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MAGNUM HUNTER UNLOCKING SHAREHOLDER VALUE OCTOBER  7TH,  2015   ATLAS CONSULTING ATHENA  INVESTMENT  RESEARCH, ...
2 CONTENTS ISSUES   SOLUTIONS   OPPORTUNITIES     HTTP://WWW.CAPGAINR.COM  ATHENA INVESTMENT RESEARCH, LLC | ATL...
MAGNUM HUNTER ISSUES 1.  Too  Much  Financial  Complexity   2.  Too  Much  Debt   3.  Secured  Bank  Deb...
MAGNUM HUNTER REQUIRED SOLUTIONS 1.  Increase  Liquidity   2.  Reduce  Debt   3.  Reduce  Financial  Complexit...
SPECIFIC ACTION PHASE I – FINANCIAL ENGINEERING 1.  Obtain  Bank  Waiver  –  Present  Credible   Restructuring...
SPECIFIC ACTION PHASE II – OPERATIONAL IMPROVEMENTS 1.  Sell/  Take  Eureka  Hunter  Public  via  IPO/Sell  ...
MAGNUM HUNTER OPPORTUNITIES 1.  High  Yield  Debt  Trading  Deeply  Discounted   •  Open  Market  Purchase...
MAGNUM HUNTER CONCLUSION 8 1.  Need  To  Reduce  Debt,  Increase  Equity   2.  Time  SensiUve   3.  Opport...
THANK YOU ATHENA INVESTMENT RESEARCH, LLC | ATLAS CONSULTING HTTP://WWW.CAPGAINR.COM  
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Dallas Salazar Plan to Rescue Magnum Hunter Resources

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A presentation from Atlas Consulting CEO Dallas Salazar, a major stockholder in Magnum Hunter Resources. Salazar has threatened MHR with a takeover attempt if management does not right the ship and take certain actions. Salazar lays out in this presentation, in broad brush strokes, his plan for how MHR can rescue itself from bankruptcy.

Publié dans : Actualités & Politique
Licence: CC Attribution-ShareAlike License
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Dallas Salazar Plan to Rescue Magnum Hunter Resources

