8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

___________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

___________

Date of Report (Date of earliest event reported):

February 16, 2010

___________

MAGNUM HUNTER RESOURCES CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware (State or Other Jurisdiction of Incorporation) 001-32997 (Commission File Number) 86-0879278 (I.R.S. Employer Identification Number)

777 Post Oak Boulevard, Suite 910

Houston, Texas 77056

(Address of principal executive offices, including zip code)

(832) 369-6986

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 2.01.Completion of Acquisition or Disposition of Assets.

As previously disclosed, Magnum Hunter Resources Corporation (the “Company”) entered into an Asset Purchase Agreement, dated October 28, 2009, as amended (the “Agreement”), to acquire substantially all of the assets (the “Acquisition”) of Triad Energy Corporation, a West Virginia corporation, and certain of its affiliated entities (collectively, “Triad”).  On February 12, 2010, the Company completed the Acquisition pursuant to the terms of the Agreement and the Order Confirming Joint Plan of Reorganization of Triad Resources, Inc., et al. (the “Bankruptcy Order”), entered on January 28, 2010 by the United States Bankruptcy Court for the Southern District of Ohio, Eastern Division.

The acquired assets consist primarily of oil and gas property interests in approximately 2,000 operated wells and include over 88,000 net mineral acres located in the states of Kentucky, Ohio, and West Virginia, a natural gas pipeline, two salt water disposal facilities, three drilling rigs, workover rigs, and other oilfield equipment.  Pursuant to the terms of the Agreement, Triad Hunter, LLC, a wholly-owned subsidiary of the Company formed for purposes of the Acquisition, and certain of its affiliates acquired the assets for aggregate consideration ofapproximately $81 million.  The $81 million total purchase price consisted of (i) the repayment of $55 million of Triad senior debt via drawing under the Company’s existing $150 million revolving commercial bank line of credit ($70 million borrowing base) and assumption of approximately $3 million of equipment indebtedness, (ii) the issuance to Triad’s Secured Creditors (as defined below) of $15 million of the Company’s Series B Redeemable Convertible Preferred Stock (the “Preferred Stock”), and (iii) the payment to Triad of $8 million in cash.

The foregoing description of the Agreement is qualified in its entirety by reference to the full text of the Agreement, as amended, a copy of which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed on October 29, 2009 and which is incorporated herein by reference.

In connection with the Acquisition, the Company amended and restated its senior credit facility, which will be summarized in a subsequent Current Report on Form 8-K.

Item 3.02.Unregistered Sales of Equity Securities.

In connection with the Acquisition and pursuant to the Bankruptcy Order, on February 12, 2010, the Company issued, in the aggregate, 4,000,000 shares of its Preferred Stock, with an aggregate liquidation preference of $15 million, to Allied Irish Banks, P.L.C., Capital One, N.A., and Citibank, N.A. (collectively, the “Secured Creditors”), each of which was a secured creditor of Triad in its Chapter 11 bankruptcy proceedings.  The Preferred Stock was issued as partial consideration for the Acquisition and served as partial satisfaction of the bankruptcy claims of the Secured Creditors against Triad.

The Preferred Stock was issued pursuant to the Bankruptcy Order and an exemption from registration under Regulation D under the Securities Act of 1933 (“Regulation D”).  The Secured Creditors are accredited investors within the meaning of Rule 501 of Regulation D, and the Preferred Stock was not sold by any form of general solicitation or general advertising.

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Pursuant to the Certificate of Designation for the Preferred Stock (the “Certificate of Designation”), the Preferred Stock is entitled to dividends at a rate of 2.75% per annum payable quarterly (i) in shares of Preferred Stock or (ii) subject to the receipt of any required consent under the Company’s senior credit facility, in cash.  At any time within twenty years of the date of issuance, the holders of shares of the Preferred Stock may convert any or all of their Preferred Stock into shares of the Company’s common stock (the “Common Stock”), at a conversion ratio of one share of Preferred Stock to one share of Common Stock.  The Preferred Stock is subject to redemption by the Company at a price of $3.75 per share (a) at any time following the two-year anniversary of the date on which such shares of Preferred Stock were issued, or (b) if the average trading price of the Common Stock equals or exceeds $4.74 per share for five consecutive trading days.  The Preferred Stock is subject to redemption at the option of the holders at a price of $3.75 per share at any time between the two-year anniversary and the twenty-year anniversary of the date on which such shares of Preferred Stock were issued.

