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Magnum Hunter Resources
Corporate Presentation: January, 2011
- Market cap: $500 million
- Over last 18 months, new management with new strategy
- Strategy: acquire and operate properties in Eagle Ford, Marcellus, and Williston Basin (Bakken/TFS/Madison)
- Current Mix: Until today -- no CAPEX in the Bakken for 2011 (slide 5)
- The big jump in production started in 1Q10
- Production: 600 boe/day 4Q09 --> 2,800 boe/day 4Q10 (estimate)
- Bakken acreage: 15,000 gross acres; MHR interest 43%, --> 6,450 net acres
- Bakken acreage: not in the best Bakken; Burke, Renville, Ward, Bottineau, McHenry counties
- Bakken: 3 hz wells drilled 4Q09 with IP of ~600 boe (gross) combined
- Recently announced acquisitions: NuLoch Resources -- $327 million; NGAS -- $98 million
Nuloch Resources, Inc. Acquisition (some numbers rounded)
- $327 million acquisition
- Reserves: est proved reserves of 6 million boe; 85% crude; est probable, 3 million bbls
- 14 net Bakken/TFS wells producing; approx 1,550 boe/d productive capacity
- 71,600 net acres in Williston Basin (32,900 in Divide and Burke counties; 38,700 acres in Saskatchewan, right across the border from North Dakota); currently 1,070 boe/day productive capacity
- ND acreage: most of the acreage is in Divide county (24,500 net acres); other, Burke (6,700 net acres)
- 50,680 net acres in Alberta; currently 480 boe/day (50% light oil)
- Approx 267 net identified Williston Basin drilling locations (Bakken/Three Forks Sanish)
- No outstanding long term debt
- Expected to close on / before April 30, 2011
- Joint venture arrangements with operators in ND to include: Samson, Baytex
- 2010 CAPEX: $30 million in North Dakota
- 2011E CAPEX: $36 million in North Dakota
- After NuLoch and NGAS acquisitions
- NGAS: Marcellus natural gas asset
- NGAS a natural gas asset -- okay
- Only 54% of the new acreage in the Williston Basin is in North Dakota
- Significant increase in Bakken acreage, but not "prime" Bakken
- Explains recent price movement in Samson: new MHR management wants to drill in North Dakota and has partnered with Samson and Baytex [I changed this to "Samson" based on comment below; the presentation only used the word "Samson" and did not specify]
- The "Bakken" cachet will move price action on companies involved, but need to see results of some wells; one big well can make a big difference in these small companies
- A $1 billion market cap company overnight (MHR was a $500 million company before this acquisition) -- the deal is expected to close April, 2011
