Fri, Dec 19, 2014, 7:56 AM EST - U.S. Markets open in 1 hr 34 mins


% | $
Quotes you view appear here for quick access.

Magnum Hunter Resources Corp. Message Board

  • fastball.98mph fastball.98mph Oct 27, 2013 1:50 PM Flag

    Should they sell Eureka?

    The question is based on the CEO saying that there's an offer today that would net MHR $600mil pre tax. However, the assumption is now they can wait another year to year and a half and get around $900mil pre tax. Essentially the decision is to hold the asset and gain 50% hopefully in one year. But in the recent presentation, assuming flat O&G prices, they have around a 50% IRR in production. While you can't discount the decision entirely by 50% because naturally there's exploration cost, but you can't assume a guaranteed $900mil in a year either. If they take the cash today and plough it into E&P, and exit 2014 at 45k- 50k boe/d without much if any balance sheet expansion that's a huge value driver for the shares. Furthermore, the cashflow from the production of 2014 roll's right into simply accelerates production growth. I know Gary Evans is a former banker so he's mindful of present value's and IRR's. This leads me to think that this $1b offer had a large equity component. If it were cash he'd take it....Just my opinion...Your's?

    SortNewest  |  Oldest  |  Most Replied Expand all replies
3.23-0.16(-4.72%)Dec 18 4:02 PMEST

Trending Tickers

Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.