Magnum Hunter Redeems $105 Million of Senior Notes Due 2012

Magnum Hunter Resources, Inc. (NYSE: MHR) reports that pursuant to the Indenture dated March 15, 2002, between Magnum Hunter, the Subsidiary Guarantors named therein, and Bankers Trust Company, as Trustee, (the "Indenture), it has elected to redeem $105 million in aggregate principal amount of its outstanding 9.6% Senior Notes due 2012 (CUSIP No. 55972 FAD6) (the "Redeemed Notes"). At the close of business at 5:00 p.m., Eastern time on August 27, 2004 (the "Redemption Date"), the Company will pay the Holders of the Redeemed Notes the redemption price of 109.6% of the $105 million aggregate principal amount of the Notes, or $115.08 million plus accrued and unpaid interest through the Redemption Date of approximately $4.5 million. The $10 million premium paid for the early redemption of the bonds will result in a one-time charge to earnings in the third quarter of 2004. The redemption will be funded with a portion of the proceeds from the Company's recent issuance of 17.25 million shares of common stock.

Effective July 15, 2004, Magnum Hunter's commercial bank lenders approved certain amendments to its senior bank credit facility, including an increase in the borrowing base from $275 million to $480 million. The amended facility includes the following financial institutions and their respective management roles:

         Financial Institution                     Title

     Deutsche Bank Trust Company Americas  Administrative and Collateral Agent
     BNP Paribas                           Documentation Agent
     Bank of America                       Co-Syndication Agent
     BMO Nesbitt Burns Financing, Inc.     Co-Syndication Agent
     Fortis Capital                        Lead Manager
     Bank of Scotland                      Lead Manager
     Bank of Nova Scotia                   Lead Manager

Commenting on this early retirement of indebtedness, Mr. Chris Tong, Senior Vice President and Chief Financial Officer stated, "Due to our ability to continue the Company's operational and financial success, our senior commercial bank lenders have agreed to increase their commitments to Magnum Hunter by $205 million from $275 million to $480 million. This will allow the Company to complete the previously announced property acquisition from Tom Brown, Inc. as scheduled and redeem $105 million of 9.6% Senior Notes. Annual interest expense savings due to this redemption will be approximately $6.6 million per year or $.05 per share after tax, on a fully diluted basis.

From a long-term debt perspective, the pro forma March 31, 2004 balance sheet would reflect a debt to total capitalization ratio of 53.8%, after giving effect to this redemption and the property acquisition. This redemption is just the latest step in our efforts to continue our goal of improving Magnum Hunter's balance sheet. During 2003, Magnum Hunter retired all of our $140 million 10% Senior Notes resulting in annual interest expense savings of $9.6 million. The reconfiguration of our debt structure will immediately provide us with additional interest savings and more flexibility to reduce debt in the future with cash flow generated from the Company's operations. The borrowing base increase will also allow us to continue to maintain sufficient liquidity under our credit line for our ongoing operations. We are very pleased with the confidence in our business plan that continues to be reflected by the support received from our senior bank group."