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To: Dale Baker who wrote (107951)5/16/2012 12:15:23 PM
From: KaiserSosze
of 118196
 
And Coastal is rewarded for such a great quarter by selling off another 5%! Sigh!

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From: Steve Felix5/16/2012 12:24:17 PM
of 118196
 
"a slightly lower production forecast" ???

UPDATE: Pritchard Capital Partners Drops PT to $7 on Magnum Hunter Resources Post Recent Capital Raises
9:40a ET May 16, 2012 (Benzinga)

Pritchard Capital Partners reduces its price target from $8 to $7 on Magnum Hunter Resources (NYSE: MHR) following a recent capital raise.

Pritchard Capital Partners says, "Following the recent capital market raises, we are lowering our 2012 EPS/CFPS to ($0.11)/$0.74 from $0.06/$1.15, driven by more shares outstanding, a slightly lower production forecast (15.0 MBoe/d vs. 15.6 MBoe.d previously), as well as lower assumed realized prices and higher G&A and interest expense, partly offset by lower LOE. Our price target goes to $7 from $8 on a lowering of NAV to ~$8.60 from ~$9.90. MHR has built meaningful positions in three of the leading unconventional resource plays in North America--the Williston Basin (WB), Eagle Ford (EF) Shale, and liquids-rich area of the West Virginia Marcellus Shale."

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From: KaiserSosze5/16/2012 12:25:06 PM
of 118196
 
MHR closes both deals. Yeah??!!

finance.yahoo.com 

finance.yahoo.com 

Stock over 10% discount from the closing...wonder how the big boyz feel now?

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To: Steve Felix who wrote (107953)5/16/2012 12:34:38 PM
From: Dale Baker
of 118196
 
So Pritchard thinks 15K production while Evans is saying 18K, and Evans has beat his targets over and over for a couple of years.

Yeah, that makes sense.

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To: KaiserSosze who wrote (107954)5/16/2012 12:36:47 PM
From: Dale Baker
of 118196
 
My guess is the secondary buyers were shorting the stock from the day they heard about the offer and just used their $4.50 shares to cover those shorts at a nice profit.

On the plus side, the odds of any other major news goes way down for some time to come.

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To: Dale Baker who wrote (107946)5/16/2012 12:38:27 PM
From: Jerrymac
of 118196
 
Good point Dale, after giving some thought about this it occurred to me that since the retail guy cannot trade the senior MHR debt because of the 144a status, then the D's are (will be?) the only game in town for Magnum income investors. It is not totally irrelevant what the senior debt trades at, but rather a variable one must consider in making a decision. If the C's get called, its a good bet the proceeds find there way into the D's. An aside related note, GMXR just "swapped" their 144a debt for equivalent retail tradable debt (non144a). These are 11% due 12/01/17. RTQ ~84 cents on the dollar, cusip # 38011maq1.

finance.yahoo.com 

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To: Jerrymac who wrote (107957)5/16/2012 12:39:25 PM
From: Dale Baker
of 118196
 
That sounds right to me, Jerry. Beware conventional wisdom when something is TOO obvious.

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To: Dale Baker who wrote (107947)5/16/2012 12:44:21 PM
From: Dale Baker
of 118196
 
A quick search turns up APA and APC had preferreds out in the 5% range, while EOG hasn't used them. That's why I think an MHR buyer would retire the 8% debt ASAP.

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To: Dale Baker who wrote (107958)5/16/2012 12:48:10 PM
From: Jerrymac
of 118196
 
Agreed, would love to have that low print on the D's today.

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To: Steve Felix who wrote (107953)5/16/2012 12:54:25 PM
From: Schnullie
of 118196
 
I went back and looked - this is indeed the fourth analyst downgrade in 2 weeks on the heels of the offering. There are probably more in the making.

You can sneer at analyst opinions but they've been unanimous and, if anything, overly optimistic for at least the past year. Their current price targets represent large reductions in pps from previous price action several years ago ($8+)....we have gone significantly backwards.

Question to Dale or anybody else here: What is the best-case scenario that can be put on the latest events? What did MHR give up in their Baytex property acquisition and offering, what exactly did they gain?

Y'all have heard my doom and gloom take on the downside, now amplified by others - lowered EPS, missed production targets, higher G&A and interest, lower pps, enormous increase in the float, crushing debt, etc. In exchange for this managerial armageddon, what exactly did the company gain?

Sure it allowed them to double their Capex budget but how does this translate into anything specifically beneficial to shareholders. I haven't seen a single opinion that Gary's maneuverings will bring some benefit to shareholders, aside from establishing "meaningful positions" in promising areas. Even though Pritchard's numbers look sloppy and inaccurate, an eventual 15% overshoot in production (18 mboe) has been the rule for the past year or two but hasn't been translated into any advantage.

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