HOUSTON, TX--(Marketwire - May 14, 2010) - Magnum Hunter Resources Corporation (
NYSE Amex:
MHR) (
NYSE Amex:
MHR-PC) ("Magnum Hunter," or the "Company") announced
today operational and financial results for the first quarter of 2010.
OPERATIONAL RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2010
Average daily production during the first quarter ended March 31, 2010 was
1,374 Boe's per day (64% crude oil and ngl's) and represented a 88%
increase over the average daily production rate of 731 Boe's per day (69%
crude oil and ngl's) reported during the first quarter of 2009. Magnum
Hunter's first quarter 2010 average daily production rate also exceeded the
Company's fourth quarter 2009 average daily production rate with an
increase of 87%. The significant increase to the Company's average daily
production rate during the first quarter of 2010 is directly attributable
to the production additions from the February 2010 acquisition of privately
held Triad Energy Corporation, an Appalachian Basin focused energy company.
OPERATIONAL UPDATE
Magnum Hunter currently has under contract a drilling rig scheduled to spud
its first Eagle Ford Shale crude oil prospect in Gonzales County, Texas on
or about June 1, 2010. Two additional Eagle Ford Shale wells will be
subsequently drilled in Atascosa County and another location yet to be
determined. Additionally, the Company is proceeding with expansion plans
regarding the increased capacity of the Eureka Hunter pipeline system
located in northwestern West Virginia which includes right-of-way
acquisition, regulatory permits, and ordering of 20" steel pipe for
anticipated construction activities over the next several months. The
first two horizontal Marcellus Shale prospects are currently planned to be
drilled later this year once the new gas pipeline is completed and in
operation. None of Magnum Hunter's currently identified drilling locations
on either the Company's approximate 30,000 Eagle Ford Shale gross lease
acreage position or the Company's approximate 42,000 gross Marcellus Shale
lease acreage position located in West Virginia, have been previously
booked as proved reserves by Magnum Hunter or its third party engineering
consultants. Success in either of these two new resource plays could have
a material effect on future reserve additions.
FINANCIAL RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2010
Magnum Hunter reported a net loss of $4.0 million, or ($0.07) per basic and
fully diluted shares outstanding for the first quarter of 2010, as compared
to 2009's first quarter net loss of $1.4 million, or ($0.04) per basic and
fully diluted shares outstanding. Total revenues for the three months
ended March 31, 2010 and 2009 were $7.8 million and $1.9 million,
respectively, an increase of 308%.
The Company's first quarter 2010 net loss included the following
non-recurring and non-cash charges; (i) exploration expense of $451
thousand, or ($0.01) per basic and fully diluted share, (ii) non-cash
general and administrative charges associated with employee stock options
and restricted common share grants for a total of $1.4 million, or ($0.03)
per basic and fully diluted share, (iii) accrual of employee performance
bonuses for 2009 of approximately $1.9 million, or ($0.03) per basic and
fully diluted share, (iv) non-recurring acquisition expenses related to
Triad of $1.3 million, or ($0.02) per basic and fully diluted share, and
(v) an unrealized loss on derivative contracts in the amount of $1.9
million, or ($0.03) per basic and fully diluted share. Adjusting for these
non-recurring and non-cash charges, Magnum Hunter's first quarter 2010 net
loss would have improved by $0.12 per basic and fully diluted shares
outstanding, or to an adjusted net profit per basic and fully diluted
common shares of $0.05.
Operating cash flow (before changes in working capital accounts) generated
by Magnum Hunter during the three months ended March 31, 2010 was
approximately $1.1 million compared to $642,000 generated by the Company
during the comparable period in 2009.
MANAGEMENT COMMENTS
Mr. Gary C. Evans, Chairman and CEO of Magnum Hunter Resources Corporation,
commented, "This was an eventful quarter for our company with the
successful closing of the acquisition of Triad Energy in February. As
anticipated when we were originally evaluated this acquisition, we are
continuing to uncover a number of new opportunities within this asset base
that will further develop throughout the year.
