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Investor Presentation October 2015 Confidential Subject To Non-disclosure Agreement Subject To Fre 408

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 This NonDisclosure Agreement NDA involves

MAGNUM HUNTER RESOURCES CORP | FRE 408 Executive Summary Magnum Hunter Resources Corporation | Kirkland Ellis LLP | PJT Partners LP | Utica JV

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Title: Investor Presentation October 2015 Confidential Subject to Non-Disclosure Agreement Subject to FRE 408
Date: 11/5/2015
Industry: Oil and Gas Operations     Law Firm: Kirkland Ellis     Sector: Energy

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Exhibit 99.2

 

Investor Presentation October 2015 Confidential Subject to Non-Disclosure Agreement Subject to FRE 408

 


Confidential Subject to Non-Disclosure Agreement Subject to FRE 408 Forward-Looking Statements The statements and information contained in this presentation that are not statements of historical fact, including any estimates and assumptions contained herein, are "forward looking statements" as defined in Section 27A of the Securities Act of 1933, as amended, referred to as the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, referred to as the Exchange Act. These forward-looking statements include, among others, statements, estimates and assumptions relating to our business and growth strategies, our oil and gas reserve estimates, estimates of oil and natural gas resource potential, our ability to successfully and economically explore for and develop oil and gas resources, our exploration and development prospects, future inventories, projects and programs, expectations relating to availability and costs of drilling rigs and field services, anticipated trends in our business or industry, our future results of operations, our liquidity and ability to finance our exploration and development activities and our midstream activities, market conditions in the oil and gas industry and the impact of environmental and other governmental regulation. In addition, with respect to any pending transactions described herein, forward-looking statements include, but are not limited to, statements regarding the expected timing of the completion of proposed transactions; the ability to complete proposed transactions considering various closing conditions; the benefits of any such transactions and their impact on the Company's business; and any statements of assumptions underlying any of the foregoing. In addition, if and when any proposed transaction is consummated, there will be risks and uncertainties related to the Company's ability to successfully integrate the operations and employees of the Company and the acquired business. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," "could," "should," "expect," "intend," "estimate," "anticipate," "believe," "project," "pursue," "plan" or "continue" or the negative thereof or variations thereon or similar terminology. These forward-looking statements are subject to numerous assumptions, risks, and uncertainties. Factors that may cause our actual results, performance, or achievements to be materially different from those anticipated in forward-looking statements include, among others, the following: adverse economic conditions in the United States and globally; difficult and adverse conditions in the domestic and global capital and credit markets; changes in domestic and global demand for oil and natural gas; volatility in the prices we receive for our oil, natural gas and natural gas liquids; the effects of government regulation, permitting and other legal requirements; future developments with respect to the quality of our properties, including, among other things, the existence of reserves in economic quantities; uncertainties about the estimates of our oil and natural gas reserves; our ability to increase our production and therefore our oil and natural gas income through exploration and development; our ability to successfully apply horizontal drilling techniques; the effects of increased federal and state regulation, including regulation of the environmental aspects, of hydraulic fracturing; the number of well locations to be drilled, the cost to drill and the time frame within which they will be drilled; drilling and operating risks; the availability of equipment, such as drilling rigs and transportation pipelines; changes in our drilling plans and related budgets; regulatory, environmental and land management issues, and demand for gas gathering services, relating to our midstream investment; and the adequacy of our capital resources and liquidity including, but not limited to, access to additional borrowing capacity. These factors are in addition to the risks described in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's 2014 annual report on Form 10-K, as amended, filed with the Securities and Exchange Commission, which we refer to as the SEC, and subsequently filed quarterly reports on Form 10-Q. Most of these factors are difficult to anticipate and beyond our control. Because forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such statements. You are cautioned not to place undue reliance on forward-looking statements contained herein, which speak only as of the date of this document. Other unknown or unpredictable factors may cause actual results to differ materially from those projected by the forward-looking statements. Unless otherwise required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We urge readers to review and consider disclosures we make in our reports that discuss factors germane to our business. See in particular our reports on Forms 10-K, 10-Q and 8-K subsequently filed from time to time with the SEC. All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements. The SEC requires oil and natural gas companies, in filings made with the SEC, to disclose proved reserves, which are those quantities of oil and natural gas that by analysis of geoscience and engineering data can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations. Probable reserves are those additional reserves that are less certain to be recovered than proved reserves but which, together with proved reserves, are as likely as not to be recovered. When deterministic methods are used, it is as likely as not that actual remaining quantities recovered will exceed the sum of estimated proved plus probable reserves. When probabilistic methods are used, there should be at least a 50% probability that the actual quantities recovered will equal or exceed the proved plus probable reserves estimates. Probable reserves may be assigned to areas of a reservoir adjacent to proved reserves where data control or interpretations of available data are less certain, even if the interpreted reservoir continuity of structure or productivity does not meet the reasonable certainty criterion. Probable reserves may be assigned to areas that are structurally higher than the proved area if these areas are in communication with the proved reservoir. Probable reserves estimates also include potential incremental quantities associated with a greater percentage recovery of the hydrocarbons in place than assumed for proved reserves. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. When deterministic methods are used, the total quantities ultimately recovered from a project have a low probability of exceeding proved plus probable plus possible reserves. When probabilistic methods are used, there should be at least a 10% probability that the total quantities ultimately recovered will equal or exceed the proved plus probable plus possible reserves estimates. Possible reserves may be assigned to areas of a reservoir adjacent to probable reserves where data control and interpretations of available data are progressively less certain. Frequently, this will be in areas where geoscience and engineering data are unable to define clearly the area and vertical limits of commercial production from the reservoir by a defined project. Possible reserves also include incremental quantities associated with a greater percentage recovery of the hydrocarbons in place than the recovery quantities assumed for probable reserves. Possible reserves may be assigned where geoscience and engineering data identify directly adjacent portions of a reservoir within the same accumulation that may be separated from proved areas by faults with displacement less than formation thickness or other geological discontinuities and that have not been penetrated by a wellbore, and the Company believes that such adjacent portions are in communication with the known (proved) reservoir. Possible reserves may be assigned to areas that are structurally higher or lower than the proved area if these areas are in communication with the proved reservoir. Where direct observation has defined a highest known oil (“HKO”) elevation and the potential exists for an associated gas cap, proved oil reserves should be assigned in the structurally higher portions of the reservoir above the HKO only if the higher contact can be established with reasonable certainty through reliable technology. Portions of the reservoir that do not meet this reasonable certainty criterion may be assigned as probable and possible oil or gas based on reservoir fluid properties and pressure gradient interpretations. The term “contingent resources” is a broader description of potentially recoverable volumes than probable and possible reserves, as defined by SEC regulations. In this presentation disclosure of “contingent resources” represents a high estimate scenario, rather than a middle or low estimate scenario. Estimates of contingent resources are by their nature more speculative than estimates of proved, probable, or possible reserves and accordingly are subject to substantially greater risk of actually being realized by the Company. We believe our estimates of contingent resources and future drill sites are reasonable, but such estimates have not been reviewed by independent engineers. Estimates of contingent resources may change significantly as development provides additional data, and actual quantities that are ultimately recovered may differ substantially from prior estimates. Note Regarding Non-GAAP Measures This presentation includes certain non-GAAP measures, including Adjusted EBITDAX and PV-10, which are described in greater detail in this presentation. Management believes that these non-GAAP measures, which may be defined differently by other companies, better explain the Company's results of operations in a manner that allows for a more complete understanding of the underlying trends in the Company's business, and are also measures that are important to the Company’s lenders. However, these measures should not be viewed as a substitute for those determined in accordance with GAAP. 1

