<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C. 20549

================================================================================
                            
                                   FORM 10-Q

              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

         For the Quarter Ended                  Commission File Number
          March 31, 1999                               0-23431


                          MILLER EXPLORATION COMPANY
            (Exact Name of Registrant as Specified in Its Charter)

         Delaware                                   38-3379776
(State or Other Jurisdiction of                 (I.R.S. Employer
Incorporation or Organization)                  Identification No.)

     3104 Logan Valley Road
      Traverse City, Michigan                       49685-0348
(Address of Principal Executive Offices)            (Zip Code)

      Registrant's Telephone Number, Including Area Code:  (616) 941-0004

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

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

                                         Outstanding at
               Class                      May 14, 1999
               -----                      ------------

      Common stock, $.01 par value       12,614,874 shares

================================================================================
<PAGE>
 
                          MILLER EXPLORATION COMPANY

                               TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                Page No.
                                                                                                --------

PART I.  FINANCIAL INFORMATION
 
<S>                                                                                               <C>
Item 1.  Financial Statements.......................................................................   3
 
         Consolidated Statements of Operations--
         Three Months Ended March 31, 1999 and 1998.................................................   3
 
         Consolidated Balance Sheets--
         March 31, 1999 and December 31, 1998.......................................................   4
 
         Consolidated Statement of Equity--
         Three Months Ended March 31, 1999..........................................................   5
 
         Consolidated Statements of Cash Flows--
         Three Months Ended March 31, 1999 and 1998.................................................   6
 
         Notes to Consolidated Financial Statements.................................................   7
 
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations......  14
 
PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings..........................................................................  22

Item 6.  Exhibits and Reports on Form 8-K...........................................................  22
</TABLE> 

                                       2
<PAGE>
 
PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

                          MILLER EXPLORATION COMPANY
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                   (In thousands, except per share amounts)
                                  (Unaudited)
<TABLE>
<CAPTION>
 
                                                    For the Three Months
                                                      Ended March  31,
                                                   ----------------------
                                                      1999        1998
                                                   ----------  ----------
<S>                                                <C>         <C>
REVENUES:
  Natural gas....................................     $4,119     $ 3,575
  Crude oil and condensate.......................        716         453
  Other operating revenues.......................        145         208
                                                      ------     -------
  Total operating revenues.......................      4,980       4,236
                                                      ------     -------
 
OPERATING EXPENSES:
  Lease operating expenses and production taxes..        602         647
  Depreciation, depletion and amortization.......      3,392       2,501
  General and administrative.....................        878       1,049
                                                      ------     -------
     Total operating expenses....................      4,872       4,197
                                                      ------     -------
 
OPERATING INCOME.................................        108          39
                                                      ------     -------
 
INTEREST EXPENSE.................................       (594)       (236)
                                                      ------     -------
 
LOSS BEFORE INCOME TAXES.........................       (486)       (197)
                                                      ------     -------
 
INCOME TAX PROVISION (CREDIT) (Note 2)...........       (198)      5,384
                                                      ------     -------
 
NET LOSS.........................................     $ (288)    $(5,581)
                                                      ======     =======
 
EARNINGS (LOSS) PER SHARE (Note 3)...............
  Basic..........................................     $(0.02)     $(0.79)
                                                      ======     =======
  Diluted........................................     $(0.02)     $(0.79)
                                                      ======     =======
</TABLE>
  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       3
<PAGE>
 
                          MILLER EXPLORATION COMPANY
                          CONSOLIDATED BALANCE SHEETS
                     (In thousands, except share amounts)
<TABLE>
<CAPTION>
 
                                                                   As of March 31,   As of December 31,
                                                                         1999               1998
                                                                   ----------------  -------------------
                                                                     (Unaudited)
<S>                                                                <C>               <C>
                           ASSETS
                           ------
CURRENT ASSETS:
 Cash and cash equivalents.......................................         $    769             $     22
 Accounts receivable.............................................            3,416                3,959
 Inventories, prepaids and advances to operators.................              646                  978
                                                                          --------             --------
  Total current assets...........................................            4,831                4,959
                                                                          --------             --------
 
OIL AND GAS PROPERTIES--at cost (full cost method):
 Proved oil and gas properties...................................          108,717              103,272
 Unproved oil and gas properties.................................           38,942               39,995
 Less-Accumulated depreciation, depletion and amortization.......          (66,577)             (63,253)
                                                                          --------             --------
  Net oil and gas properties.....................................           81,082               80,014
                                                                          --------             --------
 
OTHER ASSETS.....................................................              739                  995
                                                                          --------             --------
  Total assets...................................................         $ 86,652             $ 85,968
                                                                          ========             ========
 
                   LIABILITIES AND EQUITY
                   ----------------------
   
CURRENT LIABILITIES:
 Current portion of long-term debt...............................         $ 11,000             $ 10,500
 Accounts payable................................................            4,455                6,819
 Accrued expenses and other current liabilities..................            4,804                3,565
                                                                          --------             --------
  Total current liabilities......................................           20,259               20,884
                                                                          --------             --------
 
LONG-TERM DEBT...................................................           33,327               31,837
 
DEFERRED INCOME TAXES............................................            6,734                6,883
 
DEFERRED REVENUE.................................................            1,609                1,615
 
COMMITMENTS AND CONTINGENCIES (NOTE 6)
 
EQUITY:
 Preferred stock, $0.01 par value; 2,000,000 shares authorized;
  none outstanding...............................................               --                   --
 Common stock, $0.01 par value; 20,000,000 shares
  authorized; 12,614,874 shares and 12,492,597 shares
  outstanding at March 31, 1999 and December 31, 1998,
  respectively...................................................              126                  126
 Additional paid in capital......................................           66,689               67,136
 Deferred compensation...........................................             (167)                (876)
 Retained deficit................................................          (41,925)             (41,637)
                                                                          --------             --------
  Total equity...................................................           24,723               24,749
                                                                          --------             --------
  Total liabilities and equity...................................         $ 86,652             $ 85,968
                                                                          ========             ========
</TABLE>
     The accompanying notes are an integral part of these consolidated financial
statements.
                                       4
<PAGE>
 
                          MILLER EXPLORATION COMPANY
                       CONSOLIDATED STATEMENT OF EQUITY
                                (In thousands)
                                  (Unaudited)
<TABLE>
<CAPTION>
 
                                                   Additional
                                  PreferredCommon    Paid In      Deferred     Retained
                                   Stock   Stock     Capital    Compensation    Deficit
                                  -------  ------  -----------  -------------  ---------
<S>                               <C>      <C>     <C>          <C>            <C>
 
