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JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp.

Magnum Hunter Resources Corp. · Jul 21, 2011 · 106 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 1
    MAGNUM HUNTER RESOURCES CORPORATION July 2011 Analyst Meeting Colorado Springs, Colorado
  2. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 2
    Meeting Agenda 1) Introduction and Corporate OverviewGary C. Evans, Chairman and Chief Executive Officer 2) Williston Basin.Glenn Dawson, President - Williston Hunter, Inc. 3) Eagle Ford Shale..........................Kip Ferguson,…
  3. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 3
    Introduction and Corporate Overview Gary C. Evans Chairman and Chief Executive Officer 4
  4. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 4
    Executive Summary Magnum Hunter Resources has been repositioned over the past several years by a new management team to acquire, drill, and operate properties within three of the most prolific unconventional resource plays in the United…
  5. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 5
    MHR Overview Upon completion of the recent acquisitions in the first half of 2011, Magnum Hunter has the following characteristics: Approaching 1 billion in market capitalization Debt-to-total capitalization less than 15% Daily…
  6. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 6
    Current Portfolio Overview Focused exclusively on unconventional resource plays 80,623 Net Acres Resource Potential: 114 MMboe 58,048 Net Marcellus Acres Resource Potential: 265 MMboe 273,000 Net Southern Appalachia Acres…
  7. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 7
    IRRs of Top U.S. Shale Plays 70% MHR Active Resource Plays 60% 59% 60% 55% 50% 40% 40% 30% 29% 30% 28% 26% 24% 23% 21% 20% 20% 20% 17% 17% 16% 13% 11% 9% 9% 10% 7% 6% 0% Year: 1 2 3 4 5 6 7 8+ WTI Oil: 98.89…
  8. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 8
    Business Strategy The business plan is different than the old Magnum Hunter (15 year average annual shareholder return of 38%) in that the focus is exclusively on unconventional resource plays. Balanced program of opportunistic…
  9. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 9
    2011 Capital Budget of 255 million Appalachia Williston Basin 70 mm 70 mm 27.5% 27.5% 15.7% 29.4% Eagle Ford Eureka Hunter 75 mm Midstream (Pipeline/Processing) 40 mm 10
  10. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 10
    Production Forecast Oil/Liquids Natural Gas 11,000 10,000 Actual Forecast 9,000 8,000 37% 7,000 6,000 Boe/d 5,000 4,000 63% 3,000 2,000 1,000 0 11
  11. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 11
    2011 Projected Production Growth Magnum Hunter Recent Completed Acquisitions* 12,000 10,000 10,000 9,000 8,000 (2) 6,750 Boe/d 6,000 (1) 5,000 4,000 2,269 2,000 0 1Q11A 2Q11E 3Q11E 4Q11E 2011E Exit…
  12. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 12
    Williston Basin Glenn Dawson President Williston Hunter, Inc. 13
  13. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 13
    Williston Hunter Overview Proved producing reserves of 2.7 MMBoe as of June 30, 2011 (1) Proved Reserves Total proved reserves of 7.8 MMBoe as of June 30, 2011 R/P ratio of approximately 18.7 years Current net productive capacity of…
  14. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 14
    Williston Hunter Areas of Operation 72% Avg. WI 38,700 net acres 10% Avg. WI 30% Avg. WI 24,500 net acres 11,700 net acres 50% Avg. WI 6,450 net acres Recently Acquired MHR Existing NuLoch Assets Assets 15
  15. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 15
    Middle Bakken / Sanish Sandstone Type Section Tableland / North Dakota Area Middle Bakken Target Zones: A: Fine Grained Sandstone Shoreline Depositional Environment B: Siltstone Offshore Marine Canada Avg. Perm = 2.0 mD North…
  16. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 16
    Williston Hunter Operations Overview Gross of Wells of Wells Drilled of Wells Recent Average IP Rates (boe/d) Wells Completed Awaiting Currently 24 hour 7-day 30-day Producing 1Q 2011 Completion Being Drilled North Dakota 2 mile…
  17. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 17
