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

                                   Form 10-Q/A

(Mark one)
[X]      Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
         Act of 1934 For the Quarterly Period Ended September 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 November 14, 2000: 23,449,605.
<PAGE>
                         PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements

                 Magnum Hunter Resources, Inc. and Subsidiaries
                           Consolidated Balance Sheets
                            (in thousands of dollars)
<TABLE>
<CAPTION>
<S>                                                                              <C>                    <C>
                                                                                   September 30,          December 31,
                                                                                        2000                 1999
                                                                                   (unaudited)
                                                                                  --------------------------------------
                                      ASSETS                                             (as restated, see Note 8)
Current Assets
     Cash and cash equivalents..................................................  $        1,269           $   1,565
     Restricted cash ...........................................................           2,151               2,145
     Accounts receivable
          Trade, net of allowance of $166 for 2000 and 1999.....................          21,356              10,203
          Due from affiliates...................................................             132                  48
     Notes receivable from affiliate............................................             394                 398
     Current portion of long-term notes receivable, net of allowance of $790
                      for 2000 and 1999.........................................              57                  57
     Prepaid and other..........................................................           1,443               1,296
                                                                                  --------------------------------------

           Total Current Assets.................................................          26,802              15,712
                                                                                  --------------------------------------

Property, Plant, and Equipment
     Oil and gas properties, full cost method
           Unproved.............................................................          12,354               3,567
           Proved...............................................................         328,397             349,510
     Pipelines..................................................................          12,569              12,462
     Other property.............................................................           2,277               1,964
                                                                                  --------------------------------------
     Total Property, Plant and Equipment........................................         355,597             367,503
           Accumulated depreciation, depletion, amortization and impairment.....        (119,248)           (102,308)
                                                                                  --------------------------------------
     Net Property, Plant and Equipment..........................................         236,349             265,195
                                                                                  --------------------------------------
Other Assets
     Deposits and other assets, net of allowance of $76 and $78
       for 2000 and 1999........................................................           7,477               5,663
     Investment in unconsolidated affiliate.....................................           6,830               4,163
     Deferred tax asset ........................................................           6,340              13,289
                                                                                  --------------------------------------
     Total Assets...............................................................  $      283,798           $ 304,022
                                                                                  ======================================
                       LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
     Trade payables and accrued liabilities.....................................  $       22,778           $  15,111
     Dividends payable..........................................................             333                 552
     Suspended revenue payable..................................................           1,748               1,357
     Current maturities of long-term debt, with recourse........................              18                   6
                                                                                  --------------------------------------
           Total Current Liabilities............................................          24,877              17,026
                                                                                  --------------------------------------
Long-Term Liabilities
     Long-term debt, with recourse, less current maturities.....................         171,525             193,000
     Long-term debt, non recourse, less current maturities......................          37,500              41,800
     Production payment liability...............................................             384                 460
     Minority interest..........................................................             184                 184
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 September  30, 2000,
              liquidation at $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,
              21,755,262 and 21,738,320 shares issued, respectively.............              44                  43
     Additional paid-in capital.................................................         112,119             121,845
     Accumulated other comprehensive loss.......................................            (298)             (1,713)
     Accumulated deficit........................................................         (56,016)            (62,560)
     Receivable from stockholder................................................            (442)               (795)
     Unearned common stock in ESOP (628,431 and 537,515 shares, respectively)...          (1,950)             (1,638)
                                                                                  --------------------------------------
                                                                                          53,458              55,183
     Treasury stock, at cost (1,567,151 and 1,512,719 shares of
       common stock, respectively)..............................................          (4,130)             (3,631)
                                                                                  --------------------------------------
     Total Stockholders' Equity.................................................          49,328              51,552
                                                                                  --------------------------------------
     Total Liabilities and Stockholders' Equity.................................  $      283,798           $ 304,022
                                                                                  ======================================
</TABLE>
     The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
                 Magnum Hunter Resources, Inc. and Subsidiaries
      Consolidated Statements of Operations and Comprehensive Income (Loss)
                                   (Unaudited)
                  (in thousands, except for per share amounts)
<TABLE>
<CAPTION>
<S>                                                              <C>                <C>              <C>               <C>
                                                                        Three Months Ended                 Nine Months Ended
                                                                           September 30,                     September 30,
                                                              ----------------------------------------------------------------------
                                                                     2000               1999            2000               1999
                                                              ----------------------------------------------------------------------
                                                                                    (as restated, see Note 8)
Operating Revenues:
   Oil and gas sales.........................................    $    24,995        $     17,575        $     69,954    $   42,263
   Gas gathering, marketing and processing...................          5,300               2,039              13,544         5,516
   Oil field services and international sales................            394                 250                 870           549
                                                              ----------------------------------------------------------------------
        Total Operating Revenues.............................         30,689              19,864              84,368        48,328
                                                              ----------------------------------------------------------------------
Operating Costs and Expenses:
   Oil and gas production lifting costs......................          3,456               4,235              12,341        11,052
   Production taxes and other costs..........................          3,004               2,327               8,486         5,504
   Gas gathering, marketing and processing...................          4,266               1,442              10,558         4,024
   Oil field services and international sales................            200                  98                 450           234
   Depreciation and depletion................................          5,398               5,768              16,935        16,383
   Gain on sale of assets....................................             (4)               (228)                (28)         (228)
   General and administrative................................          1,125                 683               3,396         2,015
                                                              ----------------------------------------------------------------------
        Total Operating Costs and Expenses...................         17,445              14,325              52,138        38,984
                                                              ----------------------------------------------------------------------

Operating Profit ............................................         13,244               5,539              32,230         9,344
   Equity in earnings (loss) of affiliate, net of income tax.             92                  (3)                362          (100)
   Other income..............................................            165                  53                 394           341
   Interest expense..........................................         (5,712)             (5,377)            (17,139)      (16,588)
                                                              ----------------------------------------------------------------------

Income (Loss) before income tax and minority interest........          7,789                 212              15,847        (7,003)
   Provision for deferred income tax.........................         (2,915)                  -              (5,865)            -
                                                              ----------------------------------------------------------------------

Income (Loss) before minority interest.......................          4,874                 212               9,982        (7,003)
   Minority interest in subsidiary earnings .................              -                   1                   -           (86)
                                                              ----------------------------------------------------------------------

Net Income (Loss)............................................          4,874                 213               9,982        (7,089)
   Dividends Applicable to Preferred Stock...................         (1,000)             (1,241)             (3,294)       (3,291)
                                                              ----------------------------------------------------------------------


Income (Loss) Applicable to Common Shares....................    $     3,874        $     (1,028)       $      6,688    $  (10,380)
                                                              ======================================================================

Net Income (Loss)............................................    $     4,874        $        213        $      9,982    $   (7,089)
Other Comprehensive Income (Loss), net of tax
   Unrealized Gain (Loss) on Investments.....................            825                (226)              1,415          (315)
                                                              ----------------------------------------------------------------------

Comprehensive Income (Loss)..................................          5,699        $        (13)       $     11,397    $   (7,404)
                                                              ======================================================================

Income (Loss) per Common Share - Basic.......................    $      0.20        $      (0.05)       $       0.34    $    (0.53)
                                                              ======================================================================
Income (Loss) per Common Share - Diluted.....................    $      0.15        $      (0.05)       $       0.32    $    (0.53)
                                                              ======================================================================

Common Shares Used in Per Share Calculation..................
     Basic...................................................     19,502,384          19,701,203          19,594,012    19,769,302
                                                              ======================================================================
     Diluted.................................................     32,159,978          19,701,203          30,546,007    19,769,302
                                                              ======================================================================
</TABLE>
     The accompanying notes are an integral part of these consolidated financial
statements.