 The Preferred Stock enjoys a liquidation preference of the greater of (i) its $3.75 per share stated value plus all accrued and unpaid dividends or (ii) the amount payable per share of Common Stock upon liquidation if the holder of the Preferred Stock had converted such shares of Preferred Stock into Common Stock immediately prior to the liquidation event, together with all accrued and unpaid dividends thereon.  The Preferred Stock has no voting rights except in certain limited circumstances.

The foregoing description of the terms of the Preferred Stock is qualified in its entirety by reference to the full text of the Certificate of Designation, a copy of which is filed with this Current Report on Form 8-K as Exhibit 3.1.

Item 5.03.Amendments to Articles of Incorporation.

The description of the Certificate of Designation set forth above under Item 3.02 is incorporated herein by reference.

On February 11, 2010, the Company filed the Certificate of Designation with the Secretary of State of the State of Delaware.  The Certificate of Designation is filed herewith as Exhibit 3.1 and is incorporated by reference into this Item 5.03.

Item 8.01.Other Events.

On February 16, 2010, the Company issued a press release announcing the consummation of the Acquisition, a copy of which is filed with this Current Report on Form 8-K as Exhibit 99.1.

The historic and pro forma financial statements required by Item 9.01 will be timely filed in a subsequent Current Report on Form 8-K or another filing pursuant to the Securities Exchange Act of 1934.

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The Company is including in this Item 8.01 of this Current Report on Form 8-K certain supplemental financial information regarding the combined company for potential investors and to incorporate such information by reference in pending and future registration statements under the Securities Act of 1933.  The unaudited pro forma balance sheet of the Company as of September 30, 2009 and the unaudited pro forma income statement for the year ended December 31, 2008 and the nine month period ended September 30, 2009, which each give effect to (i) the purchase of Triad’s assets (including the issuance of the Preferred Stock by the Company to Triad and its designees as part of the consideration for the assets), (ii) the incurrence of indebtedness by the Company pursuant to the new revolving credit facility, (iii) the Company’s issuance of additional shares of common stock between October 31, 2009 and February 10, 2010, and (iv) the issuance of shares of series C preferred stock, are attached as Exhibit 99.2 to this Current Report on Form 8-K and incorporated herein by reference (collectively, the “Pro Forma Financial Information”).  Sections (iii) and (iv) above were included in the Pro Forma Financial Information as both were closing conditions under the Agreement.  The Pro Forma Financial Information includes TriTex Energy, L.L.C. and TriTex Resources L.L.C., affiliates of Triad, the assets of which were not acquired by the Company pursuant to the Agreement, and does not include Alpha Drilling Ltd., an affiliate of Triad, the assets of which were acquired by the Company pursuant to the Agreement.The Pro Forma Financial Information should be read in conjunction with the notes thereto, the Company’s Current Reports on Form 8-K, filed on October 28, 2009 and November 16, 2009, and the consolidated financial statements of the Company and the notes thereto as filed with the Company’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.

Forward-Looking Statements

This Current Report on Form 8-K (including the information included or incorporated by reference herein) includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995.  Such statements may include, but are not limited to, statements about the benefits of the proposed agreement between the Company and Triad, including future financial and operating results, the combined company’s plans, objectives, expectations, and intentions and other statements that are not historical facts.  Such statements are based upon the current beliefs and expectations of the Company’s and Triad’s management and are subject to significant risks and uncertainties.  Actual results may differ from those set forth in the forward-looking information.

