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JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp.

Magnum Hunter Resources Corp. · Jun 1, 2012 · 48 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. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 1
    MAGNUM HUNTER RESOURCES CORPORATION Corporate Presentation June 2012
  2. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 2
    Overview of Magnum Hunter Overview Production Growth (Boe/d) Magnum Hunter Resources is an exploration and Oil / Liquids Natural Gas production company focused on three of the 18,000 most prolific unconventional resource plays in…
  3. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 3
    Large, Diversified Asset Base 125,000 Net Acres 58,426 Net Marcellus Acres 61,151 Potential Net Utica Shale Acres 313,000 Net Southern Appalachia Acres Proved Reserves of Potential 24,000 Net Acres % Oil/ Drilling…
  4. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 4
    Ea gle Fo rd Note: Sh ale Ni ob - Liq 10% 20% 30% 40% 50% 60% ra ui ra d - W s Ri ch M at te iss iss n be ip rg Ui pi Ba W n ta a n 54% 53% ol kk f -G Lim en cam re e Sh p e n M 51% ale - M R…
  5. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 5
    Liquids Driven Capital Plan Revised 2012 Drilling Budget 325 Million 2012 upstream capital budget heavily weighted to liquids targets Appalachia Williston Basin: 34 net wells expected to be 25 mm drilled in 2012 8% Eagle Ford:…
  6. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 6
    Proved Reserves and Resource Summary Proved Reserves and PV-10 up 32% and 53%, respectively, since year-end 2011 (1) (2) Significant Un-risked Potential Resources Proved Reserve Summary Proved Reserve Allocation ( in millions) Net…
  7. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 7
    Track Record of Proved Reserve Growth Robust track record of proved reserve growth since inception Approximately 60 MMBoe after the Baytex acquisition Expect to continue consistently adding reserves with mix becoming more dominated by…
  8. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 8
    Focus on Operational Efficiency All-in Costs (/Boe) 79.18 4.85 34.43 41.20 3.72 30.96 13.36 3.17 21.90 7.01 13.46 9.78 18.00 10.66 11.00 2010 2011 Q1 2012 Drill-bit F&D (1) LOE Recurring Cash G&A Production…
  9. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 9
    Williston Basin 9
  10. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 10
    Williston Hunter Overview Overview Areas of Operation Pro-forma Proved Reserves Total proved reserves of 20.6 MMBoe as of 3/31/12 Proved producing reserves of 7.1 MMBoe as of 3/31/12 100% Avg. WI Acreage 125,000 net acres in the…
  11. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 11
    Williston Basin Acquisition Overview On May 22, 2012, MHR acquired Baytex Energys assets in the Samson-operated area of Divide County, North Dakota for 311 million Transaction closed on May 22, 2012, with an effective date of March 1,…
  12. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 12
    Williston Basin Acquisition Highlights Attractive cost of 3,663 per undeveloped acre for large contiguous block of acreage in a known producing area Contiguous low-risk land base generates 200 net Three Forks Sanish two-mile laterals…
  13. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 13
    Williston Hunter Recent North Dakota Well Results Williston (North Dakota) MHR results 1,525 1,212 1,203 1,188 1,139 988 897 900 852 869 818 842 790 684 636 621 622 598 607 591 529 513 409 422 346 350 358 335 345…
  14. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 14
    Williston Basin Recent North Dakota Results vs. Type Curve Lampert Torgeson 1-15 Riede 4-14 Bonneville Hauge 13-21 Thomte Nomad Titan Bel Aire Marauder Dorado Type Curve - 350 Mbo 1,200 1,000 800 Bopd 600 400…
  15. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 15
    Recent Tableland Well Results Williston (Tableland) MHR results 810 749 605 576 543 491 354 333 319 288 301 254 236 169 27 26 24 24 24 26 21 1-14-1-10W2M 13-16-1-10W2M 13-10-1-10W2M 12-10-1-10W2M 9-2-1-10W2M…
  16. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 16
