Magnum Hunter Resources Provides Operational Update on New Wells
Drilled in the Marcellus and Utica Shale Plays
Leasehold Acreage Position Increased to 180,000 Net Acres
HOUSTON, TX--(Marketwired - Dec 20, 2013) - Magnum Hunter
Resources Corporation (NYSE: MHR) (NYSEMKT: MHR.PRC) (NYSEMKT:
MHR.PRD) (NYSEMKT: MHR.PRE) ("Magnum Hunter" or the "Company")
announced today certain updates on drilling activity and recently
acquired lease acreage located in the Marcellus and Utica Shale
Plays. Additionally, the Company is providing an update on the
operations of its midstream division, Eureka Hunter Pipeline, LLC
("Eureka Hunter" or "Eureka").
Appalachian Basin Drilling Update:
The Company has now drilled and completed three 100%
(approximately) owned wells located on the Ormet Pad in Monroe
County, Ohio. The Ormet 1-9H Well tested at 2,676 Mcf/d and 216
Bbl/d of condensate, the Ormet 2-9H Well tested at 5,117 Mcf/d and
816 Bbl/d of condensate and the Ormet 3-9H Well tested at 3,876
Mcf/d and 756 Bbl/d of condensate. Eureka Hunter is continuing to
install gathering system pipelines to these wells which are
approximately 80% complete. Additionally, sufficient surface
liquids handling equipment has been ordered and is scheduled to be
installed by mid-March.
On the Collins Pad located in Tyler County, West Virginia, the
Company has drilled four 100% owned wells. The Collins 1118H Well
has tested at 10,000 Mcf/d and 472 Bbl/d of condensate and the
Collins 1119H Well has tested at 9,850 Mcf/d and 470 Bbl/d of
condensate. The Company is in the process of moving this test
equipment to the remaining two wells already drilled and completed,
the Collins 1116H and 1117H, and will begin the testing of these
wells sometime early next week. Due to the high liquids content of
this region at both our Collins and Spencer Pads, operational
upgrades are being made to the Eureka Hunter gathering system in
order to appropriately handle all new liquids production.
Shortly after completion of the first well on our Farley Pad
(Farley 1305) located in Washington County, Ohio which had a
controlled blow-out, the Company began drilling the second well on
the Farley Pad (Farley 1306). The Company is currently drilling the
lateral section and anticipates TD at 7,600 feet (horizontally)
sometime today. The Company anticipates fracture stimulation of
this well in early January and expects to report initial production
test rates by the end of February.
The Company has recently hit TD on the first Utica Shale well on
the Stalder Pad located in Monroe County Ohio, and will commence
fracture stimulation operations next week. Test results from this
well are anticipated by the beginning of January. The first
Marcellus Shale well drilled on the Stalder Pad is awaiting
completion operations. Management has chosen to delay completion
and testing of the Marcellus well on the Stalder Pad until late in
the first quarter of 2014 to allow the Utica Shale well on this pad
to flow to sales for an extended period of time.
Update on Leasehold Acreage:
The Company has continued to acquire mineral leases in both West
Virginia and Ohio to increase its overall ownership position.
Approximately 89,000 gross (83,000 net) mineral acres have been
purchased in the Marcellus Shale and approximately 105,000 gross
(97,000 net) mineral acres have been purchased in the Utica Shale.
Of this acreage, the Company currently estimates that approximately
21% or 38,000 net acres are overlapping and provide potential
drilling in both the Marcellus and Utica Shale Plays from dual pad
sites.
Update on Eureka Hunter:
Eureka Hunter is currently connecting a significant amount of
new Marcellus production volumes from several Triad Hunter, LLC
("Triad") locations as well as other third party locations into
Eureka's "wet" or rich gas pipeline system located in Tyler and
Wetzel Counties, West Virginia. These increased volumes of
particularly rich gas, in conjunction with colder winter
temperatures, have been causing significant "liquids fallout" with
resulting high pipeline pressure and liquids handling issues on the
Eureka Hunter pipeline system.
These issues are currently being addressed and rectified by
expansion of the system's liquids handling capabilities and by
increasing its slug volume capacities. Also, the frequency and
addition of new pig launchers and receiving stations along the
pipeline system have been authorized. Additionally, Eureka Hunter
will have liquids stabilization operations and loading facilities
near its Ohio River crossing near Sardis, Ohio operating sometime
in the first quarter of 2014. To further assist with volume
demands and pigging operations, Eureka Hunter is also adding new
mainline compression at its Carbide facility in Tyler County, West
Virginia.
The new Marcellus volumes into Eureka Hunter are also coupled
with the addition of dry Utica (Point Pleasant) production located
in Ohio from third party producers. Eureka Hunter expects to
connect significant volumes of new Utica production throughout 2014
including Triad's Utica production anticipated from the Stalder pad
located in Monroe County, Ohio during the first quarter of 2014.