BALANCE-December 31, 1998         $    --    $126     $67,136          $(876)  $(41,637)
 
  Issuance of restricted stock
     and benefit plan shares           --      --        (447)           709         --
  Net loss                             --      --          --             --       (288)
                                  -------  ------     -------          -----   --------
 
BALANCE-March 31, 1999            $    --    $126     $66,689          $(167)  $(41,925)
                                  =======  ======     =======          =====   ========
</TABLE>
  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       5
<PAGE>
 
                          MILLER EXPLORATION COMPANY
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (In thousands)
                                  (Unaudited)
<TABLE>
<CAPTION>
 
                                                                For the Three Months Ended
                                                                          March 31,
                                                                   ---------------------
                                                                    1999         1998
                                                                   ------        -----         
<S>                                                             <C>             <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss.......................................................  $  (288)     $ (5,581)
 Adjustments to reconcile net loss to net cash from
  operating activities--
   Depreciation, depletion and amortization.....................    3,392         2,501
   Deferred income taxes........................................     (149)           (8)
   Deferred revenue.............................................       (6)          (13)
   Changes in assets and liabilities--
    Accounts receivable.........................................      543        (1,954)
    Other assets................................................      534         3,214
    Accounts payable............................................   (2,364)        4,561
    Accrued expenses and other current liabilities..............    1,239           144
                                                                  -------       -------
     Net cash flows provided by operating activities............    2,901         2,864
                                                                  -------       -------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Exploration and development expenditures.......................   (5,607)       (7,701)
 Acquisition of properties......................................       --       (51,271)
 Proceeds from sale of oil and gas properties and purchases of
  equipment, net................................................    1,201           507
                                                                  -------      --------
    Net cash flows used in investing activities.................   (4,406)      (58,465)
                                                                  -------      --------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Payments of principal..........................................     (500)       (8,178)
 Borrowing on long-term debt....................................    2,490        20,500
 Contributions, return of capital and stock proceeds, net.......      262        45,604
                                                                  -------      --------
    Net cash flows provided by financing activities.............    2,252        57,926
                                                                  -------      --------
NET INCREASE IN CASH AND CASH EQUIVALENTS.......................      747         2,325
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE
 PERIOD.........................................................       22           146
                                                                  -------      --------
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD..................  $   769      $  2,471
                                                                  =======      ========
SUPPLEMENTAL CASH FLOW INFORMATION:
 Cash paid during the period for--
  Interest......................................................  $   641      $    203
                                                                  =======      ========
</TABLE>
  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       6
<PAGE>
 
                          MILLER EXPLORATION COMPANY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

(1)  Organization and Nature of Operations

     The consolidated financial statements of Miller Exploration Company (the
"Company") and subsidiary included herein have been prepared by management
without audit pursuant to the rules and regulations of the Securities and
Exchange Commission (the "SEC").  Accordingly, they reflect all adjustments
which are, in the opinion of management, necessary for a fair presentation of
the financial results for the interim periods.  Certain information and notes
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations.  However, management believes that the disclosures are
adequate to make the information presented not misleading.  These consolidated
financial statements should be read in conjunction with the financial statements
and the notes thereto included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1998.

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.  Actual results could differ from those estimates.

     Principles of Consolidation

     The consolidated financial statements of the Company include the accounts
of the Company and its subsidiary after elimination of all intercompany accounts
and transactions.

     The Combination Transaction

     The Company was formed as a Delaware corporation in November 1997 to serve
as the surviving company upon the completion of a series of combination
transactions (the "Combination Transaction").  The first part of the Combination
Transaction included the following activities:  the Company acquired all of the
outstanding capital stock of Miller Oil Corporation ("MOC"), the Company's
predecessor, and certain oil and gas interests (collectively, the "Combined
Assets") owned by Miller & Miller, Inc., Double Diamond Enterprises, Inc.,
Frontier Investments, Inc., Oak Shores Investments, Inc., Eagle Investments,
Inc. (d/b/a Victory, Inc.) and Eagle International, Inc. (the "affiliated
entities," all Michigan corporations owned by Miller family members who were
beneficial owners of MOC) in exchange for an aggregate consideration of
approximately 5.3 million shares of Common Stock of the Company.  The operations
of all of these entities had been managed through the same management team, and
had been owned by the same members of the Miller family. The Company completed
the Combination Transaction concurrently with consummation of the Company's
initial public offering (the "Offering").

     Initial Public Offering

     On February 9, 1998, the Company completed the Offering of its Common Stock
and concurrently completed the Combination Transaction.  On that date, the
Company sold 5.5 million shares of its Common Stock for an aggregate purchase
price of $44.0 million.  On March 9, 1998, the Company sold an additional 62,500
shares of its Common Stock for an aggregate purchase price of $0.5 million,
pursuant to the exercise of the underwriters' over-allotment option.

                                       7
<PAGE>
 
                          MILLER EXPLORATION COMPANY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


(1)  Organization and Nature of Operations (Continued)

     Other Transactions Completed Concurrently With the Offering

     In addition to the above described activities of the Company, the second
part of the Combination Transaction (consummated concurrently with the Offering)
was the exchange by the Company of an aggregate of approximately 1.6 million
shares of Common Stock for interests in certain other oil and gas properties
that were owned by non-affiliated parties. Because these interests were acquired
from individuals who were not under the common ownership and management of the
Company, these exchanges were accounted for under the purchase method of
accounting. Under that method, the properties were recorded at their estimated
fair value at the date on which the exchange was consummated (February 9, 1998).

     In November 1997, the Company entered into a Purchase and Sale Agreement
whereby the Company acquired interests in certain crude oil and natural gas
producing properties and undeveloped properties from Amerada Hess Corporation
("AHC") for approximately $48.8 million, net of post-closing adjustments.  This
purchase was consummated concurrently with the Offering. This acquisition was
accounted for under the purchase method of accounting and was financed with the
use of proceeds from the Offering and with new bank borrowings.

     In February 1998, MOC terminated its S corporation status which required
the Company to reclassify combined equity and retained earnings as additional
paid-in capital.

     Nature of Operations

     The Company is a domestic, independent energy company engaged in the
exploration, development and production of crude oil and natural gas. The
Company has established exploration efforts concentrated primarily in four
regions: the Mississippi Salt Basin of central Mississippi; the onshore Gulf
Coast region of Texas and Louisiana; the Blackfeet Indian Reservation of the
southern Alberta Basin in Montana; and the Michigan Basin.

