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 June 30, 2000
                                  ---- --- ----

[   ]    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 1100, 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 August 1, 2000: 20,115,819.

<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-K for the year ended  December  31,  1999.  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.

     On  December  31,  1998,  the Company  through  its 100% owned  subsidiary,
Bluebird Energy, Inc. ("Bluebird"), acquired natural gas reserves and associated
assets in producing fields located in Oklahoma and Texas for  approximately  $25
million.  As part of the  capitalization  of Bluebird,  the Company  contributed
1,840,271 units of TEL Offshore Trust. Bluebird is an "unrestricted subsidiary",
as defined under certain  credit  agreements,  and is neither a guarantor of the
Company's  10%  Senior  Notes  due 2007 nor can it be  included  in  determining
compliance  with  certain   financial   covenants  under  the  Company's  credit
agreements.

     On  February  3, 1999,  the  Company  sold $50  million of its  Convertible
Preferred Stock in a private  placement to a natural gas utility.  The Preferred
Stock  has a  liquidation  value  of $50  million  and is  convertible  into the
Company's common stock at $5.25 per share.  Dividends on the preferred stock are
payable in cash at the rate of 8% per annum and are cumulative. The Company used
the net proceeds from the  transaction,  approximately  $46.3 million,  to repay
senior bank indebtedness.

     On June 8, 1999,  the Company  acquired  oil and gas  reserves  and related
assets from Vastar for a total  purchase  price of $32.5 million after  purchase
price adjustments.  The effective date of the acquisition was April 1, 1999. The
acquisition  included Vastar's interest in 476 wells, a gas processing plant and
two gas gathering systems located in the states of Texas, Oklahoma and Arkansas.

     On December 1, 1999, the Company  acquired a 50% ownership  interest in the
Madill Gas Processing  Plant and its associated  gathering  system.  This modern
cryogenic  plant includes  3,350  horsepower of high-speed  compression  and has
gas-processing capacity of approximately 18,000 Mcf/d.

     On May 24,  2000,  the Company and a major New York Stock  Exchange  listed
company formed a new partnership,  Mallard Hunter LP, to acquire certain oil and
gas reserves from two of the Company's  subsidiaries,  including  Bluebird.  The
Company is the  general  partner of the new  limited  partnership.  The  Company
assigned  approximately  20 billion cubic feet  equivalent  of proved  producing
reserves to the limited partnership,  effective June 1, 2000, for a cash payment
of approximately $23 million with a 35% reversionary interest upon predetermined
partnership  pay-out. The reserves assigned to the partnership are approximately
60% oil and 40% natural gas. The Company used the net proceeds received from the
limited  partnership to reduce  commercial bank indebtedness on its two existing
credit lines.

     On June 30, 2000,  the holders of the  Company's  1996 Series A Convertible
Preferred Stock agreed to exchange the convertible  preferred securities for (i)
900,000 warrants to purchase  restricted common shares of the Company's stock at
an exercise  price of $5.25 per share with an  expiration  date of June 30, 2003
and (ii) payment of $10 million. The convertible preferred stock was transferred
to the Company's  wholly-owned  subsidiary,  Bluebird. The convertible preferred
stock has a coupon rate of 8.75% per annum and is convertible into the Company's
common stock at a conversion price of $5.25 per share (approximately 1.9 million
shares of common stock).  As a result of this exchange,  the Company reduced its
reported  dividends to preferred  stockholders by $144,000 for the three and six
month  periods ended June 30, 2000.  Bluebird used an existing  credit line with
its commercial banks to acquire the $10 million preferred stock issue. It is the
intent of  Bluebird to  re-market  the  preferred  stock to a third party in the
future.

<PAGE>

     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 SEC
PV-10 property  valuation at June 30, 2000 exceeded the capitalized cost at that
date.  Significant  downward  revisions  of quantity  estimates  or  significant
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 in the
future.

Results of Operations for the Three Month Periods Ended June 30, 2000 and 1999

     The results of  operations  for the three month  period ended June 30, 2000
included  three  months of  operations  for the Vastar and Madill  acquisitions,
while the corresponding period in 1999 included one month of the Vastar and none
of the Madill acquisition. The 2000 interim period was also impacted by the sale
of  properties to Mallard  Hunter LP effective  June 1, 2000.  Unless  otherwise
stated,  the  increases  in the 2000  interim  period  over the 1999 period were
substantially  the result of these  acquisitions and divestitures as well as the
Company's  successful  drilling  activities during the remainder of 1999 and the
first half of 2000.

     Oil and natural gas sales were $23,594,000,  a 77% increase over 1999 sales
of  $13,367,000.  The Company sold 334,000  barrels of oil, a 12% increase  over
1999 sales of 298,000 barrels.  The Company sold 4,839,000 Mcf of natural gas, a
5% increase  over 1999 sales of 4,594,000  Mcf.  The price  received for oil was
$23.10 per barrel and for  natural  gas was $3.28 per Mcf in 2000  versus an oil
price  of  $14.40  per  barrel  and a gas  price  of  $1.98  per  Mcf  in  1999,
representing  a 60% increase in oil price and a 66%  increase in gas price.  Oil
and natural gas  production  lifting  costs  increased 18% to $4,269,000 in 2000
while  production  taxes and other costs  increased  54% to  $2,642,000  in 2000
compared to 1999. The gross operating margin from oil and natural gas production
was  $16,683,000  in 2000, a 108%  increase  over the 1999  operating  margin of
$8,031,000.  On an equivalent unit basis, the gross margin was $2.44 per Mcfe in
2000 versus  $1.26 in 1999, a 94%  increase.  The sales price  increased  64% to
$3.45 per Mcfe in 2000  versus  $2.10 per Mcfe while  production  lifting  costs
increased  9% to $0.62 per Mcfe in 2000 from $0.57 per Mcfe in 1999.  Production
taxes and other costs,  including  overhead,  were $0.39 per Mcfe in 2000 versus
$0.27  per Mcfe in  1999,  a 44%  increase.  Total  Mcfe  sold  increased  7% to
6,844,000 Mcfe in 2000 from 6,380,000 Mcfe in 1999.

     Gas gathering,  marketing,  and processing  revenues were $4,414,000 in the
2000 period, a 138% increase from 1999 revenues of $1,851,000,  principally as a
result of the Dynegy acquisition and the increase in natural gas and natural gas
liquids  prices.  Costs from these  activities  were  $3,516,000 in 1999, a 169%
increase from 1999 costs of $1,306,000.  Gross operating  margin was $898,000 in
2000 versus $545,000 in 1999, a 65% increase.  Net gathering  system  throughput
decreased  15% to 16,557 Mcf per day in 2000  compared  to 19,453 Mcf per day in
1999 due to the sale of a  gathering  system  in 1999.  Net  natural  gas  plant
processing  throughput  was 17,864 Mcf per day in 2000 versus 16,145 Mcf per day
in 1999, an 11% increase.  The increase in net processing plant throughput was a
result of the Dynegy acquisition completed in the fourth quarter of 1999 and was
partially  offset by a reduction in net throughput at the Company's McLean Plant
due to a  contractual  payout that reduced the  Company's  portion of future net
cash flow. During December 1999 the Company completed recoupment of its original
investment in the McLean Plant and its share of operating income reverted to 50%
from the 100% applicable  during the recoupment  period.  Gross operating margin
from  gathering  operations  was $0.18 per Mcf of throughput for the 2000 period
versus $0.17 for the 1999 period, a 6% increase. The gross operating margin from
natural gas  processing was $0.37 per Mcf of throughput in 2000 versus $0.15 per
Mcf of throughput in 1999 due to more favorable processing economics as a result
of higher natural gas liquids prices in the 2000 period.

