross margin realized from gas
gathering, marketing and processing for the 2004 period was $2.9 million versus $2.8
million in the 2003 period, an increase of 4%. The gas gathering margin was $0.21 per Mcf
gathered in 2004 versus $0.18 per Mcf in 2003 due to higher gathering fees. The gas
processing margin was $1.13 per Mcf in 2004 compared to $1.25 per Mcf in 2003.

Depreciation expense for gas
gathering, marketing and processing operations was basically unchanged for the 2004 period
at $583 thousand versus $576 thousand for the same period in 2003.

Segment profit for gas gathering,
marketing and processing operations was $2.4 million in the 2004 period versus $2.3
million for the 2003 period, an increase of 4%, principally due to higher processing
throughput.

Oil Field Management
Services Operations:

Revenues from oil field management
services increased 89% to $2.0 million in the first quarter of 2004 versus $1.1 million in
the first quarter of 2003. Approximately $893 thousand of this increase is due to three
months worth of revenues generated by our majority-owned subsidiary, Metrix
Networks, Inc. (Metrix). We purchased an 80% controlling interest in this
entity during December 2003. Prior to this purchase, we included our approximately 32%
share of their profits in the equity in earnings of affiliate section of our income
statement. We also received revenues of approximately $188 thousand from equipment rental
fees charged to outside owners under a new program in which Gruy purchases completion
equipment to be used on multiple projects and charges rental fees to the owners. These
increases were partially offset by lower management fees earned under our partnership
agreements in 2004.

Operating costs increased 68% to $1.4
million in 2004 from $857 thousand in 2003, again primarily due to the Metrix purchase.

The gross margin for this segment in
2004 was $595 thousand versus $222 thousand in 2003, an increase of 168%, due to increased
revenues.

Depreciation expense was $283
thousand in the 2004 period versus $146 thousand in the 2003 period, an increase of 94%,
due to capital additions.

Segment profit was $312 thousand for
the three months in 2004 versus $76 thousand for the same period in 2003.

Other Income and Expenses:

Total depreciation, depletion,
amortization and accretion expense was $25.5 million in the 2004 period versus $21.5
million in the 2003 period, an increase of 18%. This is primarily the result of the
increased depletion and accretion rates in our exploration and production segment.

17

General and administrative expense
for the 2004 period increased 59% to $5.1 million from $3.2 million in the 2003 period.
The principal reasons for this increase were a $1.2 million increase in incentive compensation
expenses and $651 thousand of expenses due to
Metrix recorded in the 2004 period. We elected to begin expensing of stock compensation in
June 2003. We recorded no equity in earnings of affiliate in the 2004 period versus
earnings of $288 thousand in the 2003 period due to the sale of our interest in NGTS and
the acquisition of a majority interest in Metrix. Other income was $222 thousand for the
2004 period versus $118 thousand in the 2003 period, caused by an increase in interest
income. The company recognized a $94 thousand gain in other non-cash hedging adjustments
in the 2004 period versus a $369 thousand gain in the 2003 period. In the 2004 period,
$198 thousand of the hedging gain relates to the amortization of commodity hedge assets
acquired in the Prize merger, while a loss of $104 thousand was due to recording hedge
ineffectiveness.

We incurred costs associated with the
early retirement of debt of $1.9 million in the three months of 2003 versus none in the
same period of 2004. The 2003 period costs were associated with the redemption of $30
million in principal of our 10% Senior Notes in January 2003.

Interest expense was $9.7 million for
the 2004 period versus $12.6 million for the 2003 period, principally the result of the
redemption in 2003 of our 10% Senior Notes, partially offset by interest on our
Convertible Notes issued in December 2003, which have a floating interest rate based on
three-month LIBOR, initially set at 1.17% and currently set at 1.11%. Our weighted average
interest rate paid under our Senior Bank Credit Facility (Facility) was 3.3%
in the 2004 period versus 3.4% in the 2003 period. Our overall effective interest rate
(excluding costs associated with the early retirement of debt) was 6.5% in the 2004 period
versus 8.6% in the 2003 period.

