Magnum Hunter Resources Reports Third Quarter 2013 Financial and Operating Results

Magnum Hunter Resources Reports Third Quarter 2013 Financial and Operating 
Results 
2013 Production Exit Rate Estimate Reaffirmed at 23,000 - 25,000
BOEPD 
Establishing 2014 Production Exit Rate Estimate Guidance of 35,000
BOEPD 
HOUSTON, TX -- (Marketwired) -- 11/08/13 --  Magnum Hunter Resources
Corporation (NYSE: MHR) (NYSE MKT: MHR.PRC) (NYSE MKT: MHR.PRD) (NYSE
MKT: MHR.PRE) (the "Company" or "Magnum Hunter") announced today
financial and operating results for the three months and nine months
ended September 30, 2013. The Company plans to file its Form 10-Q for
the quarter ended September 30, 2013 with the Securities and Exchange
Commission later today. Highlights of the Company's financial and
operating results include the following: 


 
--  Oil and gas revenues(a)increased 80.2% to $54.0 million for the third
    quarter of 2013, compared with revenues of $30.0 million for the third
    quarter of 2012
--  Midstream and marketing revenues increased 148.0% to $12.5 million for
    the third quarter of 2013, compared with revenues of $5.1 million for
    the third quarter of 2012
--  Adjusted EBITDAX(b)was $28.0 million for the third quarter of 2013
--  Adjusted net loss(b) of ($0.17) per diluted share for the third
    quarter of 2013
--  Production(a)of 10,049 BOEPD and adjusted production(c)of 13,699 BOEPD
    for the third quarter of 2013
--  Current throughput on Eureka Hunter Pipeline of 126,000 MMBtu/d

