<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                    FORM 8-K/A

                                 CURRENT REPORT


     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


                                                    December 17, 1997
Date of Report (Date of earliest event reported)____________________


                          MAGNUM HUNTER RESOURCES, INC.

-------------------------------------------------------------------------------

             (Exact name of registrant as specified in its charter)


NEVADA                                1-12508                        87-0462881

--------------------------------------------------------------------------------
(State or other jurisdiction         (Commission                   IRS Employer
 of incorporation)                    File Number)          Identification No.)



         600 East Las Colinas Boulevard, Suite 1200, Irving, Texas 75039

-------------------------------------------------------------------------------
              (Address of principal executive offices) (Zip Code)


Registrant's telephone number, including area code (972) 401-0752



-------------------------------------------------------------------------------
          (Former name or former address, if changed since last report)


                                        1

<PAGE>

                                    


Item 7. Financial Statements and Exhibits.

(a) Financial statements of businesses acquired

Financial Statements of NGTS
    Independent Auditors' Report-Grace, Pulliam & Patterson Company, PC . . F-1
    NGTS Balance Sheets for the year ended December 31, 1996
      and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-2
    NGTS Statements of Income for the Years Ended
      December 31, 1996 and 1995 . . . . . . . . . . . . . .  . . .. . . . .F-3
    Retained Earnings for Years Ended 
      December 31, 1996 and 1995. . . . . . . . . . . . . . . . . . . . . . F-4
    NGTS Statements of Cash Flow for the Years Ended
      December 31, 1996 and 1995. . . . . . . . . . . . . . . .  . . . . . .F-5
    Notes to Financial Statements for the Years Ended
      December 31, 1996 and 1995 . . . . . . . . . . . . . . . . .  . . . . F-6
    NGTS Unaudited Balance Sheet for the period ended
      September 30, 1997 . . . . . . . . . . . . .  . . . . . . . . .  . . .F-12
    NGTS Unaudited Statement of Income for the period ended
      September 30, 1997. . . . . . . . . . . . . . . . . . . . . . .  . . .F-13

(b) Pro forma financial information

Unaudited Pro Forma Financial Data
    Introduction............................................................F-14
    Unaudited Pro Forma Balance Sheet as of September 30, 1997.. . . . .. . F-15
    Unaudited Pro Forma Statement of Operations for the Nine months 
      ended September 30, 1997..............................................F-16
    Unaudited Pro Forma Statement of Operations for the year ended
      December 31, 1996 ....................................................F-17
    Notes To Unaudited Pro Forma Financial Statements. .  . . . . . . . . . F-18



<PAGE>



                          INDEPENDENT AUDITORS' REPORT

     Board of Directors

     Natural Gas Transmission Services, Inc.

     Dallas, Texas

     We  have   audited  the   accompanying   balance   sheets  of  Natural  Gas
Transmissions  Services,  Inc.  (an S  Corporation)  as of December 31, 1996 and
1995  and the related statements of income, retained earnings and cash flows for
the years then ended.  These financial  statements are the responsibility of the
Company's  Management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audit.

     We conducted  our audit in  accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable  assurance  about  whether  the  financial  statements  are free from
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

     In our opinion,  the financial statements referred to above present fairly,
in all material  aspects,  the  financial  position of Natural Gas Transmissions
Services,  Inc.  as of  December  31,  1996 and  1995,  and the  results  of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
generally accepted accounting principles.




GRACE, PULLIAM & PATTERSON COMPANY, PC

Dallas, Texas

March 27, 1997




                                       F-1

<PAGE>
                     NATURAL GAS TRANSMISSIONS SERVICES, INC.
                                 BALANCE SHEETS
                           DECEMBER 31, 1996 AND 1995

                                     ASSETS

                                                           1996         1995
                                                         ---------   ----------
 CURRENT ASSETS
   Cash (Notes 1 and 3)                              $  4,247,213   $   127,078
   Accounts receivable - gas sales (Notes 1,2,3,&5)    31,407,555     3,915,022
   Accounts receivable - shareholders                       1,000         1,000
   Accounts receivable - other                               0           37,447
   Accounts receivable - related party (Note 2)            88,340          0
   Inventory                                              248,429          0
                                                      -------------  -----------
     Total  current  assets                            35,992,537     4,080,547

 EQUIPMENT,  AT COST (NOTES 1 AND 3)
  Office and computer equipment                            99,577        38,722
  Less:  accumulated depreciation                          24,744         9,826
                                                      ------------   -----------
    Total equipment - net                                  74,833        28,896

 OTHER ASSETS
  Other assets - net                                       11,352        11,726
                                                      ------------   -----------
    Total other assets                                     11,352        11,726
                                                      ------------   -----------
    Total assets                                     $ 36,078,722   $ 4,121,169
                                                     =============  ============

                       LIABILITIES & SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable - trade/gas purchased
    (Notes 2 and 3)                                  $ 33,254,294   $ 3,715,034
  Accrued officers' salaries and accrued
    employee bonuses                                      368,045          0
  Note payable - related party (Note 2)                   237,104       237,104
  Payroll taxes payable                                    10,031         4,557
  Accrued state franchise tax payable                      42,000          0
  Accrued interest payable (Note 2)                        28,259         6,920
                                                      ------------   -----------
    Total current liabilities                          33,939,733     3,963,615
  
SHAREHOLDERS' EQUITY
  Common stock, no par value, 1,000 shares                  1,000         1,000
    authorized, 1,000 shares issued
  Paid in capital                                         100,000       100,000
  Retained earnings                                     2,037,989        56,554
                                                      -----------    -----------
    Total shareholders' equity (Notes 3 and 5)          2,138,989       157,554
                                                      -----------    -----------
      Total liabilities & shareholders' equity       $ 36,078,722   $ 4,121,169
                                                      ===========    ===========


