Drilling Deeper Into Magnum Hunter Resources Corp (MHR)’s Future

Pearsall
The final area to watch is the company’s remaining acreage in Texas in what’s known as the Pearsall Shale. Magnum Hunter owns about 7,000 net acres in the Pearsall, which is about half a mile below the Eagle Ford Shale. The Pearsall has different composition than the Eagle Ford; it’s composed more of silica and limestone. Further, Magnum Hunter’s position is in the wet gas and rich condensate part of the play, as opposed to the more oil-rich position in its recently sold Eagle Ford acres.

Magnum Hunter, along with partner Marathon Oil Corporation (NYSE:MRO), completed one well in the quarter. Initial results were decent, with initial production coming in at 584 barrels of oil equivalent per day. The bottom line here is that the play shows promise for both companies, meaning that it could provide some nice future upside to investors.

Final Foolish thoughts
Magnum Hunter Resources Corp (NYSE:MHR) has a lot of potential, but it still lacks certainty. It is positive that the future is starting to come into focus, especially as it continues to develop both the Marcellus and the Bakken. Full production of those two plays can finally be unleashed because they’ll no longer be held back by infrastructure issues. This leaves investors with additional upside potential from both the Utica and the Pearsall. When put all together, the future looks promising, but the company still has a long road ahead of it.

The article Drilling Deeper Into Magnum Hunter’s Future originally appeared on Fool.com.

Fool contributor Matt DiLallo has no position in any stocks mentioned. The Motley Fool recommends ONEOK Partners, L.P.

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