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Blue Ridge Merges with Eclipse, Renamed to Montage Resources

Yesterday was an eventful day for the former Blue Ridge Mountain Resources (nee Magnum Hunter Resources) and Eclipse Resources. We’ve been telling you since last August that the two companies are merging, with Blue Ridge Mountain essentially buying out Eclipse. The deal is done as of yesterday and there is A LOT of news to share–including a name change for the newly combined entity.
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Blue Ridge Mountain Resources Shareholders Approve Eclipse Merger

Last August Eclipse Resources announced it had sold itself to Blue Ridge Mountain Resources, the renamed remnant of Magnum Hunter Resources (see Eclipse Resources Merging with Former Magnum Hunter). Although Eclipse shareholders have approved the deal, not until today was there official approval by the shareholders of Blue Ridge Mountain Resources.
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Eclipse Resources Stock Hits New 1-Yr Low – $1.17/Share

We typically don’t report on the ups and downs of the stock price for Marcellus/Utica companies, primarily because the per-share price goes up, then it goes, down, then it goes up again…You get the picture. However, today we’re reporting on the share price for Eclipse Resources (as of last Friday) because it hit a new one-year low of $1.17 per share, before closing at $1.28/share. Bumping around the bottom of the barrel. Why pick on Eclipse about their stock price? Because they’re in the middle of getting bought out and merged into Blue Ridge Mountain Resources, the former Magnum Hunter Resources (see Eclipse Resources Merging with Former Magnum Hunter). And because it’s a shame the stock price is that low, given that Eclipse has had a stellar record of drilling long laterals–currently the record-holder for longest onshore laterals in the world! (All drilled in the Ohio Utica Shale.) We hate to see a star performer like Eclipse under-perform financially. It doesn’t seem to balance on the scales of cosmic justice. What now seems obvious, in retrospect, is that Eclipse has been in a financial pickle for some time–hence their sale to Blue Ridge Mountain…
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Eclipse’s Top Brass Not Sticking Around After Blue Ridge Merger

MDN brought you the big news yesterday that Eclipse Resources is merging with Blue Ridge Mountain Resources (see Eclipse Resources Merging with Former Magnum Hunter). We noted that nowhere in the announcement and paperwork we read that Eclipse co-founder and CEO Ben Hulburt would be staying with the newly merged company. We now have confirmation that Hulburt is leaving when the deal closes. We also have confirmation that pretty much all of Eclipse’s top brass is leaving–except for Oleg Tolmachev, who will become the senior vice president and COO of the newly merged company. In addition to Hulburt’s departure, Eclipse executive VP/general counsel Christopher Hulburt is leaving, and executive VP/CFO Matthew DeNezza will also exit stage right. All three are being paid more than $1 million (Ben Hulburt more than $3 million) to leave…
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Eclipse Resources Merging with Former Magnum Hunter

Blue Ridge/Eclipse combined acreage location – click for larger version

Some big news breaking from yesterday: After months of teasing by Eclipse Resources that it’s working on selling itself–it finally has. The buyer is Blue Ridge Mountain Resources, the renamed remnant of Magnum Hunter Resources. Magnum Hunter filed for bankruptcy in December 2015, emerging from bankruptcy in May 2016 minus CEO Gary Evans (see Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone). Looking to shed the image of the past, the company renamed itself as Blue Ridge in January 2017 (see Magnum Hunter Changes Its Name, Leaves the Bankrupt Past Behind). Blue Ridge, headquartered in Texas, has 99,000 acres of leases (mostly undeveloped) in the Marcellus and Utica Shale plays. Eclipse, on the other hand, is headquartered in State College, PA and has 128,000 acres–focused 100% on the Marcellus/Utica. Eclipse is renown for having drilled the world’s longest onshore lateral wells. Why do we say Blue Ridge is buying Eclipse when the announcement talks about a merger and on paper Blue Ridge will become a subsidiary of Eclipse? Because Eclipse is doing a 15 to 1 reverse stock split (combining shares to boost the per share value) and Eclipse CEO Ben Hulburt is nowhere to be found in the management structure of the newly combined company. Blue Ridge President and CEO John Reinhart will become President and CEO of the newly combined company. Eclipse’s top engineer Oleg Tolmachev–the guy who figures out how to drill those super-long laterals–will become Executive Vice President and COO of the combined company. No word yet on which name (or new name) they will use for the newly merged company…
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Blue Ridge Mountain Res. Jazzed by Utica Wells in Washington, OH