The effective tax rate was 38.4% for
the three months ended March 31, 2004 and 2003. The variance from the statutory rate of
35% was primarily due to state income taxes.

# Liquidity and Capital
Resources

CASH FLOW AND WORKING CAPITAL. Net
cash provided by operating activities for the three months ended March 31, 2004 increased
$20.4 million to $58.2 million, from $37.8 million for the same period during 2003. The
main driver of this increase was our substantial increase in net income. Please refer to
our period to period comparisons in the above sections for an analysis of this increase by
operating segment.

Our net working capital position at
March 31, 2004, was a deficit of $23.7 million. On that date, we had $102.5 million
available to be drawn under our $255 million Facility. A large factor in our working
capital deficit at March 31, 2004 is our current derivative liability of $27.2 million,
partially offset by current deferred tax assets of $10.3 million, which we have recorded
on our hedged positions for the next twelve months due to continued increases in
commodities prices over our hedged ceiling prices. If actual commodities prices realized remain
higher than our hedged ceiling prices on these positions, our resulting higher cash proceeds
received on our production will offset any actual amounts paid out related to these
liabilities.

INVESTING ACTIVITIES. Net cash used
in investing activities was $59.2 million in the 2004 three month period. We made capital
expenditures of $59.7 million under our capital budget during 2004. Our capital
expenditures are discussed in further detail below. For 2004, we also received proceeds
from the sales of property and equipment of $528 thousand, net of certain purchase price
adjustments related to both 2003 and 2004 divestitures.

In the 2003 three month period, net
cash used in investing activities was $36.3 million. We made cash expenditures of $35.9
million under our capital budget during 2003. Additionally during 2003, we made an
investment of $600 thousand to an affiliate, received proceeds from sale of assets of $106
thousand, paid out $487 thousand in revenues received on properties sold during 2002, and
received distributions from an affiliate of $600 thousand.

FINANCING ACTIVITIES. Net cash used
in financing activities was $11.1 million for the three month period ending March 31,
2004. We borrowed a total of $26.5 million, and we repaid borrowings of $42.0 million. We
paid $106 thousand in fees related to our Facility and received net proceeds from the
issuance of common stock pursuant to our employee stock option plans of $4.5 million.

18

Net cash used by financing activities
was $1.0 million for the three month period in 2003. We borrowed a total of $104.1 million
during the period, and repaid borrowings of $67.8 million. We paid $29.1 million to redeem
$30.0 million in principal of our 10% Senior Notes, at a price of 105% of par. The $31.5
million paid to redeem the Notes was reduced by approximately $2.4 million in redeemed
Notes which were held by a wholly-owned subsidiary. We also loaned our KSOP $660 thousand
to purchase shares of our common stock and paid $7.1 million to purchase an additional 1.3
million shares of treasury stock. We also spent $318 thousand to purchase stock for our
deferred compensation plan.

CAPITAL RESOURCES. The following
discussion of Magnum Hunters capital resources refers to the company and our
affiliates. Internally generated cash flow and the borrowing capacity under our Facility
are our major sources of liquidity. From time to time, we may also sell non-strategic
properties in order to increase liquidity. In addition, we may use other sources of
capital, including the issuance of additional debt securities or equity securities, as
sources to fund acquisitions or other specific needs. In the past, we have accessed both
the public and private capital markets to provide liquidity for specific activities and
general corporate purposes.

At March 31, 2004, we had $102.5
million available under our Facility which had a borrowing base of $255 million.

We have a Facility which provides for
total borrowings of $500 million, on which our borrowing base was limited to $255 million
at March 31, 2004. The level of the borrowing base is dependent on the valuation of the
assets pledged, which are primarily oil and gas reserve values.

On April 30, 2004 we amended our
Facility to receive a more favorable rate structure and to increase the borrowing base by
$20 million, up to $275 million. We also extended the expiration date of the Facility by
one year, resulting in a new maturity date of May 2, 2007.