     Revenues from oil field services and  international  sales were $278,000 in
2000 versus $141,000 in 1999. Operating costs increased to $135,000 in 2000 from
$65,000 in 1999. The gross operating  margin was $143,000 in 2000 versus $76,000
in 1999.  Depreciation and depletion  expense increased 2% to $5,566,000 in 2000
versus $5,467,000 in 1999. General and administrative  expense was $1,317,000 in
2000, a 104% increase from 1999.  Operating profit increased 327% to $10,847,000
in 2000 from $2,539,000 in 1999. Equity in earnings of affiliate,  net of income
tax,  was a profit of $230,000  in 2000 versus a loss of $66,000 in 1999.  Other
income was $153,000 in 2000 versus $125,000 in 1999.

                                      2
<PAGE>
     Interest  expense  increased 16% to  $5,691,000 in 2000 from  $4,894,000 in
1999. The Company  provided for deferred income taxes of $2,011,000 on income of
$5,539,000  in 2000  versus no  benefit  on a loss of  $2,296,000  in 1999.  The
Company reported net income applicable to common shares of $2,452,000,  or $0.12
per common share,  basic and $0.11 per common share,  diluted,  in 2000 versus a
loss of $3,555,000,  or $0.18 per common share, basic and diluted,  in 1999. The
Company  recorded  $1,076,000 in dividends on its preferred stock in 2000 versus
$1,215,000 in 1999.

Results of Operations for the Six Month Periods Ended June 30, 2000 and 1999

     The results of  operations  for the six month  period  ended June 30, 2000,
included six months of operations for the Vastar and Madill acquisitions,  while
the  corresponding  period  in  1999  included  only  one  month  of the  Vastar
acquisition and none of the Madill acquisition. The 2000 interim period was also
impacted by the sale of  properties  to Mallard  Hunter L.P.  effective  June 1,
2000. Unless otherwise stated, the increases in the 2000 interim period over the
1999 period were substantially the result of these acquisitions and divestitures
as well as the Company's  successful drilling activities during the remainder of
1999 and the six months of 2000.

     Oil and natural gas sales were $44,959,000, an 82% increase over 1999 sales
of  $24,688,000.  The Company sold 704,000  barrels of oil, a 21% increase  over
1999 sales of 584,000  barrels of oil. The Company sold 9,833,000 Mcf of natural
gas, an 8% increase over 1999 sales of 9,146,000 Mcf. The price received for oil
was $22.38 per barrel and for  natural  gas was $2.97 per Mcf in 2000  versus an
oil  price of  $12.70  per  barrel  and a gas  price  of $1.89  per Mcf in 1999,
representing  a 76% increase in oil price and a 57%  increase in gas price.  Oil
and natural gas  production  lifting  costs  increased 30% to $8,885,000 in 2000
while  production  taxes and other costs  increased  73% to  $5,482,000  in 2000
compared to 1999. The gross operating margin from oil and natural gas production
was  $30,592,000  in  2000,  a 108%  increase  over  1999  operating  margin  of
$14,694,000. On an equivalent unit basis, the gross margin was $2.18 per Mcfe in
2000 versus $1.16 in 1999,  an 88%  increase.  The sales price  increased 64% to
$3.20 per Mcfe in 2000  versus  $1.95 per Mcfe while  production  lifting  costs
increased 17% to $0.63 per Mcfe in 2000 from $0.54 per Mcfe in 1999.  Production
taxes and other costs,  including  overhead,  were $0.39 per Mcfe in 2000 versus
$0.25  per Mcfe in 1999,  a 56%  increase.  Total  Mcfe  sold  increased  11% to
14,059,000 Mcfe in 2000 from 12,652,000 Mcfe in 1999.

     Gas gathering,  marketing,  and processing  revenues were $8,244,000 in the
2000 period, a 137% increase from 1999 revenues of $3,477,000,  principally as a
result of the Dynegy acquisition and the increase in natural gas and natural gas
liquids  prices.  Costs from these  activities  were  $6,292,000 in 1999, a 144%
increase from 1999 costs of $2,582,000. Gross operating margin was $1,952,000 in
2000 versus $895,000 in 1999, a 118% increase.  Net gathering system  throughput
decreased  15% to 16,689 Mcf per day in 2000  compared  to 19,546 Mcf per day in
1999 due to the sale of a  gathering  system  in 1999.  Net  natural  gas  plant
processing  throughput  was 18,167 Mcf per day in 2000 versus 15,618 Mcf per day
in 1999, a 16% increase.  The increase in net processing  plant throughput was a
result of the Dynegy acquisition completed in the fourth quarter of 1999 and was
partially  offset by a reduction in net throughput at the Company's McLean Plant
due to a  contractual  payout that reduced the  Company's  portion of future net
cash flow. During December 1999 the Company completed recoupment of its original
investment in the McLean Plant and its share of operating income reverted to 50%
from the 100% applicable  during the recoupment  period.  Gross operating margin
from  gathering  operations was $0.17 per Mcf of throughput in 2000 versus $0.16
in 1999, a 6% increase.  The gross operating  margin from natural gas processing
was $0.42 per Mcf of  throughput  in 2000 versus $0.11 per Mcf of  throughput in
1999 due to more  favorable  processing  economics as a result of higher natural
gas liquids prices in the 2000 period.

     Revenues from oil field services and  international  sales were $476,000 in
2000 versus $299,000 in 1999. Operating costs increased to $250,000 in 2000 from
$136,000  in 1999.  The gross  operating  margin  was  $226,000  in 2000  versus
$163,000 in 1999.  Depreciation and depletion  expense increased nine percent to
$11,537,000  in 2000 versus  $10,615,000  in 1999.  General  and  administrative
expense was  $2,271,000  in 2000, a 70%  increase  from 1999.  Operating  profit
increased  399% to  $18,986,000  in 2000  from  $3,805,000  in 1999.  Equity  in
earnings  of  affiliate,  net of income  tax,  was a profit of  $270,000 in 2000
versus a loss of  $97,000 in 1999.  Other  income was  $229,000  in 2000  versus
$288,000 in 1999.  Interest expense increased two percent to $11,427,000 in 2000
from  $11,211,000  in 1999.  The Company  provided for deferred  income taxes of
$2,950,000  on  income  of  $8,058,000  in  2000  versus  no  benefit  on a loss
applicable  to common shares of  $7,215,000  in 1999.  The Company  reported net
income  applicable  to common shares of  $2,814,000,  or $0.14 per common share,
basic and  diluted,  in 2000  versus a loss of  $9,351,000,  or $0.46 per common
share, basic and diluted,  in 1999. The Company recorded $2,294,000 in dividends
on its preferred stock in 2000 versus $2,049,000 in 1999.

                                       3
<PAGE>

Liquidity and Capital Resources

     The Company has three  principal  operating  sources of cash:  (i) sales of
crude oil and natural 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 natural gas could result in  reductions  of both
cash flow and the borrowing base under the Company's existing credit facilities,
which would result in decreased  funds  available,  including  funds for capital
expenditures.

     At December 31, 1998, the Company had repurchased  625,600 common shares of
stock in the open market for  approximately  $1.9 million  under the  previously
announced stock repurchase  program of up to one million shares at a cost not to
exceed $4 million.  In 1999, the Company purchased an additional  601,472 shares
of common  stock for  approximately  $1.7  million.  In April 2000,  the Company
announced a stock  repurchase  program whereby the Company or its affiliates are
authorized  to  repurchase  up to an  additional  five  percent  (5%) of  Magnum
Hunter's  outstanding  common stock.  In May 2000,  Bluebird  purchased  129,032
shares of the Company's common stock for $500,000.

