HOUSTON, TX -- (Marketwired) -- 04/24/13 -- Magnum Hunter Resources Corporation (NYSE: MHR) (NYSE MKT: MHR.PRC) (NYSE MKT: MHR.PRD) (NYSE MKT: MHR.PRE) (the "Company") announced today that the Company has closed on the sale of all its ownership interests in the Company's Eagle Ford Shale properties located in Gonzales and Lavaca Counties of South Texas to a wholly-owned subsidiary of Penn Virginia Corporation (NYSE: PVA), for a total purchase price of $401 million. The total consideration was comprised of (i) $361 million in cash and (ii) 10,000,000 shares of common stock of Penn Virginia Corporation (valued at $4.00 per share), before taking into account customary purchase price adjustments. The effective date of the transaction was January 1, 2013. The Company has retained approximately 7,000 net mineral acres located in Fayette, Lee, and Atascosa Counties in South Texas.
The Company intends to use the net proceeds from the sale to completely pay-off all outstanding borrowings under its Senior Revolving Credit Facility and for general corporate purposes. As a result of the sale, the Company's borrowing base under its Senior Revolving Credit Facility has now been reduced from $350 million to $265 million, a decrease of approximately 24%. With this closing today, the Company will have $375 million of cash liquidity available. As previously disclosed, the Company intends to allocate its $300 million upstream capital expenditure budget for calendar 2013 evenly between its Williston and Appalachian Basin Divisions, a large portion of which will be funded from existing cash flow.
The closing of the sale of the Eagle Ford Shale properties represents a further step by the Company to take a holistic view of its asset base and identify assets, including non-core assets, which could be monetized and reallocated to higher growth properties. In recent months, the Company has continued to evaluate its asset base and believes that a focus on core assets is essential for its future plan. Today's announcement is seen as the first step in ensuring that the Company's asset mix continues to provide its shareholders with the best possibilities for value creation.
Magnum Hunter Management Comments
Mr. Gary C. Evans, Chairman of the Board and Chief Executive Officer of Magnum Hunter, commented, "We are very pleased with this first step in our monetization plan that we were successful in closing ahead of schedule today. We are working to ensure that all of our assets are being utilized in the best possible way to enhance shareholder value. Magnum Hunter has an impressive portfolio of remaining assets and a strong management and technical team in place to make informed decisions regarding proper capital allocation for future growth."
About Magnum Hunter Resources Corporation
Magnum Hunter Resources Corporation and subsidiaries are a Houston, Texas based independent exploration and production company engaged in the acquisition, development and production of crude oil, natural gas and natural gas liquids, primarily in the states of West Virginia, Kentucky, Ohio, Texas and North Dakota and Saskatchewan, Canada. The Company is presently active in four of the most prolific unconventional shale resource plays in North America, namely the Marcellus Shale, Utica Shale, Pearsall Shale and Williston Basin/Bakken Shale.
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