On a semi-annual basis, our borrowing
base under our Facility is redetermined by the financial institutions who have committed
to the company based on their review of our proved oil and gas reserves and other assets.
If the outstanding senior bank debt exceeds the redetermined borrowing base, the company
must repay the excess. As a result of the redetermination completed on April 30, 2004, our
borrowing base has been increased by $20 million. The next redetermination date will have
an effective date of June 30, 2004 and will have a completion date of no later than
November 10, 2004.

Our internally generated cash flow,
results of operations, and financing for our operations are substantially dependent on oil
and gas prices. To the extent that oil and gas prices decline, our earnings and cash flows
may be adversely affected regardless of our commodity hedging activities. We believe that
our cash flow from operations, existing working capital, and availability under our
Facility will be sufficient to meet interest payments and to fund the capital expenditure
budget for the year 2004.

CAPITAL EXPENDITURES. During the
three month period in 2004, our total capital expenditures were $59.7 million. Exploration
activities accounted for $24.5 million, development activities accounted for $31.2
million, unproved property acquisitions accounted for $3.5 million, proved property
acquisitions accounted for $343 thousand, and additions to other assets accounted for $171
thousand of the capital expenditures. We participated in the drilling of 37 wells during
the 2004 period, of which 34 were deemed commercial, for a 92% overall success rate. Of
the 37 wells drilled, 7 were exploratory wells, of which 5 were successful, and 30 were
development wells, 29 of which were successful. As of March 31, 2004, we had total
unproved oil and gas property costs of $100.4 million.

Our Board of Directors approved a
capital budget of up to $185 million for calendar year 2004. We are not contractually
obligated to proceed with any of our material budgeted capital expenditures. The amount
and allocation of future capital expenditures will depend on a number of factors that are
not entirely within our control or ability to forecast, including drilling results,
oilfield service costs, and changes in oil and gas prices. As a result, actual capital
expenditures may vary significantly from current expectations. We anticipate that this
budget will be funded by our cash flow from operations as well as utilization of our
Facility. In the normal course of business, we review opportunities for the possible
acquisition of oil and gas reserves and activities related thereto. When potential
acquisition opportunities are deemed consistent with our growth strategy, bids or offers
in amounts and with terms acceptable to us may be submitted. It is uncertain whether any
such bids or offers which may be submitted by us from time to time, will be acceptable to
the sellers. In the event of a future significant acquisition, utilizing cash, we may
require additional financing in connection therewith.

19

RECENT TRENDS. The following is a
discussion of recent trends we consider important and our assessment of the impact of
these trends on our business plan.

Commodity prices.Since
mid-year 2002, crude oil and natural gas commodity prices have significantly increased. We
believe that natural gas prices (NYMEX index) will average between $4.00 and $6.50 per Mcf
over the foreseeable future. We have based our 2004 capital and operating budgets on
prices of approximately $5.40 per Mcf. Crude oil prices have recently increased
significantly, but in our view are much more variable due to worldwide political and
economic factors. For 2004 budgeting purposes, we have assumed crude prices will average
approximately $32.00 per Bbl (NYMEX index). Our production mix is largely natural gas, and
therefore our gross margins are largely driven by natural gas prices.

Interest rates. We have
experienced an unusually low interest rate environment for the past several years. We
expect interest rates to increase moderately over the next several years. The interest
rate on approximately one-half of our present debt is fixed at 9.6% per annum through
2012.

Depreciation, depletion,
amortization and accretion (DD&A). Our exploration and production segment DD&A
rate has increased an annual average of 13% per year since 1999. This increase is attributable to
our increased capital expenditures in the offshore Gulf of Mexico region, where our
finding and development costs per unit are higher than our average finding and development
costs per unit have been historically onshore. We expect to continue to spend a significant
percentage of our total capital expenditures budget on offshore Gulf of Mexico projects.
Assuming similar results in our drilling activities and reserve recognition to what we
have been achieving, we would expect our DD&A rate to continue to increase.

Managements assessment of
the impact of these trends on our business plan. We have concentrated our capital
budget in areas where we expect to realize the highest financial benefits, including rate
of return. As such, we have dedicated significant portions of our capital expenditure
budget to the offshore Gulf of Mexico region and onshore in the Southeast New Mexico area
over the past several years.

