Cimarex Energy Co., Denver, (NYSE:
XEC) has completed the acquisition of
Magnum Hunter Resources Inc. (NYSE:
MHR). Including the assumption by
Cimarex of Magnum Hunter’s debt, which
at Dec. 31, 2004, totaled $645 million, the
total transaction value is approximately $2.1
billion. Magnum Hunter stockholders
received 0.415 share of Cimarex common
stock per share of Magnum Hunter.
Cimarex now has a market capitalization
of approximately $3.2 billion. Year-end
2004 pro forma combined proved reserves
total 1.5 trillion cubic feet equivalent (67%
gas) and first-quarter 2005 pro forma combined
production was 482.5 million cubic
feet equivalent per day.
The company’s reserve-life index is now
7.7 years and Cimarex has an inventory of
925 drilling targets in the Permian and Midcontinent,
and some $600 million of capex
to fund this.
The deal will change onshore-focused
and lightly leveraged Cimarex’s profile significantly.
Cimarex had a small amount of
debt; with Magnum, it gained more than
$600 million of debt, though its new debt-tototal-
capitalization profile will be still a
peer-group low of 25%.
Cimarex is also involved in relatively
lower-risk plays than Magnum’s deepwater
Gulf of Mexico assets.
Petrie Parkman & Co. advised Cimarex
on this transaction.
F.H. Merelli, chairman and chief executive
of Cimarex, says, “We look forward to
successful integration of Magnum
Hunter’s assets and operations. The combined
asset base and drilling portfolio of
the two companies provides an excellent
opportunity for long-term growth and positive
financial performance.”