Magnum Hunter Sells Bakken Acreage - $84.7-Million

November 4, 2014 Kirk Eggleston

Magnum Hunter Resources' Bakken Acreage Map

Houston, TX-based Magnum Hunter Resources has sold a large chunk of its Bakken acreage for $84.7-million to an undisclosed buyer.

The deal, which closed in mid October of this year, included non-operated working interests in ~105,661 gross (12,500 net) leasehold acres in Divide County, ND. The divested properties currently account for net average production of ~720 boe/d.

“In a prepared statement, CEO Gary Evans described the sold Bakken assets as non-core. “Our remaining portfolio of assets located in North Dakota consists of 151 gross producing wells covering approximately 159,916 gross (73,690 net) acres, said Evans. Total net production to the Company from these remaining assets is currently approximately 2,577 boe/d at present with another ~800 boe/d anticipated to be put on production prior to year-end from this region.”

According to company officials, total divestitures, including this one, have amounted to $210-million across Magnum Hunter's portfolio so far in 2014. In the second quarter of 2013, the company sold 19,000 net acres in the Eagle Ford to Penn Virginia for approximately $400-million. The deal was for the majority of the company’s Eagle Ford holdings.

Magnum Hunter's divestment strategy is designed to shift the company's focus to growth in the Marcellus Shale and Utica Shale in West Virginia and Ohio.

Magnum Hunter Decides to Exit North Dakota Bakken

August 8, 2014 Kirk Eggleston

In Magnum Hunter's second quarter report, the company announced its decision to sell its Divide County, North Dakota operated/non-operated properties and reallocate resources to core operations in the Appalachian Basin. Baytex Energy, Continental Resources, or Samson Resources are all likely buyers for the acreage.

Magnum Hunter currently holds 102,000 net acres in Divide County, with an additional 50,000 net acres in Canada. Across its Williston Basin assets (152,000 net acres), the company currently has 255 gross producing wells.

Magnum Hunter Bakken Operations Update

During the second quarter of 2014, Magnum Hunter participated in 13 gross (2.4 net) wells and the completion of six gross (1.3 net) wells in Divide County. Magnum Hunter's Q2 upstream capex in the Bakken amounted to $33.2-million.

At the end of June, operators of Magnum Hunter's non-operated properties in Divide County electrified ~113 gross wells and tied in approximately 183 gross wells into the Oneok, Inc. gas gathering system. Magnum Hunter officials say production and revenues from the gathering of associated gas from the tied-in wells are growing monthly.

Magnum Hunter Resources Bakken First Quarter Update

May 14, 2014 Kirk Eggleston

During the first quarter of 2014, Magnum Hunter Resources participated in the drilling of 4 gross (0.7 net) non-operated wells in the Bakken/Three Forks Sanish formations in North Dakota. At the end of the quarter, 4 gross (1.0 net) wells were drilling or waiting on fracture stimulation. Capital expenditures since the first of the year in the Bakken amounted to $11.6 million.

Across the company's portfolio, oil and gas production increased 102% for the quarter to 14,796 boe/d, compared to the same time period last year.

Magnum Hunter First Quarter Bakken Operations Update

Magnum Hunter Resources reported one operated one-mile lateral well was completed in the Middle Bakken formation, with an average initial production (IP) 24-hour rate of 223 boe/d at a 35% water cut. Four non-operated two-mile lateral wells were completed in the Middle Bakken formation, with an average IP 24-hour rate of 534 boe/d. One non-operated, three-mile lateral well, was completed in the Middle Bakken formation, with an average IP 24-hour rate of 949 Boe/d, and seven non-operated two-mile lateral wells were completed in the Three Forks Sanish formation with an average IP 24-hour rate of 544 boe/d.

Magnum Hunter Bakken Midstream Update

In May of 2014, Magnum Hunter revealed it will begin transporting oil from some of its non-operated wells in Divide County, North Dakota, through a third-party, to the Colt Hub in Epping, North Dakota. The company expects ~51 existing wells, combined with 18 wells scheduled under the 2014 drilling program, to be connected to the gathering system, which is slated to be fully operational by September 2014. A truck terminal will also be constructed and connected to the gathering system to minimize oil hauling costs from wells not connected to the gathering system.

Furthermore, ~125 gross wells have now been connected into the Oneok gas gathering system in North Dakota. The company estimates current net throughput volumes on this system at approximately 1,000 Mcf/d and 170 barrels of NGLs, or 340 boe/d.