     Oil and Gas Properties

     Securities and Exchange Commission Regulation S-X, Rule 4-10 requires
companies reporting on a full cost basis to apply a ceiling test wherein the
capitalized costs within the full cost pool may not exceed the net present value
of the Company's proven oil and gas reserves plus the lower of cost or market of
unproved properties.  Any such excess costs should be charged against earnings.
Using unescalated period-end prices at March 31, 1999, the Company would have
recognized a non-cash cost ceiling write-down of oil and gas properties of
approximately $2.8 million.  However, based upon the improvements in oil and gas
pricing experienced subsequent to period-end, the Company has determined that a
write-down is not required.

     Reclassifications

     Certain reclassifications have been made to prior period statements to
conform with the March 31, 1999 presentation.

                                       8
<PAGE>
 
                          MILLER EXPLORATION COMPANY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)



(2)  Income Taxes

     Before consummation of the Offering, the Company and the combined entities
either elected to be treated as S corporations under the Internal Revenue Code
of 1986, as amended, or were otherwise not taxed as entities for federal income
tax purposes. The taxable income or loss has therefore been allocated to the
equity owners of the Company and the affiliated entities.

     Due to the use of different methods for tax and financial reporting
purposes in accounting for various transactions, the Company has temporary
differences between its tax basis and financial reporting basis. Had the Company
been a taxpaying entity before consummation of the Offering, a deferred tax
liability of approximately $5.4 million would have been recorded for this
difference, with a corresponding reduction in retained earnings.  Therefore,
included in the deferred income tax provision for the three months ended March
31, 1998, is a one-time non-cash accounting charge of $5.4 million to record net
deferred tax liabilities upon consummation of the Offering and the termination
of MOC's S corporation status.


(3)  Earnings Per Share

     The computation of earnings (loss) per share for the three-month periods
ended March 31, 1999 and 1998 are as follows (in thousands, except per share
data):
<TABLE>
<CAPTION>
 
                                                                 1999      1998
                                                               --------  ---------
<S>                                                            <C>       <C>
  Net loss attributable to
     basic and diluted EPS...................................  $  (288)   $(5,581)
 
  Average common shares outstanding
     applicable to basic EPS.................................   12,553      7,079
  Add:  stock options, treasury shares and restricted stock..       --         --
                                                               -------    -------
  Average common shares outstanding
     applicable to diluted EPS...............................   12,553      7,079
 
  Earnings (loss) per share:
     Basic...................................................  $ (0.02)   $ (0.79)
     Diluted.................................................  $ (0.02)   $ (0.79)
</TABLE>

     Options and restricted stock were not included in the computation of
diluted earnings per share for the three months ended March 31, 1999 and 1998
because their effect was antidilutive.

                                       9
<PAGE>
 
                          MILLER EXPLORATION COMPANY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

(4)  Long-Term Debt

     The Company has entered into a credit facility (the "Credit Facility") with
Bank of Montreal, Houston Agency ("BMO").  The Credit Facility consists of a
three-year revolving line of credit that converts to a three-year term loan. The
amount of credit available during the revolving period and the debt allowed
during the term period may not exceed the Company's "borrowing base," or the
amount of debt that BMO and the other lenders under the Credit Facility agree
can be supported by the cash flow generated by the Company's producing and non-
producing proved oil and gas reserves. The borrowing base may not exceed $75.0
million. Amounts advanced under the Credit Facility initially bore interest,
payable quarterly, at either (i) BMO's announced prime rate or (ii) the London
Inter-Bank Offered Rate plus a margin rate ranging from 0.75% to 1.62%, as
selected by the Company. In addition, the Company is assessed a commitment fee
equal to 0.375% of the unused portion of the borrowing base, payable quarterly
in arrears, until the termination of the revolving period. At the termination of
the revolving period, the revolving line of credit will convert to a three-year
term loan with principal payable in 12 equal quarterly installments. The Credit
Facility includes certain negative covenants that impose limitations on the
Company and its subsidiaries with respect to, among other things, distributions
with respect to its capital stock, limitations on financial ratios, the creation
or incurrence of liens, the incurrence of additional indebtedness, making loans
and investments and mergers and consolidations. The obligations of the Company
under the Credit Facility are secured by a lien on all real and personal
property of the Company.  At March 31, 1999, $37.0 million was outstanding under
the Credit Facility.

     As a result of a decrease in estimated proved oil and gas reserves at
December 31, 1998, BMO notified the Company that the Company's borrowing base
was in noncompliance and certain principal obligations were being accelerated
during 1999.  Additionally, the Company was in violation of certain negative
covenants under the Credit Facility, primarily as a result of the non-cash cost
ceiling write-down at December 31, 1998.

     On April 14, 1999, the Company and BMO entered into the Second Amendment to
the Credit Facility which includes:  (i) terms requiring the Company to make
principal payments to BMO of $3.0 million by May 1, 1999, $3.0 million by May
31, 1999 and $1.0 million by the first of each month during the period July
through October 1999, inclusive; (ii) terms requiring that all outstanding
borrowings bear interest at the prime rate plus 3.5%; (iii) a waiver of all
negative covenant violations until October 15, 1999 (the "re-determination
date"); (iv) revised negative covenant provisions which take effect on the re-
determination date; (v) a requirement to submit a revised reserve report to BMO
by October 1, 1999 for a re-determination of the borrowing base; (vi) a
requirement that all proceeds from the sales of oil and gas properties,
additional debt financings or equity offerings, prior to the re-determination
date, must be used to reduce the principal amount outstanding under the Credit
Facility; and (vii) a requirement for a $300,000 amendment fee payable to BMO at
the re-determination date.  At the re-determination date, the Company will be
required to make additional payments of principal to the extent its outstanding
borrowings exceed the borrowing base.  The May 1, 1999 principal payment
obligation was satisfied with the $3.1 million in proceeds from the sale of
certain non-strategic proved and unproved oil and gas properties.  To fulfill
the May 31, 1999 principal obligation, management plans to sell certain
additional non-strategic oil and gas property interests to business partners,
investors and affiliated entities.  All other principal and interest obligations
are expected to be fulfilled through available cash flows, additional property
sales or other financing sources, including the possible issuance of additional
equity securities as well as identifying alternative sources for debt financing.

