SOURCE: Magnum Hunter Resources

Magnum Hunter Resources

September 06, 2011 06:30 ET

Magnum Hunter Resources Announces Further Expansion of Senior Bank Credit Facilities

Liquidity Sufficient to Fund 100% of 2012 Capex

HOUSTON, TX--(Marketwire - Sep 6, 2011) - Magnum Hunter Resources Corporation (NYSE: MHR) (NYSE Amex: MHR-PrC) (NYSE Amex: MHR-PrD) (the "Company" or "Magnum Hunter") announced today that the Company has received and accepted an underwritten commitment from the Bank of Montreal ("BMO"), the Company's lead senior bank lender, to expand the availability of its Senior Credit Facilities (the "Senior Credit Facilities") to $250 million from its current level of $187.5 million.

The expansion of the Senior Credit Facilities includes a new Term Loan Facility (the "Term Loan Facility") of $75 million along with the revision of the Company's existing Senior Secured Revolving Credit Facility (the "Senior Revolving Facility") to $175 million. The Term Loan Facility will have a maturity of five years. The Term Loan Facility can increase, subject to lender approval, by another $25 million, up to $100 million of availability. The terms of the Senior Revolving Facility will remain substantially the same and the amount under the facility can subsequently increase up to $250 million, subject to semi-annual borrowing base redeterminations and requisite lender approval. Therefore, total combined borrowing capacity under the Senior Credit Facilities can be expanded up to a maximum of $350 million.

As of August 31, 2011, the Company had approximately $151 million of outstanding indebtedness under its existing Senior Revolving Facility. The combination of existing cash and the borrowing capacity under these new Senior Credit Facilities provide Magnum Hunter pro forma liquidity exceeding $110 million. When also including the Company's new Eureka Hunter Credit Facility (see press release dated August 17, 2011), along with existing cash, the Company currently has over $135 million of existing liquidity on a pro forma basis.

Magnum Hunter anticipates closing these new financial commitments prior to the end of September 2011. Closing is subject to the satisfaction of customary closing conditions, including execution of final documentation. Specific terms and amounts under the Term Loan Facility and Senior Revolving Facility will be reported on appropriate Form 8-Ks to be filed by the Company with the Securities and Exchange Commission subsequent to closing.

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 oil and natural gas, primarily in the states of West Virginia, Kentucky, Ohio, Texas, and North Dakota and in Saskatchewan, Canada. The Company is presently active in three of the most prolific shale resource plays in North America, namely the Marcellus Shale, Eagle Ford Shale and Williston Basin/Bakken Shale.

For more information, please view our website at

Forward-Looking Statements
The statements and information contained in this press release that are not statements of historical fact, including all estimates and assumptions contained herein, are "forward looking statements" as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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, market conditions in the oil and gas industry and the impact of environmental and other governmental regulation. 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 other, the following: adverse economic conditions in the United States 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 and natural gas; 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 oil and natural gas income through exploration and development; our ability to successfully apply horizontal drilling techniques and tertiary recovery methods; 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; and the adequacy of our capital resources and liquidity including, but not limited to, access to additional borrowing capacity. Because forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such statements. Readers 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, including estimates, whether as a result of new information, future events, or otherwise. We urge readers to review and consider disclosures we make in our public filings made from time to time with the Securities and Exchange Commission that discuss factors germane to our business, including our Annual Report on Form 10-K, as amended for the year ended December 31, 2010 and our Quarterly Reports on Form 10-Q for the quarters ending March 31, 2011 and June 30, 2011. All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements.

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