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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (188334)	1/25/2015 8:08:52 PM
From: kollmhn	Read Replies (1) \| Respond to of 206325

Sam- Read the January presentation materials. PAGE 50: MHR Net Asset Value* Total Proved Reserves PV-10 (6/30/2014) (1)916,253 916,253 Undeveloped FOOTNOTES: * See Appendix for information regarding NAV, PV-10 and Standardized Measure (1) Includes the proved reserves associated with the divestiture of the non-core assets in Divide County, North Dakota for $23.0 million (2) Approximate amount of undeveloped acreage as of June 30, 2014 (3) Based on MHR’s estimated total market valuation of Eureka Hunter Pipeline of between $1.0 billion and $1.25 and MHR’s approximate 58% equity ownership of Eureka Hunter Pipeline (4) MHR’s estimated FMV of Alpha Hunter Drilling (5) As of July 31, 2014, there was ~$265.5 million of debt outstanding under our senior revolving credit facility and ~$42.1 million of cash on hand (6) As of August 7, 2014 there were ~199.4 million shares outstanding . PAGE 53: PV-10 PV-10 is the present value of the estimated future cash flows from estimated total proved reserves after deducting estimated production and ad valorem taxes, future capital costs and operating expenses, but before deducting any estimates of future income taxes. The estimated future cash flows are discounted at an annual rate of 10% to determine their "present value." We believe PV-10 to be an important measure for evaluating the relative significance of our oil and gas properties and that the presentation of the non-GAAP financial measure of PV-10 provides useful information to investors because it is widely used by professional analysts and investors in evaluating oil and gas companies. Because there are many unique factors that can impact an individual company when estimating the amount of future income taxes to be paid, we believe the use of a pre-tax measure is valuable for evaluating the Company. We believe that PV-10 is a financial measure routinely used and calculated similarly by other companies in the oil and gas industry. However, PV-10 should not be considered as an alternative to the standardized measure as computed under GAAP. The standardized measure of discounted future net cash flows relating to Magnum Hunter's total proved oil and natural gas reserves is as follows: Unaudited30-Jun-14 Future cash inflows 3,629,151$ Future production costs(1,456,377) Future development costs(369,976) Future income tax expense(95,808) Future net cash flows1,706,990 10% annual discount for estimatedtiming of cash flows(838,595) Standardized measure of discounted futurenet cash flows related to proved reserves868,395$ Reconciliation of Non-GAAP MeasurePV-10916,253$ Less: Income taxesUndiscounted future income taxes(95,808) 10% discount factor47,950 Future discounted income taxes(47,858) Standardized