Magnum Hunter Bakken 2014 Capital Budget - $52 Million

March 24, 2014 Kirk Eggleston

Magnum Hunter sold off its non-core Eagle Ford assets in 2013. In 2014, the company is focusing on its core Appalachia and Williston Basin areas. $52 million of the company's $400 million capital budget will be spent in the Williston Basin in 2013. 65% of the budget will be spent on the company's Appalachia assets.

“In a company statement, Magnum Hunter CEO Gary Evans said, “we made the decision to sell our Eagle Ford assets [] for a contracted price of $401 million and redeploy those proceeds to our two remaining core areas, Appalachia and the Williston Basin. Revenues were still up over 72% and EBITDAX increased 48%. We drilled 21 gross wells (12.5 net) in the Marcellus and Utica resource plays and drilled 72 gross (24.6 net) in the Bakken and Three Forks Sanish plays of the Williston Basin.”

Magnum Hunter Bakken & Three Forks Fourth Quarter Operations

In the fourth-quarter of 2013, Magnum Hunter drilled 15 gross (6.2. net) in the Bakken/Three Forks formations. In its operated areas, the company drilled 2 wells, and in non-operated areas, 13 gross (4.2 net) wells were drilled.

Initial production (IP) rates varied across the company's Williston Basin acreage. In the Middle Bakken Formation, six two-mile lateral wells completed, with an average 24-hour IP rate of 561 boe/d and a 30-day rate of 389 boe/d. Two one-mile laterals were also completed in the Middle Bakken. At the end of the year, one well had a 24-hour IP rate of 680 boe/d and a 30-day rate of 253 boe/d. In the Three Forks/Sanish Formation, seven two-mile lateral wells were completed, with an average 24-hour IP rate of 584 boe/d and a 30-day rate of 287 boe/d. One one-mile lateral was also completed in the Three Forks/Sanish. It had an a 24-hour IP rate of 760 boe/d and a 30-day rate of 282 boe/d.

Magnum Hunter 2013 Bakken & Three Forks Capital Spending

Upstream capital spending in the Williston Basin during the fourth-quarter was $19.7 million in 2013. For the full-year, the company spent $131.8 million. That was ~43% of the company's total upstream capex budget for the year.

Magnum Hunter Resources Provides Second Quarter Bakken Update

July 18, 2013 R.T. Dukes

Mangnum Hunter Resources participated in bringing on 19 gross (5.5 net) Bakken wells in the second quarter of 2013. At the end of the quarter 20.4 gross (11.4 net) wells were in some stage of drilling or being completed.

Magnum Hunter also noted midstream delays brought on by wet weather. A Oneok gathering system expected to be online in April did not accept gas until the last week of June. The gas gathering system is being built in an effort to conserve natural gas production in the area. In total, the project will connect ~300 wells in the area over the next year.

Bakken & Three Forks Well Highlights

Border Farms 3130-5TFH - (28.3% interest) Drilled to a measured depth of 14,300 ft (lateral length of 6,075 ft), fraced with 26 stages. The 24-hour flowing initial production (IP) rate was 626 boe/d
Montclair 0112-2TFH - (16.7% interest) Drilled to a measured depth of 17,710 ft (lateral length of 9,572 ft), fraced with 40 stages and placed. The 24-hour flowing IP rate was 683 boe/d
J. Olson 22-15-162-98H 2DM - (36.25% interest) Drilled to a measured depth of 18,215 ft (lateral length of 9,455 ft), fraced with 36 stages. The 24-hour flowing IP rate was 872 boe/d
J. Olson 27-34-162-98H 2XM - (35.7% interest) Drilled to a measured depth of 18,842 ft (length of 10,096 ft), fraced with 36 stages. The 24-hour flowing IP rate was 820 boe/d
Baja 2215-2H - (30.4% interest) Drilled to a measured depth of 18,155 ft (lateral length of 9,568 ft), fraced with 25 stages. The 24-hour flowing IP rate was 813 boe/d
Baja 2215-3H - (30.4% interest) Drilled to a measured depth of 18,280 ft (lateral length of 9,820 ft), fraced with 25 stages. The 24-hour flowing IP rate was 1,076 boe/d
Baja 2215-1H - (30.4% interest) Drilled to a measured depth of 17,977 ft (lateral length of 9,545 ft), fraced with 25 stages. The 24-hour flowing IP rate was 913 boe/d

Magnum Hunter controls 190,000 net acres in the Williston Basin. 140,000 acres are located in North Dakota and ~50,000 acres are located in Canada.