Magnum Hunter Announces Closing of $311 Million Williston Basin Acquisition
May 23 2012 - 08:00AM
Marketwired
Magnum Hunter Resources Corporation (NYSE: MHR) (NYSE Amex:
MHR-PrC) (NYSE Amex: MHR-PrD) ("Magnum Hunter" or the "Company")
announced today the closing of its previously announced acquisition
of certain Bakken/Three Forks Sanish properties located in the
Williston Basin of North Dakota from Baytex Energy USA Ltd. (a
subsidiary of Baytex Energy Corp. (TSX: BTE) (NYSE: BTE)) for $311
million, as adjusted for certain customary adjustments. The
acquisition was financed with proceeds from a combination of the
Company's recently closed senior notes and common stock offerings.
With this closing, the Williston Basin Division now has an
approximate 47.5% working interest in the acquired properties.
Samson Resources Company is the current operator of the properties,
and pursuant to the Joint Operating Agreement, has the option under
an existing area of mutual interest provision, to participate in
the acquisition, which it may choose to exercise within a specified
period of time subsequent to closing.
Pursuant to the acquisition and assuming Samson does not
participate, Magnum Hunter has acquired 50,414 net mineral acres
located primarily in Divide County, North Dakota, which expands the
Company's total Williston Basin position to over 125,000 net acres.
Total proved reserves attributable to the acquired properties are
estimated at 8.6 million BOE and are approximately 93% oil. Current
net production capacity is 1,295 Bopd, which includes an estimated
350 Bopd that is behind-pipe or waiting to be completed from wells
recently drilled on the leasehold acreage.
The 2012 capital budget for the Williston Basin Division has
been increased to $170 million. With the significant new drilling
anticipated for the remainder of 2012, the current estimated daily
production exit rate net to the Company's ownership interest at the
end of this year is presently estimated at 6,000 - 7,000 Boe per
day.
Forward-Looking Statements
The statements and information contained in this press release
that are not statements of historical fact, including any estimates
and assumptions contained herein, are "forward looking statements"
as defined in Section 27A of the Securities Act of 1933, as
amended, referred to as the Securities Act, and Section 21E of the
Securities Exchange Act of 1934, as amended, referred to as the
Exchange Act. 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 and our midstream
activities, market conditions in the oil and gas industry and the
impact of environmental and other governmental regulation. In
addition, with respect to any pending acquisitions described
herein, forward-looking statements include, but are not limited to,
statements regarding the expected timing of the completion of the
proposed transactions; the ability to complete the proposed
transactions considering the various closing conditions; the
benefits of such transactions and their impact on the Company's
business; and any statements of assumptions underlying any of the
foregoing. In addition, if and when any proposed transaction is
consummated, there will be risks and uncertainties related to the
Company's ability to successfully integrate the operations and
employees of the Company and the acquired business. 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 others, the following: adverse economic conditions
in the United States, Canada 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; the effects of increased federal and state regulation,
including regulation of the environmental aspects, of hydraulic
fracturing; 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; regulatory, environmental and
land management issues, and demand for gas gathering services,
relating to our midstream operations; and the adequacy of our
capital resources and liquidity including, but not limited to,
access to additional borrowing capacity.
These factors are in addition to the risks described in the
"Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" sections of the
Company's 2011 annual report on Form 10-K, as amended, filed with
the Securities and Exchange Commission, which we refer to as the
SEC. Most of these factors are difficult to anticipate and beyond
our control. Because forward-looking statements are subject to
risks and uncertainties, actual results may differ materially from
those expressed or implied by such statements. You 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, whether
as a result of new information, future events or otherwise. We urge
readers to review and consider disclosures we make in our reports
that discuss factors germane to our business. See in particular our
reports on Forms 10-K, 10-Q and 8-K subsequently filed from time to
time with the SEC. All forward-looking statements attributable to
us are expressly qualified in their entirety by these cautionary
statements.
Magnum Hunter Contact: Gabe Scott Vice President -
Capital Markets and Corporate Development
http://www.magnumhunterresources.com/ ir@magnumhunterresources.com
(832) 203-4539
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