<PAGE>



                                 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, 1998

[ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange Act
    of 1934
    For 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                   IRS employer identification No.
incorporation or organization


           600 East Las Colinas Blvd., Suite 1200, Irving, Texas 75039
                     Address of principal executive offices

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


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

State the number of shares outstanding of each of the issuer's classes of common
equity, as of May 1, 1998:  21,738,320.







<PAGE>
                         PART I -- FINANCIAL INFORMATION
                         
Item 1.  Financial Statements

The  consolidated  financial  statements of Magnum Hunter  Resources,  Inc.
("Magnum  Hunter"or the "Company") follow "Item 2.  Management's  Discussion and
Analysis of Financial Condition and Results of Operation".

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operation
         
The following  discussion and analysis should be read in conjunction with Magnum
Hunter's  consolidated  financial  statements and the notes associated with them
contained  in its Form  10-KSB  for the  year  ended  December  31,  1997.  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 management of Magnum
Hunter.

In June  1996,  the  Company  acquired  the  Panoma  Properties,  which  include
interests in 520 gas wells  (including  third party) in the Texas  Panhandle and
Western Oklahoma and an adjoining 427-mile gas gathering system, from Burlington
Resources Inc. for $34.7 million.  The Company assumed  operations of nearly all
the wells and of the gathering  system and began planning for increased  density
development drilling in the Panoma area.

In January  1997,  the Company  purchased a fifty  percent  (50%)  interest in a
natural gas liquids  processing plant, the McLean Gas Plant,  which is connected
to the Panoma gas  gathering  system,  for $2.5 million.  The related  operating
agreement allows the Company to recoup its investment out of one hundred percent
(100%) of the net profits of the plant before reverting to a fifty percent (50%)
interest after payout.

In  February  1997,  the  Company  entered  into an  agreement  with  Burlington
Resources Inc. to purchase certain oil and gas properties located in the Permian
Basin (hereinafter referred to as the "Permian Basin Properties"), consisting of
1,852  producing oil and natural gas wells and associated  acreage located in 25
field areas of West Texas and in 22 field  areas of  Southeast  New  Mexico.  On
April  30,  1997,  the  Company  closed  on  the  purchase  for a net  price  of
approximately $133.8 million, including, but not limited to, certain adjustments
for a January 1, 1997 effective date.

On April 29, 1997,  the Company  received and accepted two new loan  commitments
from  Bankers  Trust  Company,  as Agent,  and other  banks  for  senior  credit
facilities for the Company and several of its  subsidiaries.  The two new senior
credit  facilities  were  structured as a $130 million  revolving line of credit
with a term of five years and a $60 million one year senior  subordinated bridge
facility  convertible into a five year term loan. The new credit facilities were
conditioned,  among  other  things,  upon  the  closing  of  the  Permian  Basin
Properties from Burlington,  which took place April 30, 1997. The revolving line
of credit  gives the  Company  the  flexibility  of  choosing  a range of either
"LIBOR"  or "Prime"  based  interest  rate  options.  This new  credit  facility
replaced the previously  existing $100 million  revolving credit facility with a
different bank group.

On May 29,  1997,  the Company  placed,  through a Rule 144A  private  placement
offering,  $140 million in Senior  Notes due 2007.  The Notes have a 10% coupon,
with interest  payable on June 1 and December 1, commencing on December 1, 1997.
There is no restriction  on the ability of any  consolidated  or  unconsolidated
subsidiary to transfer funds to the Company in the form of cash dividends, loans
or  advances.  Net  proceeds  from the sale of the  Senior  Notes  were  used to
completely  repay  the  Company's  outstanding  senior  subordinated  term  loan
facility in the principal amount of $60 million with the remaining proceeds used
to repay a substantial  portion of the Company's  outstanding  revolving  credit
facility.  At that time,  the  maximum  commitment  under the  revolving  credit
facility was reduced from $130 million to $75 million,  with a borrowing base of
$60  million.  The credit  facility was amended as of  September  30,  1997,  to
increase the maximum  commitment from $75 million to $125 million,  increase the
borrowing  base by $5 million to $65 million,  and modify the  interest  expense
coverage ratio test.


                                        2

<PAGE>



On December 18, 1997,  the Company  acquired a thirty  percent (30%)  membership
interest in NGTS,  LLC., a newly formed  wholly owned  subsidiary of Natural Gas
Transmission  Services,  Inc., a natural gas marketing and trading company based
in Dallas, Texas. NGTS, LLC assumed all of the parent company's operations as of
December 1, 1997. The Company, as of December 1, 1997,  dedicated  substantially
all of its natural gas  production  to NGTS,  LLC for  marketing.  The Company's
$4.35  million  acquisition  was  completed  for a  combination  of cash  ($2.35
million) and promissory  notes ($2.0  million) that have equity "put"  features.
The Company may, at its option, retire the promissory note due December 1, 1998,
with common stock or cash.

