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INVESTOR PRESENTATION – Magnum Hunter Resources Corp.

Magnum Hunter Resources Corp. · Oct 15, 2013 · 51 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. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 1
    MAGNUM HUNTER RESOURCES CORPORATION Investor Presentation October 2013
  2. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 2
    Who We Are Magnum Hunter Resources is an exploration and production company focused in three of the most prolific unconventional shale resource plays in North America, namely the Marcellus, Utica and Williston/Bakken Shale Current…
  3. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 3
    Where We Operate A well-balanced and concentrated asset base in large shale plays Secure footholds in West Virginia, Ohio, Kentucky, and North Dakota 175,000 Net Acres 81,000 Net Marcellus Acres 80,000 Net Utica Acres…
  4. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 4
    Production Growth 2012 production increased 139% to 13,152 Boepd compared to 5,510 Boepd in 2011 Year-end 2013 exit rate guidance reaffirmed at 23,000 25,000 Boepd 23,000 - 25,000 17,814 16,889 14,145 14,587 12,984 12,624…
  5. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 5
    Proved Reserve Growth Consistency Track record of proved reserve growth since inception Approximately 57.8 MMBoe of proved reserves and 119.3 MMBoe of 3P reserves at June 30, 2013 (50.5% oil/liquids) Anticipate continuing to…
  6. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 6
    Proved Reserves Summary Proved Reserves Summary Net Proved Reserves as of Mid-Year 2013 (SEC PRICING) Liquids Gas Total Category (MMBbls) (Bcf) (MMBoe) % PDP 16.8 111.6 35.4 61.3% PDNP 0.6 3.8 1.2 2.1% PUD 11.8 56.4 21.2 36.6%…
  7. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 7
    Operational Efficiency Improvements (/Boe) 61.95 5.01 34.43 30.18 3.72 21.23 13.36 3.13 7.43 22.51 13.10 10.67 2010 2011 2012 LOE Recurring Cash G&A Production Taxes 7
  8. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 8
    Growth Plan Continues EBITDAX Revenue 300 271.0 250 200 168.6 ( MM) 150 129.2 100 50.4 50 32.7 5.4 6.8 4.2 0 2009 2010 2011 2012 Year * Please see page 40 of this presentation for a non-GAAP…
  9. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 9
    Substantial Leasehold Inventory Developed Undeveloped As of May 1, 2013 Acreage (1) Acreage (2) Total Acreage Gross Net Gross Net Gross Net Appalachian Basin (3) Marcellus Shale 63,198 62,490 24,978 18,511 88,176 81,001 Utica Shale…
  10. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 10
    Future Growth and Profitability Drivers To achieve consistent growth, we are committed to the following: Focus on developing and growing core assets in areas with the highest rate of return using our proven development expertise…
  11. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 11
    Appalachian Division 11
  12. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 12
    Appalachian Division Overview Overview Areas of Operation Proved Reserves MHR areas of operations Total proved reserves of 37.8 MMBoe as of 6/30/13 Proved producing reserves of 24.8 MMBoe as of 6/30/13 Acreage Position 490,000…
  13. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 13
    Marcellus Operations Marcellus Well Results IP 24-hr avg. rate (Mcfe/d) IP 30-day avg. rate (Mcfe/d) Frac Stages () 10,500 10,400 10,000 9,700 9,700 9,600 9,500 9,471 9,563 8,340 7,998 7,078 6,542 6,337 6,361 5,800 5,618…
  14. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 14
    NGL Uplift in Appalachia Following the startup of the Mobley Processing Plant in December 2012, Magnum Hunter has realized an uplift in NGLs on a per wellhead Mcf basis between 0.75 - 1.25 The Company has 200 MMcf/d of dedicated…
  15. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 15
    Economic Sensitivity of Marcellus CAPEX: 6.5 million per well EUR: 7.8 Bcfe (includes natural gas liquids) 14 IRR: 108% 12 IRR: 98% 3.79/MMBtu(1) 10 IRR: 87% Single Well NPV-10 ( MM) IRR: 77% 8 IRR: 67% 6 IRR: 57% 4…
  16. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 16
    Marcellus Shale Note: MHR owns approximately 81,000 net acres in the Marcellus Shale. 16
  17. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 17
    Utica Shale Overview The Utica Shale extends approximately 170,000 square miles throughout the Total Organic Carbon Appalachia Basin in the United States and Canada Ordovician-aged organic rich black shale with interbedded limestone…
