Magnum Hunter Resources Corp. (MHR) Chief Executive Gary Evans said Tuesday that the oil and gas producer, with a pair of acquisitions set to close this month, would pursue additional deals within its three U.S. operating areas.
Magnum Hunter expects to increase its average daily output to the equivalent of 10,600 barrels of oil by the end of 2011, up from about 1,600 barrels in 2009 when the current management team took over and changed the name of troubled Petro Resources Corp.
Since then shares have risen from less than $1 to recent highs of more than $8. Magnum Hunter shares closed down 5% at $7.62 amid broader market declines Tuesday.
The growth has been fueled largely by acquisitions of smaller, often distressed producers.
On Tuesday the company announced that it would close its $98 million purchase of NGAS Resources Inc. (NGAS) on Wednesday. Evans told investors at a conference here that Magnum Hunter's $327 million purchase of Calgary-based NuLoch Resources Inc. (NLR.V) should be finalized by the end of the month.
In NGAS, Magnum Hunter adds 300,000 acres to its Appalachian region holdings and the NuLoch acquisition greatly enlarges its position in North Dakota's unconventional oil fields.
Magnum Hunter will look to pick up additional oil and gas producing properties in those areas along with the Eagle Ford shale formation in south Texas, Evans said.
"You'll see bolt-on transactions, no doubt," Evans said.
Magnum Hunter is also actively expanding it footprint in southeastern Ohio, where the company has found oil and natural gas liquids trapped in the Utica shale formation, Evans said.
Evans said the company has about 15,000 acres leased there now. Evans declined to discuss Magnum Hunter's plans there in detail when asked by investors.
"We have an active leasing program going on," Evans said. "We're trying to keep what we're doing there close to the vest."
At the same conference on Monday Aubrey McClendon, Chief Executive of Chesapeake Energy Corp. (CHK), which has spent about $1 billion leasing some 1.3 billion acres in eastern Ohio, was also silent on the Utica's prospects when pressed by investors. McClendon said he believes the Ohio formation may be the last major shale oil find in the U.S.
-By Ryan Dezember, Dow Jones Newswires; 713-560-6670; email@example.com