From Texas-based Magnum Hunter Resources:
HOUSTON, TX -- (Marketwired) -- 04/16/13 -- Magnum Hunter Resources Corporation (NYSE: MHR) (NYSE MKT: MHR.PRC) (NYSE MKT: MHR.PRD) (NYSE MKT: MHR.PRE) (the "Company") announced today an operational update on each of the Company's upstream unconventional resource plays for the first quarter of 2013 which includes (i) the Appalachia/Marcellus/Utica Shales, (ii) the Williston Basin, and (iii) the Eagle Ford Shale (sale pending). Additionally, the Company is providing an operational update for the Company's midstream division, Eureka Hunter Pipeline, LLC ("Eureka Hunter").
On April 10, 2013, the Company began drilling its first Utica Shale well on our Farley Pad (4 well pad).
During the first quarter of 2013, 2 gross (2 net) additional Marcellus wells have been drilled and cased in our Ormet Area of Monroe County, OH. Fracture stimulation will be timed to occur with planned additional capacity on the Eureka Pipeline system, completion of which is expected late in the third quarter of 2013.
During the first quarter of 2013, in the non-operated Wetzel County 50/50 joint venture with Stone Energy, 4 gross (2 net) additional Marcellus wells have been fracture stimulated and tested. Three wells on the same pad had been previously fracture stimulated and tested. All seven wells on this pad are expected to begin flowing to processing and sales in mid-April 2013. On a separate pad in this county, 4 gross (2 net) Marcellus wells have been fracture stimulated and are currently being tested. We anticipate first production from this pad around May 1, 2013. Drilling activity continues on a third pad where topholes to the kick off point have been drilled on 8 gross (4 net) additional Marcellus wells. Production from this pad is forecast to occur in the fourth quarter of 2013.
Highlights for the Appalachia Division include:
The rates reflected above do not include natural gas liquids which when processed through the Markwest Mobley Plant, should add approximately 525 Boepd, assuming ethane rejection.
Mr. James Denny, President of Triad Hunter commented, "With eleven gross wells, five and a half net wells going to processing and sales in the next thirty days, we are pleased with the step change in our production profile. We are also excited about the potential impact of our first horizontal Utica test in Washington County, OH."
North Dakota (Non-Operated)
First quarter activities in North Dakota included bringing on production 16 gross (3.4 net) wells. At quarter end, there were 7 gross (1.7 net) wells drilled awaiting completion operations.
North Dakota (Operated)
Williston Hunter operated its first drilling well in the Bakken/Three Forks formation in North Dakota during the first quarter. The 35-26-164-97 well was drilled with 1.25 mile lateral technology on budget for $4.2 million and completed with 20 ton fracs over 25 stages targeting the Sanish Three Forks.
Highlights for North Dakota include:
The ONEOK gas conservation and gathering project to gather all casing head gas currently being flared continues the construction phase and is currently estimated to begin initial gas volume throughput in mid-April 2013. ONEOK has finalized the build-out of the compression station, high pressure 12" discharge line and 2 1/2 of the four east-west gathering lines in Phase 1.
Middle Bakken exploration across the Ambrose Block has accelerated. Seven test wells have now been placed on production, all yielding positive results. Six new laterals are awaiting completion and four locations are currently drilling. Further delineation will continue in 2013 and significant step-outs are planned.
During the first quarter of 2013, the Williston Hunter Division placed on production 5 gross (3.8 net) wells in the Tableland Field.
Highlights for the Tableland field include:
Mr. Glenn Dawson, President of Williston Hunter, commented, "In the first quarter of 2013, Williston Hunter evolved as a drilling operator in Divide County, North Dakota and plans to continue field operations for the remainder of 2013. Drilling operations in the Ambrose Field focused on Middle Bakken exploration successes, indicating a significant economic discovery leading to material reserve growth potential throughout 2013. Initial natural gas and liquids sales will commence in the ONEOK gathering system in mid-April 2013. This milestone is the beginning of a major conservation effort to tie in approximately 180 wells this year currently being flared which will add valuable reserves and cash flow."
On April 2, 2013 the Company entered into a definitive agreement to sell all of its ownership interests in the Company's Eagle Ford Shale oil and gas properties in Gonzales and Lavaca Counties of South Texas to a wholly-owned subsidiary of Penn Virginia Corporation (NYSE: PVA) ("Penn Virginia") for a total purchase price of $401 million. During the first quarter of 2013, the Eagle Ford division placed on production 1 gross (.3 net) operated wells and 3 gross (1.5 net) non-operated wells in the Eagle Ford Shale of South Texas.
Highlights for the Eagle Ford include:
Magnum Hunter Operated
Mr. H.C. "Kip" Ferguson, President of Eagle Ford Hunter, commented, "We are expeditiously proceeding ahead with the closing of the sale of our Eagle Ford Division to Penn Virginia as previously announced. We anticipate financial closing prior to the end of April 2013. Since entering South Texas in late 2009 with our first acquisition of leases in the Eagle Ford, we have been executing our plan through exploration, completion optimization and now into the development phase. The sale of this more mature asset will allow management to focus on our other core areas where we hold substantial lease acreage positions and are realizing significant returns in the current commodity price environment."
During the first quarter of 2013, Eureka Hunter's focus has been on continued expansion into Ohio, most notably acquiring right of way in Monroe County, Ohio. Eureka Hunter has acquired and cleared over 20 miles of right of way in Ohio, and anticipates pipeline construction in this region to commence during the second quarter of 2013. Current throughput on Eureka Hunter is over 75,000 Mcfpd. All gas previously shut-in associated with the flash fire reported last week is currently flowing.
TransTex Hunter, Eureka Hunter's treating and processing division, saw increased demand for gas treating units due to the improvement of natural gas prices and the continued drilling efforts by operators in the liquids-rich resource plays, especially in the Eagle Ford Shale. TransTex Hunter has continued to see opportunities in the gas processing sector which is being driven by producers seeking to take advantage of processing uplift. Currently, TransTex Hunter is in the process of building smaller and medium size processing equipment which will allow the Company to take advantage of producers' requirements for processing while waiting for the larger cryogenic processing facilities to be built which require much greater lead times.
Magnum Hunter Management Comments
Mr. Gary C. Evans, Chairman of the Board and Chief Executive Officer of Magnum Hunter, commented, "Companywide daily production is quickly approaching 20,000 Boe per day. We will not be lowering our production guidance for the year even after losing approximately 3,200 Boe per day later this month due to the Eagle Ford sale. With the imminent sale and closing of the Eagle Ford Division, we will be reallocating the capital budget previously earmarked for this Division to both the Appalachian and Williston Basin Divisions and maintain an overall $300 million upstream capital expenditure budget for the year. Our liquidity position will significantly improve at the end of this month with the expectation of completely paying off our existing Senior Revolving Credit Facility at that time. We are most anxious to test our first horizontal Utica well currently drilling in Northern Washington County, Ohio. Management has continued to build the Company's lease acreage position in the Utica Shale as we approach 100,000 gross acres under lease. With our midstream division, we are in a unique position to gather and process new discoveries in this region much more expeditiously than our competition."
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, please view our website at www.magnumhunterresources.com.
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 transactions described herein, forward-looking statements include, but are not limited to, statements regarding the expected timing of the completion of proposed transactions; the ability to complete proposed transactions considering various closing conditions; the benefits of any 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, natural gas and natural gas liquids; 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.
|Apr 16, 2013|
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