Magnum Hunter: Proposed Acquisition in Williston Basin Did Not Close

- Magnum Hunter: Proposed Acquisition in Williston Basin Did Not Close

Friday, August 19, 2011
Magnum Hunter Resources Corp.

Magnum Hunter announced that the previously announced proposed acquisition by its wholly owned subsidiary, Williston Hunter ND, LLC, of oil and gas properties in the Williston Basin in North Dakota from Eagle Operating, Inc. ("Eagle") did not close yesterday due to unresolved issues between the parties resulting from what Magnum Hunter considers to be Eagle's intentional and bad faith breach of its obligations under the Purchase and Sale Agreement ("PSA"). In the proposed acquisition, Magnum Hunter would have acquired from Eagle for total consideration of $57 million ($55 million in cash and $2 million in Magnum Hunter restricted common stock), the remaining approximate 48% working ownership interest in the Williston Basin properties owned by Eagle, subject to Eagle's retention of a variable overriding royalty interest not exceeding 2% on certain properties.

The acquisition would also have resulted in the settlement of two pending lawsuits between the Company and Eagle currently filed in the United States District Court for the District of North Dakota (Northwestern Division), which litigation is now expected to continue. Management of Magnum Hunter does not consider this pending litigation to be of any material nature to the Company.

Magnum Hunter has today filed a new lawsuit against Eagle in the United States District Court for the District of North Dakota (Northwestern Division) asking the court to order Eagle to comply with its obligations under the PSA and complete the sale of the properties to the Company on the specific terms outlined in the PSA. Magnum Hunter is also seeking monetary damages, including compensatory, consequential and general damages, for Eagle's material default under the PSA. The Company intends to vigorously pursue all available remedies against Eagle.

As of August 18, 2011, Magnum Hunter had total liquidity including cash and availability under its various credit facilities of approximately $75 million, of which approximately $55 million is currently available to continue to fund its upstream capital program focused on the Company's high growth unconventional resource plays. In addition, Magnum Hunter has a commitment from its bank group to provide an additional $42.5 million in borrowing capacity for the purchase of the Eagle properties referenced above. Moreover, Magnum Hunter continues to pursue various non-dilutive alternatives to provide access to capital in order to fund capital budget needs later in fiscal year 2012.

Additional information regarding the Company's lawsuit against Eagle, including a copy of the complaint filed by the Company Friday in the United States District Court for the District of North Dakota (Northwestern Division), is contained in a Report on Form 8-K also filed today by the Company with the Securities and Exchange Commission.

Oil & Gas Post

Promote Your Page Too
LINK

Magnum Hunter Closes Credit Facility for Eureka Hunter Pipeline

- Magnum Hunter Closes Credit Facility for Eureka Hunter Pipeline

Wednesday, August 17, 2011
Magnum Hunter Resources Corp.

Magnum Hunter's wholly-owned subsidiary, Eureka Hunter Pipeline, has closed a new credit facility totaling $150 million. The Eureka Hunter Finance Facility is comprised of two tranches: (i) a revolving credit facility in the aggregate principal amount of up to $100 million secured by a first lien on the assets of Eureka Hunter Pipeline ("Revolver") with an initial committed amount of $25 million; and (ii) a $50 million term loan secured by a second lien on such assets ("Term Loan"). All of the Term Loan must be drawn before any of the Revolver is drawn and $31 million of the Term Loan was drawn at closing yesterday. Both the Revolver and the Term Loan are "non-recourse" to the parent company, Magnum Hunter.

The proceeds from the Revolver and the Term Loan will be used to finance capital expenditures for the construction of the Eureka Hunter Pipeline system located in northern West Virginia and Ohio. Advances under the Term Loan will be limited to 60% of the project's "Total Capital" including equity and debt invested. As of August 15, 2011, Magnum Hunter has invested approximately $52 million of equity capital in the Eureka Hunter Pipeline project.

In addition, Magnum Hunter has received $21 million of net proceeds from the Term Loan Closing to repay existing indebtedness. As of August 16, 2011, Magnum Hunter had total liquidity including cash and availability under its credit facilities, including the Term Loan, of approximately $75 million, of which $55 million is available to fund its upstream capital program focused on the Company's high growth resource plays.

