Magnum Hunter's wholly owned subsidiary, Williston Hunter ND, LLC, has entered into a Purchase and Sale Agreement (PSA) with a privately-held company (Seller) for all of the Seller's operated working interest ownership in oil and gas mineral leases and 191 wells on approximately 15,500 gross acres located within four counties of the Williston Basin of North Dakota. Gross production from the properties is approximately 833 BOE per day. Total proved reserves attributable to the acquired properties are estimated at 2.6 million barrels of oil equivalent. Magnum Hunter presently owns an approximate 47% working interest in these oil and gas properties. Upon closing of this transaction, Magnum Hunter will own an approximate 95% working interest in these properties. The effective date of the transaction is April 1, 2011. Magnum Hunter intends to close the purchase transaction on or before August 18, 2011.

Magnum Hunter will pay to the Seller a total purchase price of $57 million, to be paid at closing in the form of $55.0 million in cash and $2.0 million in Magnum Hunter restricted common stock. The number of shares of Magnum Hunter common stock will be determined based on the volume weighted average price of the Company's common stock during the five trading days prior to closing. Magnum Hunter intends to fund the cash portion of this purchase through existing liquidity and borrowings under the Company's senior credit facility. Additionally, the Seller will retain an overriding royalty interest in certain of the properties in various amounts not to exceed 2%. No existing debt of Seller will be assumed by Williston Hunter in connection with the closing of the acquisition.

The PSA between Williston Hunter and the North Dakota based privately-held Seller was negotiated pursuant to a Settlement Agreement between Magnum Hunter and the Seller as a result of certain lawsuits pending in the United States District Court for the District of North Dakota (Northwestern Division). The agreed upon settlement between the parties will resolve all outstanding claims. The parties will file stipulations with the District Court for dismissal, with prejudice, of the two pending civil actions upon the PSA's final closing.

Mr. Glenn Dawson, President of Williston Hunter, commented, "We are pleased to announce this final agreement to acquire these Williston Basin properties where we have been a minority owner for years. With this 'bolt on' transaction, we will be establishing an operating base in North Dakota which has been a primary objective as we continue to grow our presence in the Williston Basin. Our game plan in 2011 is to continue our geological and engineering evaluation of these properties so that we will be in a position to prudently develop these assets beginning early next year."

Tags: Magnum Hunter Resources Corporation