<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
             September 30, 2000                               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: (231) 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                                     November 13, 2000
                    -----                                     -----------------

        Common stock, $.01 par value                          13,746,799 shares

================================================================================
<PAGE>

                          MILLER EXPLORATION COMPANY

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                         Page No.
                                                                                                         --------
<S>                                                                                                      <C>
PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements............................................................................       3

         Consolidated Statements of Operations--
         Three Months and Nine Months Ended September 30, 2000 and 1999..................................       3

         Consolidated Balance Sheets--
         September 30, 2000 and December 31, 1999........................................................       4

         Consolidated Statement of Equity--
         Nine Months Ended September 30, 2000............................................................       5

         Consolidated Statements of Cash Flows--
         Nine Months Ended September 30, 2000 and 1999...................................................       6

         Notes to Consolidated Financial Statements......................................................       7

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations...........      16

Item 3.  Quantitative and Qualitative Disclosures About Market Risk......................................      24

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings...............................................................................      25

Item 2.  Changes in Securities...........................................................................      25

Item 3.  Defaults Upon Senior Securities.................................................................      25

Item 4.  Submissions of Matters to a Vote of Securityholders.............................................      25

Item 5.  Other Information...............................................................................      25

Item 6.  Exhibits and Reports on Form 8-K................................................................      26
</TABLE>
<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    For the Nine Months
                                                      Ended Sept. 30,         Ended Sept. 30,
                                                   ----------------------  ---------------------
                                                       2000        1999        2000      1999
                                                      ------      ------     -------    -------
<S>                                                <C>            <C>      <C>          <C>
REVENUES:
  Natural gas....................................     $5,466      $4,403     $14,807    $12,434
  Crude oil and condensate.......................      1,463       1,041       3,978      2,655
  Other operating revenues.......................        108          48         273        127
                                                      ------      ------     -------    -------
  Total operating revenues.......................      7,037       5,492      19,058     15,216
                                                      ------      ------     -------    -------

OPERATING EXPENSES:
  Lease operating expenses and production taxes..        970         288       1,985      1,338
  Depreciation, depletion and amortization.......      4,235       4,460      13,021     11,383
  General and administrative.....................        427         573       1,598      2,158
                                                      ------      ------     -------    -------
     Total operating expenses....................      5,632       5,321      16,604     14,879
                                                      ------      ------     -------    -------

OPERATING INCOME.................................      1,405         171       2,454        337
                                                      ------      ------     -------    -------

INTEREST EXPENSE.................................       (782)       (998)     (2,449)    (2,605)
                                                      ------      ------     -------    -------

INCOME (LOSS) BEFORE INCOME TAXES
  AND EXTRAORDINARY ITEM.........................        623        (827)          5     (2,268)
                                                      ------      ------     -------    -------

INCOME TAX PROVISION (CREDIT)....................        212        (281)          2       (857)
                                                      ------      ------     -------    -------

INCOME (LOSS) BEFORE EXTRAORDINARY ITEM..........        411        (546)          3     (1,411)

EXTRAORDINARY ITEM - LOSS FROM
  EARLY EXTINGUISHMENT OF DEBT,
  LESS APPLICABLE INCOME TAXES (Note 10).........       (166)         --        (166)        --
                                                      ------      ------     -------    -------

NET INCOME (LOSS)................................     $  245      $ (546)    $  (163)   $(1,411)
                                                      ======      ======     =======    =======

EARNINGS (LOSS) PER SHARE (Note 3)
  Basic..........................................     $ 0.02      $(0.04)    $ (0.01)   $ (0.11)
                                                      ======      ======     =======    =======
  Diluted........................................     $ 0.02      $(0.04)    $ (0.01)   $ (0.11)
                                                      ======      ======     =======    =======
</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 September 30,   As of December 31,
                                                                                2000                 1999
                                                                             ----------           ----------
                                                                            (Unaudited)
<S>                                                                      <C>                   <C>
                              ASSETS
                              ------
CURRENT ASSETS:
  Cash and cash equivalents.......................................             $  1,098             $  3,712
  Restricted cash (Note 2)........................................                  789                    4
  Accounts receivable.............................................                4,679                4,580
  Inventories, prepaids and advances to operators.................                1,405                  640
                                                                               --------             --------
   Total current assets...........................................                7,971                8,936
                                                                               --------             --------

OIL AND GAS PROPERTIES--at cost (full cost method):
  Proved oil and gas properties...................................              124,412              115,040
  Unproved oil and gas properties.................................               16,708               22,678
 Less-Accumulated depreciation, depletion and amortization........              (91,584)             (78,881)
                                                                               --------             --------
   Net oil and gas properties.....................................               49,536               58,837
                                                                               --------             --------

OTHER ASSETS......................................................                  733                  838
                                                                               --------             --------
   Total assets...................................................             $ 58,240             $ 69,611
                                                                               ========             ========

                       LIABILITIES AND EQUITY
                       ----------------------

CURRENT LIABILITIES:
  Current portion of long-term debt...............................             $  3,530             $  3,500
  Accounts payable................................................                1,619                3,472
  Accrued expenses and other current liabilities..................                5,033                6,164
                                                                               --------             --------
   Total current liabilities......................................               10,182               13,136
                                                                               --------             --------

LONG-TERM DEBT....................................................               12,196               25,610

CONVERTIBLE PROMISSORY NOTE.......................................                5,000                   --

DEFERRED INCOME TAXES.............................................                5,732                5,816

DEFERRED REVENUE..................................................                   29                   54

COMMITMENTS AND CONTINGENCIES (NOTE 7)

EQUITY:
  Common stock warrants...........................................                1,268                  845
  Preferred stock, $0.01 par value; 2,000,000 shares authorized;
   none outstanding...............................................                   --                   --
  Common stock, $0.01 par value; 40,000,000 shares
   authorized; 13,249,876 shares and 12,681,244 shares
   outstanding at September 30, 2000 and December 31, 1999,
   respectively...................................................                  132                  127
  Additional paid in capital......................................               67,483               66,690
  Deferred compensation...........................................                   --                  (48)
  Retained deficit................................................              (43,782)             (43,619)
                                                                               --------             --------
   Total equity...................................................               25,101               23,995
                                                                               --------             --------
   Total liabilities and equity...................................             $ 58,240             $ 69,611
                                                                               ========             ========
</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>
                                   Common                      Additional
                                   Stock    Preferred  Common   Paid In      Deferred     Retained
                                  Warrants    Stock    Stock    Capital    Compensation    Deficit
                                  --------  ---------  ------  ----------  -------------  ---------
<S>                               <C>       <C>        <C>     <C>         <C>            <C>
BALANCE-December 31, 1999         $    845  $      --    $127     $66,690   $    (48)     $(43,619)

  Issuance of restricted stock
     and benefit plan shares            --         --      --          81         48            --
  Common stock
     warrants issued                   423         --      --          --         --            --
  Issuance of non-employee
     Directors' shares                  --         --       1         216         --            --
  Issuance of common stock              --         --       4         496         --            --
  Net loss                              --         --      --          --         --          (163)
                                  --------  ---------    ----     -------   --------      --------