         The Accompanying Notes are an Integral Part of These Statements

                                      F-2
<PAGE>



                    NATURAL GAS TRANSMISSIONS SERVICES, INC.
                              STATEMENTS OF INCOME
                 FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
  

                                                        1996           1995
                                                     -----------   -----------  
REVENUE FROM OPERATIONS (NOTES 1 AND 2)
    Natural gas sales                              $ 154,715,973   $ 16,479,277
    Services fees                                        226,914        153,772
                                                    ------------   -------------
      Total revenues                                 154,942,887     16,633,049

COST OF OPERATIONS (NOTE 1)
    Cost of gas sold                                 150,417,928     15,889,793
                                                    ------------   -------------
      Total cost of gas sold                         150,417,928     15,889,793
                                                    ------------   -------------
INCOME BEFORE EXPENSES                                 4,524,959        743,256

    EXPENSES (NOTES 1 AND 2)
    Depreciation                                          14,918          5,167
    General and administrative                         2,266,482        723,009
                                                    ------------   -------------
      Total  expenses                                  2,281,400        728,176
                                                    ------------   -------------
OPERATING INCOME                                       2,243,559         15,080

OTHER INCOME (EXPENSE)
    Interest income                                      104,925         14,914
    Interest expense (Note 2)                            (43,924)        (7,033)
    Other                                                 (1,718)         1,718
                                                     ------------   ------------
    Total other income (expense)                          59,283          9,599
                                                     ------------   ------------
NET INCOME  (NOTES 3 AND 5)                         $  2,302,842    $    24,679
                                                     ============   ============

         The Accompanying Notes are an Integral Part of These Statements

                                      F-3
<PAGE>



                    NATURAL GAS TRANSMISSIONS SERVICES, INC.
                         STATEMENTS OF RETAINED EARNINGS
                 FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995

                                                             1996         1995
                                                          ---------   ----------

 Retained earnings, beginning of year                    $   56,554   $ 31,875
 Add net income (Notes 3 and 5)                           2,302,842     24,679
 Dividends                                                 (321,407)         0
                                                         -----------  ----------
 Retained earnings, end of period                        $2,037,989   $ 56,554 
                                                         ===========  ==========
 

         The Accompanying Notes are an Integral Part of These Statements

                                      F-4
<PAGE>

                    NATURAL GAS TRANSMISSIONS SERVICES, INC.
                            STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
<S>                                                                  <C>                 <C>    


                                                                            1996           1995
                                                                        -----------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income                                                             $   2,302,842   $    24,679
Adjustments  to  reconcile  net  income 
    to  net  cash  provided  by operating activities:
    Depreciation                                                              14,918         5,167
   (Increase) Decrease in accounts receivable - gas sales                (27,492,533)   (2,416,844)
   (Increase) Decrease in accounts receivable - service fees                    0           36,500
   (Increase) Decrease in accounts receivable - other                         37,447       (37,447)
   (Increase) Decrease in accounts receivable - related party                (88,340)         0
   (Increase) Decrease in prepaid loan fees                                     0          (11,556)
   (Increase) Decrease in prepaid expenses                                      0              500
   (Increase) Decrease in inventory                                         (248,429)         0
   Increase (Decrease) in accounts payable - trade/gas purchased          29,539,260     1,976,543
   Increase (Decrease) in accrued officers' salaries and employee            368,045          0
   Increase (Decrease) in taxes payable                                       47,474         2,257
   Increase (Decrease) in accrued interest payable                            21,339         6,920
                                                                       --------------   -------------
   Net cash provided (used) by operating activities                        4,502,023      (413,281)

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of office and computer equipment                                 (60,855)      (13,930)
                                                                       --------------   -------------
Net cash provided (used) by investing activities                             (60,855)      (13,930)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from note payable - related party                                   0          237,104
   Payment of loan fees                                                          374          0
   Dividends paid to shareholders                                           (321,407)         0
                                                                       --------------   ------------
Net cash provided (used) by financing activities                            (321,033)      237,104

INCREASE (DECREASE) IN CASH                                                4,120,135      (190,107)

CASH AT BEGINNING OF PERIOD                                                  127,078       317,185
                                                                      --------------   ------------

CASH AT END OF PERIOD                                                 $    4,247,213   $   127,078
                                                                      ==============   ============
SUPPLEMENTAL CASH FLOW INFORMATION:
  INTEREST PAID                                                       $       22,585   $       113
                                                                      ==============   ============

</TABLE>

For purposes of the statement of cash flows, the corporation  considers
cash   equivalents  to  include  all  highly  liquid  debt  instruments
purchased with a maturity of three months or less and  certificates  of
deposit paying interest monthly.


         The Accompanying Notes are an Integral Part of These Statements

                                      F-5
<PAGE>


                    Natural Gas Transmissions Services, Inc.
                          Notes to Financial Statements
                           December 31, 1996 and 1995



NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         This  summary  of  significant   accounting  policies  of  Natural  Gas
Transmissions   Services,  Inc.  ("The  Company")  is  presented  to  assist  in
understanding the Company's financial  statements.  The financial statements and
notes are representations of the Company's management. These accounting policies
conform to generally accepted  accounting  principles and have been consistently
applied in the preparation of the financial statements.

         BUSINESS ACTIVITIES

                  The  Company,  located  in  Dallas,  Texas,  is engaged in the
                  purchase   and   sale  of   natural   gas  and   natural   gas
                  administrative services to its customers in various states.