     In  connection  with the Madill  Gas Plant  acquisition,  Bluebird's  banks
increased  the  borrowing  base  under the  credit  agreement  to $45.0  million
effective November 30, 1999, subject to a provision to automatically  reduce the
borrowing  base to $41.5 million on March 31, 2000,  with further  reductions to
the borrowing base of $2.0 million to occur on June 30, 2000 and each subsequent
quarter-end.   Effective  March  27,  2000,  the  banks  suspended  the  various
requirements  of the  November 30, 1999  adjustment  to the  borrowing  base and
established a current  borrowing base for Bluebird of $43.5  million.  The banks
agreed to redetermine  the borrowing base and the need to reimplement  the other
requirements  of the  November 30, 1999  adjustment  upon the earlier of May 15,
2000,  or the  consummation  or  termination  of a proposed  sale of oil and gas
properties owned partially by Bluebird.

     On May 24, 2000, the Company and Bluebird sold properties to Mallard Hunter
LP for  approximately  $23 million,  of which  approximately  $10.7  million was
attributable  to Bluebird.  Both the Company and Bluebird used these proceeds to
repay senior bank indebtedness.

     On May 23, 2000,  Bluebird's banks agreed to allow Bluebird to acquire 100%
of  the  Company's  existing  1996  Series  A  Convertible  Preferred  stock  at
liquidation  value,  or $10 million,  and to purchase up to $500 thousand of the
Company's common stock. At the same time, the banks lowered Bluebird's borrowing
base to $41 million effective July 1, 2000 and to $38.5 million effective August
31, 2000. The bank agreement also provides that the Company may either re-market
the 1996 Series A Convertible  Preferred stock or raise  additional  equity in a
substantially  similar  amount by  October  1, 2000.  The  Company is  currently
exploring  various ways to meet these  conditions or  alternatives  that will be
satisfactory to all parties.  The Company believes that  accommodations with the
Bluebird  lenders will be reached due to new reserve  estimates,  as of June 30,
2000,  provided by Bluebird's third party engineering  consultants.  The Company
believes that this  agreement,  along with cash flow from  operations,  provides
Bluebird with sufficient liquidity to meet interest payments as well as to carry
out its capital spending budget plans in 2000.

     The Company's borrowing base under its revolving credit line with banks was
$53  million at June 30,  2000,  providing  $8 million of  additional  borrowing
capacity at that date. The Company believes that this  availability,  along with
cash  flow  from  operations,  is  sufficient  to  meet  interest  and  dividend
requirements in 2000 as well as to carry out its capital  spending budget plans.
The Company may also sell  certain  non-strategic  oil and gas  reserves to fund
capital investment opportunities.

     For the six months ended June 30,  2000,  the Company had a net decrease in
cash of $983 thousand.  The Company's operating  activities provided net cash of
$13.5  million,  principally  from  operating  income  before  depreciation  and
depletion.  The Company  was  provided  $7.9  million by  investing  activities,
principally from proceeds from property sales of $25.1 million less additions to
property of $14.1  million.  Financing  activities  used $22.7  million of cash,
principally for net repayments  under the Company's and Bluebird's  credit lines
with banks and the  purchase  of the  Company's  preferred  and common  stock by
Bluebird.  The Company also paid  $2,657,000 in dividends on preferred  stock to
such holders.

                                       4

<PAGE>

Capital Requirements

     For fiscal  2000,  the Company has budgeted  approximately  $45 million for
exploration and development activities,  including approximately $23 million for
participation  in exploration  projects in the shallow water area of the Gulf of
Mexico. The Company is typically 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. As a result,  actual capital expenditures may
vary significantly from current expectations.

     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 $8.0 million available as of June 30, 2000) will
be adequate to meet its anticipated  requirements for working  capital,  capital
expenditures  and scheduled  interest and dividend  payments for the foreseeable
future.  In addition,  Bluebird has  availability  under its own credit facility
(non-recourse to the Company) of approximately $400 thousand as of June 30, 2000
on  a  borrowing  base  of  $43.5  million.   The  Company  believes  that  this
availability,  along  with cash flow from  operations,  provides  Bluebird  with
sufficient  liquidity  to meet  interest  payments  as well as to carry  out its
capital spending plans in 2000.

     In the normal course of business, the Company reviews opportunities for the
possible  acquisition of additional 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 or equity capital in connection therewith.

Inflation and Changes in Prices

     During 1999, the Company experienced an increase in prices for crude oil of
18% and for natural gas of 7% compared to the  previous  year.  During the first
six months of 2000, the price increase realized (before hedge effects) for crude
oil was 110% and for natural gas was 75% compared to the six months of 1999. The
results of operations  and cash flow of the Company have been, and will continue
to be,  affected 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  futures,  options,  and swap
contracts to reduce the effects of fluctuations in crude oil and gas prices.  It
is the  policy of the  Company  not to enter  into any such  arrangements  which
exceed 75% of the Company's  anticipated oil and gas production  during the next
12 months.

     The Company  markets  oil and gas for its own  account,  which  exposes the
Company  to  the  attendant  commodities  risk.  A  substantial  portion  of the
Company's gas production is currently sold to NGTS, LLC, a 30% owned  affiliate,
or  end-users  either on the spot market on a  month-to-month  basis,  at either
prevailing  spot market prices,  or under  long-term  contracts based on current
spot  market   prices.   The  Company   normally   sells  its  crude  oil  under
month-to-month contracts to a variety of different purchasers.

                                       5

<PAGE>
Hedging Activity

Crude Oil and Natural Gas Hedges

     Periodically,  the Company enters into futures, options, and swap contracts
to mitigate the effects of significant fluctuations in crude oil and gas prices.
At June 30, 2000, the Company had the following open contracts:

       Type            Volume/Month          Duration           Avg. Price
   -------------     ----------------      --------------     ---------------
Oil
-----
       Swap...........  30,000 Bbl        Jul 00 - Dec 00               $17.60
       Collar.........  30,000 Bbl        Jul 00 - Sep 00       Floor - $18.00
                                                                Cap -   $24.00
       Collar.........  30,000 Bbl        Jul 00 - Sep 00       Floor - $18.00
                                                                Cap -   $24.65
       Collar.........  10,000 Bbl        Oct 00 - Dec 00       Floor - $19.00
                                                                Cap -   $26.21
Gas
-----
       Collar ........ 300,000 MMBtu      Jul 00 - Oct 00      Floor - $  1.80
                                                               Cap -   $  2.25

     Net gains and  (losses)  related to crude oil and  natural  gas  derivative
transactions  for the three  month  periods  ended  June 30,  2000 and 1999 were
($2,589,000) and ($358,000),  respectively,  and for the six month periods ended
June 30, 2000 and 1999 were ($4,502,000) and $1,085,000,  respectively.  At June
30, 2000, the unrealized loss from derivative transactions was $6,102,000. Based
upon daily natural gas  production  and daily crude oil  (including  natural gas
liquids) production at June 30, 2000,  approximately 19% and 82%,  respectively,
of the Company's total daily  production mix was subject to some form of hedging
activity.