BALANCE-Sept. 30, 2000            $  1,268  $      --    $132     $67,483   $     --      $(43,782)
                                  ========  =========    ====     =======   ========      ========
</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 Nine Months Ended
                                                                      September 30,
                                                                   --------------------
                                                                       2000       1999
                                                                   --------   --------
<S>                                                                <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss.......................................................  $   (163)  $ (1,411)
  Adjustments to reconcile net loss to net cash from
    operating activities--
      Depreciation, depletion and amortization...................    13,021     11,383
      Deferred income taxes......................................       (84)      (772)
      Deferred revenue...........................................       (25)    (1,553)
      Warrants and stock compensation............................       769        831
      Extraordinary item.........................................       166         --
      Changes in assets and liabilities--
        Restricted cash..........................................      (785)        --
        Accounts receivable......................................       (99)      (316)
        Other assets.............................................    (1,144)       664
        Accounts payable.........................................    (1,853)    (4,306)
        Accrued expenses and other current liabilities...........    (1,131)     2,016
                                                                   --------   --------
          Net cash flows provided by operating activities........     8,672      6,536
                                                                   --------   --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Exploration and development expenditures.......................    (4,349)    (8,669)
  Proceeds from sale of oil and gas properties and purchases of
    equipment, net...............................................       947     12,701
                                                                   --------   --------
      Net cash flows provided by (used in) investing activities..    (3,402)     4,032
                                                                   --------   --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments of principal..........................................   (25,023)   (12,149)
  Borrowing on long-term debt....................................    16,639      2,490
  Issuance of common stock.......................................       500         --
                                                                   --------   --------
    Net cash flows used in financing activities..................    (7,884)    (9,659)
                                                                   --------   --------
NET CHANGE IN CASH AND CASH EQUIVALENTS..........................    (2,614)       909
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE
  PERIOD.........................................................     3,712         22
                                                                   --------   --------
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD...................  $  1,098   $    931
                                                                   ========   ========
SUPPLEMENTAL CASH FLOW INFORMATION:
  Cash paid during the period for--
    Interest.....................................................  $  1,555   $  2,331
                                                                   ========   ========
</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, 1999.

     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.

     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 the
Mississippi Salt Basin of central Mississippi.

     Oil and Gas Properties

     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 the cost or market value of unproved properties and
deferred income taxes.  Any such excess costs should be charged against
earnings.

     Reclassifications

     Certain reclassifications have been made to prior period statements to
conform with the September 30, 2000 presentation.

                                       7
<PAGE>

                          MILLER EXPLORATION COMPANY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

(2)  Restricted Cash

     Periodically the Company enters into escrow agreements at the request of
joint interest partners regarding the drilling of wells operated by the Company.
Terms of the escrow agreements require the parties to the agreements to deposit
their proportionate share of the estimated costs of drilling each subject well
into a separate escrow account.  The escrow account is controlled by an
independent third party agent and is restricted to the sole purpose of
processing payments to vendors covered by the escrow agreements.  The amount
recorded as restricted cash in the Consolidated Balance Sheets represents the
Company's share of funds on deposit in the escrow accounts. Once the agreed upon
drilling procedure has been completed, any remaining funds in the escrow
accounts will be promptly returned to the respective joint interest partners in
the same proportions as the original contributions into the escrow accounts.

(3)  Earnings Per Share

     The computation of earnings (loss) per share for the three-month and nine-
month periods ended September 30, 2000 and 1999 are as follows (in thousands,
except per share data):

<TABLE>
<CAPTION>
                                                         For the Three Months    For the Nine Months
                                                           Ended Sept. 30,         Ended Sept. 30,
                                                        ----------------------  ---------------------
                                                             2000        1999       2000        1999
                                                          -------     -------    -------     -------
<S>                                                     <C>         <C>         <C>        <C>
BASIC EARNINGS (LOSS) PER SHARE COMPUTATION
  Income (loss) before extraordinary item.............    $   411     $  (546)   $     3     $(1,411)
  Extraordinary item..................................       (166)         --       (166)         --
                                                          -------     -------    -------     -------
  Net income (loss)...................................    $   245     $  (546)   $  (163)    $(1,411)
                                                          =======     =======    =======     =======

  Weighted average common shares outstanding..........     13,101      12,679     12,836      12,617
  Earnings (loss) per share - Basic
     Income (loss) before extraordinary item..........    $  0.03     $ (0.04)   $  0.00     $ (0.11)
     Extraordinary item...............................      (0.01)         --      (0.01)         --
                                                          -------     -------    -------     -------
     Net income (loss)................................    $  0.02     $ (0.04)   $ (0.01)    $ (0.11)
                                                          =======     =======    =======     =======

DILUTED EARNINGS (LOSS) PER SHARE COMPUTATION
  Income (loss) before extraordinary item.............    $   411     $  (546)   $     3     $(1,411)
  Adjustment for effect of assumed conversions:
     Convertible promissory note......................        143          --         --          --
                                                          -------     -------    -------     -------
  Adjusted income (loss) before extraordinary item....        554        (546)         3      (1,411)
  Extraordinary item..................................       (166)         --       (166)         --
                                                          -------     -------    -------     -------
  Net income (loss)...................................    $   388     $  (546)   $  (163)    $(1,411)
                                                          =======     =======    =======     =======

  Weighted average common shares outstanding..........     13,101      12,679     12,836      12,617
  Incremental shares from:
     Convertible promissory note......................      3,704          --         --          --
     Stock options and Veritas warrants...............      1,284          --         --          --
                                                          -------     -------    -------     -------
  Diluted weighted average common shares outstanding..     18,089      12,679     12,836      12,617
                                                          =======     =======    =======     =======

  Earnings (loss) per share - Diluted
     Income (loss) before extraordinary item..........    $  0.03     $ (0.04)   $  0.00     $ (0.11)
     Extraordinary item...............................      (0.01)         --      (0.01)         --
                                                          -------     -------    -------     -------
     Net income (loss)................................    $  0.02     $ (0.04)   $ (0.01)    $ (0.11)
                                                          =======     =======    =======     =======
</TABLE>

                                       8
<PAGE>

                          MILLER EXPLORATION COMPANY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


(3)  Earnings Per Share (continued)

     Options, warrants and restricted stock were not included in the computation
of diluted earnings per share for the three-month period ended September 30,
1999 and the nine-month period ended September 30, 2000 and 1999 because their
effect was antidilutive.

(4)  Long-Term Debt

     Bank Debt

     Concurrently with the Company's Initial Public Offering, the Company
entered into a credit facility (the "Credit Facility") with Bank of Montreal,
Houston Agency ("Bank of Montreal"). The Credit Facility, as amended, required
principal reductions and included certain negative covenants that imposed
limitations on the Company and its subsidiary with respect to, among other
things, distributions with respect to capital stock, limitations on financial
ratios, the creation or incurrence of liens, restrictions on proceeds from sales
of oil and gas properties, the incurrence of additional indebtedness, making
loans and investments and mergers and consolidations. The obligations under the
Credit Facility were secured by a lien on all real and personal property of the
Company. Commencing April 1999, the interest rate under this facility was
increased to Bank of Montreal's prime rate plus 3.5%.

     On July 11, 2000, a principal payment of $4.9 million was made to pay down
the Credit Facility to $11.5 million.  The pay down was made from the Guardian
transaction proceeds (as more fully described in Note 5).

     On July 19, 2000, the Company entered into a new senior credit facility
with Bank One, Texas, N.A. ("Bank One") which replaced the existing credit
facility with Bank of Montreal. The new credit facility has a 30-month term and
a current borrowing base of $11.5 million. The interest rate under the new
credit facility is either the Bank One prime rate plus 2% or LIBOR plus 4% at
the Company's option. The new credit facility requires the Company to make
monthly payments of $500,000 until the next borrowing base re-determination
which is scheduled for January 1, 2001. The outstanding Bank One credit facility
balance is $10.0 million at September 30, 2000.

     The new credit facility with Bank One includes certain covenants that
impose restrictions on the Company with respect to, among other things,
incurrence of additional indebtedness, limitations on financial ratios, making
investments and mergers and consolidation. The obligations under the new credit
facility are secured by a lien on all of the Company's real and personal
property.

