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May 2012 Investor Presentation – Magnum Hunter Resources Corp.

Magnum Hunter Resources Corp. · May 17, 2012 · 50 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. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 1
    MAGNUM HUNTER RESOURCES CORPORATION Corporate Presentation May 2012
  2. May 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 18,000 production company focused on three of the 14,500 most prolific unconventional resource…
  3. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 3
    Transaction Overview On April 18, 2012, MHR announced an agreement to acquire additional interests in a significant portion of its existing Williston Basin Bakken / Three Forks properties for 311 million Closing May 22, 2012 Magnum…
  4. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 4
    Transactions Enhance Liquids Exposure Williston Basin Acquisition Capex transition to Liquids-Rich Basins Increase working interest in Baytex 2012 Capex budget of 325 million properties to 47.5% 92% dedicated to oil / liquids Proved…
  5. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 5
    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 % Oil/ Drilling Locations 24,000 Net…
  6. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 6
    MHR Track Record of Value Creation Successful history of creating value for shareholders Bakken acquisition represents potential for additional value creation (3) 2,023.0 / EV = 1.4x Current Enterprise Value (EV)(3) 945.5…
  7. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 7
    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:…
  8. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 8
    Pro Forma Proved Reserve and Resource Summary Proved Reserves and PV-10% up 32% and 53%, respectively since year end 2011 (1) (2) Significant Un-risked Potential Resources Pro-Forma Proved Reserve Summary Proved Reserve Allocation (…
  9. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 9
    Key Investment Highlights Large, contiguous operations in three of the highest return resource plays in the U.S. Large, Diversified Asset Base in Highest Diversification and acreage in each core area provides investment flexibility…
  10. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 10
    Asset Overview 10
  11. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 11
    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…
  12. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 12
    Williston Basin Acquisition Overview The Company is acquiring Baytex Energys assets out of the Samson operated area in Divide County, North Dakota for 311 million Transaction expected to close on or about May 22, 2012, with an…
  13. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 13
    Williston Basin Acquisition Bid Value The metrics for the 311 million acquisition price for the Baytex Energy assets in the Samson operated area in Divide County, ND are: Total Proved ( in MM) Reserves (MMBOE) PV-10% PDP 1.39…
  14. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 14
    Williston Basin Acquisition Highlights Attractive cost of 3,663 per undeveloped acre for large contiguous block of acreage in a known producing area Well results continue to improve in acquired area Completion code cracked Less…
  15. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 15
    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…
  16. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 16
    Williston Basin Comparative Economics Lower drilling and completion costs per well result in best-in-class returns even with lower EUR/well 54% 44% 43% 43% 40% 37% 37% 27% 25% 25% 10.5 22% 9.6 8.8 8.0 8.0 6.9 7.0 3.4…
  17. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 17
    Williston Hunter Recent Well Results Williston (North Dakota) MHR results 1,525 1,139 1,212 1,203 1,188 897 900 988 852 790 818 869 636 621 598 684 622 607 591 346 409 350 358 422 335 345 328 302 220 23 15 26 15 20 26 30 30 30…
  18. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 18
    Williston Basin Recent Tableland Results vs. Type Curve 1 mile Type Curve 1-14-1-10 13-16-1-10 13-10-1-10 12-10-1-10 5-15-1-10 8-14-1-10 800 TFSanish 1 Mile Type Curve 185 MBBL 700 600 500 BOPD 400 1-14 Install tubing pump…
  19. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 19
    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 21 gross wells on…
  20. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 20
    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…
  21. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 21
    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 IRR: 85% 8.0 IRR: 63% NPV-10 ( MM) 7.0 IRR: 54% 6.0 IRR: 51% 5.0…
  22. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 22
    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 1,039 1,017 909 882 902 910 883 886 854 839 841 698 690 618 612 25 24 23 23 21 21 20 20 14 15 16 16 13…
  23. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 23
    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 433 MBOE Type Curve 1,200 1,000 800…
  24. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 24
    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…
  25. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 25
    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%…