The Company uses the full cost method of  accounting  for its  investment in oil
and gas  properties.  Under the full cost  method  of  accounting,  all costs of
acquisition, exploration and development of oil and gas reserves are capitalized
into a "full cost pool" as incurred, and properties in the pool are depleted and
charged to operations using the unit-of-production  method based on the ratio of
current production to total proved oil and gas reserves. To the extent that such
capitalized costs (net of accumulated depreciation,  depletion and amortization)
less deferred taxes exceed the SEC PV-10 of estimated  future net cash flow from
proved  reserves of oil and gas, and the lower of cost or fair value of unproved
properties  after  income  tax  effects,   such  excess  costs  are  charged  to
operations.  Once  incurred,  a  write-down  of oil  and gas  properties  is not
reversible  at a later date even if oil or gas prices  increase.  The  Company's
capitalized  costs exceeded the SEC PV-10 limitation  utilizing prices in effect
at March  31,  1998.  However,  as  allowed  by SEC  rules,  no  write-down  for
impairment of oil and properties was required as a result of the increase in oil
and gas prices  subsequent  to March 31, 1998.  While the Company has never been
required  to  write-down  its asset  base,  significant  downward  revisions  of
quantity  estimates  or declines in oil and gas prices,  which are not offset by
other factors, could possibly result in write-down for impairment of oil and gas
properties.

Results of Operations for the Three Month Periods in 1998 and 1997

The results of  operations  for the three  month  period  ended March 31,  1998,
included three months of operations for Permian Basin,  while the  corresponding
period in 1997 did not include any results of operations from these  properties.
Unless otherwise stated,  the increases in the 1998 interim period over the 1997
period were substantially the result of this acquisition.

Oil and natural gas sales were  $10,555,000  in 1998, a 255% increase over 1997.
The Company sold 262,428  barrels of oil, a 470% increase,  and 3,261,217 Mcf of
gas, a 235% increase,  in 1998. The price received for oil was $14.44 per barrel
and for natural gas was $2.07 per Mcf in 1998,  representing  a 30%  decrease in
oil price and an  insignificant  decrease in gas price compared to 1997. Oil and
natural  gas  production  lifting  costs  increased  494%  to  $3,689,000  while
production  taxes and other costs  increased 116% to $1,486,000 in 1998 compared
to 1997.  The gross  operating  margin from oil and natural gas  production  was
$5,380,000 in 1998, a 223% increase over 1997. On an equivalent unit basis,  the
gross margin was $1.11 per Mcfe in 1998 versus  $1.33 in 1997,  a 17%  decrease.
The sales price  declined 8% to $2.18 per Mcfe while  production  lifting  costs
were $0.76 per Mcfe in 1998,  a 52%  increase  over 1997.  Production  taxes and
other  costs,  including  overhead,  were $0.31 per Mcfe in 1998, a 44% decrease
over 1997. The overall  increase in the gross operating margin from 1997 to 1998
was  principally  due to a 287% increase in Mcfe sold,  from  1,248,482  Mcfe to
4,835,785 Mcfe.

Gas gathering,  marketing, and processing  revenues were $2,005,000 in the  1998
period, a 48% decrease from 1997,  principally as a result of a 27%   decline in
natural  gas  and  natural gas liquids prices.  Costs from these activities were
$1,559,000  in 1998,  a 47%  decrease  from  1997.  Gross  operating  margin was
$446,000  in 1998 versus  $932,000 in 1997,  a 52%  decrease.  Gathering  system
throughput decreased 1% to 20,899 Mcf per day in 1998 compared to 21,052 Mcf per
day in 1997 primarily due to the sale of one of the Company's gathering systems.
Natural gas plant  processing  throughput  was 15,813 Mcf per day in 1998 versus
15,309 Mcf per day in 1997, a 3% increase. Gross operating margin from gathering
operations  was  $0.12 per Mcf of  throughput  in 1998  versus  $0.44 per Mcf of
throughput in 1997, which included a gain of $0.34 per Mcf from the repayment of
a gas imbalance position. The gross operating margin from natural gas processing
was $0.17 per Mcf of  throughput  in 1998 versus $0.24 per Mcf of  throughput in
1997.


                                        3

<PAGE>



Revenues from oil field services and international  sales were $193,000 in 1998,
a $3,278,000  decrease from 1997. Operating  costs  decreased to $99,000 in 1998
from  $3,338,000  in 1997.  The  decline of both  revenue and costs was due to a
decrease in business  activity in Hunter  Butcher  International  LLC. The gross
operating  margin was $94,000 in 1998 versus $133,000 in 1997.  Depreciation and
depletion   expense   increased   258%  to  $3,875,000  in  1998.   General  and
administrative  expense was $750,000 in 1998, a 238% increase over 1997,  due to
increased staffing and other costs.  Operating profit decreased 9% to $1,295,000
in 1998 from 1997. The Company booked equity in loss of affiliate, net of income
tax, of $49,000 in 1998 versus none in 1997.  Other income was $201,000 in 1998,
an increase of 179% due to dividends on marketable securities.  Interest expense
increased  296% to $4,233,000 in 1998 from  $1,068,000 in 1997, due primarily to
borrowing  under the  Company's  10% Senior Notes used to fund the  acquisitions
previously mentioned.  The Company provided for a deferred income tax benefit of
$1,040,000 on this loss in 1998 versus  deferred  income tax expense of $164,000
in 1997.  The  Company  reported a net loss of  $1,966,000,  or $0.09 per common
share, in 1998 versus income of $31,000,  or $0.00 per common share in 1997. The
Company accrued $219,000 in dividends on its preferred stock in 1998 and 1997.