         CASH AND CASH EQUIVALENTS

                  For  purposes  of the  statement  of cash  flows,  the Company
                  considers all highly liquid debt instruments  purchased with a
                  maturity of three months or less to be cash  equivalents.  All
                  cash is restricted per the terms of the credit facility.

         ALLOWANCE FOR DOUBTFUL ACCOUNTS

                  The  Company  considers   accounts   receivable  to  be  fully
                  collectible;  accordingly,  no allowance for doubtful accounts
                  is  required.  However,  see  Note 5  regarding  a  contingent
                  write-off.

         PROPERTY AND EQUIPMENT

                  Property and  equipment  are carried at cost.  Management  has
                  elected to depreciate property using the straight-line  method
                  over the estimated  useful lives of the assets,  which is five
                  years.

                  Maintenance   and  repairs  are  charged  to  operations  when
                  incurred.  Betterments  and  renewals  are  capitalized.  When
                  property and equipment are sold or otherwise  disposed of, the
                  asset account and related accumulated depreciation account are
                  reduced, and any gain or loss are included in operations.

                  Depreciation  expense for the  periods  ended  December  31,
                  1996 and 1995 was $14,918 and $5,167 respectively.



                                      F-6
<PAGE>


NOTE 1:        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

         REVENUE RECOGNITION

                  Revenue consists of sales to natural gas buyers and end users.
                  The  Company   also   generates   revenue   from  natural  gas
                  administrative services.

                  Natural  Gas  Sales  -  Revenue  from  natural  gas  sales  is
                  recognized   upon  receiving   confirmation   from  the  buyer
                  detailing the  transaction  as to the buyer,  seller,  volume,
                  price  and  commitment  period.  The  gas,  if  necessary,  is
                  nominated  and is  recorded  as  revenue  based on the  actual
                  volume delivered per the pipeline  company.  Approximately 90%
                  of the gas  volumes  delivered  are  recorded  based on actual
                  versus nominated volumes. The revenue is recorded in the month
                  in which the gas is delivered to the buyer.

                  Administrative  Services  -  Services  income  is  derived  by
                  providing services to producers to nominate,  confirm, deliver
                  and  sale.  The  Company  charges  a  percentage  of the gross
                  revenue received by the producer from the sale.

                  The Company  performs credit  evaluations of its customers.  A
                  letter of credit or guaranty  from a customer  may be required
                  based upon the customer's credit worthiness.

         INVENTORY

                  Differences between the volumes of gas purchased and nominated
                  to customers and volumes  actually  delivered by the pipelines
                  (imbalances)  are included in inventory at a weighted  average
                  cost.  As of December 31,  1996,  the Company has an inventory
                  balance of $248,429.

         CONSIDERATION OF CREDIT RISK

                  The Company  maintains  its cash in bank  deposit  accounts at
                  high credit financial  institutions.  The balances,  at times,
                  may exceed federally  insured limits. At December 31, 1996 and
                  1995,  the  Company  exceeded  the  limit  by $0  and  $27,078
                  respectively.  Included  in cash  is  $4,187,449  of  interest
                  bearing  government  backed securities that are convertible to
                  cash on a daily basis.

         EMPLOYEE BENEFIT PLANS

                  The   Company   maintains   a   qualified   cash  or  deferred
                  compensation plan under section 401(k) of the Internal Revenue
                  Code. Under the Plan, domestic employees

                                      F-7

<PAGE>

NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

                  may  elect  to  defer  up to  fifteen  percent  (15%) of their
                  salary,  subject to the Internal  Revenue Service limits.  The
                  Company,  on an elective  basis,  contributes a matching fifty
                  percent  (50%)  of the  first  six  percent  (6%) of  employee
                  contributions.  Company  contributions to the plan amounted to
                  $11,090 and $5,964 for the periods ended December 31, 1996 and
                  1995, respectively.

         USE OF ESTIMATES

                  The preparation of financial  statements  based upon generally
                  accepted  accounting  principles  requires  management  to use
                  various  estimates  and  assumptions  that  could  impact  the
                  various assets,  liabilities  and revenue  recognition for the
                  reported  periods.  The actual  results  could differ from the
                  estimates.

         INCOME TAX

                  The shareholders of Natural Gas Transmissions  Services,  Inc.
                  have elected to be treated under  Subchapter S of the Internal
                  Revenue  Code.  Therefore,  there is no provision  for federal
                  income tax  presented in the financial  statements  due to the
                  tax responsibility being at the shareholders' level.  However,
                  due to the  distributions  made in 1996 in relationship to the
                  net income, on or before April 15, 1997, a distribution to the
                  shareholders  will be  required  to pay their  individual  tax
                  liability.


NOTE 2:  RELATED PARTY TRANSACTIONS

         The   majority   shareholders   of  the  Company  are  also  the  major
shareholders  of  another   corporation  in  which  the  following   significant
transactions occurred:

                  The Company  has a balance  due from the  related  party as of
                  December 31, 1996 and 1995 of $45,038 and $478,  respectively,
                  in connection with services rendered to the related party.

                  The Company has  accounts  payable as of December 31, 1996 and
                  1995 of $0 and $132,061,  respectively, in connection with the
                  purchase of gas and other activities.

                  The Company  has an  outstanding  note  payable to the related
                  party  of  $237,104  as of  December  31,  1996,  which  bears
                  interest at 9% and is due on December  31,  1997.  The note is
                  unsecured.   The  note   payable  to  the  related   party  is
                  subordinated  to the debt arising from the credit  facility as
                  described  in  Note 3.  As of  December  31,  1996  and  1995,
                  respectively, the Company owed accrued interest on the note in
                  the amount of $21,339 and $6,920.

