NEW YORK (TheStreet) -- Shares of Magnum Hunter Resources (MHR) were gaining 10.3% to $1.93 on heavy trading volume Thursday after the company announced it will divest its 45.53% stake in Eureka Hunter.
Magnum Hunter can raise between $600 million to $700 million in gross proceeds by divesting its 45.53% equity in Eureka Hunter. The company said the transaction will allow it to "restructure its balance sheet and dramatically improve its current liquidity position."
The oil company has to raise about $9.4 million by July 10 to pay back its lenders, according to Columbus Business First. Magnum Hunter Resources already raised $55.6 million of the $65 million is owes its lenders.
About 9.8 million shares of Magnum Hunter Resources were traded by 12:02 p.m. Thursday, above the company's average trading volume of about 4.7 million shares a day.
TheStreet Ratings team rates MAGNUM HUNTER RESOURCES CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate MAGNUM HUNTER RESOURCES CORP (MHR) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."