    Williston Hunter Net Production Overview boe/d Williston Hunter Net Production/Forecast 2011 3500 SK & ND - Behind 3000 Pipe Oil - ND 2011 Drilling 2500 491 223 743 Production Shut-in due to area flooding 979 Oil - ND Base…
  18. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 18
    Williston Hunter - North Dakota Bakken / TFS Gross Production Data 19
  19. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 19
    Williston Basin Activity Viewfield (Mid Bakken) Legacy, PetroBakken, Crescent Point, Painted Pony Flat Lake Hoffer (Mid Bakken) (Mid Bakken) Cresent Point, Torquay, Husky, Cresent Tableland (TFS) Penn West Point Williston…
  20. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 20
    Williston Basin Three Forks/Sanish Activity 8-2-1-10W2 IP24hr: 269 boe/d Ness: IP24hr: 650 boe/d Almos Farms: IP24hr: 1236 boe/d Woodpecker IP24hr: 269 boe/d Impala IP24hr: 615 boe/d Hall: IP24hr: 534 boe/d…
  21. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 21
    Williston Basin Middle Bakken Activity Eagle 22-15 Williston Hunter IP24hr: 543 boe/d Sam Gustafson Williston Hunter IP24hr: 694 boe/d 22
  22. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 22
    Williston Hunter Last 12 Months Activity Drilled & Completed 36 Drilled W/O Completion 18 Currently Drilling 6 2011 Drilling Locations 33 23
  23. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 23
    Williston Basin Economics Sensitivity North Dakota (2 mile lateral) Saskatchewan (1 mile lateral) North Dakota (2 mile lateral) CAPEX: 6.9 Million CAPEX: 3.4 Million IP30: 350 Bbl/D IP30: 180 Bbl/D Saskatchewan (1 mile lateral)…
  24. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 24
    North Dakota - Williston Basin - Madison Acreage: 15,000 gross acres MHR W.I.: 50 % Producing Madison Fields: Primary: Eden Valley, Flaxton, Lake Darling, Lake View, Portal, SW Glenburn, Upper Des Lacs, Wheaton, Woburn Secondary:…
  25. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 25
    Madison - Secondary Recovery Unitize Drill New Wells Re-pressurize Secondary Recovery Tertiary Recovery Field North Grano East Flaxton Mohall Lake Darling Capital Invested by MHR Glenburn West Greene Since December 2006 Pratt…
  26. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 26
    Alberta Overview Alberta Properties: Balsam Balsam (Peace River Arch) Operated light oil 2 (1.3 net) Kiskatinaw oil wells 1 mile Net production of 150 boe/d 34o API, high netback Battery electrified in 2010 Enchant Enchant…
  27. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 27
    Eagle Ford Shale Kip Ferguson President Eagle Ford Hunter, Inc. 28
  28. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 28
    Eagle Ford Hunter Overview Proved producing reserves of 1.3 MMBoe as of June 30, 2011 (1) Proved Reserves Total proved reserves of 4.5 MMBoe as of June 30, 2011 R/P ratio of approximately 15.5 years Current net production of 1,000…
  29. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 29
    Eagle Ford Shale Oil Window HIGHLIGHTS 51,664 gross / 24,872 net acres leased in focus areas with 190+ possible EFS horizontal locations Potential EUR of 300,000 to 600,000 BOE/well Completed horizontal well cost of 7.5MM to…
  30. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 30
    Eagle Ford Hunter Areas of Operations PEACH CREEK PROSPECT GONZALES CO. TX 34,876 Gross Acres / MHR 50% WI JV 100 Possible Well Locations Estimated Well Cost: Cost: 7.5 to 8.5 MM EUR: 350 to 600 Mboe IP: 600 to 1,300 boe/d…
  31. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 31
    Eagle Ford Hunter - Operations Magnum Hunters 2010/2011 TD Drilling Activity: MHR Lateral Stages IP Rate (boe/d) First Well County Operator Interest Length Fraced 24 Hour 7-day 30-day Production Gonzo Hunter 1H Gonzales MHR 50% 4,365…
  32. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 32
    Eagle Ford Hunter Gross Production Gonzo Hunter 1H Lagunillas 2H Lagunillas 1H Southern Hunter 1H Gonzo North 1H Cinco 2H Cinco 1H Furrh 1H Geo Hunter 1H 4,000 3,500 3,000 2,500 Boe/d 2,000 1,500 1,000…
  33. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 33
    Production and Results Gonzo Hunter 1H Southern Hunter 1H Gonzo North 1H Cinco 2H Cinco 1H Furrh 1H Geo Hunter 1H 1,400 1,200 1,000 Boe/d 800 Newer wells, more frac stages, better fracs and higher IPs 600 Older wells…
  34. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 34