The applicable interest rate margin of the Revolver ranges from LIBOR plus 2.25% to LIBOR plus 3.50%. The Term Loan accrues interest at a rate of 12.50% per annum; of which 2.75% is payable in cash or Magnum Hunter restricted common stock at the sole option of Magnum Hunter. The Revolver and the Term Loan contain other terms and conditions customary for financings of this type. The Revolver has a maturity of five years from date of closing and the Term Loan has a maturity of seven years from date of closing. SunTrust Robinson Humphrey, Inc. has served as the "Lead Arranger" and SunTrust Bank will serve as "Administrative Agent" for the Revolver. PennantPark Investment Corporation is the "Lender" for the Term Loan.

Management Comments

Mr. Ronald D. Ormand, Executive Vice President and Chief Financial Officer of Magnum Hunter, commented, "The closing of the Eureka Hunter Finance Facility for the Eureka Hunter midstream assets completes one of our primary financial goals for fiscal year 2011. Eureka Hunter Pipeline now has its own primary source of financing, provided on a non-recourse basis to Magnum Hunter, and the capital necessary to complete construction and expand operations of the pipeline through fiscal year 2012. In addition, with the return of $21 million in capital from the Eureka Hunter Finance Facility, Magnum Hunter has further increased its overall financial liquidity to in excess of $75 million. The additional liquidity provides Magnum Hunter with the necessary capital to fund the Company's capital expenditure plan through the end of fiscal year 2011 and into fiscal year 2012."

Oil & Gas Post

Promote Your Page Too
LINK

Magnum Hunters Acquires Acreage in Williston Basin

- Magnum Hunters Acquires Acreage in Williston Basin

Friday, August 05, 2011
Magnum Hunter Resources Corp.

Magnum Hunter's wholly owned subsidiary, Williston Hunter ND, LLC, has entered into a Purchase and Sale Agreement ("PSA") with a privately-held company ("Seller") for all of the Seller's operated working interest ownership in oil and gas mineral leases and 191 wells on approximately 15,500 gross acres located within four counties of the Williston Basin of North Dakota. Gross production from the properties is approximately 833 BOE per day. Total proved reserves attributable to the acquired properties are estimated at 2.6 million barrels of oil equivalent. Magnum Hunter presently owns an approximate 47% working interest in these oil and gas properties. Upon closing of this transaction, Magnum Hunter will own an approximate 95% working interest in these properties. The effective date of the transaction is April 1, 2011. Magnum Hunter intends to close the purchase transaction on or before August 18, 2011.

Magnum Hunter will pay to the Seller a total purchase price of $57 million, to be paid at closing in the form of $55.0 million in cash and $2.0 million in Magnum Hunter restricted common stock. The number of shares of Magnum Hunter common stock will be determined based on the volume weighted average price of the Company's common stock during the five trading days prior to closing. Magnum Hunter intends to fund the cash portion of this purchase through existing liquidity and borrowings under the Company's senior credit facility. Additionally, the Seller will retain an overriding royalty interest in certain of the properties in various amounts not to exceed 2%. No existing debt of Seller will be assumed by Williston Hunter in connection with the closing of the acquisition.

The PSA between Williston Hunter and the North Dakota based privately-held Seller was negotiated pursuant to a Settlement Agreement between Magnum Hunter and the Seller as a result of certain lawsuits pending in the United States District Court for the District of North Dakota (Northwestern Division). The agreed upon settlement between the parties will resolve all outstanding claims. The parties will file stipulations with the District Court for dismissal, with prejudice, of the two pending civil actions upon the PSA's final closing.

Management Comments

Mr. Glenn Dawson, President of Williston Hunter, commented, "We are pleased to announce this final agreement to acquire these Williston Basin properties where we have been a minority owner for years. With this 'bolt on' transaction, we will be establishing an operating base in North Dakota which has been a primary objective as we continue to grow our presence in the Williston Basin. Our game plan in 2011 is to continue our geological and engineering evaluation of these properties so that we will be in a position to prudently develop these assets beginning early next year."

Oil & Gas Post

Promote Your Page Too
LINK

Magnum Hunter Makes Management Changes in Finance Dept.

- Magnum Hunter Makes Management Changes in Finance Dept.

Wednesday, July 27, 2011
Magnum Hunter Resources Corp.

Magnum Hunter announced several management changes in the Company's finance department. Victor Ponce de Leon is being transferred in a lateral position and will now work at two of the Company's wholly-owned subsidiaries, Eureka Hunter Pipeline, LLC and Energy Hunter Securities, LLC.