  
(a) Does not include revenues/production from Williston Hunter Canada,
Inc. ("Williston Canada") and Magnum Hunter Production, Inc. ("MHP"),
which have been classified as discontinued operations for the nine
months ended September 30, 2013  
(b) See Non-GAAP Financial Measures and Reconciliations below  
(c) Adjusted production includes 1,875 BOEPD of actual production
from the discontinued operations of Williston Canada and MHP, and, on
a pro forma basis, production of 1,775 BOEPD in Appalachia which has
been temporarily shut-in due to third-party processing plant issues  
Financial and Operating Results for the Three Months Ended September
30, 2013 
Magnum Hunter reported an increase in oil and gas revenues of 80.2%
to $54.0 million for the three months ended September 30, 2013,
compared with $30.0 million for the three months ended September 30,
2012. The increase in oil and gas revenues resulted principally from
(i) increases in our oil and natural gas production as a result of
prior acquisitions and expanded drilling efforts in the Company's
unconventional resources plays this year and (ii) higher average
realized commodity prices. Midstream and marketing revenues also
increased to $12.5 million for the three months ended September 30,
2013, or 148.0%, from $5.1 million for the three months ended
September 30, 2012. The increase was due primarily to (i) increased
throughput volumes on the Eureka Hunter Pipeline System, (ii) higher
utilization of gas treating and processing equipment at TransTex
Hunter and (iii) increased third-party gas marketing volumes. 
The Company reported a net loss of ($311.3) million attributable to
common shareholders, or ($1.83) per basic and diluted common shares
outstanding, for the three months ended September 30, 2013, compared
with a net loss of ($42.3) million, or ($0.25) per basic and diluted
common shares outstanding, for the three months ended September 30,
2012. When adjusted for a combination of non-cash and non-recurring
gains on asset sales and expenses, the Company's adjusted net loss
attributable to common shareholders for the three months ended
September 30, 2013 was ($0.17) per basic and diluted common shares
outstanding (see Non-GAAP Financial Measures and Reconciliations
below). 
For the three months ended September 30, 2013, Magnum Hunter's
Adjusted Earnings Before Interest, Income Taxes, Depreciation,
Amortization and Exploration ("Adjusted EBITDAX") was $28.0 million,
compared with $16.7 million for the three months ended September 30,
2012 (See Non-GAAP Financial Measures and Reconciliations below). The
increase in Adjusted EBITDAX was due primarily to (i) an overall
production increase as a result of prior acquisitions and expanded
drilling operations with a greater focus on oil and liquids as a
percentage of total production (54.0% oil/liquids) in the Company's
core areas of operations and (ii) higher average realized commodity
prices during the period. However, natural gas production shut-ins
(described below), higher lease operating expenses ("LOE") per BOE,
and higher non-recurring cash general and administrative costs (see
Non-GAAP Financial Measures and Reconciliations below) per BOE
partially offset these increases. The increase in LOE per BOE was
primarily due to (i) higher costs in the Appalachian division due to
increased liquids production which generally have higher LOE per BOE
than natural gas wells and (ii) higher gas transportation reservation
charges. In addition, LOE in the Williston Basin increased primarily
due to increased electrification implementation and maintenance costs
in the field. The completion of field electrification will ultimately
reduce LOE in the future. The Company anticipates LOE in the
Williston Basin to decrease over time due to increased efficiencies
at the field level which continue to be implemented. General and
administrative expenses increased overall during the three months
ended September 30, 2013 due to additional accounting personnel and
professional advisory services necessitated by the growth of the
Company and its focus on remediation of previously identified
internal control deficiencies. 
Oil and gas production increased 38.5% for the three months ended
September 30, 2013 to 925 thousand barrels of oil equivalent ("MBoe")
or 10,049 barrels of oil equivalent per day ("Boepd") (54.0%
oil/liquids), compared with production of 668 MBoe or 7,257 Boepd for
the three months ended September 30, 2012. The increase in production
was attributable primarily to the Company's expanded drilling program
in its core areas of operations. In addition, the Company's
oil/liquids production mix increased to 54.0% of overall production
in the third quarter of 2013, compared to 42.0% in the third quarter
of 2012. This change is a result of the shift in our capital
expenditure program towards more of an oil and liquids rich
development program. For the three months ended September 30, 2013,
adjusted production, which includes actual production from continuing
operations, actual production from discontinued operations of 1,875
Boepd and production shut-ins of 1,775 Boepd as described below,
increased 88.8% to 13,699 Boepd(c).  
In the third quarter of 2013, the Company's production was adversely
impacted by production shut-ins in the Appalachian division primarily
due to a complete shut-down of gas processing facilities near Mobley,
West Virginia owned by MarkWest Energy Partners, L.P. ("MarkWest"),
resulting from a break in a MarkWest natural gas liquids pipeline
caused by a landslide in northern Wetzel County, West Virginia. These
production shut-ins were largely natural gas and NGLs, thus the
impact on the Company's cash flow was less than any reduction in the
Company's oil volumes. All processing plant issues affecting the
production of the Company's Marcellus Shale natural gas were resolved
in mid-October 2013, and all such natural gas production is now
flowing through the Eureka Hunter Pipeline System for processing at
MarkWest's Mobley processing facilities. 
Financial and Operating Results for the Nine Months Ended September
30, 2013 
Magnum Hunter reported an increase in oil and gas revenues of 76.0%
to $138.2 million for the nine months ended September 30, 2013,
compared with $78.5 million for the nine months ended September 30,
2012. The increase in oil and gas revenues resulted principally from
increases in our oil and natural gas production as a result of (i)
acquisitions and expanded drilling operations in the Company's
unconventional resources plays throughout 2013 and (ii) higher
average realized commodity prices during the period. Midstream and
marketing revenues increased to $42.4 million for the nine months
ended September 30, 2013, or 307.1%, from $10.4 million for the nine
months ended September 30, 2012. The increase was primarily due to
(i) increased throughput volumes of the Eureka Hunter Pipeline
System, (ii) higher utilization of gas treating and processing
equipment at TransTex Hunter and (iii) increased third-party gas
marketing volumes. 
The Company reported a net loss of ($217.7) million attributable to
common shareholders, or ($1.28) per basic and diluted common shares
outstanding, for the nine months ended September 30, 2013, compared
with a net loss of ($80.2) million, or ($0.54) per basic and diluted
common shares outstanding, for the nine months ended September 30,
2012. When adjusted for non-cash and non-recurring gains on asset
sales and expenses, the Company's adjusted net loss attributable to
common shareholders for the nine months ended September 30, 2013 was
($0.52) per basic and diluted common shares outstanding (see Non-GAAP
Financial Measures and Reconciliations below). 
For the nine months ended September 30, 2013, Magnum Hunter's
Adjusted EBITDAX was $73.2 million, compared with $52.1 million for
the nine months ended September 30, 2012 (See Non-GAAP Financial
Measures and Reconciliations below). The increase in Adjusted EBITDAX
was primarily due to (i) an overall production increase as a result
of prior acquisitions and expanded drilling operations with a greater
focus on oil and liquids as a percentage of total production (48.0%
oil/liquids) in the Company's core areas of operations and (ii)
higher average realized commodity prices during the period. However,
natural gas production shut-ins (as discussed above), higher LOE
costs per BOE, and higher non-recurring cash general and
administrative costs (see Non-GAAP Financial Measures and
Reconciliations below) per BOE partially offset the increase. The
increase in LOE per BOE was primarily due to (i) higher costs in the
Appalachian division due to increased liquids production which
generally have higher LOE per BOE than natural gas wells and (ii)
higher gas transportation reservation charges. In addition, LOE in
the Williston Basin increased primarily due to increased
electrification implementation and maintenance costs in the field.
The Company anticipates LOE in the Williston Basin to decrease over
time due to increased efficiencies at the field level which continue
to be implemented. General and administrative expenses increased
overall during the nine months ended September 30, 2013 due to
additional accounting personnel and professional advisory services
necessitated by the growth of the Company and its focus on
remediation of previously identified internal control deficiencies. 
Oil and gas production increased 21.0% for the nine months ended
September 30, 2013 to 2.554 million barrels of oil equivalent
("MMBoe") or 9,355 Boepd (48.0% oil/liquids), compared with 2.110
million barrels of oil equivalent or 7,702 Boepd for the nine months
ended September 30, 2012. The increase in production was attributable
primarily to the Company's expanded drilling program in its core
areas of operations. In addition, the Company's oil/liquids
production mix increased to 48.0% of overall production for the nine
months ended September 30, 2013, compared with 32.0% for the nine
months ended September 30, 2012. For the nine months ended September
30, 2013, adjusted production, which includes actual production from
continuing operations, production from discontinued operations of
3,288 Boepd and production shut-ins of 2,251 Boepd as described
above, increased 93.4% to 14,894 Boepd for the nine months ended
September 30, 2013. 
Capital Expenditures and Liquidity 
Magnum Hunter's total upstream and midstream capital expenditures,
excluding acquisitions, were $116.3 million for the three months
ended September 30, 2013. Total upstream capital expenditures for the
three months ended September 30, 2013 were $98.1 million, consisting
of $55.5 million for the Williston Basin, $36.2 million for the
Appalachian region and $6.3 million for the South Texas region. Total
midstream capital expenditures for such period were $18.2 million.
For the nine months ended September 30, 2013, total upstream capital
expenditures were $272.3 million, consisting of $112.1 million for
the Williston Basin, $79.4 million for the Appalachian region and
$33.5 million for the South Texas region. Total midstream capital
expenditures for such period were $47.3 million. 
Magnum Hunter believes that, as a result of the Company's internally
generated cash flows, availability under its Senior Revolving Credit
Facility and additional liquidity sources, it has sufficient
liquidity to fund the remainder of its fiscal 2013 upstream capital
budget. As of September 30, 2013, the Company had total liquidity of
approximately $204.0 million, comprised of approximately $55.3
million of cash and $148.7 million of borrowing availability under
its Senior Revolving Credit Facility. In order to enhance its
liquidity and further reduce leverage, the Company is actively
negotiating an additional $200 million (estimated) of non-core asset
sales, which the Company is endeavoring to close near the end of the
year. Additionally, the Company has classified MHP as a discontinued
operation for the nine months ended September 30, 2013, and intends
to divest these assets sometime in the first quarter of 2014. 
Operations 
For the quarter ended September 30, 2013, the Company commenced the
drilling of or participated in a total of 28.0 gross wells, of which
9.0 were operated by the Company. The Company had a 100% success rate
on the 29.0 wells that were completed in the third quarter of 2013.  
The table below summarizes the Company's gross drilling activities by
area for the third quarter of 2013:  


