Magnum Provides 2015 Upstream Capital Expenditure Budget

Source: 2/17/2015, Location: North America

Magnum Hunter Resources Corporation announced that its Board of Directors has approved a $100 million upstream capital expenditure budget for fiscal year 2015. Of this amount, the Company has allocated approximately $70 million to its Utica Shale and Marcellus Shale exploration and development drilling program in Ohio and West Virginia, approximately $10 million to its properties in the Williston Basin in North Dakota (substantially all of which are non-operated properties) and approximately $20 million for leasehold acreage acquisitions in the Utica and Marcellus Shale plays. The Company expects this Appalachian focused upstream capital expenditure program to further drive its production volumes and enable it to maintain its projected 2015 average daily production volumes of approximately 29,000 - 33,000 BOE per day. At the midstream operations, the Company's pro rata portion of the capital expenditure budget is expected to be funded by Eureka Hunter's existing senior credit facility and by Eureka Hunter's other principal owner pursuant to pre-existing funding arrangements between the Company and the other principal owner established last year. The Company's total 2015 capital expenditure budget of $100 million is expected to be funded from a combination of internally-generated cash flow, borrowings under the Company's existing senior revolving credit facility, proceeds from asset sales, possible capital markets transactions and certain anticipated strategic initiatives in progress. The Company's exploration and development drilling plan in 2015 will be concentrated primarily on the delineation and further development of its combined ~208,000 net mineral acre leasehold position in the Utica and Marcellus Shale plays of Ohio and West Virginia. Specifically, the Company plans to further delineate its acreage positions in Monroe, Noble and Washington Counties, Ohio and in Tyler and Ritchie Counties, West Virginia. In 2015, Magnum Hunter plans to bring on production three net horizontal wells in the Marcellus Shale and eight net horizontal wells in the Utica Shale. A number of these wells have already been drilled and are in various stages of completion. Therefore, capital for these projects was previously expended in fiscal year 2014. Based on the combination of recent production additions and new wells expected to be brought on production in 2015, the Company anticipates that it will produce an average of approximately 29,000 - 33,000 BOE per day in 2015. Management Comments Mr. Gary C. Evans, Chairman of the Board and Chief Executive Officer of Magnum Hunter, commented, "Our Board of Directors has approved up to $100 million of capital to be spent on our upstream activities in the Utica and Marcellus Shale plays. This budget is "flexible" in that we are limiting capital spending at this time to allow upstream service costs to catch up with the drop in benchmark commodity prices that has occurred over the past several months. Therefore, we expect that most of this capital will be spent during the second half of the year. We are in a very unique position of anticipating 100% production growth year over year with minimal capital expenditures. Additionally, the focus on minimizing capital spending may change throughout the year as our Ohio shale play joint venture discussions with interested parties progress and we determine how this anticipated new capital will be spent on our Ohio leasehold acreage position and associated development activities."

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Related Articles: Coalbed Methane  General  Heavy Oil  Methane Clathrate  Oil Sands  Oil Shale  Shale Gas  Tight Gas  Tight Oil 

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