                                      10
<PAGE>
 
                           MILLER EXPLORATION COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

(5)  Risk Management Activities and Derivative Transactions (Continued)

     Commodity Price Hedges

     The Company periodically enters into certain derivatives (e.g., NYMEX
futures contracts) for a portion of its natural gas production to achieve a more
predictable cash flow, as well as to reduce the exposure to price fluctuations.
The Company's hedging arrangements apply only to a portion of its production,
provide only partial price protection against volatility in natural gas prices
and limit potential gains from future increases in prices.  Such hedging
arrangements may expose the Company to risk of financial loss in certain
circumstances, including instances where production is less than expected, the
Company's customers fail to purchase contracted quantities of oil or natural gas
or a sudden unexpected event materially impacts oil or natural gas prices.  For
financial reporting purposes, gains and losses related to hedging are recognized
as income when the hedged transaction occurs.  The Company expects that the
amount of hedge contracts that it has in place will vary from time to time.  For
the three months ended March 31, 1999 and 1998, the Company realized
approximately $384,000 and $(14,000), respectively, of hedging gains (losses)
which are included in natural gas revenues in the consolidated statements of
operations.  For the three months ended March 31, 1999 and 1998, the Company had
hedged 37% and 6%, respectively, of its natural gas production, and as of March
31, 1999 the Company had 0.4 Bcf of open natural gas contracts for the months of
April 1999 to June 1999.  Subsequent to March 31, 1999, the Company entered into
additional natural gas contracts for approximately 1.7 Bcf for the time period
of May 1999 to October 1999 ranging in price from $2.22 to $2.32 per Mcf.  Open
contracts totaling 0.3 Bcf have been settled subsequent to March 31, 1999,
resulting in hedge losses of approximately $74,000.

     Interest Rate Hedge

     The Company entered into an interest rate swap agreement, effective
November 2, 1998, to exchange the variable rate interest payment obligation
under the Credit Facility without exchanging the underlying principal amount.
This agreement converts the variable rate debt to fixed rate debt to reduce the
impact of interest rate fluctuations.  The notional amount is used to measure
interest to be paid or received and does not represent the exposure to credit
loss.  The difference between the amounts paid and received under the swap is
accrued and recorded as an adjustment to interest expense over the life of the
hedged agreement, which was to expire February 9, 2001.  During March 1999, the
Company terminated its interest rate swap agreement and received $0.3 million,
which will be recognized in earnings ratably as the related outstanding loan
balance is amortized.

                                      11
<PAGE>
 
                          MILLER EXPLORATION COMPANY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

(6)  Commitments and Contingencies

     Stock Options and Restricted Stock

     Upon consummation of the Offering, 109,500 shares of restricted stock were
granted to certain employees.  The restricted stock will begin to vest at
cumulative increments of one-half of the total number of restricted stock of
Common Stock subject thereto, beginning on the first anniversary of the date of
grant. Because the shares of restricted stock are subject to the risk of
forfeiture during the vesting period, compensation expense will be recognized
ratably over the two-year vesting period as the risk of forfeiture passes.  In
February 1999, compensation expense of $0.2 million was recorded by the Company
as certain restricted shares became vested.  At March 31, 1999, the compensation
expense on the stock shares to be vested in February 2000, has been deferred
based on the market value of the shares at March 31, 1999.

     Other

     In the normal course of business, the Company may be a party to certain
lawsuits and administrative proceedings. Management cannot predict the ultimate
outcome of any pending or threatened litigation or of actual or possible claims;
however, management believes resulting liabilities, if any, will not have a
material adverse impact upon the Company's financial position or results of
operations.

(7)  Related Party Transactions

     In March 1999, an affiliated entity purchased a working interest in certain
unproved oil and gas properties from the Company for $1.0 million.   The Company
believes that the purchase price is representative of the fair market value of
the interest being sold, and that the terms are consistent with those available
to unrelated parties.  Additionally, this affiliated entity has signed an
agreement to purchase up to a maximum of $6.0 million of the Company's proved
and unproved properties prior to May 31, 1999.

(8)  Non-Cash Activities

     During 1998, the Company recorded a one-time non-cash charge of
approximately $5.4 million for the termination of MOC's S corporation status, as
more fully discussed in Note 2, and acquired certain oil and gas properties
owned by non-affiliated parties for approximately $12.8 million of its Common
Stock, as more fully discussed in Note 1.  These non-cash activities have been
excluded from the consolidated statement of cash flows.

                                      12
<PAGE>
 
Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

Overview

     The Company  is an independent oil and gas exploration, development and
production company that has developed a base of producing properties and
inventory of prospects in Mississippi, Louisiana, Texas, Michigan, Montana and
North Dakota.

     The Company was organized in connection with the Combination Transaction.
The Combined Assets consist of MOC, interests in oil and natural gas properties
from the affiliated entities and interests in such properties owned by certain
business partners and investors, including AHC, Dan A. Hughes, Jr. and SASI
Minerals Company.  No assets other than those in which MOC or the affiliated
entities had an interest were part of the Combined Assets.  The Company and the
owners of the Combined Assets entered into separate agreements that provided for
the issuance of approximately 6.9 million shares of the Company's Common Stock
and the payment of $48.8 million (net of post-closing adjustments) in cash to
certain participants in the Combination Transaction in exchange for the Combined
Assets.  The issuance of the shares and the cash payment were completed upon
consummation of the Company's Offering.
 
     The Combination Transaction closed on February 9, 1998, in connection with
the closing of the Offering.  The Offering, including the sale of additional
shares from the underwriters' over-allotment, resulted in net proceeds to the
Company of approximately $40.4 million after expenses.
 
     For further discussion of the Offering and the Combination Transaction, see
Note 1 to the Consolidated Financial Statements.

     The Company uses the full cost method of accounting for its oil and natural
gas properties.  Under this method, all acquisition, exploration and development
costs, including any general and administrative costs that are directly
attributable to the Company's acquisition, exploration and development
activities, are capitalized in a "full cost pool" as incurred.  Additionally,
proceeds from the sale of oil and gas properties are applied to reduce the costs
in the full cost pool.  The Company records depletion of its full cost pool
using the unit-of-production method.

