On October 3, 2004, at approximately 1120 mountain daylight time, a Worner Balloon Works NL-1000 helium-filled gas balloon, German registration DOYES, piloted by a private pilot, was destroyed when it was struck by lightning while in cruise flight at 12,000 feet msl in the vicinity of Chama, New Mexico. Visual meteorological conditions prevailed at the time of the accident. The cross-country flight was being conducted under the provisions of Title 14 CFR Part 91 without a flight plan. The pilot and passenger received serious injuries. The flight originated at the Albuquerque Balloon Fiesta Park, Albuquerque, New Mexico, on October 2, 2004, at approximately 2020. According to the pilot, they were participating in the 2004 Albuquerque Balloon Fiesta's Endurance Competition. The pilot stated that, while en route over the Chama area, he heard a "loud" bang and saw a "flash." He then noticed a large "L" shaped tear in the balloon's envelope as the balloon began to descend "rapidly." The balloon impacted mountainous terrain at an elevation of 8,000 feet, approximately 1/2 mile east of Chama. The pilot and passenger each sustained a broken ankle. The lightning strike and ground impact forces destroyed the balloon. The pilot did not provide a Pilot Operator Aircraft Accident Report (NTSB form 6120.1/2) for this accident report.