Magnum Hunter Resources Reports First Quarter 2011 Financial and Operating Results
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Magnum Hunter reported an increase in revenues of 130% compared to the first quarter of 2010. Total revenues were $15.3 million compared to $6.7 million during the first quarter of 2010. This was driven principally by the significant increase in production from the Company's ongoing drilling programs. Operating margins also improved substantially as lease operating expenses per barrel of oil equivalent ("boe") declined from $23.32/boe to $12.67/boe, primarily due to the addition of new production and tighter controls on field operating expenses related to producing properties acquired. Recurring cash general and administrative costs per boe also declined significantly to $15.80/boe as recurring cash G&A in the aggregate was essentially flat compared to 2010. The Company anticipates this trend of improving operating statistics to continue as 2011 progresses.
Mr. Ronald D. Ormand, Executive Vice President and Chief Financial Officer of Magnum Hunter Resources Corporation, commented, "The first quarter of 2011 was another eventful quarter for our Company. Our drilling program continues to deliver excellent increases in production and cash flow at very attractive rates of return and we are benefiting from substantial improvement in our operating margins as the scope of the Company expands. Our continuing success in all three of our liquids-rich unconventional resource plays should also allow the Company to book significant additions to our booked total proved reserves as compared to December 31, 2010, which should also enhance our future borrowing capacity as well. As a result, we have increased our total capital budget for 2011 and are well positioned to exit 2011 with an average daily production rate exceeding 10,000 boepd. In addition, the recently closed acquisitions of NGAS Resources on April 13th and NuLoch Resources on May 3rd, position the Company for further growth with an enterprise value now exceeding $1 billion, coupled with a low debt-to-total capitalization ratio. In summary, our business plan is being executed as was set forth two years ago when Gary Evans and I joined the Company. Magnum Hunter has built a significant asset base in three of the top resource plays in the country and we are now beginning to transition these assets into significantly increased production, cash flows and shareholder value." |
