MAGNUM HUNTER RESOURCES CORPORATION Investor Day Meeting Houston, Texas November 4, 2013
Introduction (Gary Evans) 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…
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 91,000 Net Utica Acres…
Substantial Leasehold Inventory Developed Undeveloped (1) (2) As of September 1, 2013 Acreage Acreage Total Acreage Gross Net Gross Net Gross Net (3) Appalachian Basin Marcellus Shale 63,199 62,492 24,336 19,224 87,535 81,716…
Reserves (Kip Ferguson/Debbie Funderburg) 6
Proved Reserve Growth Consistency Track record of proved reserve growth Approximately 57.8 MMBoe at June 30, 2013 (50.5% oil/liquids) Anticipate continuing to add proven reserves with an equal mix of oil/liquids and natural gas…
Proved Reserves Summary Proved Reserves Summary Net Proved Reserves as of June 30, 2013 (SEC PRICING) Liquids Gas Total Category (MMBbls) (Bcf) (MMBoe) % PDP 16.8 111.6 35.4 61.3% PDNP 0.6 3.7 1.2 2.1% PUD 11.8 56.4 21.2 36.6%…
3P Reserves & Contingent Resources Summary 3P reserves and contingent resource potential of 848 MMBoe Extensive inventory of low-risk development drilling locations in the Williston Basin and Marcellus Shale Significant exploration…
Eagle Ford Cumulative Production vs. Type Curve Note: Type Curve and historical production data includes NGLs 10
Unconventional Reserve Evaluation Team The new team includes the current reservoir engineering group, former Houston Eagle Ford team leaders and key individuals from each division. Goals: Implement Company-wide the combined techniques…
Non-Core Divestitures (Brian Burgher) 12
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…
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…
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%…
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…
Williston Basin Division (Glenn Dawson) 17
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…
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…
Three Forks Sanish High Oil Saturation Fairway 20
Middle Bakken High Oil Saturation Fairway 21
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…
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…
Williston Basin Economics Sensitivity North Dakota West (High Case) North Dakota West (Base Case) CAPEX: 6.4 million per well CAPEX: 6.4 million per well EUR: 550 MBOE EUR: 350 MBOE Differential: (8) Differential: (8) North Dakota -…
Williston Basin: Drilling Costs: 1 1.25 mile lateral Total drill, complete and equipment costs are 4.0 - 4.2 million 640/800 acre DSU 1/1.2 mile lateral 20 to 26 stage Frac 40,000 lb per stage Equipping - Pumping Unit Mud 3% &…
Williston Basin: Drilling Costs: 2 mile lateral Total drill, complete and equipment costs are 6.0 million 1280 acre DSU 2 mile lateral 22 to 28 stage Frac 33,000 lb per stage Equipping - Pumping Unit & Lease Mud 10% Facilities…
Middle Bakken Discoveries 27
Ambrose Middle Bakken Discovery 28
Three Forks Sanish Resource Potential Areas of Operation Highlights Total Three Forks Sanish Potential Locations 769 gross, 162 net wells Three Forks Sanish 3-P Locations 594 gross, 94 net wells Three Forks Sanish Contingent…
Middle Bakken Resource Potential Areas of Operation Highlights Total Middle Bakken Potential Locations 680 gross, 171 net wells Middle Bakken 3-P Locations 461 gross, 120 net wells Middle Bakken Contingent Locations 219 gross,…
Williston Basin ONEOK System 31
Williston Basin ONEOK SK/ND Tableland 12-11-001-10 W2 Oil Battery and SWD Facility Proposed 3 mi. 10 HDPE (Poly) gas pipeline Saskatchewan International Boundary North Dakota BH 35-26-164-97 Oil Battery ONEOK Lateral 2…
Appalachian Division (Jim Denny) 33
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 500,000…
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…
Economic Sensitivity of Marcellus CAPEX: 6.5 million per well EUR: 7.8 Bcfe (includes natural gas liquids) 14 12 IRR: 108% IRR: 98% 10 3.62/MMBtu(1) IRR: 87% Single Well NPV-10 ( MM) 8 IRR: 77% IRR: 67% 6 IRR: 57%…
Marcellus Shale Note: MHR owns approximately 81,000 net acres in the Marcellus Shale. 38
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…
