Magnum Hunter Resources Announces Total Proved Oil & Gas

Magnum Hunter Resources Announces Total Proved Oil & Gas Reserves
Increased to 73.1 Million Barrels of Oil Equivalent at Year-End 2012 
Proved Reserves Up 63% From Year-End 2011 Present Value (PV-10) Up
59% From Year-End 2011 to $981 Million 
HOUSTON, TX -- (Marketwire) -- 01/23/13 --  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
63% increase in the quantity of the Company's estimated total proved
oil and gas reserves at December 31, 2012 as compared to December 31,
2011. The present value of estimated future cash flows, before income
taxes, of the Company's estimated total proved reserves as of
year-end 2012, discounted at 10% ("PV-10"), also increased 59% to
$981.2 Million as compared to one year ago. 
Magnum Hunter's total proved reserves increased by 28.2 million
barrels of oil equivalent (Boe) to 73.1 million Boe (62.9% crude oil
and ngls; 52% proved developed producing) at December 31, 2012 as
compared to 44.9 million Boe (48% crude oil and ngls; 51% proved
developed producing) at December 31, 2011. The Company's reserve life
(R/P ratio) based on current production is approximately 10.8 years. 
The present value (PV-10) of the Company's proved reserves at
December 31, 2012 increased by $364.3 million or 59% to $981.2
million from $616.9 million at December 31, 2011. Under SEC
guidelines, the commodity prices used in the December 31, 2012 and
December 31, 2011 PV-10 estimates were based on the 12-month
un-weighted arithmetic average of the first day of the month prices
for the period January 1, 2012 through December 31, 2012, and for the
period January 1, 2011 through December 31, 2011, 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 $94.71 per barrel used to calculate
PV-10 at December 31, 2012, was down 1.5% from the average price of
$96.19 per barrel used to calculate PV-10 at December 31, 2011. For
natural gas volumes, the average price of the Henry Hub spot price of
$2.75 per million British thermal units ("MMBTU") used to calculate
PV-10 at December 31, 2012 was down 33% from the average price of
$4.11 per MMBTU used to calculate PV-10 at December 31, 2011. All
prices were held constant throughout the estimated economic life of
the properties. 
Note: PV-10 is a non-GAAP financial measure and should not be
considered as an alternative to the standardized measure of
discounted future net cash flows as defined under GAAP; see "Non-GAAP
Measures: Reconciliation to Standardized Measure" below for the
Company's definition of PV-10 and a reconciliation to the
standardized measure.  
The Company's December 31, 2012 total proved reserves of 73.1 million
Boe reflect an organic growth of 35% from the Company's total proved
reserves of 44.9 million Boe as of December 31, 2011, when excluding
the proved reserves related to the Company's acquisitions of
properties from Eagle Operating, Inc., Baytex Energy USA Ltd., Viking
International Resources Co., Inc. and Samson Operating Company, which
occurred on April 2, 2012, May 22, 2012, November 2, 2012 and
December 20, 2012, respectively. 
The estimates of Magnum Hunter's total proved reserves as of December
31, 2012 were prepared by third-party engineering consultant, Cawley
Gillespie & Associates, Inc. The estimates of Magnum Hunter's total
proved reserves as of December 31, 2011 were prepared by Cawley
Gillespie & Associates, Inc. and AJM Deloitte. 
Magnum Hunter Management Comments 
Mr. Gary C. Evans, Chairman and Chief Executive Officer of Magnum
Hunter, commented, "Our Company's reserve growth is a key element of
determining and evaluating our level of success in any given year. As
we continue to harvest the many undeveloped opportunities in our
various shale plays, we should also continue booking substantial
reserve growth in each of them which further enhances our future
liquidity and equity value. New reserve growth probabilities this
year will exist in the new natural gas and ngl bookings anticipated
in North Dakota and Saskatchewan once midstream infrastructure
currently in process has been completed. Additionally, we have yet to
book any proved reserves in the emerging Utica Shale Play where
Magnum Hunter controls over 80,000 net acres and where a significant
focus of new drilling efforts is planned for this year." 
Non-GAAP Measures: Reconciliation to Standardized Measure 
This 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 gas reserves is as follows:  


 
                                                                            
                                                                            
                                                            As of December, 
                                                                  31        
                                                                 2012       
                                                             (in millions)  
                                                           ---------------- 
                                                                            
Future cash inflows                                        $          4,248 
Future production costs                                               1,520 
Future development costs                                                604 
Future income tax expense                                               288 
                                                           ---------------- 
Future net cash flows                                                 1,836 
10% annual discount for estimated timing of cash flows                1,012 
                                                           ---------------- 
Standardized measure of discounted future net cash flows                    
 related to proved reserves                                $            824 
                                                           ================ 
                                                                            
Reconciliation of Non-GAAP Measure                                          
PV-10                                                      $            981 
Less: Income taxes                                                          
  Undiscounted future income taxes                                     (288)
  10% discount factor                                                   131 
                                                           ---------------- 
  Future discounted income taxes                                       (157)
                                                                            
Standardized measure of discounted future net cash flows   $            824 
                                                           ================ 

 
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,
Kentucky, Ohio, Texas and North Dakota, and Saskatchewan, Canada. The
Company is presently active in five of the most prolific
unconventional shale resource plays in North America, namely the
Marcellus Shale, Utica Shale, Eagle Ford Shale, Pearsall Shale and
Williston Basin/Bakken Shale. 
For more information about Magnum Hunter, please visit
www.magnumhunterresources.com. 
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 therefore our
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. 
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Contact: 
Chris Benton 
Assistant Vice President of Finance and Capital Markets
ir@magnumhunterresources.com
(832) 203-4539 
 
 
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