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DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp.

Magnum Hunter Resources Corp. · Dec 2, 2013 · 59 slides

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Slides

  1. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 1
    MAGNUM HUNTER RESOURCES CORPORATION Investor Presentation December 2013
  2. DECEMBER 2013 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. DECEMBER 2013 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 94,200 Net Utica Acres…
  4. DECEMBER 2013 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 13,699 12,984…
  5. DECEMBER 2013 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. DECEMBER 2013 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. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 7
    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…
  8. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 8
    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 8
  9. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 9
    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…
  10. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 10
    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…
  11. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 11
    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…
  12. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 12
    Appalachian Division 12
  13. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 13
    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…
  14. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 14
    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…
  15. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 15
    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…
  16. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 16
    Economic Sensitivity of Marcellus CAPEX: 6.5 million per well EUR: 7.8 Bcfe (includes natural gas liquids) 14 12 IRR: 108% 3.99/MMBtu(1) IRR: 98% 10 IRR: 87% Single Well NPV-10 ( MM) 8 IRR: 77% IRR: 67% 6 IRR: 57%…
  17. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 17
    Marcellus Shale Note: MHR owns approximately 81,000 net acres in the Marcellus Shale. 17
  18. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 18
    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…
  19. DECEMBER 2013 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. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 20
    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…
  21. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 21
    Most Leveraged to the Utica 70 64 60 50 40 40 30 29 29 29 20 19 Average: 15 15 12 10 7 7 6 6 6 5 3 1 0 Net Utica Acres / Enterprise Value Source: Company presentations, Bloomberg, state data, Baird 21
  22. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 22
    Utica Asset Transactions Announced Total Transaction Implied Date Buyer(s) Seller(s) Value (MM) Acreage / Acre 08/09/13 Undisclosed company(ies) EnerVest, Ltd. 228 18,190 12,551 08/09/13 Undisclosed company(ies) EV Energy Parnters, L.P.…
  23. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 23
    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…
  24. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 24
    Farley Pad Drilling Locations MHR - Farley Pad Ten Planned Laterals Washington County Noble County 0 2000 4000 Magnum Hunter Acreage 24
  25. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 25
    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 25
  26. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 26
    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…
  27. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 27
    Utica Shale Recent Well Results Antero Myron 3H MUSKINGUM Antero Wayne 2H Antero Wayne 3HA Antero Wayne 4H Fracking 1331 bbls/d + 1503 bbls NGL/d 1905 bbls/d + 2018 bbls NGL/d 1922 bbls/d + 1907 bbls NGL/d Waiting On Completion +…
  28. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 28
    Eureka Hunter Midstream 28
  29. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 29
    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…
  30. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 30
    Eureka Hunter Pipeline Three pipe solution at Carbide Challenging West Virginia Terrain Ohio River Bore into Ohio (McCormick & Evans) 30
  31. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 31
    Historical Gathering Volumes Eureka Hunter Pipeline 2012 Avg. Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 High Pressure Reservation Volume (MMBtu/d) Magnum Hunter 40,000 87,950 87,950 87,950 91,117 92,950 92,950…
  32. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 32
    Residue Gas Takeaway Clarington REX & TETCO TETCO Triad Ormet Wells Triad Farley 32
  33. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 33
    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…
  34. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 34
    Eureka Hunter Utica Exposure 34
  35. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 35
    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…
  36. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 36
    TransTex Hunter Amine Plants 36
  37. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 37
    Williston Basin Division 37
  38. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 38
    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…
  39. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 39
    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…
  40. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 40
    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…
  41. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 41
    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…
  42. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 42
    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…
  43. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 43
    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 -…
  44. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 44
    Alpha Hunter Drilling 44
  45. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 45
    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, 2013 o Contract…
  46. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 46
    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…
  47. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 47
    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…
  48. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 48
    Financial Overview 48
  49. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 49
    Capitalization December 31, March 31, June 30, September 30, ( in millions) 2012 2013 2013 2013 Cash 57.6 91.2 32.7 55.3 Debt: (1) Revolving Credit Facility due 2016 225.0 325.0 0.0 90.0 Senior Unsecured Notes due 2020 600.0 600.0…
  50. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 50
    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…
  51. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 51
    Estimated Fourth Quarter Production Expected to Drive 2013 Exit Rate (2) (2) MHR Working MHR Net Estimated Gross Production Estimated Net Production Anticipated (1) Well Name Location Interest Revenue Interest Bbls/d (3) Mcfe/d…
  52. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 52
    Estimated Fourth Quarter Production Expected to Drive 2013 Exit Rate (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…
  53. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 53
    Non-Core Divestiture Summary Aggressively pursuing in excess of 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…
  54. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 54
    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…
  55. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 55
    Crude Oil and Natural Gas Hedges Crude Oil 2013 2014 2015 NYMEX Average (1) 97.46 93.00 88.15 Weighted-Average Hedge Price With Ceilings 100.38 100.90 115.93 Weighted-Average Hedge Price With Floors 87.33 85.00 85.00…
  56. DECEMBER 2013 INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 56
    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…
  57. DECEMBER 2013 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. DECEMBER 2013 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 MLV Partners Canaccord Genuity RBC Capital Markets Capital One Southcoast Robert W. Baird &…
  59. DECEMBER 2013 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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