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Magnum Hunter Resources Corp. Message Board

  • rabbi_uri_weinstein rabbi_uri_weinstein Dec 28, 2010 10:15 AM Flag

    seems ceo is like me...buys companies desperate 4 cash

    look at last 2 deals...both companies are near big time trouble then MHR comes in and gives these desperate companies a way out

    a way out of their propperties.

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    • when you can pick up distressed properties at 15cents on a dollar its worth the gamble. ngas needed capital and sold at and extreme discount. evans is a master at this type of stuff combined with triad and ngas not only did he buy 400k acres but 3500 wells many that can be reworked. evans is not through just building a mid cap company

      • 2 Replies to mhorse55
      • Most people overlook the value of those "old" depleted wells that produce 20-30 mcf/d. Those types of wells can be recompleted, deepened, turned into a horizontal, refrac'd, have additional compression installed downstream to provide lift etc etc. With a little bit of capital, you can take a set of old worn out wells and boost production 20%-30% without much effort.

        Truthfully, after listening to the call, I think the real beauty of this transaction is the Weir oil play. Gary didn't buy NGAS for the production or even the 300K acres of upper Devonian. He is buying this for the up and coming oil play. I remember doing due dilligence on NGAS 2 years ago and thinking those guys were onto something. They never had the capital to get it up and running, but Gary will have that field in development in a year or two.

      • Lots of dilution has come with this projected growth. Selling the notion of attractive IRR's for the growth in NG will be Gary's constant battle.

    • Exactly. That is Gary's gameplan. He buys distressed assets and companies at a discount, then brings in the money and operational team to make things work. They analyze the wells, gathering system, financing in place etc and fix whatever isn't working. They rework wells, enlarge pipelines, buy aditional working interests, gain operating control etc etc. He did this for 20 yrs at the first Magnum Hunter, now he is doing it again. He is a banker, so to him, it is all about the bottom line. If it doesn't make money for the company, he isn't interested.