                                        2
<PAGE>
                 Magnum Hunter Resources, Inc. and Subsidiaries
                 Consolidated Statement of Stockholders' Equity
                     For the Period Ended September 30, 2000
                                   (Unaudited)
                             (dollars in thousands)
                            (as restated, see Note 8)
<TABLE>
<CAPTION>
<S>                                               <C>       <C>      <C>        <C>         <C>         <C>       <C>
                                                                                                                   Additional
                                                  Preferred Stock       Common Stock           Treasury Stock       Paid-In
                                                  Shares     Amount   Shares      Amount    Shares       Amount     Capital
                                                 -------------------------------------------------------------------------------
Balance at December 31, 1999..................... $ 1,130,000  $ 1    21,738,320   $ 43     (1,512,719)  $ (3,631)   $   121,845
   Purchase of preferred stock by subsidiary.....                                                                        (10,035)
   Exercise of employees' common stock options...                         16,942      1         74,600          1            309
   Purchase of treasury stock....................                                             (129,032)      (500)
   Dividends declared or accrued on
     preferred stock.............................
   Net income....................................
   Unrealized gain on investment.................
   Repayment of loan by stockholder..............
   Unearned shares in ESOP.......................
                                                 --------------------------------------------------------------------------------
Balance at September 30, 2000.................... $ 1,130,000  $ 1    21,755,262   $ 44     (1,567,151)  $ (4,130)   $   112,119
                                                 ================================================================================
</TABLE>

<TABLE>
<CAPTION>
<S>                                               <C>                  <C>             <C>                <C>           <C>
                                                  Accumulated Other                    Receivable            Unearned shares
                                                    Comprehensive      Accumulated        from                  in ESOP
                                                        Loss             Deficit       Stockholder         Shares        Amount
                                                 --------------------------------------------------------------------------------

Balance at December 31, 1999.....................    $    (1,713)       $    (62,560)     $   (795)        (537,515)     $(1,638)
   Purchase of preferred stock by subsidiary.....
   Exercise of employees' common stock options...
   Purchase of treasury stock....................
   Dividends declared or accrued on preferred stock                           (3,438)
   Net income....................................                              9,982
   Unrealized gain on investment.................          1,415
   Repayment of loan by stockholder..............                                              353
   Unearned shares in ESOP.......................                                                           (90,916)        (312)
                                                 --------------------------------------------------------------------------------
Balance at September 30, 2000....................    $      (298)       $    (56,016)     $   (442)        (628,431)     $(1,950)
                                                 ================================================================================
</TABLE>

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

                                        3
<PAGE>
                 Magnum Hunter Resources, Inc. and Subsidiaries
                      Consolidated Statements of Cash Flows
                                   (Unaudited)
                                 (in thousands)
<TABLE>
<CAPTION>
<S>                                                                               <C>                <C>
                                                                                          Nine Months Ended
                                                                                            September 30,
                                                                                   ----------------------------------
                                                                                       2000              1999
                                                                                   ----------------------------------
                                                                                      (as restated, see Note 8)
CASH FLOW FROM OPERATING ACTIVITIES:
   Net Income (loss)............................................................   $      9,982      $     (7,089)
   Adjustments to reconcile net income (loss) to cash provided by
   operating activities:
        Depreciation and depletion..............................................         16,935            16,383
        Amortization of financing fees..........................................            837             1,852
        Decrease in reserve for doubtful accounts...............................             (2)                -
        Deferred income taxes...................................................          5,865                 -
        Equity in unconsolidated affiliate......................................           (362)              100
        Minority interest.......................................................              -                86
        Gain on sale of assets..................................................            (28)             (228)
        Changes in certain assets and liabilities
              Accounts and notes receivable.....................................        (11,237)           (5,763)
              Other current assets..............................................           (147)              586
              Accounts payable and accrued liabilities..........................          8,058             2,564
                                                                                   ----------------------------------
   Net Cash Provided By Operating Activities....................................         29,901             8,491
                                                                                   ----------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from sale of assets.................................................         43,609             1,125
   Additions to property and equipment..........................................        (31,569)          (47,066)
   Loan made for promissory note receivable.....................................         (1,002)              (65)
   Payments received on promissory note receivable..............................          1,006                 -
   Investment in unconsolidated affiliate.......................................         (2,090)                -
                                                                                   ----------------------------------
   Net Cash Provided By (Used In) Investing Activities..........................          9,954           (46,006)
                                                                                   ----------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from the issuance of long-term debt and production payment..........         48,556            86,000
   Fees paid related to financing activities....................................           (466)           (1,791)
   Payments of principal on long-term debt and production payment...............        (74,395)          (87,886)
   Payment of short-term notes payable .........................................              -            (2,000)
   Repayment of stockholder loan................................................            353                65
   Loan made to ESOP............................................................           (312)             (523)
   Proceeds from issuance of common and preferred stock, net of offering costs..            310            46,334
   Purchase of preferred stock by subsidiary ...................................        (10,035)                -
   Purchase of treasury stock ..................................................           (499)           (1,722)
   Increase in restricted cash for payment of notes payable ....................             (6)             (963)
   Cash dividends paid..........................................................         (3,657)           (2,958)
                                                                                   ----------------------------------
   Net Cash Provided By (Used In) Financing Activities..........................        (40,151)           34,556
                                                                                   ----------------------------------
NET DECREASE IN CASH AND CASH EQUIVALENTS.......................................           (296)           (2,959)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD................................          1,565             4,853
                                                                                   ----------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD......................................   $      1,269      $      1,894
                                                                                   ==================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
     Cash payments for interest expense.........................................         14,390            12,178
                                                                                   ==================================

</TABLE>
     The accompanying notes are an integral part of these consolidated financial
statements.

                                        4
<PAGE>
                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                               September 30, 2000
                                   (Unaudited)

NOTE 1 - MANAGEMENT'S REPRESENTATION

     The  consolidated  balance sheet as of September 30, 2000, the consolidated
statements of operations and comprehensive  income for the three and nine months
ended September 30, 2000 and 1999, the  consolidated  statement of stockholders'
equity for the period ended September 30, 2000 and the  consolidated  statements
of cash  flows for the nine  months  ended  September  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 September 30, 2000,  results of operations  for the three
and nine month periods,  and changes in stockholders'  equity and cash flows for
the nine 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
nine month periods ended September 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 the Company has presented
separate  condensed  consolidating  financial  statements and other  disclosures
concerning each Guarantor and Bluebird (See Note 7). 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.

NOTE 2 - EARNINGS PER SHARE INFORMATION

     The  following is a  reconciliation  of the basic and diluted  earnings per
share computations.
<TABLE>
<CAPTION>
<S>                                      <C>         <C>         <C>              <C>         <C>        <C>
                                                                     Three Months Ended
                                        -----------------------------------------------------------------------------
                                                 September 30, 2000                      September 30, 1999
                                        -------------------------------------   -------------------------------------
                                                                  Per Share                               Per Share
                                           Income      Shares      Amount          Income      Shares      Amount
-----------------------------------------------------------------------------   -------------------------------------
                                                            (Thousands, except per share amounts)
                                                    -------------------------   -------------------------------------
Basic EPS
   Income (loss) available to common
     stockholders.......................    $  3,874      19,502   $     0.20       $ (1,028)     19,701  $    (0.05)
                                                                ================-------------------------============

Effect of Dilutive Securities
   Warrants.............................           -       1,235                            -          -
   Options..............................           -       1,899                            -          -
   Convertible Preferred stock..........       1,000       9,524                            -          -
                                        -----------------------------------------------------------------------------

Diluted EPS
   Income (loss) available to common
     stockholders and assumed
     conversions........................    $  4,874      32,160   $     0.15       $ (1,028)     19,701  $    (0.05)
                                        =============================================================================
</TABLE>
                                       5
<PAGE>
<TABLE>
<CAPTION>
<S>                                      <C>          <C>        <C>              <C>         <C>        <C>
                                                                      Nine Months Ended
                                        -----------------------------------------------------------------------------
                                                 September 30, 2000                      September 30, 1999
                                        -----------------------------------------------------------------------------
                                                                 Per Share                                Per Share
                                           Income      Shares      Amount          Income      Shares      Amount
                                        ------------------------------------   --------------------------------------
                                                            (Thousands, except per share amounts)
                                                    ------------------------   --------------------------------------
Basic EPS
   Income (loss) available to common
     stockholders.......................    $  6,688      19,594    $   0.34       $ (10,380)     19,769  $    (0.53)
                                                                ================-------------------------============

Effect of Dilutive Securities
   Warrants.............................           -         411                            -          -
   Options..............................           -       1,017                            -          -
   Convertible Preferred stock..........       3,000       9,524                            -          -
                                        -----------------------------------------------------------------------------

Diluted EPS
   Income available to common
     stockholders and assumed
     conversions........................    $  9,688      30,546    $   0.32       $ (10,380)     19,769  $    (0.53)
                                        =============================================================================
</TABLE>

NOTE 3 - 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 September 30, 2000, the Company had the following open contracts:


              Type           Volume/Month         Duration         Avg. Price
         -----------------------------------------------------------------------
Oil
--------------------------------------------------------------------------------

         Swap...........      30,000 Bbl      Oct 00 - Dec 00             $17.60
         Collar.........      10,000 Bbl      Oct 00 - Dec 00     Floor - $19.00
                                                                  Cap   - $26.21
         Collar.........      45,000 Bbl      Jan 01 - Jun 01     Floor - $25.00
                                                                  Cap   - $33.50
         Collar.........      15,000 Bbl      Jan 01 - Jun 01     Floor - $25.00
                                                                  Cap   - $35.50
         Collar.........      15,000 Bbl      Jan 01 - Jun 01     Floor - $25.00
                                                                  Cap   - $36.80
Gas
--------------------------------------------------------------------------------

         Collar ........     300,000 MMBtu        Oct 00         Floor - $  1.80
                                                                 Cap   - $  2.25

     Net losses related to crude oil and natural gas derivative transactions for
the three month periods ended  September 30, 2000 and 1999 were  $4,308,000  and
$2,087,000,  respectively,  and for the nine month periods  ended  September 30,
2000 and 1999 were  $8,809,000 and  $1,022,000,  respectively.  At September 30,
2000, the unrealized loss from  derivative  transactions  was $2,708,000.  Based
upon daily natural gas  production  and daily crude oil  (including  natural gas
liquids)   production  at  September  30,  2000,   approximately  19%  and  43%,
respectively,  of the Company's  total daily  production mix was subject to some
form of hedging activity.

