HOUSTON, TX--(Marketwire - August 14, 2009) - Magnum Hunter Resources Corporation (
NYSE Amex:
MHR) (the "Company") announced today financial and operating results for
the three months and six months ended June 30, 2009.
Financial and Operating Results for the Three Months and Six Months Ended
June 30, 2009
Magnum Hunter reported a net loss of $3.4 million, or ($0.09) per basic and
fully diluted shares outstanding for the second quarter of 2009, as
compared to 2008's second quarter net loss of $1.9 million, or ($0.05) per
basic and fully diluted shares outstanding. The loss in the second quarter
of 2009 is attributable to the substantial decline in the realized price
for crude oil (down 54% from $113.58 per Bbl. to $51.95 per Bbl.) and
realized natural gas prices (down 68%, from $7.91 per Mcf to $2.55 per Mcf)
when compared to the second quarter of 2008. Also contributing to the
second quarter 2009 net loss was a 62% increase in general and
administrative expenses, a substantial portion of which is associated with
recognizing non-cash stock compensation expenses as a result of the
appointments of Mr. Gary C. Evans as Chairman of the Board and Mr. Ronald
D. Ormand as Executive Vice President and Chief Financial Officer of Magnum
Hunter previously announced on May 22, 2009.
The Company's production in the second quarter of 2009 increased 42% or
20,426 Boe to 69,224 Boe from 48,798 Boe produced during the second quarter
of 2008. Also during the second quarter of 2009, Magnum Hunter's lease
operating expense per Boe of production decreased 33%, from $27.60 per Boe
produced during the second quarter of 2008 to $18.39 per Boe.
Magnum Hunter reported a net loss of $4.8 million, or ($0.13) per basic and
fully diluted shares outstanding for the first six months of 2009 as
compared to a net loss of $3.5 million, or ($0.10) per basic and fully
diluted shares outstanding in the first six months of 2008. The loss for
the first half of 2009 is also attributable to the aforementioned
substantial decline in crude oil and natural gas prices and the non-cash
charges which increased general and administrative expenses.
Operating cash flow (before changes in working capital accounts) generated
by Magnum Hunter during the first six months of 2009 decreased $927.3
thousand from $2.1 million for the first six months of 2008 to $1.2 million
for the first six months of 2009.
Along with cash currently on hand and the Company's anticipated cash flow
from operations through year-end 2009, Magnum Hunter believes it has
adequate cash liquidity more than sufficient to meet all of the Company's
existing capital expenditure and other capital requirements through the
balance of fiscal year 2009 and into fiscal year 2010.
Management Comments
Mr. Gary C. Evans, Chairman of the Company, commented, "Our reported
financial and operating results for the three months and six months ended
June 30, 2009 reflect the tremendous year-over-year downward volatility in
world crude oil and North American natural gas commodity prices. With the
Company's new management team firmly in place as of the beginning of the
third quarter 2009, we expect our future financial and operational results
to be reflective of our efforts to create incrementally increasing values
for our shareholders. Our vision for Magnum Hunter remains firm on
committing our resources to focusing on operations and strategic property
acquisitions in known geologic regions of the oil patch with an emphasis on
certain shale resource plays. Low finding and development costs, reduced
operating costs and low corporate overhead are all necessary in an effort
to generate superior returns to shareholders. The merger and acquisition
markets continue to show a tremendous amount of deal flow, particularly in
the distressed asset arena, and we continue to be optimistic that the
Company will have the opportunity to announce specific transactions related
to these activities in the near future."
About Magnum Hunter Resources
Magnum Hunter Resources Corporation and subsidiaries are a Houston, Texas
based independent exploration and production company engaged in the
acquisition of exploratory leases and producing properties, secondary
enhanced oil recovery projects, exploratory drilling, and production of oil
and natural gas in the United States.
For more information, please view our website at
www.magnumhunterresources.com.
