Magnum closes deal

Ray Tyson and Kay Cashman

Exploration and production independent Magnum Hunter Resources said Aug. 3 that it has completed its previously announced $239 million acquisition of oil and gas properties in New Mexico from Tom Brown, a subsidiary of big Canadian independent EnCana.

The acquisition was financed with a combination of stock issued by Magnum Hunter in late June and proceeds from borrowings under the company’s recently increased $480 million senior bank credit facility.

DeGolyer and MacNaughton, an independent reservoir engineering firm, estimated that the Tom Brown properties hold about 115 billion cubic feet of gas equivalent of proved reserves, up from 99 billion cubic feet estimated by the firm in June. DeGolyer and MacNaughton has assigned another 5 bcfe of probable reserves to the properties. In addition to the 465 producing oil and gas wells, Magnum Hunter also acquired roughly 44,000 net acres of undeveloped leasehold mineral interests.