  1. 1. MAGNUM HUNTER UNLOCKING SHAREHOLDER VALUE OCTOBER  7TH,  2015   ATLAS CONSULTING ATHENA  INVESTMENT  RESEARCH,  LLC   CapGainr
  2. 2. 2 CONTENTS ISSUES   SOLUTIONS   OPPORTUNITIES     HTTP://WWW.CAPGAINR.COM  ATHENA INVESTMENT RESEARCH, LLC | ATLAS CONSULTING
  3. 3. MAGNUM HUNTER ISSUES 1.  Too  Much  Financial  Complexity   2.  Too  Much  Debt   3.  Secured  Bank  Debt  Greatly  Reduces   Financial  Flexibility   4.  Current  Capital    Structure  Limits   Growth   5.  Poor  Corporate  CommunicaUon   6.  Energy  Prices,  Overall  Industry   Stress  Weighing  On  Asset  Values   7.  Truncated  Timetable   8.  Investor  SenUment  Hugely  NegaUve   –  Distrust  Of  Management/Board   3HTTP://WWW.CAPGAINR.COM  ATHENA INVESTMENT RESEARCH, LLC | ATLAS CONSULTING
  4. 4. MAGNUM HUNTER REQUIRED SOLUTIONS 1.  Increase  Liquidity   2.  Reduce  Debt   3.  Reduce  Financial  Complexity   4.  Increase  Equity   4HTTP://WWW.CAPGAINR.COM  ATHENA INVESTMENT RESEARCH, LLC | ATLAS CONSULTING
  5. 5. SPECIFIC ACTION PHASE I – FINANCIAL ENGINEERING 1.  Obtain  Bank  Waiver  –  Present  Credible   Restructuring  Plan  To  Bank   •  Enable  Open  Market  High  Debt   Repurchase   •  Provide  Reasonable  Time  Required  To   ExecuUon   •  Replace  Senior  Bank  OR  Provide   Sweetener  To  Current  Bank  -­‐    Higher   Interest  Rate/  Equity  Kicker/  Blend   2.  Raise  PE,  Buy  Discounted  High  Yield  Debt   Prearranged  Debt/Equity  Swap  w/  Investor   •  Side-­‐Step  Secured  Bank  Covenants   3.  Convert  Preferred  Equity  Into  Common   •  Eliminate  ~$400  million  Quasi-­‐Debt   •  Reduce  Fixed  Charge  ObligaUons   •  Minimal  DiluUon  At  Higher  Pricing       4.  Rights  Offering   •  Provides  Needed  Growth  Capital   •  Enables  ExisUng  Holders  Opportunity   To  Hold  Ownership  PosiUon     •  Enables  ExisUng  Holders  A  Lower  Cost   Basis   5HTTP://WWW.CAPGAINR.COM  ATHENA INVESTMENT RESEARCH, LLC | ATLAS CONSULTING
  6. 6. SPECIFIC ACTION PHASE II – OPERATIONAL IMPROVEMENTS 1.  Sell/  Take  Eureka  Hunter  Public  via  IPO/Sell   w/  Forgivable  Long-­‐Dated  Loan  (volumes)   •  IPO  Possibility  Creates  Urgency/  Bid   Demand  via  MLP   •  Long-­‐Dated  Loan  Brings  Immediate   Liquidity/  Performance  Kicker  To  Sale   2.  Work  JV’s  w/  PE,  Develop/MoneXze  UXca  &   Marcellus  Assets   •  Leases  Trading  Deeply  Discounted  – Selling  At  Depreseed  Value  Hurts   Equity  Value   •  JV  Enables  MHR  Increased  ProducUon   w/  NO  CAPEX     •  Increased  ProducUon  Increases   OperaUng  Scale,  Reduces  OperaUng   Overhead  Per  Boe/d     3.  Sell  Fully  Valued  Non-­‐Core  Assets   6HTTP://WWW.CAPGAINR.COM  ATHENA INVESTMENT RESEARCH, LLC | ATLAS CONSULTING
  7. 7. MAGNUM HUNTER OPPORTUNITIES 1.  High  Yield  Debt  Trading  Deeply  Discounted   •  Open  Market  Purchases  At  Deep   Discounts  &  Swap  For  Equity   •  Opportunity  To  Reduce  High  Yield  Debt   By  50%  or  ~$300  million   2.  Preferred  SecuriXes  Trading  At  Deep  Discount   3.  Open  Market  Purchases  At  Deep  Discounts  &   Swap  For  Equity   4.  Generous  Exchange  Offer  To  Preferred   Holders  To  Swap  Into  Equity   •  Allows  Preferred  Holders  Upside   Opportunity  In-­‐Line  w/  Equity   Counterparts   •  Long-­‐Term  Viability  Improvement  Drives   Equity  Value,  Removes  PorUon  Of  Short   Overhang   7HTTP://WWW.CAPGAINR.COM  ATHENA INVESTMENT RESEARCH, LLC | ATLAS CONSULTING
  8. 8. MAGNUM HUNTER CONCLUSION 8 1.  Need  To  Reduce  Debt,  Increase  Equity   2.  Time  SensiUve   3.  Opportunity  To  Repurchase  OR  Swap   Junior  SecuriUes  At  Deep  Discounts   4.  Rights  Offering,  Add  Non-­‐DiluUve  Equity   5.  Selling  Fully  Valued  Assets,  Raise  Cash   6.  JV  Partner  To  Develop  UUca  and   Marcellus,  Raise  Cash   7.  Increase  ProducUon   8.  Limit  Cash  Outlay   9.  Preferred  Conversion  Strategy  To  Selling   Raw  Land  At  Distressed  Prices   10.  Aligning  Obligors  To  Equity  Counterparts   Will  Drive  Long-­‐Term  Viability  Visibility/ Remove  Short  Seller  Overhang   HTTP://WWW.CAPGAINR.COM  ATHENA INVESTMENT RESEARCH, LLC | ATLAS CONSULTING
  9. 9. THANK YOU ATHENA INVESTMENT RESEARCH, LLC | ATLAS CONSULTING HTTP://WWW.CAPGAINR.COM  

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