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INVESTOR PRESENTATION – Magnum Hunter Resources Corp.

Magnum Hunter Resources Corp. · Jan 18, 2014 · 58 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 January 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 shale resource plays in North America, namely the Marcellus, Utica and Williston/Bakken Shale Current…
  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 151,000 Net Acres 83,000 Net Marcellus Acres 97,000 Net Utica Acres…
  4. 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 Production increased 93% from 7,702 Boepd for the nine months ended 2012 to 14,894 Boepd(1) for the nine months ended 2013 Year-end 2014…
  5. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 5
    Proved Reserve Growth Consistency Track record of proved reserve growth since inception Approximately 75.9 MMBoe of proved reserves at December 31, 2013 (45.8% oil/liquids) Anticipate continuing to consistently add proven reserves with…
  6. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 6
    Proved Reserves Summary Proved Reserves Summary Net Proved Reserves as of June 30, 2013 (SEC PRICING) Liquids Gas Total Category (MMBbls) (Bcf) (MMBoe) % PDP 16.8 136.7 39.6 52.2% PDNP 2.2 39.9 8.9 11.7% PUD 15.7 70.2 27.4 36.1%…
  7. 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. 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. 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. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 10
    Substantial Leasehold Inventory Developed Undeveloped (1) As of September 1, 2013 Acreage Acreage (2) Total Acreage Gross Net Gross Net Gross Net Appalachian Basin (3) Marcellus Shale 63,199 62,492 24,336 19,224 87,535 81,716 Utica…
  11. 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. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 12
    Appalachian Division 12
  13. 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 53.4 MMBoe as of 12/31/13 Proved producing reserves of 30.2 MMBoe as of 12/31/13 Acreage Position…
  14. 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. 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. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 16
    Economic Sensitivity of Marcellus 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: 94% 14 IRR:…
  17. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 17
    Marcellus Shale Note: MHR owns approximately 83,000 net acres in the Marcellus Shale. 17
  18. 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. 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. 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. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 21
    Most Leveraged to the Utica 70 64 60 50 41 40 30 29 29 29 19 Average: 15 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 21
  22. 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. 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. 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 PETRA 9/9/2013 10:22:31 AM 24
  25. 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 PETRA 9/9/2013 4:06:37 PM 25
  26. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 26
    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 +…
  27. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 27
    Eureka Hunter Midstream 27
  28. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 28
    Eureka Hunter Midstream Overview Strategically Positioned Assets In the heart of Wet Marcellus WV and Dry Utica of eastern Ohio 100 miles of primarily 20 1135 MAOP gathering system currently in the ground Assets and Business 350+…
  29. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 29
    Eureka Hunter Pipeline Pulling Trackhoe Up Incline Welding Up Pipeline Connection Strung Pipe Before Being Lowered 29
  30. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 30
    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 Oct-13 Nov-13 Dec-13 High Pressure Reservation Volume (MMBtu/d) Magnum Hunter 40,000 87,950 87,950 87,950…
  31. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 31
    Residue Gas Takeaway Clarington REX & TETCO TETCO Triad Ormet Wells Triad Farley 31
  32. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 32
    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…
  33. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 33
    Eureka Hunter Utica Exposure 33
  34. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 34
    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…
  35. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 35
    TransTex Hunter Amine Plants 35
  36. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 36
    Williston Basin Division 36
  37. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 37
    Williston Basin Overview Areas of Operation Overview Proved Reserves Total proved reserves of 20.8 MMBoe as of 12/31/13 Proved producing reserves of 9.1 MMBoe as of 12/31/13 Acreage 151,000 net acres in the Williston Basin…
  38. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 38
    Ambrose/Divide County 2014 Activity Areas of Operation Overview 2014 Ambrose Field Drilling Program 15-20 gross, 6-9 net wells Targeting Three Forks Sanish and Middle Bakken Prolific Two-mile Lateral Wells IP 24-hour rates up to…
  39. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 39
    Williston Basin Recent North Dakota Well Results Williston (North Dakota) MHR results 24-Hour IP Rates 30-Day IP Rates of Frac Stages 1,582 1,166 1,076 1,001 910 922 923 913 947 867 872 893 820 813 825 809 845 742 658 683…
  40. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 40
    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…
  41. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 41
    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…
  42. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 42
    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 -…
  43. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 43
    Alpha Hunter Drilling 43
  44. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 44
    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…
  45. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 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 (Marcellus) spud July 1, 2013…
  46. 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. 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 9 EQT 165 EXCO Resources 57 Green Hunter Water 4 Hildreth 7 PetroEdge 1 Rex…
  48. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 48
    Financial Overview 48
  49. 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: Revolving Credit Facility due 2016 (1) 225.0 325.0 0.0 90.0 Senior Unsecured Notes due 2020 600.0 600.0…
  50. 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. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 51
    New Marcellus/Utica Production (Near Term) (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 Stalder…
  52. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 52
    Non-Core Divestiture Summary Aggressively pursuing in excess of 400 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…
  53. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 53
    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…
  54. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 54
    Crude Oil and Natural Gas Hedges Crude Oil 2014 2015 2016 (1) NYMEX Average 94.49 87.98 83.74 Weighted-Average Hedge Price With Ceilings 100.90 115.93 - Weighted-Average Hedge Price With Floors 85.00 85.00 - Weighted-Average…
  55. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 55
    MHR Net Asset Value* Assumptions Valuation ( in thousands) Low High Low High (1) Total Proved Reserves PV-10 (12/31/2013) 922,100 922,100 /acre (2) Undeveloped Acreage Low High Eagle Ford 6,200 3,000 5,000 18,600 31,000 Williston…
  56. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 56
    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…
  57. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 57
    Equity Research Coverage / Contact Information Magnum Hunter Resources (NYSE: MHR) Equity Research Analyst Coverage: BMO Capital Markets RBC Capital Markets Canaccord Genuity Robert W. Baird & Co. Capital One Southcoast Stephens…
  58. INVESTOR PRESENTATION – Magnum Hunter Resources Corp. – slide 58
    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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