 
                                                                            
                                          Third Quarter 2013                
                         ---------------------------------------------------
                             Total                                          
                            Drilled     Operated     Completed    Awaiting  
                             Wells        Wells        Wells        Frac    
                         ------------ ------------ ------------ ------------
                                                                            
Marcellus Shale                    14            6            6           10
Utica Shale                         1            1            0            0
Williston Basin                    13            2           23           12
                         ------------ ------------ ------------ ------------
Total                              28            9           29           22
                         ============ ============ ============ ============

 
Currently, the Company is running five drilling rigs (three operated
and two non-operated drilling rigs); two rigs (two operated) are
drilling wells in the Marcellus and Utica Shales; and three rigs (one
operated and two non-operated) are drilling wells in the Williston
Basin/Bakken Shale.  
Marcellus Shale 
During the third quarter of 2013, the Company drilled 14 gross (9.5
net) wells in the Marcellus Shale. In the Company operated areas, the
Company drilled six gross (5.5 net) wells, and in the Company
non-operated Wetzel County, West Virginia 50/50 joint venture with
Stone Energy, eight gross (four net) wells were drilled. The Company
anticipates that these wells will be connected to the Eureka Hunter
Pipeline System over the next 30-45 days and production therefrom
will begin flowing to sales shortly thereafter. The Company's net
production in the third quarter of 2013 attributable to Triad
Hunter's operations was approximately 35,800 Mcfepd, a 25% increase
over the third quarter of 2012.  
Utica Shale 
During the third quarter of 2013, the Company commenced drilling of
one gross (0.5 net) well in the Utica Shale on the Stalder pad in
Monroe County, Ohio. This well is currently being drilled as part of
the Company's 50/50 joint venture with Eclipse Resources, with Magnum
Hunter designated as the operator. The Company anticipates this well
will reach TVD over the next several days, and then the Company
intends to plug back the well and drill an approximate 5,600'
lateral.  
Additionally, the Company has completed the fracture stimulation of
the Farley well, which is its first Utica Shale well in Washington
County, Ohio. As a result of the controlled blowout that the Company
experienced during the drilling process, the Company was only able to
fracture stimulate 10 of 26 planned stages, primarily due to poor
cement isolation behind the production casing. Following the
completion of the fracture stimulation, the Company began flow
testing the well the week of October 28, 2013 with approximately
one-third of the horizontal section open. The well tested at 3.0
MMcfepd. The aforementioned rate assumes full ethane rejection. The
Company intends to commence the drilling of a second well on the
Farley pad within the next 10 days. 
Williston Basin 
During the third quarter of 2013, the Company drilled 13 gross (5.1
net) wells in the Three Forks Sanish/Bakken formations in North
Dakota. In the Company operated areas, the Company drilled two gross
(1.8 net) wells, and in the Company non-operated areas, 11 gross (3.3
net) wells were drilled. During the third quarter, (i) a total of 11
two-mile wells were completed in the Middle Bakken formation, with an
IP 24-hour rate of 768 Boepd and an IP 30-day rate of 474 Boepd, and
(ii) a total of 12 two-mile wells were completed in the Three Forks
Sanish formation with an IP 24-hour rate of 640 Boepd and an IP
30-day rate of 435 Boepd. At the end of the third quarter of 2013, 12
gross (4.5 net) Company wells were drilling or waiting on fracture
stimulation in North Dakota. 
Eureka Hunter Pipeline 
In the third quarter of 2013, Eureka Hunter Pipeline's focus has been
on expansion efforts in Monroe County, Ohio. Eureka Hunter Pipeline
has acquired and cleared in excess of 20 miles of right-of-way in
southeastern Ohio and has initiated pipeline construction in this
region. Eureka Hunter Pipeline anticipates production from Monroe
County wells along its 11-mile long Tippens lateral to begin flowing
into this new Tippens gathering system segment before year-end 2013;
and production from Monroe County wells along its eight-mile long
Ormet lateral to begin flowing into this new Ormet gathering system
segment toward the end of 2013 or early 2014 depending on any weather
delays. Eureka Hunter Pipeline plans additional pipeline expansion in
Ohio throughout 2014.  
During the third quarter of 2013, Eureka Hunter Pipeline also set its
third compressor at its Carbide central facilities site located in
Wetzel County, West Virginia to assist with low pressure gathering
and to help manage ongoing mainline pigging operations. Current daily
throughput on Eureka Hunter Pipeline is averaging more than 100,000
MMBtu per day, and Eureka Hunter Pipeline anticipates the connection
of significant new gas supplies from new wells during the fourth
quarter of 2013 and first quarter of 2014.  
Management Comments 
Mr. Gary C. Evans, Chairman of the Board and Chief Executive Officer
of Magnum Hunter Resources, commented, "By accelerating our non-core
asset sales and focusing the Company on our three core unconventional
shale plays, we are positioning Magnum Hunter for exception growth in
the future. While this was a "noisy" quarter with a combination of
asset write-downs and the acceleration of discontinued operations
associated with contemplated property divestitures, we are cleaning
up the Company and repositioning for a much more laser focused
entity. Our industry competitors have significantly de-risked our
large leasehold acreage position in the Utica Shale Play over the
last 90 days. This has occurred through the drilling of exceptional
new wells located to the north, northwest, and southwest of our
holdings. While our first Utica well drilled on the Farley pad (10
locations) in northern Washington County, Ohio is not a true test of
this area with only 30% of the horizontal section open and producing,
we are encouraged enough from the production characteristics
witnessed to not only accelerate our leasing activity in this area
but also move another drilling rig in for spudding a second well next
week. On our Stalder pad (18 locations) in Monroe County, Ohio is our
second Utica test which is on schedule to be completed prior to
year-end. We will then begin drilling our first Utica test in Tyler
County, West Virginia in the first quarter of 2014. With 21 new
Williston Basin wells coming on stream prior to year-end and 15 new
Marcellus wells located in West Virginia on schedule for production
sales in December, we are setup for a substantial production boost
prior to January. While our board of directors has not yet approved
our capital expenditure budget for fiscal 2014, management is
confident in providing a target exit rate on daily production for the
Company of 35,000 Boepd by the end of next year." 
Non-GAAP Financial Measures 
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. 
Magnum Hunter defines adjusted income (loss) as reported net income
(loss) attributable to common shareholders, plus non-recurring and
non-cash items which include (1) exploration, (2) impairment of
proved oil and gas properties, (3) non-cash stock compensation
expense, (4) non-cash 401k matching expense, (5) non-recurring
transaction and other expense, (6) unrealized (gain) loss on
investments, (7) interest expense -- fees, (8) unrealized (gain) loss
on derivatives, (9) (gain) loss on sale of assets, (10) income tax
expense (benefit), (11) (gain) loss from sale of discontinued
operations and (12) income from discontinued operations. 
Magnum Hunter defines Adjusted EBITDAX as net income (loss) from
continuing operations before (1) net interest expense, (2) (gain)
loss on sale of assets, (3) depletion, depreciation, amortization and
accretion, (4) impairment of proved oil and gas properties, (5)
exploration, (6) non-cash stock compensation expense, (7) non-cash
401k matching expense, (8) non-recurring transaction and other
expense, (9) unrealized (gain) loss on investments, (10) income tax
(benefit) and (11) unrealized (gain) loss on derivatives. Adjusted
EBITDAX is not a measure of net income or cash flows as determined by
GAAP. 
Magnum Hunter defines recurring cash G&A as total general and
administrative expenses before (1) non-cash stock compensation and
(2) transaction and other non-recurring expense. 
Management believes these non-GAAP financial measures facilitate
evaluation of the Company's business on a "normalized" or recurring
basis and without giving effect to certain non-cash expenses and
other items, thereby providing management, investors and analysts
with comparative information for evaluating the Company in relation
to other oil and gas companies providing corresponding non-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, and that the
reconciliations to the closest corresponding GAAP measure should be
reviewed carefully. 
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, North Dakota and Texas. 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. 
Results of Operations 


