                                                                 EXHIBIT 99.5



                   TERMINATION OF AGREEMENT AND MUTUAL RELEASE



DATE:           The date of this Agreement is October 1, 2002.



PARTIES:        Aquila Merchant Services, Inc.
                909 Fannin, Suite 1850
                Houston, Texas  77010
                Fax No:  (713) 336.7494
                ("Aquila")

                Mallon Resources Corporation
                999 18th Street, Suite 1700
                Denver, Colorado  80202
                Fax No.  (303) 293-3601
               ("Mallon")



RECITALS:

     A. Aquila, as successor in interest to Aquila Risk Management  Corporation,
and Mallon are parties to that certain ISDA Master  Agreement dated September 9,
1999 (the "Swap Agreement").

     B. Aquila and Mallon are not parties to any current underlying transactions
to the Swap Agreement,  and now desire to terminate the Swap Agreement  pursuant
to the terms and conditions stated herein.



AGREEMENT:

         In consideration of the mutual covenants herein contained, and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:

     1. Termination of Swap Agreement. Notwithstanding any provision in the Swap
Agreement to the contrary, the Swap Agreement is hereby cancelled and terminated
by the  parties,  and  neither  party  shall have any right or  obligation  with
respect to the Swap Agreement except as provided herein.

     2. Release of Obligations. Effective from and after the execution of this
Agreement, and excepting only such claims, demands, and causes of action which


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Aquila or Mallon may assert against one another for purposes of enforcing this
Agreement, or for purposes of claiming a breach of this Agreement, Aquila and
Mallon, for themselves, their successors and assigns, do hereby release and
forever discharge each other and the successors and assigns of each other from
all liability, known or unknown, contingent or direct, liquidated or
unliquidated, for any claims, demands, actions, or suits of any kind which they
have had, now have, or may in the future have, against one another arising out
of or pursuant to the Swap Agreement. Each party acknowledges the possibility
that the other party may have unknown claims against such party, and that by
signing this Agreement, each party expressly waives such claims, if any. The
parties further acknowledge that the consideration for this mutual release takes
into account the possibility of such future claims.

     3.  Representations  and  Warranties.  Each  party  hereto  represents  and
warrants the following to the other party:

          A.  Authority;  Execution.  The  party  has all  requisite  power  and
     authority  to  execute  this  Agreement  and  consummate  the  transactions
     contemplated  hereby.  The  execution,  delivery,  and  performance of this
     Agreement and the consummation of the transactions  contemplated  hereby on
     the  part of the  party  have  been  duly  and  validly  authorized  by all
     necessary action on the part of such party.

          B. No Conflict.  The execution,  delivery and performance by the party
     of this  Agreement  does not and  will not  conflict  with or  violate  any
     provision  of its  respective  Articles of  Incorporation,  bylaws or other
     organizational  documents  or any other  material  agreement,  contract  or
     instrument to which it is a party.

     4.   General Covenants.

          A. Voluntary  Agreement.  The parties have read this Agreement and the
     mutual release  contained herein,  and have freely and voluntarily  entered
     into this  Agreement.  Each party is fully  aware of the  contents  of this
     Agreement and its legal  effects.  Each party confirms that it has executed
     this Agreement free from duress, undue influence,  or promise not set forth
     in this Agreement.

          B. Further Assurances.  Each party shall take such actions and execute
     such further documents as may be reasonably requested by the other party to
     effectuate the purposes of this Agreement,  provided, that Aquila shall not
     be required to incur any expense in connection therewith.

          C. Entire Agreement;  Amendments. This Agreement represents the entire
     agreement of the parties  hereto and  supersedes  all prior  agreements  or
     understandings with respect to the foregoing matters. This Agreement may be
     amended  only  pursuant  to a written  document  executed  by both  parties
     hereto.

          D.  Counterparts/Facsimile  Signatures. This Agreement may be executed
     in  counterparts,  all of  which  together  shall  be  deemed  an  original
     Agreement.  Delivery of an executed  signature  page of this  Agreement  by
     facsimile transmission shall constitute effective and binding execution and
     delivery of this Agreement.


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          E. Governing Law. This Agreement shall be governed by and construed in
     accordance  with the  internal  laws of the state of Texas  without  giving
     effect to its conflict of laws decisions.

          F. Individual Authorization.  The individuals executing this Agreement
     represent  and  warrant  that they have been  authorized  to  execute  this
     Agreement by the parties on whose behalf they are executing the  Agreement,
     and shall be personally  liable to the other parties for any breach of this
     representation and warranty.

          G.  Effective  Date.  Notwithstanding  anything  else  herein  to  the
     contrary,  this Agreement shall not become  effective unless and until that
     certain cash  consideration  required to be paid by Black Hills Corporation
     to Aquila  Energy  Capital  Corporation  ("AECC")  pursuant to that certain
     Assignment of Credit Agreement,  Note, Liens, and Security  Documents dated
     October 1, 2002, among such parties and others has been received by AECC.

                          [signature page is attached]


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         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

Aquila Merchant Services, Inc.                  Mallon Resources Corporation


By:                                             By:
   --------------------------------------          ----------------------------
     Name:                                         Name:
          -------------------------------               -----------------------
     Title:                                        Title:
           ------------------------------                ----------------------




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