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Magnum Hunter Resources Corporation: Magnum Hunter Resources Corporation Reports Second Quarter 2009 Financial Results

^{Published on 2009-08-14 06:15:59, Last Modified on 2009-08-14 06:16:08 - Market Wire}
 

HOUSTON, TX--(Marketwire - August 14, 2009) - Magnum Hunter Resources Corporation (NYSE Amex: [ MHR ]) (the "Company") announced today financial and operating results for the three months and six months ended June 30, 2009.

Financial and Operating Results for the Three Months and Six Months Ended June 30, 2009

Magnum Hunter reported a net loss of $3.4 million, or ($0.09) per basic and fully diluted shares outstanding for the second quarter of 2009, as compared to 2008's second quarter net loss of $1.9 million, or ($0.05) per basic and fully diluted shares outstanding. The loss in the second quarter of 2009 is attributable to the substantial decline in the realized price for crude oil (down 54% from $113.58 per Bbl. to $51.95 per Bbl.) and realized natural gas prices (down 68%, from $7.91 per Mcf to $2.55 per Mcf) when compared to the second quarter of 2008. Also contributing to the second quarter 2009 net loss was a 62% increase in general and administrative expenses, a substantial portion of which is associated with recognizing non-cash stock compensation expenses as a result of the appointments of Mr. Gary C. Evans as Chairman of the Board and Mr. Ronald D. Ormand as Executive Vice President and Chief Financial Officer of Magnum Hunter previously announced on May 22, 2009.

The Company's production in the second quarter of 2009 increased 42% or 20,426 Boe to 69,224 Boe from 48,798 Boe produced during the second quarter of 2008. Also during the second quarter of 2009, Magnum Hunter's lease operating expense per Boe of production decreased 33%, from $27.60 per Boe produced during the second quarter of 2008 to $18.39 per Boe.

Magnum Hunter reported a net loss of $4.8 million, or ($0.13) per basic and fully diluted shares outstanding for the first six months of 2009 as compared to a net loss of $3.5 million, or ($0.10) per basic and fully diluted shares outstanding in the first six months of 2008. The loss for the first half of 2009 is also attributable to the aforementioned substantial decline in crude oil and natural gas prices and the non-cash charges which increased general and administrative expenses.

Operating cash flow (before changes in working capital accounts) generated by Magnum Hunter during the first six months of 2009 decreased $927.3 thousand from $2.1 million for the first six months of 2008 to $1.2 million for the first six months of 2009.

Along with cash currently on hand and the Company's anticipated cash flow from operations through year-end 2009, Magnum Hunter believes it has adequate cash liquidity more than sufficient to meet all of the Company's existing capital expenditure and other capital requirements through the balance of fiscal year 2009 and into fiscal year 2010.

Management Comments

Mr. Gary C. Evans, Chairman of the Company, commented, "Our reported financial and operating results for the three months and six months ended June 30, 2009 reflect the tremendous year-over-year downward volatility in world crude oil and North American natural gas commodity prices. With the Company's new management team firmly in place as of the beginning of the third quarter 2009, we expect our future financial and operational results to be reflective of our efforts to create incrementally increasing values for our shareholders. Our vision for Magnum Hunter remains firm on committing our resources to focusing on operations and strategic property acquisitions in known geologic regions of the oil patch with an emphasis on certain shale resource plays. Low finding and development costs, reduced operating costs and low corporate overhead are all necessary in an effort to generate superior returns to shareholders. The merger and acquisition markets continue to show a tremendous amount of deal flow, particularly in the distressed asset arena, and we continue to be optimistic that the Company will have the opportunity to announce specific transactions related to these activities in the near future."

About Magnum Hunter Resources

Magnum Hunter Resources Corporation and subsidiaries are a Houston, Texas based independent exploration and production company engaged in the acquisition of exploratory leases and producing properties, secondary enhanced oil recovery projects, exploratory drilling, and production of oil and natural gas in the United States.