Mr. Ponce de Leon has over 15 years of experience in the energy sector, with the last two years having served as Vice President of Finance and Treasurer at Magnum Hunter. He has previous experience as an Investment Banker with Morgan Keegan and West LB, having worked on numerous energy related transactions, including structured and corporate financings, mergers and acquisitions and fairness opinions. Mr. Ponce de Leon has also worked as an equity research analyst covering the exploration and production sector for CIBC World markets, Credit Lyonnais and Jeffries & Co. He received a B.B.A. in Finance from the University of St. Thomas and a Certificate in Accounting from the University of Houston.

Additionally, the Company has promoted E. Gabe Scott to Assistant Vice President of Finance and Assistant Treasurer of the Company. Mr. Scott has been an employee of Magnum Hunter since January 2011. He has five years of corporate finance experience with increasing management responsibilities in the energy sector, having spent the last year as a Financial Analyst for the Company. His work related experience include four years in Senior Financial Analyst positions with an upstream energy company, an energy sector focused private equity firm and with a multinational global financial services provider. Mr. Scott was a full scholarship recipient and four year letterman in baseball at the University of Alabama receiving numerous honors and recognition such as serving as team co-captain for several years, being named an ESPN Academic All-American, recognized as the Outstanding Finance Undergraduate Student for two years, a Paul Bear Bryant Student Athlete of the Year Finalist in 2005, a National Collegiate Baseball Writers Association All-American in 2005, and a First Team All Southeastern Conference choice in 2005 amongst many other awards for both his academic and athletic achievements.

Oil & Gas Post

Promote Your Page Too

Magnum Hunter Buys New Rigs

- Magnum Hunter Buys New Rigs

Friday, July 15, 2011
Magnum Hunter Resources Corp.

Magnum Hunter announced that the Company's Appalachian Basin Division has acquired two new 2011 Schramm T200XD trailer mounted hydraulic drilling rigs ("Schramm Rigs") with a rated vertical working depth capacity of 9,000 feet. The two new Schramm Rigs will join the existing Alpha Hunter Drilling LLC ("Alpha Hunter") drilling rig fleet comprised of three Schramm T130 rigs.

All five of Alpha Hunter's drilling rigs are under term contracts with third parties who are operators active in the Pennsylvania and northwestern West Virginia Marcellus Shale region. When Magnum Hunter acquired Triad Energy early last year out of bankruptcy, the three existing Schramm Rigs were part of the overall acquisition. Alpha Hunter has been successful in contracting its rig fleet out on an improving day rate basis since last year. The existing drilling rig fleet have been primarily used to drill the vertical top hole sections for Marcellus Shale wells for third parties and for Triad Hunter LLC. These two Schramm Rigs can not only drill the surface holes, but they can also perform the directional drilling operations in unconventional resource shales in this region. They are equipped with automatic pipe handling systems, have unparalleled mobility and utilize the smallest footprint available in the market today. Due to the mountainous terrain in Appalachia, utilizing pad drilling and minimizing surface locations significantly reduce the location cost of each well.

The two new drilling rigs (including drill pipe) are being purchased for approximately $5.8 million and are being financed under a secured commercial bank term loan.

Management Comments

Mr. Kirk Trosclair, Senior Vice President of Equipment Services for Triad Hunter LLC, commented, "The addition of the two new Schramm Rigs recently acquired will expand Alpha Hunter Drilling's ability to provide top of the line, safety oriented, and cost effective contract drilling services for our Appalachian exploration and production customers. Additionally, Triad Hunter will receive the benefit of having an internal source for oilfield service equipment, supplies and drilling rigs available to draw upon and utilize as we expect the markets for this specialized equipment to continue to be extremely tight over the next several years. We believe adding these two high quality drilling rigs to our existing three rig fleet will allow Triad Hunter the greatest amount of operational flexibility in providing for our Company's internal needs as well as third parties."

Oil & Gas Post

Promote Your Page Too
LINK

Magnum Hunter Sees 133% Increase in Reserves

- Magnum Hunter Sees 133% Increase in Reserves

Thursday, July 14, 2011
Magnum Hunter Resources Corp.

Magnum Hunter announced a 133% increase in the quantity of the Company's estimated total proved reserves at June 30, 2011 as compared to December 31, 2010. The present value of estimated future cash flows, before income taxes, of the Company's estimated total proved reserves as of mid-year 2011, discounted at 10% ("PV-10"), also increased 141% as compared to six months ago at year-end 2010.

