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<TITLE>Letter to Shareholders Annual Report</TITLE>
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<B><FONT SIZE=5><P ALIGN="CENTER">SECURITIES AND EXCHANGE COMMISSION</P>
</FONT><FONT SIZE=3><P ALIGN="CENTER">Washington, D. C.  20549</P>
</B></FONT>
<P>&nbsp;</P>
<B><FONT SIZE=6><P ALIGN="CENTER">Form 8-K</P>
</FONT><I><FONT SIZE=2><P ALIGN="CENTER">Current Report Pursuant to Section 13 or 15(d) of The Securities Act of 1934</P>
</B></I></FONT>
<P>&nbsp;</P>
<B><FONT SIZE=2><P>Date of Report (date of earliest event reported):  </B></FONT>July 17, 2002</P>

<P>&nbsp;</P>
<B><FONT SIZE=7><P ALIGN="CENTER">Mallon Resources Corporation</P>
</FONT><FONT SIZE=2><P ALIGN="CENTER">(exact name of registrant as specified in its charter)</P>
</B></FONT>
<P>&nbsp;</P>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=638>
<TR><TD WIDTH="33%" VALIGN="TOP">
<P>Colorado</TD>
<TD WIDTH="33%" VALIGN="TOP">
<P>0-17267</TD>
<TD WIDTH="33%" VALIGN="TOP">
<P>84-1095959</TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP">
<B><FONT SIZE=2><P>(State or other<BR>
jurisdiction<BR>
of incorporation)</B></FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<B><FONT SIZE=2><P>(Commission<BR>
File Number)</B></FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<B><FONT SIZE=2><P>(I.R.S. Employer<BR>
Identification No.)</B></FONT></TD>
</TR>
</TABLE>


<P>&nbsp;</P>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=422>
<TR><TD WIDTH="77%" VALIGN="TOP">
<P>999 18th Street, Suite 1700, Denver, Colorado</TD>
<TD WIDTH="23%" VALIGN="TOP">
<P>80202</TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="TOP">
<B><FONT SIZE=2><P>(address of principal executive offices)</B></FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<B><FONT SIZE=2><P>(zip code)</B></FONT></TD>
</TR>
</TABLE>
</CENTER></P>


<P>&nbsp;</P>
<B><FONT SIZE=2><P>Registrant's telephone number, including area code:</B></FONT>  (303) 293-2333</P>

<P>&nbsp;</P>
<P>&nbsp;</P>
<P ALIGN="CENTER">not applicable</P>
<B><FONT SIZE=2><P ALIGN="CENTER">(former name or former address, if changed since last report)</P>
</B>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&lt;PAGE&gt;</P>

<P>&nbsp;</P>
<B><P>Item 4.  Changes to Registrant's Certifying Accountant</P>
</B>
<P>On July&nbsp;17, 2002, Arthur Andersen LLP ("Andersen") was dismissed as independent accountants for Mallon Resources Corporation (the "Company"), effective immediately, and HEIN + ASSOCIATES LLP ("Hein") was appointed as the Company's new independent accountants for the fiscal year ending December&nbsp;31, 2002.  The decision to dismiss Andersen was recommended by the Audit Committee of the Board of Directors and was approved by the Board of Directors on July&nbsp;17, 2002. </P>
<P>Andersen's reports on the Company's financial statements for the two fiscal years ended December 31, 2000 and December 31, 2001, did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty or audit scope.  In addition, such reports were not qualified or modified as to accounting principles except that the audit report of Andersen for the fiscal year ended December 31, 2001 contained an explanatory paragraph with respect to the change in the method of accounting for derivative instruments effective January 1, 2001 as required by the Financial Accounting Standards Board.  During the Company's two most recent fiscal years and the period from January 1, 2002 though the date of Andersen's termination, there were no disagreements between the Company and Andersen on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Andersen. would have caused it to make reference to the subject matter of the disagreements in connection with its reports.  In addition, during the above-stated period, there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K. </P>
<P>The Company has provided a copy of the foregoing statements to Andersen.  Although the Company requested a letter from Andersen stating its agreement with such statements and although the Company has used reasonable efforts to obtain such letter, the Company has not been able to obtain the letter. </P>
<P>During the Company's two most recent fiscal years ended December&nbsp;31, 2001, and the subsequent interim periods through the date of this Report, the Company did not consult with Hein regarding any of the matters or events set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K.</P>

<B><P ALIGN="CENTER">Signatures</P>
</B>
<P>&#9;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.</P>

<B><P ALIGN="CENTER">Mallon Resources Corporation</P>
</B>
<P>&nbsp;</P>
<P>&nbsp;</P></FONT>
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<TR><TD WIDTH="47%" VALIGN="TOP">
<FONT SIZE=2><P>July 25, 2002</FONT></TD>
<TD WIDTH="53%" VALIGN="TOP">
<FONT SIZE=2><P>__<U>/s/ Roy K. Ross</U>_________________</FONT></TD>
</TR>
<TR><TD WIDTH="47%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="53%" VALIGN="TOP">
<FONT SIZE=2><P>Roy K. Ross, Executive Vice President</FONT></TD>
</TR>
</TABLE>

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Letter to Shareholders Annual Report
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.  20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of The Securities Act of 1934
Date of Report (date of earliest event reported):
July 17, 2002
Mallon Resources Corporation
(exact name of registrant as specified in its charter)
Colorado
0-17267
84-1095959
(State or other
jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
999 18th Street, Suite 1700, Denver, Colorado
80202
(address of principal executive offices)
(zip code)
Registrant's telephone number, including area code:
(303) 293-2333
not applicable
(former name or former address, if changed since last report)
<PAGE>
Item 4.  Changes to Registrant's Certifying Accountant
On July 17, 2002, Arthur Andersen LLP ("Andersen") was dismissed as independent accountants for Mallon Resources Corporation (the "Company"), effective immediately, and HEIN + ASSOCIATES LLP ("Hein") was appointed as the Company's new independent accountants for the fiscal year ending December 31, 2002.  The decision to dismiss Andersen was recommended by the Audit Committee of the Board of Directors and was approved by the Board of Directors on July 17, 2002.
Andersen's reports on the Company's financial statements for the two fiscal years ended December 31, 2000 and December 31, 2001, did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty or audit scope.  In addition, such reports were not qualified or modified as to accounting principles except that the audit report of Andersen for the fiscal year ended December 31, 2001 contained an explanatory paragraph with respect to the change in the method of accounting for derivative instruments effective January 1, 2001 as required by the Financial Accounting Standards Board.  During the Company's two most recent fiscal years and the period from January 1, 2002 though the date of Andersen's termination, there were no disagreements between the Company and Andersen on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Andersen. would have caused it to make reference to the subject matter of the disagreements in connection with its reports.  In addition, during the above-stated period, there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.
The Company has provided a copy of the foregoing statements to Andersen.  Although the Company requested a letter from Andersen stating its agreement with such statements and although the Company has used reasonable efforts to obtain such letter, the Company has not been able to obtain the letter.
During the Company's two most recent fiscal years ended December 31, 2001, and the subsequent interim periods through the date of this Report, the Company did not consult with Hein regarding any of the matters or events set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K.
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.
Mallon Resources Corporation
July 25, 2002
__
/s/ Roy K. Ross
_________________
Roy K. Ross, Executive Vice President