Magnum Hunter Resources (MHR) announced the purchase of NGAS Resources (NGAS), an Appalachian based exploration and production company with extensive acreage prospective for the Marcellus Shale.
Magnum Hunter Resources will pay $0.55 per share for all the outstanding shares of NGAS Resources. The company will issue approximately 6.6 million shares of its common stock in the deal, or 0.0846 shares of Magnum Hunter Resources for each share of NGAS Resources. The value of the deal including debt assumed by Magnum Hunter Resources is $98 million.
The Marcellus Shale assets acquired from NGAS Resources include proved reserves of 78.4 Bcfe as of the end of 2009, and net production of 9.2 million cubic feet of natural gas equivalents per day as of the end of the third quarter of 2010. The company has approximately 360,000 net acres under lease, much of which is prospective for the Marcellus Shale.