     Other

     On April 14, 1999, the Company issued a $4.7 million note payable to one of
its suppliers, Veritas DGC Land, Inc. (the "Veritas Note"), for the outstanding
balance due to Veritas for past services provided in 1998 and 1999.  The
principal obligation under the Veritas Note was originally due on April 15,
2001.  On July 19, 2000, the note was amended as more fully described below.

                                       9
<PAGE>

                          MILLER EXPLORATION COMPANY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

(4)  Long-Term Debt (continued)

     On April 14, 1999, the Company also entered into an agreement (the "Warrant
Agreement") to issue warrants to Veritas that entitle Veritas to purchase shares
of common stock in lieu of receiving cash payments for the accrued interest
obligations under the Veritas Note. The Warrant Agreement required the Company
to issue warrants to Veritas in conjunction with the signing of the Warrant
Agreement, as well as on the six and, at the Company's option, 12 and 18 month
anniversaries of the Warrant Agreement. The warrants issued equal 9% of the then
current outstanding principal balance of the Veritas Note. The number of shares
issued upon exercise of the warrants issued on April 14, 1999, and on the six-
month anniversary was determined based upon a five-day weighted average closing
price of the Company's common stock at April 14, 1999. The exercise price of
each warrant is $0.01 per share. On April 14, 1999, warrants exercisable for
322,752 shares of common stock were issued to Veritas in connection with
execution of the Veritas Note. On October 14, 1999 and April 14, 2000, warrants
exercisable for another 322,752 and 454,994 shares, respectively, of common
stock were issued to Veritas. The Company ratably recognizes the prepaid
interest into expense over the period that it relates. During the nine months
ended September 30, 2000 and 1999, the Company recognized non-cash interest
expense of $635,121 and $386,189, respectively, related to the Veritas Note
Payable. The Warrant Agreement was also amended on July 19, 2000.

     Under the terms of the amended note and warrant agreements, the maturity of
the Veritas Note was extended from April 15, 2001 to July 21, 2003 and the
expiration date for all warrants issued was extended until June 21, 2004. The
annual interest rate has been reduced from 18% to 9 3/4%, provided the entire
note balance is paid in full by December 31, 2001. If all principal and interest
under the Veritas Note is not paid by December 31, 2001, then the note bears
interest at 13 3/4% until paid in full. Interest accrues at the reduced rate
from and after October 15, 2000 and is payable commencing April 15, 2001 and
continuing on each October 15 and April 15 until principal is paid in full.
Interest will be paid in warrants under the terms of the Warrant Agreement until
such time as the Company is in borrowing base compliance with its senior lender,
Bank One, at which time interest will only be paid in cash.

     Under the amended Veritas Note, a principal payment of $500,000 was made on
July 19, 2000, the effective date of the amendment, and another $500,000 payment
must be made on or before December 31, 2000. Nonpayment of this second principal
amount results in a penalty payment of $750,000 payable in warrants at the then
current market price of the stock. The balance due Veritas was $4.2 million at
September 30, 2000 with $3.7 million classified as long-term and $0.5 million as
current in the accompanying financial statements.

     Any additional proceeds derived from exercise of warrants issued or from
other debt or equity transactions must be used to pay interest and principal on
the amended Veritas Note until paid in full. Effective November 1, 2000, Veritas
exercised 500,000 warrants to receive 496,923 shares (net of exercise price) of
Company stock.

     In connection with the closing of the Amerada Hess Corporation ("AHC")
property acquisition on February 9, 1998, the Company issued a non-interest
bearing note payable to AHC (the "AHC Note"). The Company had obtained a six-
month extension of the $1.0 million payment due AHC from February 2000 to August
2000. This payment was made on August 3, 2000. Also, the $1.5 million payment
due February 2001 has been divided into three quarterly installments of $500,000
each, payable commencing February 2001.

                                       10
<PAGE>

                          MILLER EXPLORATION COMPANY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

(4)  Long-Term Debt (continued)

     The Company's long-term debt consisted of the following as of September 30,
2000 (in thousands):


     Bank One Credit Facility                  $   10,000
     Veritas Note                                   4,196
     AHC Note                                       1,500
     Other                                             30
                                               ----------
       Total                                       15,726

     Less current portion of long-term debt        (3,530)
                                               ----------
                                               $   12,196
                                               ==========

(5)  Convertible Promissory Note and Other Capital Transactions

     On July 11, 2000, the Company entered into a Securities Purchase Agreement
(the "Securities Purchase Agreement") with Guardian Energy Management Corp.
("Guardian"). Pursuant to the Securities Purchase Agreement, the Company issued
to Guardian a convertible promissory note in the amount of $5.0 million, and
three warrants exercisable, for 1,562,500, 2,500,000 and 9,000,000 shares of the
Company's common stock respectively. Conversion of the note and exercise of the
warrants are subject to stockholder approval. Until the stockholders approve the
conversion of the note, the Company will accrue interest at an amount equal to
the prime rate plus 10% per annum (currently 19.5%). The accrual of interest is
required under Emerging Issues Task Force ("EITF") 85-17 even though no interest
will be owed if the stockholders approve the conversion of the note. Even if
conversion of the note is approved, the related interest expense charged to
operations will not be reversed. The Company has accrued approximately $0.2
million of interest expense during the quarter ended September 30, 2000.

     On July 11, 2000, the Company signed a letter agreement (the "Eagle
Transaction") to acquire an interest in certain undeveloped oil and gas
properties and $0.5 million in cash from Eagle Investments, Inc., ("Eagle") an
affiliated entity controlled by C. E. Miller, the Chairman of the Company, in
exchange for a total of 1,851,851 shares of common stock. In addition, Eagle
will be issued warrants exercisable for a total of 2,031,250 shares of common
stock. Consummation of the transaction with Eagle is subject, among other
things, to stockholder approval.

     The Company's Board of Directors has fixed the close of business on
November 3, 2000 as the record date for determining which stockholders are
entitled to notice of, and vote at, the special meeting on December 7, 2000, to
approve the Guardian and Eagle transactions.

     Also on July 11, 2000, the Company entered into a Subscription Agreement
with ECCO Investments, LLC ("ECCO"), pursuant to which ECCO purchased 370,370
shares of the Company's common stock for an aggregate purchase price of $0.5
million or $1.35 per share.

(6)  Risk Management Activities and Derivative Transactions

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

                                       11
<PAGE>

                          MILLER EXPLORATION COMPANY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

(6)  Risk Management Activities and Derivative Transactions (continued)

     Commodity Price Hedges

     The Company periodically enters into certain derivatives (primarily NYMEX
futures contracts) for a portion of its oil and 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 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 income (loss) 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 nine months ended September 30, 2000 and 1999,
the Company realized approximately $(1.1) million and $(0.01) million,
respectively, of hedging gains (losses) which are included in oil and natural
gas revenues in the consolidated statements of operations. For the nine months
ended September 30, 2000 and 1999, the Company had hedged 46% and 37%,
respectively, of its oil and natural gas production, and as of September 30,
2000 the Company had 2.7 Bcfe of open oil and natural gas contracts for the
months of October 2000 through December 2001. The prices for these contracts
ranged from $3.82 to $5.14 per Mcf for natural gas and $30.00 to $31.00 per Bbl
for oil.

