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To: Dale Baker who wrote (106307)	1/17/2012 10:30:22 AM
From: CusterInvestor	Respond to of 118717

from an i-village post: Re: MHR up Alot of the increase in reserves was due to the three acquisitions they made last year. However, reserves went up 8 MBOE from the end of 3rd quarter at 37 MBOE. That's all the result of new drilling and pretty impressive. One caveat is that about 50% of their production is gas and only about 40% hedged in 2012 (At least I think, they may have put on more hedges recently.) The percent liquids is expected to be increasing in the next year. In their recent presentation at a conference they said they had a Utica deal that should be announced by the end of the month, would be reconsidering their capex spend for next year in light of low gas prices, and would probably buy back their preferred MHR.PRC in the next 90 days. I'm not sure where they get the money to buy it back. Also in recent news releases all their new wells are coming in at the high end of their projections (partly based on longer laterals and more frac stages).

To: Dale Baker who wrote (106307)	1/17/2012 1:17:38 PM
From: Spekulatius	Respond to of 118717

you are correct,the pipeline operation could be worth 200M$. However, other O&G companies have pipeline and midstream assets too, some have rigs and other assets. I can buy gassy O&G companies with decent financial metrics for 1.5$/mcfe proved reserves in the ground, not counting other assets. ECA is an example but there are many others. I sort of question that 1.5$/mcfe in the ground is a good price, when spot is <3$mcfe. In a relative sense MHR is not cheap, it is still valued partly on growth,imo.