    MHR Operating Procedures = Maximizing Returns Typical Operating Procedures MHR Enhanced Operating Procedures Initial flow-back period: 6-8 months Initial flow-back period: 6-8 months Install extra large pumping unit: 12 months ESP…
  35. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 35
    Eagle Ford Hunter Cost Analysis How are we managing costs The single most costly factor is time and operational problems 64% of drilling costs are covered by service contract, stock inventory and planning 77% of completion costs are…
  36. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 36
    Eagle Ford Hunter Remaining 2011 Plan Eagle Ford Hunter Position for Growth 2 Rigs secured with extended contracts 1 yr Unit Rig / 3 yr Patterson Rig Halliburton contract for frac dates. Negotiating extra frac week per month New…
  37. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 37
    Eagle Ford Shale Permit Activity Eagle Ford Shale Permits Issued by Month All Eagle Ford Permits Core Area Permits: Gonzales, Dewitt, Karnes, Wilson 350 2,548 EFS Permits 304 300 (from 1/2010 to 5/2011) 279 250 232 225 227 of…
  38. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 38
    7/21/2011 Eagle Ford Shale Gonzales County Well Performance 1,200 Note: 1. EUR based on MHR internal evaluation 2. Horizontal length based upon directional surveys as per RRC filings 1,000 800 Cusack Clampit - 1H Ullman Unit…
  39. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 39
    Economic Sensitivity of Eagle Ford Gonzales County High Case: Mid Case: Low Case: Capex: 8.0MM + .02MM PU Capex: 8.0MM + .02MM PU Capex: 8.0MM + .02MM PU IP: 1,280 bbl/d IP: 800 bbl/d IP: 613 bbl/d Initial Decline: 99% Initial…
  40. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 40
    Appalachia Jim Denny President Triad Hunter, LLC 41
  41. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 41
    Appalachia Overview Magnum Hunters Appalachia assets are a combination of multiple acquisitions Magnum Hunter has completed over the past year and a half including Triad, NGAS, PostRock, and Windsor. Proved producing reserves of 11.6…
  42. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 42
    Appalachia Areas of Operation Primary focus on liquids rich Marcellus gas in northwest West Virginia Triad Hunter NGAS Hunter The Marcellus is one of the most attractive shale plays in the United States Ohio The Marcellus has one…
  43. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 43
    Appalachia Property Transactions Size Transaction (MM) Date Closed Overview Triad Energy Corporation 81 2/16/2010 Proved Reserves of 7.7 MMBoe at 6/30/2011 Over 88,417 net acres 182 miles of pipeline right of ways - Eureka Pipeline…
  44. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 44
    Appalachia Net Production Apppalachian Division Boe/d Net Production Triad Hunter Legacy Triad Hunter Marcellus NGAS Hunter 4000 3500 3000 1,457 1,520 2500 2000 1,500 1,271 1,085 1,041 1,011…
  45. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 45
    Triad Hunter Liquids Rich Marcellus Shale Pennsylvania Ohio Marcellus Properties / Operations: 58,048 Net Marcellus Acres To-date five wells have been drilled and completed Two wells in Tyler County, WV West Virginia Two…
  46. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 46
    Triad Hunter Near Term Activity Remaining 2011 Activity: Three wells drilled awaiting completion in Wetzel County, WV One well being drilled in Tyler County, WV Ormet Area 6-7 wells to be drilled throughout the remainder of…
  47. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 47
    Triad Hunter Resource Map 100% WI Laterals Majority of Lateral 100% WI Majority of…
  48. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 48
    Marcellus Horizontal Permitting Activity Last 12 Months Eureka Hunter system Eureka Hunter system active Eureka Hunter system-interconnects D-Dominion, E-EQT, C-Columbia Triad AB Resources Antero Chief CHK CNX or…
  49. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 49
    Marcellus Operations MHR Lateral Frac IP Rate (mcfe/d) First Well County Operator Interest Length Stages 24 Hour 7-day 30-day Production Weese 1H Tyler MHR 100% 3,550 12 7,210 4,559 4,205 12/31/2010 Weese 3H Tyler MHR 100% 3,030 12…
  50. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 50
