By OGJ editors
HOUSTON, July 3 -- Mallon Resources Corp. of Denver reported that it has withdrawn from discussions with Tulsa-based Smart Exploration Inc. to enter into a coalbed methane exploration project with the company on Mallon's acreage in New Mexico.
Mallon had signed a letter of intent with Smart in April to form a joint venture to explore and develop the Fruitland formation coal seams under Mallon's East Blanco prospect in New Mexico's San Juan basin (OGJ, Apr. 15, 2002, p. 8), but the two firms were unable to agree upon definitive terms, Mallon said.
Mallon Chairman George Mallon said, "We were excited to do a transaction with Smart as outlined in the original letter of intent. Unfortunately, as we worked toward a definitive agreement, we realized that Smart's willingness to commit real exploration dollars to the project was eroding.
"Ultimately, we determined it would not be in our shareholders' best interests for the company to commit our 50,000 prospective acres to a project with Smart," Mallon added.
Mallon said it has reopened discussions with "other prospective joint venture partners."