Liquidity and Capital Resources

The Company has three principal  operating sources of cash: (i) sales of oil and
gas, (ii) revenues from gas  gathering,  processing,  and  marketing,  and (iii)
revenues from petroleum management and consulting  services.  The Company's cash
flow is highly dependent upon oil and gas prices.  Decreases in the market price
of oil and gas could result in  reductions  of both cash flow and the  Borrowing
Base under the Company's Credit Facility,  which would result in decreased funds
available, including funds for capital expenditures.

On April 30, 1997, the  Company  closed the  acquisition  of the  Permian  Basin
Properties for a net purchase price of approximately $133.8 million. At the same
time, the Company's  previously  existing  $100.0  million  credit  facility was
replaced by two new credit facilities;  (i) a $130.0 million Credit Facility and
(ii) a $60.0  million  Term Loan  Facility  for a combined  aggregate  amount of
$190.0 million.  The initial advances under these new facilities  totaled $179.5
million,  including  funds to complete  the Permian  Basin  Acquisition,  to pay
principal  and accrued  interest  remaining  on the  Company's  previous  credit
facility, and to provide cash for working capital purposes.

On May 29,  1997, the  Company  sold,  through  a Rule  144A  private  placement
offering,  $140.0  million  aggregate  principal  amount  of Senior  Notes.  Net
proceeds  from the sale of the Senior  Notes were used to  completely  repay the
Company's  Term Loan  Facility in the  principal  amount of $60.0 million and to
repay a substantial  portion of the  indebtedness  outstanding  under the Credit
Facility.  The Senior Notes are  unsecured  and bear  interest at 10% per annum,
with  interest  payable on June 1 and December 1 commencing on December 1, 1997.
After paydown, the maximum commitment under the Credit Facility was reduced from
$130.0  million to $75.0 million,  with a Borrowing  Base of $60.0 million.  The
Credit  Facility  was  subsequently  amended  effective  September  30, 1997  to
increase the maximum  commitment from $75.0 million to $125.0 million,  increase
the Borrowing Base by $5.0 million to $65.0 million and modify the  Consolidated
EBITDA to Interest Expense ratio. With these  adjustments,  total long-term debt
under the Credit  Facility at March 31, 1998 was $32.5  million,  leaving  $32.5
million  available  to draw at such  time,  prior  to the  next  borrowing  base
redetermination  based upon financial results of the Company. At March 31, 1998,
the Company had $4.5 million in cash and cash  equivalents and a deficit of $3.0
million in net working  capital,  in addition to the funds  available  under the
Credit Facility.

The Company  called for  redemption  on November  14, 1997 its  publicly  traded
Warrants,  each of which were exercisable for three shares of Common Stock at an
exercise  price of $5.50 per share and  redeemable  at $0.02 per  Warrant.  As a
result,  Warrants were  exercised  for an aggregate of 846,256  shares of Common
Stock and the  remaining  Warrants  covering  7,920  shares of Common Stock were
redeemed.  The Company received cash proceeds of approximately $4.7 million.  In
addition,  during June and October,  1997,  100,000 warrants and 50,000 warrants
were  exercised  at  $4.125  per  share  and an  average  of  $4.25  per  share,
respectively, resulting in net proceeds to the Company of $625,000.


                                        4

<PAGE>



On November 21,  1997,  the Company sold  6,500,000  newly issued  shares of its
common stock in a public offering,  receiving net cash proceeds of approximately
$36.2 million, after deducting fees and expenses of the offering.

For the three months  ended March 31, 1998,  the Company had a  net  increase in
cash of  $1.5 million.  The  Company's operating activities provided net cash of
$8.5 million, principally from operating income before depreciation,  depletion,
and  deferred  taxes,  a decrease  in  accounts  receivable,  and an increase in
accounts  payable and accrued  liabilities.  The Company  used $17.8  million in
investing  activities,  principally  for  additions to property and equipment of
$17.4 million.  Financing activities provided $10.8 million of cash, principally
from  the  aggregate  proceeds  from the  issuance  of  long-term  debt of $13.5
million,  less principal payments of $2.5 million on this debt. The Company also
paid $219,000 in dividends on preferred stock.