The following factors, among others could cause actual results to differ from those set forth in the forward-looking statements: the possibility that the expected synergies from the proposed acquisition of the Triad assets will not be realized, or will not be realized within the expected time period, due to, among other things, the risk that the assets will not be integrated successfully, disruption from the asset purchase making it more difficult to maintain business and operational relationships, the Company’s and Triad’s ability to accurately predict future market conditions; the actual terms of the financing required for the asset purchase and/or the failure to obtain such financing, and the risks of new and changing regulation of the oil and gas industry.  Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the Company’s Annual Report on Form 10-K, as amended, for the year ended December 31, 2008, the registration statement filed by the Company on September 16, 2009, as amended and supplemented from time to time, and the Company’s other filings with the Securities and Exchange Commission from time to time.  You are cautioned not to place undue reliance on such statements.  We undertake no obligation to publicly update or revise any forward-looking statement.

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Item 9.01.Financial Statements and Exhibits.

Exhibit No.	Description
3.1	Certificate of Designation for Series B Redeemable Convertible Preferred Stock
99.1	Press Release dated February 16, 2010
99.2	Pro Forma Financial Information

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MAGNUM HUNTER RESOURCES CORPORATION
Date:  February 16, 2010	By:	/s/ Gary C. Evans
		Name: Gary C. Evans
		Title: Chairman and Chief Executive Officer

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EXHIBIT INDEX

Exhibit No.	Description
3.1	Certificate of Designation for Series B Redeemable Convertible Preferred Stock
99.1	Press Release dated February 16, 2010
99.2	Pro Forma Financial Information

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EX-3.1

EXHIBIT 3.1

CERTIFICATE OF DESIGNATION

OF RIGHTS, PREFERENCES AND LIMITATIONS OF THE

SERIES B REDEEMABLE CONVERTIBLE PREFERRED STOCK

OF

MAGNUM HUNTER RESOURCES CORPORATION

_______________

Magnum Hunter Resources Corporation, a corporation organized and existing under the General Corporation Law of the State of Delaware, in accordance with Sections 151 of the Delaware General Corporation Law, DOES HEREBY CERTIFY:

FIRST:  The name of the corporation is Magnum Hunter Resources Corporation (formerly known as Petro Resources Corporation and Kid Critter U.S.A., Inc., the “Corporation”).

SECOND:  The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on June 4, 1997.

THIRD:  This Certificate of Designation for the Corporation’s Series B Redeemable Convertible Preferred Stock (the “Series B Preferred Stock”) was duly adopted by the affirmative vote of the Corporation’s Board of Directors (the “Board of Directors”) on February 10, 2010, and is as follows:

1.Designation, Amount and Par Value. The series of Preferred Stock shall be designated as the Corporation’s Series B Redeemable Convertible Preferred Stock, and the number of shares so designated shall be 5,000,000 (which number includes 1,000,000 shares of Series B Redeemable Convertible Preferred Stock reserved exclusively for the payment of dividends in kind). Each share of Series B Preferred Stock shall have a par value of $0.01 and a stated value equal to $3.75 (the “Stated Value”).

2.Definitions. In addition to the terms defined elsewhere in this Certificate of Designation,  the following terms have the meanings indicated:

“Business Day” means any day other than Saturday, Sunday and any day on which banks are required or authorized by law to be closed in the State of Texas.

“Commission” means the Securities and Exchange Commission.

“Common Stock” means the common stock of the Corporation, par value $0.01 per share.

“Dividend Rate” means 2.75% per annum of the sum of (i) the Stated Value per share of Series B Preferred Stock plus (ii) all accrued but unpaid dividends on such share of Series B Preferred Stock that remain unpaid following the Dividend Payment Date when due, in each case as adjusted for any stock split, stock dividend, stock combination or other similar transactions with respect to the Series B Preferred Stock.

“Eligible Market” means any of the New York Stock Exchange, the NYSE Amex, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or the OTC Bulletin Board.