Interest Rate Swaps

     At June 30, 2000,  the Company had the  following  open  interest rate swap
contract:
<TABLE>
<CAPTION>
<S>                           <C>                  <C>                 <C>                     <C>
           Type                Notional Amount     Termination Date      Pay Rate              Receive Rate
---------------------------------------------------------------------------------------------------------------
  Pay Variable/Receive Fixed   $50,000,000           06/01/02            LIBOR + 3.69%          10% fixed
                                                                         from 06/01/00 to
                                                                         06/01/02
</TABLE>
     Net gains from  interest  rate swaps at June 30, 2000 and 1999 were $48,000
and none for the three months, respectively,  and were $153,000 and none for the
six month periods,  respectively.  At June 30, 2000,  the  unrealized  loss from
interest rate derivative transactions was $934,000.

Year 2000 Compliance

     Beginning in 1998,  the Company was involved in a program to be "Year 2000"
ready.  The program  involved  reviews of major  business,  financial  and other
information   systems,   including  equipment  with  embedded   microprocessors,
development of specific plans for modification or replacement of  date-sensitive
software  or  microprocessors,  execution  of such plans and the testing of such
systems to ensure their "Year 2000" readiness.  Included within the scope of the
program were contacts with key suppliers and customers to determine  their "Year
2000"  readiness  in order to ensure a steady flow of goods and  services to the
Company and  continuity  with respect to customer  service.  As a result of this
program,  there were no significant  occurrences of Year 2000-related  failures.
Additionally,  the Company does not anticipate that any  significant  subsequent
events will occur.

Recently Issued Accounting Pronouncements

     In June 1998,  the FASB  issued  SFAS No. 133,  Accounting  for  Derivative
Instruments and Hedging Activities, which established a new model for accounting
for  derivatives and hedging  activities.  SFAS No. 133, which will be effective
for the Company's fiscal year 2001,  requires that all derivatives be recognized
on the balance sheet as either assets or liabilities and measured at fair value.
The  Statement  also requires that changes in fair value be reported in earnings
unless  specific  hedge  accounting  criteria  are met. The Company is currently
evaluating  the effect of the  adoption  of the  Statement  on its  consolidated
financial position and results of operations.

                                       6
<PAGE>

                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                            (in thousands of dollars)
<TABLE>
<CAPTION>
<S>                                                                                  <C>                        <C>
                                                                                      June 30,                   December 31,
                                                                                        2000                         1999
                                                                                ---------------------------------------------------
ASSETS                                                                               (Unaudited)
Current Assets
         Cash and cash equivalents..............................................      $     582                  $    1,565
         Restricted cash .......................................................          2,077                       2,145
         Accounts receivable
              Trade, net of allowance of $166 for 2000 and 1999.................         15,688                      10,203
              Due from affiliates...............................................            261                          48
         Notes receivable from affiliate........................................          1,801                         902
         Current portion of long-term notes receivable, net of allowance of $790
           for 2000 and 1999....................................................             57                          57
         Prepaid and other......................................................          1,708                       1,296
                                                                                ----------------------------------------------------
               Total Current Assets.............................................         22,174                      16,216
                                                                                ----------------------------------------------------
Property, Plant, and Equipment
         Oil and gas properties, full cost method
               Unproved.........................................................          6,592                       3,567
               Proved...........................................................        335,384                     349,510
         Pipelines..............................................................         12,529                      12,462
         Other property.........................................................          2,123                       1,964
                                                                                ----------------------------------------------------
         Total Property, Plant and Equipment....................................        356,628                     367,503
               Accumulated depreciation, depletion, amortization and impairment.       (113,848)                   (102,308)
                                                                                ----------------------------------------------------
         Net Property, Plant and Equipment......................................        242,780                     265,195
                                                                                ----------------------------------------------------
Other Assets
         Deposits and other assets..............................................          6,566                       5,698
         Investment in unconsolidated affiliate.................................          6,155                       4,163
         Deferred tax asset ....................................................          9,825                      13,351
         Long-term notes receivable, net of imputed interest....................          1,772                       1,487
                                                                                ----------------------------------------------------
         Total Assets                                                                 $ 289,272                  $  306,110
                                                                                ====================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
         Trade payables and accrued liabilities.................................      $  14,588                  $   15,111
         Dividends payable......................................................            333                         552
         Suspended revenue payable..............................................          1,633                       1,357
         Current maturities of long-term debt...................................             18                           6
                                                                                ----------------------------------------------------
               Total Current Liabilities........................................         16,572                      17,026
                                                                                ----------------------------------------------------
Long-Term Liabilities
         Long-term debt -with  recourse, less current maturities................        185,030                    193,000
         Long-term debt - nonrecourse...........................................         40,600                     41,800
         Production payment liability...........................................            408                        460
Minority interest...............................................................            184                        184
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 at December 31, 1999, 1,000,000 purchased and
           held for remarketing by subsidiary at June 30, 2000,
           liquidation amount $10,000,000.......................................              1                          1
         50,000 designated as 1999 Series A 8% Convertible; 50,000 issued
           and outstanding, liquidation amount $50,000,000......................            -                          -
         Common Stock - $.002 par value; 100,000,000 shares authorized,
           21,738,320 shares issued.............................................             43                         43
         Additional paid-in capital.............................................        111,809                    121,815
         Accumulated other comprehensive income.................................         (1,372)                    (2,046)
         Accumulated deficit....................................................        (59,872)                   (62,542)
                                                                                ----------------------------------------------------
                                                                                         50,609                     57,271
Treasury stock, at cost (1,623,751 and 1,512,719 shares of common stock,
respectively)...................................................................         (4,131)                    (3,631)
                                                                                ----------------------------------------------------
Total Stockholders' Equity......................................................         46,478                     53,640
                                                                                ----------------------------------------------------
Total Liabilities and Stockholders' Equity......................................     $  289,272                  $ 306,110
                                                                                ====================================================
</TABLE>
     The accompanying notes are an integral part of these consolidated financial
statements.