Capital Requirements

For  fiscal  1998  the  Company  has  budgeted  approximately  $36  million  for
development  and  exploration  activities,  including  $30 million  budgeted for
development projects on the Permian Basin and Panoma Properties and $6.0 million
budgeted for  exploration  projects.  In  addition,  with respect to the Permian
Basin Acquisition  closed in April,  1997, the Company  anticipates that it will
spend approximately $38.1 million over a four year period which began in 1997 on
a development program to enhance an existing waterflood project in the Westbrook
Field  located in  Mitchell  County,  Texas.  The  Company is not  contractually
obligated to proceed with any of its budgeted capital  expenditures.  The amount
and allocation of future capital expenditures will depend on a number of factors
that are not  entirely  within the  Company's  control  or ability to  forecast,
including  drilling results and changes in oil and gas prices. Due to the recent
decline in oil prices,  the Company has begun to redirect  some of its  budgeted
funds from oil projects to natural gas or it may defer certain  projects until a
later date. As a result, actual capital expenditures may vary significantly from
current expectations.

In connection  with the  acquisition of 30% of the  outstanding  common member's
equity of NGTS,  the  Company  is  obligated  to pay a note of $2.0  million  to
current and former  shareholders  of NGTS. This loan is due December 1, 1998 and
may be repaid,  at the option of the Company,  with cash or shares of its common
stock.

Based upon the Company's  anticipated level of operations,  the Company believes
that cash flow from operations  together with the availability  under the Credit
Facility  (approximately $32.5 million as of March 31, 1998) will be adequate to
meet its anticipated  requirements for working capital, capital expenditures and
scheduled interest payments for the foreseeable future.

In the normal  course of business,  the Company  reviews  opportunities  for the
possible  acquisition  of oil and gas reserves and activities  related  thereto.
When  potential  acquisition   opportunities  are  deemed  consistent  with  the
Company's growth  strategy,  bids or offers in amounts and with terms acceptable
to the Company may be submitted. It is uncertain whether any such bids or offers
which may be submitted by the Company  from time to time will be  acceptable  to
the sellers. In the event of a future significant  acquisition,  the Company may
require additional financing in connection therewith.

Inflation and Changes in Prices

During the past several years, the Company experienced some inflation in oil and
gas prices with  moderate  increases  in property  acquisition  and  development
costs.  During 1997, the Company received  significantly  lower (13%) oil prices
and slightly lower (1%) gas prices for the natural  resources  produced from its
properties.  For the three  months  ended  March 31,  1998  compared to the same
period in 1997, oil prices were significantly  lower (30%) while gas prices were
unchanged. The results of operations and cash flow of the Company have been, and
will continue to be,  affected to a certain  extent by the volatility in oil and
gas prices.  Should the Company experience a significant increase in oil and gas
prices that is  sustained  over a prolonged  period,  it would expect that there
would also be a  corresponding  increase  in oil and gas  finding  costs,  lease
acquisition costs, and operating expenses. Periodically the Company enters into

                                        5

<PAGE>



futures,  options,  and swap  contracts  to reduce the  effects  of  significant
fluctuations  in crude oil and gas  prices.  It is policy of the  Company not to
enter into any such  arrangements  which exceed 75% of the Company's oil and gas
production during the next twelve months.

The Company  markets oil and gas for its own account,  which exposes the Company
to the  attendant  commodities  risk.  Substantially  all of the  Company's  gas
production is currently sold to NGTS, LLC or end users either on the spot market
on a  month-to-month  basis at prevailing  spot market prices or under long-term
contracts  based on current spot market prices.  The Company  normally sells its
oil under month-to-month contracts with a number of different purchasers.

Hedging Activity

Periodically,  the Company enters into futures,  options,  and swap contracts to
reduce the effects of  fluctuations  in crude oil and natural gas prices.  As of
March 31,  1998,  the Company had 34% of its oil  production  and 74% of its gas
production  hedged through  September,  1998. At March 31, 1998, the Company had
open  contracts  for oil price collars of 30,000 Bbls of oil per month (with cap
and floor prices of $23.25 and $18.50,  respectively)  through December 1998. At
March 31, 1998,  the Company had open  contracts  for gas price swaps of 250,000
MMBtu of gas per month at $2.09 per MMBtu through September 1998,  250,000 MMBtu
of gas per month at $2.11 per MMBtu through September 1998, gas price collars of
100,000  MMBtu  per  month  (with  cap and  floor  prices  of $2.25  and  $2.05,
respectively) through September 1998, and gas price collars of 200,000 MMBtu per
month (with cap and floor  prices of $2.65 and $2.25,  respectively)  from,  May
1998 through  October,  1998. In addition,  a call was sold on 200,000 MMBtu per
month at $2.65 from May 1998 through  October,  1998. The average Btu content of
gas produced by the Company exceeds 1,100 Btu per Mcf of gas. Therefore, each of
the above gas prices  should be increased by 10% to reflect the actual gas price
per Mcf  received  by the  Company.  All of these  swaps are against the El Paso
Permian Basin Index and these contracts expire monthly.  The gains and losses on
the Company's hedging  transactions are determined as the difference between the
contract price and a reference price,  generally  closing prices on the New York
Mercantile Exchange.  The resulting  transaction gains and losses are determined
monthly and are  included in the period the hedged  production  or  inventory is
sold.  Net gains related to  derivatives  for the three month period ended March
31, 1997 were $724,000.