We have significant exploration,
development and exploitation opportunities both onshore and offshore. Management continues
to monitor commodity prices, finding and development costs and interest rates, among other
factors, to determine both the total dollars to be spent and the allocation of these
dollars among alternative projects within the capital budget. Even if DD&A rates and
interest rates continue to increase, if commodity price increases offset these expenses,
then we would expect to continue our current business plan. We believe we have significant
flexibility in the management of our cash flows.

FORWARD-LOOKING STATEMENTS. This Form
10-Q and the information incorporated by reference contain statements that constitute
forward-looking statements within the meaning Section 27A of the Securities
Act and Section 21E of the Securities Exchange Act. The words expect,
project, estimate, believe, anticipate,
intend, budget, plan, forecast,
predict and other similar expressions are intended to identify forward-looking
statements. These statements appear in a number of places and include statements regarding
our plans, beliefs, or current expectations, including the plans, beliefs, and
expectations of our officers and directors.

When considering any forward-looking
statement, one should keep in mind the risk factors that could cause our actual results to
differ materially from those contained in any forward-looking statement. Important factors
that could cause actual results to differ materially from those in the forward-looking
statements herein include the timing and extent of changes in commodity prices for oil and
gas, operating risks and other risk factors as described in our Annual Report on Form 10-K
as filed with the Securities and Exchange Commission. Furthermore, the assumptions that
support our forward-looking statements are based upon information that is currently
available and is subject to change. We specifically disclaim all responsibility to
publicly update any information contained in a forward-looking statement or any
forward-looking statement in its entirety and therefore disclaim any resulting liability
for potentially related damages.

All forward-looking statements
attributable to Magnum Hunter Resources, Inc. are expressly qualified in their entirety by
this cautionary statement.

20

# Inflation and Changes in
Prices

Our results of operations and cash
flow have been, and will continue to be, affected by the volatility in oil and gas prices.
Should we experience a significant increase in oil and gas prices that is sustained over a
prolonged period, we would expect that there would also be a corresponding increase in oil
and gas finding costs, lease acquisition costs, and operating expenses.

We market oil and gas for our own
account, which exposes us to the attendant commodities risk. A significant portion of our
gas production is currently sold to end-users either (i) on the spot market on a
month-to-month basis at prevailing spot market prices or (ii) under long-term contracts
based on current spot market prices. We normally sell our oil under month-to-month
contracts to a variety of purchasers.

# Hedging

We were obligated to eleven crude oil
derivatives and thirteen natural gas derivatives on March 31, 2004. All outstanding
derivatives qualify for cash flow hedge accounting treatment as defined within SFAS No.
133, which requires derivative assets and liabilities to be recorded at their fair value
on the balance sheet with an offset for the effective part of the hedge to other
comprehensive income. Hedge ineffectiveness on cash-flow hedges is recorded in earnings.

At March 31, 2004, the fair value of
the companys derivatives were as follows (in thousands):

|Derivative Liabilities       |  |  |   |        | 
|---------------------------- |  |  | - | ------ | 
|Natural gas collars          |  |  | $ | 24,668 | 
|Crude oil collars            |  |  |   | 7,449  | 
|                             |  | 
|Total derivative liabilities |  |  | $ | 32,117 | 
|                             |  | 

Of the $32.1 million derivative
liability, $27.1 million is classified as a current liability on our condensed
consolidated balance sheet at March 31, 2004.

For the three month period ended
March 31, 2004, the statement of operations includes a non-cash hedging adjustment gain of
$94 thousand, made up of a hedging ineffectiveness loss of $104 thousand related to the
crude oil and natural gas derivatives and a non-cash gain of $198 thousand related to the
amortization of hedge contracts acquired in the Prize merger. The remaining amortization
amount relating to hedge contracts acquired in the Prize merger that will be reclassified
into the operations statement in 2004 is a $594 thousand gain. It is estimated at this
time that $16.2 million, net of income tax, of other comprehensive loss will be
reclassified into the income statement during the next 12 months.