                                      F-8

<PAGE>
NOTE 2:  RELATED PARTY TRANSACTIONS - CONTINUED

         For the years  ended  December  31, 1996 and 1995,  the Company  rented
office space and some equipment  from the related party,  which is accounted for
as an  operating  lease.  In addition,  the Company  paid the related  party for
certain  administrative  fees.  The rental  agreements  and fees are on a 30 day
basis and can be canceled by either party.  The aggregated  amounts paid for the
operating lease payments and administrative fees for 1996 and 1995, were $66,476
and $47,400, respectively.

         During  1996 and 1995,  the  Company  provided  certain  administrative
services to the related party mentioned above.  Administrative  services fees of
$226,914 and $153,772, respectively, are included in income for the periods.

         As of December 31, 1996, there is an outstanding  accounts  receivable,
non-interest  bearing, from an owner in the amount of $88,340. The receivable is
being paid down out of distributions and/or salary from The Company.

         A related  limited  partnership  has  guaranteed  the Company's  credit
facility.  The related corporation referred to above is the general partner and,
along with the  majority  shareholders  of Natural Gas  Transmissions  Services,
Inc., owns the controlling interest of the limited partnership.

         The  guarantor has also  provided  direct term  guaranties to creditors
which supply gas to the  Company.  In turn the  guarantor  charges a fee for the
direct  guaranties and the guarantee of the credit  facility,  which amounted to
$12,000 and $5,990 for the periods ended December 31, 1996 and 1995. The details
and amounts of the guarantees are disclosed in Note 3.


NOTE 3:  CREDIT FACILITY

         On November 30, 1996 the Company  executed an agreement  with Bank One,
Texas  N.A.  to  provide  letters  of  credit  and  short-term  working  capital
arrangements.  The face of the revolving note is fifteen million  ($15,000,000).
This agreement  allows the Company to borrow or extend letters of credit up to a
limit determined by a borrowing base  calculation.  The borrowing base as of any
determination date is equal to the lessor of:

                  A.       The sum of  100% of  collected  funds  in  collateral
                           accounts  of Borrower  plus 60% of Eligible  Accounts
                           from Unrated Account Debtors as determined by Lenders
                           in  their  sole   discretion  plus  80%  of  Eligible
                           Accounts from Rated Account  Debtors as determined by
                           Lenders in their sole discretion; or




                                      F-9
<PAGE>
NOTE 3:  CREDIT FACILITY - CONTINUED

                        B. The  sum  of  the  Revolving  Loan  Commitment  ($8.0
                           million  as of  the  balance  sheet  date)  less  the
                           aggregate  obligations  of Borrower to Persons  other
                           than Lenders,  as calculated by Lenders in their sole
                           discretion, that have been guaranteed by Guarantor.

         As of the date of the balance sheet,  the Company's  borrowing base was
$20,239,650. Outstanding letters of credit were as follows:

                                        Amounts         Expiration Dates
                                    -------------       ----------------
                                    $     515,020       January 1997
                                        3,835,000       February 1997
                                           40,000       January 1997
                                    -------------
                                    $   4,390,020

         The  Company  had no working  capital  loan  advances as of the balance
sheet date.

         As  referred  to in Note 2, the  credit  facility  is  guaranteed  by a
related  party.  The  guarantor  also  provides  guaranties  to creditors of the
Company  in order for the  Company  to  purchase  gas and  services  from  those
creditors.  As of the balance sheet date, the guarantor provided  guaranties for
open accounts payable aggregating $13,693,794. All accounts were paid in full by
the Company  subsequent to the balance sheet date.  The credit  facility is also
guaranteed by the shareholders of the Company, limited to the product of 150% of
the  shareholder's  ownership  times all  amounts  due  arising  from the credit
facility.

         Borrowing Base and outstanding  indebtedness  recap, as of December 31,
1996:

                  Cash                                            $   4,086,514
                  Accounts Receivable   - Rated x 80%                11,066,237
                                        - Unrated x 60%               5,086,899
                                                                    -----------
                  Total Borrowing Base                               20,239,650

                  Less:    Guaranties                                13,693,794
                  Less:    Outstanding Letters of Credit              4,390,020
                                                                    -----------

                  Balance Available                               $   2,155,836
                                                                   ============

         In accordance with the loan agreement all present and future cash, cash
equivalents,  accounts receivable,  equipment and all other tangible property of
the Company  secure the loan.  The interest rate to be applied to any short term
borrowing is prime plus one percent (1%) and is



                                      F-10
<PAGE>
NOTE 3:  CREDIT FACILITY - CONTINUED

due monthly.  Letter of credit fees are charged on a percentage basis as issued.
In  addition,  the credit  facility  requires the Company to maintain a ratio of
total  liabilities  to tangible  net worth of 15.0 to 1.0 at such times when the
sum of the letters of credit issued and the outstanding  revolving loans is less
than  $4,000,000.  If the total is greater  than  $4,000,000,  the ratio  cannot
exceed 10.0 to 1.0. General and administrative  expenses cannot be more than 65%
of gross  profits.  A tangible net worth  covenant is applied which requires the
Company to  maintain  $250,000 in net worth,  which  includes  the  subordinated
indebtedness  of $237,104 as described in Note 2, plus 35% of net profits  after
December 31, 1995. The maturity of the note is June 30, 1997.


NOTE 4:  FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

         The Company  has entered  into a certain  master  commodity  price swap
agreement  with a  financial  counterpart  to  manage  all of  the  market  risk
associated  with  fluctuations  in the prices of natural  gas  commitments  to a
certain specific customer for a certain time period. The Company entered into an
arrangement  with this  customer to supply gas at a certain  price for a defined
period of time. The commodity swap agreement was put in place to offset any risk
associated with fluctuating  prices.  The swap agreement requires the Company to
make payments to (or receive payments from) the financial counterpart based upon
the  differential  between a fixed and a variable  price,  as  specified  by the
contract. The Company accounts for these transactions as hedging activities and,
accordingly,  gains and losses are  included  in income for the term of the swap
transaction.

