Blue Ridge Mtn Res/Magnum Hunter

That didn’t take long. Gary Evan, former CEO of bankrupt Magnum Hunter Resources lost has job as CEO of the company post-bankruptcy, just last week (see Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone). He’s already started a new drilling company–this one aimed at scooping up leases in the oil-rich Permian Basin and Eagle Ford fields of Texas. Apparently the Marcellus/Utica, once the apple of Gary’s eye, has left a bad taste in his mouth. He’s already raising investment capital–from friends and family–for Energy Hunter Resources, as he’s calling it. Gary does love the “Hunter” name…
Read More “Gary Evans, Ex-CEO of Magnum Hunter, Starts New O&G Company”

UPDATE 5/11/16 – See additional details below from SNL.

Magnum Hunter Resources Corporation (MHR), a driller focused almost entirely on the Marcellus/Utica, announced yesterday the company has emerged from bankruptcy–less than five months after filing (see Sad Day: Magnum Hunter Files for Chapter 11 Bankruptcy). We suppose we should have seen this coming, but we were nonetheless surprised to read that MHR CEO Gary Evans is gone from the company. Currently two of Evans’ lieutenants will serve as co-CEOs while the new board of directors looks for a permanent replacement for Evans. Interestingly (to us), Evans’ name isn’t even mentioned in the press release–as if he never existed. That’s cold. MHR achieved their restructuring by converting what was $1 billion worth of debt into shares of stock, thereby screwing the old shareholders in favor of debtholders (see Magnum Hunter Investors Burned in Bankruptcy Restructuring Plan). Just wave the magic wand and turn debt into equity. Quite a feat. Here’s the announcement from the new bosses (i.e. the new board)…
Read More “Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone”

Reuters has written a wide ranging article on Magnum Hunter Resources (MHR) and the results of bankruptcy. The article implies MHR is nearly out of bankruptcy now (although it looks to us like a hearing in June will likely be the grande finale). The deal that MHR cut with debtors was to turn their debt into equity–note and bond holders are now stockholders. So MHR CEO Gary Evans now has a new board of directors composed of the new owners of the company. The problem is, the investors who used to hold stock in the company before bankruptcy have essentially lost their ownership–with the value of their previously issued stock now worthless. At least that’s our understanding of how this works (we’re open to being corrected on this). The Reuters article does a close-up of Gary Evans and recounts how he assured investors that a major asset sale was in the works that would save the company–shortly before he had the company file for bankruptcy. Some investors are not very happy with Mr. Evans over what they consider a deceptive practice…
Read More “Magnum Hunter Investors Burned in Bankruptcy Restructuring Plan”

The long, slow process of “reorganizing” and emerging from bankruptcy just sped up for Magnum Hunter Resources (MHR). The Marcellus/Utica driller filed for bankruptcy protection in December (see Sad Day: Magnum Hunter Files for Chapter 11 Bankruptcy). Two weeks later the Delaware court, where MHR filed, approved MHR’s initial plan (see Court Approves Magnum Hunter’s “First Day” Bankruptcy Motions). Now, four months later, that same court has given its full approval for the restructuring plan. What is the plan? Essentially MHR will convert outstanding debt held by lenders in a series of “notes” or what we call IOUs, into ownership equity. Noteholders will not be reimbursed the money they invested–instead they will be given shares of stock that they can later cash in to recoup their investments. What about existing common stockholders? MHR doesn’t say, but going by our story yesterday about Seventy Seven Energy’s plans to do the same thing, the value of common stockholders’ shares become essentially worthless (see Seventy Seven Energy Filing for Bankruptcy, Converting Debt into Stock). Here’s the MHR announcement about the court approving their plan…
Read More “Dela. Court Approves Magnum Hunter Bankruptcy Restructuring Plan”

Two weeks ago MDN brought you the sad news that Marcellus/Utica driller Magnum Hunter Resources (MHR) has filed for Chapter 11 bankruptcy protection (see Sad Day: Magnum Hunter Files for Chapter 11 Bankruptcy). A few days after filing, MHR reported (see below) that the courts have already approved all “first day” motions related to the bankruptcy. The upshot is this: the courts have approved MHR’s plans that allow the company to continue to make payroll, pay royalty payments to landowners, and continue to work on getting a $200 million bridge loan to keep it all going. Here’s the details…
Read More “Court Approves Magnum Hunter’s “First Day” Bankruptcy Motions”

If you’ve read MDN for any length of time, you know since February of this year we’ve been hinting and warning that Magnum Hunter Resources (MHR) was heading for bankruptcy (see 19 Oil/Gas Companies on “Death List” – 8 are in Marcellus/Utica). Yesterday MHR, a driller totally focused on the Marcellus and Utica Shale, filed for bankruptcy. We consider it a sad day. Continuing low commodity prices coupled with more than $1.1 billion in outstanding debt (the biggest portion being unsecured IOUs or “notes” due in 2020–some $634.6 million worth), finally led the company to file for Chapter 11 bankruptcy protection. MHR says three-fourths of their debt-holders are on board with the bankruptcy filing and also on board with MHR seeking a new $200 million bridge loan to keep operating. Just about all of MHR’s various subsidiary companies are listed in the bankruptcy filing–except for Eureka Hunter, MHR’s midstream/pipeline business. Eureka Hunter is not part of the filing (for now) which likely explains the press release issued just a few days ago promoting Eureka Hunter’s latest stellar performance (see Magnum Hunter De-Listed from NYSE; Still Shopping Eureka Hunter). Here’s the sad news from MHR…
Read More “Sad Day: Magnum Hunter Files for Chapter 11 Bankruptcy”