Magnum Hunter Resources Corp. Enters into $430 Million for Utica Shale Joint Venture
Aug 11 15
Magnum Hunter Resources Corp. has entered into a $430 million letter of intent for a Utica shale joint venture, continuing an eventful week for the Utica shale driller. The company's agreement with an unnamed private equity fund involves 28,500 undeveloped acres in eastern Ohio's Monroe and Washington counties. A letter of intent is different from an agreement - Magnum Hunter says it expects a definitive agreement within 30 to 45 days, and a closing 15 to 30 days after that. And the terms could change. Nonetheless, the announcement marks another notable event for the Appalachia-focused Texas shale driller that has spent 2015 finding ways to raise cash. The two deals totaling around $1 billion including the joint venture - were close to fruition. On August 10, 2015, the company's depressed stock closed up 71% to $1.33 after cratering to as low as 70 cents in the year. The joint venture would initially target 9,500 acres, but the filing did not disclose a specific location in the two-county area. Magnum Hunter has 200,000 acres under lease in the Marcellus and Utica shale region, but since January hasn't drilled a well to preserve capital. The company plans to restart some drilling after it gets its cash infusion. The land in the letter of intent is dedicated to the company's Eureka Hunter pipeline. Once the private equity fund gets a 16% rate of return back on its invested money, Magnum Hunter gets back at least 95% of the land.
Magnum Hunter Resources Corp. Reports Unaudited Consolidated Earnings and Production Results for the Second Quarter and Six Months Ended June 30, 2015; Reports Impairment Charges for the Second Quarter Ended June 30, 2015; Provides Production and Capital Expenditure Guidance for the Year of 2015
Aug 7 15
Magnum Hunter Resources Corp. reported unaudited consolidated earnings and production results for the second quarter and six months ended June 30, 2015. For the quarter, the company's total revenue was $39,526,000 compared to $129,648,000 a year ago. Operating income was $4,529,000 compared to $4,814,000 a year ago. Loss from continuing operations before income tax was $20,082,000 compared to $17,691,000 a year ago. Loss from continuing operations, net of tax was $20,082,000 or $0.14 per basic and diluted share compared to $17,691,000 or $0.14 per basic and diluted share a year ago. Net loss attributable to the company was $21,676,000 compared to $64,647,000 a year ago. Net loss attributable to common shareholders was $30,523,000 or $0.15 per basic and diluted share compared to $79,977,000 or $0.43 per basic and diluted share a year ago. Net loss attributable to common shareholders - as adjusted was $46,891,000 or $0.23 per share compared to $10,204,000 or $0.06 per share for the same period last year. Total adjusted EBITDAX was $7,482,000 compared to $52,268,000 a year ago. The decrease in Adjusted EBITDAX was due primarily to the continued dramatic downturn in commodity prices for the quarter ended June 30, 2015. For the three months ended June 30, 2015, total upstream capital expenditures were $13.0 million, of which $7.0 million and $2.0 million constituted drilling and completion capital for the Appalachian and Williston Basins, respectively.
For the six months, the company's total revenue was $94,922,000 compared to $237,518,000 a year ago. Operating loss was $72,959,000 compared to $24,700,000 a year ago. Loss from continuing operations before income tax was $125,722,000 compared to $71,030,000 a year ago. Loss from continuing operations, net of tax was $125,722,000 or $0.70 per basic and diluted share compared to $71,030,000 or $0.49 per basic and diluted share a year ago. Net loss attributable to the company was $127,595,000 compared to $126,239,000 a year ago. Net loss attributable to common shareholders was $145,290,000 or $0.71 per basic and diluted share compared to $156,465,000 or $0.88 per basic and diluted share a year ago. Net cash provided by operating activities was $51,960,000 compared to $18,747,000 a year ago. Capital expenditures and advances was $136,635,000 compared to $257,469,000 a year ago. Net income loss attributable to common shareholders - as adjusted was $122,652,000 or $0.60 compared to $28,855,000 or $0.16 per share a year ago. Total adjusted EBITDAX was $20,928,000 compared to $91,236,000 a year ago.
For the quarter, the company reported oil production was 288 MBbl compared to 427 MBbl a year ago. Natural gas production was 7,809 MMcf compared to 5,506 MMcf a year ago. NGL production was 322 MBoe compared to 251 MBoe a year ago. Total production was 11,469 MMcfe compared to 9,578 MMcfe a year ago. The increase in production was attributable primarily to the Company’s expanded 2014 drilling program in its core areas of operations and higher production volumes from its Marcellus Shale and Utica Shale wells. Oil and gas production increased 19.7% for the quarter ended June 30 to 126 MMcfe per day compared to 105.3 MMcfe per day for the prior period. Pro forma production of oil and gas production was 144 Mmcfe per day, which is a 37% increase compared to prior year actual production.
For the six months, the company reported oil production was 605 MBbl compared to 853 MBbl a year ago. Natural gas production was 18,752 MMcf compared to 10,455 MMcf a year ago. NGL production was 635 MBoe compared to 480 MBoe a year ago. Total production was 26,190 Mmcfe compared to 18,452 MMcfe a year ago.
The company also announced impairment of proved oil and gas properties of $95,000.
The company’s upstream capital expenditure budget for fiscal year 2015 is $100 million. The company’s upstream capital expenditure budget may be reduced or increased depending on realized prices for its natural gas, NGLs and oil, investment opportunities, continued effective implementation of cost reduction initiatives, including reduction of oil and gas field service costs, and funding allocations. The company has allocated approximately $70 million of its upstream capital expenditure budget to its Marcellus Shale and Utica Shale exploration and development drilling program in West Virginia and Ohio, approximately $10 million to its properties in the Williston Basin/Bakken Shale in North Dakota (substantially all of which are non-operated) and approximately $20 million for additional leasehold acreage acquisitions in the Marcellus Shale and Utica Shale plays. 2015 production guidance, the company expects average daily production for 2015 of approximately 174 MMcfe/d — 198 MMcfe/d (29.0 — 33.0 MBoe/d).