Magnum Hunter expects to slash revolver’s $65 million proceeds demand

By Wendy Van Sickle

Columbus, Ohio, July 8 – Magnum Hunter Resources Corp. expects to eliminate its obligation under its senior secured revolving credit facility to raise $65 million in net proceeds from certain specified transactions by Friday, according to a company press release.

Magnum Hunter said Wednesday that it had accepted a commitment from administrative agent and lead lender Bank of Montreal to waive the obligation and to assume interests under the facility of any member of the lending syndicate that does not consent to the waiver and other proposed amendments.

The company said it has raised about $55.6 million of the $65 million obligation. As previously reported, those proceeds came from subsidiary Triad Hunter, LLC’s sale of some acreage in West Virginia to Antero Resources Corp. for $33.6 million and about $22 million in other capital transactions.

The deadline to meet the obligation was extended from a previous deadline of May 29 after Magnum Hunter failed to meet the required mark. However, the contemplated amendment would permanently eliminate the obligation.

Other planned amendments include waivers of compliance by the company with the current ratio and total secured net debt to EBITDAX ratio covenants until the earlier of the fiscal quarter ending Dec. 31 or the fiscal quarter when the company closes on the sale of all or substantially all of its equity interest in Eureka Hunter Holdings, LLC

In June, Magnum Hunter announced its intent to sell all of its equity ownership interests in Eureka. The company said it expects that sale could generate up to $600 million to $700 million in gross cash proceeds.

The company said it expects to close on the amendments by Friday.

Magnum Hunter is a Houston-based oil and gas exploration and development company.

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