MAGNUM HUNTER RESOURCES CORPORATION 4th Annual Research Analyst Meeting August 21, 2013
Introduction (Gary Evans) 2
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…
Reserves (Kip Ferguson/Debbie Funderburg) 4
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
Unconventional Reserve Evaluation Team The new team includes the current reservoir engineering group, additional former Houston Eagle Ford team leaders and key individuals from each division. Goals: Implement throughout the company the…
Non-Core Divestitures (Kip Ferguson) 10
Non-Core Asset Summary Aggressively targeting 200+ million of non-core asset sales Proceeds will be allocated to reduce overall indebtedness Non-core assets include legacy properties and waterfloods in North Dakota and West…
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 650 BOEPD Acreage of…
Non-Core Asset Divestiture Overview (cont.) Kentucky Primrose Waterflood Field 246 wells on 2,453 gross and net acres - held by production Primrose Field is collectively producing approx. 265.95 BOPD Divestiture strategy: Convey a…
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 well went on Production in Mid-2013 Assets are collectively…
Williston Hunter Division (Glenn Dawson) 15
Williston Hunter 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 190,000 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…
Williston Hunter 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) 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…
Williston Hunter: Drilling Costs Total drill, complete and equipment cost are 4.0 - 4.2 million 640/800 acre DSU 1/1.2 mile lateral 20 to 25 stage Frac 60,000 lb/stage Equipping - Pumping Unit Mud 3% & Lease Directional 9% Coil…
WTI Brent Pricing Spread narrows between Brent and WTI crude oil benchmark prices 130 120 Brent 110 per Barrel 100 90 West Texas Intermediate 80 70 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13…
Middle Bakken Discoveries 25
Ambrose Middle Bakken Discovery 26
Three Forks Sanish Resource Potential Areas of Operation Highlights Total Three Forks Sanish Potential Locations 885 gross, 191 net wells Three Forks Sanish 3-P Locations 622 gross, 101 net wells Three Forks Sanish Contingent…
Middle Bakken Resource Potential Areas of Operation Highlights Total Middle Bakken Potential Locations 854 gross, 192 net wells Middle Bakken 3-P Locations 543 gross, 118 net wells Middle Bakken Contingent Locations 311 gross,…
Burke Activity Map 29
Williston Hunter ONEOK System ONEOK Gas Gathering System Crosby Compressor Station 30
Williston Hunter 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…
Williston Hunter Madison Production Production & Reserves 650 BOEPD Current net production 167 Producing Wells Low Decline Production Six existing waterfloods Two horizontal wells planned for 2013 Mohall drilling complete Portal…
Appalachian Division (Jim Denny) 33
Appalachia 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 net acres…
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: 6.5MM per well EUR: 7.8 Bcfe (includes natural gas liquids) 14.0 IRR: 108% 12.0 IRR: 98% 10.0 3.70/MMBtu(1) IRR: 87% Single Well NPV-10 ( MM) 8.0 IRR: 77% IRR: 67% 6.0 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) Triad has…
Potentially Best Shale Play in US 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 4 horizontal wells Pilot Well has recently reached TD vertically at 8,164 feet, logged and cored Lateral…
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 2000 Magnum Hunter Acreage Marcellus Horizontal Well Utica Horizontal Well 0 2,000 FEET 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 all 16 - 18 wells on the Stalder Pad over the next 18 months First well spud July 1, 2013 46
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 47
Eureka Hunter Midstream (Don Kirkendall) 48
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…
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 Projects 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…
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 2006; Acquired by Eureka in April 2012 TransTexs business is providing gas treating services and for natural gas producers Assets for gas treating, processing,…
TransTex Hunter Amine Plants 59
Eureka Hunter Organization Structure Magnum Hunter Resources ArcLight Capital Corporation Series A Preferred Units Common Units (1) 60% 40% Eureka Hunter Holdings, LLC Eureka Hunter Pipeline, LLC Pipeline assets in West…
Alpha Hunter Drilling (Kirk Trosclair) 61
Alpha Hunter Drilling: Company Overview A wholly-owned subsidiary of Magnum Hunter Resources Corporation Current fleet of five (5) drilling rigs consisting of: One (1) Schramm TXD 500 Rig 7 o Spud first well (Stalder Pad) on July 1,…
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 120 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/Ron Ormand) 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 Focused 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 (MMs) 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 2.7 3.6…
Crude Oil and Natural Gas Hedges Crude Oil 2013 2014 2015 NYMEX Average (1) 89.44 86.45 84.12 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
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 &…
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