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Mon, May 17, 2010
Sun, May 16, 2010
Fri, May 14, 2010 Magnum Hunter Resources Reports First Quarter 2010 Financial and Operating Results
HOUSTON, TX--(Marketwire - May 14, 2010) - Magnum Hunter Resources Corporation (
OPERATIONAL RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2010
Average daily production during the first quarter ended March 31, 2010 was 1,374 Boe's per day (64% crude oil and ngl's) and represented a 88% increase over the average daily production rate of 731 Boe's per day (69% crude oil and ngl's) reported during the first quarter of 2009. Magnum Hunter's first quarter 2010 average daily production rate also exceeded the Company's fourth quarter 2009 average daily production rate with an increase of 87%. The significant increase to the Company's average daily production rate during the first quarter of 2010 is directly attributable to the production additions from the February 2010 acquisition of privately held Triad Energy Corporation, an Appalachian Basin focused energy company.
OPERATIONAL UPDATE
Magnum Hunter currently has under contract a drilling rig scheduled to spud its first Eagle Ford Shale crude oil prospect in Gonzales County, Texas on or about June 1, 2010. Two additional Eagle Ford Shale wells will be subsequently drilled in Atascosa County and another location yet to be determined. Additionally, the Company is proceeding with expansion plans regarding the increased capacity of the Eureka Hunter pipeline system located in northwestern West Virginia which includes right-of-way acquisition, regulatory permits, and ordering of 20" steel pipe for anticipated construction activities over the next several months. The first two horizontal Marcellus Shale prospects are currently planned to be drilled later this year once the new gas pipeline is completed and in operation. None of Magnum Hunter's currently identified drilling locations on either the Company's approximate 30,000 Eagle Ford Shale gross lease acreage position or the Company's approximate 42,000 gross Marcellus Shale lease acreage position located in West Virginia, have been previously booked as proved reserves by Magnum Hunter or its third party engineering consultants. Success in either of these two new resource plays could have a material effect on future reserve additions.
FINANCIAL RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2010
Magnum Hunter reported a net loss of $4.0 million, or ($0.07) per basic and fully diluted shares outstanding for the first quarter of 2010, as compared to 2009's first quarter net loss of $1.4 million, or ($0.04) per basic and fully diluted shares outstanding. Total revenues for the three months ended March 31, 2010 and 2009 were $7.8 million and $1.9 million, respectively, an increase of 308%.
The Company's first quarter 2010 net loss included the following non-recurring and non-cash charges; (i) exploration expense of $451 thousand, or ($0.01) per basic and fully diluted share, (ii) non-cash general and administrative charges associated with employee stock options and restricted common share grants for a total of $1.4 million, or ($0.03) per basic and fully diluted share, (iii) accrual of employee performance bonuses for 2009 of approximately $1.9 million, or ($0.03) per basic and fully diluted share, (iv) non-recurring acquisition expenses related to Triad of $1.3 million, or ($0.02) per basic and fully diluted share, and (v) an unrealized loss on derivative contracts in the amount of $1.9 million, or ($0.03) per basic and fully diluted share. Adjusting for these non-recurring and non-cash charges, Magnum Hunter's first quarter 2010 net loss would have improved by $0.12 per basic and fully diluted shares outstanding, or to an adjusted net profit per basic and fully diluted common shares of $0.05.
Operating cash flow (before changes in working capital accounts) generated by Magnum Hunter during the three months ended March 31, 2010 was approximately $1.1 million compared to $642,000 generated by the Company during the comparable period in 2009.
MANAGEMENT COMMENTS
Mr. Gary C. Evans, Chairman and CEO of Magnum Hunter Resources Corporation, commented, "This was an eventful quarter for our company with the successful closing of the acquisition of Triad Energy in February. As anticipated when we were originally evaluated this acquisition, we are continuing to uncover a number of new opportunities within this asset base that will further develop throughout the year.