 


Confidential Subject to Non-Disclosure Agreement Subject to FRE 408 Executive Summary Magnum Hunter Resources Corporation (“Magnum Hunter” or the “Company”) has transformed itself into a pure-play, Appalachian-focused E&P with a highly desirable Utica and Marcellus acreage position in the core of the plays • • • Over 200,000 net acres(1) of which over 125,000 are undeveloped in the Utica 801.8 Bcfe with a PV-10 of $743mm(2) Approximately 45% equity ownership interest in the Eureka Hunter pipeline Magnum Hunter holds highly concentrated acreage positions with low breakeven costs, but the current commodity price environment is a drag on financial results and pressuring the Company’s liquidity profile As a result, Magnum Hunter announced that it has retained PJT Partners LP as financial advisor, and Kirkland & Ellis LLP as special legal advisor, to explore strategic alternatives to enhance liquidity and address the stressed capital structure The Company continues to execute on its announced strategy to divest non-core assets to enhance liquidity • Pursuing sale of the equity ownership interest in the Eureka Hunter pipeline ~175-mile gas gathering system serving MHR and approximately 12 third party customers currently flowing more than 700,000 MMBtu/d • Ready to execute a significant Utica JV with a private equity fund with deep energy expertise (1) Excludes acreage in Magnum Hunter Production (“MHP”). (2) Reserves as of 6/30/15 per SEC price deck. 2

 


Confidential Subject to Non-Disclosure Agreement Subject to FRE 408 Track Record of Growth 1000 126,034 800 600 455.4 438.6 400 200 0 2013 (1) Natural Gas 2010 2011 2012 2014 2Q2015 2010 2011 2012 2013 2014 Q2 2015 Oil / Liquids PDP PDNP PUD Note: The numbers referenced above include production from continuing operations (excludes Eagle Ford assets, Bakken properties divested in 2015 and other discontinued operations). (1) Includes, on a pro forma basis, 17,550 Mcfe/d of actual production from discontinued operations, and estimated shut-in production volumes of 12,366 Boe/d. (2) Proved reserves based upon respective year-end reserve reports and 6/30/15 reserve report. 3 Proved Reserves (Bcfe) 101,274 88,986 46,431 29,370 7,655 801.8 502.8 270.0 79.8 Daily Production (MMcfe/d) Proved Reserves (Bcfe)(2)

 


Confidential Subject to Non-Disclosure Agreement Subject to FRE 408 Valuable Asset Base Mid-year estimate reserves of 801.8 Bcfe Proved PV-10 of reserves at June 30, 2015 of $743mm Positioned to substantially grow reserves from a combination of joint venture and offsetting undeveloped drilling activity Strong Reserve Position Dry Utica continues to provide highly economic returns at current commodity prices, with an estimated IRR of above 40% for new wells(1) Wet Marcellus acreage positioned to benefit from improving takeaway capacity in the basin and/or an eventual recovery in NGL pricing Highly Economic Returns at Current Prices Utica and Marcellus expected to ser


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