# New Accounting Standards

The Financial Accounting Standards
Board (FASB) is currently evaluating an issue involving the classification of
mineral rights. In June 2001, FASB issued SFAS No. 141, Business Combinations,
which requires the purchase method of accounting for business combinations initiated after
June 30, 2001 and eliminates the pooling-of-interests method. In July 2001, the FASB also
issued SFAS No. 142, Goodwill and Other Intangible Assets, which discontinues
the practice of amortizing goodwill and indefinite lived intangible assets and initiates
an annual review of impairment. Intangible assets with a determinable useful life will
continue to be amortized over that period. The amortization provisions apply to goodwill
and intangible assets acquired after June 30, 2001. SFAS No. 141 and 142 clarify that more
assets should be distinguished and classified between tangible and intangible. We did not
change or reclassify contractual mineral rights included in proved and unproved oil and
gas properties on our balance sheet upon adoption of SFAS No. 142. We believe the
treatment of such mineral rights as tangible assets under the full cost method of
accounting for oil and gas properties is appropriate. An issue has been raised regarding
whether these mineral rights should be classified as tangible or intangible assets. If it
is determined that reclassification is necessary, we would have reduced our proven
properties by $408.1 million, decreased unproved properties by $94.4 million and reported
intangible mineral rights related to proved properties of $408.1 million and intangible
mineral rights related to unproved properties of $94.4 million at December 31, 2003. At
March 31, 2004, we would have reduced our proven properties by $428.7 million, reduced our
unproved properties by $77.6 million, and reported intangible mineral rights related to
proved properties of $428.7 million and intangible mineral rights related to unproved
properties of $77.6 million. These reclassifications represent the cost of acquiring
proved and unproved mineral use rights from the effective date of June 30, 2001. The
provisions of SFAS No. 141 and SFAS No. 142 impact only the balance sheet and any
associated footnote disclosures. Any reclassifications potentially required would not
impact our cash flows or results of operations.

21

# Item 3. Qualitative and
Quantitative Disclosure About Market Risk

Our operations are exposed to market
risks primarily as a result of changes in commodity prices and interest rates. We do not
use derivative financial instruments for speculative or trading purposes.

Commodity Price Hedging Contracts.We produce, purchase, and sell crude oil, natural gas, condensate, and natural gas
liquids. As a result, our financial results can be significantly impacted as these
commodity prices fluctuate widely in response to changing market forces and conditions. We
have previously engaged in oil and gas hedging activities and intend to continue to
consider various hedging arrangements to realize commodity prices that we consider
favorable. The company engages in hedging contracts for a portion of its oil and gas
production through various contracts (Hedging Agreements). The primary
objective of these activities is to protect against significant decreases in price during
the term of the hedge.

The Hedging Agreements provide for
separate contracts tied to the New York Mercantile Exchange (NYMEX) light
sweet crude oil and Henry Hub natural gas, and the Inside FERC natural gas index price
posting (Index). We have combined option contracts that have agreed upon price
floors and ceilings (Costless collars). To the extent the Index price exceeds
the contract ceiling, we pay the spread between the ceiling and the Index price applied to
the related contract volumes. To the extent the contract floor exceeds the Index, we
receive the spread between the contract floor and the Index price applied to the related
contract volumes.

To the extent we receive the spread
between the contract price and the Index price applied to related contract volumes, we
have a credit risk in the event of nonperformance of the counterparty to the agreement. We
do not anticipate any material impact to our results of operations as a result of
nonperformance by such parties.

The following is a summary of the
companys open commodity hedge contracts as of March 31, 2004:

|Commodity   | Type | Volume/Day | Duration | Weighted Average
Price
|----------- | ---- | ---------- | -------- | ----------------------
|Natural Gas |      |            | Collar   |                       
|Natural Gas |      |            | Collar   |                       
|Crude Oil   |      |            | Collar   |                       
|Crude Oil   |      |            | Collar   |                       

Based on future  market  prices  at March 31,  2004,  the fair  value of open  commodity  hedging  contracts  was a
liability of $32.1  million.  If future  market prices were to increase 10% from those in effect at March 31, 2004,
the fair value of open  contracts  would be a liability of $52.8  million.  If future market prices were to decline
10% from those in effect at March 31,  2004,  the fair value of the open  contracts  would be a liability  of $14.2
million.