"We anxiously anticipate our new drilling schedule in the Eagle Ford Shale
and Marcellus unconventional resource plays which will begin this month.
We are also evaluating a number of acquisition opportunities considered
'bolt on' transactions within our core areas of existing operations.
"Our Company's liquidity position continues to improve with a combination
of support from our recently expanded senior bank group, the recent sales
of our Series C Perpetual Preferred Stock (non-convertible), and due to the
upcoming redemption of certain outstanding stock purchase warrants."
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
This press release contains statements concerning our expectations,
beliefs, plans, intentions, objectives, goals, strategies, future events or
performance and underlying assumptions and other statements that are not
historical facts. These statements and others contained in this
presentation 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"), Section 21E of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and the Private Securities Litigation
Reform Act of 1995 (the "Litigation Reform Act"). Actual results may differ
materially from those expressed or implied by these statements. You can
generally identify our forward-looking statements by the words
"anticipate", "believe", "continue", "could", "estimate", "expect",
"forecast", "goal", "intend", "may", "objective", "plan", "potential",
"predict", "projection", "should", "will", or other similar words. Such
forward-looking statements 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; (3) the general risks associated with oil and gas exploration,
development and operations, 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 Reports on Form 10-K for the period ended
December 31, 2009, 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 March 31, 2010, 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)
SELECTED BALANCE SHEET DATA
March 31, December 31,
2010 2009
------------ ------------
Cash and Cash Equivalents $ 1,478,011 $ 2,281,568
Total Current Assets 8,609,315 6,873,258
Total Property and Equipment 144,064,688 57,538,632
Total Assets 156,901,163 66,584,051
Total Current Liabilities 11,424,974 6,219,375
Total Long-term Debt 66,617,437 13,000,000
Other Long-term Liabilities 4,995,859 2,673,001
Series B Redeemable Convertible Preferred
Stock 14,982,000 0
Series C Cumulative Perpetual Preferred
Stock 9,069,050 5,373,750
Total Shareholders' Equity $ 49,811,843 $ 39,317,925
MAGNUM HUNTER RESOURCES CORPORATION
(FORMERLY PETRO RESOURCES CORPORATION)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
2010 2009
------------ ------------
REVENUE:
Oil and gas sales $ 7,294,992 $ 1,817,036
Field operations and other 527,989 100,000
------------ ------------
Total revenue 7,822,981 1,917,036
------------ ------------
EXPENSES:
Lease operating expenses 2,349,699 1,018,611
Severance taxes and marketing 533,549 225,951
Exploration 451,128 94,475
Field operations 270,644 -
Depreciation, depletion and accretion 1,539,847 1,307,527
General and administrative 6,768,038 746,613
------------ ------------
Total expenses 11,912,905 3,393,177
------------ ------------
LOSS FROM OPERATIONS (4,089,924) (1,476,141)
OTHER INCOME AND (EXPENSE):
Interest income 1,894 601
Interest expense (762,686) (570,677)
Gain on derivative contracts 1,131,878 556,315
------------ ------------
Net loss (3,718,838) (1,489,902)
Less: Net (income) loss attributable to
non-controlling interest (67,775) 118,619
------------ ------------
Net loss attributable to Magnum Hunter
Resources Corporation (3,786,613) (1,371,283)
Dividend on Preferred Stock (262,446) -
------------ ------------
Net loss attributable to common stockholders $ (4,049,059) $ (1,371,283)
============ ============
Loss per common share
Basic and diluted $ (0.07) $ (0.04)
============ ============
Weighted average number of common shares
outstanding
Basic and diluted 55,748,540 36,778,172
============ ============
Contact Information: Contact:
M. Bradley Davis
Senior Vice President of Capital Markets
bdavis@magnumhunterresources.com
(832) 203-4545