Market Overview

Magnum Hunter Resources Announces Partial Monetization of Midstream Subsidiary

Magnum Hunter Resources Corporation (NYSE: MHR) announced today a definitive agreement for the placement of $100 million of convertible preferred units in its subsidiary, Eureka Hunter Holdings, LLC, to an affiliate of ArcLight Capital Partners, LLC.

Eureka Hunter is the holding company for Magnum Hunter's midstream operation, including the Eureka Hunter Pipeline located in West Virginia and Ohio. ArcLight, based in Boston, Massachusetts, will also have the right to invest up to an additional $100 million of Preferred Units, based certain terms and conditions which includes the ultimate approval of Eureka Hunter, bringing the total potential investment to $200 million.

The initial investment of $100 million will give ArcLight an approximate 28% ownership interest in Eureka Hunter, establishing Eureka Hunter at an enterprise valuation of approximately $400 million. Of the initial $100 million investment, approximately $60 million will be distributed to the parent, Magnum Hunter, and the remaining $40 million will be used to fund a pending acquisition. Additional investments will be used to (i) develop Eureka Hunter's gathering system network currently located in West Virginia; (ii) develop the Company's expansion plans into the Utica Shale in Ohio; and (iii) fund other accretive midstream growth projects and/or acquisitions.

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