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Investor Presentation – Magnum Hunter Resources Corp.

Magnum Hunter Resources Corp. · Sep 1, 2014 · 59 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 September 2014
  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 resource shale plays in North America; the Marcellus, Utica and Williston/Bakken Shale Current management…
  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 91,200 Net Acres North Dakota Williston Basin 80,300 Net Bakken / Three Forks…
  4. Investor Presentation – Magnum Hunter Resources Corp. – slide 4
    Production Growth 2013 Production increased 92% to 14,831 Boepd(1) compared to 7,739 Boepd in 2012 Year-end 2014 exit rate guidance of 32,500 Boepd(2) (2) 32,500 14,831 7,739 4,895 1,276 2010 2011 2012 2013 (1) 2014…
  5. Investor Presentation – Magnum Hunter Resources Corp. – slide 5
    Proved Reserve Growth Consistency Track record of proved reserve growth since inception Approximately 79.8 MMBoe of proved reserves at June 30, 2014 (37.7% oil/liquids) Expect to significantly increase proved reserves in the Utica…
  6. Investor Presentation – Magnum Hunter Resources Corp. – slide 6
    Proved Reserves Summary Proved Reserves Summary Net Proved Reserves as of June 30, 2014 (SEC PRICING) Liquids Gas Total Category (MMBbls) (Bcf) (MMBoe) % PDP 14.7 136.5 37.5 47.0% PDNP 2.7 61.7 13.1 16.4% PUD 12.6 99.9 29.2…
  7. Investor Presentation – Magnum Hunter Resources Corp. – slide 7
    3P Reserves & Contingent Resources Summary 3P reserves and contingent resource potential of 1,024.1 MMBoe Extensive inventory of low-risk development drilling locations in the Williston Basin and Marcellus Shale Significant…
  8. Investor Presentation – Magnum Hunter Resources Corp. – slide 8
    Growth Plan Continues EBITDAX Revenue 500 475.0 450 400 350 300 280.4 ( MM) 250 200.0 200 150 140.4 112.4 100 76.2 66.5 50.4 50 28.6 4.2 0 2010 2011 2012 2013 2014 Note: This information constitutes…
  9. Investor Presentation – Magnum Hunter Resources Corp. – slide 9
    Breakdown of Capital Expenditure Budgets 2013 Drilling and Completion Capital Expenditures 2014 Capital Budget Appalachia Williston Eureka Hunter Eagle Ford/Other Appalachia Williston Eureka Hunter 10% 23% 34% 22% 13%…
  10. Investor Presentation – Magnum Hunter Resources Corp. – slide 10
    Substantial Leasehold Inventory Developed Undeveloped (1) (2) As of June 30, 2014 Acreage Acreage Total Acreage Gross Net Gross Net Gross Net (3) Appalachian Basin Marcellus Shale 58,334 57,908 27,642 22,381 85,976 80,289 Utica…
  11. Investor Presentation – Magnum Hunter Resources Corp. – slide 11
    Williston Basin Division 10
  12. Investor Presentation – Magnum Hunter Resources Corp. – slide 12
    Williston Basin Overview Areas of Operation Overview Proved Reserves Total proved reserves of 15.5 MMBoe as of 06/30/14 Proved producing reserves of 7.5 MMBoe as of 06/30/14 Acreage 91,200 net acres in the Williston Basin in…
  13. Investor Presentation – Magnum Hunter Resources Corp. – slide 13
    Ambrose/Divide County 2014 Activity Areas of Operation Overview 2014 Ambrose Field Drilling Program 15-20 gross (6-8 net) wells Targeting Three Forks Sanish and Middle Bakken Prolific Two-mile Lateral Wells IP 24-hour rates - 500…
  14. Investor Presentation – Magnum Hunter Resources Corp. – slide 14
    Williston Basin Recent Well Results Williston (North Dakota) MHR results 24-Hour IP Rates 30-Day IP Rates of Frac Stages 1200 1000 968 906 874 876 822 806 803 791 800 736 Crude Oil Production (Boe/)d 684 677 653 581…
  15. Investor Presentation – Magnum Hunter Resources Corp. – slide 15
