Boston, MA 06/02/2014 (wallstreetpr) – The Texas based self-governing company engaged with exploration and production of natural gas, crude oil as well as natural gas liquids, Magnum Hunter Resources Corp (NYSE:MHR) on May 28, 2014 reported that the company has entered into a definitive securities purchase agreement.
Purchase agreement with Relational Investors LLC:
Magnum Hunter Resources Corp (NYSE:MHR) made the securities purchase agreement with the relational investors LLC and few of its associates to sell a total of 21,428,580 shares of Magnum’s common stock at a rate of $7.00 per share, which in collectively makes a total amount of $150 million. Magnum will also issue 2,142,858 warrants to purchase the common stock at a value of $8.50 per share.
Senior Revolving Credit Facility:
Magnum Hunter Resources Corp (NYSE:MHR) aims to move with the equity offering for the purpose of general corporate. It includes adding of extra drilling rig to fasten the drilling operations in the Utica Shale and Marcellus Share. The aim also includes funding for acquisition of new gas and oil lease in Ohio and West Virginia. The third target of the company is to repay the part of the outstanding debts under the ‘Senior Revolving Credit Facility.’
CEO commented:
Till May 27, 2014 the company reported having a total liquidity of $208.5 million, which includes $200 million of borrowing availability under ‘Senior Revolving Credit Facility’ and $8.5 million of cash and cash equivalents. Magnum’s Chief Executive Officer and Chairman of Board, Gary C. Evans stated that the private placement of equity will create profits $150 million, which indeed will help the company to firm its financial flexibility. The CEO also added that Magnum Hunter Resources Corp (NYSE:MHR) is delighted that the Relational Investors will hold a huge portion of the share, i.e. 15%. Magnum Hunter looks forward to a better relational with the investors for a long term for both oil and gas.
The Co-founder and Principal of Relational Investors LLC, Ralph V. Whitworth also showed his interest to invest in Magnum for a long-term strategic plan to expand the growth.