  18. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 18
    Utica Acreage Acquisition On August 12, 2013, Triad Hunter, LLC, a wholly-owned subsidiary of Magnum Hunter Resources Corporation, entered into an Asset Purchase Agreement (Purchase Agreement) with MNW Energy, LLC (MNW) Triad has…
  19. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 19
    Potentially Best Shale Play in US Shale Play Comparison Chart Ohio / West Va. / Penn. Wyoming/Colorado Texas N. Dakota Utica Shale / Parameter Point Pleasant DJ Basin Niobrara Eagle Ford Bakken Lithology Calcareous Shale Chalk/marl…
  20. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 20
    First Utica Pad Farley First Utica horizontal well in Washington County spud April 10, 2013 Farley Pad is designed to handle 10 horizontal wells Pilot Well has reached TD vertically at 8,164 feet, logged and cored Lateral section has…
  21. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 21
    Farley Pad Drilling Locations MHR - Farley Pad Ten Planned Laterals Washington County Noble County 0 2000 4000 Magnum Hunter Acreage 21
  22. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 22
    Stalder Pad Drilling Locations MHR - Stalder Pad Eighteen Planned Laterals 0 200 0 Magnum Hunter Acreage Magnum Hunter/Eclipse JV Acreage Marcellus Horizontal Well Utica Horizontal Well 22
  23. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 23
    Alpha Hunter T500XD Rig On May 7, 2013 Alpha Hunter took possession of a new state of the art robotic drilling rig Will be used to drill 16 - 18 wells on the Stalder Pad over the next 18 months First well spud July 1, 2013 23
  24. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 24
    Utica Shale Recent Well Results Note: MHR currently owns approximately 80,000 net acres in the Utica Shale; following the MNW acquisition, MHRs acreage position will be in excess of 110,000 net acres. 24
  25. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 25
    Eureka Hunter Midstream 25
  26. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 26
    Eureka Hunter Midstream Overview Strategically Positioned Assets In the heart of Wet Marcellus - WV and Utica of eastern Ohio 90 miles of primarily 20 1135 MAOP gathering system currently in the ground 350+ MMcf per day current design…
  27. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 27
    Eureka Hunter Pipeline Three pipe solution at Carbide Challenging West Virginia Terrain Ohio River Bore into Ohio (McCormick & Evans) 27
  28. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 28
    Historical Gathering Volumes Eureka Hunter Pipeline 2012 Avg. Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 High Pressure Reservation Volume (MMBtu/d) Magnum Hunter 40,000 87,950 87,950 87,950 91,117 92,950 92,950 Third-Parties 6,667 35,000…
  29. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 29
    Eureka Hunter Area Map Eureka Pipeline Constructed/In process Eureka Pipeline Proposed Eureka Pipeline Beverly Bell System Markwest Processing Facility DTI/Blue Racer Processing Facility EQT Pipelines TCO Pipelines Texas…
  30. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 30
    TransTex Hunter Overview TransTex Hunter, LLC (TransTex) founded in 2006; acquired by Eureka Hunter in April 2012 Provides gas treating services for natural gas producers Assets for gas treating, processing, dehydration, and…
  31. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 31
    Williston Basin Division 31
  32. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 32
    Williston Basin Overview Areas of Operation Overview Proved Reserves Total proved reserves of 19.5 MMBoe as of 6/30/13 Proved producing reserves of 10.6 MMBoe as of 6/30/13 Acreage 175,000 net acres in the Williston Basin…
  33. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 33
    Ambrose/Divide County 2013 Activity Areas of Operation Overview 2013 Ambrose Field Drilling Program 30 gross, 10 net wells Targeting Three Forks Sanish and Middle Bakken Prolific Two-mile Lateral Wells IP 24-hour rates up to…
  34. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 34
    Williston Basin Recent North Dakota Well Results Williston (North Dakota) MHR results 24-Hour IP Rates 30-Day IP Rates of Frac Stages 1,770 1,549 1,352 1,166 1,085 1,076 910 910 922 923 913 836 833 867 872 820 781 813 776…
  35. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 35
    Ambrose 2 Mile TFS Wells vs Type Curve Recent Ambrose 2 Mile TFS Wells vs Type Curve Type Curve - 439 MBO (550 MBOE) Type Curve - 335 MBO (410 MBOE) Average 600 500 400 Bopd 300 200 100 0 1 2 3 4 5 6 7 8 9 10…
