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Magnum Hunter Resources' CEO Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: MHR

Our 2011 Annual report also includes a glossary of certain industry terms that may be used in today’s conference call. The full forward-looking statements disclaimer as well as reconciliation to certain non-GAAP financial information presented are included in the company’s second quarter 2012 financial results press release dated August 9, 2012, which is posted on the company’s website under press releases. This disclaimer is in effect for the full duration of this conference call.

I will now turn the meeting over to Mr. Gary C. Evans, our Chairman and CEO.

Gary Evans

Thank you for dialing in today and hearing about our second quarter as well as our six months ended June 30 financial results we reported this morning before the market opened. The company reported a record revenues of $60.3 million for the three months ended June 30. We also reported record EBITDA of $41.1 million pro forma for the second quarter, which included our acquisition of the Baytex properties located in Williston Basin that was completed in May.

Average production rate for the second quarter increased to 162% and our liquidity continue to increase with combination of our high-yield offering, our perpetual preferred, our new borrowing-based increase and we presently have about $255 million of liquidity including what we can sell under our perpetual preferred Series D.

So, all in all, if you look at the quarter, we continued our game plan of exploiting predominantly our existing assets located in Williston Basin with active rigs running in North Dakota, five rigs today; two rigs running in Saskatchewan. And then we also continued our development efforts in the Eagle Ford of South Texas, predominantly Gonzales and Lavaca counties where we’ve had substantial success. We have two rigs running down there today.

So we made a decision, early part of the year, to refocus a significant piece of our capital budget to oil. Magnum Hunter is in a unique position of having a number of shale plays where we can redirect capital dollars and as operator, be in control of that and therefore change our production mix pretty rapidly.

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