SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 2, 1998
(July 2, 1998)
HONDO OIL & GAS COMPANY
(Exact name of registrant as specified in its charter)
Delaware 1-8979 95-1998768
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
10375 Richmond Ave, Ste 900, Houston, Texas 77042
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 954-4600
_____________________________________________________________________
(Former name or former address, if changed since last report)
There are no exhibits to this report.
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Item 5. Other Events
The Registrant issued the following press release on July 1, 1998:
Hondo Oil & Gas Company today announced that that its shares will no
longer be traded on the American Stock Exchange as the Company has
withdrawn its appeal of the Exchange's delisting decision. Instead, its
shares have begun trading over-the-counter on the electronic bulletin
board under the symbol HOGL. The Company has been informed that one or
more brokers will make a market in the Company's stock, although they
are not obligated to do so and may discontinue making a market at any
time.
In April 1998 the Company announced that the rate of decline in
production from its Opon No. 3 and Opon No. 4 gas wells in Colombia had
been higher than expected during the first five months of production.
Recent testing of the wells is complete. An analysis of the test
results by the Company's independent reserve engineers has concluded
that it will become uneconomic (operating costs will exceed operating
revenues) to produce the wells before the end of fiscal 1998 and that
the drilling of additional wells would be uneconomic (net profit over
the life of a new well would be less than the cost to drill it). In its
annual report for the year ended September 30, 1997, the Company
reported proved reserves of 52.5 billion cubic feet of natural gas and
1.9 million barrels of associated liquids, for which the present value
of net cash flows was $16.0 million. As a result of the significant
declines in production observed since December 1997 and the recently
completed testing, proved reserves as of April 30, 1998 are now
estimated to be 0.7 billion cubic feet of natural gas and 0.03 million
barrels of associated liquids, for which the present value of net cash
flows is less than $0.1 million.
The Company is considering its available alternatives in light of its
current financial situation, which may include, among others,
negotiation with the Company's existing creditors, dissolution of the
Company, or a filing under the applicable bankruptcy law.
Certain statements in this news release regarding future expectations
may be regarded as _forward-looking statements_ within the meaning of
the U.S. Securities Litigation Reform Act. They are subject to various
risks and uncertainties which are discussed in detail in the Company's
Securities and Exchange Commission filings, including the report on Form
10-Q for the quarter ended March 31, 1998. Actual results may vary
materially.
Hondo Oil & Gas Company is an independent oil and gas company focusing
on international oil and gas exploration and development.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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HONDO OIL & GAS COMPANY
Date: July 2, 1998 By: /s/ Stanton J. Urquhart
______________________________
Stanton J. Urquhart
Vice President
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