Welcome!

News Feed Item

Magnum Hunter Resources Reports Total Proved Reserves of 75.9 MMBoe at Year-End 2013

Proved Reserves Up 23% From Year-End 2012*; Present Value (PV-10) Up 22% From Year-End 2012 to $922 Million*

HOUSTON, TX -- (Marketwired) -- 01/15/14 -- Magnum Hunter Resources Corporation (NYSE: MHR) (NYSE MKT: MHR.PRC) (NYSE MKT: MHR.PRD) (NYSE MKT: MHR.PRE) ("Magnum Hunter" or the "Company") announced today a 23% increase in the quantity of the Company's estimated total proved oil and natural gas reserves at December 31, 2013, as compared to such reserves at December 31, 2012 (as adjusted for the Company's Eagle Ford divestiture described below). The present value of estimated future cash flows, before income taxes, of the Company's estimated total proved reserves as of year-end 2013, discounted at 10% ("PV-10"), also increased 22% or $168.7 million to $922.1 million, as compared to the PV-10 of such reserves at year-end 2012 (as adjusted for such divestiture) (see "Non-GAAP Financial Measures and Reconciliations" below). Please note the Company's December 31, 2012 total proved reserves decreased from 73.1 million barrels of oil equivalent ("MMBoe") to 61.6 MMBoe as a result of the Company's Eagle Ford divestiture that was completed on April 24, 2013. The Company divested its ownership interests in approximately 19,000 net acres located in Gonzales and Lavaca Counties of South Texas in April 2013 for approximately $401 million (before purchase price adjustments).

Magnum Hunter's total proved reserves increased by 14.3 MMBoe to 75.9 MMBoe (46% crude oil and NGLs; 52% proved developed producing) at December 31, 2013, as compared to 61.6 MMBoe (57% crude oil and NGLs; 56% proved developed producing) at December 31, 2012. Proved developed producing reserves increased 16% to 39.6 MMBoe as of December 31, 2013, predominately as a result of the Company's continued execution of its development drilling program in the Appalachian Basin. Proved undeveloped reserves increased 23% to 27.4 MMBoe primarily due to the execution and delineation of the Company's existing lease acreage position in the Marcellus Shale. The Company's reserve life (R/P ratio) of its proved reserves based on current production is approximately 11.9 years.

As of December 31, 2013, there were proved reserves attributable to only one Utica Shale well included in the new reserve report. The Company expects to significantly increase reserves in the Utica Shale, where it presently owns over 97,000 net leasehold acres, during 2014 as a result of "pad" drilling and delineation of its lease acreage position in this region. The Appalachian Basin accounted for 70% of Magnum Hunter's proved reserve volumes at December 31, 2013, the Williston Basin accounted for 28% and other legacy assets, including the Company's remaining assets in South Texas, accounted for the remaining 2%.

The PV-10 of the Company's proved reserves at December 31, 2013 increased by $168.7 million or 22% to $922.1 million from $753.4 million at December 31, 2012 (see "Non-GAAP Financial Measures and Reconciliations" below). Under SEC guidelines, the commodity prices used in the December 31, 2013 and December 31, 2012 PV-10 estimates were based on the 12-month unweighted arithmetic average of the first day of the month prices for the period January 1, 2013 through December 31, 2013, and for the period January 1, 2012 through December 31, 2012, respectively, adjusted by lease for transportation fees and regional price differentials. For crude oil and NGL volumes, the average West Texas Intermediate posted price of $96.78 per barrel used to calculate PV-10 at December 31, 2013, was up 2% from the average price of $94.71 per barrel used to calculate PV-10 at December 31, 2012. For natural gas volumes, the average price of the Henry Hub spot price of $3.67 per million British thermal units ("MMBTU") used to calculate PV-10 at December 31, 2013 was up 33% from the average price of $2.75 per MMBTU used to calculate PV-10 at December 31, 2012. All prices were held constant throughout the estimated economic life of the properties.

The estimates of Magnum Hunter's total proved reserves as of December 31, 2013 were prepared by the Company's independent engineering consultant, Cawley Gillespie & Associates, Inc., and include Marcellus, Utica and Williston Basin/Bakken/Sanish Shales reserves.