For more information, please view our website at [ www.magnumhunterresources.com ].

Forward-looking Statements

The statements contained in this press release that are not historical are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including statements, without limitation, regarding the Company's expectations, beliefs, intentions or strategies regarding the future. Such forward-looking statements may relate to, among other things: (1) the Company's proposed exploration and drilling operations on its various properties, (2) the expected production and revenue from its various properties, (3) the Company's proposed redirection as an operator of certain properties and (4) estimates regarding the reserve potential of its various properties. These statements are qualified by important factors that could cause the Company's actual results to differ materially from those reflected by the forward-looking statements. Such factors include but are not limited to: (1) the Company's ability to finance the continued exploration, drilling and operation of its various properties, (2) positive confirmation of the reserves, production and operating expenses associated with its various properties; and (3) the general risks associated with oil and gas exploration, development and operation, including those risks and factors described from time to time in the Company's reports and registration statements filed with the Securities and Exchange Commission, including but not limited to the Company's Annual Report on Form 10-K and Form 10-K/A for the year ended December 31, 2008 filed with the Securities and Exchange Commission on March 31, 2009 and April 29, 2009, respectively, and our subsequently filed reports. The Company cautions readers not to place undue reliance on any forward-looking statements. The Company does not undertake, and specifically disclaims any obligation, to update or revise such statements to reflect new circumstances or unanticipated events as they occur.

 MAGNUM HUNTER RESOURCES CORPORATION (FORMERLY PETRO RESOURCES CORPORATION) CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2009 2008 2009 2008 ------------ ------------ ------------ ------------ Revenue Oil and gas sales $ 2,428,891 $ 4,368,442 $ 4,245,927 $ 7,426,443 Other income 100,000 - 200,000 100,000 ------------ ------------ ------------ ------------ Total revenue 2,528,891 4,368,442 4,445,927 7,526,443 Expenses Lease operating expenses 1,273,205 1,346,708 2,517,767 2,569,106 Exploration 19,201 37,654 113,676 610,164 Depreciation, depletion and accretion 799,335 612,021 2,106,862 1,137,193 General and administrative 1,445,062 894,329 2,191,675 2,187,772 ------------ ------------ ------------ ------------ Total expenses 3,536,803 2,890,712 6,929,980 6,504,235 ------------ ------------ ------------ ------------ Income (loss) from operations (1,007,912) 1,477,730 (2,484,053) 1,022,208 Other income and (expense) Interest income 251 63,147 852 139,002 Interest expense (607,509) (590,819) (1,178,186) (1,105,780) Loss on derivative contracts (1,774,419) (2,778,056) (1,218,104) (3,463,650) ------------ ------------ ------------ ------------ Net loss (3,389,589) (1,827,998) (4,879,491) (3,408,220) Less: Net loss attributable to noncontrolling interest (3,987) 223,165 114,632 349,990 Net loss attributable to Magnum Hunter Resources Corporation (3,393,576) (1,604,833) (4,764,859) (3,058,230) Dividend on Series A Convertible Preferred - (277,993) - (458,801) Net loss attibutable to common stockholders $ (3,393,576) $ (1,882,826) $ (4,764,859) $ (3,517,031) ============ ============ ============ ============ Earnings per common share Basic and diluted $ (0.09) $ (0.05) $ (0.13) $ (0.10) Weighted average number of common shares outstanding Basic and diluted 36,797,771 36,718,186 36,788,129 36,685,504 MAGNUM HUNTER RESOURCES CORPORATION UNAUDITED SELECTED BALANCE SHEET DATA June 30, 2009 December 31, 2008 ----------------- ----------------- Cash, cash equivalents, and restricted cash $ 677,500 $ 6,120,402 Total current assets 4,084,788 10,179,778 Total property and equipment 49,403,045 45,938,221 Total assets 56,913,540 61,664,868 Total current liabilities 1,819,143 3,497,408 Total long-term liabilities 24,183,352 23,089,197 Total shareholder's equity 29,640,768 33,693,354