Magnum Hunter Resources Corp. continues to await what could be more than $1 billion in liquidity events so that it can resume its suspended drilling program in the Appalachian Basin.

The cash-strapped company said during a second quarter earnings call that it could announce a joint venture (JV) for a portion of its 125,000 net acres in Ohio as early as this week. CEO Gary Evans said the potential JV could net it up to $450 million, mostly for drilling carry, that would help fund 50 Utica Shale wells to prove acreage in the state (see Shale Daily, May 11). A sale of the company’s midstream subsidiary Eureka Hunter Holdings LLC also remains in the works, with Magnum now estimating that it could get less for its stake in the system than previously announced.

“We went through a long process with a number of parties,” Evans said of the ongoing JV negotiations. “We decided to choose one party, predominantly based on economics related to their proposal and those negotiations have been going on since March, and here we are in August. It’s important for you to understand that these have been very active negotiations…we expect news of that in very short order.

“We spent a lot of time looking at which wells we want to drill and how we want to do them, and so the program should be very, very good and will help us prove-up acreage that we have in Ohio.”

Magnum is relying on the joint venture and the Eureka sale to help pay down debt and start drilling again. It suspended all of its operations in the Marcellus and Utica shales earlier this year and has instead relied on wells brought online last year and in various stages of development to grow production (see Shale Daily, March 2). Despite a series of noncore assets sales in Canada, Texas, North Dakota and more recently in West Virginia, the company remains low on cash in its transition to an Appalachian pure-play (see Shale Daily, May 26).

In June, Evans said Magnum would sell its 46% interest in Eureka (see Shale Daily, June 25). Morgan Stanley Infrastructure Inc. owns about the same stake in the system. Evans said at the time that Magnum hoped to net up to $700 million with a sale of its interest. But he said the price range has been tightened to $460-600 million given market conditions. Negotiations with an undisclosed master limited partnership (MLP) that approached Magnum with an interest in Eureka had also fallen through, he said.

“We were originally approached by one MLP and were kind of given a price range. They did a fair amount of work. We gave them an opportunity to get to the number — we weren’t satisfied with the number,” Evans said of the Eureka negotiations. “So, we went out to a broader group. It’s a small group, though, it’s less than seven [companies]. We’ve presented to all these parties. We’ve got three total bids now.”

Eureka is one of Magnum’s paramount assets. Last year, the company had discussed taking it public (see Shale Daily, Nov. 7, 2014). The nearly 200-mile, 20-inch diameter gathering system straddles five counties in West Virginia and Ohio, where peak throughput recently reached 700 MMcf/d.

Magnum produced 126 MMcfe/d in the second quarter, up from 105.3 MMcfe/d in the year-ago period. Volumes dropped from 163.6 MMcfe/d in 1Q2015, however. Second quarter production consisted of 68% natural gas, 17% natural gas liquids and 15% oil.

The company shut-in 59.8 MMcfe/d during the second quarter at two pads to install permanent production facilities. Management said it expects to bring online a series of backlogged wells throughout the remainder of the year.

Average realized natural gas prices for the second quarter continued to fall, going from $5.13/Mcf in the year-ago period and $2.91/Mcf in 1Q2015 to $1.67/Mcf. Those declines pushed second quarter revenue lower to $39.5 million from $129.7 million at the same time last year.

Magnum reported a second quarter net loss of $30.5 million (minus 15 cents/share), compared to a net loss of $80 million (minus 43 cents/share) in the year-ago quarter and a loss of $114.8 million (minus 57 cents/share) in 1Q2015.