 
                                      Three Months Ended  Nine Months Ended 
                                        September 30,       September 30,   
                                     ------------------- -------------------
                                        2013      2012      2013      2012  
                                     --------- --------- --------- ---------
Oil and natural gas revenue and                                             
 production                                                                 
Revenues (in thousands, U.S.                                                
 Dollars)                                                                   
  Oil                                $  39,119 $  21,319 $  97,813 $  51,416
  Natural gas                            9,805     8,389    31,068    26,743
  NGL                                    5,094       275     9,361       373
                                     --------- --------- --------- ---------
    Total oil and natural gas sales  $  54,018 $  29,983 $ 138,242 $  78,532
                                     ========= ========= ========= =========
                                                                            
Production                                                                  
  Oil (MBbl)                               393       269     1,079       633
  Natural gas (MMcf)                     2,567     2,328     7,651     8,788
  NGL (MBoe)                               103        10       199        13
    Total (MBoe)                           925       668     2,554     2,110
Boe/d                                   10,049     7,257     9,355     7,702
                                                                            
Average prices (U.S. Dollars)                                               
  Oil (per Bbl)                      $   99.54 $   79.57 $   90.65 $   81.23
  Natural gas (per Mcf)              $    3.82 $    3.60 $    4.06 $    3.04
  NGL (per Boe)                      $   49.46 $   26.68 $   47.04 $   29.68
    Total average price (per Boe)    $   58.40 $   44.88 $   54.13 $   37.22
                                                                            
Costs and expenses (per Boe)                                                
  Lease operating expense            $   16.37 $    9.13 $   14.89 $    8.67
  Severance tax and marketing        $    5.91 $    3.79 $    4.82 $    3.14
  Exploration expense                $   43.38 $    4.94 $   28.74 $    8.60
  Impairment of proved oil and gas                                          
   property                          $      -- $      -- $    3.90 $      --
  General and administrative expense                                        
   (1)                               $   24.02 $   18.30 $   22.93 $   18.12
  Depletion, depreciation and                                               
   accretion                         $   30.59 $   22.67 $   28.17 $   20.00
                                                                            