At inception,  due to Company policy, commodity hedge positions may not exceed 75% of natural gas and 90% of crude oil forecasted  current
(18 months) commodity  production.  For non-current  (greater than 18 months) commodity  production,  at inception,
commodity  hedge  positions  for natural  gas and crude oil may not exceed 75% of  forecasted  production  for each
product.  Unhedged  portions  of our  natural  gas and  crude  oil  production  will be  subject  to  market  price
fluctuations.

Fixed and  Variable  Rate Debt.  The  company  uses fixed and  variable  rate debt to  partially  finance  budgeted
expenditures.  These agreements expose the company to market risk related to changes in interest rates.

The following  table presents the carrying and fair value of the company's  debt along with average  interest rates
as of March 31,  2004.  Fair values are  calculated  as the net  present  value of the  expected  cash flows of the
financial  instruments,  except for the fixed rate  Senior  Notes and the  Convertible  Notes,  which are valued at
their last traded value before March 31, 2004.

22

|Expected Maturity Dates | 2004 | 2005-7 | 2012 | 2023  | Total | Fair Value
|----------------------- | ---- | ------ | ---- | ----- | ----- | ----------
|
|Variable Rate Debt:     |      |        |      |       |       |           
|Facility (a)            |      |        | $    | --    |       | $         
|Convertible Notes (b)   |      |        |      | --    |       |           
|Capital Leases (c)      |      |        |      | 1,512 |       |           
|Fixed Rate Debt:        |      |       
|Senior Notes (d)        |      |        | $    | --    |       | $         

---

(a)    
          The average interest rate on the Facility is 3.0866%. (b) The average interest
          rate on the convertible notes is 1.110%. (c) The average interest rate on the
          two capital leases is 4.4396%. (d) The interest rate on the senior notes due
          2012 is a fixed 9.6%.

# Item 4. Controls and
Procedures

Our chief executive officer and chief
financial officer have reviewed and evaluated the effectiveness of the companys
disclosure controls and procedures [as defined in Rules 240.13a-15(e) and 15d-15(e)
promulgated under the Securities Exchange Act of 1934] as of the end of the period covered
by this quarterly report. Based on that review and evaluation, which included inquiries
made to certain other employees of the company, the chief executive officer and chief
financial officer have concluded that our current disclosure controls and procedures, as
designed and implemented, are reasonably adequate to ensure that they are provided with
material information relating to the company required to be disclosed in the reports the
company files or submits under the Securities Exchange Act of 1934. There have not been
any significant changes in our internal controls or in other factors that could
significantly affect these controls subsequent to the date of their evaluation. There were
no significant deficiencies or material weaknesses and, therefore, no corrective actions
were taken.