Year 2000 Modification

The   inability   of   computers,   software  and  other   equipment   utilizing
microprocessors  to recognize and properly process data fields  containing a two
digit year is commonly  referred to as the Year 2000  Compliance  issue.  As the
year 2000 approaches,  such systems may be unable to accurately  process certain
date-based information.

The  Company  has  identified  no  significant  applications  that will  require
modifications to ensure Year 2000 Compliance.  In addition, the Company plans to
communicate  with others  with whom it does  significant  business to  determine
their Year 2000  Compliance  readiness  and the  extent to which the  Company is
vulnerable  to any  third  party  Year  2000  issues.  However,  there can be no
guarantee  that the systems of other  companies on which the  Company's  systems
rely will be timely converted,  or that a failure to convert by another company,
or a conversion that is incompatible with the Company's systems,  would not have
a material adverse effect on the Company.

The total cost to the Company of these Year 2000  Compliance  activities has not
been and is not anticipated to be material to its financial  position or results
of operations in any given year.  However,  there can be no guarantee that these
estimates will be achieved and actual results could differ from those plans.

Comprehensive Income

Statement  of  Financial   Accounting   Standards  (SFAS)  No.  130,  "Reporting
Comprehensive  Income,"  became  effective as of the first quarter of 1998. This
statement requires companies to report and display  comprehensive income and its
components (revenues, expenses, gains and losses). Comprehensive income includes
all changes in equity during a period except those resulting from investments by
owners and distributions to owners. For the Company, comprehensive income is the
same as net income reported in the statement of consolidated  operations for the
period

                                        6

<PAGE>



ended March 31, 1998, since there are no other items of comprehensive income for
that period.  For the period ended March 31, 1997,  the Company  incurred a loss
from investments of $6,000, resulting in comprehensive income of $25,000.

Changes in Accounting Standards

SFAS 131, "Disclosures About Segments of an Enterprise and Related Information,"
will become effective in 1998. This statement establishes standards for defining
and  reporting  business  segments.  The Company is  currently  determining  its
reportable  segments.  The  adoption  of SFAS 131 will not affect the  Company's
consolidated financial position, results of operations or cash flows.











































                                        7

<PAGE>
                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                 (in thousands)
<TABLE>
<CAPTION>
<S>                                                                             <C>               <C>    
                                                                                  March 31,        December 31,
                                                                                    1998               1997
                                                                                --------------------------------
                                                                                 (Unaudited)
                                   ASSETS
Current Assets
Cash and cash equivalents...................................................    $    4,485          $   3,030
Accounts receivable
     Trade, net of allowance of $166........................................        10,040             12,850
     Due from affiliates....................................................            63                 58
Notes receivable from affiliate.............................................           375                355
Current portion of long-term note receivable................................           370                357
Prepaid and other...........................................................           656              1,299
                                                                                -------------------------------
      Total Current Assets..................................................        15,989             17,949
                                                                                -------------------------------
Property, Plant, and Equipment
Oil and gas properties, full cost method
      Unproved..............................................................           944                517
      Proved................................................................       244,189            227,389
Pipelines...................................................................         9,176              9,166
Other property..............................................................           810                776
                                                                                -------------------------------
Total Property, Plant and Equipment.........................................       255,119            237,848
     Accumulated depreciation, depletion, and impairment....................       (20,455)           (16,589)
                                                                                -------------------------------
Net Property, Plant and Equipment...........................................       234,664            221,259
                                                                                -------------------------------
Other Assets
   Deposits and other assets................................................         6,130              5,863
   Investment in unconsolidated affiliate...................................         4,343              4,372
   Long-term notes receivable, net of imputed interest......................         1,612              1,626
                                                                                -------------------------------
                           Total Assets                                         $  262,738         $  251,069
                                                                                ===============================
                    LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
   Trade payables and accrued liabilities...................................    $   12,248         $   9,235
   Dividends payable........................................................           219               219
   Suspended revenue payable................................................         1,825              1,162
   Current maturities of long-term debt.....................................            24                 24
   Notes payable............................................................         4,699              4,699
                                                                                -------------------------------
          Total Current Liabilities.........................................        19,015             15,339
                                                                                -------------------------------
Long-Term Liabilities
   Long-term debt, less current maturities..................................       172,514            161,519
   Production payment liability.............................................           711                743
   Deferred income taxes....................................................           218              1,289
   Minority interest........................................................            40                 39
Commitments and Contingencies
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..........................................             -                  -
       1,000,000 designated as 1996 Series A Convertible; 1,000,000
       issued and outstanding, liquidation amount $10,000,000...............             1                  1
Common Stock-$.002 par value; 50,000,000 shares authorized,
       21,738,320 shares issued.............................................            43                 43
Additional paid-in capital..................................................        80,578             80,731
Accumulated deficit.........................................................       (10,381)            (8,634)
                                                                                --------------------------------
                                                                                    70,241             72,141
Treasury stock (525,820 and 538,633 shares of common stock, respectively)...            (1)                (1)
                                                                                --------------------------------
Total Stockholders' Equity..................................................        70,240             72,140
                                                                                --------------------------------
Total Liabilities and Stockholders' Equity..................................    $  262,738        $   251,069
                                                                                ================================
         The  accompanying  notes  are  an  integral  part  of  these consolidated financial statements.
</TABLE>
                                        8
<PAGE>