Other segments (in thousands)                                               
  Midstream and marketing operations                                        
   segment revenue                   $  12,545 $   5,058 $  42,415 $  10,418
  Midstream and marketing operations                                        
   segment expense                   $   8,985 $   2,288 $  35,830 $   4,379
  Oilfield services segment revenue  $   6,423 $   1,504 $  13,728 $   6,118
  Oilfield services segment expense  $   4,527 $   3,366 $  11,928 $   6,933
                                                                            
                                                                            
                                                                            
                                                                            
                    MAGNUM HUNTER RESOURCES CORPORATION                     
                        CONSOLIDATED BALANCE SHEETS                         
              (In thousands, except share and per share data)               
                                                                            
                                               September 30,  December 31,  
                                                    2013           2012     
                                               -------------  ------------- 
                    ASSETS                                                  
CURRENT ASSETS                                                              
  Cash and cash equivalents                    $      55,283  $      57,623 
  Restricted cash                                         --          1,500 
  Accounts receivable, net of allowance for                                 
   doubtful accounts of $315 and $448 as of                                 
   September 30, 2013 and December 31, 2012,                                
   respectively                                       73,486        124,861 
  Derivative assets                                    1,079          5,146 
  Inventory                                           11,957          9,162 
  Investments                                          2,237          3,278 
  Prepaid expenses and other assets                    4,732          2,249 
  Assets held for sale                                10,380            500 
                                               -------------  ------------- 
    Total current assets                             159,154        204,319 
                                               -------------  ------------- 
                                                                            
PROPERTY, PLANT AND EQUIPMENT                                               
  Oil and natural gas properties, successful                                
   efforts method of accounting                    1,347,147      1,908,118 
  Accumulated depletion, depreciation, and                                  
   accretion                                        (133,993)      (185,615)
                                               -------------  ------------- 
  Total oil and natural gas properties, net        1,213,154      1,722,503 
  Gas transportation, gathering and processing                              
   equipment and other, net                          258,797        201,910 
                                               -------------  ------------- 
    Total property, plant and equipment, net       1,471,951      1,924,413 
                                               -------------  ------------- 
                                                                            
OTHER ASSETS                                                                
  Deferred financing costs, net of                                          
   amortization of $3,661and $8,024 as of                                   
   September 30, 2013 and December 31, 2012,                                
   respectively                                       21,169         23,862 
  Derivative assets, long-term                           392             -- 
  Intangible assets, net                               7,048          8,981 
  Goodwill                                            30,602         30,602 
  Assets held for sale                               193,255             -- 
Other assets                                           2,245          6,455 
                                               -------------  ------------- 
    Total assets                               $   1,885,816  $   2,198,632 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
                                                                            
                    MAGNUM HUNTER RESOURCES CORPORATION                     
                        CONSOLIDATED BALANCE SHEETS                         
              (In thousands, except share and per share data)               
                                                                            
                                               September 30,   December 31, 
                                                    2013           2012     
                                               -------------  ------------- 
     LIABILITIES AND SHAREHOLDERS' EQUITY                                   
CURRENT LIABILITIES                                                         
  Current portion of notes payable             $       4,144  $       3,991 
  Accounts payable                                   148,754        196,515 
  Accrued liabilities                                 57,898         11,212 
  Revenue payable                                     12,728         20,394 
  Derivative liabilities                               5,913          3,501 
  Liabilities associated with assets held for                               
   sale                                               16,139             -- 
  Other liabilities                                    7,336          8,043 
                                               -------------  ------------- 
    Total current liabilities                        252,912        243,656 
                                               -------------  ------------- 
                                                                            
NONCURRENT LIABILITIES                                                      
  Long-term debt                                     749,131        886,769 
  Asset retirement obligations                        19,902         28,322 
  Deferred tax liabilities                            32,858         74,258 
  Derivative liabilities, long-term                   75,997         47,524 
  Other long-term liabilities                          2,450          5,573 
  Long-term liabilities associated with assets                              
   held for sale                                      14,601             -- 
                                               -------------  ------------- 
    Total liabilities                              1,147,851      1,286,102 
                                               -------------  ------------- 
                                                                            
COMMITMENTS AND CONTINGENCIES (Note 13)                                     
                                                                            