23

# PART II  OTHER
INFORMATION

# Item 6. Exhibits and
Reports on Form 8-K

(a) Exhibits

|Number    | Description of Exhibit                                                                                                                                                                                                                                                  
|--------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1 & 4.1 | Articles of Incorporation (Incorporated by reference to Registration Statement on Form S-18, File No. 33-30298-D).                                                                                                                                                      
|3.2 & 4.2 | Articles of Amendment to Articles of Incorporation (Incorporated by reference to Form 10-K for the year ended December 31, 1990).                                                                                                                                       
|3.3 & 4.3 | Articles of Amendment to Articles of Incorporation (Incorporated by reference to Registration Statement on Form SB-2, File No. 33-66190).                                                                                                                               
|3.4 & 4.4 | Articles of Amendment to Articles of Incorporation (Incorporated by reference to Registration Statement on Form S-3, File No. 333-30453).                                                                                                                               
|3.5 & 4.5 | Articles of Amendment to Articles of Incorporation (Incorporated by reference to Form 10-K for the year ended December 31, 2001).                                                                                                                                       
|3.6 & 4.6 | By-Laws, as Amended (Incorporated by reference to Registration Statement on Form SB-2, File No. 33-66190).                                                                                                                                                              
|3.7 & 4.7 | Amendment to By-Laws (Incorporated by reference to Registration Statement on Form S-4, File No. 333-76774).                                                                                                                                                             
|3.8 & 4.8 | Certificate of Designation of 1996 Series A Preferred Stock (Incorporated by reference to Form 8-K dated December 26, 1996, filed January 3, 1997).                                                                                                                     
|3.9 & 4.9 | Amendment to Certificate of Designation for 1996 Series A Convertible Preferred Stock (Incorporated by reference to Registration Statement on Form S-3, File No. 333-30453).                                                                                            
|4.10      | Form of Warrant Agreement by and between Magnum Hunter Resources, Inc. and American Stock Transfer & Trust Company, as warrant agent (Incorporated by reference to Registration Statement on Form S-3, File No. 333-82552).                                             
|4.11      | Indenture, dated March 15, 2002, between Magnum Hunter Resources, Inc., the subsidiary guarantors named therein and Bankers Trust Company, as Trustee (Incorporated by reference to Form 10-K for the year ended December 31, 2001).                                    
|4.12      | Form of 9.6% Senior Note due 2007 (included in Exhibit 4.11).                                                                                                                                                                                                           
|4.13      | Indenture dated December 15, 2003 between Magnum Hunter Resources, Inc., the subsidiary guarantors named therein and Deutsche Bank Trust Company Americas, as Trustee (Incorporated by reference to Form 10-K for the year ended December 31, 2003).                    
|4.14      | Form of Floating Rate Convertible Senior Notes due 2023 (included in Exhibit 4.13).                                                                                                                                                                                     
|4.15      | Shareholder Rights Agreement dated as of January 6, 1998 by and between Magnum Hunter Resources, Inc. and Securities Transfer Corporation, as Rights Agent (Incorporated by reference to Form 8-K dated January 7, 1998, filed January 9, 1998).                        
|10.1      | Fourth Amended and Restated Credit Agreement dated March 15, 2002, as amended, between Magnum Hunter Resources, Inc. and Bankers Trust Company, et al (Incorporated by reference to Form 10-K for the year ended December 31, 2001).                                    
|10.2      | First Amendment to Fourth Amended and Restated Credit Agreement, dated April 19, 2002 between Magnum Hunter Resources, Inc. and Deutsche Bank Trust Company Americas, et al (Incorporated by reference to Form 10-K for the year ended December 31, 2003).              
|10.3      | Second Amendment to Fourth Amended and Restated Credit Agreement, dated July 3, 2002 between Magnum Hunter Resources, Inc. and Deutsche Bank Trust Company Americas, et al (Incorporated by reference to Form 10-K for the year ended December 31, 2003).               
|10.4      | Third Amendment to Fourth Amended and Restated Credit Agreement, dated August 28, 2002 between Magnum Hunter Resources, Inc. and Deutsche Bank Trust Company Americas, et al (Incorporated by reference to Form 10-K for the year ended December 31, 2003).             
|10.5      | Fourth Amendment to Fourth Amended and Restated Credit Agreement, dated September 6, 2002 between Magnum Hunter Resources, Inc. and Deutsche Bank Trust Company Americas, et al (Incorporated by reference to Form 10-K for the year ended December 31, 2003).          
|10.6      | Waiver and Fifth Amendment to Fourth Amended and Restated Credit Agreement, dated November 20, 2002 between Magnum Hunter Resources, Inc. and Deutsche Bank Trust Company Americas, et al (Incorporated by reference to Form 10-K for the year ended December 31, 2003).
|10.7      | Waiver and Sixth Amendment to Fourth Amended and Restated Credit Agreement, dated May 2, 2003 between Magnum Hunter Resources, Inc. and Deutsche Bank Trust Company Americas, et al (Incorporated by reference to Form 10-K for the year ended December 31, 2003).      
|10.8      | Seventh Amendment to Fourth Amended and Restated Credit Agreement, dated August 8, 2003 between Magnum Hunter Resources, Inc. and Deutsche Bank Trust Company Americas, et al (Incorporated by reference to Form 10-K for the year ended December 31, 2003).            
|10.9      | Waiver and Eighth Amendment to Fourth Amended and Restated Credit Agreement, dated October 31, 2003 between Magnum Hunter Resources, Inc. and Deutsche Bank Trust Company Americas, et al (Incorporated by reference to Form 10-K for the year ended December 31, 2003).
|10.10     | Ninth Amendment to Fourth Amended and Restated Credit Agreement, dated December 10, 2003 between Magnum Hunter Resources, Inc. and Deutsche Bank Trust Company Americas, et al (Incorporated by reference to Form 10-K for the year ended December 31, 2003).           
|10.11*    | Tenth Amendment to Fourth Amended and Restated Credit Agreement, dated April 30, 2004 between Magnum Hunter Resources, Inc. and Deutsche Bank Trust Company Americas, et al (Incorporated by reference to Form 10-K for the year ended December 31, 2003).              

