02-11-04 Magnum Hunter Resources, MHR, announced that it has completed the previously announced $ 40 mm acquisition of oil and gas properties located in the Permian Basin of West Texas from a privately-held company. The properties acquired are located predominately in Reagan and Irion Counties of West Texas.
Additional properties are also located in Glasscock and Gaines Counties, Texas. All of the properties acquired in this transaction are in close proximity to areas of existing company operations. Closing occurred on October 29, 2004, with an effective date of September 1, 2004.

The Permian Basin has been a core area of geographic focus for Magnum Hunter for the last 15 years. At year-end 2003, the Permian Basin represented approximately 52 % of Magnum Hunter's proved reserves (38 % natural gas). On a pro-forma basis, including the effects of the earlier acquisition of properties purchased from Tom Brown, a subsidiary of EnCana, the Permian Basin assets now represent approximately 44 % of our current net daily production and approximately 37 % of our current net daily natural gas production.
The company estimates that the properties acquired represent approximately 51 bn cfe of proved reserves (59 % natural gas and 71 % proved undeveloped) and include approximately 100 proved undeveloped locations in the Canyon, Clearfork, Spraberry and Wolfcamp formations. DeGolyer and MacNaughton, an independent reservoir engineering firm, has completed a study on the properties and concurs with our reserve estimates.

Magnum Hunter acquired 170 producing wells that are 100 % operated and currently producing approximately 3.4 mm cfpd (58 % natural gas). With the addition of these properties to Magnum Hunter's existing proved reserve base, the company's total proved reserves has grown to approximately 1 tcfe.
The company will have operational control over the entire 31,000 gross and 26,000 net mineral acres acquired. As Magnum Hunter has significant ongoing field operations in the immediate vicinity of the properties acquired, no additional general and administrative expenses are anticipated.

Magnum Hunter financed the acquisition through borrowings under its recently increased $ 525 mm senior bank credit facility. The company's September 30, 2004 pro-forma outstandings under the senior bank credit facility is $ 380 mm with approximately $ 145 mm in unutilised borrowing capacity.
In conjunction with the announcement of this property acquisition on August 30, 2004, Magnum Hunter, at that time, entered into approximately 1,000 bpd of 2005 crude oil cost-less collars with a floor of $ 35.00 per barrel and a ceiling price of $ 55.00 per barrel.

Mr Dick Frazier, Executive Vice President and COO of Magnum Hunter stated, "In today's commodity price environment, when record purchase prices are being paid for proved oil and gas properties at more than twice the price paid here, we believe this add-on property acquisition was extremely well negotiated at a purchase price of $ 0.78 per mm cfpd on proved reserves only.”
“Magnum Hunter's company-wide production is currently in the 250 mm cfpd day range with the closing of this latest transaction and the return of predominately all of our Gulf of Mexico properties to production after the latest storms."

Magnum Hunter Resources is one of America's fastest growing independent exploration and development companies engaged in three principal activities:
(1) the exploration, development and production of crude oil, condensate and natural gas;
(2) the gathering, transmission and marketing of natural gas; and
(3) the managing and operating of producing oil and natural gas properties for interest owners.