Daily News: October 7, 2014

BMO Capital Markets, Credit Suisse Arrange Magnum Hunter Facilities

Magnum Hunter Resources announced it initiated a process to obtain two new credit facilities and refinance its existing revolving credit facility. Credit Suisse Securities (USA) LLC and BMO Capital Markets Corp. are acting as joint lead arrangers for the proposed new credit facilities described above.

The new facilities are expected to consist of a $50 million senior secured first lien reserve-based revolving credit facility, maturing four years after the closing date, and a $340 million senior secured second lien term loan, maturing five years after the closing date.

Proceeds from the new term loan are expected to be used to repay all outstanding borrowings under the company’s existing revolving credit facility ($256 million as of September 30, 2014), to pay fees and expenses associated with the transactions, to fund operations in the Marcellus and Utica Shale plays of West Virginia and Ohio, and for general corporate purposes. The company expects that the new revolving credit facility would be available for borrowings thereunder commencing at closing. Closing of the new credit facilities is anticipated to occur this month.

The company expects that the new credit facilities, if consummated, will significantly enhance its current liquidity position and provide it with greater financial flexibility. The company anticipates that the new credit facilities will initially increase its liquidity by approximately $115 million.

The proposed new credit facilities are subject to, among other things, successful syndication, negotiation, execution and delivery of definitive loan documentation and various customary closing conditions. The terms of the new credit facilities could materially differ from those described above, and the terms of the new revolving credit facility could materially differ from those of the company’s existing revolving credit facility. Furthermore, no assurances can be given that the new financings will be consummated. Magnum Hunter would be the borrower under the new credit facilities, and the new credit facilities would not affect, and would be in addition to, the existing revolving credit facility of Eureka Hunter Pipeline, the company’s majority-owned subsidiary which owns and operates the Eureka Hunter Gas Gathering System located in Ohio and West Virginia.

Magnum Hunter Resources and subsidiaries are a Houston-based independent exploration and production company engaged in the acquisition, development and production of crude oil, natural gas and natural gas liquids.