Magnum Hunter Resources Corp. said Monday the Appalachian Basin now accounts for approximately 80% of its total proved reserves, up from 70% at the end of last year as it continues to divest non-core assets to focus on developing nearly 200,000 net Marcellus/Utica acres.
At year-end, Magnum reported proved reserves of 75.9 million boe (see Shale Daily, Jan. 15), but after it adjusted for asset sales in Canada and Texas made earlier this year (see Shale Daily, April 22), the figure dropped to 72.1 million boe. According to the company's new estimates -- that it said primarily resulted from "the execution and continued delineation" of its leasehold in the Marcellus and Utica -- total proved reserves increased by 7.7 million boe to 79.8 million boe at the end of last month.
The new estimate consists of 38% crude oil and natural gas liquids, while 47% is proved developed producing. Magnum also said the value of its reserves increased by roughly 10% to $916.3 million, with an estimated life of 12 years, based on mid-year production.
In April, the company announced an agreement to sell subsidiary Williston Hunter Canada Inc. and its last remaining oil and gas properties in Canada, in addition to a smaller acreage sale in Texas. The company has sold more than $600 million in non-core assets in the last year or so, including a deal with Penn Virginia Corp. for land in Texas' Eagle Ford Shale (see Shale Daily, April 4, 2013).
The Williston Basin in North Dakota accounts for 19% of the company's remaining proved reserves, while legacy assets in Kentucky account for the other 1%. Financial analysts have said they expect Magnum to close on more sales in those areas in the coming months.
Investors have also expressed concern about the company's cash position and indebtedness, with company officials most recently telling analysts during a first quarter conference call that its position in Appalachia should help shore up liquidity (see Shale Daily, May 12).
The company continues to bolt-on acreage in the basin and it is expected to release results from a highly-anticipated Utica well in West Virginia by the end of this summer (see Shale Daily, July 10; May 16). Magnum said Monday that it expects to "significantly increase proved reserves in the Utica Shale" during the remainder of this year.