  36. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 36
    Williston Basin Economics Sensitivity North Dakota West (High Case) North Dakota West (Base Case) Saskatchewan (1 mile lateral) CAPEX: 7.1 million per well CAPEX: 7.1 million per well CAPEX: 3.5 million per well EUR: 730 MBOE EUR: 550…
  37. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 37
    Financial Overview 37
  38. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 38
    Financial Strategy Capital spending driven by rates of return across all operating areas Focus on development of existing acreage in our core areas 2013 capital budget will focus on high return oil/liquids areas in the Williston and…
  39. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 39
    Capitalization September 30, December 31, March 31, June 30, ( in millions) 2012 2012 2013 2013 Cash 22.0 57.6 91.2 32.7 Debt: Revolving Credit Facility due 2016 (1) 175.0 225.0 325.0 0.0 Senior Unsecured Notes due 2020 444.1 600.0…
  40. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 40
    Adjusted EBITDAX Reconciliation ( in millions) Full Year Full Year Full Year Full Year 2009 2010 2011 2012 Net income (loss) (15.1) (22.3) (76.7) (139.4) Unrealized (gain) loss on derivatives, net 7.7 3.1 4.2 (10.9) Interest expense, net…
  41. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 41
    Estimated Fourth Quarter Production Expected to Drive 2013 Exit Rate (2) (2) MHR Working MHR Net Estimated Gross Production Estimated Net Production (1) Well Name Location Interest Revenue Interest Bbls/d (3) Mcfe/d Bbls/d (3)…
  42. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 42
    Estimated Fourth Quarter Production Expected to Drive 2013 Exit Rate (2) (2) MHR Working MHR Net Estimated Gross Production Estimated Net Production (1) Well Name Location Interest Revenue Interest Boe/d (3) Mcfe/d Boe/d (3)…
  43. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 43
    Non-Core Divestiture Summary Aggressively pursuing approximately 250 million of non-core asset sales to enhance our financial flexibility to focus capital on high return oil/liquids projects Internal technical team evaluating portfolio…
  44. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 44
    Non-Core Asset Divestiture Overview North Dakota Madison Formation Waterfloods Water flood units located in Burke, Bottineau, McHenry, and Renville Counties, North Dakota Collectively producing approximately 600 BOEPD Acreage of…
  45. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 45
    Non-Core Asset Divestiture Overview (cont.) Kentucky Primrose Field 246 wells on 2,453 gross and net acres - held by production Primrose Field is collectively producing approximately 265 BOPD Divestiture strategy: Convey a 33%…
  46. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 46
    Non-Core Asset Divestiture Overview (cont.) Texas Eagle Ford and Pearsall Production 2 prospects located in Atascosa County, Texas The Marathon McCarty Unit A 1H Pearsall (30% WI) well went on production in mid-2013 Assets are…
  47. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 47
    Crude Oil and Natural Gas Hedges Crude Oil 2013 2014 2015 NYMEX Average (1) 104.87 96.70 88.88 Weighted-Average Hedge Price With Ceilings 100.38 100.90 115.93 Weighted-Average Hedge Price With Floors 87.33 85.00 85.00…
  48. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 48
    MHR Net Asset Value* Assumptions Valuation ( in thousands) Low High Low High (1) Total Proved Reserves PV-10 (6/30/2013) 666,369 666,369 /acre (2) Undeveloped Acreage Low High Eagle Ford 6,000 3,000 5,000 18,000 30,000 Williston…
  49. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 49
    A Focused Company on the Right Path Proven management and technical team in place committed to proper capital allocation for future growth Geographically diversified asset base in three of the most prolific shale plays in the US…
  50. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 50
    Equity Research Coverage / Contact Information Magnum Hunter Resources (NYSE: MHR) Equity Research Analyst Coverage: BMO Capital Markets MLV Partners Canaccord Genuity RBC Capital Markets Capital One Southcoast Robert W. Baird &…
  51. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 51
    Appendix Net Asset Value Although Magnum Hunter does not consider Net Asset Value and Net Asset Value Per Share to be non-GAAP financial measures, as defined in SEC rules, Magnum Hunter uses Net Asset Value as an estimate of fair value.…

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