|10.12  | Employment Agreement for Gary C. Evans (Incorporated by reference to Form 10-K for the fiscal year-end December 31, 1999, filed March 30, 2000).                                                                                               
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.13  | Employment Agreement for Richard R. Frazier (Incorporated by reference to Form 10-K for the fiscal year-end December 31, 1999, filed March 30, 2000).                                                                                          
|10.14  | Employment Agreement for Chris Tong (Incorporated by reference to Form 10-K for the fiscal year-end December 31, 2002)                                                                                                                         
|10.15  | Employment Agreement for R. Douglas Cronk (Incorporated by reference to Form 10-K for the fiscal year-end December 31, 2002).                                                                                                                  
|10.16  | Employment Agreement for Charles Erwin (Incorporated by reference to Form 10-K for the fiscal year-end December 31, 2002).                                                                                                                     
|10.17* | Employment Agreement for Morgan F. Johnston (Incorporated by reference to Form 10-K for the year ended December 31, 2003).                                                                                                                     
|10.18   | Purchase and Sale Agreement, dated February 27, 1997 among Burlington Resources Oil and Gas Company, Glacier Park Company and Magnum Hunter Production, Inc. (Incorporated by reference to Form 8-K, dated April 30, 1997, filed May 12, 1997).
|10.19   | Purchase and Sale Agreement dated November 25, 1998, between Magnum Hunter Production, Inc. and Unocal Oil Company of California (Incorporated by reference to Form 10-K for the fiscal year-end December 31, 1998, filed April 14, 1999).     
|10.20   | Agreement of Limited Partnership of Mallard Hunter, L.P., dated May 23, 2000 (Incorporated by reference to Form 10-Q/A for the period ended June 30, 2000, filed November 3j0, 2000).                                                          
|21      | Subsidiaries of the Registrant (Incorporated by reference to Form 10-K for the period ended December 31, 2001.                                                                                                                                 
|31.1*   | Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002, signed by Gary C. Evans                                                                                                                                                   
|31.2*   | Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002, signed by Chris Tong                                                                                                                                                      
|32.1*   | Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002 signed by Gary C. Evans                                                                                                                                                    
|32.2*   | Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002 signed by Chris Tong                                                                                                                                                       

---

* Filed herewith

(a)    
          Reports on Form 8-K

(1)    
          Report on Form 8-K filed January 9, 2004 reporting Items 5 and 7.

(2)    
          Report on Form 8-K filed March 4, 2004 reporting Items 12 and 7.

# SIGNATURE

Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

# MAGNUM HUNTER RESOURCES,
INC.

|By    /s/ Gary C. Evans                                                         |  | May 6, 2004
|------------------------------------------------------------------------------- |  | -----------
|Gary C. Evans         Chairman, President and Chief Executive Officer           |  |            
|                                                                                |  |            
|By    /s/ Chris Tong                                                            |  | May 6, 2004
|Chris Tong         Senior Vice President and Chief Financial Officer            |  |            
|                                                                                |  |            
|By    /s/ Morgan F. Johnston                                                    |  | May 6, 2004
|Morgan F. Johnston         Senior Vice President, General Counsel and Secretary |  |            
|                                                                                |  |            
|By    /s/ David S. Krueger                                                      |  | May 6, 2004
|David S. Krueger         Senior Vice President and Chief Accounting Officer     |  |