         The Company has no open or uncovered hedging activities that expose the
Company to market risk.


NOTE 5:  CONTINGENCIES

         As of December 31, 1996, The Company has an outstanding receivable from
a customer  that is in excess of $350,000  which  arose in the normal  course of
business  during the early part of 1996. The receivable is subject to a possible
accounts payable offset of  approximately  $140,000;  thereby,  reflecting a net
receivable in excess of $200,000.  A dispute has arisen  between the parties and
currently there are lawsuits and counter suits  regarding  payment of the amount
with the case set for trial in 1997. Consequently,  as of December 31, 1996, the
ultimate collectibility or non-collectibility is not determinable.


                                      F-11
<PAGE>                                     


                    NATURAL GAS TRANSMISSIONS SERVICES, INC.
                                  BALANCE SHEET
                               SEPTEMBER 30, 1997
                                   (UNAUDITED)


                                     ASSETS
                                                       September 30,
                                                           1997
                                                       ------------- 
CURRENT ASSETS
  Cash                                              $      1,664,067
  Accounts receivable - gas sales                         20,509,020
  Accounts receivable - shareholders                           1,000
  Accounts receivable - other                                155,525
  Inventory                                                  509,501
                                                        ------------
    Total current assets                                  22,839,113
                                                        
 EQUIPMENT, AT COST
  Office and computer equipment                              131,199
  Less:  accumulated depreciation                             38,976
    Total equipment - net                                     92,223

 OTHER ASSETS
  Other assets - net                                           8,558
    Total other assets                                         8,558
                                                        ------------
      Total assets                                   $    22,939,894
                                                        ------------

LIABILITIES & SHAREHOLDERS' EQUITY

                               CURRENT LIABILITIES

  Accounts payable - trade/gas purchased             $    21,205,823
  Deferred income                                            (66,149)
  Payroll taxes payable                                       (5,465)
    Total current liabilities                             21,134,209
 
        SHAREHOLDERS' EQUITY
  Common stock, no par value, 1,000 shares                     1,000
    authorized, 1,000 shares issued 
  Paid in capital                                            100,000
  Retained earnings                                        1,704,685
    Total shareholders' equity                             1,805,685
                                                        ------------
      Total liabilities & shareholders' equity       $    22,939,894
                                                        ------------

                                      F-12
<PAGE>


                    NATURAL GAS TRANSMISSIONS SERVICES, INC.
                               STATEMENT OF INCOME
                     FOR THE PERIOD ENDED SEPTEMBER 30, 1997
                                   (UNAUDITED)
                    
                                                          September 30,
                                                              1997
                                                        ----------------
REVENUE FROM OPERATIONS
   Natural gas sales                                  $   131,159,573
   Services fees                                              208,100
                                                        ---------------
     Total revenues                                       131,367,673
                                                        ---------------
         
COST OF OPERATIONS
    Cost of gas sold                                       127,684,082
                                                        ---------------
      Total cost of gas sold                               127,684,082
                                                        ---------------

INCOME BEFORE EXPENSES                                       3,683,591

 EXPENSES
   Depreciation                                                 14,232
   General and administrative                                1,569,578
                                                         --------------
      Total  expenses                                        1,583,810
                                                         --------------
OPERATING INCOME (LOSS)                                      2,099,781

OTHER INCOME (EXPENSE)
    Interest income                                             84,073
    Interest expense                                           (11,158)
    Other                                                            0
                                                         --------------
    Total other income (expense)                                72,915
                                                         --------------
NET INCOME (LOSS)                                      $     2,172,696 
                                                          ==============


                                      F-13
<PAGE>

                   UNAUDITED PRO FORMA FINANCIAL STATEMENTS


         The following unaudited pro forma financial statements are derived from
the consolidated  financial  statements of the Company, the financial statements
of  Natural  Gas  Transmission  Services,  Inc.  (NGTS) and  certain  historical
financial data in respect of various assets  acquired by the Company in 1996 and
1997. The pro forma  adjustments  set forth on the attached  unaudited pro forma
financial  statements  reflect the  acquisition of NGTS in December 1997 and the
following transactions that occurred earlier in 1997 or 1996:

(1) The Panoma Acquisition completed in June 1996;

(2) The  conversion  or  redemption  of the  Company's  Series  B and  Series  C
    Preferred Stock in 1996;
(3) The issuance of the TCW Preferred Stock in December 1996;
(4) The McLean Plant  Acquisition  in January 1997;
(5) The Permian Basin Acquisition completed in April 1997 (including the
    incurrence of  indebtedness under the Company's current Credit Facility (the
    "Credit Facility") and the Company's previously  existing term loan facility
    (the"Term Loan Facility") to finance the Permian Basin Acquisition and repay
    the indebtedness under the Company's previous credit facility (the "Previous
    Credit  Facility")); 
(6) The debt offering completed in May 1997 (the "Debt Offering") and the
    application of the net proceeds  therefrom;
(7) The  6,500,000  share  common  stock  offering completed in November  1997
    and the exercise of 896,256 warrants, resulting in approximately $41 million
    in cash proceeds.