(7)  Commitments and Contingencies

     Stock-Based Compensation

     During 1997, the Company adopted the Stock Option and Restricted Stock Plan
of 1997 (the "1997 Plan"). The Board of Directors contemplates that the 1997
Plan primarily will be used to grant stock options. However, the 1997 Plan
permits grants of restricted stock and tax benefit rights if determined to be
desirable to advance the purposes of the 1997 Plan. These stock options,
restricted stock and tax benefit rights are collectively referred to as
"Incentive Awards." Persons eligible to receive Incentive Awards under the 1997
Plan are directors, corporate officers and other full-time employees of the
Company and its subsidiaries. A maximum of 1.9 million shares of common stock
(subject to certain antidilution adjustments) are available for Incentive Awards
under the 1997 Plan. During 1999, incentive stock options of 25,000 were issued
to outside directors and new employees under the 1997 Plan. In February 2000 and
1999, 43,500 and 54,750 shares of restricted stock vested, respectively, and the
Company recognized compensation expense of approximately $60,000 and $178,000,
accordingly.

     On January 1, 2000, the Company granted 191,500 stock options to certain
employees with an exercise price of $0.01 per share. The right to exercise the
options vests and they become exercisable when the normal trading average of the
common stock on the market remains above the designated target prices for a
period of five consecutive trading days as follows:

          Five-Day Daily Average Target    Percentage Vested
          -----------------------------    -----------------
                     $2.00                        40%
                     $2.75                        30%
                     $3.50                        30%

                                       12
<PAGE>

                          MILLER EXPLORATION COMPANY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

(7)  Commitments and Contingencies (continued)

     When it is probable that the five-day stock price target price will be
attained (the "measurement date"), the Company will recognize compensation
expense for the difference between the quoted market price of the stock at this
measurement date less the $0.01 per share grant price times the number of
options that will vest.

     On October 31, 2000, the Company granted 250,000 stock options to employees
with an exercise price of $1.625 per share (the closing market price on the date
of grant). The right to exercise the options shall vest at a rate of one-fifth
per year beginning on the first anniversary of the grant date.

     Other

     The Company has been named as a defendant in a lawsuit filed June 1, 1999
by Energy Drilling Company ("Energy Drilling"), in the Parish of Catahoula,
Louisiana arising from a blowout of the Victor P. Vegas #1 well that was drilled
and operated by the Company. Energy Drilling, the drilling rig contractor on the
well, is claiming damages related to their destroyed drilling rig and related
costs amounting to approximately $1.2 million, plus interest, attorneys' fees
and costs.

     The Company has been named in a lawsuit brought by Victor P. Vegas, the
landowner of the surface location of the blowout well referenced above. The suit
was filed July 20, 1999 in the Parish of Orleans, Louisiana, claiming
unspecified damages related to environmental and other matters.

     The Company has been named in a lawsuit brought by Charles Strickland,
employee of BJ Services, Inc., on September 30, 1999. The suit is claiming
damages of $1.0 million for personal injuries allegedly suffered at a well site
operated by the Company.

     The Company has been named in a lawsuit brought by Eric Parkinson, husband
and personal representative of the Estate of Kelly Anne Parkinson (deceased).
The amended complaint was filed December 13, 1999, in the County of Hillsdale,
Michigan, claiming an unspecified amount plus interest and attorney fees for
suffering the loss of the deceased. Kelly Anne Parkinson was killed in an
automobile accident on February 2, 1999, while traveling on a county road
located next to land wherein the Company is lessee of underground mineral
rights. The plaintiff alleges that the accident was the result of mud dragged on
the road from the leased property and alleges that the Company was negligent in
its duty to conduct its operations at the site with reasonable care.

     The Company received notice on February 1, 2000 that AHC became a defendant
in a lawsuit as operator of certain Texas properties wherein Miller Oil
Corporation was a joint venture partner. The claimant alleges that he contacted
leukemia during his 17 year employment at Schlumberger while working on various
wells in Texas. Approximately 25 oil and gas companies have been named as
defendants in this suit. AHC has tendered defense and indemnity of this lawsuit
to Schlumberger and has agreed to pursue defense on behalf of all working
interest owners including the Company in this case. The case is in the early
stages of discovery.

                                       13
<PAGE>

                          MILLER EXPLORATION COMPANY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

(7)  Commitments and Contingencies (continued)

     The Company is a party to a lawsuit filed against AHC in 1997 as operator
of a well drilled under a joint venture. The plaintiff is an employee of a crane
operator who claims he received personal injuries while working at the well
site.

     The Company believes it has meritorious defenses to the claims discussed
above and intends to vigorously defend these lawsuits. The Company does not
believe that the final outcome of these matters will have a material adverse
effect on the Company's operating results, financial condition or liquidity. Due
to the uncertainties inherent in litigation, however, no assurances can be given
regarding the final outcome of each action. The Company currently believes any
costs resulting from the lawsuits mentioned above would be covered by the
Company's insurance.

     On May 1, 2000, the Company filed a lawsuit in the United States District
Court for the District of Montana against K2 America Corporation and K2 Energy
Corporation (hereinafter collectively referred to as "K2"). The Company's
lawsuit includes certain claims of relief and allegations by the Company against
K2, including breach of contract arising from failure by K2 to agree to escrow,
repudiation, and rescission; specific performance; declaratory relief; partition
of K2 lands that are subject to the K2/Blackfeet IMDA; negligence; and tortuous
interference with contract. The lawsuit is on file with the United States
District Court for the District of Montana, Great Falls Division and is not
subject to protective order. Discovery is currently underway.

     On May 1, 2000, the Company gave notice to the Blackfeet Tribal Business
Council demanding arbitration of all disputes as provided for under the Indian
Mineral Development Act ("IMDA") agreement between the Company and the Blackfeet
(the "Miller/Blackfeet IMDA") dated February 19, 1999, and pursuant to the IMDA
agreement between K2 and the Blackfeet ("K2/Blackfeet IMDA") dated May 30, 1997.

     The disputes for which the Company demands arbitration include but are not
limited to the unreasonable withholding of a consent to a drilling extension as
provided in the Miller/Blackfeet IMDA, as well as a determination by the
Blackfeet dated March 16, 2000, that certain wells which the Company proposed to
drill "would not satisfy the mandatory drilling obligations" under the
K2/Blackfeet IMDA. The Company contends the K2/Blackfeet IMDA, gives it as
lessee, and not the Blackfeet, the exclusive right to select drill sites and
well depths. The Company has had two meetings to date with the new Tribal
Council elected in July 2000, and is working toward resolution of these matters.

(8)  Related Party Transactions

     During 1999, Eagle, an affiliated entity purchased a working interest in
certain unproved oil and gas properties from the Company for $3.9 million. Based
on the Company's extensive leasing experience, knowledge of recent acquisitions
of 2-D and 3-D seismic data in the Mississippi Salt Basin and dealings with
other industry partners, the Company believes that the purchase price was
representative of the fair market value of these interests and that the terms
were consistent with those available to unrelated parties.

     On July 11, 2000, the Company signed a letter agreement with Eagle for the
acquisition of certain undeveloped properties (see Note 5).

                                       14
<PAGE>

                          MILLER EXPLORATION COMPANY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

(9)  Non-Cash Activities

     In February 2000 and 1999, 43,500 and 54,750 shares of restricted stock,
respectively, vested. In connection therewith, the Company recognized
compensation expenses of approximately $60,000 and $178,000 for the nine months
ended September 30, 2000 and 1999, respectively. In February and June 2000,
37,210 and 12,329 shares of Company common stock, respectively, were issued to
the Company's 401(k) savings plan as an employer matching contribution.
Commencing April 14, 1999, interest expense is being provided for under the
Veritas Note with warrants rather than through the payment of cash. These non-
cash activities have been excluded from the consolidated statements of cash
flows.

