-- July 2009 - East Chalkley Acquisition - $1.7 million -- September 2009 - Sharon Resources - $2.35 million -- February 2010 - Triad Energy Corporation - $81 millionWe were successful late in the year in refinancing all of our Company's existing senior indebtedness from CIT to a much larger and more traditional senior bank credit facility of up to $150 million with BMO (Bank of Montreal) and Capital One. In addition, we have raised approximately $50 million of total equity over the last ten months including (i) $25 million of common stock, (ii) $15 million of Series B Convertible Preferred Stock issues to the prior lenders of Triad, and (iii) $10 million of Series C Perpetual Preferred Stock (MHR-PC) which is non-dilutive because it does not convert into our common stock. The Company had notable success in further developing certain existing oil and gas properties located in North Dakota, Louisiana and Texas. A total of 33 gross wells were drilled in 2009 with a 97% success rate. These wells had a direct correlation to the 99% increase in our year-end proved reserves to 6.2 million barrels of oil equivalent. Additionally, we have transformed the company in the field to a predominately operated entity versus non-operated. At last count, we operated 2,079 wells as compared to only two operated wells at the beginning of 2009. Our primary focus in 2010 will be in three unconventional resources plays which are:
-- Appalachia - Marcellus Shale/Huron -- South Texas - Eagle Ford Shale -- North Dakota - Williston/Bakken/Three ForksNew drilling is about to commence on two unbooked locations on our approximate 20,000 gross mineral acreage position in the oil leg of the Eagle Ford Shale. Additionally, the completion and expansion of take-away capacity on our Eureka Hunter pipeline system in West Virginia is on track to allow Magnum Hunter to spud our first two Marcellus Shale horizontal wells this year. The addition of approximately 1,000 Boe's to the Company's daily production rate with the recent closing of the Triad acquisition in February exposes the Company to a new unconventional resource play located in the Appalachia region. Magnum Hunter's production profile today, after adding the Triad acquisition, is approximately 70% crude oil. Our position in the Eagle Ford Shale and the Williston/Bakken/Three Forks resources plays are predominately oriented for crude oil and our leasehold position in the Williston Basin of North Dakota and the Marcellus Shale of West Virginia are predominately HBP ("held by production"). This means we have no financial pressure to drill any new wells in order to meet mineral lease expiration periods on primary terms. Many of our competitors are not in this unique position, which is especially critical as we enter an uncertain commodity price environment with very low North American natural gas prices. We continue to see a tremendous amount of deal flow from the mergers and acquisitions market, however, our primary focus in the short term will be successfully proving our unconventional resource plays. Should an attractive and accretive acquisition opportunity present itself, we will certainly analyze the assets being offered. However, we will also be mindful of the tremendous value creating opportunities that remain in our existing portfolio and would be hesitant to pursue any opportunity which would either dilute or discount Magnum Hunter's increasing recognition as an up and coming North American unconventional resource company." 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 unconventional 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 and Triad's various properties, (2) the expected production and revenue from its and Triad's various properties, (3) the Company's proposed redirection as an operator of certain properties and (4) estimates regarding the reserve potential of its and Triad's 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 and Triad's various properties, (2) positive confirmation of the reserves, production and operating expenses associated with its and Triad's 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.
MAGNUM HUNTER RESOURCES CORPORATION
(FORMERLY PETRO RESOURCES CORPORATION)
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Year Ended
December 31, December 31,
-------------------------- --------------------------
Revised
2009 2008 2009 2008
------------ ------------ ------------ ------------
REVENUE:
Oil and gas sales $ 3,468,592 $ 2,277,102 $ 10,035,033 $ 14,486,478
Other income 22,668 100,000 222,668 200,000
Gain on sale of
property 14,000 15,000 14,000 1,196,963
------------ ------------ ------------ ------------
Total revenue 3,505,260 2,392,102 10,271,701 15,883,441
------------ ------------ ------------ ------------
EXPENSES:
Lease operating
expenses 413,728 1,106,753 4,220,345 4,252,835
Severance taxes and
marketing 1,057,818 210,969 1,057,818 1,126,156
Exploration 503,972 4,559,226 896,337 7,348,778
Impairment of oil &
gas properties 633,953 1,973,015 633,953 1,973,015
Depreciation,
depletion and
accretion 1,399,369 5,826,587 4,499,611 7,682,293
General and
administrative 3,969,288 959,081 8,490,364 3,964,664
------------ ------------ ------------ ------------
Total expenses 7,978,128 14,635,631 19,798,428 26,347,741
------------ ------------ ------------ ------------
LOSS FROM
OPERATIONS (4,472,868) (12,243,529) (9,526,727) (10,464,300)
OTHER INCOME
(EXPENSE):
Interest income 35 9,289 959 188,932
Interest expense (1,469,691) (599,601) (3,336,346) (2,771,858)
Loss on debt
extinguishment 0 0 0 (2,790,829)
Gain (loss) on
derivative
contracts (1,297,784) 8,297,500 (2,325,251) 7,311,255
------------ ------------ ------------ ------------
Net loss (7,240,308) (4,536,341) (15,187,365) (8,526,800)
Less: Net loss
attributable to
non-controlling
interest (66,820) 968,170 63,156 1,640,466
------------ ------------ ------------ ------------
Net loss
attributable to
Magnum Hunter
Resources Corp. (7,307,128) (3,568,171) (15,124,209) (6,886,334)
Dividend on Series
A Convertible
Preferred 0 0 0 (734,406)
Dividend on Series
C Preferred (25,654) 0 (25,654) 0
------------ ------------ ------------ ------------
Net loss to
attributable to
common
shareholders (7,332,782) (3,568,171) (15,149,863) (7,620,740)
Weighted avg.
number of common
shares outstanding,
basic and diluted 40,983,945 36,727,343 38,953,834 36,714,489
Net loss per common
share, basic and
diluted ($ 0.18) ($ 0.10) ($ 0.39) ($ 0.21)
MAGNUM HUNTER RESOURCES CORPORATION
(FORMERLY PETRO RESOURCES CORPORATION)
SELECTED BALANCE SHEET DATA
December 31,
----------------------------
2009 2008
------------- -------------
Cash and cash equivalents $ 2,281,568 $ 6,120,402
Total current assets 6,873,258 10,179,778
Total property and equipment 57,538,632 45,938,221
Total assets 66,584,051 61,664,868
Total current liabilities 6,219,375 2,856,713
Total long-term liabilities 13,000,000 21,500,000
Total shareholders' equity 39,317,915 35,078,263
Contact Information: Contact: M. Bradley Davis Senior Vice President of Capital Markets bdavis@magnumhunterresources.com (832) 203-4545