                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                  (in thousands, except for per share amounts)

<TABLE>
<CAPTION>
<S>                                                                              <C>              <C>    

                                                                                   For the Three Months Ended
                                                                                            March 31,
                                                                                ------------------------------
                                                                                    1998               1997
                                                                                ------------------------------
Operating Revenues:
   Oil and gas sales........................................................    $    10,555        $     2,976
   Gas gathering, marketing and processing..................................          2,005              3,892
   Oil field services and international sales...............................            193              3,471
                                                                                ------------------------------
         Total Operating Revenue............................................         12,753             10,339
                                                                                ------------------------------
Operating Costs and Expenses:
   Oil and gas production lifting costs.....................................          3,689                621
   Production taxes and other costs.........................................          1,486                689
   Gas gathering, marketing and processing..................................          1,559              2,960
   Oil field services and international sales...............................             99              3,338
   Depreciation and depletion...............................................          3,875              1,081
   General and administrative...............................................            750                222
                                                                                ------------------------------
         Total Operating Costs and Expenses.................................         11,458              8,911
                                                                                ------------------------------
Operating Profit ...........................................................          1,295              1,428

   Equity (loss) of affiliate, net of income tax............................            (49)                 -
   Other income.............................................................            201                 72
   Interest expense.........................................................         (4,233)            (1,068)
                                                                                -------------------------------
Net Income (Loss) before income tax and minority interest...................         (2,786)               432

   Benefit (Provision) for deferred income tax..............................          1,040               (164)
                                                                                -------------------------------
Net Income (Loss) before minority interest..................................         (1,746)               268

   Minority interest in subsidiary earnings.................................             (1)               (18)
                                                                                -------------------------------
Net Income (Loss)...........................................................         (1,747)               250

   Dividends Applicable to Preferred Stock..................................           (219)              (219)
                                                                                -------------------------------
Income (Loss) Applicable to Common Shares...................................    $    (1,966)       $        31
                                                                                ===============================
Income (Loss) per Common Share - Basic......................................    $     (0.09)       $      0.00
                                                                                ===============================
Income (Loss) per Common Share - Diluted....................................    $     (0.09)       $      0.00
                                                                                ===============================
Common Shares Used in Per Share Calculation 
   Basic....................................................................     21,204,385         13,687,294
                                                                                ===============================
   Diluted..................................................................     21,204,385         14,215,868
                                                                                ===============================

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

</TABLE>

                                        9

<PAGE>



                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                       FOR THE PERIOD ENDED MARCH 31, 1998
                                   (Unaudited)
                             (dollars in thousands)

<TABLE>
<CAPTION>
<S>                                     <C>             <C>      <C>         <C>      <C>        <C>     <C>           <C>

     
                                                                                                          Additional
                                           Preferred     Stock    Common      Stock    Treasury   Stock    Paid - In   Accumulated
                                            Shares       Amount   Shares      Amount    Shares    Amount    Capital      Deficit
                                         ------------------------------------------------------------------------------------------

Balance at December 31, 1997                1,080,000    $   1    21,738,320  $   43   (538,633)  $  (1)  $  80,731    $  (8,634)
                                         ------------------------------------------------------------------------------------------
   Issue shares to 401(k) plan                                                           12,813       -          66
   Dividends declared on preferred stock                                                                       (219)
   Net Income (Loss)                                                                                                      (1,747)
                                         ------------------------------------------------------------------------------------------
Balance at March 31, 1998                   1,080,000    $   1    21,738,320  $   43  (525,820)   $  (1)  $  80,578    $ (10,381)
                                         ------------------------------------------------------------------------------------------