(10) Extraordinary Item

     During July 2000, the Company replaced the existing credit facility with
Bank of Montreal by extinguishing its remaining principal payments of $11.9
million. An extraordinary loss was recorded on this extinguishment for the
remaining unamortized debt expenses.

                                       15
<PAGE>

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         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 primarily in Mississippi.

     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 the
cost or market value of unproved properties and deferred income taxes. Any such
excess costs should be charged against earnings.

     On July 11, 2000, the Company issued to Guardian Energy Management Corp. a
subordinated Convertible Promissory Note, the conversion of which is subject to
stockholder approval, in exchange for $5.0 million. Since the proceeds of this
note were used to pay down existing debt, the Company's long-term debt balance
did not increase. Additionally, until the stockholders approve the conversion of
the Convertible Promissory Note, the Company will accrue interest at an amount
equal to the prime rate plus 10% per annum (currently 19.5%). The accrual of
interest is required under Emerging Issues Task Force ("EITF") 85-17 even though
no interest will be owed if the stockholders approve the conversion of the note.
There will be no other material effects from the issuance of this note on the
Company's financial position or results of operations prior to the stockholder
approval of the conversion. If the conversion of the Convertible Promissory Note
is approved by the Company's stockholders is approved, the Company's liquidity
and cash flow available for capital expenditures in the future will be increased
due to lower principal and interest payments required under the Company's new
credit facility and the elimination of the Company's obligations under the
Convertible Promissory Note.

                                       16
<PAGE>

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>
                                                   For the Three Months    For the Nine Months
                                                    Ended September 30,     Ended September 30,
                                                   ---------------------   -------------------
                                                       2000       1999       2000      1999
                                                       ----       ----       ----      ----
<S>                                                <C>           <C>       <C>        <C>
Production volumes:
  Crude oil and condensate (MBbls)...............         54         60         158       200
  Natural gas (MMcf).............................      1,400      1,805       4,548     5,736
  Natural gas equivalent (MMcfe).................      1,724      2,165       5,496     6,936

Revenues:
  Crude oil and condensate.......................     $1,463     $1,041     $ 3,978   $ 2,655
  Natural gas....................................      5,466      4,403      14,807    12,434

Operating expenses:
  Lease operating expenses and production taxes..     $  970     $  288     $ 1,985   $ 1,338
  Depletion, depreciation and amortization.......      4,235      4,460      13,021    11,383
  General and administrative.....................        427        573       1,598     2,158

Interest expense.................................     $  782     $  998       2,449   $ 2,605

Net income (loss)................................     $  245     $ (546)    $  (163)  $(1,411)

Average sales prices:
  Crude oil and condensate ($ per Bbl)...........     $27.09     $17.35     $ 25.18   $ 13.28
  Natural gas ($ per Mcf)........................       3.90       2.44        3.26      2.17
  Natural gas equivalent ($ per Mcfe)............       4.02       2.51        3.42      2.17

Average Costs ($ per Mcfe):
  Lease operating expenses and production taxes..     $ 0.56     $ 0.13     $  0.36   $  0.19
  Depletion, depreciation and amortization.......       2.46       2.06        2.37      1.64
  General and administrative.....................       0.25       0.26        0.29      0.31
</TABLE>

     Three Months Ended September 30, 2000 compared to Three Months Ended
September 30, 1999

    Oil and natural gas revenues for the three months ended September 30, 2000
increased 27% to $6.9 million from $5.4 million for the same period in 1999. The
revenues for the three months ended September 30, 2000 and 1999 include $(0.7)
million and $(0.3) million of hedging losses, respectively (see "Risk Management
Activities and Derivative Transactions" below). Total gas production for the
three months ended September 30, 2000 declined 22% to 1,400 MMcf from 1,805 MMcf
for the same period in 1999. The decrease in gas production output is primarily
attributable to a declining production curve for Mississippi Salt Basin
properties. Average natural gas prices increased 60% to $3.90 per Mcf for the
three months ended September 30, 2000 from $2.44 per Mcf in the same period in
1999. Total oil production volumes during the three months ended September 30,
2000 decreased 10% to 54 MBbls from 60 MBbls for the same period in 1999. The
drop in oil production is attributable to a declining production curve for
Mississippi Salt Basin properties. In an effort to slow the oil and gas
production decline, the Company has installed compression equipment on all
Company operated wells. This project began in May 2000 and was completed in
August 2000. The Company will continue to monitor its wells and analyze
additional methods to stimulate production. Generally, there are no limits as to
the number of times a well can be re-worked as long as there is an economic
benefit for doing so. Re-perforating can be performed for as little as $10,000
and small stimulation jobs for as little as $30,000. We expect that any future
workovers, re-perforations, or similar activities will be funded from operating
cash flow.

                                       17
<PAGE>

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


Average oil prices increased 56% to $27.09 per barrel during the three months
ended September 30, 2000 from $17.35 per barrel in the same period in 1999.  The
significant increases in natural gas and oil prices represents an example of the
volatility in commodity prices the industry has experienced over the past couple
years.

     Lease operating expenses and production taxes for the three months ended
September 30, 2000 increased 237% to $1.0 million from $0.3 million for the same
period in 1999. Lease operating expenses increased by approximately $0.2 million
due primarily to the cost of installing compression equipment and the related
compressor rental on certain Mississippi Salt Basin wells during the quarter
ended September 30, 2000. The addition of compressors will help slow current
production rate declines occurring on the Mississippi wells. Production taxes
increased by approximately $0.5 million due primarily to the phase out of the 6%
State of Mississippi production tax exemption. The exemption will remain phased
out until commodity prices fall back below the ceiling limitation as stipulated
in the applicable statute.

     Depreciation, depletion and amortization ("DD&A") expense for the three
months ended September 30, 2000 decreased 5% to $4.2 million from $4.5 million
for the same period in 1999. The decreased DD&A expense was the combined result
of a decrease in the amount of capitalized costs subject to DD&A partially
offset by an increase in the depletion rate. The higher depletion rate was
primarily the result of decreased proved oil and gas reserves primarily
attributable to the sale of producing oil and gas properties in 1999.

     General and administrative expense for the three months ended September 30,
2000 decreased 25% to $0.4 million from $0.6 million for the same period in
1999.  This decrease is primarily the result of the cost reduction plan
implemented in May 1999 and continued monitoring which had the combined effect
of:  1) a reduction in the number of employees from 32 at September 30, 1999 to
22 at September 30, 2000 which reduced salaries, wages and benefits; 2) a
significant decrease in legal and professional fees and; 3) reduced travel
related expenditures.

     Interest expense for the three months ended September 30, 2000 decreased
22% to $0.8 million from $1.0 million in the same period in 1999. The $0.8
million of interest expense for the quarter ended September 30, 2000, includes
interest of approximately $0.2 million that was accrued during this period in
connection with the $5.0 million Convertible Promissory Note. The interest
accrued on the Convertible Promissory Note will not be owed if its conversion is
approved by the stockholders. Without this accrual in the third quarter of 2000,
interest expense decreased 43%. The primary factor that offsets this interest
accrual is attributable to the resultant effect on interest expense of the
substantial decrease in the outstanding credit facility debt to $10.0 million at
September 30, 2000 from $25.5 million at September 30, 1999. Also, the Bank One
interest rate of prime plus 2% or LIBOR plus 4% that became effective on July
19, 2000, results in lower interest expense than the previous Bank of Montreal
rate of prime plus 3.5%.

     Net income (loss) for the three months ended September 30, 2000 was $0.2
million compared to net loss of $(0.5) million for the same period in 1999, as a
result of the factors described above.