    Bakken Hunter Fracture Stimulation Trends Plug & Perf vs Sleeves Bernie A 20-17-162-98H 2XC Bernie B 20-17-162-98H 3XB Fluid Rate vs Time Comet 2635-7H (26-35-163-99) Bel Air 2314-7H (23-14-163-99) 100,000 Les Hall…
  16. Investor Presentation – Magnum Hunter Resources Corp. – slide 16
    ONEOK Net Production & Revenue Williston Basin Net Gas & NGL Production & Revenue 2,500 Gas, mcfd 2,000 NGL, bpd Gas & NGL Revenue, M BpdMmcfd or M/mo 1,500 Est. Gas, mcfd Est. NGL, bpd Est. Gas & NGL Rev, M…
  17. Investor Presentation – Magnum Hunter Resources Corp. – slide 17
    Williston Basin Economics Sensitivity North Dakota West (High Case) North Dakota West (Base Case) CAPEX: 6.0 million per well CAPEX: 6.0 million per well EUR: 550 MBOE EUR: 350 MBOE Differential: (8) Differential: (8) North Dakota -…
  18. Investor Presentation – Magnum Hunter Resources Corp. – slide 18
    Appalachian Division 17
  19. Investor Presentation – Magnum Hunter Resources Corp. – slide 19
    Appalachian Division Overview Overview Areas of Operation Proved Reserves Total proved reserves of 64.1 MMBoe as of 6/30/14 Proved producing reserves of 30.0 MMBoe as of 6/30/14 Acreage Position 477,600 net acres in the…
  20. Investor Presentation – Magnum Hunter Resources Corp. – slide 20
    Marcellus Shale Recent Well Results Marcellus Operated Well Results 24-Hour IP Rates 30-Day IP Rates of Frac Stages 14,000 12,854 12,832 12,670 Recently Completed Wells 12,421 12,000 10,340 10,013 10,119 10,000 9,543 9,677…
  21. Investor Presentation – Magnum Hunter Resources Corp. – slide 21
    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 0.50 - 1.00 The Company has 200 MMcf/d of dedicated…
  22. Investor Presentation – Magnum Hunter Resources Corp. – slide 22
    Economic Sensitivity of Marcellus Magnum Rich High Case: Base Case: CAPEX: 6.5 million per well CAPEX: 6.5 million per well EUR: 11.7 Bcfe (includes NGL) EUR: 7.8 Bcfe (includes NGLs) High Case Base Case 18 IRR: 105% 16 IRR:…
  23. Investor Presentation – Magnum Hunter Resources Corp. – slide 23
    Marcellus Shale NOBLE MHR - Ormet 9 Pad MONROE MHR/Eclipse - McIntire Pad MHR - Ormet 15 Pad Mark West Mobley MHR/Eclipse - Stalder Pad WETZEL Facility Fractionation Eclipse/MHR - Herrick Pad Eureka - Carbide Compression…
  24. Investor Presentation – Magnum Hunter Resources Corp. – slide 24
    Utica Shale Overview Total Organic Carbon The Utica Shale extends approximately 170,000 square miles throughout the Appalachia Basin in the United States and Canada Ordovician-aged organic rich black shale with interbedded limestone…
  25. Investor Presentation – Magnum Hunter Resources Corp. – slide 25
    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…
  26. Investor Presentation – Magnum Hunter Resources Corp. – slide 26
    Major Players in the Utica: Who They Are Company Ticker Net Acres EV (MM) Acres/EV Chesapeake Energy CHK 1,000,000 34,063 29 Chevron CVX 600,000 233,468 3 Anadarko Petroleum APC 267,000 57,360 5 Devon Energy DVN 195,000 30,153 6…
  27. Investor Presentation – Magnum Hunter Resources Corp. – slide 27
    Most Leveraged to the Utica 70 64 60 50 48 40 30 29 29 29 19 Average: 18 20 15 12 10 7 7 6 6 6 5 3 1 0 Net Utica Acres / Enterprise Value Source: Company presentations, Bloomberg, state data, Baird 26
  28. Investor Presentation – Magnum Hunter Resources Corp. – slide 28
    Utica Asset Transactions Announced Total Transaction Implied Date Buyer(s) Seller(s) Value (MM) Acreage / Acre Feb-14 GPOR Rhino 185 8,200 22,561 Jan-14 American Energy Partners, LP Paloma Partners 442 26,000 17,000 Jan-14 American…
  29. Investor Presentation – Magnum Hunter Resources Corp. – slide 29