    Triad Hunter Gross Marcellus Production Weese 1001 Weese 1003 Ormet 1-9H(1) Stone Unit 2 - 2H(2) Stone Unit 3 - 5H(2) 14,000 12,000 10,000 8,000 mcfe/d 6,000 4,000 2,000 0 (1) Ormet 1-9H on restricted…
  51. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 51
    Triad Hunter Marcellus Well Cost Analysis Typical Cost for a 4,800 ft in Zone Lateral for a Marcellus Well: % of Total Completed DRILLING COST Well Cost 22 DAYS DRILLING 476,300 9% FUEL USAGE 140,000 3% SITE PREPARATION AND STONE…
  52. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 52
    Implied Acreage Value by Transactions * Valuation based on historical Marcellus acreage transactions 53
  53. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 53
    Economic Sensitivity of Marcellus Economic Sensitivity of Marcellus Gas Price, /MMBtu High Middle Low Completed Well Cost - 5.0MM High Case: Middle Case: Low Case: IP: 7 Mmcf/D IP: 5 MMcf/D IP: 2.5MMcf/D Initial Decline: 99%…
  54. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 54
    Southern Appalachia Overview NGAS Hunter Operations: Kentucky Current Daily Production 1,450 boe/d Since the close of the NGAS transaction, three wells have been successfully drilled and completed Two additional wells are…
  55. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 55
    Southern Appalachia Infrastructure Gas Gathering Concurrent with the NGAS Resources acquisition, MHR successfully negotiated a significant fee reduction in the gas gathering contract with Seminole Energy Services. 56
  56. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 56
    Appalachia Shale Has Best Economics Estimated Gas Price Required for 10% IRR 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 Source: Morgan Stanley Research Report (January 2011) 57
  57. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 57
    Eureka Hunter Midstream Don Kirkendall Senior Vice President Eureka Hunter 58
  58. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 58
    Magnum Hunter Resources Midstream Group Magnum Hunters Midstream Group works with the core production areas: o Eagle Ford Shale - Texas o Marcellus and Appalachia West Virginia and Kentucky o Bakken - North Dakota Midstream is…
  59. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 59
    Eureka Hunter Pipeline Game Plan: Build high capacity gathering in an area void of high pressure pipeline capacity Build new pipeline capacity faster and cheaper than competitors Maximize producer options for gathering, processing,…
  60. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 60
    Eureka Hunter Pipeline - Overview Eureka Hunter Eureka Hunter 20 Pipeline(s) and Right of Ways and Connecting Gathering Systems PA Ohio and West Virginia MarkWest Mobley Plant Eureka Carbide Ohio Plant Mobley to TCO Dominion…
  61. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 61
    Eureka Hunter Pipeline Key Points 20 - 900 psi gathering system 200 300 Mmcf per day capacity Strategically located in heart of Marcellus wet gas corridor Construction costs below industry average: 62.5K vs. 200K per inch mile…
  62. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 62
    Eureka Filling Void in Northern WV MHR Acreage WI 100% or HBP MHR Acreage…
  63. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 63
    Proximity to Interstate Pipelines Eureka TETCO Equitrans Dominion Columbia Tennessee Beverly Bell ROW 64
  64. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 64
    Eureka and 3rd Party Producers Chesapeake Acreage HG Energy Acreage Consol Energy Acreage Antero Resources Acreage Stone Energy Acreage 65
  65. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 65
    Pipeline Expansion Projects Construction Update 32 Miles of 20 Installed to date F Construction costs well below industry D C 2011 Planned Projects B A. 8 miles - 20 Mainline West (Done) A B. 7 miles - 20 Pursley Lateral…
  66. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 66
    Eureka Hunter Outlook Estimated Completion Dates and Potential Volumes April 2012 50,000 mcf/day processing capacity thru MarkWest Mobley September 2012 50,000 mcf/day to Dominion Lines 413 and 404 September 2012 Additional 120,000…
  67. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 67
    Eureka Hunter Pipeline Construction Photos 68
  68. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 68
    Eureka Hunter Pipeline Construction Photos 69
