Magnum Hunter Closes on Delaware Basin Gas Property

Magnum Hunter Resources, Inc. has closed the previously announced acquisition of Delaware Basin oil and gas reserves and related assets located in Eddy and Lee Counties of Southeast New Mexico from Mallon Resources Corporation. These oil and gas properties had proved reserves of 41.8 billion cubic feet of natural gas equivalent at December 31, 2000. The acquisition includes Mallon's interest in 23 fields consisting of 141 producing wells and 13,742 net mineral acres. The total net purchase price was $31.3 million, after purchase price adjustments, utilizing a July 1, 2001 effective date.

Magnum Hunter's wholly-owned subsidiary, Gruy Petroleum Management Co., became operator of 59 of the 141 producing wells. The property package consists of approximately 27% oil and 73% natural gas based upon proved reserves with an approximate 50/50 split on oil and natural gas based upon daily production.

Mr. Gary C. Evans, President and CEO commented, "The location of these producing oil and gas properties in New Mexico are adjacent to our existing properties where we have been extremely active. They provide our Company a large number of new drilling opportunities for the future. The rate of return based upon dollars invested in this region over the past several years exceeds any other onshore area of the Company. We have already made plans to begin remedial operations to enhance production on over a half dozen of these new properties in the near future."