Magnum Rises After Eagle Ford Asset Sale: Dallas Mover
Magnum Hunter Resources Corp. (MHR), the Houston-based oil and natural gas producer with operations in West Virginia, North Dakota and Saskatchewan, advanced the most in more than four months after it agreed to sell Texas assets for double the amount invested in them.
Magnum Hunter rose 5.6 percent to $4.02 at 11:10 a.m. in New York after earlier gaining 12 percent, the most intraday since Nov. 19. The shares have fallen 38 percent in the last year.
Magnum Hunter sold mineral leases on 19,000 net acres in the Eagle Ford Shale for $401 million in cash, including production equivalent to about 3,000 barrels of oil a day to Penn Virgina Corp., according to statements today by the companies. The deal is expected to close in mid May.
Penn Virginia, based in Radnor, Pennsylvania, fell 0.3 percent today. The company also announced it will sell $400 million of senior notes due 2020 to finance the purchase, which will increase its Eagle Ford holdings to about 54,000 net acres.
The sale price was double the capital invested in the leases during the past three years, Magnum Hunter Chairman and Chief Executive Officer Gary C. Evans said in the company’s statement today. The company is keeping 7,000 net acres in the Eagle Ford deposit.
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