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

Interest Rate Swaps

     At September  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 10/01/00 to
                                                                          06/01/02
</TABLE>

     The Company recorded a loss of $89,000 on interest rate swaps for the three
months ended  September  30, 2000 and recorded a gain on interest  rate swaps of
$104,000  for the three  months ended  September  30, 1999.  For the nine months
ended September 30, 2000 and 1999, the Company  recorded a loss of $64,000 and a
gain of $104,000,  respectively.  The gains and losses from  interest rate swaps
are included in interest expense for the appropriate  periods.  At September 30,
2000 the unrealized loss from interest derivative transactions was $835,000.

NOTE 4 - NEW ACCOUNTING STANDARD

     In June 1998,  the FASB  issued SFAS No. 133,  "Accounting  for  Derivative
Instruments and Hedging  Activities." The statement  establishes  accounting and
reporting standards that require every derivative  instrument (including certain
derivative  instruments  embedded  in other  contracts)  to be  recorded  in the
balance sheet as either an asset or liability  measured at its fair market value
and that  changes in the  derivative's  fair value be  recognized  currently  in
earnings  unless specific hedge  accounting  criteria are met. If those criteria
are met,  the  instruments  are treated as cash flow or fair value  hedges under
SFAS  No.  133  creating   volatility  in  equity   through   changes  in  other
comprehensive  income or net income due to the  marking to market of the hedging
contracts. We will adopt SFAS No. 133 on January 1, 2001.

     The Company is currently  obligated to four crude oil  derivatives  and one
interest rate  derivative  that extend beyond  December 31, 2000. The Company is
currently  evaluating  the  effect  of  the  adoption  of the  statement  on its
consolidated  financial  position and results of operations related to the crude
oil  derivatives.  The Company's crude oil derivatives are expected to result in
cash flow hedges,  which require the Company to record the derivative  assets or
liabilities at fair value in the statement of financial  position with an offset
in Other  Comprehensive  Income  to the  extent  the hedge is  effective.  Hedge
ineffectiveness will be recorded in earnings.  The Company continues to evaluate
the  impact  of SFAS  No.  133,  as well as the  ongoing  implementation  issues
currently being addressed by the Derivatives  Implementation Group. As a result,
the direct  financial  impact of the  application  of hedge  accounting  and the
transition  adjustment  related to the crude oil  derivatives  on the  Company's
financial  position and results of operations has yet to be determined.  We have
determined that the interest rate derivative will not qualify for treatment as a
fair value  hedge as defined in the  statement.  If the  Company had adopted the
statement on September  30, 2000, it would have recorded a liability of $835,000
on its balance  sheet at that date  representing  the fair value of the interest
rate  derivative  with a resulting  charge to income of $543,000,  net of income
tax, as the cumulative  effect of change in accounting  method for the three and
nine month periods ending September 30, 2000.

                                        7
<PAGE>
                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                               September 30, 2000
                                   (Unaudited)

NOTE 5 - SUBSEQUENT EVENTS

     On October 17, 2000 public  warrants  for  3,174,600  common  shares of the
Company were exercised at a price of $6.50 per share,  resulting in net proceeds
of $20.6  million.  On October 26, 2000 the Company  announced the redemption of
all remaining  outstanding public warrants on the redemption date of December 5,
2000.  There are presently  outstanding a total of 7,337,550  warrants,  and the
redemption  price is $0.01 per  warrant.  Each  warrant is  exercisable  for the
purchase of one share of common stock at the exercise  price of $6.50 per share.
The Company  has agreed to use the first  proceeds  from the  exercise of public
warrants  to  redeem up to 25,000  shares  of its 1999  Series A 8%  convertible
preferred stock with a liquidation value of $25,000,000.

NOTE 6 - 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.

     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 September  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.


                     [Rest of page intentionally left blank]

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

     Segment data for the periods ended  September 30, 2000 and 1999 follows (in
thousands):
<TABLE>
<CAPTION>
<S>                                      <C>                <C>                 <C>         <C>        <C>           <C>
                                                             Gas Gathering,
                                           Exploration &     Marketing &        Oil Field
  Three Months Ended September 30, 2000:    Production        Processing        Services    All Other  Elimination   Consolidated
  --------------------------------------    ----------        ----------        ---------   ---------  -----------   -------------
Revenue from external customers...........  $   24,995       $     5,300        $    402     $    (8)    $      -    $     30,689
Intersegment revenues.....................                         5,386           1,424           -       (6,810)              -
Depreciation, depletion, amortization and
   impairment ............................       5,095               220              78           5                        5,398

Segment profit (loss).....................      12,799               788             508        (851)                      13,244
Equity in earnings (losses) of affiliates.                                                        92                           92
Interest expense..........................                                                    (5,712)                      (5,712)
Other income..............................                                                       165                          165
                                                                                                                     -------------
Income before income taxes................                                                                                  7,789
Provision for deferred income taxes.......                                                    (2,915)                      (2,915)
Minority interest.........................                                                                                      -
                                                                                                                     -------------
Net income................................                                                                           $      4,874
                                                                                                                     =============
Capital expenditures (net of asset sales).  $   (1,258)      $        40        $    154     $     -                 $     (1,064)
</TABLE>

<TABLE>
<CAPTION>
<S>                                       <C>                <C>                <C>         <C>        <C>           <C>
                                                             Gas Gathering,
                                           Exploration &     Marketing &        Oil Field
  Three Months Ended September 30, 1999:    Production       Processing         Services    All Other  Elimination   Consolidated
  --------------------------------------    ----------       ----------         ---------   ---------  -----------   -------------
Revenue from external customers...........   $   17,575      $    2,039         $    250     $     -    $      -      $    19,864
Intersegment revenues.....................            -           4,041            1,762           -      (5,803)               -
Depreciation, depletion, amortization and
        impairment .......................        5,563             148               51           6                        5,768

Segment profit (loss).....................        4,128             408              799         204                        5,539
Equity in earnings (losses) of affiliates.                                                        (3)                          (3)
Interest expense..........................                                                    (5,377)                      (5,377)
Other income..............................                                                        53                           53
                                                                                                                      ------------
Income before income taxes................                                                                                    212
Provision for deferred income taxes.......                                                         -                            -
Minority interest.........................                                                         1                            1
                                                                                                                      ------------
Net income................................                                                                            $       213
                                                                                                                      ============
Capital expenditures (net of asset sales).   $    5,930      $     (880)        $    104     $     -                  $     5,154
</TABLE>

                                        9
<PAGE>
                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                               September 30, 2000
                                   (Unaudited)
<TABLE>
<CAPTION>
<S>                                         <C>              <C>                <C>         <C>        <C>           <C>
                                                             Gas Gathering,
                                            Exploration &    Marketing &        Oil Field
  Nine Months Ended September 30, 2000:     Production       Processing         Services    All Other  Elimination   Consolidated
  -------------------------------------     ----------       ----------         ---------   ---------  -----------   -------------
Revenue from external customers...........  $    69,954       $   13,544        $    870     $     -    $      -      $    84,368
Intersegment revenues.....................                        13,082           4,695           -     (17,777)               -
Depreciation, depletion, amortization and
   impairment.............................       16,046              657             218          14                       16,935

Segment profit (loss).....................       31,012            2,211           1,688      (2,681)                      32,230
Equity in earnings (losses) of affiliates.                                                       362                          362
Interest expense..........................                                                   (17,139)                     (17,139)
Other income..............................                                                       394                          394
                                                                                                                    --------------
Income before income taxes................                                                                                 15,847
Provision for deferred income taxes ......                                                    (5,865)                      (5,865)
Minority interest.........................                                                         -                            -
                                                                                                                    --------------
Net income................................                                                                                  9,982
                                                                                                                    ==============
Capital expenditures (net of asset sales).  $   (12,460)      $      107        $    257     $    56    $      -      $   (12,040)
</TABLE>

