Magnum Hunter Resources Corporation (NYSE: MHR) (NYSE MKT: MHR.PRC) (NYSE MKT: MHR.PRD) (NYSE MKT: MHR.PRE) (the "Company") announced today that the Company has closed on the sale of all its ownership interests in the Company's Eagle Ford Shale properties located in Gonzales and Lavaca Counties of South Texas to a wholly-owned subsidiary of Penn Virginia Corporation (NYSE: PVA), for a total purchase price of $401 million. The total consideration was comprised of (i) $361 million in cash and (ii) 10,000,000 shares of common stock of Penn Virginia Corporation (valued at $4.00 per share), before taking into account customary purchase price adjustments. The effective date of the transaction was January 1, 2013. The Company has retained approximately 7,000 net mineral acres located in Fayette, Lee, and Atascosa Counties in South Texas.
The Company intends to use the net proceeds from the sale to completely pay-off all outstanding borrowings under its Senior Revolving Credit Facility and for general corporate purposes. As a result of the sale, the Company's borrowing base under its Senior Revolving Credit Facility has now been reduced from $350 million to $265 million, a decrease of approximately 24%. With this closing today, the Company will have $375 million of cash liquidity available. As previously disclosed, the Company intends to allocate its $300 million upstream capital expenditure budget for calendar 2013 evenly between its Williston and Appalachian Basin Divisions, a large portion of which will be funded from existing cash flow.
The closing of the sale of the Eagle Ford Shale properties represents a further step by the Company to take a holistic view of its asset base and identify assets, including non-core assets, which could be monetized and reallocated to higher growth properties. In recent months, the Company has continued to evaluate its asset base and believes that a focus on core assets is essential for its future plan. Today's announcement is seen as the first step in ensuring that the Company's asset mix continues to provide its shareholders with the best possibilities for value creation.