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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List of 85 Bankrupt O&G Companies Since 2015; 4 in Marc/Utica

Haynes BooneIn November 2015 MDN brought you a list of 36 North America drillers that had, as of that time, declared bankruptcy (see List of 36 Oil & Gas Companies that Filed for Bankruptcy in 2015). In April, just three short months ago, the list stood at 59 bankruptcies (see List of 59 Oil & Gas Companies Filing for Bankruptcy in 2015/2016). The law firm compiling the list, Haynes and Boone, keeps updating the list. The most recent version was issued on June 30 and it shows the list growing to 85 declared bankruptcies, with more on the way. As of April we noted there was only one Marcellus/Utica driller on the list–Magnum Hunter Resources–which has since emerged from Chapter 11 and is once again up and running. However, in the latest list of 85 bankruptcies, we now must add three more companies with operations in the Marcellus/Utica…
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Gary Evans, Ex-CEO of Magnum Hunter, Starts New O&G Company

Gary Evans
Gary Evans

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…
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Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone

Gary Evans
Gary Evans

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)…
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Magnum Hunter Investors Burned in Bankruptcy Restructuring Plan

mhrReuters 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…
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Dela. Court Approves Magnum Hunter Bankruptcy Restructuring Plan

mhrThe 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…
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List of 59 Oil & Gas Companies Filing for Bankruptcy in 2015/2016

Last November MDN brought you a list of 36 North America drillers that had, as of that time, declared bankruptcy (see List of 36 Oil & Gas Companies that Filed for Bankruptcy in 2015). The law firm compiling the list, Haynes and Boone, is back with an updated version. Since that time more have fallen to low commodity prices for oil and gas. There are now 59 drillers who have declared bankruptcy–42 last year and (so far) 17 in 2016. Fortunately, the only Marcellus/Utica name we spot on the list is Magnum Hunter Resources, which filed for bankruptcy back in December (see Sad Day: Magnum Hunter Files for Chapter 11 Bankruptcy). Here’s the latest edition of Haynes and Boone’s “Oil Patch Bankruptcy Monitor”…
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