REDEEMABLE PREFERRED STOCK                                                  
  Series C Cumulative Perpetual Preferred                                   
   Stock ("Series C Preferred Stock"),                                      
   cumulative dividend rate 10.25% per annum,                               
   4,000,000 authorized, 4,000,000 issued and                               
   outstanding as of September 30, 2013 and                                 
   December 31, 2012, respectively, with                                    
   liquidation preference of $25.00 per share        100,000        100,000 
  Series A Convertible Preferred Units of                                   
   Eureka Hunter Holdings, LLC, cumulative                                  
   distribution rate of 8.0% per annum,                                     
   9,391,227 and 7,672,892 issued and                                       
   outstanding as of September 30, 2013 and                                 
   December 31, 2012, respectively, with                                    
   liquidation preference of $190,766 and                                   
   $167,403 as of September 30, 2013 and                                    
   December 31, 2012, respectively                   128,871        100,878 
                                               -------------  ------------- 
                                                     228,871        200,878 
SHAREHOLDERS' EQUITY                                                        
  Preferred Stock of Magnum Hunter Resources                                
   Corporation, 10,000,000 shares, including                                
   authorized shares of Series C Preferred                                  
   Stock                                                                    
    Series D Cumulative Preferred Stock                                     
     ("Series D Preferred Stock"), cumulative                               
     dividend rate 8.0% per annum, 5,750,000                                
     authorized, 4,424,889 and 4,208,821                                    
     issued and outstanding as of September                                 
     30, 2013 and December 31, 2012,                                        
     respectively, with liquidation preference                              
     of $50.00 per share                             221,244        210,441 
    Series E Cumulative Convertible Preferred                               
     Stock ("Series E Preferred Stock"),                                    
     cumulative dividend rate 8.0% per annum,                               
     12,000 authorized, 3,803 and 3,775 issued                              
     and 3,722 and 3,705 outstanding as of                                  
     September 30, 2013 and December 31, 2012,                              
     respectively, with liquidation preference                              
     of $25,000 per share                             95,069         94,371 
  Common stock, $0.01 par value per share,                                  
   350,000,000 and 250,000,000 shares                                       
   authorized, and 171,602,272 and 170,032,999                              
   issued, and 170,687,320 and 169,118,047                                  
   outstanding as of September 30, 2013 and                                 
   December 31, 2012, respectively                     1,716          1,700 
  Exchangeable common stock, par value $0.01                                
   per share, none and 505,835 issued and                                   
   outstanding as of September 30, 2013 and                                 
   December 31, 2012, respectively                        --              5 
  Additional paid in capital                         728,551        715,033 
  Accumulated deficit                               (525,157)      (307,484)
  Accumulated other comprehensive loss               (16,910)        (8,889)
  Treasury Stock, at cost:                                                  
    Series E Preferred Stock, 81 and 70 shares                              
     as of September 30, 2013 and December 31,                              
     2012, respectively                               (2,030)        (1,750)
    Common stock, 914,952 shares as of                                      
     September 30, 2013 and December 31, 2012         (1,914)        (1,914)
                                               -------------  ------------- 
  Total Magnum Hunter Resources Corporation                                 
   shareholders' equity                              500,569        701,513 
  Non-controlling interest                             8,525         10,139 
                                               -------------  ------------- 
    Total shareholders' equity                       509,094        711,652 
                                               -------------  ------------- 
    Total liabilities and shareholders' equity $   1,885,816  $   2,198,632 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
                                                                            
                    MAGNUM HUNTER RESOURCES CORPORATION                     
               UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS               
              (In thousands, except share and per share data)               
                                                                            
                         Three Months Ended          Nine Months Ended      
                            September 30,               September 30,       
                     --------------------------  -------------------------- 
                         2013          2012          2013          2012     
                     ------------  ------------  ------------  ------------ 
REVENUES AND OTHER                                                          
  Oil and natural                                                           
   gas sales         $     54,018  $     29,983  $    138,242  $     78,532 
  Natural gas                                                               
   transportation,                                                          
   gathering,                                                               
   processing, and                                                          
   marketing               12,545         5,058        42,415        10,418 
  Oilfield services         6,423         1,504        13,728         6,118 
  Other revenue                46          (164)          789          (144)
                     ------------  ------------  ------------  ------------ 
  Total revenue            73,032        36,381       195,174        94,924 
                     ------------  ------------  ------------  ------------ 
OPERATING EXPENSES                                                          
  Lease operating                                                           
   expenses                15,145         6,100        38,027        18,291 
  Severance taxes                                                           
   and marketing            5,465         2,530        12,313         6,618 
  Exploration              40,123         3,299        73,402        18,143 
  Impairment of                                                             
   proved oil and                                                           
   gas properties              --            --         9,968            -- 
  Natural gas                                                               
   transportation,                                                          
   gathering,                                                               
   processing, and                                                          
   marketing                8,985         2,288        35,830         4,379 
  Oilfield services         4,527         3,366        11,928         6,933 
  Depletion,                                                                
   depreciation,                                                            
   amortization and                                                         
   accretion               28,293        15,146        71,956        42,199 
  Loss on sale of                                                           
   assets, net             40,952           328        42,116           528 
  General and                                                               
   administrative          22,218        12,222        58,559        38,226 
                     ------------  ------------  ------------  ------------ 
  Total operating                                                           
   expenses               165,708        45,279       354,099       135,317 
                     ------------  ------------  ------------  ------------ 
                                                                            
OPERATING LOSS            (92,676)       (8,898)     (158,925)      (40,393)
                                                                            
