Magnum Hunter Completes Sale of South Texas Properties
Magnum Hunter Resources has closed on the sale of a $33.0 million package of South Texas oil and gas properties to Peoples Energy Production, a subsidiary of Peoples Energy. The package consisted of approximately 175 wells in five separate fields located in Webb, Zapata, Colorado and Duval Counties, Texas.
This divestiture brings the total sales of non-core properties completed to-date in 2002 to approximately $93 million. Predominately all of the properties sold this year had been acquired earlier by Magnum Hunter in its merger with Prize Energy Co. which closed in March 2002. With additional minor value property sales currently being negotiated, Magnum Hunter is on target to close on approximately $100 million in property sales this year. All of the net proceeds received from the various divestitures have been used to reduce Magnum Hunter's indebtedness.
Commenting on the completion of this most recent sale of non-core assets, Mr. Richard R. Frazier, Chief Operating Officer of Magnum Hunter stated, "We have been very pleased with the prices received for all of the non-core property sales completed by Magnum Hunter during 2002. This sale of the 'South Texas Package' represented less than 5% of the company's total reserve base, and less than 30% of our onshore Gulf Coast division oil and gas assets. We continue toward our goal of streamlining our property base by selling non- core properties during a commodity price period that remains strong, in order that we may refocus our professional staff on our core assets and further reduce our Company's overall indebtedness. With the recent new wells drilled, completed, and placed on production in Southeast New Mexico, Magnum Hunter has more than replaced the loss of production stemming from this 'South Texas Package' sale."