Current MHR Stock Info

Magnum Hunter Resources (ticker: MHR) is an oil and natural gas exploration and production company active in three shale resource plays in North America: the Marcellus Shale, Utica Shale and the Williston Basin/Bakken Shale. The company’s growth platform is supported with approximately 350,000 net acres spread across its core operating regions.  The company owns 47,000 net acres in Ohio.

MHR announced July 2, 2013, that the company spud its first well on the new Stalder pad site located in eastern Monroe County, Ohio. This is MHR’s second pad site in Ohio. The plan for pad development is to drill both Utica and Marcellus wells, fracture stimulate them and test the wells during Q4’13.  The pad has been designed to handle the drilling of up to 18 wells in the next 18 months (10 Marcellus and eight Utica).   070213MHRpic

Gary Evans, Chairman and Chief Executive Officer of Magnum Hunter Resources, said in the company’s press release: “The eastern portion of Monroe County is an exciting region for us, especially due to our significant acreage position and the ability to exploit so many wells on just one drilling pad site targeting both the Marcellus and Utica formations.”

Upcoming Catalysts

This well marks MHR’s second well pad in Ohio. Back in April, MHR spud its first well on the Farley pad targeting the Utica Shale. MHR plans are to complete the Utica well from the Farley pad sometime in July and test the well in September.

OAG360 notes MHR’s strategy with this new Stalder pad has the opportunity to create significant growth opportunities for Magnum Hunter. No one else is currently doing what MHR plans to do. The company recently purchased a new Schramm T500XD robotic drilling rig to handle the state-of-the-art drilling techniques needed to execute the strategy.  Over the next year and half, MHR plans to drill 16 to 18 wells from the Stalder pad. These wells will target both the wet gas portion of the Marcellus and what is currently understood as the dry portion of the Utica.

The combined production from two zones and one pad could be a game-changer.

070213MHRpic1Research Commentary

Oil & Gas 360® compiled a few paragraphs from research analysts who wrote on QEP Resources following the announcement. OAG360 suggests that you contact the analyst and/or salesperson to receive a complete copy of the report. Please read the important disclosures at the end of this note.

*Baird Equity Research (7.2.13)

MHR spud first well on Stalder Pad in Monroe County, Ohio. MHR announced this morning that it has spud its first Marcellus well on the Stalder Pad (50% WI) in Monroe County, Ohio. This is MHR’s second pad in southern Ohio (initial results from Farley pad expected in August). The pad is designed for 18 gross wells (10 Marcellus, 8 Utica) and will be drilled using the company’s recently-purchased walking rig. After drilling this Marcellus well, MHR will drill a Utica well in an attempt to further delineate the southern portion of its acreage, and then test both wells during 4Q13. Eureka Hunter is currently laying pipeline to serve the pad, and is expected to reach it during October 2013.

*Wunderlich Securities (7.2.13)

About to Know a lot More About the Southern Utica-Point Pleasant Play in Ohio

Utica-Point Pleasant Play in Ohio: Pushing South. By now, the desirable Counties in Ohio are well known: Noble, Monroe, Guernsey, Belmont, Jefferson, and Harrison. We believe the next catalysts for this play will come from southern Ohio. PDC Energy (PDCE-$53.07, Buy) and Magnum Hunter Resources (MHR, $3.78, Buy) will both have test results from Washington County towards yearend. In addition, Antero Resources, a private producer active in the Utica and Marcellus, is about to come public. Eclipse Resources, also a private company, made a sizable acquisition last week and plans to ramp up to five rigs.

Magnum Hunter Resources – Sizable foot print in the Marcellus and the Utica. Magnum Hunter Resources is about to file its 10-Q for first quarter of 2013 next week, and plans to report second quarter on time, before Mid-August. We can focus on MHR’s drilling activities in the Utica and the Marcellus once again. MHR is a first mover in the liquid rich Marcellus Play in West Virginia with 81,000 net acres plus 80,000 net acres prospective for the Utica Play, mostly in Ohio. MHR’s liquid rich Utica acreage is located in Noble County and Washington County in Ohio.

Magnum Hunter Resources – Drilled the Farley Well in Northern Washington County. The Farley well spudded in April, will be completed in July and tested in September after a resting period. The company encountered a high pressure zone while drilling the horizontal leg of the well and did flare gas briefly. In Eastern Monroe County, MHR will use a state-of-the-art robotic drilling rig to drill 16 to 18 wells on the Stalder Pad within the next 18 months: targeting both the dry Utica and the wet Marcellus. This is a new concept and we don’t think the upside is fully quantified and understood. We are excited about the combined EUR potential.

We are about to learn a whole lot more about the Southern Utica – time to buy MHR and PDCE. On March 5, 2013, we published a piece on the Southern Utica, core data suggested that Washington County can be very prospective. We expect three wells to be completed and tested with results likely, starting in September. Antero has drilled ten wells and we could see results later this year. In addition, in eastern Washington County and Monroe County, MHR and Eclipse will test the wet Marcellus-dry Utica Combo Play. This area will not be sleepy for long; we would buy MHR and PDCE now, both with nice footprints in the South.

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