                                       18
<PAGE>

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

     Nine Months Ended September 30, 2000 compared to Nine Months Ended
September 30, 1999

     Oil and natural gas revenues for the nine months ended September 30, 2000
increased 24% to $18.8 million from $15.1 million for the comparable period in
the prior year.  The revenues for the nine months ended September 30, 2000 and
1999 include approximately $(1.1) million and $(0.01) million of hedging
(losses) gains, respectively (see "Risk Management Activities and Derivative
Transactions" below).  In 1999, the Company sold substantially all of its
producing properties in Texas, Louisiana and the Antrim Shale properties in
Michigan.  These property sales and a declining production curve for Mississippi
Salt Basin properties represent the primary reasons why production volumes for
the nine months ended September 30, 2000 decreased 21% to 5,496 MMcfe from 6,936
MMcfe for the comparable period of the prior year.  Average realized oil prices
increased 90% to $25.18 per barrel from the significantly depressed price of
$13.28 per barrel experienced during the comparable period of 1999.  Realized
natural gas prices for the nine months ended September 30, 2000 increased 50% to
$3.26 per Mcf from $2.17 per Mcf for the comparable period of the prior year.

     Lease operating expenses and production taxes for the nine months ended
September 30, 2000 increased 48% to $2.0 million from $1.3 million for the
comparable period in the prior year. Lease operating expenses increased by
approximately $0.1 million. This decrease was comprised of an approximate $0.4
million reduction in expenses attributable to the properties in Texas, Louisiana
and Michigan that were sold in 1999. This reduction was partially offset by
approximately $0.4 million of additional lease operating expenses associated
with the compression equipment installed at certain Mississippi Salt Basin well
sites in the later part of May 2000 and June 2000 plus $0.1 million of operating
expenses related to new production in Michigan. Production taxes increased by
approximately $0.6 million due primarily to the phase out of the 6% State of
Mississippi production tax exemption and taxes on new production in Michigan.
The exemption will remain phased out until commodity prices fall back below the
ceiling limitations as stipulated in the applicable statute.

     Depreciation, depletion and amortization expense for the nine months ended
September 30, 2000 increased 14% to $13.0 million from $11.4 million for the
comparable period in the prior year.  The higher depletion expense was the
combined result of an increase in capitalized costs subject to depletion and an
increased depletion rate.  The higher depletion rate was primarily the result of
decreased proved oil and gas reserves attributable to the sale of producing oil
and gas properties in 1999.

     General and administrative expenses for the nine months ended September 30,
2000 decreased 26% to $1.6 million from $2.2 million for the comparable period
in the prior year.  This decrease is the result of the cost reduction plan
implemented in May 1999 and the continued monitoring which had the combined
effect of:  1) a reduction in the number of employees from 32 at September 30,
1999 to 22 at September 30, 2000 which reduced salaries, wages and benefits; 2)
a significant decrease in legal and professional fees and; 3) reduced travel
related expenditures.

     Interest expense for the nine months ended September 30, 2000 decreased 6%
to $2.4 million from $2.6 million for the comparable period in the prior year.
The $2.4 million of interest expense for 2000 includes approximately $0.2
million that was accrued during the year in connection with the $5.0 million
Convertible Promissory Note. The interest accrued on the Convertible Promissory
Note will not be owned if its conversion is approved by the stockholders.
Without this accrual in 2000, interest expense decreased 14%. The primary factor
that offsets this interest accrual is attributable to the resultant effect on
interest expense of the substantial decrease in the outstanding credit facility
debt to $10.0 million at September 30, 2000 from $22.5 million at September 30,
1999.

                                       19
<PAGE>

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

     Net loss for the nine months ended September 30, 2000 decreased to ($0.2)
million from ($1.4) million for the comparable period in the prior year, as a
result of the factors described above.

Liquidity and Capital Resources

     Liquidity

     The Company's primary source of liquidity is cash generated from
operations.  Net cash provided by operating activities was $8.7 million and $6.5
million for the nine months ended September 30, 2000 and 1999, respectively.
The increase in cash provided in 2000 compared to 1999 was principally comprised
of a reduction in the net loss to $(0.2) million in 2000 from $(1.4) million in
1999 and due to the reduction of vendor payables in 1999 resulting from an
effort by the Company to pay these liabilities on a more timely basis.

     Net cash provided by (used in) investing activities was $(3.4) million and
$4.0 million in 2000 compared to 1999, respectively.  The decrease in cash
provided in 2000 compared to 1999 was principally due to a decrease in property
sales of $11.8 million and a decrease in exploration and development
expenditures of $4.4 million in 2000.

     Net cash used in financing activities was $(7.9) million and $(9.7) million
in 2000 and 1999, respectively.  The decrease in cash used in 2000 compared to
1999 was principally due to principal payments on long-term debt of $25.0
million in 2000 compared to $12.1 million in 1999, and borrowings on long-term
debt of $16.6 million in 2000 compared to $2.5 million in 1999.

     Capital Resources

     Historically, the Company's primary sources of capital have been funds
generated by operations and borrowings under its bank credit facility.

     Concurrently with the Company's Initial Public Offering, the Company
entered into a credit facility (the "Credit Facility") with Bank of Montreal,
Houston Agency ("Bank of Montreal").  The Credit Facility, as amended, required
principal reductions and included certain negative covenants that imposed
limitations on the Company and its subsidiary with respect to, among other
things, distributions with respect to capital stock, limitations on financial
ratios, the creation or incurrence of liens, restrictions on proceeds from sales
of oil and gas properties, the incurrence of additional indebtedness, making
loans and investments and mergers and consolidations.  The obligations under the
Credit Facility were secured by a lien on all real and personal property of the
Company.  Commencing April 1999, the interest rate under this facility was
increased to Bank of Montreal's prime rate plus 3.5%.

     On July 11, 2000, a principal payment of $4.9 million was made to pay down
the Credit Facility to $11.5 million.  The pay down was made from the Guardian
transaction proceeds (as more fully described in Note 5).

     On July 19, 2000, the Company entered into a new senior credit facility
with Bank One, Texas, N.A. ("Bank One") which replaced the existing credit
facility with Bank of Montreal.  The new credit facility has a 30-month term and
a current borrowing base of $11.5 million.  The interest rate under the new
credit facility is either the Bank One prime rate plus 2% or LIBOR plus 4% at
the Company's option.

                                       20
<PAGE>

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


     The new credit facility requires the Company to make monthly payments of
$500,000 until the next borrowing base re-determination which is scheduled for
January 1, 2001.  The outstanding Bank One credit facility balance is $10.0
million at September 30, 2000.

     The new credit facility with Bank One includes certain covenants that
impose restrictions on the Company with respect to, among other things,
incurrence of additional indebtedness, limitations on financial ratios, making
investments and mergers and consolidation.  The obligations under the new credit
facility are secured by a lien on all of the Company's real and personal
property.

     On April 14, 1999, the Company issued a $4.7 million note payable to one of
its suppliers, Veritas DGC Land, Inc. (the "Veritas Note"), for the outstanding
balance due to Veritas for past services provided in 1998 and 1999.  The
principal obligation under the Veritas Note was originally due on April 15,
2001.  On July 19, 2000, the note was amended as more fully described below.