    Farley Pad Drilling Locations First Utica horizontal well in Washington County spud April 10, 2013 Farley Pad is designed to handle 10 horizontal wells A vertical pilot, and subsequent horizontal well was drilled, logged, cored,…
  30. Investor Presentation – Magnum Hunter Resources Corp. – slide 30
    Stalder Pad Drilling Locations Magnum Hunter announced the initial production results from the first Utica horizontal well on the MHR - Stalder 3UH 32.5 MMCF 97% Methane Stalder Pad on 2/14/14 Tested at a peak rate of 32.5 MMCF of…
  31. Investor Presentation – Magnum Hunter Resources Corp. – slide 31
    Pad Drilling 30
  32. Investor Presentation – Magnum Hunter Resources Corp. – slide 32
    Stewart-Winland Pad Drilling Locations The Stewart-Winland Pad located Tyler County, West Virginia in Tyler County, WV has seven Magnum Hunter Acreage planned laterals MHR / JV Partner Acreage Four wells will be drilled on…
  33. Investor Presentation – Magnum Hunter Resources Corp. – slide 33
    Fracing Operations 32
  34. Investor Presentation – Magnum Hunter Resources Corp. – slide 34
    Utica Shale Recent Well Results Note: MHR currently owns approximately 118,000 net acres in the Utica Shale; following the MNW acquisition, MHRs acreage position will be in excess of 130,000 net acres. 33
  35. Investor Presentation – Magnum Hunter Resources Corp. – slide 35
    Marcellus/Utica Wells Put on Production YTD (2) (2) MHR Working MHR Net Estimated Gross Production Estimated Net Production (1) Well Name Location Formation Interest Revenue Interest Boe/d (3) Mcfe/d Boe/d (3) Mcfe/d Status…
  36. Investor Presentation – Magnum Hunter Resources Corp. – slide 36
    New Marcellus/Utica Production (2) (2) MHR Working MHR Net Estimated Gross Production Estimated Net Production Anticipated (1) Well Name Location Interest Revenue Interest Boe/d (3) Mcfe/d Boe/d (3) Mcfe/d Timing Stewart Winland…
  37. Investor Presentation – Magnum Hunter Resources Corp. – slide 37
    Eureka Hunter Midstream 36
  38. Investor Presentation – Magnum Hunter Resources Corp. – slide 38
    Eureka Hunter Highlights Strategically located asset base Northern West Virginia (Primary: Tyler, Ritchie, Wetzel, Pleasants, Doddridge Location Secondary: Marion, Harrison, Lewis, Monongalia) Southeastern Ohio (Monroe, Washington)…
  39. Investor Presentation – Magnum Hunter Resources Corp. – slide 39
    Contracted vs. Gathered Volumes Eureka Hunter Pipeline 1Q 2013 2Q 2013 3Q 2013 4Q 2013 1Q 2014 2Q 2014 High Pressure Reservation Volume (MMBtu/d) Magnum Hunter 87,950 92,339 75,000 75,000 83,500 96,000 Third-Parties 35,000 47,000…
  40. Investor Presentation – Magnum Hunter Resources Corp. – slide 40
    Eureka Volume Forecast 2014-2015 1,000,000 900,000 800,000 700,000 Third-Party 7 600,000 Mmbtu/d Third-Party 6 Third-Party 5 500,000 Third-Party 4 400,000 Third-Party 3 Third-Party 2 300,000 Third-Party 1 Triad…
  41. Investor Presentation – Magnum Hunter Resources Corp. – slide 41
    Eureka Hunter Utica Exposure MARSHALL Clairington MarkWest Hub Seneca Blue Racer Berne Blue Racer Natrium Ormet Wells NOBLE MONROE PENN W.V. Farley Units Stalder Units WETZEL MORGAN MarkWest Dominion Mobley Eureka…
  42. Investor Presentation – Magnum Hunter Resources Corp. – slide 42
    2015-2016 Update 41
  43. Investor Presentation – Magnum Hunter Resources Corp. – slide 43
    How Do We Measure Up Gathering Capacity Marcellus / Utica Operations Summit Midstream mcf/d, 1050 Eureka Hunter mcf/d, 1500 Crestwood Midstream mcf/d, 700 Markwest Midstream mcf/d, 1000 EQT Midstream mcf/d, 1940…
  44. Investor Presentation – Magnum Hunter Resources Corp. – slide 44
