Contact Information: Contact: M. Bradley Davis Senior Vice President of Capital Markets bdavis@magnumhunterresources.com (832) 203-4545
Magnum Hunter Resources Announces Initial 2010 Capital Budget of $25 Million
| Source: Magnum Hunter Resources
HOUSTON, TX--(Marketwire - February 4, 2010) - Magnum Hunter Resources Corporation (NYSE Amex : MHR ) (NYSE Amex : MHR-PC ) (the "Company" or "Magnum Hunter") announced today
that the Company's Board of Directors has approved an initial capital
budget for fiscal year 2010 of $25.0 million. The capex budget does not
include any potential expenditures which may occur for possible merger and
acquisition activities. The 2010 capex budget is predominately for capital
expenditures necessary to fund the exploration and development activities
associated with Magnum Hunter's acquisition of substantially all of the
assets of Triad Energy Corp. ("Triad") and certain of its affiliated
entities, scheduled to close next week. The Company plans to fund the
approved fiscal year 2010 capex budget from internally generated sources of
cash flows derived from a combination of operating activities and cash
liquidity available under the Company's existing $150 million revolving
commercial bank line of credit ($70 million borrowing base).
The Company has approximately $17.0 million of capex (approximately 70% of
the total) directed to the Triad assets, including the horizontal drilling
of a minimum of two unbooked Marcellus Shale locations in Tyler County,
West Virginia. Additionally, Magnum Hunter has budgeted to immediately
begin spending approximately $9.0 million of the capex on upgrading and
completing the Eureka Pipeline system located in West Virginia being
acquired with the Triad transaction. The balance of the Company's capex
budget in Appalachia will be for new leasing activity and other oil and gas
related projects.
For the Eagle Ford Shale located in Central and South Texas, Magnum Hunter
has allocated approximately $7.0 million of capex (approximately 28% of the
total). The Company plans to horizontally drill two unbooked Eagle Ford
Shale locations during fiscal year 2010, with one of these to be completed
before mid-year. Additionally, Magnum Hunter will be fracing this month an
Eagle Ford Shale vertical well to test the fracturing and stimulation
process for use going forward on the Company's extensive Eagle Ford Shale
mineral lease acreage inventory. The balance of Magnum Hunter's capex
budget in the Eagle Ford Shale will be for additional leasing related
activities that are currently ongoing.
As the year progresses, it is probable that this initial $25.0 million
capex budget will be increased by the Board of Directors based upon
anticipated success in the Company's unconventional resource plays.
About Magnum Hunter Resources Corporation
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. The Company is presently active in three
of the "big four" emerging
shale plays in the United States.
For more information, please view our website at http://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, Form 10-K/A and Form10-K/A for the year ended
December 31, 2008 filed with the Securities and Exchange Commission on
March 31, 2009, April 29, 2009 and September 11, 2009, respectively, and
the Company's Quarterly Reports on Form 10-Q for the quarters ending March
31, 2009, June 30, 2009 and September 30, 2009, filed on May 11, 2009,
August 14, 2009 and November 16, 2009, respectively. 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.