<TABLE>
<CAPTION>
<S>                                         <C>              <C>                <C>         <C>        <C>           <C>
                                                             Gas Gathering,
                                            Exploration &    Marketing &        Oil Field
  Nine Months Ended September 30, 1999:     Production       Processing         Services    All Other  Elimination   Consolidated
  -------------------------------------     ----------       ----------         ---------   ---------  -----------   -------------
Revenue from external customers...........  $    42,263      $    5,516         $    549     $     -    $      -      $   48,328
Intersegment revenues.....................            -          10,212            4,485           -     (14,697)              -
Depreciation, depletion, amortization and
        impairment........................       15,748             474              147          14                      16,383

Segment profit (loss).....................        7,209             879            2,541      (1,285)                      9,344
Equity in earnings (losses) of affiliates.                                                      (100)                       (100)
Interest expense..........................                                                   (16,588)                    (16,588)
Other income..............................                                                       341                         341
                                                                                                                     -------------
Loss before income taxes..................                                                                                (7,003)
Provision for deferred income taxes ......                                                                                     -
Minority interest.........................                                                       (86)                        (86)
                                                                                                                     -------------
Net loss..................................                                                                            $   (7,089)
                                                                                                                     =============
Capital expenditures (net of asset sales).  $    46,638      $     (850)        $    236     $     -                  $   46,024
</TABLE>

<TABLE>
<CAPTION>
<S>                                         <C>               <C>               <C>         <C>        <C>           <C>
                                                              Gas Gathering,
                                            Exploration &     Marketing &       Oil Field
        As of September 30, 2000:           Production        Processing        Services    All Other  Elimination   Consolidated
        -------------------------           ----------        ----------        ---------   ---------  -----------   ------------
Segment assets............................     $ 236,684        $ 18,459        $ 18,046    $ 10,609                   $ 283,798
Equity subsidiary investments.............                                                     6,830                       6,830

         As of December 31, 1999:
Segment assets............................     $ 278,652        $ 12,416        $  4,252     $ 8,702                   $ 304,022
Equity subsidiary investments.............                                                     4,163                       4,163
</TABLE>

                                       10
<PAGE>
                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                               September 30, 2000
                                   (Unaudited)

NOTE 7 -- 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 Company's  10% Senior Notes,  it cannot
be included in determining  compliance  with certain  financial  covenants under
certain of the  Company's  credit  agreements.  The Company has  concluded  that
separate financial statements related to the Guarantors are not included because
management  has  determined  that they are not material to investors.  Condensed
consolidating  financial  information  for Magnum  Hunter  Resources,  Inc.  and
subsidiaries  as  of  September  30,  2000  and  December  31,  1999,  condensed
consolidating  statements  of  operations  for the three and nine  months  ended
September  30, 2000 and 1999,  and  condensed  consolidating  statements of cash
flows as of September 30, 2000 and 1999 were as follows:

                 Magnum Hunter Resources, Inc. and Subsidiaries
                     Condensed Consolidating Balance Sheets
<TABLE>
<CAPTION>
<S>                                          <C>                   <C>                <C>             <C>
                            As of September 30, 2000
-------------------------------------------------------------------------------------------------------------------------
                                                Magnum Hunter
                                               Resources, Inc.         Bluebird                        Magnum Hunter
                                              And Guarantor Subs     Energy, Inc.      Eliminations   Resources, Inc.
Amounts in Thousands                         ---------------------  (Non Guarantor)   ---------------   Consolidated
---------------------------------------------                     --------------------               --------------------
ASSETS
Current assets..............................  $        20,581          $   6,221         $      -       $    26,802
Property and equipment
  (using full cost accounting)..............          189,572             46,777                -           236,349
Investment in subsidiaries
  (equity method)...........................           21,139                  -          (21,139)                -
Investment in parent's preferred and
   common stock.............................                -             10,535          (10,535)                -

Other assets................................           24,764                527           (4,644)           20,647
                                            -----------------------------------------------------------------------------

   Total assets.............................  $       256,056          $  64,060         $(36,318)      $   283,798
                                            =============================================================================

LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities.........................  $        24,100          $     777         $      -       $    24,877
Long-term liabilities.......................          172,093             42,144           (4,644)          209,593

Shareholders' equity........................           59,863             21,139          (31,674)           49,328
                                            -----------------------------------------------------------------------------
   Total liabilities and shareholders' equity $       256,056          $  64,060         $(36,318)      $   283,798
                                            =============================================================================
</TABLE>

                                       11
<PAGE>
                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                               September 30, 2000
                                   (Unaudited)
<TABLE>
<CAPTION>
<S>                                          <C>                  <C>                  <C>           <C>
                             As of December 31, 1999
------------------------------------------------------------------------------------------------------------------------
                                                Magnum Hunter
                                               Resources, Inc.         Bluebird                        Magnum Hunter
                                              And Guarantor Subs     Energy, Inc.      Eliminations   Resources, Inc.
Amounts in Thousands                         ---------------------  (Non Guarantor)   ---------------   Consolidated
---------------------------------------------                     --------------------               -------------------
ASSETS
Current assets..............................     $      14,572         $    3,741        $ (2,601)       $   15,712
Property and equipment
  (using full cost accounting)..............           211,159             54,036               -           265,195
Investment in subsidiaries
 (equity method)............................            13,302                  -         (13,302)                -
Other assets................................            22,605                510               -            23,115
                                              --------------------------------------------------------------------------
   Total assets.............................     $     261,638         $   58,287        $(15,903)       $  304,022
                                              ==========================================================================

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........................            51,552             13,302         (13,302)           51,552
                                              --------------------------------------------------------------------------
   Total liabilities and shareholders' equity    $     261,638         $   58,287        $(15,903)       $  304,022
                                              ==========================================================================
</TABLE>
                 Magnum Hunter Resources, Inc. and Subsidiaries
                Condensed Consolidating Statement of Operations
<TABLE>
<CAPTION>
<S>                                         <C>                    <C>                <C>             <C>
                  For the Three Months Ended September 30, 2000
---------------------------------------------------------------------------------------------------------------------
                                                Magnum Hunter          Bluebird                        Magnum Hunter
                                               Resources, Inc.       Energy, Inc.                     Resources, Inc.
Amounts in Thousands                         And Guarantor Subs     (Non Guarantor)   Eliminations     Consolidated
---------------------------------------------------------------------------------------------------------------------
Revenues...................................     $     19,309            $ 11,476        $    (96)       $    30,689
Expenses...................................           16,792               6,204             (96)            22,900
                                           --------------------------------------------------------------------------
Income before                                          2,517               5,272               -              7,789
  Equity in net earnings of subsidiary.....            3,275                   -          (3,275)                 -
                                           --------------------------------------------------------------------------
Income before income taxes.................            5,792               5,272          (3,275)             7,789
Provision for deferred income tax..........             (918)             (1,997)              -             (2,915)
                                           --------------------------------------------------------------------------
  Net income...............................     $      4,874            $  3,275        $ (3,275)       $     4,874
                                           ==========================================================================
</TABLE>

<TABLE>
<CAPTION>
<S>                                         <C>                   <C>                <C>             <C>
                  For the Three Months Ended September 30, 1999
---------------------------------------------------------------------------------------------------------------------
                                                Magnum Hunter          Bluebird                        Magnum Hunter
                                               Resources, Inc.       Energy, Inc.                     Resources, Inc.
Amounts in Thousands                         And Guarantor Subs     (Non Guarantor)   Eliminations     Consolidated
---------------------------------------------------------------------------------------------------------------------
Revenues...................................     $    14,387             $  5,634        $  (157)        $   19,864
Expenses...................................          15,901                3,907           (157)            19,651
                                           --------------------------------------------------------------------------
Income (loss) before                                 (1,514)               1,727              -                213
  Equity in net earnings of subsidiary.....           1,727                    -         (1,727)                 -
                                           --------------------------------------------------------------------------
Income before income taxes.................             213                1,727         (1,727)               213
Provision for deferred income tax..........               -                    -              -                  -
                                           --------------------------------------------------------------------------
  Net income...............................     $       213             $  1,727        $(1,727)        $      213
                                           ==========================================================================
</TABLE>
                                       12
<PAGE>
                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                               September 30, 2000
                                   (Unaudited)
<TABLE>
<CAPTION>
<S>                                          <C>                    <C>              <C>              <C>
                  For the Nine Months Ended September 30, 2000
---------------------------------------------------------------------------------------------------------------------
                                                Magnum Hunter          Bluebird                        Magnum Hunter
                                               Resources, Inc.       Energy, Inc.                     Resources, Inc.
Amounts in Thousands                         And Guarantor Subs     (Non Guarantor)   Eliminations     Consolidated
---------------------------------------------------------------------------------------------------------------------
Revenues...................................     $     54,549            $  30,128       $    (309)      $   84,368
Expenses...................................           50,964               17,866            (309)          68,521
                                           --------------------------------------------------------------------------
Income before                                          3,585               12,262               -           15,847
  Equity in net earnings of subsidiary.....            7,618                    -          (7,618)               -
                                           --------------------------------------------------------------------------
Income before income taxes.................           11,203               12,262          (7,618)          15,847
Provision for deferred income tax..........           (1,221)              (4,644)              -           (5,865)
                                           --------------------------------------------------------------------------
  Net income...............................     $      9,982            $   7,618       $  (7,618)      $    9,982
                                           ==========================================================================
</TABLE>