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) to acquire up…
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…
Lithology The Point Pleasant Formation is actually a series of very Point Pleasant Core Photomicrograph thin, high-permeability carbonate stringers encased in organic-rich source rock Large gross interval provides huge amount of…
First Utica Pad Farley 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, and cased…
Farley Pad Drilling Locations MHR - Farley Pad Ten Planned Laterals Washington County Noble County 0 2000 4000 Magnum Hunter Acreage 44
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 45
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 (Marcellus…
Utica Shale Recent Well Results Antero Wayne 2H Antero Wayne 3HA Antero Wayne 4H MUSKINGUM Antero Miley 2H Antero Miley 5HA 1331 bbls/d + 1503 bbls NGL/d 1905 bbls/d + 2018 bbls NGL/d 1922 bbls/d + 1907 bbls NGL/d 1450 bbls/d + 1172…
Eureka Hunter Midstream (Don Kirkendall) 48
Eureka Hunter Midstream Overview Strategically Positioned Assets In the heart of Wet Marcellus WV and Dry Utica of eastern Ohio 90 miles of primarily 20 1135 MAOP gathering system currently in the ground Assets and Business 350+ MMcf…
Eureka Hunter Pipeline Three pipe solution at Carbide Challenging West Virginia Terrain Ohio River Bore into Ohio (McCormick & Evans) 50
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…
Eureka Hunter Near-Term Organic Expansion West Virginia Ohio In Process / Under Construction In Process / Under Construction Ritchie County Lateral Monroe County System Southern expansion off mainline to Ritchie County Wet and dry gas…
Eureka Hunter Utica Exposure 54
Our Charge: Gather it, Move it out Platts - ICE Forward Curves August 16th Basin Production = Gas on Gas Competition Appalachian basis premium is now gone Maximum flexibility and optionality for producers Multiple interstate…
Eureka Hunter Gas Flows 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…
Residue Gas Takeaway Clarington REX & TETCO TETCO Triad Ormet Wells Triad Farley 57
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…
TransTex Hunter Amine Plants 59
Eureka Hunter Organization Structure Magnum Hunter Resources ArcLight Capital Partners Corporation Series A Preferred Units Common Units (1) 60% 40% Eureka Hunter Holdings, LLC Eureka Hunter Pipeline, LLC Pipeline assets…
Alpha Hunter Drilling (Kirk Trosclair) 61
Alpha Hunter Drilling: Company Overview Wholly-owned subsidiary of Magnum Hunter Resources Corporation Current fleet of six (6) drilling rigs consisting of: One (1) Schramm TXD 500 Rig 7 o Spud first well (Stalder Pad) on July 1,…
Alpha Hunter Growth Plan Continues 30 25 Revenues ( in millions) 20 15 10 5 0 2010 2011 2012 2013 (Estimated) Revenues Note: This information constitutes forward-looking statements and is subject to the…
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 3 EQT 136 EXCO Resources 57 Green Hunter Water 4 Hildreth 7 PetroEdge 1 Rex…
New Schramm T500XD Rig Pictures of T500XD drilling on the Stalder Pad 65
Financial Overview (Joe Daches) 66
Accounting / Compliance Update Compliance with Regulatory Agencies Ensure accuracy and timeliness of SEC filings Meet and exceed stakeholder compliance expectations Governance & Controls Ensure compliance with SOX Remediate material…
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…
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…
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…
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…
Summary (Gary Evans) 72
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)…
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)…
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…
Summary of Key Investment Highlights Focused, geographically diversified asset base in three of the most prolific shale plays in the US (Utica, Marcellus and Bakken) Continued focus on operational efficiency and net margin…
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 &…
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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