    Recent Tableland Results vs. Type Curve 1-14-1-10 13-16-1-10 13-10-1-10 12-10-1-10 8-14-1-10 5-15-1-10 Type Curve - 185 Mbo 400 350 300 250 Bopd 200 150 100 50 0 1 2 3 4 5 6 7 8 9 10 11 12 Month * Only…
  17. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 17
    Williston Basin Economics Sensitivity North Dakota (2 mile lateral) Saskatchewan (1 mile lateral) CAPEX: 6.9 Million North Dakota (2 mile lateral) CAPEX: 3.4 Million IP-24 Hour: 550 Bbl/D IP-24 Hour: 250 Bbl/D EUR: 350 MBoe…
  18. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 18
    Williston Basin Comparative Economics Lower drilling and completion costs per well result in best-in-class returns even with lower EUR/well 44% 43% 43% 40% 37% 37% 27% 25% 10.5 22% 9.6 8.0 6.9 7.0 3.4 1.7 1.7 2.2 (1)…
  19. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 19
    Eagle Ford 19
  20. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 20
    Eagle Ford Hunter Overview Total proved reserves of 8.2 MMBoe as of March 31, 2012 Proved Reserves Proved producing reserves of 2.1 MMBoe as of March 31, 2012 85% crude oil, with high btu gas (+1350) Production 26 gross wells on…
  21. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 21
    Eagle Ford Map MHR EOG Hilcorp/Marathon Weber Conoco Phillips Hess / ZaZa Penn Virginia GeoSouthern Leopard Hunter 1H Southern Bay 24hr IP 1,333 Boe/d Penn Virginia Gardner 1H IP 1,247 Boe/d Hawn Holt 9H IP 1,877 Boe/d…
  22. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 22
    Economic Sensitivity of Eagle Ford Gonzales County CAPEX: 8.5MM + 0.3MM (ESP) + .02MM PU IP-24 Hour: 1,250 Bbl/d EUR: 433 MBoe 11.0 10.0 IRR: 97% 9.0 8.0 IRR: 85% IRR: 63% 7.0 NPV-10 ( MM) IRR: 54% 6.0 IRR: 51%…
  23. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 23
    Eagle Ford Hunter Operations Eagle Ford MHR results 2,289 2,044 2,033 1,590 1,545 1,321 1,333 1,336 1,275 1,203 1,039 1,017 909 882 902 910 883 886 908 854 839 841 698 690 618 612 25 24 23 23 21 21 20 20 14 15 16…
  24. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 24
    Eagle Ford Historical Production vs. Type Curve Furrh 1H Furrh 2H Geo Hunter 1H Gonzo N 1H Gonzo N 2H Kudu Hunter 1H Leopard Hunter 1H Oryx Hunter 1H Sable Hunter 1H Southern Hunter 1H Gonzo Hunter 1H Hawg Hunter 1H Snipe Hunter 1H…
  25. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 25
    Appalachia 25
  26. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 26
    Appalachia Overview Overview Areas of Operation Proved Reserves MHR areas of operations Total proved reserves of 30.5 MMBoe as of 3/31/12 Proved producing reserves of 17.0 MMBoe as of 3/31/12 Acreage 400,000 net acres in the…
  27. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 27
    Marcellus Operations Marcellus MHR results 10,500 10,400 10,000 9,700 9,600 9,400 9,500 8,340 7,078 6,689 6,450 6,273 5,800 5,618 5,040 4,716 16 16 16 16 16 18 16 18 WVDNR 1102 WVDNR 1103 WVDNR 1104 Roger Weese…
  28. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 28
    Marcellus Historical Production vs. Type Curve R Weese 1001 R Weese 1003 R Weese 1110 WVDNR 1102 WVDNR 1103 WVDNR 1104 E Weese 1107 E Weese 1108 E Weese 1109 Type Curve - 6.0 Bcfe 8,000 7,000 6,000 5,000 Mcfe/d 4,000…
  29. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 29
    Economic Sensitivity of Marcellus CAPEX: 6.5MM IP-24 Hour: 5 MMcf/d EUR: 8.2 Bcfe 11.0 IRR: 57% 10.0 9.0 IRR: 52% 8.0 IRR: 47% NPV-10 ( MM) (1) 7.0 IRR: 42% 6.0 IRR: 38% 5.0 IRR: 33% 4.0 IRR: 28% 3.0 IRR: 24% 2.0…
  30. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 30
    Utica Shale Overview CHESAPEAKE EXPLORATION On February 17, 2012, MHR closed on the HESS OHIO RESOURCES acquisition of 12,186 net Utica Shale acres for approximately 25 million (2,037/acre) Spencer A-1H & A-5H The acreage is…
  31. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 31
    Weir Sand Kentucky Liquids Play NEW WET GAS PLAY 38,000 Prospective Acres Horizontal Wells To-Date: Well 1 5645' of production casing run 10 stage slick water frac Well 2 6193' of production casing run 12 stage 65 quality foam…
  32. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 32
    Eureka Hunter Midstream 32
  33. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 33