<TABLE>
<CAPTION>
<S>                                          <C>                   <C>               <C>             <C>
                  For the Nine Months Ended September 30, 1999
---------------------------------------------------------------------------------------------------------------------
                                                Magnum Hunter          Bluebird                        Magnum Hunter
                                               Resources, Inc.       Energy, Inc.                     Resources, Inc.
Amounts in Thousands                         And Guarantor Subs     (Non Guarantor)   Eliminations     Consolidated
---------------------------------------------------------------------------------------------------------------------
Revenues...................................     $      37,898           $   0,729       $  (299)        $    48,328
Expenses...................................            45,364              10,352          (299)             55,417
                                           --------------------------------------------------------------------------
Income (loss) before                                   (7,466)                377             -              (7,089)
  Equity in net earnings of subsidiary.....               377                   -          (377)                  -
                                           --------------------------------------------------------------------------
Income (loss) before income taxes..........            (7,089)                377          (377)             (7,089)
Provision for deferred income tax..........                 -                   -             -                   -
                                           --------------------------------------------------------------------------
  Net income (loss)........................     $      (7,089)          $     377       $  (377)        $    (7,089)
                                           ==========================================================================
</TABLE>
                 Magnum Hunter Resources, Inc. and Subsidiaries
                Condensed Consolidating Statements of Cash Flows
<TABLE>
<CAPTION>
<S>                                           <C>                   <C>               <C>            <C>
                  For the Nine Months Ended September 30, 2000

                                                 Magnum Hunter          Bluebird                       Magnum Hunter
                                                Resources, Inc.       Energy, Inc.                    Resources, Inc.
Amounts in Thousands                           And Guarantor Subs    (Non Guarantor)   Eliminations    Consolidated
-----------------------------------------------------------------------------------------------------------------------
Cash flow from operating activities..........   $      16,747           $    13,154     $      -        $    29,901
Cash flow provided by investing activities...           8,092                 1,862            -              9,954
Cash flow used by financing activities.......         (25,135)              (15,010)          (6)           (40,151)
                                             --------------------------------------------------------------------------
Net increase (decrease) in cash..............            (296)                    6           (6)              (296)
Cash at beginning of period..................           1,565                 2,145       (2,145)             1,565
                                             --------------------------------------------------------------------------
Cash at end of period........................   $       1,269           $     2,151     $ (2,151)       $     1,269
                                             ==========================================================================
</TABLE>

<TABLE>
<CAPTION>
<S>                                           <C>                  <C>                 <C>          <C>
                  For the Nine Months Ended September 30, 1999

                                                 Magnum Hunter          Bluebird                       Magnum Hunter
                                                Resources, Inc.       Energy, Inc.                    Resources, Inc.
Amounts in Thousands                           And Guarantor Subs    (Non Guarantor)   Eliminations    Consolidated
-----------------------------------------------------------------------------------------------------------------------
Cash flow from operating activities..........   $      3,774            $   4,717       $      -        $     8,491
Cash flow used by investing activities.......        (29,152)             (18,704)         1,850            (46,006)
Cash flow provided by financing activities...         22,419               14,950         (2,813)            34,556
                                             --------------------------------------------------------------------------
Net increase (decrease) in cash..............         (2,959)                 963           (963)            (2,959)
Cash at beginning of period..................          4,853                  459           (459)             4,853
                                             --------------------------------------------------------------------------
Cash at end of period........................   $      1,894            $   1,422       $ (1,422)       $     1,894
                                             ==========================================================================
</TABLE>

                                       13
<PAGE>
                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                               September 30, 2000
                                   (Unaudited)

NOTE 8 - RESTATEMENT

     Subsequent to the issuance of the consolidated financial statements for the
period ended  September 30, 2000, the Company's  management  determined that the
Company's  loans to a  shareholder  and  transactions  involving  the  Company's
Employee  Stock  Option  Plan  ("ESOP")  should  have  been  accounted  for as a
reduction  in  Stockholders'  Equity  rather than as assets.  In  addition,  the
Company determined that common shares acquired by the ESOP but not yet allocated
to participants should not have been considered outstanding in the determination
of the number of shares  included in the calculation of income per common share.
As a  result,  the  accompanying  consolidated  financial  statements  have been
restated  from the amounts  previously  reported.  A summary of the  significant
effects of the restatement follows:
<TABLE>
<CAPTION>
<S>                                             <C>                  <C>            <C>               <C>
                                                     As of September 30, 2000            As of December 31, 1999
                                               ------------------------------------------------------------------------
                                                 As Previously           As          As Previously           As
                                                    Reported          Restated          Reported          Restated
                                               ------------------------------------------------------------------------

                                                                           ($ in thousands)

Note receivable from affiliate.................    $          572    $          394  $            902  $            398
Total Current Assets...........................            26,980            26,802            16,216            15,712
Deposits and other assets......................             7,835             7,477             5,698             5,663
Deferred tax asset.............................             6,280             6,340            13,351            13,289
Long-term notes receivable, net of imputed
   interest....................................             1,772                 -             1,487                 -
Total Assets ..................................           286,046           283,798           306,110           304,022
Additional paid-in capital.....................           112,089           112,119           121,815           121,845
Accumulated other comprehensive loss...........             (430)             (298)           (2,046)           (1,713)
Accumulated deficit............................          (55,998)          (56,016)          (62,542)          (62,560)
Receivable from stockholder....................                -              (442)                -              (795)
Unearned common stock in ESOP, at cost
   (628,431 and 537,515 shares, respectively)..                -            (1,950)                -            (1,638)
Total Stockholders' Equity.....................           51,576            49,328            53,640            51,552
Total Liabilities and Stockholders' Equity.....          286,046           283,798           306,110           304,022
</TABLE>

<TABLE>
<CAPTION>
<S>                                         <C>                  <C>              <C>              <C>
                                                                   For the Three Months Ended
                                          -----------------------------------------------------------------------------
                                             September 30,       September 30,      September 30,   September 30, 1999
                                                  2000               2000               1999
                                             As Previously            As            As Previously           As
                                                Reported           Restated           Reported           Restated
                                          -----------------------------------------------------------------------------
                                                                        ($ in thousands)
Other Comprehensive Income (Loss),
   net of tax, Unrealized Gain (Loss) on
   Investments............................      $          942     $          825    $         (258)    $         (226)
Comprehensive Income (Loss)...............               5,816              5,699               (45)               (13)
</TABLE>

                                       14
<PAGE>
                 MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                               September 30, 2000
                                   (Unaudited)
<TABLE>
<CAPTION>
<S>                                        <C>                <C>                 <C>              <C>
                                                                    For the Nine Months Ended
                                          -----------------------------------------------------------------------------
                                             September 30,      September 30,       September 30,   September 30, 1999
                                                 2000                2000               1999
                                             As Previously            As            As Previously           As
                                               Reported            Restated           Reported           Restated
                                          -----------------------------------------------------------------------------
                                                                        ($ in thousands)
Other Comprehensive Income (Loss),
   net of tax, Unrealized Gain (Loss) on
   Investments............................     $        1,616      $        1,415    $         (514)    $         (315)
Comprehensive Income (Loss)...............             11,598              11,397            (7,603)            (7,404)
</TABLE>

     Net income (loss) per common share and the reported weighted average common
shares outstanding changed as follows:
<TABLE>
<CAPTION>
<S>                                         <C>                 <C>                <C>                <C>
                                                                   For the Three Months Ended
                                          -----------------------------------------------------------------------------
                                                    September 30, 2000                     September 30, 1999
                                             As Previously            As            As Previously           As
                                                Reported           Restated           Reported           Restated
                                          -----------------------------------------------------------------------------

Income (Loss) Applicable to Common
   Shares.................................      $        3,874     $        3,874    $       (1,028)    $       (1,028)
Income (Loss) Per Common Share
   Basic..................................                0.19               0.20             (0.05)             (0.05)
   Diluted................................                0.15               0.15             (0.05)             (0.05)
Common shares used in per shares
   calculation
   Basic..................................          20,130,815         19,502,384        20,114,261         19,701,203
   Diluted................................          32,788,409         32,159,978        20,114,261         19,701,203
</TABLE>

