Activist Investor Ralph Whitworth Continues To Jettison His Stake In Magnum Hunter Resources Corp. (MHR)

Magnum Hunter had to raise $65 million by July 10, which was a new deadline set by its lenders. The company managed to raise $55.6 million through the newly-agreed deadline, including $33.6 million from the sell-off of 5,200 acres of undeveloped acreage in Tyler County, West Virginia. However, Magnum Hunter announced last week that it received a commitment from the Bank of Montreal to amend its senior secured revolving credit facility. The amendments eliminated Magnum’s obligations to raise the above-mentioned figure of $65 million in net cash proceed by July 10. The Chairman of the Board and Chief Executive Officer of Magnum Hunter, Gary C. Evans, claimed that the new amendment under the company’s existing senior bank loan facility offers Magnum the freedom and flexibility to pursue its plans of boosting the company’s liquidity without pressure from the short-term mandated requirements.

Magnum Hunter Resources Corp. (NYSE:MHR) had long-term debt of $941 million and $13.7 million in cash and equivalents as of March 31. Thus, the company intends to pay down $300 million to $400 million in debt with the sale’s proceeds, which will surely restructure and enhance Magnum’s balance sheet. As a result, the independent oil and gas company will be able to continue exploiting its vast Appalachian lease acreage position. Even more to that, the company intends to form two new joint ventures, one in Ohio and the second one in West Virginia, which will certainly boost Magnum’s activities in those regions. Therefore, it seems that the company will stop struggling under the weight of its debt and will embark on a growth journey soon enough. The sooner the sale of Magnum’s entire equity ownership interest in Eureka Hunter is completed, which could do wonders for the company’s balance sheet, the sooner its future prospects will improve. Within our database, Todd J. Kantor’s Encompass Capital Advisors represents the second-largest shareholder in Magnum Hunter Resources Corp. (NYSE:MHR) after Whitworth’s fund, owning 5.37 million shares.

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