Magnum Hunter Resources Corporation has entered into a definitive securities purchase agreement with Relational Investors LLC and certain of its affiliates to sell to, in a private offering, an aggregate of 21,428,580 shares of the Company's common stock at $7.00 per share, for net proceeds of $150 million.

The Company will also issue to Relational 2,142,858 warrants to purchase common stock with an exercise price of $8.50 per share and with terms substantially identical to those of the October 2013 warrants previously issued to the Company's stockholders as a dividend. 

The Company intends to use the proceeds from this equity offering for general corporate purposes, which the Company anticipates will include (i) adding an additional drilling rig to accelerate its drilling operations in the Marcellus Shale and Utica Shale in Ohio and West Virginia on the Company's existing 200,000 leasehold acres (approx.), (ii) funding the acquisition of new oil and gas leases covering acreage in those shale plays in Ohio and West Virginia and (iii) repaying a portion of the outstanding indebtedness under its Senior Revolving Credit Facility. Pro forma for this private offering and the anticipated repayment of indebtedness under the Senior Revolving Credit Facility, as of May 27, 2014, the Company will have total liquidity of approximately $208.5 million, comprised of $8.5 million of cash and cash equivalents and $200.0 million of borrowing availability under its Senior Revolving Credit Facility. The closing of the private offering is subject to customary conditions and is scheduled to occur tomorrow, May 29, 2014.

Mr. Gary C. Evans, Chairman of the Board and Chief Executive Officer of Magnum Hunter, commented, "This private placement of equity will generate proceeds of $150 million which will increase the Company's financial flexibility in order to better execute on our defined operating plan. Combined with ongoing divestitures of non-core assets, this financing positions us very well to exploit our strategic lease acreage position in the Marcellus and Utica Shale plays.

"We are pleased that Relational Investors will now become our largest shareholder with approximately 15% ownership of our outstanding shares. We look forward to Relational's continued involvement and support, as both a preeminent oil and gas investor and proponent of long-term value creation for all shareholders."

Mr. Ralph V. Whitworth, Co-founder and Principal of Relational Investors LLC, commented, "Our interest in increasing our investment in Magnum Hunter coincided with some very attractive opportunities for the Company to extend its growth and long-term strategic plans. This investment reflects our confidence in Magnum's outstanding management team and their strategic plan. The Company, led by Gary, has assembled a premier acreage position in North America's most prolific shale plays. Our cash infusion will allow the Company to accelerate development and expansion in the highly attractive Appalachian Region."