Magnum Hunter Resources Corp
From Wikimarcellus
Houston, Texas-based Magnum Hunter Resources Corp (NYSE Amex: MHR) is an oil and gas exploration company. At the end of October, 2009 a news account appeared about the company agreeing to purchase all of the oil and gas exploration and production assets of Triad Energy of Reno, Ohio (not the same as Triad Energy of Texas).
Triad had been an E & P company with exclusive focus on the Appalachian region especially in Kentucky, Ohio, and West Virginia. Their oil and gas interests consisted of roughly 88,500 net acres, 75% held by production. 47,000 net acres of this total are underlain by Marcellus shale formation.
At the end of January, 2010 more details emerged about this deal when it was approved by the U.S. Bankruptcy Court for the Southern District of Ohio, Eastern Division who oversaw Triad Energy Corp.'s Plan of Reorganization. The acquisition by Magnum Hunter of Triad covered the latter's 2,000 operating wells as well as the aforementioned acreage. The deal was set to close on or before February 15, 2010.
In early February, 2010 Magnum Hunter announced that it planned to drill two horizontal Marcellus shale wells in Tyler County, WV located about half way on a straight line between Marietta, OH and Fairmont, WV. It also was to spend $9 million upgrading and completing an in-state Eureka Pipeline.
In September, 2010, a news item appeared providing greater detail about the Tyler Co. project. The pipeline, now dubbed the Eureka Hunter Pipeline, was to have a western terminus on the Roger and Sandra Weese farm located near Jefferson Run Road in Tyler Co. There, Magnum Hunter had completed two horizontal wells, each drilled to a total depth of 6,200 feet, and with 3,500 foot laterals, on the Weese's 220-acre tract. These were to go online to sales in November, 2010. As part of terms agreed upon with the Weeses, Magnum was also to build access roads, a culvert system and a 3 acre lake on their property.
Magnum Hunter had formed a joint venture (JV) with Colorado-based DCP Midstream to deveop the Eureka Hunter Pipeline. The JV was to be known as Triad Hunter LLC. This pipeline was to be completed in two sections:
- 114 miles passing through Doddridge, Harrison, Lewis, Marion, Monongalia, Pleasants, Ritchie, Tyler, and Wetzel counties.
- 68 miles traversing central West Virginia.
The total length of the 20 inch pipeline was to be 182 miles, and it was to be placed 4-5 feet underground. Scheduled for completion at the end of 2011, the line was to represent a capital investment of between $40 and $55 million. Apex Pipeline Services of Winfield, WV was contractor on the project and had about 100 employees working on it during the fall of 2010.
In December, 2010, a press release appeared announcing that Magnum Hunter had acquired, through its wholly-owned subsidiary, Triad Hunter, LLC, a portfolio of leased land in Wetzel and Lewis counties from PostRock Energy for $39.75 million. 50% of the total, or $19.875 million had been paid in cash and the balance with 3.2 million in newly-issued restricted shares of Magnum Hunter Corp. stock. The property was referred to as the Marcellus Assets. The Wetzel County land was valued at $28 million and the Lewis Co. acreage at $11.75 million. The deal was to close in January, 2011. 2,336 net acres were in Wetzel Co. and 6,316 in Lewis Co. (Total: 8,652 net acres). The sale included 8 proved and developed producing wells, 6 developed wells shut-in, 2 wells behind pipe, and 15 proved yet undeveloped locations. The estimated probable reserves of this acreage was 165.4 Bcfe with 905 Mcfe/d of current production. The company planned to begin drilling on this property by early 2011.
- Gary C. Evans is Chairman and CEO of Magnum Hunter Resources Corp.
- M. Bradley Davis is Magnum Hunter's Senior Vice President of Capital Markets.
- Jim Denny is Triad Hunter LLC's COO.
