Magnum Hunter Resources provides fourth quarter 2012 company wide operational update

Tuesday, February 12, 2013
  • During the fourth quarter of 2012, the Eagle Ford division placed on production 6 gross (2.8 net) operated wells and 1 gross (.5 net) non-operated wells in the Eagle Ford Shale of South Texas.
  • During the fourth quarter of 2012, the Williston Hunter Division placed on production 8 gross (6.7 net) wells in the Tableland Field.
  • Fourth quarter activities in Divide and Burke Counties, North Dakota included drilling 24 gross (5.2 net) wells and completing and bringing to production 24 gross (5.0 net) wells.

Magnum Hunter Resources Corporation (NYSE: MHR) (NYSE MKT: MHR.PRC) (NYSE MKT: MHR.PRD) (NYSE MKT: MHR.PRE) (the "Company") announced today an operational update on each of the Company's upstream unconventional resource plays for the fourth quarter of 2012 which includes (i) the Eagle Ford Shale, (ii) the Williston Basin, and (iii) the Appalachia/Marcellus/Utica Shales. Additionally, the Company has also provided an operational update for the Company's midstream division, Eureka Hunter Pipeline, LLC ("Eureka Hunter").

Eagle Ford

During the fourth quarter of 2012, the Eagle Ford division placed on production 6 gross (2.8 net) operated wells and 1 gross (.5 net) non-operated wells in the Eagle Ford Shale of South Texas.

Highlights for the Eagle Ford include:

Magnum Hunter Operated

  • Hippo Hunter 1H - MHR drilled and cased this well to a measured depth of 17,923 feet (horizontal lateral length of 6,391 feet), fraced with 25 stages and placed on production October 12, 2012. The 24 hour flowing initial production rate was 1,033 Boepd on a 17/64" choke with 2,256 psi FCP. Magnum Hunter operates this well and owns a 50% working interest.
  • Hippo Hunter 2H - MHR drilled and cased this well to a measured depth of 17,887 feet (horizontal lateral length of 6,577 feet), fraced with 24 stages and placed on production October 12, 2012. The 24 hour flowing initial production rate was 1,044 Boepd on a 17/64" choke with 2,421 psi FCP. Magnum Hunter operates this well and owns a 50% working interest.
  • Bertha 1H - MHR drilled and cased this well to a measured depth of 17,236 feet (horizontal lateral length of 6,036 feet), fraced with 26 stages and placed on production November 2, 2012. The 24 hour flowing initial production rate was 1,591 Boepd on a 16/64" choke with 2,650 psi FCP. Magnum Hunter operates this well and owns a 35% working interest.
  • Rhino Hunter 1H - MHR drilled and cased this well to a measured depth of 17,905 feet (horizontal lateral length of 6,296 feet), fraced with 27 stages and placed on production December 22, 2012. The 24 hour flowing initial production rate was 2,218 Boepd on a 16/64" choke with 3,250 psi FCP. Magnum Hunter operates this well and owns a 49% working interest.
  • Zebra Hunter 1H - MHR drilled and cased this well to a measured depth of 16,929 feet (horizontal lateral length of 5,410 feet), fraced with 22 stages and placed on production December 22, 2012. The 24 hour flowing initial production rate was 2,145 Boepd on a 16/64" choke with 3,000 psi FCP. Magnum Hunter operates this well and owns a 45% working interest.
  • Hippo Hunter 3H - MHR drilled and cased this well to a measured depth of 17,135 feet (horizontal lateral length of 6,062 feet), fraced with 21 stages and placed on production January 30, 2013. The 24 hour flowing initial production rate was 1,677 Boepd on a 17/64" choke with 2,925 psi FCP. Magnum Hunter operates this well and owns a 30% working interest.
  • Peeler Ranch 3H - This well is located in Atascosa County, Texas. MHR drilled and cased this well to a measured depth of 14,966 feet (horizontal lateral length of 5,740 feet), fraced with 20 stages and placed on production December 12, 2012. The 24 hour flowing initial production rate was 616 Boepd on a 18/64" choke with 900 psi FCP. Magnum Hunter operates this well and owns a 50% working interest.

Non-Operated

  • HOC Goodwin 1H - This well was drilled and cased to a measured depth of 18,259 feet (horizontal lateral length of 8,310 feet), fraced with 25 stages and placed on production October 18, 2012. The 24 hour flowing production rate on October 30, 2012 was 435 Boepd on a 24/64" choke with 460 psi FTP. Magnum Hunter owns a 50% working interest and Hunt Oil Company is the operator.

Mr. H.C. "Kip" Ferguson, President of Eagle Ford Hunter, commented, "The overall proved reserves from the Company's Eagle Ford division continues to grow and the individual well EURs have also continued to increase over time with more production history under our belt. The 2012 year-end reserve report prepared by our third party consulting engineers reflects continued improvements as EURs on these Eagle Ford wells are up to 524 MBoe per well. Recent well completions should achieve 100 MBoe within a six to nine month time frame after completion. We deem this occurrence to be payout of the costs to drill and complete the well. The production efficiencies of our operations are due to a carefully designed artificial lift process that has matched the apparent stimulated reservoir volume, bottom hole flowing pressures, and production."