    Eureka Hunter Midstream Overview Strategically Positioned Assets Pipeline in strategic geographical location in heart of Marcellus wet gas corridor of WV 54 miles of 20 1135 MAOP gathering system in the ground to-date 350+ MMcf per…
  34. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 34
    Eureka Hunter Pipeline Geographical Map Proposed Ohio River Crossing Under Construction 34
  35. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 35
    Eureka Hunter Pipeline - Utica Shale Overview The Utica Shale: The Utica extent extends for 170,000 sq. miles (Nearly twice the size of the Marcellus Shale extent) Big players are attracted to Utica including CHK, Range, Consol,…
  36. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 36
    Eureka Hunter Outlook Additional 3rd Party Gathering Contracts Third-party producers plus Triad Hunter are currently committed to Eureka More than 100,000 mmcfd contracted under long-term gathering agreements In negotiations with…
  37. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 37
    TransTex Gas Services, LLC Acquisition On April 2, 2012, Magnum Hunters wholly owned unrestricted subsidiary, Eureka Hunter, acquired the assets of TransTex Gas Services, LLC (TransTex) for 58.5 million The 58.5 million purchase price…
  38. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 38
    Financial Overview 38
  39. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 39
    Financial Strategy Capital spending driven by rates of return across all operating areas Focus on development of existing acreage Capital budget adjusted in Q2 2012 to focus on high return, oil / liquids areas Margins and EBITDAX…
  40. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 40
    Borrowing Base Growth ( in millions) Pre-HY 375 300 300 100 268 100 100 Term Loan 100 275 200 200 213 (2) Revolver 188 168 (1) 145 170 6/30/2011 7/13/2011 8/15/2011 9/29/2011 12/7/2011 12/31/2011 3/31/2012 May…
  41. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 41
    Pro-Forma Capitalization Status quo Pro-forma Pro-forma ( in millions, except as indicated) 3/31/2012 adjustments 3/31/12 Cash (1) 30.7 30.7 Debt: Revolving Credit Facility due 2016 205.0 (169.9) 35.1 Second Lien Term Loan 100.0…
  42. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 42
    Summary of Commodity Hedges in Place As of 5/22/2012 2nd Qtr 2012 3rd Qtr 2012 4th Qtr 2012 2013 NATURAL GAS HEDGES: Swaps Volume (mmbtu/d) 16,099 16,098 16,098 15,500 Price - /mmbtu 3.53 3.53 3.53 3.52 Collars Volume (mmbtu/d)…
  43. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 43
    MHR Track Record of Value Creation Successful history of creating value for shareholders Bakken acquisition represents potential for additional value creation 1,913.2 / EV = 1.5x Current Enterprise Value (EV) 854.0 1,315 MHR…
  44. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 44
    Summary of Key Investment Highlights Focused Liquids-Driven Drilling Factory to Generate Strong Cash Flow Large, Diversified Asset Base in Highest Return Resource Plays Increased Operational Efficiency and Margins Attractive…
  45. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 45
    Contact Information Magnum Hunter Resources (NYSE: MHR) Equity Research Analyst Coverage: BMO Capital Markets MLV Partners Canaccord Genuity Pritchard Capital Capital One Southcoast, Inc. Robert W. Baird & Co. Caris & Company…
  46. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 46
    Other footnotes Source: Company information and management estimates, unless stated otherwise. Note: Unless otherwise stated, Proved Reserves and PV-10 figures based on SEC pricing (98.15/Bbl and 3.71/MMBtu) as of 3/31/12; all numbers are…
  47. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 47
    MHR Track Record of Value Creation Triad Hunter (1) Eureka Hunter Eagle Ford (Marcellus / Utica) (Midstream) Initial Investment Date Sep-2009 Feb-2010 Feb-2010 Initial Investment 2.4 71.0 10.0 Total MHR Investment To-Date (2) 151.5…
  48. JUNE 2012 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 48
    PV-10 Reconciliation ( in thousands) As of 3/ 31/ 12 As of 12/ 31/ 11 Future cash inflows 2,893,358 2,409,249 Future production costs (862,238) (765,048) Future development costs (368,128) (330,007) Future income tax expense…

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