7:04AM Magnum Hunter reports proved, probable and possible reserves and contingent resources of 848 MMBoe (MHR) 4.00 : Co announced that its combined estimated proved, probable and possible reserves were 119.3 MMBoe and its estimated contingent resources were an additional 728.9 MMBoe as of June 30, 2013. Magnum Hunter's 3P Reserves at June 30, 2013 were prepared by a third-party engineering consultant, Cawley Gillespie & Associates, and include the Marcellus and Williston Basin/Bakken/Sanish Shale reserves, however, no Utica Shale reserves were included.
The Williston Basin/Bakken/Sanish Shale and Marcellus Shale probable and possible reserves were estimated at 49.8 MMBoe and 11.7 MMBoe, respectively, as of June 30, 2013. The contingent resources based on Magnum Hunter's internal analysis as of June 30, 2013 were comprised of 44.4 MMBoe in the Williston Basin/Bakken/Sanish Shale, 142.9 MMBoe in the Marcellus Shale, 496.2 MMBoe in the Utica Shale, and 45.4 MMBoe in the Devonian Shale.
Would anyone LONG correct me if I am wrong but wasn't there some dialog a couple years ago from GE that once MHR acheives 100 MMBoe they would consider selling? If that was infact the case that they deemed to make a profitable arrangement, we are possibly over 18 times that much which could lead to a handsome selling price. Im holding my bag until the end because this growth is starting to seem unreal.
Sentiment: Strong Buy
In 2012 CEO said, “Positioning for BO 2-3 yrs.” “BO potential if $20, we’re long way from $20” also said ... "#1 goal daily production 20,000 BOE/day with more oil. Statoil paid BEXP $4B w/that production. Plan to unload pipe 1H13."
I knew i wasnt losing my thoughts.... Here you go from seeking alpha 27 sep, 2012-
Built for Sale: Management has laid out a very clear exit strategy, with plans to grow MHR to 100 mmboe in proved reserves and then sell the company. Gary Evans was the CEO of the prior iteration of Magnum Hunter that was sold to XEC in 2005 for $2.1 billion, in all-stock deal that included the assumption of $645 million of debt. The assets were not the same, with the prior MHR focused on the Permian, Mid-Continent, Gulf of Mexico, and Gulf Coast regions, but we note that there is clearly a track record of building and divesting a successful E&P business, while less clear who a strategic buyer may potentially be.
Yes on the first sentence, but the 18 multiple is BS as everyone in the industry has 3P reserves that, for the most part, are simply insignificant. Overall, this report is not particularly impressive, although not bad either, as proved reserved fell 6% while the EFS asset divestiture was greater than 6% of former resources. So, MHR picked up at least a little, but not a lot, of non-EFS proved reserves. As GE continues to note, the big pick up in reserves will come once Utica reserves are booked, and will be enhanced with Pad drilling results, and will have some "bounce back" once the LOE costs are reduced. Hopefully, at least some significant part of all that will be realized by the next reserve report in Feb for EOY 2013.
By this time next year, the reserve number bump, coupled with increased production and the Eureka pipeline sale, should really propel the PPS, but for now the story is more of the same ... just be patient. My view anyway. Lex