Williston Basin

Tableland

During the fourth quarter of 2012, the Williston Hunter Division placed on production 8 gross (6.7 net) wells in the Tableland Field. At the beginning of this year, there was 1 gross (0.9 net) wells drilled and awaiting completion. The Company continues to operate 1 drilling rig in the Tableland Field at working interests ranging from 70% to 100%. Operational efficiencies have continued to reduce drilling and completion costs, as cycle time of spud to first production has been reduced to 38 days well-to-well. The Company has continued to be active in acquiring both freehold mineral acres and Crown lands. During the fourth quarter, 1,979 net acres were acquired bringing our total net acres in the Tableland field to 42,960.

Highlights for the Tableland field include:

  • 91/09-14-001-10W2 - MHR drilled and cased this well to a measured depth of 12,195 feet (horizontal lateral length of 4,508 feet), fraced with 27 stages and placed on production October 22, 2012. The 24 hour flowing initial production rate was 845 Boepd. Magnum Hunter operates this well and owns a 100% working interest.
  • 91/12-15-001-10W2 - MHR drilled and cased this well to a measured depth of 11,716 feet (horizontal lateral length of 3,947 feet), fraced with 27 stages and placed on production October 26, 2012. The 24 hour flowing initial production rate was 707 Boepd. Magnum Hunter operates this well and owns an 85% working interest.
  • 92/16-11-001-10W2 - MHR drilled and cased this well to a measured depth of 12,152 feet (horizontal lateral length of 4,347 feet), fraced with 26 stages and placed on production November 23, 2012. The 24 hour flowing initial production rate was 512 Boepd. Magnum Hunter operates this well and owns a 70% working interest.
  • 91/16-14-001-10W2 - MHR drilled and cased this well to a measured depth of 12,201 feet (horizontal lateral length of 4,511 feet), fraced with 27 stages and placed on production December 16, 2012. The 24 hour flowing initial production rate was 900 Boepd. Magnum Hunter operates this well and owns a 100% working interest.
  • 91/13-15-001-10W2 - MHR drilled and cased this well to a measured depth of 11,781 feet (horizontal lateral length of 4,087 feet), fraced with 26 stages and placed on production December 25, 2012. The 24 hour flowing initial production rate was 207 Boepd. Magnum Hunter operates this well and owns an 85% working interest.

North Dakota (Non-Operated)

Fourth quarter activities in Divide and Burke Counties, North Dakota included drilling 24 gross (5.2 net) wells and completing and bringing to production 24 gross (5.0 net) wells. At quarter end, there were 15 gross (2.9 net) wells drilled awaiting completion operations.

Highlights for North Dakota include:

  • Burton Olson 21-16-162-98 - This well was drilled and cased to a measured depth of 18,217 feet (horizontal lateral length of 9,443 feet), fraced with 36 stages and placed on production December 6, 2012. The 24 hour flowing initial production rate was 1,807 Boepd. Magnum owns a 20.72% working interest.
  • Burton Olson 28-33-162-98 - This well was drilled and cased to a measured depth of 18,842 feet (horizontal lateral length of 10,097 feet), fraced with 36 stages and placed on production December 14, 2012. The 24 hour flowing initial production rate was 1,272 Boepd. Magnum owns a 21.05% working interest.
  • Border Farms 3130-2TFH - This well was drilled and cased this well to a measured depth of 14,111 feet (horizontal lateral length of 5,919 feet), fraced with 40 stages and placed on production November 19, 2012. The 24 hour flowing initial production rate was 975 Boepd. Magnum owns a 28.35% working interest.
  • Border Farms 3130-1H - This well was drilled and cased this well to a measured depth of 14,300 feet (horizontal lateral length of 6,025 feet), fraced with 40 stages and placed on production December 1, 2012. The 24 hour flowing initial production rate was 972 Boepd. Magnum owns a 28.35% working interest.

The ONEOK gas conservation and gathering project under construction is currently estimated to begin initial operations in March 2013. ONEOK is currently building out the compressor station, the 12" High Pressure Discharge line and the northern most East/West gathering pipeline.

Our initial two Middle Bakken Exploration test wells yielded positive results, and five additional laterals are currently being fraced. Significant 2013 drilling capital has been allocated to further delineate this resource emerging over the Ambrose Block in Divide County.

Operational initiatives at Williston Hunter's Tableland Consolidated Battery Facility have increased overall fluid handling capabilities, and ongoing field electrification will further reduce downtime and operating costs in the future.

Mr. Glenn Dawson, President of Williston Hunter, commented, "In the fourth quarter of 2012, Williston Hunter concluded the Central Divide Acquisition of approximately 20,000 net mineral acres and evolved as an Operator in Divide County, North Dakota. The first well targeting Three Forks Sanish has now spudded and we plan to utilize one mile lateral technology. Drilling operations for Three Forks Sanish continued in harvest mode on low risk high return eco-pad infill wells with EUR potential up to 500 MBOE per well. Fourth quarter drilling realized some of the highest IP 24 hour flowback results experienced to-date in our region."

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser. More

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