     Securities and Exchange Commission ("SEC") Regulation S-X, Rule 4-10
requires companies reporting on a full cost basis to apply a ceiling test
wherein the capitalized costs within the full cost pool may not exceed the net
present value of the Company's proven oil and gas reserves plus the lower of
cost or market of unproved properties.  Any such excess costs should be charged
against earnings.  Using unescalated period-end prices at March 31, 1999, the
Company would have recognized a non-cash cost ceiling write-down of oil and gas
properties of approximately $2.8 million.  However, using the improvements in
pricing experienced subsequent to period-end, the Company has determined that a
write-down is not required.
                                      13
<PAGE>
 


   Management's Discussion and Analysis of Financial Condition and Results of
                             Operations (Continued)

Results of Operations

     The following table summarizes production volumes, average sales prices and
average costs for the Company's oil and natural gas operations for the periods
presented (in thousands, except per unit amounts):
<TABLE>
<CAPTION>
                                                    Three Months Ended March 31,
                                                    ----------------------------
                                                        1999           1998
                                                    -------------  -------------
<S>                                                 <C>            <C>
Production volumes:
   Crude oil and condensate (MBbls)                          77.0           35.0
   Natural gas (MMcf)                                     2,054.9        1,835.0
   Natural gas equivalent (MMcfe)                         2,516.9        2,045.0
 
Average sales prices:
   Crude oil and condensate ($ per Bbl)                  $   9.30       $  12.94
   Natural gas ($ per Mcf)                                   2.00           1.95
   Natural gas equivalent ($ per Mcfe)                       1.92           1.97
 
Average Costs ($ per Mcfe):
   Lease operating expenses and production taxes         $   0.24       $   0.32
   Depletion, depreciation and amortization                  1.35           1.22
   General and administrative                                0.35           0.51
</TABLE>

     Three Months Ended March 31, 1999 compared to Three Months Ended March 31,
1998


     Oil and natural gas revenues for the three months ended March 31, 1999
increased 20% to $4.8 million from $4.0 million for the comparable period in the
prior year.  The revenues for the three months ended March 31, 1999 and 1998
include approximately $384,000 and $(14,000) of hedging gains (losses),
respectively (see "Risk Management Activities and Derivative Transactions"
below).  Production volumes for natural gas during the three months ended March
31, 1999 increased 12% to 2,054.9 MMcf from 1,835.0 MMcf for the comparable
period in the prior year.  Average natural gas prices increased 3% to $2.00 per
Mcf for the three months ended March 31, 1999 from $1.95 per Mcf for the
comparable period in the prior year. Production volumes for oil during the three
months ended March 31, 1999 increased 120% to 77.0 MBbls from 35.0 MBbls for the
comparable period in the prior year.  Average oil prices decreased 28% to $9.30
per barrel during the three months ended March 31, 1999 from $12.94 per barrel
in the comparable period in the prior year.  Despite strong increases in
production, the oil and gas industry is continuing to suffer through a period of
historically low oil prices that commenced in mid-1998.  A global influx of
crude oil supply brought on by increased Middle-East exports combined with a
weaker demand from Asian markets that were experiencing an economic recession
are the primary causes for the oil price collapse.  The natural gas market also
was depressed as a result of abnormally mild winters caused by a strong El Nino
weather pattern that affected the United States during the past two heating
seasons; however, hedging gains of $384,000 helped to mitigate the effect of the
downward pressure on gas prices during the current period ended March 31, 1999.

     Lease operating expenses and production taxes for the three months ended
March 31, 1999 decreased 7% to $0.60 million from $0.65 million for the
comparable period in the prior year.  Lease operating expenses and production
taxes decreased primarily due to cost containment measures and increased
efficiency in the Company-operated Mississippi field operations.

                                      14
<PAGE>
 
  Management's Discussion and Analysis of Financial Condition and Results of
                            Operations (Continued)

     Depreciation, depletion and amortization ("DD&A") expense for the three
months ended March 31, 1999 increased 36% to $3.4 million from $2.5 million for
the comparable period in the prior year.  The higher depletion rate was the
combined result of increased production, an increase in costs subject to DD&A
and a downward revision in estimated proved oil and gas reserves.

     General and administrative expense for the three months ended March 31,
1999 decreased 16% to $0.9 million from $1.1 million for the comparable period
in the prior year.   The prior period includes $0.3 million of non-recurring
bonuses paid to certain employees of the Company in connection with the
Offering, while the March 31, 1999 period includes approximately $0.2 million of
compensation expense on vested restricted stock that was issued.

     On March 18, 1999, the Company's board of directors approved a general and
administrative cost reduction plan for 1999.  The plan calls for an overall
reduction in general and administrative costs from 1998 of approximately 20%.
Cost reductions will be implemented in several areas, however, the largest cost
reductions will be in the area of salaries and benefits which constitute
approximately 60% of the anticipated total general and administrative reductions
for 1999.  The applicable salary reductions took effect in May 1999.
Additionally, directors have agreed to waive director fees for 1999.

     Interest expense for the three months ended March 31, 1999 increased 152%
to $0.6 million from $0.2 million for the comparable period in the prior year,
as a result of increased debt levels during 1998 and into 1999 associated with
substantial exploration and development activities in the Mississippi Salt Basin
area.

     Net loss for the three months ended March 31, 1999 decreased to $0.3
million from $5.6 million for the comparable period in the prior year, as a
result of the factors described above, plus the three months ended March 31,
1998 include a one-time non-cash charge to earnings of $5.4 million in
connection with the termination of MOC's S corporation status.

Liquidity and Capital Resources

     Historically, the Company's primary sources of capital have been funds
generated by operations, capital contributions and borrowings.

     The Company has entered into a credit facility (the "Credit Facility") with
Bank of Montreal, Houston Agency ("BMO"). The Credit Facility consists of a
three-year revolving line of credit that converts to a three-year term loan.
The amount of credit available during the revolving period and the debt allowed
during the term period may not exceed the Company's "borrowing base," or the
amount of debt that BMO and the other lenders under the Credit Facility agree
can be supported by the cash flow generated by the Company's producing and non-
producing proved oil and natural gas reserves.  The borrowing base may not
exceed $75.0 million.  Amounts advanced under the Credit Facility initially bore
interest, payable quarterly, at either (i) BMO's announced prime rate or (ii)
the London Inter-Bank Offered Rate plus a margin rate ranging from 0.75% to
1.62%, as selected by the Company.  In addition, the Company is assessed a
commitment fee equal to 0.375% of the unused portion of the borrowing base,
payable quarterly in arrears, until the termination of the revolving period.  At
the termination of the revolving period, the revolving line of credit will
convert to a three-year term loan with principal payable in 12 equal quarterly
installments. The Credit Facility includes certain negative covenants that
impose limitations on the Company and its subsidiaries with respect to, among
other things, distributions with respect to its capital stock, limitations on
financial ratios, the creation or incurrence of liens, the incurrence of
additional indebtedness, making loans and investments and mergers and
consolidations. The obligations of the Company under the Credit Facility are
secured by a lien on all real and personal property of the Company.  At March
31, 1999, $37.0 million was outstanding under the Credit Facility.

                                      15
<PAGE>
 
  Management's Discussion and Analysis of Financial Condition and Results of
                            Operations (Continued)

     In connection with the closing of the AHC acquisition on February 9, 1998,
the Company has a note payable to AHC of $2.5 million (at March 31, 1999) which
is payable on the anniversary date of the closing as follows:  $1.0 million in
2000 and $1.5 million in 2001.

