Magnum Hunter Resources Corporation Expands Operations with New Cryogenic Plant

Strategic Insights -

Magnum Hunter Resources Corporation has announced a significant expansion of its operations with the purchase of a new 200 MMcf per day capacity cryogenic natural gas processing plant. This plant will treat and process natural gas liquids transported on the Company's Eureka Hunter Pipeline System located in Northwestern West Virginia. The purchase of this plant aligns with the Company's goal of becoming a fully integrated producer, gas gatherer, and processor in this region. Magnum Hunter intends to fund the purchase price of the plant using undrawn availability under its commercial bank revolver and cash on hand, with approximately $55 million in available liquidity as of December 15, 2010.

Key Takeaways:

  • Magnum Hunter Resources Corporation has acquired a new 200 MMcf per day capacity cryogenic natural gas processing plant to treat and process natural gas liquids transported on the Company's Eureka Hunter Pipeline System in Northwestern West Virginia.
  • The plant will enable Magnum Hunter to become a fully integrated producer, gas gatherer, and processor in this region, in line with its long-term strategy.
  • The Company will fund the purchase price of the plant using available liquidity of approximately $55 million as of December 15, 2010.
  • Magnum Hunter holds a substantial 50,000 net acres position in the Marcellus Shale natural gas resource play of Northwestern West Virginia and Ohio, with significant liquids-rich production potential.
  • The Company plans to drill a minimum of twelve horizontal Marcellus Shale wells in fiscal year 2011, with the new plant facilitating the processing of equity natural gas production and providing an outlet for existing shut-in or curtailed gas.
  • Magnum Hunter Resources Corporation is a Houston-based independent exploration and production company, with a focus on the acquisition of exploratory leases, producing properties, and enhanced oil recovery projects.
  • The Company is engaged in the three major emerging shale plays: the Marcellus, Eagle Ford, and Williston basins in the United States.

Statistics:

  • 200 MMcf per day capacity cryogenic natural gas processing plant to be delivered in October 2011.
  • $55 million in available liquidity as of December 15, 2010.
  • Approximately 50,000 net acres in the Marcellus Shale natural gas resource play in Northwestern West Virginia and Ohio.
  • Minimum of twelve horizontal Marcellus Shale wells to be drilled by the Company in fiscal year 2011.
  • Magnum Hunter Resources Corporation's wholly-owned subsidiary, Eureka Hunter Pipeline, will transport and process Magnum Hunter's equity natural gas production and provide an outlet for existing shut-in or curtailed gas.

Sources:

  • Magnum Hunter Resources Corporation
  • Comtex SmarTrend Alert
  • Comtex News Network, Inc.