Magnum Hunter provided a drilling, operational, and production update on the Company's activities in the oil-window of the Eagle Ford Shale unconventional resource play located across approximately 51,664 gross acres predominately in Gonzales and Lavaca Counties of South Texas. Significant highlights for the third quarter of 2011 for the Company's Eagle Ford Shale oil-window activities include:
The Company's capital budget for the Eagle Ford Division for fiscal 2011 remains at approximately $75 million (30% of the total capex budget) to drill 16 gross wells (8.4 net wells). Since spudding our first Eagle Ford Shale well in June 2010 and year-to-date, Magnum Hunter has drilled and completed 11 gross wells (6.3 net wells). The Furrh #2H well (50% working interest) is located in Lavaca County and is currently drilling with an anticipated 20 stage frac completion date beginning in mid-October. Eagle Ford Hunter has an additional 8 gross wells (4.5 net wells) planned for spudding before year-end 2011. The Company anticipates having a total of 19 gross wells (10.8 net wells) on line and flowing to sales on or before year-end 2011.
A new gas gathering system has recently been installed in the Gonzales and Lavaca County area. The system went operational in early August with most of Magnum Hunter's wells now tied and selling gas into the system.
Mr. Gary C. Evans, Chairman of the Board and Chief Executive Officer of Magnum Hunter Resources, commented, "Over the last several weeks, our Eagle Ford Division has successfully put on production and into sales two extraordinary wells. The more experience we continue to obtain in this region is undoubtedly creating better production results. A combination of longer laterals, more frac stages, and certain modifications to downhole equipment has led to new well completions ranging from 1,000 - 2,000 Boepd per well. Our mineral lease acreage position is undoubtedly some of the best in the entire Eagle Ford Shale play when comparing rates of return on capital deployed due to our 90% oil component. We have plenty of running room for many years to come with 198 drilling locations currently identified across our 52,000 gross leasehold acreage positions. Our Company's in-house reservoir engineers have identified net unrisked resource potential of 39 Million Boe over this acreage position."
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