    Eureka Hunter Pipeline - Construction Challenging Terrain Welding Up Pipeline Strung Pipe Before Connection Being Lowered 43
  45. Investor Presentation – Magnum Hunter Resources Corp. – slide 45
    TransTex Hunter TransTex Hunter, LLC (TransTex) founded in 2006; acquired by Eureka Hunter in April 2012 Design and fabricate gas treating plants for natural gas production Assets for gas treating, processing, dehydration and…
  46. Investor Presentation – Magnum Hunter Resources Corp. – slide 46
    TransTex Hunter Amine Plants 45
  47. Investor Presentation – Magnum Hunter Resources Corp. – slide 47
    Alpha Hunter Drilling 46
  48. Investor Presentation – Magnum Hunter Resources Corp. – slide 48
    Drilling Fleet Overview Current fleet of six (6) drilling rigs with one (1) Schramm TXD 500 on order One (1) Schramm TXD 500 (new rig on order) Rig 7 o Spud first well (Stalder Pad) on July 1, 2013 o Contract Rate of 21,500/day o Two…
  49. Investor Presentation – Magnum Hunter Resources Corp. – slide 49
    Alpha Hunter Growth Continues 20 18 16 Revenues ( in millions) 14 12 10 8 6 4 2 0 2010 2011 2012 2013 Revenues 48
  50. Investor Presentation – Magnum Hunter Resources Corp. – slide 50
    Alpha Hunter Experience Company of Wells Drilled Bretagne 1 CNX Gas 8 Consol 3 Central WV Oil & Gas 1 Dominion 34 Eagle Ford Hunter 15 Eclipse 32 EQT 246 EXCO Resources 57 Green Hunter Water 4 Hildreth 7 PetroEdge 1 Rex…
  51. Investor Presentation – Magnum Hunter Resources Corp. – slide 51
    Financial Overview 50
  52. Investor Presentation – Magnum Hunter Resources Corp. – slide 52
    Financial Strategy Capital spending driven by rates of return across all operating areas Focus on development of existing acreage in our core areas 2014 capital budget will focus predominately on high return areas in the Appalachian…
  53. Investor Presentation – Magnum Hunter Resources Corp. – slide 53
    Adjusted EBITDAX Reconciliation Adjusted EBITDAX Reconciliation ( in Millions) (1) FYE 2010 FYE 2011 FYE 2012 FYE 2013 FYE 2014 Net income (loss) from continuing operations ( 22.3) ( 76.7) ( 119.7) ( 204.1) Unrealized (gain) loss on…
  54. Investor Presentation – Magnum Hunter Resources Corp. – slide 54
    MHR Non-Core Divestiture Summary Asset Sales Value (MM) Completed in 2013 Eagle Ford Sale 401.0 Gain on Sale of PVA Stock 10.6 Burke County, North Dakota - Non-Operated Properties 32.5 North Dakota - Madison Waterfloods - Operated…
  55. Investor Presentation – Magnum Hunter Resources Corp. – slide 55
    Crude Oil and Natural Gas Hedges Crude Oil 2014 2015 2016 NYMEX Average (1) 91.02 89.84 88.52 Weighted-Average Hedge Price With Ceilings 100.90 115.93 - Weighted-Average Hedge Price With Floors 85.00 85.00 - Weighted-Average…
  56. Investor Presentation – Magnum Hunter Resources Corp. – slide 56
    MHR Net Asset Value* Assumptions Valuation ( in thousands) Low High Low High Total Proved Reserves PV-10 (6/30/2014) 916,253 916,253 /acre (1) Undeveloped Acreage Low High Williston Basin U.S. 50,100 3,000 5,000 150,300 250,500…
  57. Investor Presentation – Magnum Hunter Resources Corp. – slide 57
    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…
  58. Investor Presentation – Magnum Hunter Resources Corp. – slide 58
    Equity Research Coverage / Contact Information Magnum Hunter Resources (NYSE: MHR) Equity Research Analyst Coverage: BMO Capital Markets Maxim Group Canaccord Genuity MLV Partners Capital One Southcoast RBC Capital Markets…
  59. Investor Presentation – Magnum Hunter Resources Corp. – slide 59
    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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