                                      F-1
<PAGE>

                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
         CONSOLIDATED STATEMENTS OF OPERATIONS and COMPREHENSIVE INCOME
                                   (Unaudited)
                  (in thousands, except for per share amounts)
<TABLE>
<CAPTION>
<S>                                                             <C>             <C>              <C>             <C>
                                                                       Three Months Ended           Six Months Ended
                                                                            June 30,                    June 30,
                                                                -------------------------------------------------------------
                                                                  2000             1999              2000            1999
Operating Revenues:
  Oil and gas sales...........................................   $    23,594    $    13,367        $   44,959      $    24,688
  Gas gathering, marketing and processing.....................         4,414          1,851             8,244            3,477
  Oil field services and international sales .................           278            141               476              299
                                                                 -------------------------------------------------------------
        Total Operating Revenues..............................        28,286         15,359            53,679           28,464
                                                                 -------------------------------------------------------------
Operating Costs and Expenses:
  Oil and gas production lifting costs.........................        4,269          3,624             8,885            6,817
  Production taxes and other costs.............................        2,642          1,712             5,482            3,177
  Gas gathering, marketing and processing......................        3,516          1,306             6,292            2,582
  Oil field services and international sales...................          135             65               250              136
  Depreciation and depletion  .................................        5,566          5,467            11,537           10,615
  Gain on sale of assets  .....................................           (6)           -                 (24)             -
  General and administrative...................................        1,317            646             2,271            1,332
                                                                 -------------------------------------------------------------
        Total Operating Costs and Expenses.....................       17,439         12,820            34,693           24,659
                                                                 -------------------------------------------------------------
Operating Profit ..............................................       10,847          2,539            18,986            3,805
  Equity in earnings (loss) of affiliate, net of income tax ...          230            (66)              270              (97)
  Other income.................................................          153            125               229              288
  Interest expense.............................................       (5,691)        (4,894)          (11,427)         (11,211)
                                                                 -------------------------------------------------------------
Net Income (Loss) before income tax and minority interest......        5,539         (2,296)            8,058           (7,215)
  Provision for deferred income tax............................       (2,011)           -              (2,950)             -
                                                                 -------------------------------------------------------------
Net Income (Loss) before minority interest.....................        3,528         (2,296)            5,108           (7,215)
  Minority interest in subsidiary earnings.....................          -              (44)              -                (87)
                                                                 -------------------------------------------------------------
Net Income (Loss)..............................................        3,528         (2,340)            5,108           (7,302)
  Dividends Applicable to Preferred Stock .....................       (1,076)        (1,215)           (2,294)          (2,049)
                                                                 -------------------------------------------------------------
Income (Loss) Applicable to Common Shares......................  $     2,452    $    (3,555)       $    2,814      $    (9,351)
                                                                 =============================================================
Net Income (Loss)..............................................  $     3,528    $    (2,340)       $    5,108      $    (7,302)
Other Comprehensive Income (Loss), net of tax
  Unrealized Gain (Loss) on Investments .......................          497           (129)              674             (256)
                                                                 -------------------------------------------------------------
Comprehensive Income (Loss)....................................  $     4,025    $    (2,469)       $    5,782      $    (7,558)
                                                                 =============================================================
Income (Loss) per Common Share - Basic                           $      0.12    $     (0.18)       $     0.14      $     (0.46)
                                                                 =============================================================
Income (Loss) per Common Share - Diluted                         $      0.11    $     (0.18)       $     0.14      $     (0.46)
                                                                 =============================================================
Common Shares Used in Per Share Calculation...................
  Basic.......................................................    20,191,137     20,100,862        20,216,875       20,191,265
                                                                 =============================================================
  Diluted.....................................................    30,559,691     20,100,862        20,792,260       20,191,265
                                                                 =============================================================
</TABLE>
     The accompanying notes are an integral part of these consolidated financial
statements.

                                      F-2
<PAGE>

                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                       FOR THE PERIOD ENDED JUNE 30, 2000
                                   (Unaudited)
                             (dollars in thousands)
<TABLE>
<CAPTION>
<S>                                                    <C>         <C>          <C>          <C>          <C>            <C>
                                                        Preferred Stock            Common Stock             Treasury Stock
                                                      Shares        Amount      Shares       Amount       Shares         Amount
                                                     -------------------------------------------------------------------------------
Balance at December 31, 1999........................    1,130,000    $  1       21,738,320    $  43       (1,512,719)     $ (3,631)
  Purchase of preferred stock by subsidiary.........   (1,000,000)      -
  Exercise of employees' common stock options.......                                                          18,000           -
  Purchase of treasury stock........................                                                        (129,032)         (500)
  Dividends declared or accrued on preferred stock .
  Net income........................................
  Unrealized gain on investment.....................
                                                     -------------------------------------------------------------------------------
Balance at June 30, 2000............................      130,000    $  1       21,738,320    $  43       (1,623,751)     $ (4,131)
                                                     ===============================================================================
</TABLE>
<TABLE>
<CAPTION>
<S>                                                            <C>              <C>                   <C>

                                                               Additional       Accumulated Other
                                                                Paid-In          Comprehensive        Accumulated
                                                                Capital           Income (Loss)         Deficit
                                                        ------------------------------------------------------------
Balance at December 31, 1999........................           $ 121,815           $   (2,046)         $ (62,542)
  Purchase of preferred stock by subsidiary.........             (10,035)
  Exercise of employees' common stock options.......                  29
  Purchase of treasury stock........................
  Dividends declared or accrued on preferred stock..                                                      (2,438)
  Net income........................................                                                       5,108
  Unrealized gain on investment.....................                                      674
                                                        ------------------------------------------------------------
Balance at June 30, 2000............................           $ 111,809           $   (1,372)         $ (59,872)
                                                        ============================================================
</TABLE>


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

                                      F-3
<PAGE>

                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (in thousands)
<TABLE>
<CAPTION>
<S>                                                                                   <C>           <C>
                                                                                          Six Months Ended
                                                                                              March 31,
                                                                                ---------------------------------------
                                                                                         2000          1999
                                                                                ---------------------------------------
   CASH FLOW FROM OPERATING ACTIVITIES:
            Net Income (loss).............................................             $  5,108       $ (7,302)
            Adjustments to reconcile net income (loss) to cash provided by
            (used for) operating activities:
                     Depreciation and depletion...........................               11,537         10,615
                     Amortization of financing fees.......................                  575          1,611
                     Deferred income taxes................................                2,950            -
                     Equity in unconsolidated affiliate...................                 (270)            97
                     Minority interest....................................                  -               87
                     Gain on sale of assets...............................                  (24)           -
                     Changes in certain assets and liabilities
                              Accounts and notes receivable...............               (5,698)        (3,114)
                              Other current assets........................                 (412)           486
                              Accounts payable and accrued liabilities....                 (247)        (3,830)
                                                                                ---------------------------------------
            Net Cash Provided By (Used In) Operating Activities...........               13,519         (1,350)
                                                                                ---------------------------------------
   CASH FLOWS FROM INVESTING ACTIVITIES:
            Proceeds from sale of assets..................................               25,056            -
            Additions to property and equipment...........................              (14,080)       (40,825)
            Loan made for promissory note receivable......................               (1,414)          (473)
            Payments received on promissory note receivable...............                  230             66
            Investment in unconsolidated affiliate........................               (1,590)           -
                                                                                ---------------------------------------
            Net Cash Provided By (Used In) Investing Activities...........                7,872        (41,232)
                                                                                ---------------------------------------
   CASH FLOWS FROM FINANCING ACTIVITIES:
            Proceeds from the issuance of long-term debt and production payment          33,556         78,000
            Fees paid related to financing activities.....................                 (399)        (1,659)
            Payments of principal on long-term debt and production payment              (42,766)       (79,070)
            Payment of short-term notes payable...........................                  -           (2,000)
            Proceeds from issuance of preferred and common stock,
             net of offering costs........................................                   29         46,302
            Purchase of preferred stock by subsidiary.....................              (10,035)           -
            Purchase of treasury stock....................................                 (500)        (1,722)
            (Increase) Decrease in segregated funds for payment of notes payable             68           (517)
            Cash dividends paid...........................................               (2,657)          (438)
                                                                                ---------------------------------------
            Net Cash Provided By (Used In) Financing Activities...........              (22,704)        38,896
                                                                                ---------------------------------------
   NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS...................                 (983)        (3,686)
   CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD.......................                1,565          4,853
                                                                                ---------------------------------------
   CASH AND CASH EQUIVALENTS AT END OF PERIOD.............................             $    582        $ 1,167
                                                                                =======================================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Cash payments for interest expense.....................................               11,075          9,654
                                                                                =======================================

</TABLE>

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

                                      F-4
<PAGE>

                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2000
                                   (Unaudited)

NOTE 1 - MANAGEMENT'S REPRESENTATION

     The  consolidated  balance  sheet as of June  30,  2000,  the  consolidated
statements of operations and  comprehensive  income for the three and six months
ended June 30, 2000 and 1999, the consolidated statement of stockholders' equity
for the period ended June 30, 2000 and the consolidated statements of cash flows
for the six months ended June 30, 2000 and 1999, are  unaudited.  In the opinion
of management,  all necessary  adjustments  (which include only normal recurring
adjustments) have been made to present fairly the financial position at June 30,
2000, results of operations for the three and six month periods,  and changes in
stockholders' equity and cash flows for the six month periods.

     Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting  principles generally accepted
in the United States of America have been condensed or omitted.  It is suggested
that  these  condensed  financial  statements  be read in  conjunction  with the
financial  statements and notes thereto included in the December 31, 1999 annual
report on Form 10-K for the Company. The results of operations for the three and
six month periods  ended June 30, 2000,  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,  except for  Bluebird,  are direct  Guarantors of the Company's 10%
Senior 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   Bluebird  and   inconsequential
subsidiaries),  and the Company has presented separate  condensed  consolidating
financial  statements  and  other  disclosures  concerning  each  Guarantor  and
Bluebird  (See Note 4).  Except for  Bluebird,  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.

     In December  1999,  the  Securities  and Exchange  Commission  issued Staff
Accounting  Bulletin 101,  "Revenue  Recognition in Financial  Statements" which
summarized  the  application  of generally  accepted  accounting  principles  to
revenue  recognition in financial  statements.  The Company does not believe the
adoption  of  Staff  Accounting  Bulletin  101  will  have  any  impact  on  its
consolidated  financial  position  or  results  of  operations  since it already
recognizes revenue when the earnings process is complete.

NOTE 2 - RECENT EVENTS

     On April 17, 2000, the Company announced a stock repurchase program whereby
the Company or its  affiliates  are  authorized to repurchase up to five percent
(5%) of Magnum Hunter's outstanding common stock.

     On May 24, 2000, the Company entered into a strategic alliance with another
entity and formed a new  partnership,  Mallard Hunter LP, to acquire certain oil
and gas reserves from two of the Company's subsidiaries, including Bluebird. The
Company is the general partner of the limited partnership.  The Company assigned
approximately 20 billion cubic feet equivalent of proved  producing  reserves to
the  limited  partnership,  effective  June  1,  2000,  for a  cash  payment  of
approximately  $23  million  with  a  35%  reversionary  working  interest  upon
predetermined  partnership  pay-out.  The Company used the net proceeds received
from this sale to the limited partnership to reduce commercial bank indebtedness
on its two existing credit lines.

     On June 30, 2000,  the holders of the  Company's  1996 Series A Convertible
Preferred  Stock agreed to exchange the  convertible  preferred  securities  for
900,000 warrants to purchase  restricted common shares of the Company's stock at
an exercise  price of $5.25 per share with an  expiration  date of June 30, 2003
and payment of $10 million.  The convertible  preferred stock was transferred to
the Company's wholly-owned subsidiary, Bluebird. The convertible preferred stock
has a coupon  rate of 8.75%  per  annum and is  convertible  into the  Company's
common stock at a conversion price of $5.25 per share (approximately 1.9 million
shares of common stock).  As a result of this exchange,  the Company reduced its
reported  dividends to preferred  stockholders by $144,000 for the three and six
month  periods ended June 30, 2000.  Bluebird used an existing  credit line with
its commercial banks to acquire the $10 million preferred stock issue. It is the
intent of  Bluebird to  re-market  the  preferred  stock to a third party in the
future.

                                      F-5
<PAGE>

                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                  June 30, 2000
                                   (Unaudited)

NOTE 3 - EARNINGS PER SHARE INFORMATION

     The  following is a  reconciliation  of the basic and diluted  earnings per
share computations.

                                          Three Months Ended June 30, 2000
<TABLE>
<CAPTION>
<S>                                                                <C>                 <C>            <C>
                                                                                                        Per Share
                                                                    Income             Shares             Amount
---------------------------------------------------------------------------------------------------------------------
                                       (Thousands, except per share amounts)
---------------------------------------------------------------------------------------------------------------------
Basic EPS
     Income available to common stockholders......................   $  2,452           20,191           $ 0.12
                                                                                                        ========
Effect of Dilutive Securities
     Options......................................................        -                845
     Convertible Preferred stock..................................      1,000            9,524
                                                                   -----------------------------
Diluted EPS
     Income available to common stockholders and
        assumed conversions.......................................   $  3,452           30,560           $ 0.11
                                                                   -----------------------------        ========
</TABLE>

     For the three months ended June 30, 1999,  the Company  incurred a loss per
share of $0.18 basic and diluted,  since the effect of dilutive  securities  was
antidilutive to EPS.
<TABLE>
<CAPTION>
<S>                                                                  <C>               <C>             <C>

                                           Six Months Ended June 30, 2000
                                                                                                        Per Share
                                                                        Income          Shares           Amount
------------------------------------------------------------------- ---------------- --------------- ----------------
                                       (Thousands, except per share amounts)
---------------------------------------------------------------------------------------------------------------------
Basic EPS
     Income available to common stockholders......................    $  2,814           20,217           $ 0.14
                                                                                                        ==========
Effect of Dilutive Securities
     Options......................................................         -                575
                                                                    -----------------------------
Diluted EPS
     Income available to common stockholders and
        assumed conversions.......................................    $  2,814           20,792           $ 0.14
                                                                    -----------------------------       ==========
</TABLE>

     For the six months  ended June 30,  1999,  the Company  incurred a loss per
share of $0.46 basic and diluted,  since the effect of dilutive  securities  was
antidilutive to EPS.

NOTE 4 - SEGMENT DATA

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

                                      F-6
<PAGE>
                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                  June 30, 2000
                                   (Unaudited)

     The Company's  reportable  segments are strategic business units that offer
different  products  and  services.  They are managed  separately  because  each
business requires different technology and marketing strategies. The Exploration
and Production  segment has six geographic  areas that are  aggregated.  The Gas
Gathering, Marketing and Processing segment includes the activities of three gas
gathering  systems  and three  natural gas  liquids  processing  plants in three
geographic areas that are aggregated as of June 30, 2000. The Oil Field Services
segment has six geographic areas that are aggregated. The reason for aggregating
the segments,  in each case, is due to the similarity in nature of the products,
the production processes, the type of customers, the method of distribution, and
the regulatory environments.

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

     Segment  data for the three and six month  periods  ended June 30, 2000 and
1999 are as follows (in thousands):
<TABLE>
<CAPTION>
<S>                                     <C>                 <C>                 <C>           <C>         <C>           <C>
                                                            Gas Gathering,
                                         Exploration &       Marketing &        Oil Field
   Three Months Ended June 30, 2000:     Production          Processing         Services      All Other   Elimination   Consolidated
------------------------------------------------------------------------------------------------------------------------------------
Revenue from external customers.........   $  23,594          $  4,414          $   270        $    8      $              $ 28,286
Intersegment revenues...................                         4,323            1,602           -         (5,925)            -
Depreciation, depletion and
amortization ...........................       5,271               219               72             4                        5,566

Segment profit (loss)...................       9,958               562            1,297          (970)                      10,847
Equity earnings (losses) of affiliates..                                                          230                          230
Interest expense........................                                                       (5,691)                      (5,691)
Other income............................                                                          153                          153
                                                                                                                          ----------
Loss before income taxes................                                                                                  $  5,539
Provision for deferred income tax.......                                                        2,011                        2,011
Minority interest.......................                                                                                       -
                                                                                                                          ----------
Net income..............................                                                                                  $  3,528
                                                                                                                          ==========
Capital expenditures (net of asset
sales)..................................     (16,635)               54               83           -                        (16,498)
</TABLE>
<TABLE>
<CAPTION>
<S>                                      <C>              <C>               <C>         <C>            <C>            <C>
                                                          Gas Gathering,
                                         Exploration &     Marketing &      Oil Field
   Three Months Ended June 30, 1999:     Production        Processing       Services     All Other     Elimination     Consolidated
------------------------------------------------------------------------------------------------------------------------------------
Revenue from external customers........    $  13,367        $   1,851        $    141      $  -         $  -            $  15,359
Intersegment revenues...................         -              3,368           1,391         -         (4,759)               -
Depreciation, depletion and
amortization ...........................       5,251              163              49           4                           5,467