The increased volumes of gas to the Eureka Hunter gathering system
will aid in liquids handling and pigging operations with the
increased mass of gas production moving through the
system.
The build out of the Eureka Hunter gathering system in Ohio
continues despite weather delays. The first lateral to be completed
in Ohio is a 20-inch extension from the Ohio River past Triad's
Stalder Pad extending approximately 11 miles to the west to gather
gas from the Eclipse Resources' Tippens pad site. This line
will initially gather dry Utica gas production. This lateral has
been completed, hydro-tested and is ready to turn to sales. The
second Ohio line is known as the "Ormet Lateral" which is also a
20-inch line, approximately 80% completed at this time. Eureka
Hunter's delays in the build out of the Ormet lateral has impacted
Triad's ability to produce the Ormet Marcellus wells that have been
successfully drilled, fraced, and tested. The pipeline construction
delays are a reflection of the huge increase in activity for both
the Marcellus and Utica resource plays. All pipeline
construction companies are fully engaged in this region and
pipeline appurtenances have caused very long lead items. The
Company projects that the Ormet lateral will be completed by mid to
late February barring any further weather delays. The necessary
liquids handling equipment should be installed by
mid-March.
Management Comments
Mr. Gary C. Evans, Chairman of the Board and Chief Executive
Officer of Magnum Hunter, commented, "Magnum Hunter's focus
continues to be in accelerating our leasehold ownership position
and adding new production in both the Marcellus and Utica resource
plays. Our newly completed wells in the Marcellus continue to
improve both in overall gas production volumes and liquids
recovery. We are very anxious to test our two new Utica wells
recently drilled in Ohio, which are currently in process of
completing. We are planning our 2014 capital drilling program for
both the Marcellus and Utica locations in a manner that guarantees
the maximum throughput capabilities available on the midstream
system. We continue to be impressed with the quality of these
reservoirs which seem to get better with time. This will be
reflected in our forthcoming 2013 year-end reserve report which
will be announced in January."
About Magnum Hunter Resources Corporation
Magnum Hunter Resources Corporation and subsidiaries are a
Houston, Texas-based independent exploration and production company
engaged in the acquisition, development and production of crude
oil, natural gas and natural gas liquids, primarily in the States
of West Virginia, Ohio, Kentucky, and North Dakota. The Company is
presently active in three of the most prolific unconventional shale
resource plays in North America, namely the Marcellus Shale, Utica
Shale, and Williston Basin/Bakken Shale.
Availability of Information on the Company's Website
Magnum Hunter is providing a reminder that it makes available on
its website (at www.magnumhunterresources.com) a variety of
information for investors, analysts and the media, including the
following:
- annual reports on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K and any amendments to those reports as
soon as reasonably practicable after the material is electronically
filed with or furnished to the Securities and Exchange
Commission;
- the most recent version of the Company's Investor Presentation
slide deck;
- announcements of conference calls, webcasts, investor
conferences, speeches and other events at which Company executives
may discuss the Company and its business and archives or
transcripts of such events;
- press releases regarding annual and quarterly earnings,
operational developments, legal developments and other matters;
and
- corporate governance information, including the Company's
corporate governance guidelines, committee charters, code of
conduct and other governance-related matters.
Magnum Hunter's goal is to maintain its website as the
authoritative portal through which visitors can easily access
current information about the Company. Over time, the Company
intends for its website to become a primary channel for public
dissemination of important information about the
Company. Investors, analysts, media and other interested
persons are encouraged to visit the Company's website
frequently.
Certain information included on the Company's website
constitutes forward-looking statements and is subject to the
qualifications under the heading "Forward-Looking Statements" below
and in the Company's Investor Presentation slide deck.
Forward-Looking Statements
This press release includes "forward-looking statements." All
statements other than statements of historical facts included or
incorporated herein may constitute forward-looking statements.
Actual results could vary significantly from those expressed or
implied in such statements and are subject to a number of risks and
uncertainties. Although Magnum Hunter believes that the
expectations reflected in the forward-looking statements are
reasonable, Magnum Hunter can give no assurance that such
expectations will prove to be correct. The forward-looking
statements involve risks and uncertainties that affect operations,
financial performance, and other factors as discussed in filings
made by Magnum Hunter with the Securities and Exchange Commission
(SEC). Among the factors that could cause results to differ
materially are those risks discussed in the periodic reports filed
by Magnum Hunter with the SEC, including Magnum Hunter's Annual
Report on Form 10-K for the fiscal year ended December 31, 2012 and
its Quarterly Reports on Form 10-Q for the fiscal quarters ended
after such fiscal year. You are urged to carefully review and
consider the cautionary statements and other disclosures made in
those filings, specifically those under the heading "Risk Factors."
Forward-looking statements speak only as of the date of the
document in which they are contained, and Magnum Hunter does not
undertake any duty to update any forward-looking statements except
as may be required by law.
Contact: Chris Benton AVP, Finance and Capital Markets
ir@magnumhunterresources.com 832-203-4539