<TABLE>
<CAPTION>
<S>                                         <C>                 <C>               <C>                <C>
                                                                    For the Nine Months Ended
                                          -----------------------------------------------------------------------------
                                                    September 30, 2000                     September 30, 1999
                                             As Previously            As            As Previously           As
                                                Reported           Restated           Reported           Restated
                                          -----------------------------------------------------------------------------
Income (Loss) Applicable to Common
   Shares.................................      $        6,688     $        6,688    $      (10,380)    $      (10,380)
Income (Loss) Per Common Share
   Basic..................................                0.33               0.34             (0.51)             (0.53)
   Diluted................................                0.31               0.32             (0.51)             (0.53)
Common shares used in per shares
   calculation
   Basic..................................          20,187,955         19,594,012        20,165,315         19,769,302
   Diluted................................          31,139,950         30,546,007        20,165,315         19,769,302
</TABLE>
                                       15
<PAGE>
Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations
--------------------------------------------------------------------------------

     Subsequent to the issuance of the consolidated financial statements for the
period ended  September 30, 2000, the Company's  management  determined that the
Company's  loans to a  shareholder  and  transactions  involving  the  Company's
Employee  Stock  Option  Plan  ("ESOP")  should  have  been  accounted  for as a
reduction  in  Stockholders'  Equity  rather than as assets.  In  addition,  the
Company determined that common shares acquired by the ESOP but not yet allocated
to participants should not have been considered outstanding in the determination
of the number of shares included in the calculation of loss per common share. As
a result, the accompanying  consolidated financial statements have been restated
from the amounts previously reported.

     Throughout  this  document  we  make  statements  that  are  classified  as
"forward-looking."  Please refer to the "Forward-Looking  Statements" section of
this document for an explanation of these types of assertions.  We use the terms
"Magnum  Hunter",  "Company",  "we",  "us" and "our" to refer to  Magnum  Hunter
Resources,  Inc.  and  its  consolidated  subsidiaries.  We also  use  the  term
"Bluebird" to refer to Bluebird Energy Inc., our  wholly-owned  subsidiary which
is not a guarantor of our 10% senior notes.

Results of Operations
---------------------

     The following table sets forth certain  information with respect to our oil
and gas operations and our gas gathering, marketing and processing operations.
<TABLE>
<CAPTION>
<S>                                                  <C>              <C>            <C>              <C>
                                                           Three Months Ended              Nine Months Ended
                                                              September 30,                  September 30,
                                                    ---------------------------------------------------------------

                                                         2000            1999            2000             1999
                                                    ---------------------------------------------------------------

Oil and Gas Operations
-------------------------------------------------------------------------------------------------------------------

Reported Production:
   Oil (MBbls)......................................           294             352             998              937
   Gas (MMcf).......................................         4,779           5,130          14,611           14,276
   Oil and Gas (MMcfe)..............................         6,541           7,245          20,601           19,897
Underlying Production (*):
   Oil (MBbls)......................................           294             285             876              741
   Gas (MMcf).......................................         4,595           4,291          13,040           12,303
   Oil and Gas (MMcfe)..............................         6,358           6,002          18,294           16,751

   (*) Adjusted for the sale of properties in June and September 2000.


Average Sale Prices (after hedging)
   Oil (per Bbl)....................................     $   21.31       $   15.86       $   22.07        $   13.89
   Gas (per Mcf)....................................          3.92            2.34            3.28             2.05
   Oil and Gas (per Mcfe)...........................          3.82            2.43            3.40             2.12
Effect of hedging activities (per Mcfe).............     $   (0.66)      $   (0.29)      $   (0.43)       $   (0.05)
Lease Operating Expense (per Mcfe)
   Lifting costs....................................     $    0.53       $    0.58       $    0.60        $    0.56
   Production tax and other costs...................          0.46            0.32            0.41             0.28
Gross margin (per Mcfe).............................     $    2.83       $    1.53       $    2.39        $    1.29
Gas Gathering, Marketing and

   Processing Operations
----------------------------------------------------
Throughput Volumes (Mcf per day)
   Gathering........................................        16,424          17,387          16,600           18,818
   Processing.......................................        15,190          15,439          17,145           15,558
Gross margin (in thousands).........................     $   1,034       $     597        $  2,986         $  1,492
   Gathering (per Mcf throughput)...................     $    0.17       $    0.11        $   0.17         $   0.14
   Processing (per Mcf throughput)..................          0.53            0.27            0.46             0.16
</TABLE>

                                       16
<PAGE>
     For the third  quarter  of 2000,  we  reported  net  income  of  $4,874,000
compared to net income of  $213,000  for the third  quarter of 1999.  Net income
applicable to common shares was  $3,874,000,  or $0.20 per share-basic and $0.15
per share-  diluted,  for the third  quarter of 2000.  For the third  quarter of
1999, we reported a net loss applicable to common shares of $1,028,000, or $0.05
per share basic and  diluted.  For the nine month period of 2000 we reported net
income of $9,982,000  versus a net loss of $7,089,000  for the nine month period
of 1999. Our net income applicable to common shares was $6,688,000, or $0.34 per
share-basic and $0.32 per  share-diluted  for the nine months of 2000,  versus a
net loss  applicable to common shares of  $10,380,000,  or $0.53 per share basic
and diluted  for the nine months of 1999.  The  improvements  in these  reported
results are due to the following factors:

Oil and Gas Operations:
----------------------

     PRODUCTION.  For the third quarter of 2000,  we reported oil  production of
294 Mbbls  (thousand  barrels) and gas  production of 4,779 Mmcf (million  cubic
feet),  which  represents  a  decline  of  17% in oil  and  7% in gas  from  the
comparable  quarter  in 1999.  This  decline  was  primarily  due to the sale of
certain  non-core  oil and gas  properties  which  took  effect in June 2000 and
September 2000.  Excluding the production of these properties from both periods,
our underlying  oil production  increased 3% to 294 Mbbls and our underlying gas
production  increased 7% to 4,595 Mmcf for the third quarter of 2000 compared to
the third quarter of 1999. These increases were the result of the success of our
drilling program offsetting normal production  declines.  For the nine months of
2000,  our reported  production  was 998 Mbbls of oil and 14,611 Mmcf of gas, an
increase of 7% and 2%,  respectively,  while our  underlying  production was 876
Mbbls of oil and 13,040 Mmcf of gas,  an  increase of 18% and 6%,  respectively.
These increases in reported and underlying  production can be attributed in part
to the  success  of our  drilling  programs  and in part to the  acquisition  of
properties from Vastar effective June 1999.

     PRICES.  The  increase  in  prices  received  for oil and gas was the  most
significant  factor  affecting  net  income  for both the three  and nine  month
periods  in 2000.  Prices  realized  during the third  quarter of 2000  averaged
$21.31  per  barrel  of oil and  $3.92  per Mcf of gas.  This  represents  a 57%
increase,  on a thousand cubic feet of gas equivalent  (Mcfe) basis,  over third
quarter of 1999  average  realized  prices of $15.86 per barrel of oil and $2.34
per Mcf of gas.  Average  realized  prices  during the first nine months of 2000
were  $22.07 per barrel of oil and $3.28 per Mcf of gas,  a 60%  increase  on an
Mcfe  basis  compared  to  $13.89  per  barrel  of oil and  $2.05 per Mcf of gas
realized during the 1999 period. The unit prices realized include the effects of
hedging.

     From time to time,  we enter into  various  hedging  contracts  in order to
reduce our exposure to the  possibility of declining oil and gas prices.  During
the third quarter of 2000, hedging reduced the average price we received for oil
by $8.90 per barrel and for gas by $0.35 per Mcf as compared to net decreases of
$3.35  per  barrel  and $0.18 per Mcf for the  third  quarter  of 1999.  Hedging
transactions  for the first nine months of 2000  reduced  the  average  price we
received for oil by $6.26 per barrel and for gas by $0.17 per Mcf as compared to
a net  decrease of $1.51 per barrel and a net  increase of $0.03 per Mcf for the
comparable 1999 period.

     During the third quarter of 2000, we had  approximately  19% of our natural
gas production and 94% of our oil  production  hedged.  For October 2000 we have
300,000 Mcf of gas hedged through  cost-less collars with a price range of $1.80
to $2.25 per Mcf.  Beginning  November 1, 2000 we have no natural gas hedges for
the remainder of 2000 or thereafter.  For the fourth quarter of 2000, the amount
of our oil hedged drops to approximately  43% of our current oil production at a
weighted  average price using cost-less  collars of $17.94 to $19.75 per barrel.
For the first six months of 2001 we have  approximately  81% of our  current oil
production hedged using cost-less collars with a weighted average price range of
$25.00 to $34.56 per barrel.