OTHER INCOME                                                                
 (EXPENSE)                                                                  
  Interest income              34           132           172           216 
  Interest expense        (15,689)      (14,405)      (53,203)      (40,595)
  Gain (loss) on                                                            
   derivative                                                               
   contracts, net         (29,553)      (10,151)      (30,644)        9,056 
  Other income              8,540            27         7,860            90 
                     ------------  ------------  ------------  ------------ 
  Total other                                                               
   expense, net           (36,668)      (24,397)      (75,815)      (31,233)
                     ------------  ------------  ------------  ------------ 
LOSS FROM CONTINUING                                                        
 OPERATIONS BEFORE                                                          
 INCOME TAX              (129,344)      (33,295)     (234,740)      (71,626)
  Income tax benefit       (3,255)        1,983        40,944         9,143 
                     ------------  ------------  ------------  ------------ 
LOSS FROM CONTINUING                                                        
 OPERATIONS, NET OF                                                         
 TAX                     (132,599)      (31,312)     (193,796)      (62,483)
                     ------------  ------------  ------------  ------------ 
  Income (loss) from                                                        
   discontinued                                                             
   operations, net                                                          
   of tax                 (80,554)       (1,102)      (71,455)        2,832 
  Gain (loss) on                                                            
   disposal of                                                              
   discontinued                                                             
   operations, net                                                          
   of tax                 (84,454)           --        87,998         2,224 
                     ------------  ------------  ------------  ------------ 
NET LOSS                 (297,607)      (32,414)     (177,253)      (57,427)
  Net income (loss)                                                         
   attributed to                                                            
   non-controlling                                                          
   interests                  725           (49)        1,614           (71)
                     ------------  ------------  ------------  ------------ 
LOSS ATTRIBUTABLE TO                                                        
 MAGNUM HUNTER                                                              
 RESOURCES                                                                  
 CORPORATION             (296,882)      (32,463)     (175,639)      (57,498)
  Dividends on                                                              
   preferred stock        (14,417)       (9,820)      (42,034)      (22,680)
                     ------------  ------------  ------------  ------------ 
NET LOSS                                                                    
 ATTRIBUTABLE TO                                                            
 COMMON SHAREHOLDERS $   (311,299) $    (42,283) $   (217,673) $    (80,178)
                     ============  ============  ============  ============ 
  Weighted average                                                          
   number of common                                                         
   shares                                                                   
   outstanding,                                                             
   basic and diluted  169,953,997   168,897,700   169,752,042   151,225,832 
                     ============  ============  ============  ============ 
  Loss from                                                                 
   continuing                                                               
   operations per                                                           
   share, basic and                                                         
   diluted           $      (0.86) $      (0.24) $      (1.38) $      (0.56)
  Income (loss) from                                                        
   discontinued                                                             
   operations per                                                           
   share, basic and                                                         
   diluted                  (0.97)        (0.01)         0.10          0.03 
                     ------------  ------------  ------------  ------------ 
NET LOSS PER COMMON                                                         
 SHARE, BASIC AND                                                           
 DILUTED             $      (1.83) $      (0.25) $      (1.28) $      (0.53)
                     ============  ============  ============  ============ 
                                                                            
AMOUNTS ATTRIBUTABLE                                                        
 TO MAGNUM HUNTER                                                           
 RESOURCES                                                                  
 CORPORATION                                                                
Loss from continuing                                                        
 operations, net of                                                         
 tax                 $   (131,874) $    (31,361) $   (192,182) $    (62,554)
Income (loss) from                                                          
 discontinued                                                               
 operations, net of                                                         
 tax                     (165,008)       (1,102)       16,543         5,056 
                     ------------  ------------  ------------  ------------ 
  Net loss           $   (296,882) $    (32,463) $   (175,639) $    (57,498)
                     ============  ============  ============  ============ 
                                                                            
                                                                            
                                                                            
                                                                            
                    MAGNUM HUNTER RESOURCES CORPORATION                     
               UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS               
              (In thousands, except share and per share data)               
                                                                            
                                                        Nine Months Ended   
                                                          September 30,     
                                                        2013        2012    
                                                     ----------  ---------- 
CASH FLOWS FROM OPERATING ACTIVITIES                                        
  Net loss                                           $ (177,253) $  (57,427)
  Adjustments to reconcile net loss to net cash                             
   provided by (used in) operating activities:                              
  Depletion, depreciation, amortization and                                 
   accretion                                            107,624      90,462 
  Exploration                                            91,533      25,564 
  Impairment of proved oil and gas properties            88,504          -- 
  Impairment of other operating assets                      263          -- 
  Share based compensation                               11,834      14,758 
  Cash paid for plugging wells                              (14)       (101)
  Gain on sale of assets                                (50,063)     (2,900)
  Unrealized (gain) loss on derivative contracts         23,757      (1,094)
  Unrealized loss on investments                          1,043         301 
  Amortization and write-off of deferred financing                          
   costs and discount on Senior Notes included in                           
   interest expense                                       3,660      10,725 
  Deferred tax benefit                                  (54,465)     (5,748)
  Changes in operating assets and liabilities:                              
    Accounts receivable, net                               (703)    (36,984)
    Inventory                                                77      (5,283)
    Prepaid expenses and other current assets            (3,095)     (1,219)
    Accounts payable                                     23,303      (4,592)
    Revenue payable                                      (3,027)      8,795 
    Accrued liabilities                                  16,219      11,562 
                                                     ----------  ---------- 
Net cash provided by operating activities                79,197      46,819 
                                                     ----------  ---------- 
CASH FLOWS FROM INVESTING ACTIVITIES                                        
  Capital expenditures and advances                    (418,245)   (360,498)
  Cash paid in acquisitions                                  --    (433,865)
  Change in restricted cash                               1,500          -- 
  Change in deposits and other long-term assets             571        (147)
  Proceeds from sales of assets                         460,997         823 
                                                     ----------  ---------- 
Net cash provided by (used in) investing activities      44,823    (793,687)
                                                     ----------  ---------- 
CASH FLOWS FROM FINANCINGS ACTIVITIES                                       
  Net proceeds from sale of common shares                    --     148,329 
  Net proceeds from sale of preferred shares             10,181     119,469 
  Equity issuance costs                                    (109)         -- 
  Proceeds from sale of Series A convertible                                
   preferred units in Eureka Hunter Holdings, LLC        27,440     128,251 
  Proceeds from exercise of warrants and options          1,932       1,336 
  Preferred stock dividend                              (29,911)    (17,536)
  Repayments of debt                                   (379,504)   (481,557)
  Proceeds from borrowings on debt                      245,991     430,977 
  Proceeds from issuance of Senior Notes                     --     443,971 
  Deferred financing costs                               (1,184)    (19,414)
  Change in other long-term liabilities                  (1,103)        335 
                                                     ----------  ---------- 
  Net cash provided by (used in) financing                                  
   activities                                          (126,267)    754,161 
                                                     ----------  ---------- 
Effect of changes in exchange rate on cash                  (93)       (146)
                                                     ----------  ---------- 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS     (2,340)      7,147 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD           57,623      14,851 
                                                     ----------  ---------- 
CASH AND CASH EQUIVALENTS, END OF PERIOD             $   55,283  $   21,998 
                                                     ==========  ========== 

