Magnum Hunter Resources Sues Eagle Operating for Default on Previously Announced Proposed Acquisition of Williston Basin Properties
Magnum Hunter Resources (NYSE: MHR) announced today that the previously announced proposed acquisition by its wholly owned subsidiary, Williston Hunter ND, LLC, of oil and gas properties in the Williston Basin in North Dakota from Eagle Operating. Eagle did not close yesterday due to unresolved issues between the parties resulting from what Magnum Hunter considers to be Eagle's intentional and bad faith breach of its obligations under the Purchase and Sale Agreement). In the proposed acquisition, Magnum Hunter would have acquired from Eagle for total consideration of $57 million ($55 million in cash and $2 million in Magnum Hunter restricted common stock), the remaining approximate 48% working ownership interest in the Williston Basin properties owned by Eagle, subject to Eagle's retention of a variable overriding royalty interest not exceeding 2% on certain properties.
The acquisition would also have resulted in the settlement of two pending lawsuits between the Company and Eagle currently filed in the United States District Court for the District of North Dakota (Northwestern Division), which litigation is now expected to continue. Management of Magnum Hunter does not consider this pending litigation to be of any material nature to the Company.
Magnum Hunter has today filed a new lawsuit against Eagle in the United States District Court for the District of North Dakota (Northwestern Division) asking the court to order Eagle to comply with its obligations under the PSA and complete the sale of the properties to the Company on the specific terms outlined in the PSA. Magnum Hunter is also seeking monetary damages, including compensatory, consequential and general damages, for Eagle's material default under the PSA.
The Company intends to vigorously pursue all available remedies against Eagle.
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