Magnum Hunter Resources Corporation Announces Acquisition of Sharon Resources, Inc.
10 Settembre 2009 - 7:26PM
Marketwired
Magnum Hunter Resources Corporation (NYSE Amex: MHR) (the
"Company") announced today the execution of a definitive agreement
to acquire 100% of the capital stock of Sharon Resources, Inc., a
wholly owned subsidiary of Calgary based Sharon Energy Ltd. (TSX-V:
SHY).
The total consideration of $2.35 Million (USD) under the
agreement will be paid in 2,294,474 shares of restricted common
stock of Magnum Hunter Resources Corporation. This represents
approximately 5.6% of the Company's 40.8 Million fully-diluted
common shares outstanding as of August 1, 2009. No debt or any
other liabilities will be assumed by Magnum Hunter and no other
consideration beyond issuance of the new Magnum Hunter restricted
common shares was paid for the acquisition.
Closing is anticipated to occur on or about September 30, 2009
and is subject to certain customary conditions including, but not
limited to, the receipt of all necessary regulatory approvals.
About Sharon Resources, Inc.
Houston based Sharon Resources, Inc. ("Sharon Resources") is an
independent oil and gas exploration company engaged in the
exploitation of emerging trends and the development of proven
reserves. Sharon Resources has an established track record for
identifying, acquiring, drilling and developing oil and gas
reserves, particularly in areas which utilize advanced drilling and
completion techniques. Sharon Resources' primary focus has been on
exploration and development projects along the Texas Gulf Coast
(onshore) offering repeatable, lower risk development
opportunities. Specific project areas include mineral acreage
positions in the Eagle Ford Shale, Austin Chalk, and Northwest
Speaks areas where a substantial inventory of lower risk projects
with repeatable success profiles have been assembled.
Notably, Sharon Resources has acquired approximately 6,400 acres
in the Eagle Ford fractured shale resource play. This acreage
position is directly on trend with recent developmental success by
other operators in the area. Under the direction of Magnum Hunter's
senior management, Sharon Resources will continue to pursue the
acquisition of additional acreage in this new resource play.
Based on the analysis completed by Magnum Hunter as of June 30,
2009, Sharon Resources had estimated total proved reserves of
approximately 2.9 Bcfe's (30% proved developed producing and 85%
natural gas) with daily net production of approximately 288 Mcfe's
per day (95% natural gas). The PV-10% value as of June 30, 2009 was
$4.2 Million at the SEC pricing ($69.89 per Bbl pricing for crude
oil and $3.835 per MMBtu pricing for natural gas). Sharon Resources
operates over 65% of its proved reserve base.
H.C. "Kip" Ferguson III, President of Sharon Resources, Inc.,
stated, "Our team of three highly seasoned exploration and
evaluation oriented professionals are very excited to be joining
forces with the new management team at Magnum Hunter Resources.
With the contribution of our existing inventory and ready to drill
portfolio of lower risk and repeatable projects, we believe our
Company is positioned with one of the better situated acreage
holdings in the emerging Eagle Ford Shale resource play. We are
truly excited about the business combination of our two
organizations whereby we can contribute an immediate impact to
Magnum Hunter's business model."
Management Comments
Mr. Gary C. Evans, Chairman of Magnum Hunter Resources,
commented, "The announcement today of our acquisition of 100% of
Sharon Resources from its Canadian parent in an all stock
transaction follows in line with the strategy we previously laid
out in late May when I joined the Company as its new Chairman of
the Board. Kip Ferguson and his team of successful exploration and
evaluation professionals brings to Magnum Hunter three seasoned
industry professionals with specific expertise that previously did
not exist in our organization. Sharon's existing inventory of
attractive drilling opportunities, expertise in advanced drilling
and completion technologies (particularly in resource plays), and
expansion of our operational and technical staff will be
immediately accretive to our existing organization. We have been
most impressed by the high quality of Sharon's existing projects
even in this low commodity price environment. In particular, their
6,400 acre position in the Eagle Ford Shale resource play is
something we are very excited about and intend to pursue
immediately."
About Magnum Hunter Resources
Magnum Hunter Resources Corporation and subsidiaries are a
Houston, Texas based independent exploration and production company
engaged in the acquisition of exploratory leases and producing
properties, secondary enhanced oil recovery projects, exploratory
drilling, and production of oil and natural gas in the United
States.
For more information, please view our website at
www.magnumhunterresources.com
Forward-looking Statements
The statements contained in this press release that are not
historical are "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), including statements,
without limitation, regarding the Company's expectations, beliefs,
intentions or strategies regarding the future. Such forward-looking
statements may relate to, among other things: (1) the Company's
proposed exploration and drilling operations on its various
properties, (2) the expected production and revenue from its
various properties, (3) the Company's proposed redirection as an
operator of certain properties and (4) estimates regarding the
reserve potential of its various properties. These statements are
qualified by important factors that could cause the Company's
actual results to differ materially from those reflected by the
forward-looking statements. Such factors include but are not
limited to: (1) the Company's ability to finance the continued
exploration, drilling and operation of its various properties, (2)
positive confirmation of the reserves, production and operating
expenses associated with its various properties; and (3) the
general risks associated with oil and gas exploration, development
and operation, including those risks and factors described from
time to time in the Company's reports and registration statements
filed with the Securities and Exchange Commission, including but
not limited to the Company's Annual Report on Form 10-K and Form
10-K/A for the year ended December 31, 2008 filed with the
Securities and Exchange Commission on March 31, 2009 and April 29,
2009, respectively, and our subsequently filed reports. The Company
cautions readers not to place undue reliance on any forward-looking
statements. The Company does not undertake, and specifically
disclaims any obligation, to update or revise such statements to
reflect new circumstances or unanticipated events as they
occur.
Contact: M. Bradley Davis Senior Vice President of Capital
Markets bdavis@magnumhunterresources.com (832) 203-4545
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