     OIL AND GAS REVENUES.  Primarily as a result of higher realized prices, oil
and gas revenues increased 42% to $24,995,000 compared to third quarter 1999 oil
and gas revenues of $17,575,000.  Oil and gas revenues for the first nine months
of 2000  increased  66% to  $69,954,000  as compared to  $42,263,000  during the
comparable 1999 period, also primarily because of an increase in realized prices
received.

                                       17
<PAGE>
     LEASE OPERATING EXPENSE.  We break out our lease operating expense into two
components,  lifting  costs and  production  tax and other costs.  For the third
quarter of 2000,  lifting costs, on a unit of production  basis,  were $0.53 per
Mcfe as  compared  to  $0.58  per Mcfe in the  comparable  period  of 1999.  The
decrease in lifting  costs per unit is  attributable  to the sale of  properties
with higher than average lifting costs as well as the addition  through drilling
of new gas production with lower than average lifting costs.  Production tax and
other  costs were $0.46 per Mcfe during the third  quarter of 2000 versus  $0.32
per Mcfe  during the  corresponding  period in 1999.  This  increase  was caused
primarily by higher  production  taxes and net profits  interest  expense due to
higher oil and gas prices. For the nine month period in 2000, lifting costs were
$0.60  per  Mcfe  versus  $0.56  per Mcfe for the  nine  month  period  in 1999,
primarily the result of the  acquisition of properties  with higher than average
lifting costs in June 1999.  Production  tax and other costs were $0.41 per Mcfe
for the nine months in 2000 versus $0.28 per Mcfe for the  corresponding  period
in 1999. The increase is attributable to higher  production  taxes,  net profits
interest expense and overhead charges.

     GROSS  MARGIN - OIL AND GAS.  We define  our gross  margin  for oil and gas
operations as oil and gas revenue less lease operating  expenses.  For the third
quarter of 2000, our gross margin was $18,535,000,  or $2.83 per Mcfe, on a unit
of  production  basis.  For the third  quarter  of 1999,  our gross  margin  was
$11,013,000,  or $1.53 per Mcfe.  For the nine month  period in 2000,  our gross
margin was  $49,127,000,  or $2.39 per Mcfe,  versus  $25,707,000,  or $1.29 per
Mcfe, for the comparable  period in 1999. In the case of both the three and nine
month  periods,  the principal  reason for the increase in our gross margin from
oil and gas operations  was the increase in the realized  prices for oil and gas
production.

Gas Gathering, Marketing and Processing Operations:
---------------------------------------------------

     THROUGHPUT  VOLUMES.  For the third quarter of 2000,  our gathering  system
throughput was 16,424 Mcf per day versus 17,387 Mcf per day for the same quarter
in 1999. This decline was due to normal production  declines behind the systems.
For the nine months in 2000,  gathering system throughput was 16,600 Mcf per day
versus  18,818 Mcf per day for the nine months of 1999.  This decline was partly
due to production  declines and partly due to the sale of a gathering  system in
June of 1999.  Gas  processing  throughput  was 15,190 Mcf per day for the third
quarter of 2000 versus 15,439 Mcf per day for the third quarter of 1999. For the
nine months in 2000,  gas  processing  throughput  was 17,145 Mcf per day versus
15,558 Mcf per day for the nine months in 1999.  The increase in throughput  for
the nine months in 1999 was the result of the acquisition of a processing  plant
in June of 1999.

     REVENUES.  For the third  quarter  of 2000,  revenues  from gas  gathering,
marketing and processing were $5,300,000 versus $2,039,000 for the third quarter
of  1999.  For the  nine  months  in  2000,  revenues  were  $13,544,000  versus
$5,516,000  for the nine months in 1999.  The increase in revenues for the third
quarter  and nine  month  period  in 2000 was  primarily  due to  higher  prices
received for plant products and residue gas and the plant acquisition  completed
in 1999.

     GROSS MARGIN.  The gross margin we realized from  gathering,  marketing and
processing for the third quarter of 2000 was $1,034,000  versus $597,000 for the
third quarter of 1999.  Gathering  margin was $0.17 per Mcf in 2000 versus $0.11
per Mcf in 1999 due to an increase in marketing  spreads.  Processing margin was
$0.53 per Mcf for the third  quarter of 2000  versus  $0.27 per Mcf for the same
quarter in 1999 due to higher prices for plant products.  For the nine months in
2000, gross margin was $2,986,000  versus $1,492,00 for the nine months in 1999.
Gathering  margin was $0.17 per Mcf and processing  margin was $0.46 per Mcf for
the nine months in 2000 versus  gathering margin of $0.14 per Mcf and processing
margin of $0.16 per Mcf for the 1999 period.  The  increase in these  margins in
2000 was due to greater marketing spreads and higher prices for plant products.

Oil Field Services:
------------------

     Revenues  from oil  field  services  for the  third  quarter  of 2000  were
$394,000  versus  $250,000 for the third quarter of 1999,  due to an increase in
operating  services  provided to third party  clients.  The gross margin for the
third  quarter of 2000 was $194,000  versus  $152,000  for the third  quarter of
1999. For the nine months of 2000,  revenues were $870,000  versus  $549,000 for
the  corresponding  period in 1999,  due to an increase in third party  clients.
Gross  margin for the nine  month  periods  of 2000 and 1999 were  $420,000  and
$315,000, respectively.

                                       18
<PAGE>
Total Operating Revenues:
-------------------------

     Our total operating revenues for the third quarter of 2000 were $30,689,000
versus  $19,864,000  for the third  quarter of 1999, an increase of 54%. For the
nine  months of 2000,  our total  operating  revenues  were  $84,368,000  versus
$48,328,000 for the  corresponding  period in 1999, an increase of 75%. For both
periods in 2000,  revenues were higher  primarily due to higher  realized prices
for oil, gas and plant products.

Other Income and Expenses:
--------------------------

     DEPRECIATION AND DEPLETION. For the third quarter of 2000, our depreciation
and depletion  expense was  $5,398,000,  or $0.83 per Mcfe of production  versus
$5,768,000,  or $0.80 per Mcfe of production  in the third quarter of 1999.  The
depletion  rate per Mcfe was  slightly  higher in the 2000 period due to capital
costs incurred on our Gulf of Mexico exploration  projects.  For the nine months
of 2000,  depreciation and depletion expense was $16,935,000,  or $0.82 per Mcfe
of production versus $16,383,000, or $0.82 per Mcfe for the nine months of 1999.

     GAIN ON SALE.  For the third quarter of 2000, we recorded a gain on sale of
assets of $4,000  versus a gain on sale of assets of  $228,000  for the  similar
period in 1999.  For the nine months of 2000 and 1999, we recorded gains on sale
of assets of $28,000 and $228,000, respectively.

     GENERAL AND ADMINISTRATIVE  EXPENSE. Our G&A expense was $1,125,000 for the
third quarter of 2000 versus $683,000 for the third quarter of 1999, an increase
of 65%.  This  increase  was due to higher  salary and  benefits,  office  rent,
franchise taxes and other costs.  Our employee  headcount grew 8% when comparing
the two periods.

     For the  nine  months  of  2000,  our G&A  expense  was  $3,396,000  versus
$2,015,000 for the  corresponding  period in 1999, an increase of 69% due to the
same reasons that affected the quarterly change.

     OPERATING  PROFIT.  Our operating  profit for the third quarter of 2000 was
$13,244,000  versus  $5,539,000  for the third  quarter of 1999,  an increase of
139%. For the nine months in 2000, our operating profit was $32,230,000 versus a
nine month operating profit of $9,344,000 in 1999, an increase of 245%.

     EQUITY IN EARNINGS OF AFFILIATE.  We recorded equity in affiliate  earnings
of $92,000  for the third  quarter of 2000 versus a loss of $3,000 for the third
quarter  of 1999.  For the nine  month  period in 2000,  we  recorded  equity in
earnings of affiliate of $362,000  versus a loss of $100,000 for the nine months
of 1999. In both periods of 2000, the increase was due to increased net earnings
from gas marketing profits of the affiliate.

     OTHER  INCOME.  Other  income was  $165,000  for the third  quarter of 2000
versus $53,000 for the third quarter of 1999. For the nine months in 2000, other
income was $394,000  versus  $341,000 for the nine months in 1999. In both cases
the increase was due to an increase in interest income.