Management Comments

Mr. Gary C. Evans, Chairman and Chief Executive Officer of Magnum Hunter, commented, "This past year's growth in proved reserves was primarily attributable to our success in the Marcellus Shale Play of West Virginia and Southeastern Ohio. We were successful at replacing over 100% of the reserves lost in 2013 due to asset divestitures which included our Eagle Ford Division ($401 million). We had three new Marcellus wells that have been estimated to have over 10.5 Bcfe of proved reserves per well and one of those wells was estimated to have 11.7 Bcfe of proved reserves. Approximately 55% of our Marcellus wells exceed the average estimated cumulative proved reserves of 7.8 Bcfe each. Every year since initiating operations in the Marcellus Shale Play back in 2010, we have been successful at increasing the ultimate recoveries on new drills. This is a testimony of not only the quality of our lease acreage position, but also management's ability to continue improving upon our well completion methods. A significant point to note is that none of the proved reserves announced today include the Utica Shale Play where we hold close to 100,000 net leasehold acres with the exception of one well that had only a partial completion due to downhole issues. Therefore, with our greatly expanded Appalachian drilling budget, we are confident in our ability to continue to grow our proved reserves in both of these two exciting resources plays in a significant way during 2014."

Non-GAAP Financial Measures and Reconciliations

This press release contains certain financial measures that are non-GAAP measures. We have provided reconciliations within this release of the non-GAAP financial measures to the most directly comparable GAAP financial measures. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, measures for financial performance prepared in accordance with GAAP that are presented in this release.

PV-10 is the present value of the estimated future cash flows from estimated total proved reserves after deducting estimated production and ad valorem taxes, future capital costs and operating expenses, but before deducting any estimates of future income taxes. The estimated future cash flows are discounted at an annual rate of 10% to determine their "present value." We believe PV-10 to be an important measure for evaluating the relative significance of our oil and gas properties and that the presentation of the non-GAAP financial measure of PV-10 provides useful information to investors because it is widely used by professional analysts and investors in evaluating oil and gas companies. Because there are many unique factors that can impact an individual company when estimating the amount of future income taxes to be paid, we believe the use of a pre-tax measure is valuable for evaluating the Company. We believe that PV-10 is a financial measure routinely used and calculated similarly by other companies in the oil and gas industry. However, PV-10 should not be considered as an alternative to the standardized measure as computed under GAAP.

The standardized measure of discounted future net cash flows relating to Magnum Hunter's total proved oil and natural gas reserves is as follows:


                                                        As of December 31,
                                                               2013
                                                      ---------------------
Future cash inflows                                   $           3,711,260
Future production costs                                          (1,423,306)
Future development costs                                           (421,797)
Future income tax expense                                          (149,367)
Future net cash flows                                             1,716,790
10% annual discount for estimated timing of cash
 flows                                                             (872,280)
Standardized measure of discounted future net cash
 flows related to proved reserves                                 $ 844,510
                                                      ---------------------

Reconciliation of Non-GAAP Measure
PV-10                                                 $             922,071
Less: Income taxes
  Undiscounted future income taxes                                 (149,367)
  10% discount factor                                                71,806
                                                      ---------------------
  Future discounted income taxes                                    (77,561)

                                                      ---------------------
Standardized measure of discounted future net cash
 flows                                                $             844,510
                                                      =====================

Certain Definitions

The SEC requires oil and natural gas companies, in filings made with the SEC, to disclose proved reserves, which are those quantities of oil and natural gas that by analysis of geoscience and engineering data can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations.

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 crude oil, natural gas and natural gas liquids, primarily in the States of West Virginia, Ohio, Kentucky, and North Dakota. The Company is presently active in three of the most prolific unconventional shale resource plays in North America, namely the Marcellus Shale, Utica Shale, and Williston Basin/Bakken Shale.

Availability of Information on the Company's Website

Magnum Hunter is providing a reminder that it makes available on its website (at www.magnumhunterresources.com) a variety of information for investors, analysts and the media, including the following:

  • annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports as soon as reasonably practicable after the material is electronically filed with or furnished to the Securities and Exchange Commission;
  • the most recent version of the Company's Investor Presentation slide deck;
  • announcements of conference calls, webcasts, investor conferences, speeches and other events at which Company executives may discuss the Company and its business and archives or transcripts of such events;
  • press releases regarding annual and quarterly earnings, operational developments, legal developments and other matters; and
  • corporate governance information, including the Company's corporate governance guidelines, committee charters, code of conduct and other governance-related matters.

Magnum Hunter's goal is to maintain its website as the authoritative portal through which visitors can easily access current information about the Company. Over time, the Company intends for its website to become a primary channel for public dissemination of important information about the Company. Investors, analysts, media and other interested persons are encouraged to visit the Company's website frequently.

Certain information included on the Company's website constitutes forward-looking statements and is subject to the qualifications under the heading "Forward-Looking Statements" below and in the Company's Investor Presentation slide deck.