         The equity offering,  warrant exercise and the acquisition of NGTS, all
of which  occurred in the final  quarter of 1997 are  reflected on the September
30, 1997 unaudited pro forma balance sheet as if the  transactions  had occurred
on September 30, 1997. The  transactions  that occurred in 1997 are reflected in
the  unaudited  pro forma  statement  of  operations  for the nine months  ended
September  30,  1997 as if they had  occurred  on January  1,  1997,  and on the
unaudited pro forma statement of operations for the year ended December 31, 1996
as if they had occurred in January 1, 1996.  The  transactions  that occurred in
1996 and in January 1997 are reflected in the unaudited  statement of operations
for the year ended December 31, 1996 as if they had occurred on January 1, 1996.

         The  unaudited  pro  forma  financial  statements  should  be  read  in
conjunction  with  the  notes  thereto  and  with  the  consolidated   financial
statements of the Company and NGTS and the notes thereto.

         The unaudited pro forma financial  statements are not indicative of the
financial  position or results of operations of the Company which would actually
have  occurred if the  transactions  described  above had  occurred at the dates
presented or which may be obtained in the future.  In addition,  future  results
may vary  significantly  from the results  reflected in such  statements  due to
normal oil and gas production declines,  changes in prices paid for oil and gas,
future acquisitions, drilling activity and other factors.


                                      F-14
<PAGE>

                          MAGNUM HUNTER RESOURCES,INC.
                       UNAUDITED PRO FORMA BALANCE SHEET
                               SEPTEMBER 30, 1997
                                 (in thousands)

<TABLE>
<CAPTION>
<S>                                                     <C>                <C>                 <C>    
                                                             Magnum            Pro Forma         Pro Forma
                                                             Hunter            Adjustments         Balance
                                                            ----------         -----------        ----------

                                     ASSETS

CURRENT ASSETS                                              $  19,466          $                 $   19,466
NET PROPERTY, PLANT AND EQUIPMENT                             213,000                               213,000
INVESTMENT IN GAS MARKETING COMPANY                                                4,350  (2)         4,350
OTHER ASSETS                                                    7,692                                 7,692
                                                            ---------          ----------         ----------
TOTAL ASSETS                                                $ 240,158          $   4,350         $  244,508
                                                            =========          ==========        ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES                                         $  17,539          $                 $   17,539
LONG TERM LIABILITIES
  Long-term debt, current maturities                          188,027             (41,000) (1)      151,377
                                                                                    4,350  (2)
  Minority interest                                                40                                    40
  Other                                                         2,648                                 2,648

STOCKHOLDERS' EQUITY:
  Preferred stock                                                   1                                     1
  Common stock                                                     29                  15  (1)           44
  Additional paid-in capital                                   40,291              40,985  (1)       81,276
  Accumulated deficit                                          (8,416)                               (8,416)
  Treasury stock                                                   (1)                                   (1)
                                                            ----------          ----------       -----------
      Total stockholders' equity                               31,904              41,000            72,904
                                                            ----------          ----------       -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                  $ 240,158          $    4,350        $  244,508
                                                            =========          ===========       ===========

       See accompanying notes to unaudited pro forma financial statements
</TABLE>

                                      F-15
<PAGE>

                         Magnum Hunter Resources, Inc.
                  Unaudited Pro Forma Statement of Operations
                      Nine Months Ended September 30, 1997
                                 (in thousands)
                                                       
<TABLE>
<CAPTION>
<S>                                       <C>         <C>          <C> 
                                            Magnum     Pro Forma      Pro Forma
                                            Hunter     Adjustments     Balance 
                                            --------   -----------    ----------

Operating Revenues:
  Oil and gas sales                       $   22,793   $   12,627 (3)  $ 35,420
  Gas gathering, marketing and processing      7,721                      7,721
  Oil field services and international
    sales                                      3,792                      3,792
                                          -----------  -----------     ---------

Total Operating Revenues                      34,306       12,627        46,933

Operating Costs and Expenses:
  Oil and gas production                       8,521        3,039 (3)    11,560
  Gas gathering, marketing and processing      5,803                      5,803
  Oil field services and international sales   3,482                      3,482
  Depreciation and depletion                   8,607        3,629 (4)    12,236
  General and administrative                   1,128           50 (5)     1,178
                                          -----------  -----------     ---------
Total Operating Costs and Expenses            27,541        6,718        34,259
                                          -----------  -----------     ---------
Operating Profit (Loss)                        6,765        5,909        12,674

Equity in income of gas marketing
  subsidiary                                                  508 (6)       508
Other income                                     568                        568
Interest expense                              (9,298)      (4,587)(7)   (11,730)
                                                               87 (8)
                                                            2,068 (9)
                                           -----------  ----------      --------

Income (Loss) Before Income Tax               (1,965)       3,985         2,020

  Benefit (Provision) for income taxes           731       (1,514) (10)    (783)
                                           -----------  ----------     ---------
Income (Loss) Before Extraordinary Item       (1,234)       2,471         1,237

  Dividends Applicable to Preferred Stock       (657)                      (657)
                                           -----------  ----------     ---------
Income (Loss)Applicable to Common Shares
  Before Extraodinary Item                 $  (1,891)   $   2,471      $    580
                                           ===========  ==========     =========
Income (Loss) Per Share Before
  Extraordinary Item                       $   (0.14)   $    0.18      $   0.04
                                           ==========   ==========     =========

Common shares used in Per Share 
  Calculation                                13,659        13,659        13,659
                                           ==========   ==========     =========


       See accompanying notes to unaudited pro forma financial statements

</TABLE>
                                      F-16
<PAGE>

                         Magnum Hunter Resources, Inc.
                  Unaudited Pro Forma Statement of Operations
                          Year Ended December 31, 1996
                                 (in thousands)

                                             
                               
