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Magnum Hunter Resources Corp. Message Board

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  • rrb1981 rrb1981 Jan 12, 2011 8:06 PM Flag

    anyone own the Preferred Class C shares??

    Agreed, not_a_short is clueless. According to the recent presentation, MHR proeduction has climbed up to 3300 boe/d. Management is expecting Year End exit rates for 2011 of over 8000 BOE/D.

    If you don't know much about the E&P industry, 8000 BOE/D is nothing to sneeze at. Gary is making good on his promise to turn Magnum Hunter into a full fledged mid cap producer.

    Looks like the economics on the West Virginia wells are a heck of a lot better than I had expected according to the most recent presentation. IP rates were very high and gas is very liquids rich. I now am seeing how the PostRock deal will pay off, even though they paid full price for the acreage.

    They ought to get the pipeline full within a year to 18 months! That will be a monster cash flow machine that can be monetized to an MLP (i'd bet that Markwest is interested).

    Also, looks like MHR is sitting on $60 million in cash with probably another $50-$60 million in cash flow from production, meaning, the bulk of the $150 million dollar budget is covered.

    Gotta love how irritated not_a short must be as MHR continues to consolidate in the $7's.

    Now, can't wait for a few more Marcellus wells to be brought online!!!

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    • Bill,

      The preferred C will NOT be called in December. If you look at the registration for the additional shares authorized, it says do not expect this to be called in December. There is no mandatory call date on this issue. Most preferreds I own are well past the call dates.

      I was totally shocked to see this thing above par on the ex-dividend date. Since the underwriter is allowed to sell these preferred shares at the market if the price is above 25 dollars, I guess this just means there is huge demand for this thing. (I own 8x as much dollar wise as I do of the common)

      Since this offering was done when the stock price was 1.20, I would say now that people realize the company is for real and are pretty excited about locking in 10.25. I know I was. I thought I had a long time to buy it at par, but I guess I was wrong. Nice to have that 21.3 cents per share roll in every month no matter what.

      I think I posted more details on the thread started a few days ago about MHR-C.


      • 1 Reply to ibpawnin1
      • IB,

        I didn't say there was a mandatory call date in December. I said I thought they could be called in December and I believe that's a true statement. I have no opinion as to whether they will or will not be called.

        If you think they won't be called because of the info you have read I'm sure others are interested to know that. Let's be clear,however, I did not say they would be called but rather they could be called.

        If it's your understanding that MHR does not have the right to call the bonds then please correct me otherwise my statement it's possible they could get called at year end is accurate.

        Again, I'm not expressing an opinion just making a statement based on what I know of the Preferred shares.