Forward-Looking Statements

This press release includes "forward-looking statements." All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. Although Magnum Hunter believes that the expectations reflected in the forward-looking statements are reasonable, Magnum Hunter can give no assurance that such expectations will prove to be correct. The forward-looking statements involve risks and uncertainties that affect operations, financial performance, and other factors as discussed in filings made by Magnum Hunter with the Securities and Exchange Commission (SEC). Among the factors that could cause results to differ materially are those risks discussed in the periodic reports filed by Magnum Hunter with the SEC, including Magnum Hunter's Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and its Quarterly Reports on Form 10-Q for the fiscal quarters ended after such fiscal year. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading "Risk Factors." Forward-looking statements speak only as of the date of the document in which they are contained, and Magnum Hunter does not undertake any duty to update any forward-looking statements except as may be required by law.

* Year-end 2012 proved reserves and associated PV-10 adjusted for the Company's Eagle Ford divestiture. Also, see "Non-GAAP Financial Measures and Reconciliations."

Image Available: http://www2.marketwire.com/mw/frame_mw?attachid=2496564
Image Available: http://www2.marketwire.com/mw/frame_mw?attachid=2496567

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
SYS-CON Events announced today that Isomorphic Software will exhibit at DevOps Summit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Isomorphic Software provides the SmartClient HTML5/AJAX platform, the most advanced technology for building rich, cutting-edge enterprise web applications for desktop and mobile. SmartClient combines the productivity and performance of traditional desktop software with the simp...
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
Is the ongoing quest for agility in the data center forcing you to evaluate how to be a part of infrastructure automation efforts? As organizations evolve toward bimodal IT operations, they are embracing new service delivery models and leveraging virtualization to increase infrastructure agility. Therefore, the network must evolve in parallel to become equally agile. Read this essential piece of Gartner research for recommendations on achieving greater agility.
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
Personalization has long been the holy grail of marketing. Simply stated, communicate the most relevant offer to the right person and you will increase sales. To achieve this, you must understand the individual. Consequently, digital marketers developed many ways to gather and leverage customer information to deliver targeted experiences. In his session at @ThingsExpo, Lou Casal, Founder and Principal Consultant at Practicala, discussed how the Internet of Things (IoT) has accelerated our abil...
With so much going on in this space you could be forgiven for thinking you were always working with yesterday’s technologies. So much change, so quickly. What do you do if you have to build a solution from the ground up that is expected to live in the field for at least 5-10 years? This is the challenge we faced when we looked to refresh our existing 10-year-old custom hardware stack to measure the fullness of trash cans and compactors.
Extreme Computing is the ability to leverage highly performant infrastructure and software to accelerate Big Data, machine learning, HPC, and Enterprise applications. High IOPS Storage, low-latency networks, in-memory databases, GPUs and other parallel accelerators are being used to achieve faster results and help businesses make better decisions. In his session at 18th Cloud Expo, Michael O'Neill, Strategic Business Development at NVIDIA, focused on some of the unique ways extreme computing is...
The emerging Internet of Everything creates tremendous new opportunities for customer engagement and business model innovation. However, enterprises must overcome a number of critical challenges to bring these new solutions to market. In his session at @ThingsExpo, Michael Martin, CTO/CIO at nfrastructure, outlined these key challenges and recommended approaches for overcoming them to achieve speed and agility in the design, development and implementation of Internet of Everything solutions wi...
With over 720 million Internet users and 40–50% CAGR, the Chinese Cloud Computing market has been booming. When talking about cloud computing, what are the Chinese users of cloud thinking about? What is the most powerful force that can push them to make the buying decision? How to tap into them? In his session at 18th Cloud Expo, Yu Hao, CEO and co-founder of SpeedyCloud, answered these questions and discussed the results of SpeedyCloud’s survey.
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Actian Corporation has announced the latest version of the Actian Vector in Hadoop (VectorH) database, generally available at the end of July. VectorH is based on the same query engine that powers Actian Vector, which recently doubled the TPC-H benchmark record for non-clustered systems at the 3000GB scale factor (see tpc.org/3323). The ability to easily ingest information from different data sources and rapidly develop queries to make better business decisions is becoming increasingly importan...
To leverage Continuous Delivery, enterprises must consider impacts that span functional silos, as well as applications that touch older, slower moving components. Managing the many dependencies can cause slowdowns. See how to achieve continuous delivery in the enterprise.
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
Kubernetes, Docker and containers are changing the world, and how companies are deploying their software and running their infrastructure. With the shift in how applications are built and deployed, new challenges must be solved. In his session at @DevOpsSummit at19th Cloud Expo, Sebastian Scheele, co-founder of Loodse, will discuss the implications of containerized applications/infrastructures and their impact on the enterprise. In a real world example based on Kubernetes, he will show how to ...
SYS-CON Events announced today that Venafi, the Immune System for the Internet™ and the leading provider of Next Generation Trust Protection, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Venafi is the Immune System for the Internet™ that protects the foundation of all cybersecurity – cryptographic keys and digital certificates – so they can’t be misused by bad guys in attacks...