     At March 31, 1999, the Company had a working capital deficit of $4.4
million (excluding the current portion of long-term debt).  Management plans to
meet these working capital requirements from available cash flows, property
sales and other financing sources.

     The Company has budgeted capital expenditures of approximately $10.6
million for 1999.  Capital expenditures will be used to fund drilling and
development activities, the completion of 3-D seismic surveys that were in
process at year end and leasehold acquisitions and extensions in the Company's
project areas. The actual amounts of capital expenditures and number of wells
drilled may differ significantly from such estimates.  Actual capital
expenditures for the three months ended March 31, 1999 were approximately $5.6
million. The Company intends to fund its 1999 budgeted capital expenditures
through operational cash flow.

     The Company's revenues, profitability, future growth and ability to borrow
funds or obtain additional capital, and the carrying value of its properties,
substantially are dependent on prevailing prices of oil and natural gas.  The
Company cannot predict future oil and natural gas price movements with
certainty. Declines in prices received for oil and natural gas as experienced in
1998 and early 1999 have had an adverse effect on the Company's financial
condition, liquidity, ability to finance capital expenditures and results of
operations.  Lower prices in 1998 and early 1999 also had an impact on the
amount of reserves that can be produced economically by the Company.

     The Company has experienced and expects to continue to experience
substantial working capital requirements primarily due to the Company's active
exploration and development programs and technology enhancement programs.  While
the Company believes that cash flow from operations, property sales and
borrowings, notwithstanding substantially reduced commodity prices, allow the
Company to implement its present business strategy through 1999, additional debt
or equity financing may be required during the remainder of 1999 and in the
future to fund the Company's growth, development and exploration program and
continued technological enhancement and to satisfy its existing obligations.
The failure to obtain and exploit such capital resources could have a material
adverse effect on the Company, including further curtailment of its exploration
and other activities.

Risk Management Activities and Derivative Transactions

     The Company uses a variety of derivative instruments ("derivatives") to
manage exposure to fluctuations in commodity prices and interest rates.  To
qualify for hedge accounting, derivatives must meet the following criteria:  (i)
the item to be hedged exposes the Company to price or interest rate risk; and
(ii) the derivative reduces that exposure and is designated as a hedge.

                                      16
<PAGE>
 
   Management's Discussion and Analysis of Financial Condition and Results of
                             Operations (Continued)

     Commodity Price Hedges

     The Company periodically enters into certain derivatives (e.g., NYMEX
futures contracts) for a portion of its natural gas production to achieve a more
predictable cash flow, as well as to reduce the exposure to price fluctuations.
The Company's hedging arrangements apply to only a portion of its production,
provide only partial price protection against declines in oil and natural gas
prices and limit potential gains from future increases in prices.  Such hedging
arrangements may expose the Company to risk of financial loss in certain
circumstances, including instances where production is less than expected, the
Company's customers fail to purchase contracted quantities of oil or natural gas
or a sudden unexpected event materially impacts oil or natural gas prices.  For
financial reporting purposes, gains and losses related to hedging are recognized
as oil and natural gas revenues during the period the hedged transactions occur.
The Company expects that the amount of hedge contracts that it has in place will
vary from time to time.

     The Company's hedging strategy is to maximize its return on investment
through hedging a portion of its activities relating to natural gas price
volatility.  While this strategy should help the Company reduce its exposure to
price risks, it also limits the Company's potential gains from increases in
market prices for natural gas.  The Company intends to continue to hedge up to
50% of its natural gas production to retain a portion of the potential for
greater upside from increases in natural gas prices, while limiting to some
extent the Company's exposure to declines in natural gas prices.  For the three
months ended March 31, 1999 and 1998, the Company realized approximately
$384,000 and $(14,000), respectively, of hedging gains (losses) which are
included in natural gas revenues in the consolidated statements of operations.
For the three months ended March 31, 1999 and 1998, the Company had hedged 37%
and 6%, respectively, of its natural gas production, and as of March 31, 1999,
the Company had 0.4 Bcf of open natural gas contracts for the months of April
1999 to June 1999.  Subsequent to March 31, 1999, the Company entered into
additional natural gas contracts for approximately 1.7 Bcf for the time period
of May 1999 to October 1999 ranging in price from $2.22 to $2.32 per Mcf.  Open
contracts totaling 0.3 Bcf have been settled subsequent to March 31, 1999,
resulting in hedge losses of approximately $74,000.

     Interest Rate Hedge

     The Company entered into an interest rate swap agreement, effective
November 2, 1998, to exchange the variable rate interest payment obligation
under the Credit Facility without exchanging the underlying principal amount.
This agreement converts the variable rate debt to fixed rate debt to reduce the
impact of interest rate fluctuations.  The notional amount is used to measure
interest to be paid or received and does not represent the exposure to credit
loss.  The difference between the amounts paid and received under the swap is
accrued and recorded as an adjustment to interest expense over the term of the
hedged agreement, which was to expire February 9, 2001.  During March 1999, the
Company terminated its interest rate swap agreement and received $0.3 million,
which will be recognized in earnings ratably as the related outstanding loan
balance is amortized.

                                      17
<PAGE>
 
  Management's Discussion and Analysis of Financial Condition and Results of
                            Operations (Continued)

     Market Risk Information

     The market risk inherent in the Company's derivatives is the potential loss
arising from adverse changes in commodity prices and interest rates.  The prices
of natural gas are subject to fluctuations resulting from changes in supply and
demand.  To reduce price risk caused by the market fluctuations, the Company's
policy is to hedge (through the use of derivatives) future production.  Because
commodities covered by these derivatives are substantially the same commodities
that the Company sells in the physical market, no special correlation studies
other than monitoring the degree of convergence between the derivative and cash
markets are deemed necessary.  The changes in market value of these derivatives
have a high correlation to the price changes of natural gas.  As the majority of
the derivatives that were outstanding at March 31, 1999 have been settled
subsequent to March 31, 1999, the Company's exposure is limited to the actual
results described above.
 
Effects of Inflation and Changes in Price

     In 1998 and early 1999, the Company and the oil and gas industry as a
whole, experienced historically low crude oil prices and substantially depressed
natural gas prices.  These lower commodity prices had a negative impact on the
Company's results of operations, cash flow and liquidity.  Recent rates of
inflation have had a minimal effect on the Company.