     On April 14, 1999, the Company also entered into an agreement (the "Warrant
Agreement") to issue warrants to Veritas that entitle Veritas to purchase shares
of common stock in lieu of receiving cash payments for the accrued interest
obligations under the Veritas Note.  The Warrant Agreement required the Company
to issue warrants to Veritas in conjunction with the signing of the Warrant
Agreement, as well as on the six and, at the Company's option, 12 and 18 month
anniversaries of the Warrant Agreement.  The warrants issued equal 9% of the
then current outstanding principal balance of the Veritas Note.  The number of
shares issued upon exercise of the warrants issued on April 14, 1999, and on the
six-month anniversary was determined based upon a five-day weighted average
closing price of the Company's common stock at April 14, 1999.  The exercise
price of each warrant is $0.01 per share.  On April 14, 1999, warrants
exercisable for 322,752 shares of common stock were issued to Veritas in
connection with execution of the Veritas Note.  On October 14, 1999 and April
14, 2000, warrants exercisable for another 322,752 and 454,994 shares,
respectively, of common stock were issued to Veritas.  The Company ratably
recognized the prepaid interest into expense over the period that it relates.
During the nine months ended September 30, 2000 and 1999, the Company recognized
non-cash interest expense of $635,121 and $386,189, respectively, related to the
Veritas Note Payable.  The Warrant Agreement was also amended on July 19, 2000.

     Under the terms of the amended note and warrant agreements, the maturity of
the Veritas Note was extended from April 15, 2001 to July 21, 2003 and the
expiration date for all warrants issued was extended until June 21, 2004.  The
annual interest rate has been reduced from 18% to 9- 3/4%, provided the entire
note balance is paid in full by December 31, 2001.  If all principal and
interest under the Veritas Note is not paid by December 31, 2001, then the note
bears interest at 13 3/4% until paid in full.  Interest accrues at the reduced
rate from and after October 15, 2000 and is payable commencing April 15, 2001
and continuing on each October 15 and April 15 until principal is paid in full.
Interest will be paid in warrants under the terms of the Warrant Agreement until
such time as the Company is in borrowing base compliance with its senior lender,
Bank One, at which time interest will only be paid in cash.

     Under the amended Veritas Note, a principal payment of $500,000 was made on
July 19, 2000, the effective date of the amendment, and another $500,000 payment
must be made by December 31, 2000.  Nonpayment of this second principal amount
results in a penalty payment of $750,000 payable in warrants at the then current
market price of the stock.  The balance due Veritas was $4.2 million at
September 30, 2000 with $3.7 million classified as long-term and $0.5 million as
current in the accompanying financial Statements.

                                       21
<PAGE>

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

     Any additional proceeds derived from exercise of warrants issued or from
other debt or equity transactions must be used to pay interest and principal on
the amended Veritas Note until paid in full. Effective November 1, 2000, Veritas
exercised 500,000 warrants to receive 498,923 shares (net of exercise price) of
Company stock.

     In connection with the closing of the Amerada Hess Corporation ("AHC")
property acquisition on February 9, 1998, the Company issued a non-interest
bearing note payable to AHC (the "AHC Note"). The Company had obtained a six-
month extension of the $1.0 million payment due AHC from February 2000 to August
2000.  This payment was made on August 3, 2000.  Also, the $1.5 million payment
due February 2001 has been divided into three quarterly installments of $500,000
each, payable commencing February 2001.

     The Company has currently budgeted capital expenditures of approximately
$9.4 million for 2000.  Capital expenditures will be used to fund drilling and
development activities, the shooting of a new 3-D seismic survey and leasehold
acquisitions and extensions in the Company's project areas.  The actual amounts
of capital expenditures may differ significantly from such estimates.  Actual
capital expenditures for the nine months ended September 30, 2000 were
approximately $4.3 million.  The Company intends to fund its 2000 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.  A return to the significantly lower oil and gas commodity prices
experienced in 1998 and early 1999 would likely have an adverse effect on the
Company's financial condition, liquidity, ability to finance capital
expenditures and results of operations.  Lower oil and natural gas prices also
may reduce the amount of reserves that the Company can produce economically.

     The Company has experienced substantial working capital requirements
primarily due to the Company's active exploration and development program.  The
Company believes that cash flow from operations and improved commodity prices
should allow the Company to implement its present business strategy through
2000.  A significant decline in cash flow from operations caused by an
unexpected reduction in production and/or significant drop in commodity prices
could have a material adverse effect on the Company's operations, including
curtailment of its exploration and other activities.

Effects of Inflation and Changes in Price

     Crude oil and natural gas commodity prices have been volatile and
unpredictable during 1999 and 2000.  The wide fluctuations that have occurred
during these periods have had a significant 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 inrecent
years, often imposing greater liability on a larger number of potentially
responsible parties.

                                       22
<PAGE>

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


     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.

New Accounting Standard

     In 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities."  SFAS No.
133 was amended by the issuance in 2000 of SFAS No. 138 "Accounting for Certain
Derivative Instruments and Certain Hedging Activities, an amendment of FASB
Statement No. 133."  SFAS No. 133 is effective for fiscal years beginning after
June 15, 2000 and 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.  Therefore, SFAS No. 133 could increase volatility in earnings
and other comprehensive income.

     In order to implement SFAS No. 133 by January 1, 2001, the Company has
begun the process of identifying all derivative instruments and will continue to
measure the fair value of those instruments, designate and document various
hedge relationships, and evaluate the effectiveness of those hedge
relationships.

                                       23
<PAGE>

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Risk Management Activities and Derivative Transactions

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

     Commodity Price Hedges

     The Company periodically enters into certain derivatives (primarily NYMEX
futures contracts) for a portion of its oil and 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 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 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 nine months ended September 30, 2000 and 1999,
the Company realized approximately $(1.1) million and $(0.01) million,
respectively, of hedging gains (losses) which are included in oil and natural
gas revenues in the consolidated statements of operations.  For the nine months
ended September 30, 2000 and 1999, the Company had hedged 46% and 37%,
respectively, of its oil and natural gas production, and as of September 30,
2000 the Company had 2.7 Bcfe of open oil and natural gas contracts for the
months of October 2000 through December 2001.   The prices for these contracts
ranged from $3.82 to $5.14 per Mcf for natural gas and $30.00 to $31.00 per Bbl
for oil.

     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.

                                       24
<PAGE>

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

       None.

Item 2.  Changes in Securites

       None.

Item 3.  Defaults Upon Senior Securities

       None.

Item 4.  Submissions of Matters to a Vote of Security Holders

       None.

Item 5. Other Information

       None.

                                       25
<PAGE>

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.

       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(a)       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.


       3.1(b)       Certificate of Amendment to Certificate of Incorporation.
                    Previously filed as an exhibit to the Company's Annual
                    Report on Form 10-K for the year ended December 31, 1999, as
                    amended by filing on July 24, 2000, 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          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.

       4.2          Warrant between Miller Exploration Company and Guardian
                    Energy Management Corp. dated July 11, 2000, exercisable for
                    1,562,500 shares of the Company's Common Stock. Previously
                    filed as an exhibit to the Company's Current Report on Form
                    8-K filed July 25, 2000, and here incorporated by reference.

                                       26
<PAGE>

     4.3  Warrant between Miller Exploration Company and Guardian Energy
          Management Corp. dated July 11, 2000, exercisable for 2,500,000 shares
          of the Company's Common Stock. Previously filed as an exhibit to the
          Company's Current Report on Form 8-K filed July 25, 2000, and here
          incorporated by reference.

     4.4  Warrant between Miller Exploration Company and Guardian Energy
          Management Corp. dated July 11, 2000, exercisable for 9,000,000 shares
          of the Company's Common Stock. Previously filed as an exhibit to the
          Company's Current Report on Form 8-K filed July 25, 2000, and here
          incorporated by reference.

     4.5  Amendment to Promissory Note, Warrant and Rights Agreement between
          Miller Exploration Company and Veritas DGC Land, Inc., dated July 19,
          2000. Previously filed as an exhibit to the Company's Current Report
          on Form 8-K filed July 25, 2000, and here incorporated by reference.

