Attached files
file | filename |
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8-K - CURRENT REPORT ON FORM -K - MAGNUM HUNTER RESOURCES CORP | magnum_8k-102309.htm |
EX-99.4 - UNAUDITED PRO FORMA FINANCIAL DATA - MAGNUM HUNTER RESOURCES CORP | magnum_8k-ex9904.htm |
EX-23.2 - CONSENT - MAGNUM HUNTER RESOURCES CORP | magnum_8k-ex2302.htm |
EX-99.2 - PRESS RELEASE - COMMITMENT LETTER FOR BMO CAPITAL MARKETS - MAGNUM HUNTER RESOURCES CORP | magnum_8k-ex9902.htm |
EX-23.1 - CONSENT - MAGNUM HUNTER RESOURCES CORP | magnum_8k-ex2301.htm |
EX-99.3 - AUDITED FINANCIAL STATEMENTS - MAGNUM HUNTER RESOURCES CORP | magnum_8k-ex9903.htm |
EX-2.1 - ASSET PURCHASE AGREEMENT - MAGNUM HUNTER RESOURCES CORP | magnum_8k-ex0201.htm |
Exhibit 99.1
NEWS
RELEASE
|
FOR
IMMEDIATE
RELEASE
|
MAGNUM
HUNTER RESOURCES ANNOUNCES
DEFINITIVE
AGREEMENT TO ACQUIRE ASSETS
OF
APPALACHIAN BASIN FOCUSED
TRIAD
ENERGY & AFFILIATES
OUT
OF CHAPTER 11 FOR
$81
MILLION
Houston – (Market Wire) – October 29,
2009 – Magnum Hunter Resources Corporation (NYSE Amex: MHR, the
“Company”) announced this morning it has entered into a definitive agreement
with an Appalachian Basin energy company, privately-held Triad Energy
Corporation and affiliates (collectively “Triad”), to purchase substantially all
of Triad’s oil and gas exploration and production operating assets.
Additionally, as part of the transaction, 100% of Triad’s ownership interests in
certain oilfield service related drilling, pipeline and salt water disposal
assets are being acquired. The acquisition of Triad by Magnum Hunter
will occur upon the effectiveness of Triad’s reorganization plan under Chapter
11 of the United States Bankruptcy Code. Under Triad’s proposed plan of
reorganization, the assets of Triad along with certain affiliates would be
acquired by a wholly-owned subsidiary of Magnum Hunter.
Magnum
Hunter has agreed to pay cash, issue securities and assume or refinance Triad’s
outstanding debt obligations in the aggregate of approximately $81 million. The
$81 million total purchase price is broken out in components of (i) the
assumption and refinancing of approximately $58 million of senior debt owed to
secured lenders, (ii) issuance to Triad or its designees $15 million in
Redeemable Convertible Preferred Stock with a 2.75% fixed coupon payable
quarterly and (iii) up to $8 million in cash.
The
closing of this transaction is subject to customary conditions, as well as final
approval of the Federal Bankruptcy Court. Magnum Hunter has obtained
an agreement with Triad and its principal secured and unsecured creditors to
fully support the proposed transaction. The closing of the transaction is
expected to occur in late 2009 or early 2010.
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About
Triad Energy and Affiliates
Triad
Energy Corporation is a 23 year old Reno, Ohio headquartered oil and natural gas
exploration and production company focused exclusively in the Appalachian Basin
with operations in Ohio, West Virginia and Kentucky. As of June 30, 2009,
supported by a third party independent engineering report prepared by an
independent third party engineering firm, Triad had total proved reserves of
approximately 5.2 MMBoe (69% crude oil and 69% classified as proved
developed producing). The Company had a present value on proved reserves
discounted at 10% ($69.89 per Bbl and $3.835 per Mcf) as of June 30, 2009 of
$74.1 million. Daily production from over 2,000 wells is approximately 1,000
Boe. The third party engineering report does not reflect any future potential
that may exist from the drilling of horizontal wells in the Marcellus Shale
formation.
Triad
presently controls approximately 88,417 net mineral acres located in Ohio, West
Virginia and Kentucky, with approximately 75% of this acreage classified as held
by production “HBP”. Of this total acreage position, approximately 47,000 net
acres (53% of the total net acres) overlay the Marcellus Shale
play. Triad’s lease acreage position is concentrated and contiguous
with existing Triad operations and production. Proved reserves and
upside production potential is reflected in Triad’s mature oil fields currently
under primary and secondary development, conventional fields with additional
development and behind pipe potential and horizontal drilling of Triad’s
Marcellus Shale acreage position.
Other
assets owned by Triad include (i) oilfield service equipment (three
air drilling rigs, pole units, frac tanks, trailers, gang trucks, vacuum trucks,
etc.), (ii) salt water disposal facilities with a 1,000 Bpd average disposal
rate and (iii) the control of over 55 miles of existing natural gas pipelines
and pipeline right-of-ways (“Eureka Pipeline”). It is anticipated that the
midstream assets can be utilized to solve a portion of the existing Appalachian
Basin regional takeaway challenges and allow Magnum Hunter to expand this
natural gas transportation and processing business to third
parties.
Management
Comments
Mr. Gary
C. Evans, Chairman of the Company, commented, “We are extremely pleased to make
this announcement today concerning Magnum Hunter’s agreement to acquire the
assets of Triad Energy and its related entities. This has been a long
and difficult negotiation for our management team. With 5.2 MMBoe of
total proved reserves and 88,417 net acres within this portfolio, the
acquisition of these assets will provide Magnum Hunter a unique opportunity to
establish a very cost effective ownership position in the Appalachian Basin.
Specifically, the emerging Marcellus Shale play, which is one of the most active
and most economically attractive hydrocarbon plays in the United States
today, should provide our shareholders significant future growth
potential. This transaction offers Magnum Hunter shareholders incremental and
accretive upside from a variety of perspectives and demonstrates the type of
acquisition we discussed when Ron Ormand and I first joined Magnum Hunter in
late May. When you combine Triad’s low-decline rate and
long-life producing assets (the reserves-to-production ratio approximates 25
years) with its stable and predictable production levels and cash flows, and the
Company’s upside potential from behind-pipe reserves, numerous undrilled
locations, waterflood enhancement opportunities and, most exciting of all,
Triad’s untapped Marcellus Shale horizontal development potential, this easily
becomes a Company changing event for Magnum Hunter.”
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“Additionally,
we have identified a number of opportunities to reduce operating expenses on the
existing oil and gas properties, where approximately 75% of the leases are “held
by production”. We believe Triad’s existing pipelines and right-of-ways in the
Marcellus Shale will allow for not only the efficient delivery the natural gas
we produce or own, but also new and untapped opportunities to transport and
market third party natural gas in the area. Triad comes with
both the oilfield equipment and the infrastructure to provide for a strategic
area of core operations for Magnum Hunter. Potential revenue enhancement
projects have already been identified by our management team and can be
implemented upon final closing.”
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.
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 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
and June 30, 2009, filed on May 11, 2009 and August 14, 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.
####
Contact: |
M.
Bradley Davis
Senior Vice President of Capital Markets
bdavis@magnumhunterresources.com
(832) 203-4545
|
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