Environmental and Other Regulatory Matters

     The Company's business is subject to certain federal, state and local laws
and regulations relating to the exploration for, and the development, production
and transportation of, oil and natural gas, as well as environmental and safety
matters.  Many of these laws and regulations have become more stringent in
recent years, often imposing greater liability on a larger number of potentially
responsible parties.  Although the Company believes it is in substantial
compliance with all applicable laws and regulations, the requirements imposed by
laws and regulations frequently are changed and subject to interpretation, and
the Company is unable to predict the ultimate cost of compliance with these
requirements or their effect on its operations. Any suspensions, terminations or
inability to meet applicable bonding requirements could materially adversely
affect the Company's business, financial condition and results of operations.
Although significant expenditures may be required to comply with governmental
laws and regulations applicable to the Company, compliance has not had a
material adverse effect on the earnings or competitive position of the Company.
Future regulations may add to the cost of, or significantly limit, drilling
activity.

Year 2000 Readiness Disclosure

     This Year 2000 Readiness Disclosure is based upon and partially repeats
information provided by the Company's outside consultants and others regarding
the Year 2000 readiness of the Company and its customers, suppliers, financial
institutions and other parties.  Although the Company believes this information
to be accurate, it has not independently verified such information.

     The Company is aware of the issues associated with the programming code in
existing computer systems as the millennium (year 2000) approaches.  The "year
2000" problem is pervasive and complex as virtually every computer operation
will be affected in some way by the rollover of the two digit year value to 00.
The issue is whether computer systems will properly recognize date sensitive
information when the year changes to 2000.  Systems that do not properly
recognize such information could generate erroneous data or cause a system to
fail.

                                      18
<PAGE>
 
   Management's Discussion and Analysis of Financial Condition and Results of
                             Operations (Continued)

     The Company has initiated a plan to prepare its computer systems and
applications for possible year 2000 problems.  Under the plan, the Company will
continue to identify its computer hardware and software systems and equipment
with embedded computer chips; assess the effects of the year 2000 issues; and
enhance the plan by developing the steps necessary to identify, correct or
reprogram and test systems for year 2000 compliance.  The Company has completed
approximately 90% of the year 2000 modifications on its internal computer
hardware and software applications.  The Company will continue to assess the
impact of the year 2000 issue on its systems and applications throughout 1999.
The Company's goal is to perform tests of its systems and applications during
1999 and to have systems and applications year 2000 ready by July 1999, allowing
the remaining time to be used for validation and testing.

     The Company expects to incur internal staff costs as well as consulting and
other expenses to prepare the systems for the year 2000.  The Company expects to
spend less than $25,000 in connection with identifying, assessing, remediating
and testing year 2000 issues.  The Company expects that it will expense all
costs associated with system changes.  The Company also may invest in new or
upgraded technology which has a definable value lasting beyond 2000.  In these
instances, where year 2000 compliance is merely ancillary, the Company may
capitalize and depreciate such an asset over its estimated useful life.

     Based on currently available information, management does not anticipate
that the costs to address the year 2000 issues will have a material adverse
impact on the Company's financial condition, results of operations or liquidity.
However, the extent to which the computer operations and other systems of the
Company's important third parties are adversely affected could, in turn, affect
the Company's ability to communicate with third parties and could have a
material adverse effect on the operations of the Company (including but not
limited to failures in service, disruptions in the Company's ability to bill
customers and pay suppliers and the possible slowdown of certain computer-
dependent processes).

     The Company has made inquiries of third party vendors, suppliers and
customers, which have a material relationship with the Company, as to the status
of their year 2000 readiness.  The Company is relying on vendor, supplier and
customer representations that their internal computer systems are or will be
year 2000 compliant and that no material adverse impact on their business
operations is anticipated.  The Company has not independently verified these
representations and there can be no assurances that these representations will
prove to be accurate.  Unreadiness by these third parties would expose the
Company to the potential for loss and impairment of business processes and
activities.  The Company is assessing these risks and is creating contingency
plans intended to address perceived risks.

     The costs of the project and the date on which the Company expects to
complete the year 2000 modifications are based on management's best estimates.
There can be no guarantee that these estimates will be achieved, and actual
results could differ from those anticipated.  Specific factors that might cause
differences include, but are not limited to, the ability of other companies on
which the Company's systems rely to modify or convert their systems to be year
2000 ready, the ability of all third parties who have business relationships
with the Company to continue their businesses without interruption and similar
uncertainties.  As a result, the Company is in the process of evaluating
possible internal and external scenarios that might have an adverse impact on
the Company.  The Company also recognizes that a contingency plan must be
developed in the event the Company's systems cannot be made year 2000 compliant
on a timely basis.  The Company expects to complete the development of this
contingency plan by July 1999.

                                      19
<PAGE>
 
  Management's Discussion and Analysis of Financial Condition and Results of
                            Operations (Continued)


New Accounting Standard

     In 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities."  SFAS No. 133
establishes accounting and reporting standards requiring that every derivative
instrument (including certain derivative instruments embedded in other
contracts) be recorded in the balance sheet as either an asset or liability
measured at its fair value. SFAS No. 133 requires that changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met.  Special accounting for qualifying hedges
allows a derivative's gains and losses to offset related results on the hedged
item in the income statement, and requires that a company must formally
document, designate and assess the effectiveness of transactions that receive
hedge accounting.

SFAS No. 133 is effective for fiscal years beginning after June 15, 1999.  The
Company has not yet quantified the impacts of adopting SFAS No. 133 on its
financial statements and has not determined the timing of or method of its
adoption of SFAS No. 133.  However, SFAS No. 133 could increase volatility in
earnings and other comprehensive income.


PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

         The Company is not currently named as a defendant in any lawsuits
and/or administrative proceedings arising other than in the ordinary course of
business.

Item 6.  Exhibits and Reports on Form 8-K

     (a) Exhibits.  The following documents are filed as exhibits to this report
         --------                                                               
on Form 10-Q:

 
      Exhibit No.                Description
      -----------                -----------

       2.1      Exchange and Combination Agreement dated November 12, 1997.
                Previously filed as an exhibit to the Company's Registration
                Statement on Form S-1 (333-40383), and here incorporated by
                reference.

       2.2(a)   Letter Agreement amending Exchange and Combination Agreement.
                Previously filed as an exhibit to the Company's Registration
                Statement on Form S-1 (333-40383), and here incorporated by
                reference.

       2.2(b)   Letter Agreement amending Exchange and Combination Agreement.
                Previously filed as an exhibit to the Company's Registration
                Statement on Form S-1 (333-40383), and here incorporated by
                reference.

       2.2(c)   Letter Agreement amending Exchange and Combination Agreement.
                Previously filed as an exhibit to the Company's Registration
                Statement on Form S-1 (333-40383), and here incorporated by
                reference. 

