Attached files
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8-K - FORM 8-K - MAGNUM HUNTER RESOURCES CORP | d84237e8vk.htm |
EX-99.2 - EX-99.2 - MAGNUM HUNTER RESOURCES CORP | d84237exv99w2.htm |
EX-99.3 - EX-99.3 - MAGNUM HUNTER RESOURCES CORP | d84237exv99w3.htm |
EX-10.1 - EX-10.1 - MAGNUM HUNTER RESOURCES CORP | d84237exv10w1.htm |
Exhibit 99.1
News Release
|
News Release |
MAGNUM HUNTER RESOURCES ANNOUNCES ADDITIONAL
EXPANSION TO SENIOR BANK CREDIT FACILITY
Borrowing Base Increased to $230 Million
FOR IMMEDIATE RELEASE Houston (Market Wire) August 15, 2011 Magnum Hunter
Resources Corporation (NYSE: MHR) (NYSE Amex: MHR-PrC) (NYSE Amex: MHR-PrD) (the Company or
Magnum Hunter) announced today that it has entered into an amendment under its $250 million
senior secured revolving credit facility (the Bank Facility) to increase the borrowing base (the
Borrowing Base). The Companys Borrowing Base is increasing via two tranches. Today, the
Borrowing Base has been increased from $170 million to $187.5 million. Upon the completion of the
recently announced acquisition (Press Release dated August 5, 2011) of certain North Dakota
properties (the North Dakota Acquisition), the Borrowing Base will increase again to $230 million
(the New Borrowing Base). Closing of this transaction will be on or before August 18, 2011. The
35% increase in Magnum Hunters Borrowing Base is a reflection of the addition of proved reserves
from the Companys ongoing drilling programs in its core resource regions and the addition of
approximately 2.5 mmboe of proved reserves associated with approximately 7,500 net acres located in
the Williston Basin of North Dakota.
The amendment to the revolving credit facility agreement will be filed with the Securities and
Exchange Commission in due course. The Bank Facility is governed by a semi-annual borrowing base
redetermination derived from the Companys total proved crude oil and natural gas reserves.
Today, the Company had $159 million of outstanding indebtedness under its existing bank credit
facility which with available cash, provides for approximately $33 million of current liquidity.
The Company expects its liquidity position to be further enhanced upon the completion of the North
Dakota Acquisition and upon the closing of a new non-recourse loan financing facility for its
Eureka Hunter Pipeline (the Eureka Finance Facility). The Company has expended approximately $20
million on its Eureka Hunter Pipeline since June 30, 2011, accounting for the majority of the
increase in the Companys outstanding indebtedness since that date. The Company expects to receive
substantially all of the capital expended since the end of the second quarter as well as funding
for the ongoing capital expenditures for Eureka Hunter through the new Eureka Finance Facility. As
a result, the Company expects liquidity to exceed $50 million upon completion of these
transactions, all of which are anticipated this week.
Bank of Montreal serves as the Administrative Agent under the facility, with Capital One, N.A.
serving as the Syndication Agent, and Amegy Bank National Association, KeyBank National
Association and UBS Securities LLC serving as Documentation Agents. BMO Capital Markets serves as
Lead Arranger and Sole Bookrunner. Participating banks include Citibank, N.A., Credit Suisse
AG, Deutsche Bank Trust Company Americas, Goldman Sachs Bank USA and Union Bank, N.A.
Management Comments
Mr. Gary C. Evans, Chairman of the Board and Chief Executive Officer, commented, Since the
beginning of this year, our Companys availability under our Bank Facility has increased four times
from $71.5 million at December 31, 2010 to $230 million this week which reflects a 322% increase in
just eight months. This is due to the rapid additions in our proved reserves and associated daily
production. We are now in direct control as operator of over 75% of our annual capital budget
program. With these new financings along with our ever increasing cash flow, management anticipates
ample liquidity to fund our capital needs well into fiscal year 2012.
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, development and production of oil
and natural gas, primarily in the states of West Virginia, Kentucky, Ohio, Texas, and North Dakota
and in Saskatchewan, Canada. The Company is presently active in three of the most prolific shale
resource plays in North America, namely the Marcellus Shale, Eagle Ford Shale and Williston
Basin/Bakken Shale.
For more information, please view our website at www.magnumhunterresources.com
Forward-Looking Statements
The statements and information contained in this press release that are not statements of
historical fact, including all estimates and assumptions contained herein, are forward looking
statements as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. These forward looking statements include, among
others, statements, estimates and assumptions relating to our business and growth strategies, our
oil and gas reserve estimates, our ability to successfully and economically explore for and develop
oil and gas resources, our exploration and development prospects, future inventories, projects and
programs, expectations relating to availability and costs of drilling rigs and field services,
anticipated trends in our business or industry, our future results of operations, our liquidity and
ability to finance our exploration and development activities, market conditions in the oil and gas
industry and the impact of environmental and other governmental regulation. Forward-looking
statements generally can be identified by the use of forward-looking terminology such as may,
will, could, should, expect, intend, estimate, anticipate, believe, project,
pursue, plan or continue or the negative thereof or variations thereon or similar
terminology. These forward-looking statements are subject to numerous assumptions, risks, and
uncertainties. Factors that may cause our actual results, performance, or achievements to be
materially different from those anticipated in forward-looking statements include, among other, the
following: adverse economic conditions in the United States and globally; difficult and adverse
conditions in the domestic and global capital and credit markets; changes in domestic and global
demand for oil and natural gas; volatility in the prices we receive for our oil and natural gas;
the effects of government regulation, permitting, and other legal requirements; future developments
with respect to the quality of our properties, including, among other things, the existence of
reserves in economic quantities; uncertainties about the estimates of our oil and natural gas
reserves; our ability to increase our production and oil and natural gas income through exploration
and development; our ability to successfully apply horizontal drilling techniques and tertiary
recovery methods; the number of well locations to be drilled, the cost to drill, and the time frame
within which they will be drilled; drilling and operating risks; the availability of equipment,
such as drilling rigs and transportation pipelines; changes in our drilling plans and related
budgets; and the adequacy of our capital resources and liquidity including, but not limited to,
access to additional borrowing capacity. Because forward-looking statements are subject to risks
and uncertainties, actual results may differ materially from those expressed or implied by such
statements. Readers are cautioned not to place undue reliance on forward-looking statements,
contained herein, which speak only as of the date of this document. Other unknown or unpredictable
factors may cause actual results to differ materially from those projected by the forward-looking
statements. Unless otherwise required by law, we undertake no obligation to publicly update
or revise any forward-looking statements, including estimates, whether as a result of new
information, future events, or otherwise. We urge readers to review and consider disclosures we
make in our public filings made from time to time with the Securities and Exchange Commission that
discuss factors germane to our business, including our Annual Report on Form 10-K, as amended for
the year ended December 31, 2010 and our Quarterly Reports on Form 10-Q for the quarters ending
March 31, 2011 and June 30, 2011..All forward-looking statements attributable to us are expressly
qualified in their entirety by these cautionary statements.
Magnum Hunter Contact: | M. Bradley Davis Senior Vice President of Capital Markets bdavis@magnumhunterresources.com (832) 203-4545 |
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