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

</TABLE>


                                       10

<PAGE>



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

<TABLE>
<CAPTION>
<S>                                                                            <C>             <C>    
                                                                                For the Three Months Ended
                                                                                          March 31,
                                                                                ---------------------------
                                                                                    1998             1997
                                                                                ---------------------------
CASH FLOW FROM OPERATING ACTIVITIES:
   Net Income (loss)........................................................... $ (1,747)       $     250
   Adjustments to reconcile net income (loss) to cash provided by
   (used for) operating activities:
       Depreciation and depletion..............................................    3,875            1,081
       Amortization of financing fees..........................................      178               -
       Deferred income taxes...................................................   (1,040)             164
       Equity in unconsolidated affiliate......................................       49               -
       Minority interest.......................................................        1               18
       Other...................................................................        3             (119)
       Changes in certain assets and liabilities
         Accounts and notes receivable.........................................    2,805           (1,040)
         Other current assets..................................................      643              (16)
         Accounts payable and accrued liabilities..............................    3,742              405
                                                                                ----------------------------
Net Cash Provided By Operating Activities......................................    8,509              743
                                                                                ----------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from sale of assets................................................       93              145
   Additions to property and equipment.........................................  (17,375)          (5,460)
   Increase in deposits and other assets.......................................     (445)         (10,249)
   Loan made for promissory note receivable....................................      (35)             (29)
   Payments received on promissory note receivable.............................       14              133
   Investment in unconsolidated affiliate......................................      (50)              -
                                                                                ----------------------------
   Net Cash Used In Investing Activities.......................................  (17,798)         (15,460)
                                                                                ----------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from the issuance of long-term debt and production payment.........   13,500           14,000
   Proceeds from short-term notes payable......................................       -             2,699
   Payments of principal on long-term and production payment...................   (2,537)             (33)
   Payment of fees on issuance of preferred stock..............................       -              (505)
   Dividends paid..............................................................     (219)             (22)
                                                                                ----------------------------
   Net Cash Provided By Financing Activities...................................   10,744           16,139
                                                                                ----------------------------
NET INCREASE IN CASH AND CASH EQUIVALENTS......................................    1,455            1,422
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD...............................    3,030            1,687
                                                                                ----------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD..................................... $  4,485        $   3,109
                                                                                ============================

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

</TABLE>


                                       11


<PAGE>



                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   March, 1998
                                   (Unaudited)

NOTE 1 - MANAGEMENT'S REPRESENTATION

The consolidated balance sheet as of March 31, 1998, the consolidated statements
of  operations  for the  three  months  ended  March  31,  1998  and  1997,  the
consolidated  statement of  stockholder's  equity for the period ended March 31,
1998 and the  consolidated  statements  of cash flows for the three months ended
March  31,  1998 and 1997 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,  results  of  operations
changes in  stockholder's  equity and  changes in cash flows for the three month
periods.

Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
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 the December 31, 1997 annual  report on Form 10-KSB for the
Company.  The results of  operations  for the three month period ended March 31,
1998, are not necessarily indicative of the operating results for the full year.

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

The Company is a holding company with no significant  assets or operations other
than its investments in its subsidiaries.  The wholly-owned  subsidiaries of the
Company  are direct  Guarantors  of the  Company's  Section 144 A Notes and have
fully and unconditionally guaranteed the Notes on a joint and several basis. The
Guarantors  comprise all of the direct and indirect  subsidiaries of the Company
(other than  inconsequential  subsidiaries),  and the Company has not  presented
separate  financial  statements and other disclosures  concerning each Guarantor
because  management  has  determined  that such  information  is not material to
investors.   There  is  no  restriction  on  the  ability  of   consolidated  or
unconsolidated subsidiaries to transfer funds to the Company in the form of cash
dividends, loans, or advances.

NOTE 2 - RECENT EVENTS

On January 9, 1998, the Company adopted a Shareholder  Rights Plan,  pursuant to
which Rights would be distributed as a dividend to its common  stockholders at a
rate of one Right for each share of common  stock held of record on January  20,
1998.  Under the Rights Plan, the Rights will  initially  represent the right to
purchase  one  one-hundreth  of a share of 1998  Series  A Junior  Participating
Preferred  Stock for $35.00 per one  one-hundreth  of a share.  The Rights  will
become  exercisable  only if a person or a group  acquires or commences a tender
offer  for  15% or  more  of the  Company's  common  stock.  Until  they  become
exercisable,  the Rights attached to and trade with the Company's  common stock.
The Rights  will  expire  January  20,  2008.  The Rights may be redeemed by the
continuing  members of the Company's  Board of Directors at $.01 per Right prior
to the tenth day  after a person  or group  has  accumulated  15% or more of the
Company's  common  stock.  The  Rights  will  not be  taxable  to the  Company's
shareholders.  In the event that a person or group  acquires  15% or more of the
Company's common stock, the Rights would then be modified to represent the right
to receive for the exercise  price,  Magnum  Hunter  common stock having a value
worth twice the exercise  price.  In the event that the Company is involved in a
merger or other  business  combination  at any time  after a person or group has
acquired  15% or more of  Magnum  Hunter's  common  stock,  the  Rights  will be
modified so as to entitle a holder to buy a number of shares of common  stock of
the acquiring  entity having a market value of twice the exercise  price of each
Right.




                                       12

<PAGE>



                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                   March, 1998
                                   (Unaudited)

On January 28, 1998, the Company  announced,  and later amended, a cash purchase
offer for Units of TEL Offshore Trust.  Previous to the offer, the Company owned
161,500 Units representing 3.4% of the Units outstanding.  As amended, the offer
was to purchase  between  forty  percent  (40%) and sixty  percent  (60%) of the
Trust's  outstanding  Units at $5.50 per Unit.  On March 27,  1998,  the Company
announced  that  1,745,353  Units,  or  40.1%  of  the  total  number  of  Units
outstanding, had been tendered.