  69. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 69
    Regions Major Processing Options Dominion Processing Plants Natrium 400 Mmcfd - Proposed Hastings 180 Mmcfd Lightburn 40 Mmcfd (4/11) MarkWest Processing Plants Houston I-III 355 Mmcfd Majorsville I-II 270 Mmcfd…
  70. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 70
    Hunter Gas Marketing, LLC Gathering and Marketing Solutions for Eureka Producers: Bundling gathering and marketing services ease of transactions One stop service for producers. Gathering, sales, processing. Offering physical commodity…
  71. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 71
    Reserve Overview Debbie Funderburg Vice President Reservoir Engineering 72
  72. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 72
    June 30, 2011 SEC Proved Reserves Overview Total Proved Reserves - 31.2 MMBoe; PV-10 of 428MM PUD PDP 13.2 MMBoe 15.7 MMBoe 42.3% 50.3% 7.4% PDNP 2.3 MMBoe Proved Reserve to Production Ratio of 17.3 Years Note: PV-10…
  73. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 73
    June 30, 2011 SEC Proved Reserves Overview Proved Producing Total Proved Gas Oil/Liquids Gas Oil/Liquids 49.5 Bcf 7.4 MMBoe 84.8 Bcf 17.0 MMBoe 53% 47% 45% 55% 74
  74. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 74
    SEC Proved Reserves Walk Forward Proved Reserves Walk Forward Mboe Balance at December 31, 2010 13,400 Revisions of previous estimates 2,062 Improved Recovery - Extensions and discoveries 2,746 Production (672) Purchases of…
  75. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 75
    Nymex Proved Reserves Overview Mid Year 2011 Total Proved Reserves 36.7 MMBoe PUD PDP 17.4 MMBoe 16.7 MMBoe 45.5% 47.5% 7.0% PDNP 2.6 MMBoe Proved Reserve to Production Ratio of 20.4 Years Reserves based on June 30, 2011…
  76. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 76
    MHR Resource Potential Unrisked Net Risked Reserves of Potential Locations Net Reserves (MMBoe) Area Resevoir Gross Net (MMBoe) 50% 75% Eagle Ford Hunter Eagle Ford 198 89 39 20 29 Williston Hunter Bakken / Sanish 2,982 486 114 57…
  77. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 77
    Resource Play Reserve Progression Ability to annually predict comes with more wells, repeatable performance and time Each resource play performs differently so to book reserves, thus you need sufficient evidence for that particular…
  78. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 78
    Resource Play Reserve Progression Eagle Ford Example Eagle Ford is immature but there are pockets that are moving to semi-mature MHR is in the early stages of EFS development so the EURs are booked more conservatively by the third…
  79. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 79
    Financial Overview Ron Ormand Executive VP and Chief Financial Officer 80
  80. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 80
    MHR Financial Snapshot (NYSE: MHR) Financial Overview Debt ( in thousands, March 31, 2011 Balances) ( in thousands, March 31, 2011 Balances) Stock Price 7/19/2011 7.69 Revolver Outstanding 40,000 Estimated Fully Diluted Shares…
  81. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 81
    Financing Highlights 250 million five-year Senior Secured Revolving Credit Facility provided by Amegy Bank, BMO, Capital One, Citibank, Credit Suisse, Deutsche Bank, KeyBanc, UBS and Union Bank. Current borrowing base of 170 million…
  82. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 82
    Near Term Financial Goals Continue to increase Senior Credit Facility borrowing base through reserve additions from organic growth Move allocated capital to higher IRR projects within the portfolio Continue to strategically issue…
  83. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 83
    Senior Credit Facility Borrower: Magnum Hutner Resources Corporation Facility Type: Senior Secured Revolving Credit Facility Purpose: General Corporate Purposes Facility Amount: 250 million (1) Borrowing Base: 170 million (2)…
  84. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 84
    Preferred Stock Issuance Series C Series D Total 180,000 160,000 140,000 Series C Maximum Issuance (1/14/2011): 100 million 120,000 in thousands 100,000 80,000 60,000 40,000 Initiated Series C Issuance…
  85. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 85