Segment profit (loss).................         2,052              321             821        (655)                          2,539
Equity earnings (losses) of affiliates..                                                      (66)                            (66)
Interest expense........................                                                   (4,894)                         (4,894)
Other income............................                                                      125                             125
                                                                                                                        ------------
Loss before income taxes................                                                                                $  (2,296)
Benefit for deferred income tax.........                                                      -                               -
Minority interest.......................                                                      (44)                            (44)
                                                                                                                        ------------
Net loss................................                                                                                $  (2,340)
                                                                                                                        ============
Capital expenditures (net of asset
sales)..................................   $  38,897        $      14        $    103      $  -                         $  39,014
</TABLE>
                                      F-7
<PAGE>
                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                  June 30, 2000
                                   (Unaudited)
<TABLE>
<CAPTION>
<S>                                      <C>             <C>               <C>          <C>           <C>              <C>
                                                         Gas Gathering,
                                         Exploration &    Marketing &      Oil Field
    Six Months Ended June 30, 2000:      Production        Processing      Services     All Other     Elimination      Consolidated
------------------------------------------------------------------------------------------------------------------------------------
Revenue from external customers........    $  44,959        $  8,244        $   468      $    8        $                $  53,679
Intersegment revenues...................                       7,696          3,271         -            (10,967)             -
Depreciation, depletion and
amortization ...........................      10,951             437            140           9                            11,537

Segment profit (loss).................        18,213           1,423          1,180      (1,830)                           18,986
Equity earnings (losses) of affiliates..                                                    270                               270
Interest expense........................                                                (11,427)                          (11,427)
Other income............................                                                    229                               229
                                                                                                                        ------------
Loss before income taxes................                                                                                $   8,058
Provision for deferred income tax.......                                                 (2,950)                           (2,950)
Minority interest.......................                                                                                      -
                                                                                                                        ------------
Net income..............................                                                                                $   5,108
                                                                                                                        ============
Capital expenditures (net of asset
sales)..................................     (11,202)             67            103          56                           (10,976)
</TABLE>
<TABLE>
<CAPTION>
<S>                                      <C>              <C>               <C>           <C>           <C>            <C>
                                                          Gas Gathering,
                                         Exploration &     Marketing &      Oil Field
    Six Months Ended June 30, 1999:      Production        Processing        Services     All Other     Elimination    Consolidated
------------------------------------------------------------------------------------------------------------------------------------
Revenue from external customers........    $  24,688         $ 3,477         $   299       $  -           $  -           $  28,464
Intersegment revenues...................         -             6,171           2,723          -           (8,894)              -
Depreciation, depletion and amortization      10,185             326              96            8                           10,615

Segment profit (loss).................         3,081             471           1,492       (1,239)                           3,805
Equity earnings (losses) of affiliates..                                                      (97)                             (97)
Interest expense........................                                                  (11,211)                         (11,211)
Other income............................                                                      288                              288
                                                                                                                        ------------
Loss before income taxes................                                                                                 $  (7,215)
Benefit for deferred income tax ........                                                      -                                -
Minority interest.......................                                                      (87)                             (87)
                                                                                                                        ------------
Net loss................................                                                                                 $  (7,302)
                                                                                                                        ============
Capital expenditures (net of asset
sales)..................................   $  40,708         $    30         $   132       $  -                          $  40,870
</TABLE>
<TABLE>
<CAPTION>
<S>                                      <C>             <C>               <C>            <C>           <C>           <C>
                                                         Gas Gathering,
                                         Exploration &     Marketing &     Oil Field
          As of June 30, 2000:            Production       Processing      Services       All Other     Elimination   Consolidated
          -- -- ---- --- -----            ----------       ----------      --------       --- -----     -----------   ------------
Segment assets..........................   $ 252,061        $ 17,893       $ 8,424         $10,894                     $ 289,272
Equity subsidiary investments...........                                                     6,155                         6,155

          As of June 30, 1999:
Segment assets..........................   $ 267,482         $13,507       $ 5,607         $10,216                      $296,812
Equity subsidiary investments...........                                                     4,169                         4,169
</TABLE>
NOTE 5 -- CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

     The Company and its wholly-owned subsidiaries,  except Bluebird, are direct
Guarantors of the Company's 10% Senior Notes and have fully and  unconditionally
guaranteed  the Notes on a joint  and  several  basis.  Bluebird  was  formed in
December  1998 and first  reported  results of  operations  in fiscal  1999.  In
addition to not being a guarantor of the

                                      F-8
<PAGE>
                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                  June 30, 2000
                                   (Unaudited)

     Company's 10% Senior Notes, it cannot be included in determining compliance
with  certain  financial   covenants  under  certain  of  the  Company's  credit
agreements.  Condensed  consolidating  financial  information  for Magnum Hunter
Resources,  Inc. and subsidiaries as of June 30, 2000 and December 31, 1999, and
condensed  consolidating  statements of operations  for the three and six months
ended June 30, 2000 and 1999, were as follows:

                 Magnum Hunter Resources, Inc. and Subsidiaries
                     Condensed Consolidating Balance Sheets
<TABLE>
<CAPTION>
<S>                                            <C>                  <C>                <C>            <C>
                                                     June 30, 2000
--------------------------------------------------------------------------------------------------------------------------
                                                Magnum Hunter          Bluebird                        Magnum Hunter
                                               Resources, Inc.       Energy, Inc.                     Resources, Inc.
Amounts in Thousands                          And Guarantor Subs    (Non Guarantor)    Eliminations     Consolidated
--------------------------------------------------------------------------------------------------------------------------
ASSETS
Current assets..............................      $     16,859        $    5,315         $     -        $   22,174
Property and equipment
  (using full cost accounting)..............           196,634            46,146               -           242,780
Investment in subsidiaries
  (equity method)...........................            17,644               -             (17,644)            -
Investment in parent's preferred
   and  common stock........................               -              10,535           (10,535)            -

Other assets................................            26,381               584            (2,647)         24,318
                                                --------------------------------------------------------------------------
   Total assets.............................      $    257,518        $   62,580         $ (30,826)     $  289,272
                                                ==========================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities.........................      $     14,833        $    1,689         $     -         $  16,572
Long-term liabilities.......................           185,622            43,237            (2,647)        226,222

Shareholders' equity........................            57,013            17,644           (28,179)         46,478
                                                --------------------------------------------------------------------------
   Total liabilities and shareholders'
       equity...............................      $    257,518        $   62,580         $ (30,826)     $  289,272
                                                ==========================================================================
</TABLE>
<TABLE>
<CAPTION>
<S>                                            <C>                  <C>                <C>            <C>
                                                   December 31, 1999
--------------------------------------------------------------------------------------------------------------------------
                                                Magnum Hunter          Bluebird                        Magnum Hunter
                                               Resources, Inc.       Energy, Inc.                     Resources, Inc.
Amounts in Thousands                          And Guarantor Subs    (Non Guarantor)    Eliminations     Consolidated
--------------------------------------------------------------------------------------------------------------------------
ASSETS
Current assets..............................      $    15,076         $    3,741         $  (2,601)      $   16,216
Property and equipment
  (using full cost accounting)..............          211,159             54,036               -            265,195
Investment in subsidiaries
 (equity method)............................           13,302                -             (13,302)             -
Other assets................................           24,189                510               -             24,699
                                                --------------------------------------------------------------------------