                                      20
<PAGE>
 
       2.3(a)  Agreement for Purchase and Sale dated November 25, 1997 between
               Amerada Hess Corporation and Miller Oil Corporation. Previously
               filed as an exhibit to the Company's Registration Statement on
               Form S-1 (333-40383), and here incorporated by reference.

       2.3(b)  First Amendment to Agreement for Purchase and Sale dated January
               7, 1998. Previously filed as an exhibit to the Company's
               Registration Statement on Form S-1 (333-40383), and here
               incorporated by reference.

       3.1     Certificate of Incorporation of the Registrant. Previously filed
               as an exhibit to the Company's Registration Statement on Form S-1
               (333-40383), and here incorporated by reference.

       3.2     Bylaws of the Registrant. Previously filed as an exhibit to the
               Company's Quarterly Report on Form 10-Q for the quarter ended
               June 30, 1998, and here incorporated by reference.

       4.1     Certificate of Incorporation. See Exhibit 3.1.

       4.2     Bylaws. See Exhibit 3.2.

       4.3     Form of Specimen Stock Certificate. Previously filed as an
               exhibit to the Company's Registration Statement on Form S-1 (333-
               40383), and here incorporated by reference.

       4.4     Warrant between Miller Exploration Company and Veritas DGC Land,
               Inc., dated April 14, 1999. Previously filed as an exhibit to the
               Company's Annual Report on Form 10-K for the year ended December
               31, 1998, and here incorporated by reference.

      10.1     Second Amendment to Credit Agreement between Miller Oil
               Corporation and Bank of Montreal dated April 14, 1999. Previously
               filed as an exhibit to the Company's Annual Report on Form 10-K
               for the year ended December 31, 1998, and here incorporated by
               reference.

      10.2     Agreement between Eagle Investments, Inc. and Miller Oil
               Corporation, dated April 1, 1999. Previously filed as an exhibit
               to the Company's Annual Report on Form 10-K for the year ended
               December 31, 1998, and here incorporated by reference.

      10.3     $4,696,040.60 Note between Miller Exploration Company and Veritas
               DGC Land, Inc., dated April 14, 1999. Previously filed as an
               exhibit to the Company's Annual Report on Form 10-K for the year
               ended December 31, 1998, and here incorporated by reference.

      10.4     Registration Rights Agreement between Miller Exploration Company
               and Veritas DGC Land, Inc., dated April 14, 1999. Previously
               filed as an exhibit to the Company's Annual Report on Form 10-K
               for the year ended December 31, 1998, and here incorporated by
               reference.

      27.1     Financial Data Schedule.
____________________

     (b) Reports on Form 8-K.  No reports on Form 8-K were filed during the
         -------------------                                               
fiscal quarter ended March 31, 1999.

                                      21
<PAGE>
 
                                  SIGNATURES


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


                                 MILLER EXPLORATION COMPANY



Date: May 14, 1999               By:/s/ William J. Baumgartner
                                    ----------------------------
                                 William J. Baumgartner
                                 President-Finance, Chief Financial Officer
                                 and Secretary
                                 (Principal Accounting and Financial Officer)

                                      22
<PAGE>
 
                                 EXHIBIT INDEX

 
      Exhibit No.                Description
      -----------                -----------

       2.1        Exchange and Combination Agreement dated November 12, 1997.
                  Previously filed as an exhibit to the Company's Registration
                  Statement on Form S-1 (333-40383), and here incorporated by
                  reference.

       2.2(a)     Letter Agreement amending Exchange and Combination Agreement.
                  Previously filed as an exhibit to the Company's Registration
                  Statement on Form S-1 (333-40383), and here incorporated by
                  reference.

       2.2(b)     Letter Agreement amending Exchange and Combination Agreement.
                  Previously filed as an exhibit to the Company's Registration
                  Statement on Form S-1 (333-40383), and here incorporated by
                  reference.

       2.2(c)     Letter Agreement amending Exchange and Combination Agreement.
                  Previously filed as an exhibit to the Company's Registration
                  Statement on Form S-1 (333-40383), and here incorporated by
                  reference.

       2.3(a)     Agreement for Purchase and Sale dated November 25, 1997
                  between Amerada Hess Corporation and Miller Oil Corporation.
                  Previously filed as an exhibit to the Company's Registration
                  Statement on Form S-1 (333-40383), and here incorporated by
                  reference.

       2.3(b)     First Amendment to Agreement for Purchase and Sale dated
                  January 7, 1998. Previously filed as an exhibit to the
                  Company's Registration Statement on Form S-1 (333-40383), and
                  here incorporated by reference.

       3.1        Certificate of Incorporation of the Registrant. Previously
                  filed as an exhibit to the Company's Registration Statement on
                  Form S-1 (333-40383), and here incorporated by reference.

       3.2        Bylaws of the Registrant. Previously filed as an exhibit to
                  the Company's Quarterly Report on Form 10-Q for the quarter
                  ended June 30, 1998, and here incorporated by reference.

       4.1        Certificate of Incorporation. See Exhibit 3.1.

       4.2        Bylaws. See Exhibit 3.2.

       4.3        Form of Specimen Stock Certificate. Previously filed as an
                  exhibit to the Company's Registration Statement on Form S-1
                  (333-40383), and here incorporated by reference.

       4.4        Warrant between Miller Exploration Company and Veritas DGC
                  Land, Inc., dated April 14, 1999. Previously filed as an
                  exhibit to the Company's Annual Report on Form 10-K for the
                  year ended December 31, 1998, and here incorporated by
                  reference.

      10.1        Second Amendment to Credit Agreement between Miller Oil
                  Corporation and Bank of Montreal dated April 14, 1999.
                  Previously filed as an exhibit to the Company's Annual Report
                  on Form 10-K for the year ended December 31, 1998, and here
                  incorporated by reference.

                                      25
<PAGE>
 
       10.4       Agreement between Eagle Investments, Inc. and Miller Oil
                  Corporation, dated April 1, 1999. Previously filed as an
                  exhibit to the Company's Annual Report on Form 10-K for the
                  year ended December 31, 1998, and here incorporated by
                  reference.

       10.3       $4,696,040.60 Note between Miller Exploration Company and
                  Veritas DGC Land, Inc., dated April 14, 1999. Previously filed
                  as an exhibit to the Company's Annual Report on Form 10-K for
                  the year ended December 31, 1998, and here incorporated by
                  reference.

       10.4       Registration Rights Agreement between Miller Exploration
                  Company and Veritas DGC Land, Inc., dated April 14, 1999.
                  Previously filed as an exhibit to the Company's Annual Report
                  on Form 10-K for the year ended December 31, 1998, and here
                  incorporated by reference.

       27.1       Financial Data Schedule.
____________________

                                      26