Blue Ridge Mountain Resources is jazzed about a pair of Utica wells originally drilled in 2014, but completed this past December, located in Washington County, OH. Blue Ridge is the renamed remnant of Magnum Hunter Resources. Magnum Hunter filed for bankruptcy in December 2015, emerging from bankruptcy in May 2016 minus CEO Gary Evans (see Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone). Looking to shed the image of the past, the company renamed itself as Blue Ridge in January 2017 (see Magnum Hunter Changes Its Name, Leaves the Bankrupt Past Behind). Blue Ridge is 100% focused on the Marcellus and Utica Shale plays. The company’s current production is 100 million cubic feet equivalent per day (MMcfe/d). They own 119,000 acres of leases with huge potential–96% of their acreage is not yet developed (i.e. undrilled). In 2014 Magnum Hunter drilled two Utica wells in Washington County, OH but never completed them. In December Blue Ridge completed those wells. The early production results from the two wells is very encouraging and has allowed Blue Ridge to “de-risk” 6,700 surrounding acres that will support another 40-50 new wells. Translation: Washington County landowners signed with Blue Ridge can expect drilling activity soon…
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Blue Ridge Mountain Res. Forms JV to Raise $92M for Drilling in OH

In December 2015 Marcellus/Utica driller Magnum Hunter Resources filed for bankruptcy (see Sad Day: Magnum Hunter Files for Chapter 11 Bankruptcy). Five short months later, in May 2016, Magnum Hunter emerged from bankruptcy–without CEO Gary Evans (see Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone). Apparently the new owners of the company (the former debt holders converted into equity holders) didn’t want Evans running the company. So Evans departed to start a new drilling company not focused on the M-U. In January 2017, just one year ago, Magnum Hunter changed its name to Blue Ridge Mountain Resources (see Magnum Hunter Changes Its Name, Leaves the Bankrupt Past Behind). Since that time the only news we’ve heard about the former Magnum Hunter is that they sold their interest in Eureka Midstream (see Eureka Midstream Confirms MDN Article on New Ownership). That is, until now. Earlier this week, Blue Ridge announced it sold a “non-operating interest” in 21,000 undeveloped Marcellus/Utica acres to an undisclosed investor for $56 million, AND got the undisclosed investor to pony up another $36 million (total deal of $92 million) which Blue Ridge will use to fund an ongoing 2-rig drilling program in southeastern Ohio…
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Eureka Midstream Confirms MDN Article on New Ownership

In late September MDN connected the dots and was the first to tell you that Blue Ridge Mountain Resources, the renamed Magnum Hunter Resources, had sold its ownership stake in Eureka Midstream (formerly Eureka Resources) to South Korean conglomerate SK Group (see Former Magnum Hunter Sells Remaining Stake in Eureka Midstream). Eureka Midstream was once a subsidiary of Magnum Hunter Resources. Magnum Hunter spun Eureka out into a standalone company prior to Magnum Hunter going through bankruptcy. Not long after Magnum Hunter exited bankruptcy, they changed their name to Blue Ridge Mountain Resources (see Magnum Hunter Changes Its Name, Leaves the Bankrupt Past Behind). The newly named Blue Ridge still owned a slice of Eureka–until a few weeks ago. In a press release issued on Tuesday, Eureka Midstream officially acknowledged that the company’s ownership has changed. Morgan Stanley is still a major shareholder in the company, but now SK Group is in the mix too. Whether Blue Ridge sold its shares directly to SK Group, or whether Blue Ridge sold to Morgan Stanley which then turned around and sold to SK, the result is the same. Blue Ridge is gone, SK is here, and Eureka now answers to a different board of directors…
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Former Magnum Hunter Sells Remaining Stake in Eureka Midstream