    Preferred Stock Key Terms Series C Series D Issuer Magnum Hutner Resources Corporation Magnum Hutner Resources Corporation Security Cumulative Preferred Stock Cumulative Preferred Stock Liqidation Preference 25.00 50.00 Dividend…
  86. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 86
    Capitalization December 31, December 31, December 31, March 31, March 31, 2009 2010 2010 PF* 2011 2011 PF* Cash and Cash Equivalents 2,281 554 17,086 3,836 6,679 Notes Payable, Less Current Portion 13,000 33,151 92,594 35,798…
  87. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 87
    Second Half 2011 Sources and Uses* Sources Uses Estimated Cash Flow From Operations 50.0 Oil & Gas Capex Eagle Ford Shale 45.0 Estimated Availability Under Revolving Credit Facility 31.0 Appalachia 50.0 Williston Basin 40.0…
  88. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 88
    Estimated Net Asset Value ( in millions, except where noted) Low - High Estimated Proved Reserve Value (1) 468.0 561.6 Undeveloped Acreage Value (1) Marcellus Shale (54,500 net undeveloped acres) 408.8 545.0 Eagle Ford Shale(22,750…
  89. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 89
    Oil & Gas Revenue* ( in thousands) 13,961 26% 8,068 6,941 13% 6,578 6,127 14% 19% 74% 25% 87% 86% 81% 75% 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 Gas Oil * All periods have been restated to exclude…
  90. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 90
    * Production Costs (per BOE) 28.51 28.93 27.71 1Q 2011 vs. 4Q 2010 Marketing 1.41 1.05 0.89 1Q 2011 production costs Severance Tax 3.78 4.64 4.50 23.44 decreased 28% from 4Q 2010 0.86 2.43 1Q 2011 LOE decreased 37% from 4Q…
  91. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 91
    Per Share Growth Proved Reserves/Share Production/Share 0.30 0.06 Proved Reserve (Boe) / Share 0.25 0.26 0.052 0.25 0.05 Production (Boe) / Share 0.20 0.21 0.04 0.044 0.15 0.16 0.035 0.03 0.10 0.02 0.05 0.01…
  92. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 92
    Summary of Commodity Hedges in Place As of July 2011 1Q11 2Q11 3Q11 4Q11 2011 2012 Natural gas Hedges Swaps Volume (MMbtu/d) 113 112 111 111 112 98 Price per MCF 5.98 5.98 5.98 5.98 5.98 6.15 Collars Volume (MMbtu/d) 2,142 2,119…
  93. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 93
    2011 Production Hedged 2011 % Estimated Natural Gas Production Hedged 2011 % Estimated Crude Production Hedged RRC 100% PXD 90% CHK 100% PXP 82% PXD 91% DNR 74% 69% 63% NFX UPL 69% * MHR OAS 62% BBG 56% APC 58% ECA 51% BBG…
  94. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 94
    Summary and Q&A Brad Davis Senior VP Capital Markets 95
  95. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 95
    Recent Key Events New Credit Facility 9.00 NGAS Acq. Closed Mid-Year NuLoch Acquisition Reserves 8.00 PostRock and NGAS Acquisition 7.00 Triad Acq. and New Credit Facility 6.00 Redeemed Marcellus FYE 2009 Operating Series B…
  96. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 96
    Market Capitalization / Stock Price Market Capitalization Stock Price 1,200,000,000 9.00 8.00 1,000,000,000 7.00 800,000,000 6.00 5.00 600,000,000 4.00 400,000,000 3.00 NGAS Acq. Closed 2.00 200,000,000 NuLoch Acq.…
  97. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 97
    Stock Price vs. WTI MHR Stock Price WTI Oil Price 9.00 120 8.00 100 7.00 6.00 80 MHR Stock Price WTI Oil Price 5.00 60 4.00 3.00 40 2.00 20 1.00 0.00 0 98
  98. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 98
    Share Price Performance vs. Peers North American E&P - Share Price Performance 5/26/2009* - 7/13/2011 Magnum Hunter Resources Corporation Energy XXI (Bermuda) Limited St. Mary Land & Exploration Pioneer Natural Resources Concho…
  99. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 99
    MHR Equity Research Analyst Coverage Price Firm Analyst Report Date Rating Target BMO Capital Markets Dan McSpirit 10-May-11 Buy 9.00 Canaccord Genuity Marcus Talbott 10-May-11 Strong Buy 10.00 Capital One Southcoast, Inc Richard Tullis…
  100. JULY 2011 ANALYST MEETING – Magnum Hunter Resources Corp. – slide 100
    Upcoming Marketing Events Conference Participation: August 08, 2011 Tuhoy Brothers 1-on-1; New York, NY August 15, 2011 Enercom Denver, The 2011 Oil & Gas Convention; Denver, CO September 12, 2011 Rodman & Renshaw Annual Global…

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