Forward-looking Statements
The statements contained in this press release that are not historical are
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act"), and Section 21E
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
including statements, without limitation, regarding the Company's
expectations, beliefs, intentions or strategies regarding the future. Such
forward-looking statements may relate to, among other things: (1) the
Company's proposed exploration and drilling operations on its various
properties, (2) the expected production and revenue from its various
properties, (3) the Company's proposed redirection as an operator of
certain properties and (4) estimates regarding the reserve potential of its
various properties. These statements are qualified by important factors
that could cause the Company's actual results to differ materially from
those reflected by the forward-looking statements. Such factors include
but are not limited to: (1) the Company's ability to finance the continued
exploration, drilling and operation of its various properties, (2)
positive confirmation of the reserves, production and operating expenses
associated with its various properties; and (3) the general risks
associated with oil and gas exploration, development and operation,
including those risks and factors described from time to time in the
Company's reports and registration statements filed with the Securities and
Exchange Commission, including but not limited to the Company's Annual
Report on Form 10-K and Form 10-K/A for the year ended December 31, 2008
filed with the Securities and Exchange Commission on March 31, 2009 and
April 29, 2009, respectively, and our subsequently filed reports. The
Company cautions readers not to place undue reliance on any forward-looking
statements. The Company does not undertake, and specifically disclaims any
obligation, to update or revise such statements to reflect new
circumstances or unanticipated events as they occur.
MAGNUM HUNTER RESOURCES CORPORATION
(FORMERLY PETRO RESOURCES CORPORATION)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
------------ ------------ ------------ ------------
Revenue
Oil and gas sales $ 2,428,891 $ 4,368,442 $ 4,245,927 $ 7,426,443
Other income 100,000 - 200,000 100,000
------------ ------------ ------------ ------------
Total revenue 2,528,891 4,368,442 4,445,927 7,526,443
Expenses
Lease operating
expenses 1,273,205 1,346,708 2,517,767 2,569,106
Exploration 19,201 37,654 113,676 610,164
Depreciation,
depletion and
accretion 799,335 612,021 2,106,862 1,137,193
General and
administrative 1,445,062 894,329 2,191,675 2,187,772
------------ ------------ ------------ ------------
Total expenses 3,536,803 2,890,712 6,929,980 6,504,235
------------ ------------ ------------ ------------
Income (loss) from
operations (1,007,912) 1,477,730 (2,484,053) 1,022,208
Other income and
(expense)
Interest income 251 63,147 852 139,002
Interest expense (607,509) (590,819) (1,178,186) (1,105,780)
Loss on derivative
contracts (1,774,419) (2,778,056) (1,218,104) (3,463,650)
------------ ------------ ------------ ------------
Net loss (3,389,589) (1,827,998) (4,879,491) (3,408,220)
Less: Net loss
attributable to
noncontrolling
interest (3,987) 223,165 114,632 349,990
Net loss
attributable to
Magnum Hunter
Resources
Corporation (3,393,576) (1,604,833) (4,764,859) (3,058,230)
Dividend on Series
A Convertible
Preferred - (277,993) - (458,801)
Net loss
attibutable to
common
stockholders $ (3,393,576) $ (1,882,826) $ (4,764,859) $ (3,517,031)
============ ============ ============ ============
Earnings per common
share
Basic and diluted $ (0.09) $ (0.05) $ (0.13) $ (0.10)
Weighted average
number of common
shares outstanding
Basic and diluted 36,797,771 36,718,186 36,788,129 36,685,504
MAGNUM HUNTER RESOURCES CORPORATION
UNAUDITED SELECTED BALANCE SHEET DATA
June 30, 2009 December 31, 2008
----------------- -----------------
Cash, cash equivalents, and
restricted cash $ 677,500 $ 6,120,402
Total current assets 4,084,788 10,179,778
Total property and equipment 49,403,045 45,938,221
Total assets 56,913,540 61,664,868
Total current liabilities 1,819,143 3,497,408
Total long-term liabilities 24,183,352 23,089,197
Total shareholder's equity 29,640,768 33,693,354
Contact Information: Contact:
M. Bradley Davis
Senior Vice President of Capital Markets
bdavis@magnumhunterresources.com
(832) 369-6986 Ext. 226