 
Reconciliations 


 
                                                                            
Adjusted Loss per                                                           
 Common Share            Three Months Ended           Nine Months Ended     
 Reconciliation             September 30,               September 30,       
                                                                            
                                                                            
($ in thousands)         2013          2012          2013          2012     
                     ------------  ------------  ------------  ------------ 
                                                                            
Net income (loss)                                                           
 attributable to                                                            
 common shareholders                                                        
 - reported          $   (311,299) $    (42,283) $   (217,673) $    (80,178)
                                                                            
Non-recurring and                                                           
 non-cash items:                                                            
  Exploration                                                               
   expense           $     40,123  $      3,299  $     73,402  $     18,143 
  Impairment of                                                             
   proved oil and                                                           
   gas properties    $          -  $          -  $      9,968  $          - 
  Non-cash: stock                                                           
   compensation                                                             
   expense           $      3,135  $      2,219  $     11,834  $     14,758 
  Non-cash: 401k                                                            
   matching expense  $      1,308  $        872  $      1,558  $        872 
  Non-recurring                                                             
   transaction and                                                          
   other expense     $      5,012  $      1,755  $     19,287  $      7,689 
  Unrealized (gain)                                                         
   loss on                                                                  
   investments       $       (109) $       (305) $      1,043  $        301 
  Interest expense -                                                        
   fees              $      1,111  $        639  $      3,661  $     10,725 
  Unrealized (gain)                                                         
   loss on                                                                  
   derivatives       $     22,971  $     12,375  $     23,757  $     (1,094)
  (Gain) loss on                                                            
   sale of assets    $     40,952  $        328  $     42,116  $        528 
  Income tax                                                                
   (benefit)         $      3,255  $     (1,983) $    (40,944) $     (9,143)
  (Gain) loss from                                                          
   sale of                                                                  
   discontinued                                                             
   operations        $     84,454  $          -  $    (87,998) $     (2,224)
  Income from                                                               
   discontinued                                                             
   operations        $     80,554  $      1,102  $     71,455  $     (2,832)
                                                                            
                     ------------  ------------  ------------  ------------ 
Total non-recurring                                                         
 and non-cash items  $    282,766  $     20,301  $    129,139  $     37,723 
                                                                            
Net income (loss)                                                           
 attributable to                                                            
 common shareholders                                                        
 - recurring         $    (28,533) $    (21,982) $    (88,534) $    (42,455)
                                                                            
Net income (loss)                                                           
 attributable to                                                            
 common shareholders                                                        
 - recurring         $      (0.17) $      (0.13) $      (0.52) $      (0.28)
                                                                            
Weighted Average                                                            
 Shares               169,953,997   168,897,700   169,752,042   151,225,832 
                                                                            
                                                                            
                                                                            
                                                                            
Adjusted EBITDAX Reconciliation                                             
                                  Three Months Ended     Nine Months Ended  
                                     September 30,         September 30,    
                                 --------------------  -------------------- 
($ in thousands)                    2013       2012       2013       2012   
                                 ---------  ---------  ---------  --------- 
                                                                            
Net income (loss) from                                                      
 continuing operations           $(132,599) $ (31,312) $(193,796) $ (62,483)
Net Interest expense             $  15,655  $  14,273  $  53,031  $  40,379 
(Gain) loss on sale of assets    $  40,952  $     328  $  42,116  $     528 
Depletion, depreciation,                                                    
 amortization and accretion      $  28,293  $  15,146  $  71,956  $  42,199 
Impairment of proved oil and gas                                            
 properties                      $       -  $       -  $   9,968  $       - 
Exploration expense              $  40,123  $   3,299  $  73,402  $  18,143 
Non-cash stock compensation                                                 
 expense                         $   3,135  $   2,219  $  11,834  $  14,758 
Non-cash 401k matching expense   $   1,308  $     872  $   1,558  $     872 
Non-recurring transaction and                                               
 other expense                   $   5,012  $   1,755  $  19,287  $   7,689 
Unrealized (gain) loss on                                                   
 investments                     $    (109) $    (305) $   1,043  $     301 
Income tax (benefit)             $   3,255  $  (1,983) $ (40,944) $  (9,143)
Unrealized (gain) loss on                                                   
 derivatives                     $  22,972  $  12,375  $  23,757  $  (1,094)
                                 ---------  ---------  ---------  --------- 
Total Adjusted EBITDAX           $  27,997  $  16,667  $  73,212  $  52,149 
                                                                            
                                                                            
                                                                            
                                                                            
Recurring Cash G&A Reconciliation                                           
                                      Three Months Ended  Nine Months Ended 
                                        September 30,       September 30,   
                                     ------------------- -------------------
($ in thousands)                        2013      2012      2013      2012  
                                     --------- --------- --------- ---------
                                                                            
Total G&A                            $  22,218 $  12,222 $  58,559 $  38,226
                                                                            
Adjustments:                                                                
  Non-cash stock compensation        $   3,135 $   2,219 $  11,834 $  14,758
  Acquisition and other non-                                                
   recurring expense                 $   6,403 $   1,950 $  18,795 $   6,435
                                     --------- --------- --------- ---------
Recurring Cash G&A                   $  12,679 $   8,053 $  27,929 $  17,033
                                                                            
Recurring Cash G&A Per BOE           $   13.71 $   12.06 $   10.95 $    8.07

  
Contact:
Chris Benton 
AVP, Finance and Capital Markets
ir@magnumhunterresources.com
(832) 203-4539