For people who seem to think MHR "moved out" of the Marcellus play (from the August 2012 CC):
Now, let’s – don’t leave Appalachia out because we are very high on our Appalachian division. We’ve intentionally delayed capital spending there this year predominantly because we do not have a gas processing plant up and running yet that can strip the very rich liquids that we have in that gas stream. Our plant is supposed to go live in November. It was supposed to go live in June and it is four months behind schedule. But we believe that it will happen before the end of the year and that’s a huge uplift for this company.
It’s about $1.50 an Mcf on top of the $3 gas price puts you about $4.50 an Mcf for the rich liquids gas sold in that division. Then you will see in 2013 a redirection of our capital again. The Appalachian division undoubtedly will get a much larger share of our future capital budget because this gas plant will be up and running and allow us to extract these liquids that we have yet to do on all of our Marcellus well activities in this region.
You left out the paragraph that is the 3rd paragraph before your post:
"So in the second quarter, we now are over 50 percent crude oil production, which as you know, with current crude oil prices around $93 to $95 a barrel, has significantly better margins than what we’re experiencing all natural gas, at around $3 MCF. So that is something that not many companies can do, is direct their capital so quickly and change their production mix so quickly, which would allow us to report these substantial reports. That will continue throughout 2012. Our capital of 325 million dollars for upstream is geared to these two oil projects, being the Williston and the Eagle Ford."
They are not just some company they are a fair representation of what many companies tried to do as they shift to stay profitable during a time of steep natural gas declines.
Look at what GMXR did by adding Bakken oil drilling to their otherwise gas producing company to make the shift toward oil.
Look at what NFX did.
Look at the shift by CHK to the Hogshooter OIL.
There are lots of good examples...... I just remembered what the CEO of MHR said.
It is NOT some isolated move but one that made good sense at the time.
You just do not seem to like it since it does not conform to your latest fairy-tale.
"Magnum Hunter Resources Provides Update on Appalachia Production Curtailments
HOUSTON, TX -- (Marketwire) -- 09/26/12 -- Magnum Hunter Resources Corporation (NYSE: MHR)"
"In addition to the curtailed production described above, Magnum Hunter has shut-in approximately 1.7 mmcfepd related to approximately 400 producing natural gas wells located in Kentucky. This production was shut-in by the Company at the beginning of the third quarter of 2012 because production of the wells would not have been economical, due to a combination of factors, including low natural gas prices and the cost of blend stock required to reduce the ethane content of the gas for transportation purposes. Since both the curtailed and shut-in production in the Appalachia region is predominately natural gas, the impact on the Company's cash flow for the third quarter has been minimal."