   Total assets.............................      $   263,726         $   58,287         $ (15,903)      $  306,110
                                                ==========================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities.........................      $    16,442         $    3,185         $  (2,601)      $   17,026
Long-term liabilities.......................          193,644             41,800               -            235,444
Shareholders' equity........................           53,640             13,302           (13,302)          53,640
                                                --------------------------------------------------------------------------
   Total liabilities and shareholders'
      equity................................      $   263,726         $   58,287         $ (15,903)      $  306,110
                                                ==========================================================================
</TABLE>
                                      F-9
<PAGE>

                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                  June 30, 2000
                                   (Unaudited)

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

<TABLE>
<CAPTION>
                                           Three Months Ended June 30, 2000
--------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                    <C>               <C>             <C>
                                                Magnum Hunter          Bluebird                        Magnum Hunter
Amounts in Thousands                           Resources, Inc.       Energy, Inc.                      Resources, Inc.
                                             And Guarantor Subs     (Non Guarantor)   Eliminations     Consolidated
--------------------------------------------------------------------------------------------------------------------------
Revenues...................................     $     17,907         $   10,494         $  (115)         $   28,286
Expenses...................................           16,893              5,969            (115)             22,747
                                                ----------------------------------------------------------------------
                                                       1,014              4,525             -                 5,539
Income before
 Equity in net earnings of subsidiary......            2,812                -            (2,812)                -
                                                ----------------------------------------------------------------------
Income before income taxes.................            3,826              4,525          (2,812)              5,539
Income tax provision.......................             (298)            (1,713)            -                (2,011)
                                                ----------------------------------------------------------------------
  Net income...............................     $      3,528         $    2,812        $ (2,812)         $    3,528
                                                ======================================================================
</TABLE>


<TABLE>
<CAPTION>
                                           Three Months Ended June 30, 1999
--------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                     <C>              <C>             <C>
                                                Magnum Hunter          Bluebird                        Magnum Hunter
Amounts in Thousands                           Resources, Inc.       Energy, Inc.                      Resources, Inc.
                                             And Guarantor Subs     (Non Guarantor)   Eliminations     Consolidated
--------------------------------------------------------------------------------------------------------------------------
Revenues...................................    $     12,255           $    3,167       $   (63)         $   15,359
Expenses...................................          14,635                3,127           (63)             17,699
                                              ----------------------------------------------------------------------
                                                     (2,380)                  40           -                (2,340)
Loss before
  Equity in net earnings of subsidiary.....              40                  -             (40)                -
                                              ----------------------------------------------------------------------
Loss before income taxes...................          (2,340)                  40           (40)             (2,340)
Income tax provision.......................             -                    -             -                   -
                                              ----------------------------------------------------------------------
  Net loss.................................    $     (2,340)          $       40       $   (40)         $   (2,340)
                                              ======================================================================
</TABLE>



<TABLE>
<CAPTION>
                                            Six Months Ended June 30, 2000
--------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                    <C>               <C>              <C>
                                                Magnum Hunter          Bluebird                        Magnum Hunter
Amounts in Thousands                           Resources, Inc.       Energy, Inc.                      Resources, Inc.
                                             And Guarantor Subs     (Non Guarantor)   Eliminations     Consolidated
--------------------------------------------------------------------------------------------------------------------------
Revenues...................................      $     35,240         $   18,652       $  (213)         $   53,679
Expenses...................................            34,172             11,622          (213)             45,621
                                                ----------------------------------------------------------------------
Income before                                           1,068              6,990           -                 8,058
 Equity in net earnings of subsidiary......             4,343                -          (4,343)                -
                                                ----------------------------------------------------------------------
Income before income taxes.................             5,411              6,990        (4,343)              8,058
Income tax provision.......................              (303)            (2,647)          -                (2,950)
                                                ----------------------------------------------------------------------
  Net income...............................      $      5,108         $    4,343      $ (4,343)         $    5,108
                                                ======================================================================
</TABLE>



<TABLE>
<CAPTION>
                                            Six Months Ended June 30, 1999
--------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                    <C>               <C>              <C>
                                                Magnum Hunter          Bluebird                        Magnum Hunter
Amounts in Thousands                           Resources, Inc.       Energy, Inc.                      Resources, Inc.
                                             And Guarantor Subs     (Non Guarantor)   Eliminations     Consolidated
--------------------------------------------------------------------------------------------------------------------------
Revenues...................................      $     23,511         $    5,095       $  (142)         $   28,464
Expenses...................................            29,463              6,445          (142)             35,766
                                                ----------------------------------------------------------------------
Loss before                                            (5,952)            (1,350)          -                (7,302)
 Equity in net loss........................            (1,350)               -           1,350                 -
                                                ----------------------------------------------------------------------
Income before income taxes.................            (7,302)            (1,350)        1,350              (7,302)
Income tax provision.......................               -                  -             -                   -
                                                ----------------------------------------------------------------------
  Net loss.................................      $     (7,302)        $   (1,350)      $ 1,350          $   (7,302)
                                                ======================================================================
</TABLE>
                                      F-10
<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)
3.8 & 4.8       Certificate of Designation for 1999 Series A 8% Convertible
                Preferred Stock (Incorporated by reference to Form 8-K,
                dated February 3, 1999, filed February 11, 1999)
4.9             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)
4.10            Supplemental  Indenture  dated  January 27, 1999 between  Magnum
                Hunter  Resources,  the subsidiary  guarantors named therein and
                First  Union  National  Bank  of  North  Carolina,   as  Trustee
                (Incorporated  by reference to Form 10-K for the fiscal year-end
                December 31, 1998 filed April 14, 1999)
4.11            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-K
                for the fiscal year-end  December 31, 1998 filed April 14, 1999)
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-K for the fiscal year-end December 31, 1998
                filed April 14, 1999)
10.5            Employment Agreement for Gary C. Evans (Incorporated by
                reference to Form 10-K for the fiscal year-end December 31,
                1999 filed March 30, 2000)
10.6            Employment Agreement for Matthew C. Lutz (Incorporated by
                reference to Form 10-K for the fiscal year-end
                December 31, 1999 filed March 30, 2000)
10.7            Employment Agreement for Richard R. Frazier (Incorporated by
                reference to Form 10-K for the fiscal year-end December 31, 1999
                filed March 30, 2000)
10.8            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)

                                       7
<PAGE>
10.9            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)
10.10           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)
10.11           Purchase and Sale Agreement dated November 25, 1998 between
                Magnum Hunter Production, Inc. and Unocal Oil Company of
                California (Incorporated by reference to Form 10-K for the
                fiscal year-end December 31, 1998 filed April 14, 1999)
10.12           Stock Purchase Agreement dated February 3, 1999 between ONEOK
                Resources Company and Magnum Hunter Resources, Inc.
                (Incorporated by reference to Form 8-K, dated February 3, 1999,
                filed February 11, 1999)
27*             Financial Data Schedule

* Filed herewith.


                                       8
<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                                            August 14, 2000
  ---------------------
      Gary C. Evans
      President and Chief Executive Officer


By /s/ Chris Tong                                               August 14, 2000
   ---------------------
     Sr. Vice President and
     Chief Financial Officer


By  /s/ David S. Krueger                                        August 14, 2000
    ---------------------
      David S. Krueger
      Vice President and
      Chief Accounting Officer


By /s/ Morgan F. Johnston                                       August 14, 2000
   ------------------------
      Morgan F. Johnston
      Vice President,  General Counsel and
      Secretary