SOURCE: Magnum Hunter Resources

Magnum Hunter Resources

December 12, 2011 08:00 ET

Magnum Hunter Resources Announces New Joint Exploration Agreement With Stone Energy Corporation

HOUSTON, TX--(Marketwire - Dec 12, 2011) - Magnum Hunter Resources Corporation (NYSE: MHR) (NYSE Amex: MHR-PrC) (NYSE Amex: MHR-PrD) (the "Company" or "Magnum Hunter") announced today a Joint Development and Joint Operating Agreement ("Joint Agreements") with Stone Energy Corporation (NYSE: SGY) ("Stone Energy"). The contract area covers an existing mineral leasehold position currently owned by both companies located in Wetzel County, West Virginia.

Terms of the new Joint Agreements include Magnum Hunter's wholly owned subsidiary, Triad Hunter, LLC ("Triad Hunter") and Stone Energy working together within the contract area on an equal and joint basis on approximately 1,925 acres with the objective of drilling nineteen (19) new horizontal wells in the Marcellus Shale over the next two years. Earlier this year, Stone Energy and Triad Hunter drilled and completed two (2) horizontal Marcellus wells, with 50% ownership interest each, on a portion of this existing mineral leasehold. It is anticipated that the additional joint effort will drill and complete the first eleven (11) wells during 2012 at an estimated capital cost of $47 million. It is estimated that the total combined capital costs associated with the contract area for the Joint Agreements will exceed $100 million. Stone Energy will be designated as operator within the contract area and each company will own a 50% working interest. In a separate agreement, Stone Energy agreed to commit its share of production from the contract area to the Eureka Hunter Pipeline System operated by Magnum Hunter's wholly owned subsidiary, Eureka Hunter Pipeline, LLC.

The additional 1,925 acre contract area is a portion of an existing 5,288 acre leasehold in which Triad Hunter will retain 100% interest in 2,979 acres. During 2011 and unrelated to the additional contract area, Triad Hunter drilled and completed three (3) horizontal Marcellus wells with a 100% ownership interest. Triad Hunter anticipates drilling an additional nine (9) wells with a 100% ownership interest on the 2,979 acres.

Management Comments

Mr. James W. Denny, III, President of Triad Hunter, LLC, commented, "We are confident that this strategic alliance with Stone Energy will ensure our ability to more fully develop this area in a more efficient and prudent manner. Both companies realized that by combining our resources, we could each obtain a much greater value and improve efficiency in our respective leasehold positions by drilling a greater number of wells with longer lateral sections. We anticipate establishing new significant production volumes in this region during 2012. This joint venture will benefit greatly due to the take away capacity, processing and multiple market capabilities associated with our Eureka Hunter Pipeline system where 100% of these new anticipated gas volumes have now been dedicated."

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 http://www.magnumhunterresources.com/

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 ended March 31, 2011, June 30, 2011 and September 30, 2011. All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements.

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