MHRC on the OTC market Message Board

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Gold/Mining/Energy : MHRC on the OTC market

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To: JakeStraw who wrote (128)	10/16/2014 3:04:15 PM
From: Investor Clouseau	Read Replies (1) of 188

Topeka Capital markets’ Gabriele Sorbara thinks Chesapeake’s deal means Magnum Hunter has 40% upside: We believe Magnum Hunter has superior assets situated in the core Utica and Marcellus; however, this transaction has positive implications at the implied valuation. Based on our calculation, the assets were acquired for $13,015 per flowing Mcfe/d and $8,947 per acre (adjust for acquired production). An average of these transaction metrics on Magnum Hunter’s production and acreage implies upside of 39.2%. We reaffirm our Buy and $10 price target. By early next year, we believe management will have transitioned to a pure-play Appalachia company with an improved balance sheet/capitalization and greater transparency on its Utica potential. Further, with its scale in the core Marcellus/Utica shale, we believe Magnum Hunter makes for an attractive takeout over the next 12 months.

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