Magnum Hunter's total proved reserves increased by 17.8 million barrels of oil equivalent (Boe) to 31.2 million Boe (55% crude oil & ngl; 50% proved developed producing) as of June 30, 2011 as compared to 13.4 million Boe (51% crude oil & ngl; 44% proved developed producing) at December 31, 2010. The Company's reserve life (R/P ratio) was approximately 17.3 years as of June 30, 2011.

The Company's PV-10 at June 30, 2011 increased by $250 million or 141% to $428 million from $178 million at December 31, 2010. Under new SEC guidelines, the commodity prices used in the December 31, 2010 and June 30, 2011 PV-10 estimates were based on the 12-month unweighted arithmetic average of the first day of the month price for the periods January 1, 2010 through December 31, 2010, and July 1, 2010 through June 30, 2011, respectively, adjusted by lease for transportation fees and regional price differentials. For crude oil and ngl volumes, the average West Texas Intermediate posted price of $89.96 per barrel at June 30, 2011, was up 13% from the average price of $79.43 per barrel at December 31, 2010. For natural gas volumes, the average price of the Henry Hub spot price of $4.20 per million British thermal units ("MMBTU") at June 30, 2011 was down (4%) from the $4.37 per MMBTU at December 31, 2010. All prices were held constant throughout the estimated economic life of the properties.

Note: PV-10 is a non-GAAP financial measure and should not be considered as an alternative to the standardized measure of discounted future net cash flows as defined under GAAP; see "Non-GAAP Measures: Reconciliation to Standardized Measure" below for the Company's definition of PV-10 and a reconciliation to the standardized measure.

The Company's June 30, 2011 total proved reserves of 31.2 million Boe reflect an organic growth of 6% from the Company's pro forma proved reserves of 29.4 million Boe as of December 31, 2010, when including the proved reserves related to the Company's acquisition of the assets of NGAS Resources, Inc. and NuLoch Resources, Inc., which occurred on April 13, 2011 and May 3, 2011, respectively. Magnum Hunter's first half of fiscal year 2011 organic extensions and discoveries from drilling activities replaced the Company's estimated production through June 30, 2011 by a factor of four times. When including the first six months of fiscal year 2011's property acquisition activities, the replacement of production factor for the first six months of fiscal year 2011 increased by approximately 20 times.

The estimates of Magnum Hunter's total proved reserves as of December 31, 2010 and June 30, 2011 were prepared by the Company's third-party engineering consultants.

Resource Potential

The Company's internal engineering team has evaluated the resource potential of Magnum Hunter's existing undeveloped lease acreage position in our three unconventional shale plays. The undeveloped acreage evaluated includes 652,419 gross acres and 347,547 net acres to Magnum Hunter's ownership interest.

The current number of total new drilling locations in Magnum Hunter's inventory today is approximately 4,000 of which 1,350 are identified drilling locations in these three unconventional resource plays, net to the Company's interest. The net unrisked resource potential of 462 million barrels of oil equivalent is approximately 48% crude oil and natural gas liquids

Oil & Gas Post

Promote Your Page Too
LINK

Magnum Hunter Names VP of Finance

- Magnum Hunter Names VP of Finance

Monday, July 11, 2011
Magnum Hunter Resources Corp.

Magnum Hunter announced the appointment of Mr. Mark H. Wolf as Vice President of Finance for the Company, effective today. Mr. Wolf replaces Victor Ponce de Leon in this position. Mr. Wolf will report to the Company's Executive Vice President and Chief Financial Officer, Ronald D. Ormand.

Mr. Wolf has over 24 years of experience providing commercial banking, corporate finance and treasury related services to the various segments comprising the energy industry.
Management Comments

Mr. Gary C. Evans, Chairman of the Board and Chief Executive Officer of Magnum Hunter Resources commented, "It is with great pleasure today I am able to announce Mark Wolf's appointment as our new Vice President of Finance and Treasurer for Magnum Hunter. I have personally known Mark for approximately 15 years, and during that period, he has either worked as one of our lead commercial bankers or worked directly with me at the "old" Magnum Hunter. During this time, he has consistently demonstrated a vast knowledge of banking and corporate finance related matters, coupled with a strong and very professional work ethic. With the significant growth profile Magnum Hunter has achieved over the last couple of years, it was time to bring on a seasoned financial professional like Mark Wolf to assist senior management in our continued future growth plans."