NOTE 3 - COMPREHENSIVE INCOME

Statement  of  Financial   Accounting   Standards  (SFAS)  No.  130,  "Reporting
Comprehensive  Income,"  became  effective as of the first quarter of 1998. This
statement requires companies to report and display  comprehensive income and its
components (revenues, expenses, gains and losses). Comprehensive income includes
all changes in equity during a period except those resulting from investments by
owners and distributions to owners. For the Company, comprehensive income is the
same as net income reported in the statement of consolidated  operations for the
period  ended March 31,  1998,  since there are no other items of  comprehensive
income for that  period.  For the  period  ended  March 31,  1997,  the  Company
incurred a loss from investments of $6,000, resulting in comprehensive income of
$25,000.
































                                       13

<PAGE>
                          PART II -- OTHER INFORMATION
                          
Item 6.  Exhibits and Reports on Form 8-K

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    By-Laws,  as  Amended  (Incorporated  by  reference to Registration
             Statement on Form SB-2, File No. 33-66190) 3.6 & 4.6 Certificate of
             Designation of 1996 Series A Preferred  Stock  (Incorporated  by   
             reference to Form 8-K dated December 26,1996,filed January 3, 1997)
3.7          & 4.7 Amendment to  Certificate of  Designations  for 1996 Series A
             Convertible   Preferred   Stock   (Incorporated   by  reference  to
             Registration Statement on Form S-3, File No. 333-30453)
4.8          Indenture dated May 29, 1997 between Magnum Hunter  Resources,  the
             subsidiary  guarantors  named therein and First Union National Bank
             of  North  Carolina,  as  Trustee  (Incorporated  by  reference  to
             Registration Statement on Form S-4, File No.
             333-2290)
4.9          Form of 10% Senior Note due 2007 (Incorporated by reference to 
             Registration Statement on Form S-4, File No. 333-2290)10.1 Amended
             and Restated Credit Agreement, dated April 30, 1997, between Magnum
             Hunter Resources, Inc. and Bankers Trust Company,et al.
             (Incorporated by reference to Registration Statement on Form S-4, 
             File No. 333-2290)
10.2         First Amendment to Amended and Restated Credit Agreement, dated 
             April 30, 1997, between Magnum Hunter Resources, Inc.and Bankers
             Trust Company, et al. (Incorporated by reference to Registration
             Statement on Form S-4, File No. 333-2290)
10.3         Second Amendment to Amended and Restated Credit Agreement, dated 
             April 30, 1997, between Magnum Hunter Resources, Inc. and Bankers 
             Trust Company, et al. (Incorporated by reference to Form 10-KSB for
             the period ended December 31, 1997)
10.4         Third Amendment to Amended and Restated Credit Agreement, dated 
             April 30, 1997, between Magnum Hunter Resources, Inc. and Bankers
             Trust Company, et al. (Incorporated by reference to Form 10-KSB for
             the period ended December 31, 1997)
10.5         Employment Agreement for Gary C. Evans (Incorporated by reference
             to Registration Statement on Form S-4, File No. 333-2290)
10.6         Employment Agreement for Matthew C. Lutz (Incorporated by reference
             to Registration Statement on Form S-4, File No. 333-2290)
10.7         Stock Purchase  Agreement among Magnum Hunter  Resources,  Inc. and
             Trust Company of the West and TCW Asset Management  Company, in the
             capacities  described herein, TCW Debt and Royalty Fund IVB and TCW
             Debt  and  Royalty   Fund  IVC,   dated  as  of  December  6,  1996
             (Incorporated  by  reference  to Form 8-K dated  December 26, 1996,
             filed January 3, 1997)
10.8         Registration Rights Agreement, dated May 29, 1997, between Magnum 
             Hunter Resources, Inc. and Bankers Trust Company, et al. 
             (Incorporated by reference to Registration Statement on Form S-4,
             File No. 333-2290)
10.9         Purchase and Sale  Agreement,  dated May 17, 1996 between  Meridian
             Oil, Inc. and ConMag Energy Corporation  (Incorporated by reference
             to Form 8-K, dated June 28, 1996, filed July 12, 1996)
10.10        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)
10.11        Purchase and Sale Agreement between Magnum Hunter Resources, Inc. ,
             NGTS, et al., dated December 17, 1997 (Incorporated by reference to
             Form 8-K, dated December 17, 1997, filed December 29, 1997)
27           Financial Data Schedule

(B) Reports on Form 8-K.  None
                                       14

<PAGE>


                                    SIGNATURE

In accordance  with the  requirements  of the Exchange Act, 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 15, 1998
  --------------------------------------
  Gary C. Evans
  President and Chief Executive Officer


By /s/ Chris Tong                                    May 15, 1998
  --------------------------------------
  Sr. Vice President and
  Chief Financial Officer


By  /s/ David S. Krueger                             May 15, 1998
  ---------------------------------------
  David S. Krueger
  Vice President and
  Chief Accounting Officer


By /s/ Morgan F. Johnston                            May 15, 1998
  ---------------------------------------
  Morgan F. Johnston
  Vice President,  General Counsel and
  Secretary



                                       15