Magnum Hunter Resources updates Appalachia production curtailments

Source: Magnum Hunter Resources Corporation

Magnum Hunter Resources Corporation (NYSE : MHR) (the "Company") provided an update today on its current production in the Appalachia region. As previously reported by the Company, the Company's production was significantly impacted in late June and early July due to a severe thunderstorm in the area that knocked out electric service. In early August, full power was restored to the region allowing the Company to begin bringing its production in the region back online.

Although the Company has been successful in responding to well shut-ins created by the power outages, production remains substantially curtailed due to the lack of available processing capacity at Dominion Transmission's Hastings processing facility. The Company estimates that 9.5 million cubic feet equivalent per day (mmcfepd) of its production is currently being curtailed, and doesn't expect this production to come back online until MarkWest's Mobley processing facility is operational, which the Company anticipates will occur sometime in mid-November.

In addition to the curtailed production described above, Magnum Hunter has shut-in approximately 1.7 mmcfepd related to approximately 400 producing natural gas wells located in Kentucky. This production was shut-in by the Company at the beginning of the third quarter of 2012 because production of the wells would not have been economical, due to a combination of factors, including low natural gas prices and the cost of blend stock required to reduce the ethane content of the gas for transportation purposes. Since both the curtailed and shut-in production in the Appalachia region is predominately natural gas, the impact on the Company's cash flow for the third quarter has been minimal.

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