     INTEREST  EXPENSE.  For the third  quarter of 2000,  interest  expense  was
$5,712,000 versus $5,377,000 for the same period in 1999, due to higher rates on
our  LIBOR-based  senior  bank credit  lines and the effect of an interest  rate
swap.  Our interest  expense for the nine month  period in 2000 was  $17,139,000
versus  $16,588,000 for the  corresponding  period in 1999. The reasons for this
increase are the same as for the quarterly periods.

     PROVISION FOR DEFERRED  INCOME TAXES. We provided for deferred income taxes
of  $2,915,000  on pretax  income of  $7,789,000  in the third  quarter of 2000,
versus no tax  provision  on pretax  income of $212,000 in the third  quarter of
1999. For the nine months in 2000, we made a provision for deferred income taxes
of $5,865,000 on pretax income of  $15,847,000.  For the nine months in 1999, we
did not provide any deferred tax benefits on a pretax loss of $7,003,000 because
of uncertainty at that time in our ability to realize additional tax benefits on
our net operating losses in the future.

                                       19
<PAGE>
     DIVIDENDS APPLICABLE TO PREFERRED STOCK. We paid $1,000,000 in dividends on
our preferred  stock during the third quarter of 2000 versus  $1,241,000  during
the third quarter of 1999.  The reduction is due to  Bluebird's  acquisition  of
100% ($10,000,000) of our 1996 Series A Convertible  preferred stock on June 30,
2000. For the nine month periods in 2000 and 1999, we paid  preferred  dividends
of $3,294,000 and $3,291,000, respectively.

Liquidity and Capital Resources
-------------------------------

     CASH  FLOW  AND  WORKING  CAPITAL.  Net cash  flow  provided  by  operating
activities  for the nine month period in 2000 was  $29,901,000  and for the nine
month period in 1999 was $8,491,000.  The substantial  increase in our operating
cash flows is primarily  the result of higher  realized oil and gas prices.  Our
net working capital position at September 30, 2000 was $1,925,000. On that date,
Magnum Hunter also had available  $18,500,000 under its senior bank credit line,
and Bluebird had $3,500,000 available under its senior bank credit line.

     CAPITAL  EXPENDITURES AND INVESTMENTS.  Net cash flow provided by investing
activities  was  $9,954,000  for the nine  month  period  in 2000.  We  realized
proceeds of $43,609,000 from the sale of non-core assets during the nine months,
of which  approximately  $11,893,000  was  attributable  to  Bluebird.  Both the
Company and Bluebird used these proceeds to repay senior bank  indebtedness.  We
made capital  expenditures  of  $31,569,000  under our capital budget during the
nine months,  of which  $10,051,000  is  attributable  to Bluebird.  Our capital
budget is discussed  further  below.  Additionally,  we made  investments in two
unconsolidated  affiliates  totaling  $2,090,000  and  advanced  funds  totaling
$1,002,000 under promissory notes receivable. We received payments on promissory
notes receivable totaling $1,006,000 during the nine months.

     FINANCING  ACTIVITIES.  Net cash  flow  used in  financing  activities  was
$40,151,000  for the nine  months of 2000.  We  borrowed a total of  $48,556,000
under our senior bank credit  lines of which  $11,500,000  was  attributable  to
Bluebird.   We  repaid   borrowings  under  our  senior  bank  credit  lines  by
$74,395,000,  of which  $15,800,000 was  attributable  to Bluebird.  We received
$310,000 from the exercise of employee stock  options.  We also paid $466,000 of
fees related to financing  activities,  of which  $175,000 was  attributable  to
Bluebird. Bluebird also spent $10,534,000 to acquire Magnum Hunter preferred and
common stock. Cash dividends paid were $3,657,000 in 2000.

     BLUEBIRD'S CAPITAL RESOURCES.  On May 23, 2000, Bluebird's commercial banks
agreed to allow it to acquire 100% of Magnum  Hunter's 1996 Series A convertible
preferred stock at liquidation value, or $10 million, and to purchase up to $500
thousand of Magnum Hunter's common stock. Effective July 1, 2000, the commercial
banks set Bluebird's  borrowing base under its senior credit line at $41 million
with provision to reduce the borrowing base to $38.5 million effective  November
4, 2000. The bank agreement also provides that Bluebird may either re-market the
1996  Series A  convertible  preferred  stock or raise  additional  equity  in a
substantially  similar  amount  by  December  1,  2000.  Bluebird  is  currently
exploring  various ways to meet these financial  conditions or alternatives that
will be  satisfactory to all parties.  Additionally,  we believe that Bluebird's
commercial  banks will be willing to reestablish  its borrowing base to at least
the $41 million level based on reserve estimates as of June 30, 2000 provided by
Bluebird's  third party  engineering  consultants.  As of  September  30,  2000,
Bluebird's  borrowings  under the  senior  credit  line were $37.5  million.  We
believe  that this  bank  credit  line,  along  with cash flow from  operations,
provides Bluebird with sufficient liquidity to meet interest payments as well as
carry out its capital  spending  budget plans  through the remainder of 2000 and
through 2001.

     MAGNUM HUNTER'S CAPITAL RESOURCES. Our borrowing base under our senior bank
credit line was $50 million at September 30, 2000 and our borrowings  under this
line were $31.5  million  on that date.  On  October  17,  2000 ONEOK  Resources
Company  exercised  100% of their public warrant  shares  (3,174,600  shares) of
Magnum Hunter at an exercise price of $6.50 per share, resulting in net proceeds
to us of $20.6 million. This increased their ownership interest in Magnum Hunter
to approximately 38%. In addition,  another company exercised 450,000 restricted
common stock purchase  warrants of Magnum Hunter resulting in net proceeds to us
of $2.4  million.  We used the proceeds  from these two equity  transactions  to
reduce our borrowing  under our senior bank credit line. On October 26, 2000, we
announced the  redemption of all remaining  outstanding  public  warrants on the
redemption date of December 5, 2000. There are presently  outstanding a total of
7,337,550  warrants,  each  exercisable  for the purchase of one share of common
stock at

                                       20
<PAGE>
     the  exercise  price  of  $6.50  per  share.  If all of  the  warrants  are
exercised,  we would realize net proceeds of approximately $47.7 million.  Under
an agreement we made with ONEOK  Resources  Company,  we promised to utilize the
first proceeds received from the exercise of any public warrants to redeem up to
25,000 shares, or 50%, of our 1999 Series A 8% convertible preferred stock owned
by ONEOK. If all 25,000 shares were redeemed,  we would pay ONEOK  approximately
$30.5  million,  which  includes  a  redemption  premium  of $5.5  million.  The
redemption premium would be treated as a dividend paid on preferred stock during
the fourth quarter of 2000. The net cash proceeds after  exercising the warrants
and redeeming the preferred stock would be used to further reduce our borrowings
under our senior bank credit line.

     BUDGETED CAPITAL EXPENDITURES AND LONG-TERM  FINANCING.  For the year 2000,
we have increased our capital  expenditure  budget to approximately  $65 million
from  the  previously  reported  $45  million  level.  The new  budget  includes
approximately  $41  million for  participation  in  exploration  projects in the
shallow  water  area of the  Gulf of  Mexico.  Most of the risk  capital  on the
offshore  program has already been  expended  earlier in the year and the larger
budget is specifically  dedicated for completion of wells and the fabrication of
production  platform  facilities  for  the  Gulf  of  Mexico.  We are  currently
evaluating a capital  expenditures  budget for 2001.  Based upon our anticipated
production  levels and oil and gas  prices,  we believe  that our cash flow from
operations,  existing  working  capital and  availability  under our senior bank
credit  lines  will be  sufficient  to meet  interest  payments  and to fund the
current and expected capital expenditures budgets for 2000 and 2001.

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

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

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

                                       21
<PAGE>
                          PART II -- OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K
<TABLE>
<CAPTION>
<S>               <C>
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

                                       22
<PAGE>
                  reference to Form 8-K dated December 26, 1996, filed January 3, 1997)
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)
10.13             Agreement of Limited Partnership of Mallard Hunter, L.P., dated May 23, 2000 (Incorporated by reference to
                  Form 10-Q/A for the period ended June 30, 2000, filed November 30, 2000)
27*               Financial Data Schedule
</TABLE>

* Filed herewith.

(B) Form 8-K's - None

                                       23
<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                                         March 29, 2001
  ------------------------------------------
      Gary C. Evans
      President and Chief Executive Officer


By /s/ Chris Tong                                            March 29, 2001
  ------------------------------------------
     Sr. Vice President and
     Chief Financial Officer


By  /s/ David S. Krueger                                     March 29, 2001
    ----------------------------------------
      David S. Krueger
      Vice President and
      Chief Accounting Officer


By /s/ Morgan F. Johnston                                    March 29, 2001
   -----------------------------------------
      Morgan F. Johnston
      Vice President,  General Counsel and
      Secretary


                                       24