SOURCE: Magnum Hunter Resources

Magnum Hunter Resources

February 04, 2010 09:00 ET

Magnum Hunter Resources Announces Initial 2010 Capital Budget of $25 Million

HOUSTON, TX--(Marketwire - February 4, 2010) - Magnum Hunter Resources Corporation (NYSE Amex: MHR) (NYSE Amex: MHR-PC) (the "Company" or "Magnum Hunter") announced today that the Company's Board of Directors has approved an initial capital budget for fiscal year 2010 of $25.0 million. The capex budget does not include any potential expenditures which may occur for possible merger and acquisition activities. The 2010 capex budget is predominately for capital expenditures necessary to fund the exploration and development activities associated with Magnum Hunter's acquisition of substantially all of the assets of Triad Energy Corp. ("Triad") and certain of its affiliated entities, scheduled to close next week. The Company plans to fund the approved fiscal year 2010 capex budget from internally generated sources of cash flows derived from a combination of operating activities and cash liquidity available under the Company's existing $150 million revolving commercial bank line of credit ($70 million borrowing base).

The Company has approximately $17.0 million of capex (approximately 70% of the total) directed to the Triad assets, including the horizontal drilling of a minimum of two unbooked Marcellus Shale locations in Tyler County, West Virginia. Additionally, Magnum Hunter has budgeted to immediately begin spending approximately $9.0 million of the capex on upgrading and completing the Eureka Pipeline system located in West Virginia being acquired with the Triad transaction. The balance of the Company's capex budget in Appalachia will be for new leasing activity and other oil and gas related projects.

For the Eagle Ford Shale located in Central and South Texas, Magnum Hunter has allocated approximately $7.0 million of capex (approximately 28% of the total). The Company plans to horizontally drill two unbooked Eagle Ford Shale locations during fiscal year 2010, with one of these to be completed before mid-year. Additionally, Magnum Hunter will be fracing this month an Eagle Ford Shale vertical well to test the fracturing and stimulation process for use going forward on the Company's extensive Eagle Ford Shale mineral lease acreage inventory. The balance of Magnum Hunter's capex budget in the Eagle Ford Shale will be for additional leasing related activities that are currently ongoing.

As the year progresses, it is probable that this initial $25.0 million capex budget will be increased by the Board of Directors based upon anticipated success in the Company's unconventional resource plays.

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 shale plays in the United States.

For more information, please view our website at

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, Form 10-K/A and Form10-K/A for the year ended December 31, 2008 filed with the Securities and Exchange Commission on March 31, 2009, April 29, 2009 and September 11, 2009, respectively, 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 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.

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