MHR is on our Watch List. I am working on the forecast model today and will post it to the website this weekend.
Gary Evans will be the speaker at our luncheon on January 8th at The Hess Club in Houston.
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DEC 28: Magnum Hunter announced production results from two new Eagle Ford Shale wells operated by the co; The Rhino Hunter #1 located in Lavaca County, Texas is producing ~2,033 barrels of oil per day (MHR) 3.78 : Co announced production results from two new Eagle Ford Shale wells operated by the Co. Both wells went on production Dec 22, 2012. The Rhino Hunter #1 located in Lavaca County, Texas is producing ~2,033 barrels of oil per day and 1,113 mcf of natural gas (2,218 boe/d) on a 16/64" choke. Magnum Hunter owns ~48% working interest in the Rhino Hunter #1. The Zebra Hunter #1 is also located in Lavaca County, Texas and is producing ~1,995 barrels of oil per day and 898 mcf of natural gas (2,145 boe/d) on a 16/64" choke.
Magnum Hunter owns ~45% working interest in the Zebra Hunter #1. Mr. Gary C. Evans, Chairman and Chief Executive Officer of Magnum Hunter Resources, commented, "These two new Eagle Ford wells are by far our best producers since we initiated drilling operations in this play in 2010. We have to-date drilled or participated in a total of 42 successful wells in the oil trend of the Eagle Ford."
"Our net daily production in the Eagle Ford is currently over 4,100 boe/d. With these consistent results, and the significant reserve additions we are seeing from new wells that are now exceeding 500 thousand barrels of oil equivalent per well, our Management and Board may very well have second thoughts about our decision to possibly completely divest these properties at this time."
MHR
Re: MHR
Magnum Hunter Resources Corp. (MHR): An updated Net Income & Cash Flow Forecast Model has been posted under the Watch List Tab.
Gary Evans is good at building companies through acquisitions and that is what he is doing with this latest version of Magnum Hunter. The company has reaffirmed its target exit rate of 18,500 boepd for 2012. That is quite a step change from the 5,511 boepd they produced in 2011. Most of the growth has been through acquisitions but they have recently drilled some darn good wells in the Eagle Ford.
It is hard to value the common stock since they have so many layers of pfd stock and lots of debt. My SWAG is around $5.00 per share. See my forecast model for how I come up with my valuation. This is a very interesting company and it will remain on our Watch List. It is just too hard for me to come up with a solid valuation until things settle down a bit.
If commodity prices hold up, the company should be fine. Personally, I like the pfd more than the common stock at this point. MHR.PR.C (10.25% pfd with face value of $25) has an annual yield over 10% based on Friday's close. I think it pays dividends monthly.
Gary Evans is good at building companies through acquisitions and that is what he is doing with this latest version of Magnum Hunter. The company has reaffirmed its target exit rate of 18,500 boepd for 2012. That is quite a step change from the 5,511 boepd they produced in 2011. Most of the growth has been through acquisitions but they have recently drilled some darn good wells in the Eagle Ford.
It is hard to value the common stock since they have so many layers of pfd stock and lots of debt. My SWAG is around $5.00 per share. See my forecast model for how I come up with my valuation. This is a very interesting company and it will remain on our Watch List. It is just too hard for me to come up with a solid valuation until things settle down a bit.
If commodity prices hold up, the company should be fine. Personally, I like the pfd more than the common stock at this point. MHR.PR.C (10.25% pfd with face value of $25) has an annual yield over 10% based on Friday's close. I think it pays dividends monthly.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group