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MHR > SEC Filings for MHR > Form 8-K on 22-Jan-2014All Recent SEC Filings




Other Events, Financial Statements and Exhibits

Item 8.01. Other Events.

On January 15, 2014, Magnum Hunter Resources Corporation (the "Company") issued a press release announcing (a) the Company's estimated total proved oil and natural gas reserves totaling 75.9 million barrels of oil equivalent at December 31, 2013 and (b) the present value of estimated future cash flows, before income taxes, such proved reserves, discounted at 10% ("PV-10"), of $922.1 million at December 31, 2013 (the "Reserves Release"). A copy of the Reserves Release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.

This Current Report on Form 8-K and the Reserves Release contain certain financial measures that are non-GAAP measures. The Company has provided reconciliations within this Current Report on Form 8-K and the Reserves Release of the non-GAAP financial measures to the most directly comparable GAAP financial measures. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, measures for financial performance prepared in accordance with GAAP that are presented in this Current Report on Form 8-K and in the Reserves Release.

PV-10 is the present value of the estimated future cash flows from estimated total proved reserves after deducting estimated production and ad valorem taxes, future capital costs and operating expenses, but before deducting any estimates of future income taxes. The estimated future cash flows are discounted at an annual rate of 10% to determine their "present value." The Company believes PV-10 to be an important measure for evaluating the relative significance of its oil and gas properties and that the presentation of the non-GAAP financial measure of PV-10 provides useful information to investors because it is widely used by professional analysts and investors in evaluating oil and gas companies. Because there are many unique factors that can impact an individual company when estimating the amount of future income taxes to be paid, the Company believes the use of a pre-tax measure is valuable for evaluating the Company. We believe that PV-10 is a financial measure routinely used and calculated similarly by other companies in the oil and gas industry. However, PV-10 should not be considered as an alternative to the standardized measure as computed under GAAP.

The standardized measure of discounted future net cash flows and a reconciliation of the PV-10 to the standardized measure relating to the Company's total proved oil and natural gas reserves at December 31, 2013, are as follows:

                                          As of December
                                             31, 2013
Future cash inflows                       $   3,711,260
Future production costs                      (1,423,306 )
Future development costs                       (421,797 )
Future income tax expense                      (149,367 )
Future net cash flows                         1,716,790
10% annual discount for estimated
timing of cash flows                           (872,280 )
Standardized measure of discounted
net cash flows related to proved
reserves                                  $     844,510

Reconciliation of Non-GAAP Measure
PV-10                                     $     922,071
Less: Income taxes
Undiscounted future income taxes               (149,367 )
10% discount factor                              71,806
Future discounted income taxes                  (77,561 )

Standardized measure of discounted
future net cash flows                     $     844,510

This Current Report on Form 8-K includes "forward-looking statements." All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company can give no assurance that such expectations will prove to be correct. The forward-looking statements involve risks and uncertainties that affect operations, financial performance, and other factors as discussed in filings made by the Company with the Securities and Exchange Commission (the "SEC"). Among the factors that could cause results to differ materially are those risks discussed in the periodic reports filed by the Company with the SEC, including the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and its Quarterly Reports on Form 10-Q for the fiscal quarters ended after such fiscal year. Readers are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading "Risk Factors." Forward-looking statements speak only as of the date of the document in which they are contained, and the Company does not undertake any duty to update any forward-looking statements except as may be required by law.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number Description

99.1 Press Release of the Company dated January 15, 2014.

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