Magnum Hunter has entered into a definitive agreement to acquire Williston Basin focused NuLoch Resources in an all common stock transaction valued at approximately $327 million (USD). Magnum Hunter has agreed to acquire NuLoch for $2.50 (Canadian) per share at a fixed exchange ratio of 0.3304, which was based on the seven-day volume weighted average price of Magnum Hunter's common stock as of January 18, 2011 of $7.63 per share. Magnum Hunter will issue approximately 42.8 million new common shares to the NuLoch shareholders, representing approximately 32% of Magnum Hunter's current fully diluted common shares outstanding (assumes the contemplated purchase of NGAS Resources, Inc. ("NGAS") recently announced by the Company on December 27, 2010). As of December 31, 2010, NuLoch had no outstanding long-term debt. Each of NuLoch's and Magnum Hunter's Board of Directors has given its unanimous approval of the transaction.
Magnum Hunter has received a commitment for a new $250 million senior credit facility with an initial borrowing base of $145 million to be provided by BMO Capital Markets ("BMO"), secured by the Company's existing asset base, including the assets being acquired from NuLoch and NGAS.
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