                                            Magnum      Pro Forma     Pro Forma
                                            Hunter     Adjustments     Balance
                                           ---------    -----------   ----------
Operating Revenues:
  Oil and gas sales                        $ 10,248    $    3,267  (1) $ 52,948
                                                           39,433  (3)
Gas gathering, marketing and processing       5,768         3,562 (12)   10,304
                                                              974 (11)
Oil field services and international
  sales                                         396                         396
                                           ----------  ------------   ----------
Total Operating Revenues                     16,412        47,236        63,648

Operating Costs and Expenses:
  Oil and gas production                      4,390         1,049 (11)   17,085
                                                           11,646  (3)
  Gas gathering, marketing and processing     4,708           695 (11)    6,879
                                                            1,476 (12)
  Oil field services and international
    sales                                       267                         267
  Depreciation and depletion                  2,951         1,370 (13)   17,282
                                                           12,961  (4)
  General and administrative                  1,225           250  (5)    1,475
                                           ----------   ------------   ---------
Total Operating Costs and Expenses           13,541        29,447        42,988

Operating Profit (Loss)                       2,871        17,789        20,660

Equity in income of gas marketing
  subsidiary                                                  501  (6)      501
Other income                                    344                         344
Interest expense                             (2,394)       (1,555)(14)  (14,989)
                                                          (14,059) (7)
                                                              262  (8)
                                                            2,757  (9)
                                           ----------  -------------  ----------
Income (Loss) Before Income Tax                 821         5,695         6,516

  Benefit (Provision) for income taxes         (312)       (2,164)(10)   (2,476)
                                           ----------  -------------  ----------
Income (Loss) Before Extraordinary Item         509         3,531         4,040

Dividends Applicable to Preferred Stock        (406)         (469)(15)     (875)
                                           ----------  -------------  ----------
Income (Loss) Applicable to Common Shares
  Before Extraordinary Item                $    103    $    3,062     $   3,165
                                           ==========   ============  ==========
Income (Loss) Per Share Before
  Extraordinary Item                       $   0.01    $     0.24     $    0.25
                                           =-========  =============  ==========
Common shares used in Per Share 
  Calculation                                12,486        12,486        12,486
                                           ==========  =============  ==========

       See accompanying notes to unaudited pro forma financial statements
                                                 
                                      F-17
<PAGE>
 

                NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
                                 (in thousands)


(1)      To record the net  proceeds  from the  Company's  November  1997 equity
         offering and exercise of warrants of approximately  $41,000, which were
         used to reduce long-term debt.

(2)      To record the  acquisition  of 30% of NGTS for a total of  $4,350.  The
         purchase price was financed by $2,350 drawn under the Company's  credit
         facility and $2,000 of notes payable to the sellers.

(3)      To record the Permian Basin Properties  operating  revenues and oil and
         gas  production  expenses  as if  the  Permian  Basin  Acquisition  had
         occurred  on  January  1,  1996 for the  December  31,  1996 pro  forma
         statement of  operations  and on January 1, 1997 for the  September 30,
         1997 pro forma statement of operations.

(4)      To record the pro forma  depletion  adjustment to reflect the Company's
         depletion  expense as if the Permian Basin Properties had been acquired
         on January 1, 1996 for the  December  31, 1996 pro forma  statement  of
         operations  and on January 1, 1997 for the September 30, 1997 pro forma
         statement of operations.

(5)      To record estimated additional general and administrative expenses that
         would have been  incurred if the Panoma  Properties  that were acquired
         effective  July 1, 1996 had been  acquired  on January 1, 1996,  and to
         record the Company's  estimates of general and administrative  expenses
         that would have been incurred if the Permian Basin  Properties had been
         acquired  on  January  1,  1996 for the  December  31,  1996 pro  forma
         statement of  operations  and on January 1, 1997 for the  September 30,
         1997  statement of  operations,  net of estimated  fees that would have
         been  earned  by  the  Company  from  third  parties  on  the  acquired
         properties it operates, as follows:

                                                       1996           1997
                                                       ----           ----
         Panoma                                     $   100          $  -
                                                           
         Permian:
           Additional general and 
              administrative expenses                   702            235
           Operating fees earned from third 
              parties                                  (552)          (185)
                                                     --------        --------
                                                    $   250          $  50
                                                    =========        ========   

(6)      To record the  Company's  30% equity  interest in the  earnings of NGTS
         less  amortization  of the excess of the amount  paid for NGTS over the
         share  of  the  identifiable  net  assets  acquired  ("goodwill").  The
         goodwill is assumed to be amortized over a 20 year period. The amounts,
         as if the  acquisition  of NGTS had  occurred at the  beginning  of the
         respective periods, are as follows:

                                                        1997            1996
                                                        ----            ----
         30% of NGTS net income                      $   651        $    691
         Less amortization of goodwill                  (143)           (190)
                                                     ----------      ----------
                                                     $   508        $    501    
                                                     =========       ==========


                                      F-18
<PAGE>



(7)      To  record  the  interest  expense  associated  with the  borrowing  of
         $119,500  under the Credit  Facility  and  $60,000  under the Term Loan
         Facility to complete the Permian Basin Acquisition and to refinance the
         Previous  Credit  Facility as if the  acquisition  and  refinancing had
         closed at the beginning of the respective periods.

