Magnum Hunter Resources Corporation ("Magnum Hunter" or the "Company") announced that its Board of Directors has approved a $400 million capital expenditure budget for fiscal year 2014, excluding acquisitions. The Company intends to allocate approximately $260 million in the Utica Shale and Marcellus Shale plays, approximately $50 million in the Williston Basin and approximately $90 million for midstream activities at Eureka Hunter Pipeline ("Eureka Hunter"). The contemplated capital budget includes the acquisition of mineral leases in both the Utica Shale and Marcellus Shale plays. This Appalachian-focused capital program is expected to further drive the Company's production volumes and enable it to achieve its 2014 projected exit production rate of 35,000 BOEPD.
The 2014 capital budget of $400 million is expected to be funded from a combination of internally-generated cash flow, borrowings under the Company's existing senior secured credit facility, a new Eureka Hunter senior secured credit facility in the process of negotiation, and proceeds from non-core asset sales of approximately $200 - $400 million. The Company's drilling capital in 2014 will be primarily concentrated on the delineation and development of its combined 180,000 net mineral acres located in the Utica and Marcellus Shale plays of Ohio and West Virginia. Specifically, the Company' development plan will be to further delineate its acreage position located in Monroe, Noble, and Washington Counties, Ohio and in Tyler and Richie Counties, West Virginia. Magnum Hunter expects to operate two to three drilling rigs in Appalachia during 2014, and anticipates drilling approximately 23-25 gross horizontal wells. The Company also expects to participate predominantly as a non-operated partner in the Williston Basin and drill approximately 15-20 gross wells located primarily in the Ambrose Field in Divide County, North Dakota.
Mr. Gary C. Evans, Chairman of the Board and Chief Executive Officer of Magnum Hunter, commented, "Our ability to grow both production and reserves at the highest internal rate of return within our existing asset base, undoubtedly lies in our acreage position located in the Utica and Marcellus Shale resource plays. Therefore, this region will be allocated the largest portion of our 2014 capital expenditure budget. Also, due to our majority ownership position in our midstream subsidiary, Eureka Hunter, we anticipate additional benefit from the new production volumes that will be gathered on behalf of our Company owned gas, as well as third party volumes gathered by this system in both West Virginia and Ohio."
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