Thursday, January 27, 2011

Eagle Ford Pipeline Projects In High Gear

Thursday, January 20, 2011

Magnum Hunter Parlays Eagle Ford Acreage To Great Fortune

The forerunner of Magnum Hunter was Petro Resources, a micro cap exploration and production company with 36.7 million shares trading at $.23 per share. Since changing it's name to Mangun Hunter on July 14, 2009 the company has been on a roll. In less than a year and half, the company has grown from a $8.4 million company to yesterday acquiring Nuloch Resources for $327 million for less than 1/3 of their stock. That would roughly make Magnum Hunter a $1 billion company today.  How did Magnum Hunter do this? I am pretty sure that obtaining leaseholds in Fayette and Gonzales Counties in the Eagle Ford for less than fair market price had a lot to do with it. It's not just Magnum Hunter either, it's all the operators using their cheaply acquired Eagle Ford acreage as a piggy bank to prop up their dry gas operations and finance their future exploration and production budgets. The Eagle Ford holds a great treasure capable of this. Those landowners who lease for chump change are giving away a once in a lifetime opportunity and selling something of great value for mere peanuts. $30,000 per acre and 30% royalty are too cheap for this great crude oil treasure. Demand fair value for your land!

added on 1/21/2011
Wall Street Journal
"Magnum Hunter Resources Corporation (NYSE: MHR) (NYSE Amex: MHR-PrC) announced today a 116% increase in the quantity of the Company's estimated total proved reserves at year-end 2010 as compared to year-end 2009. The present value of estimated future cash flows, before income taxes, of the Company's estimated total proved reserves as of December 31, 2010, discounted at 10% ("PV-10"), also increased 171% as compared to year-end 2009."

DUE TO EAGLE FORD PRODUCTION PROVED RESERVES increased by 7.2 million barrels of oil equivalent (Boe) to 13.4 million Boe \at December 31, 2009. The Company's OIL reserve life IS approximately 23 years as of December 31, 2010

The 171% increase is based on accounting rules valuing oil at $79.43 per barrel, and as we know crude oil has trade above $90 per barrel for over a month.