Magnum Hunter says that its wholly-owned subsidiary, Triad Hunter, has executed a definitive agreement to acquire oil and gas properties and leasehold mineral interests located in Wetzel and Lewis Counties, West Virginia. The Seller of the asset portfolio is PostRock Energy, based out of Oklahoma City, Oklahoma.

Triad Hunter will acquire the Marcellus Assets for a total purchase price of $39.75 million. The purchase price will be a combination of (i) 50% in cash in the total amount of $19.875 million, and (ii) 50% payable in 3.2 million newly issued restricted common shares of Magnum Hunter stock. The value of the share consideration was based on the volume weighted average price of the Company's common stock on the NYSE Amex for the 10 consecutive trading days prior to the date on which the parties entered into the definitive agreement, or approximately $6.20 per share. The 3.2 million new shares of restricted common stock to be issued as consideration represents approximately 4.0% of the Company's 79.2 million fully-diluted common shares outstanding as of December 23, 2010. No debt will be assumed by Triad Hunter and no other consideration beyond the cash component and the issuance of new Magnum Hunter restricted common stock will be paid for the Marcellus Assets.

The acquisition is subject to certain conditions and scheduled to close in two phases, each of which is expected to be completed by mid-January 2011. The first closing contemplates the sale of the Wetzel County assets for $28 million and the second closing contemplates the sale of the Lewis County assets for $11.75 million. Aggregate consideration is subject to adjustments based on title, indemnities and certain other matters.

Tags: Magnum Hunter Resources Corporation