         The Credit  Facility  and the Term Loan  Facility  are  assumed to have
         interest rates of 9.0% and 11.5%, respectively. The debt issuance costs
         associated with the facilities are as follows:

                 Credit Facility debt issuance costs          $          700
                 Term Loan Facility debt issuance costs                1,800
                                                               --------------
                                                              $        2,500

         The components of this interest expense adjustment are as follows:

                                                         1997          1996
                                                         ----          ----
         Elimination of pro forma interest adjustments
            for McLean  Plant Acquisition and Panoma
            Acquisition and amortization of associated
            debt issuance costs                         $  -      $  (1,555)
                                                                                
         Elimination of historical interest expense
            on Previous Credit Facility                 (1,415)      (2,394)
         Interest on Credit Facility                     3,585       10,755
         Amortization of debt issuance costs
            on Credit Facility                              44          133
         Interest on Term Loan Facility                  2,300        6,900
         Amortization of debt issuance costs
            on Term Loan Facility                           73          220
                                                       ---------   -----------
                                                       $ 4,587     $ 14,059
                                                      ===========  ===========

(8)      To adjust  interest  expense to reflect the  repayment of the Term Loan
         Facility  and  repayment  of $75,500 of  indebtedness  under the Credit
         Facility with the net proceeds of the Debt Offering.  The interest rate
         on the Debt Offering Notes is 10.0%.  After  repayment of the Term Loan
         Facility,  using the net  proceeds  of the Debt  Offering,  the  Credit
         Facility  will bear  interest on an assumed  interest  rate of 7.6% per
         annum.  The $4,500 of estimated debt issuance costs are amortized using
         the effective yield method over the life of the Notes.  This adjustment
         excludes an  extraordinary  charge to expense of $1,800  debt  issuance
         costs  associated  with  repayment  of  the  Term  Loan  Facility.  The
         components of the interest expense adjustment are as follows:

                                                             1997       1996
                                                              ----      ----
          Interest on the Debt Offering Notes             $  4,667   $  14,000
          Amortization of debt issuance costs on Notes          90         270
          Elimination of interest on $75,500 of debt
             under Credit Facility and effect of
             reduction of interest rate on Credit
             Facility following repayment of Term
             Loan Facility                                  (2,471)     (7,412)
          Elimination of interest and amortization of
             associated debt issuance costs
             on Term Loan Facility                          (2,373)     (7,120)
                                                       -----------  ------------
                                                          $    (87)   $   (262)
                                                        ===========  ===========
                                                                                


                                      F-19
<PAGE>



(9)      To adjust  interest  expense to reflect (a) repayment of $41,000 of the
         Credit  Facility  with the proceeds of the equity  offering and warrant
         exercise,  (b) the incurrence of $2,350 of additional  borrowing  under
         the Credit  Facility  to  partially  finance  the  purchase  of the 30%
         interest in NGTS and (c) $2,000 of convertible  promissory notes to the
         sellers of the 30% interest in NGTS.  The loan from the sellers and the
         Credit  Facility  are  assumed  to have 9.0% and 7.6%  interest  rates,
         respectively. The components of this interest expense adjustment are as
         follows:

                                                           1997           1996
                                                           ----           ----
          Reduction of interest on Credit Facility      $ (2,203)     $ (2,937)
          Interest on notes to seller                        135           180
                                                        ---------    -----------
                                                        $ (2,068)     $ (2,757)
                                                        =========    ===========

(10)     To record  the  effect of the pro forma  adjustments  on  deferred  and
         current  federal and state  income  taxes at an assumed tax rate of 38%
         after  consideration  of  available  net  operating  losses  and  other
         carryforwards.

(11)     To record the operating  revenues and oil and gas  production  expenses
         and gas gathering  and  marketing  expenses for the first six months of
         1996 for the Panoma  Properties  that were acquired  effective  July 1,
         1996 as if the Panoma Acquisition had occurred on January 1, 1996.

(12)     To record operating  revenues and gas gathering and marketing  expenses
         related to the  Company's  50% interest in the McLean Gas Plant,  which
         was acquired for $2,500 in January  1997,  for the year ended  December
         31,  1996 as if the  McLean Gas Plant had been  acquired  on January 1,
         1996. The Company will receive 100% of the net profits generated by the
         facility until the $2,500  purchase price is recovered,  after which it
         will receive 50% of the net profits. If the Company had received 50% of
         the net profits  generated by the McLean Gas Plant during the pro forma
         period presented, its gross margin would have been reduced by $1,403.

(13)     To record the pro forma  depletion  adjustment of $1,203 to reflect the
         Company's  depletion  expense  as if the  Panoma  Properties  that were
         acquired  effective  July 1, 1996 had been  acquired on January 1, 1996
         and $167 to record one year of  depreciation  expense on the McLean Gas
         Plant  (depreciable  life is 15 years) as if the  McLean  Gas Plant had
         been acquired on January 1, 1996.

(14)     To record  interest as if the McLean Plant  Acquisition  and the Panoma
         Acquisition  had occurred on January 1, 1996 as set forth below.  These
         acquisitions  were  assumed  to be  financed  by  the  Previous  Credit
         Facility with an average interest rate during 1996 of 7.625%.

           McLean Gas Plant - interest                    $     191
           Panoma Properties - interest                       1,321
           Panoma Properties - amortization of 
                associated debt issuance costs                   43
                                                           ---------
                                                          $   1,555
                                                          ==========

(15)     To remove  the $389 of  dividends  applicable  to Series B and Series C
         Preferred  Stock that was redeemed or converted to Common Stock in late
         1996 as if the  redemption  or  conversion  had  occurred on January 1,
         1996,  and to record  $858 of  dividends  at a rate of 8.75% on the TCW
         Preferred  Stock issued in December 1996 as if it had been  outstanding
         since January 1, 1996.




                                      F-20
<PAGE>


                                   SIGNATURES

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

                                           Magnum Hunter Resources, Inc.

                                               /s/ Gary C. Evans
                                        BY:____________________________
                                           Gary C. Evans
                                           President and Chief Executive Officer


Dated:  February 13, 1998