We love to connect the dots and reveal information (news) that others miss. Sometimes we get it wrong–but more often we get it right. Here’s another connect-the-dots story. Yesterday we brought you the news that a huge South Korean conglomerate, SK Group, had purchased itself a $100 million slice of ownership in Marcellus/Utica midstream company Eureka Midstream (see South Korean SK Group Buys a Piece of Eureka Midstream for $100M). Eureka Midstream was once a subsidiary of Magnum Hunter Resources. Magnum Hunter spun Eureka out into a standalone company prior to Magnum Hunter going through bankruptcy. Not long after Magnum Hunter exited bankruptcy, they changed their name to Blue Ridge Mountain Resources (see Magnum Hunter Changes Its Name, Leaves the Bankrupt Past Behind). The newly named company still owned a slice of Eureka, but Eureka was/is its own company, not controlled by Blue Ridge Mountain Resources. How big a slice does Blue Ridge own? We don’t know, but we’re guessing around $100 million worth, because yesterday Blue Ridge Mountain Resources coincidentally issued a press release to say it had sold the remaining shares of stock it owned in Eureka to “an undisclosed buyer.” Well isn’t that interesting. The day before SK Group bought a large slice of Eureka–for $100 million. Want to bet the “undisclosed buyer” is SK Group?…
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M-U Pipeline Co. Eureka Midstream Expands Line of Credit to $400M

Eureka Midstream, which was once called Eureka Hunter (a subsidiary of Magnum Hunter Resources) has popped back up on the radar screen. Eureka, which operates exclusively in the Marcellus/Utica with ~200 miles of local gathering pipelines, announced yesterday it has expanded its line of credit from $225 million to $400 million, with an “accordion” option to further expand it to $500 million. Last time we wrote about Eureka (in December 2015), parent Magnum Hunter was looking to sell it off (see Magnum Hunter De-Listed from NYSE; Still Shopping Eureka Hunter). A lot has happened since that time. Magnum Hunter filed for and later emerged from bankruptcy, minus its colorful CEO Gary Evans (see Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone). During the bankruptcy process, Eureka was not sold but instead spun off into its own standalone company. Magnum Hunter, later renaming itself to Blue Ridge Mountain Resources, has remained a major customer for Eureka. Eureka says it will use the $400-$500M line of credit for “capital expenditures, financing permitted acquisitions, funding working capital, and general corporate purposes.” Here’s an update on Eureka, which has successfully charted a course away from former parent Magnum Hunter…
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Magnum Hunter Changes Its Name, Leaves the Bankrupt Past Behind

It appears to us as if Magnum Hunter Resources, which was founded by former CEO Gary Evans, is shedding the last vestiges of Evans by changing its name. “Wildcatter” Evans grew the company to be worth $1.4 billion in 2013 by borrowing heavily to drill in the Marcellus and Utica shales in West Virginia and Ohio, while at the same time financing the Eureka Hunter Pipeline that gathered and processed its production. Magnum Hunter has/had a number of subsidiary companies, like Eureka Hunter (pipelines), Alpha Hunter (drilling), and GreenHunter (wastewater). But then the price of gas (and oil) crashed, and although Magnum Hunter treaded financial water for a time, they eventually succumbed to bankruptcy in December 2015 (see Sad Day: Magnum Hunter Files for Chapter 11 Bankruptcy). Five short months later, in May 2016, Magnum Hunter emerged from bankruptcy–without Evans (see Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone). Apparently the new owners of the company (the former debt holders converted into equity holders) didn’t want Evans running the company. So Evans departed and a short time later started a new drilling company not focused on the Marcellus/Utica (see Gary Evans, Ex-CEO of Magnum Hunter, Starts New O&G Company). Must be Evans likes the “Hunter” name, because he named his new company Energy Hunter Resources. In what appears to be a bid to shed its former image and association with Evans, Magnum Hunter Resources has just changed its name–to Blue Ridge Mountain Resources…
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Magnum Hunter Dumps Shallow Well Contract Drilling