"We anxiously anticipate our new drilling schedule in the Eagle Ford Shale and Marcellus unconventional resource plays which will begin this month. We are also evaluating a number of acquisition opportunities considered 'bolt on' transactions within our core areas of existing operations.
"Our Company's liquidity position continues to improve with a combination of support from our recently expanded senior bank group, the recent sales of our Series C Perpetual Preferred Stock (non-convertible), and due to the upcoming redemption of certain outstanding stock purchase warrants."
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 of exploratory leases and producing properties, secondary enhanced oil recovery projects, exploratory drilling, and production of oil and natural gas in the United States. The Company is presently active in three of the "big four" emerging unconventional shale plays in the United States.
For more information, please view our website at [ http://www.magnumhunterresources.com/ ]
FORWARD-LOOKING STATEMENTS
This press release contains statements concerning our expectations, beliefs, plans, intentions, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are not historical facts. These statements and others contained in this presentation 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"), Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the Private Securities Litigation Reform Act of 1995 (the "Litigation Reform Act"). Actual results may differ materially from those expressed or implied by these statements. You can generally identify our forward-looking statements by the words "anticipate", "believe", "continue", "could", "estimate", "expect", "forecast", "goal", "intend", "may", "objective", "plan", "potential", "predict", "projection", "should", "will", or other similar words. Such forward-looking statements 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; (3) the general risks associated with oil and gas exploration, development and operations, 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 Reports on Form 10-K for the period ended December 31, 2009, and the Company's Quarterly Reports on Form 10-Q for the quarters ending March 31, 2009, June 30, 2009, and September 30, 2009 filed on March 31, 2010, May 11, 2009, August 14, 2009, and November 16, 2009, respectively. 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) SELECTED BALANCE SHEET DATA March 31, December 31, 2010 2009 ------------ ------------ Cash and Cash Equivalents $ 1,478,011 $ 2,281,568 Total Current Assets 8,609,315 6,873,258 Total Property and Equipment 144,064,688 57,538,632 Total Assets 156,901,163 66,584,051 Total Current Liabilities 11,424,974 6,219,375 Total Long-term Debt 66,617,437 13,000,000 Other Long-term Liabilities 4,995,859 2,673,001 Series B Redeemable Convertible Preferred Stock 14,982,000 0 Series C Cumulative Perpetual Preferred Stock 9,069,050 5,373,750 Total Shareholders' Equity $ 49,811,843 $ 39,317,925 MAGNUM HUNTER RESOURCES CORPORATION (FORMERLY PETRO RESOURCES CORPORATION) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended March 31, 2010 2009 ------------ ------------ REVENUE: Oil and gas sales $ 7,294,992 $ 1,817,036 Field operations and other 527,989 100,000 ------------ ------------ Total revenue 7,822,981 1,917,036 ------------ ------------ EXPENSES: Lease operating expenses 2,349,699 1,018,611 Severance taxes and marketing 533,549 225,951 Exploration 451,128 94,475 Field operations 270,644 - Depreciation, depletion and accretion 1,539,847 1,307,527 General and administrative 6,768,038 746,613 ------------ ------------ Total expenses 11,912,905 3,393,177 ------------ ------------ LOSS FROM OPERATIONS (4,089,924) (1,476,141) OTHER INCOME AND (EXPENSE): Interest income 1,894 601 Interest expense (762,686) (570,677) Gain on derivative contracts 1,131,878 556,315 ------------ ------------ Net loss (3,718,838) (1,489,902) Less: Net (income) loss attributable to non-controlling interest (67,775) 118,619 ------------ ------------ Net loss attributable to Magnum Hunter Resources Corporation (3,786,613) (1,371,283) Dividend on Preferred Stock (262,446) - ------------ ------------ Net loss attributable to common stockholders $ (4,049,059) $ (1,371,283) ============ ============ Loss per common share Basic and diluted $ (0.07) $ (0.04) ============ ============ Weighted average number of common shares outstanding Basic and diluted 55,748,540 36,778,172 ============ ============