  26. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 26
    Marcellus Operations Marcellus MHR results 10,500 10,400 10,000 9,700 9,600 9,500 9,400 7,078 6,450 6,689 6,273 5,800 5,618 5,040 16 16 16 16 18 16 18 WVDNR 1102 WVDNR 1103 WVDNR 1104 Roger Weese 1110 Everett Weese…
  27. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 27
    Marcellus Historical Production vs. Type Curve Weese 1001 Weese 1003 Weese 1110 WVDNR 1102 WVDNR 1103 WVDNR 1104 WVDNR 1107 WVDNR 1108 WVDNR 1109 Type Curve - 6.0 Bcfe 8,000 7,000 6,000 5,000 Mcfe/d 4,000 3,000…
  28. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 28
    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…
  29. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 29
    Eureka Hunter Midstream Overview Strategically Positioned Assets Pipeline in strategic geographical location in heart of Marcellus wet gas corridor of WV 54 miles of 20 900 high pressure gathering system in the ground to-date 200 300…
  30. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 30
    Eureka Hunter Pipeline Geographical Map 30
  31. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 31
    Financial Overview 31
  32. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 32
    Financial Strategy Capital spending driven by rates of return across all operating areas Focus on development of exiting acreage Capital budget adjusted in Q2 2012 to focus on high return, oil / liquids areas Margins and EBITDAX…
  33. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 33
    Pro Forma Capitalization Source: Company filings. Reserves and PV-10% based on SEC pricing (98.15/Bbl and 3.71/Mmbtu) as of 3/31/2012. (1) Excludes 0.786 million of cash held by and only available to Eureka Hunter. (2) Includes…
  34. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 34
    Operating and Credit Statistics 2011 Q1 2012 Q4 2012E ( in millions, except per unit data) Actual Pro Forma Production: (1) Average Daily Production 5,510 13,700 17,000 (1) 43% 40% 65% % oil / liquids % change vs. PF Q1 2012 24%…
  35. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 35
    Strong Pro Forma Collateral Coverage ( in millions) 2,562 1,789 1,305 797 958 299 Pro-forma 441 441 Net Debt: 991 472.9 MM 517 517 (1) 3/31/12 1P Enterprise Value Total NAV (based on undeveloped PV-10% (NYMEX)…
  36. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 36
    Borrowing Base Growth ( in millions) Pre-HY 375 300 300 100 268 100 100 Term Loan 100 275 (2) 200 213 200 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…
  37. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 37
    Focus on Operational Efficiency All-in Costs (/Boe) 79.18 4.85 34.43 41.20 3.72 30.96 13.36 21.90 3.17 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…
  38. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 38
    Summary of Commodity Hedges in Place As of 3/31/2012 2012 2013 NATURAL GAS HEDGES: Swaps Volume (mmbtu/d) 16,100 16,000 Price - /mmbtu 3.53 3.51 Collars Volume (mmbtu/d) 11,910 12,500 Floor Price - /mmbtu 4.58 4.50 High Price -…
  39. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 39
    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…
  40. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 40
    Appendix 40
  41. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 41
    Recent Company History March 2012: Partial monetization of Eureka May 2009: Gary C. Evans and Ron April 2011: Completed acquisition of Hunter to ArcLight Capital Ormand joined MHR Marcellus Shale assets for 20 million Partners, LLC…
  42. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 42
    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…
  43. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 43
    Track Record of Proved Reserve Growth Robust track record of proved reserve growth since inception Nearly 60 MMBoe pro-forma for Baytex acquisition Expect to continue to consistently add reserves with mix becoming more dominated by oil…
  44. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 44
    Williston Basin Acquisition Acreage Map MHR Working Interest Saskatchewan Canada Burke County North Dakota Divide County North Dakota 44
  45. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 45
    Eagle Acquisition Overview MHR announced the closing of the Williston Basin acquisition on April 2, 2012 Purchase price consisted 48.5 million in cash and 2 million in MHRs restricted stock at 6.74 per share Established MHR as an…
  46. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 46
    EBITDAX Reconciliation ( in millions) Quarter ended 1Q11 2Q11 3Q11 4Q11 1Q12 Net income (6,690) (15,040) 2,000 (56,932) (17,137) Loss (gain) on sale of assets 4 (1,559) 908 501 274 Net Interest expense 787 3,925 2,272 5,017 5,384…
  47. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 47
    PV-10 Reconciliation 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 (349,717) (253,721) Future…
  48. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 48
    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…
  49. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 49
    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…
  50. May 2012 Investor Presentation – Magnum Hunter Resources Corp. – slide 50
    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…

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