Oil & Gas Post

Promote Your Page Too
LINK

Magnum Hunter Realigns Senior Management

Magnum Hunter Realigns Senior Management

Wednesday, May 04, 2011
Magnum Hunter Resources Corp.

Magnum Hunter Resources Corp. announced Wednesday the appointment of Presidents for each of the Company's three primary areas of geographic operations: (i) the Williston Basin, (ii) the Appalachian Basin, and (iii) the Eagle Ford Shale of Central and South Texas.

The appointment of these three new Divisional Presidents follows the tremendous growth Magnum Hunter has experienced with the recent closings of both the NGAS Resources acquisition on April 13, 2011 and the NuLoch Resources acquisition on May 3, 2011 which total in excess of $425 Million.

R. Glenn Dawson, President, Williston Hunter, Inc.

R. Glenn Dawson has been appointed President of the Company's Williston Basin Division and will work out of Magnum Hunter's new Denver, Colorado office as well as Calgary, Alberta. He joins the Company from NuLoch Resources where he previously served as President and CEO.

Dawson graduated in 1980 from Weber State University of Utah with a bachelor's degree in geology and attended the University of Calgary from 1980 to 1982 in the Masters Program for Geology.

In the early stages of his career, Dawson was employed as an exploration geologist by Sundance Oil and Gas, Inc., a public company located in Denver, Colorado, concentrating on their Canadian operations. From December 1985 to September 1998, Dawson held a variety of managerial and technical positions with Summit, including Vice President of Exploration, Exploration Manager and Chief Geologist.

Dawson held the position of Vice President of Exploration with PanAtlas from 1999 until its acquisition by Velvet. Mr. Dawson was a co-founder of TriLoch in 2001, which ultimately became NuLoch Resources, Inc. He has over 20 years of experience in oil and gas exploration in North America. His principal responsibilities have involved the generation and evaluation of drilling prospects and production acquisition opportunities.

James W. Denny III, President, Triad Hunter, LLC

Jim Denny has been reappointed President of Magnum Hunter's Appalachian Basin Division through its wholly owned subsidiary, Triad Hunter, LLC. Denny has served as President of Triad Hunter, LLC since the acquisition of the assets of privately-held Triad Energy Corporation out of bankruptcy in February 2010. With the April 13, 2011 acquisition of NGAS Resources, Denny became responsible for managing and integrating the operations of NGAS into Triad Hunter.

Denny has more than 40 years of industry experience having served as President and CEO of Gulf Energy Management, a wholly owned subsidiary of Harken Energy Corporation. He is a registered Professional Engineer (Louisiana) and is a Certified Earth Scientist.

Denny is also a member of various industry associations, including the American Petroleum Institute, National Society of Professional Engineers, Society of Petroleum Engineers, and the Society of Petroleum Evaluation Engineers. He is a graduate of the University of Louisiana-Lafayette with a bachelor's degree in petroleum engineering.

H.C. "Kip" Ferguson III, President, Eagle Ford Hunter, Inc.

H.C. "Kip" Ferguson III has been appointed President of the Company's Eagle Ford Shale Division, now called Eagle Ford Hunter, Inc. (formerly Sharon Hunter, Inc.). He will be responsible for all of Magnum Hunter's operational activities in the oil window of the Eagle Ford Shale play located in Central and South Texas where the Company is extremely active.

Ferguson was formerly President of Sharon Resources, Inc. and joined the Company as Executive Vice President of Exploration on September 30, 2009 with the acquisition of Sharon Resources by Magnum Hunter. Ferguson brings more than 20 years of exploration and development experience in several major U.S. basins, and is a third generation geologist and holds a bachelor's degree in geology from the University of Texas at Austin.

Gary C. Evans, Chairman and Chief Executive Officer of the Company, commented:

"These three gentlemen, Glenn Dawson, Jim Denny, and Kip Ferguson, are very experienced professionals with long histories and successful careers in the oil and gas industry. Their individual appointments today by our Board of Directors as divisional Presidents are to not only recognize their respective successes, but are also to give them the necessary freedom to manage and operate their divisions in a manner that maximizes the value to our shareholders. With the consummation of substantial mineral acreage positions which Magnum Hunter currently owns and controls today in three of the highest rate of return unconventional resources plays coupled with development drilling programs currently underway, each of these gentlemen have the unique opportunity to create a large enterprise in their own right. We are fortunate to have them leading our team and we have provided them with all of the necessary ingredients that will allow for the achievement of outstanding success: (i) capital, (ii) quality leasehold acreage positions, (iii) proven reserves in unconventional resource plays, and (iv) qualified technical talent."