    10.1  Fourth Amendment to Credit Agreement among Miller Oil Corporation and
          Bank of Montreal dated March 20, 2000. Previously filed as an exhibit
          to the Company's Annual Report on Form 10-K for the year-ended
          December 31, 1999, and here incorporated by reference.

    10.2  Securities Purchase Agreement between Miller Exploration Company and
          Guardian Energy Management Corp. dated July 11, 2000. Previously filed
          as an exhibit to the Company's Current Report on Form 8-K filed on
          July 25, 2000.

    10.3  Promissory Note between Miller Exploration Company and Guardian Energy
          Management Corp. dated July 11, 2000. Previously filed as an exhibit
          to the Company's Current Report on Form 8-K filed on July 25, 2000.

    10.4  Registration Rights Agreement between Miller Exploration Company and
          Guardian Energy Management Corp. dated July 11, 2000. Previously filed
          as an exhibit to the Company's Current Report on Form 8-K filed on
          July 25, 2000.

    10.5  Form of Subscription Agreement between Miller Exploration Company and
          ECCO Investments, LLC dated July 11, 2000. Previously filed as an
          exhibit to the Company's Current Report on Form 8-K filed on July 25,
          2000.

    10.6  Form of Letter Agreement between Miller Exploration Company and Eagle
          Investments, Inc. dated July 12, 2000. Previously filed as an exhibit
          to the Company's Current Report on Form 8-K filed on July 25, 2000.

    10.7  Amended and Restated Credit Agreement between Miller Exploration
          Company and the Subsidiaries of the Company and Bank One, Texas, N.A.,
          dated July 18, 2000. Previously filed as an exhibit to the Company's
          Quarterly Report on Form 10-Q filed on August 14, 2000.

    27.1  Financial Data Schedule.
____________________

                                       27
<PAGE>

(b)  Reports on Form 8-K.  On July 24, 2000, the Company filed a Form 8-K to
     -------------------
     announce the following:

   1.     On July 11, 2000, the Company entered into a Securities Purchase
          Agreement (the "Securities Purchase Agreement") with Guardian Energy
          Management Corp. ("Guardian"). Pursuant to the Securities Purchase
          Agreement, the Company issued to Guardian a convertible promissory
          note in the amount of $5,000,000, and three warrants exercisable,
          respectively, for 1,562,500 shares of the Company's common stock, par
          value $0.01 per share (the "Common Stock"), 2,500,000 shares Common
          Stock and 9,000,000 shares of Common Stock. Conversion of the note and
          exercise of the warrants are subject to stockholder approval.

   2.     In addition, the Securities Purchase Agreement granted Guardian the
          right to designate two members of the Company's board of directors.
          Pursuant thereto, Guardian has designated Messrs. Paul A. Halpern and
          Robert M. Boeve to fill the board seats recently vacated by Messrs.
          Dan A. Hughes, Jr. and Frank M. Burke.

   3.     Also on July 11, 2000, the Company entered into a Subscription
          Agreement with ECCO Investments, LLC ("ECCO"), pursuant to which ECCO
          made an equity investment of $500,000.00 in the Company in exchange
          for 370,370 shares of Common Stock at $1.35 per share.

   4.     The Company also has signed a letter agreement to sell, in exchange
          for $2,500,00.00 in cash and assets, a total of 1,851,851 shares of
          Common Stock to Eagle Investments, Inc. ""Eagle"), a corporation
          controlled by C. E. Miller. Mr. Miller is Chairman of the Board of the
          Company. In addition, Eagle will be issued warrants exercisable for a
          total of 2,031,250 shares of Common Stock. Consummation of the
          transaction with Eagle is subject, among other things, to stockholder
          approval.

   5.     In a press release dated July 21, 2000, the Company announced, among
          other things, that it had entered into an Amendment to Promissory
          Note, Warrant and Registration Rights Agreement (the "Amendment") with
          Veritas DGC Land, Inc., a Delaware corporation ("Veritas"). The
          Amendment amends the Promissory Note and Warrant issued by the Company
          to Veritas on April 14, 1999, as well as the Registration Rights
          Agreement by and between the Company and Veritas of the same date.

                                       28
<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:   November 14, 2000       By: /s/ Deanna L. Cannon
                                    --------------------------------
                                    Deanna L. Cannon
                                    Vice President-Finance and Secretary
                                    (Principal Accounting and Financial Officer)

                                       29
<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(a)     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.

    3.1(b)     Certificate of Amendment to Certificate of Incorporation.
               Previously filed as an exhibit to the Company's Annual Report on
               Form 10-K for the year ended December 31, 1999, as amended by
               filing on July 24, 2000, 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        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.

    4.2        Warrant between Miller Exploration Company and Guardian Energy
               Management Corp. dated April 11, 2000, exercisable for 1,562,500
               shares of the Company's Common Stock. Previously filed as an
               exhibit to the Company's Current Report on Form 8-K filed July
               25, 2000, and here incorporated by reference.

    4.3        Warrant between Miller Exploration Company and Guardian Energy
               Management Corp. dated July 11, 2000, exercisable for 2,500,000
               shares of the Company's Common Stock. Previously filed as an
               exhibit to the Company's Current Report on Form 8-K filed July
               25, 2000, and here incorporated by reference.

                                       30
<PAGE>

     4.4       Warrant between Miller Exploration Company and Guardian Energy
               Management Corp. dated July 11, 2000, exercisable for 9,000,000
               shares of the Company's Common Stock. Previously filed as an
               exhibit to the Company's Current Report on Form 8-K filed July
               25, 2000, and here incorporated by reference.

     4.5       Amendment to Promissory Note, Warrant and Rights Agreement
               between Miller Exploration Company and Veritas DGC Land, Inc.,
               dated July 19, 2000. Previously filed as an exhibit to the
               Company's Current Report on Form 8-K filed July 25, 2000, and
               here incorporated by reference.

     10.1      Fourth Amendment to Credit Agreement among Miller Oil Corporation
               and Bank of Montreal dated March 20, 2000. Previously filed as an
               exhibit to the Company's Annual Report on Form 10-K for the year-
               ended December 31, 1999, and here incorporated by reference.

     10.2      Securities Purchase Agreement between Miller Exploration Company
               and Guardian Energy Management Corp. dated July 11, 2000.
               Previously filed as an exhibit to the Company's Current Report on
               Form 8-K filed on July 25, 2000.

     10.3      Promissory Note between Miller Exploration Company and Guardian
               Energy Management Corp. dated July 11, 2000. Previously filed as
               an exhibit to the Company's Current Report on Form 8-K filed on
               July 25, 2000.

     10.4      Registration Rights Agreement between Miller Exploration Company
               and Guardian Energy Management Corp. dated July 11, 2000.
               Previously filed as an exhibit to the Company's Current Report on
               Form 8-K filed on July 25, 2000.

     10.5      Form of Subscription Agreement between Miller Exploration Company
               and ECCO Investments, LLC dated July 11, 2000. Previously filed
               as an exhibit to the Company's Current Report on Form 8-K filed
               on July 25, 2000.

     10.6      Form of Letter Agreement between Miller Exploration Company and
               Eagle Investments, Inc. dated July 12, 2000. Previously filed as
               an exhibit to the Company's Current Report on Form 8-K filed on
               July 25, 2000.

     10.7      Amended and Restated Credit Agreement between Miller Exploration
               Company and the Subsidiaries of the Company, and Bank One, Texas,
               N.A., dated July 18, 2000. Previously filed as an exhibit to the
               Company's Quarterly Report on Form 10-Q filed on August 14, 2000.

     27.1      Financial Data Schedule.

____________________

                                       31