Magnum Hunter Resources Corporation (MHR), a driller 100% focused on the Marcellus/Utica emerged from bankruptcy last May, less than five months after filing (see Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone). In September, the MHR board hired John K. Reinhart as the new CEO (see Magnum Hunter Finds New CEO to Replace Forced-Out Gary Evans). In November, the company announced a new CFO (see Magnum Hunter Rebuilds Executive Team, Gets New CFO). Reinhart continues to build his team and tweak the company’s portfolio. Once upon a time Magnum Hunter had a number of subsidiaries: GreenHunter Resources (water and wastewater), Eureka Hunter (pipelines), and Alpha Hunter Drilling. GreenHunter is now gone, sold and merged into Fountain Quail Disposal (see GreenHunter Out of Bankruptcy, Merges with Fountain Quail Disposal). However, MHR retained both Eureka Hunter and Alpha Hunter. Earlier this week MHR announced they have sold some of Alpha Hunter, the part that does shallow well (conventional) drilling. The buyer and the sale price were not disclosed…
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Magnum Hunter Exec Team Continues to Change/Rebuild

mhrMagnum Hunter Resources Corporation (MHR), a driller 100% focused on the Marcellus/Utica emerged from bankruptcy in May, less than five months after filing (see Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone). In September the MHR board hired John K. Reinhart as the new CEO (see Magnum Hunter Finds New CEO to Replace Forced-Out Gary Evans). Last week the company announced a new CFO (see Magnum Hunter Rebuilds Executive Team, Gets New CFO). Reinhart continues to build his team. Yesterday MHR announced the hiring of a new VP for resource development, and a new manager of marketing and midstream…
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Magnum Hunter Rebuilds Executive Team, Gets New CFO

mhrMagnum Hunter Resources Corporation (MHR), a driller 100% focused on the Marcellus/Utica emerged from bankruptcy in May, less than five months after filing (see Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone). As we observed at the time, we were surprised to read that MHR’s flamboyant CEO, Gary Evans, was gone from the company. In his place MHR named two of Evans’ lieutenants to serve as co-CEOs while the new board of directors looked for a permanent replacement for Evans. The search ended with the hiring of John K. Reinhart in September (see Magnum Hunter Finds New CEO to Replace Forced-Out Gary Evans). Reinhart and the board have continued to rebuild the company. Their latest addition will come next Monday when Michael R. Koy will join the company as Executive Vice President and Chief Financial Officer. Koy was most recently CEO of Denali Energy…
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Magnum Hunter Finds New CEO to Replace Forced-Out Gary Evans

John K. Reinhart
John K. Reinhart

Magnum Hunter Resources Corporation (MHR), a driller 100% focused on the Marcellus/Utica emerged from bankruptcy in May, less than five months after filing (see Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone). As we observed at the time, we were surprised to read that MHR’s flamboyant CEO, Gary Evans, was gone from the company. In his place MHR named two of Evans’ lieutenants to serve as co-CEOs while the new board of directors looked for a permanent replacement for Evans. The search is over. MHR announced yesterday that John K. Reinhart has been named president and CEO of MHR. Reinhart has a good pedigree with 22 years of experience in the industry–most of it in the Marcellus/Utica region. Most recently Reinhart ran Ascent Resources–the company founded as American Energy Appalachia Holdings by Aubrey McClendon, later renamed to Ascent when it broke away from McClendon (see Big McClendon News: Sells 35K Utica Acres, Creates New Company). Reinhart has also worked for Chesapeake Energy and Schlumberger. Here’s the poop on MHR’s new leader…
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