Magnum Hunter Resources Corp. is an independent oil and gas company engaged in the acquisition, development and production of oil and natural gas, primarily in the states of West Virginia, North Dakota, and Texas. The Company is presently active in three of the most prolific shale resource plays in the United States, namely the Marcellus Shale, Eagle Ford Shale and Williston Basin/Bakken Shale.

Oil & Gas Post

Promote Your Page Too

Magnum Hunter Acquires Williston 'Bolt On' Acreage

Magnum Hunter Acquires Williston 'Bolt On' Acreage

Tuesday, May 03, 2011
Magnum Hunter Resources Corp.

Magnum Hunter Resources Corp. announced Tuesday that the Company's recently acquired wholly owned subsidiary, NuLoch Resources Inc, along with certain of NuLoch's existing joint venture partners, have acquired 16,800 gross acres (5,000 net acres) in a "Bolt On" acquisition located in Burke County, North Dakota.

The acquired acreage is in close proximity to a producing Sanish well, the Gustafson #29-32, where NuLoch owns an 18.6% working interest. As previously announced by NuLoch, the Gustafson #29-32 had a peak 24 hour initial production rate of 937 Boe per day from the Sanish formation.

Management Comments

Glenn Dawson, President of NuLoch, commented, "Leveraging the success of the Gustafson #29-32 well into a now much expanded acreage position in Burke County, North Dakota where we own a larger working interest (up to 30%) is an extremely positive strategic move for our Company. NuLoch has now increased the Company's net acreage position by 75% in this region alone; including one mostly contiguous block of 11,700 net acres to NuLoch's working interest ownership position. We are currently in the process of permitting production spacing units for purposes of drilling wells with two mile horizontal laterals. Today, NuLoch has drilled two wells in Burke County, North Dakota and has an additional six wells planned for the remainder of fiscal year 2011. This type of 'Bolt On' acreage acquisition adjacent to our recent success allows us to continue to maximize our presence in this region of the Williston Basin."

Magnum Hunter Resources Corp. is an independent oil and gas company engaged in the acquisition, development and production of oil and natural gas, primarily in the states of West Virginia, North Dakota, and Texas. The Company is presently active in three of the most prolific shale resource plays in the United States, namely the Marcellus Shale, Eagle Ford Shale and Williston Basin/Bakken Shale.

Oil & Gas Post

Promote Your Page Too

Magnum Acquires Marcellus O&G Properties

Magnum Acquires Marcellus O&G Properties

Friday, April 08, 2011

Magnum Hunter Resources Corp.

Magnum announced that its wholly-owned subsidiary, Triad Hunter, has executed a definitive agreement and closed on the acquisition of oil and gas properties and leasehold mineral interests located in Wetzel County, West Virginia (the "Marcellus Assets") for a cash purchase price of $20.0 Million.

Magnum Hunter funded the purchase price consideration with existing working capital. Aggregate consideration is subject to certain post closing adjustments based on title, indemnities and other specific matters. The seller is a privately-held independent E&P company.

Mr. Gary C. Evans, Chairman and Chief Executive Officer of Magnum Hunter, commented, "Today's acquisition announcement represents another 'bolt on' acquisition in one of our Company's three liquids rich unconventional resource play regions.

We consider the Marcellus Assets acquired to be accretive to shareholders and will further expand our footprint in West Virginia.

Triad Hunter previously acquired the 50% operated interest associated with these properties in December 2010. Beginning with our entry into the Appalachia with our first acquisition (Triad Hunter) in February 2010, the Company's overall presence in the Appalachian Basin has been steadily increasing.

We plan to continue to be one of the most active drillers in northwestern West Virginia. Furthermore, we have made the financial commitments in the midstream area of gathering and processing to realize the greatest value possible from each molecule of natural gas produced. The Marcellus Assets acquired with this transaction are within close proximity to our Eureka Hunter pipeline system and planned expansions to this system currently in progress."