“Fair Market Value” of any property means the fair market value thereof as determined in good faith by the Board of Directors, which determination must be set forth in a written resolution of the Board of Directors, in accordance with the following rules:

(i) for a security traded or quoted on a national securities exchange or automated quotation system, the Fair Market Value will be the average of the closing prices of such security on such exchange or quotation system over a 20-trading day period ending on the trading day immediately prior to the date of determination;

(ii) for Common Stock that is not so traded or quoted, the Fair Market Value shall be determined:  (x) mutually by the Board of Directors and the Holders of at least a majority of the then outstanding shares of Series B Preferred Stock, (y) by the Board of Directors based on a valuation of the Corporation not less than the implied valuation of the Common Stock based on an arms’-length sale of equity securities to a non-affiliate third-party within six months prior to the date of determination, or (z) by a nationally recognized investment banking or accounting firm (whose fees and expenses will be paid by the Corporation) selected by mutual agreement between the Board of Directors and the Holders representing a majority of the then outstanding shares of Series B Preferred Stock; or

(iii) for any other property, the Fair Market Value shall be determined by the Board of Directors assuming a willing buyer and a willing seller in an arm’s-length transaction;

provided that if Holders representing a majority of the then outstanding shares of Series B Preferred Stock object to a determination of the Board of Directors made pursuant to clause (ii)(y) or clause (iii), then the Fair Market Value of such property will be as determined by a nationally recognized investment banking or accounting firm (whose fees and expenses will be paid by the Corporation) selected by mutual agreement between the Board of Directors and the Holders representing a majority of the then outstanding shares of Series B Preferred Stock.

“Holder” means any holder of Series B Preferred Stock.

“Junior Securities” means (i) the Common Stock and all other outstanding equity or equity equivalent securities of the Corporation, including but not limited to the Corporation’s 10.25% Series C Cumulative Perpetual Preferred Stock (the “Series C Stock”), and (ii) all equity or equity equivalent securities issued by the Corporation after the Original Issue Date that do not rank senior to or paripassuwith the Series B Preferred Stock.

“Original Issue Date” means the date of the first issuance of any shares of the Series B Preferred Stock regardless of the number of transfers of any particular shares of Series B Preferred Stock and regardless of the number of certificates that may be issued to evidence such Series B Preferred Stock.

“Person” means any individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture or other non-corporate business enterprise, limited liability company, joint stock company, trust, organization, business, labor union or government (or an agency or subdivision thereof) or any court or other federal, state, local or other governmental authority or other entity of any kind.

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3.Voting Rights.

Except as otherwise required by law, the Series B Preferred Stock shall have no voting rights; provided, however, that so long as shares of Series B Preferred Stock are outstanding, the Corporation shall not, without the prior approval of the Holders of at least a majority of the then issued and outstanding shares of Series B Preferred Stock, voting as a separate class: (1) authorize or increase the authorized number of shares of Series B Preferred Stock or any shares of capital stock of the Corporation having any right, preference or priority ranking senior to or pari passu with Series B Preferred Stock, (2) authorize, adopt or approve any amendment to the Certificate of Incorporation, the Bylaws or this Certificate of Designation that would increase or decrease the par value or the Stated Value of the shares of the Series B Preferred Stock, alter or change the powers, preferences or rights of the shares of Series B Preferred Stock or alter or change the powers, preferences or rights of any other capital stock of the Corporation if after such alteration or change such capital stock would be senior to or pari passu with Series B Preferred Stock, (3) amend, alter or repeal the Certificate of Incorporation, the Bylaws or this Certificate of Designation so as to affect the shares of Series B Preferred Stock adversely, or (4) authorize or issue any security convertible into, exchangeable for or evidencing the right to purchase or otherwise receive any shares of any class or classes of capital stock of the Corporation having any right, preference or priority ranking senior to or pari passu with Series B Preferred Stock.

The Holder of each share of Series B Preferred Stock shall be entitled to one vote per share of Series B Preferred Stock at the record date for determination of the stockholders entitled to vote on such matters, or, if no record date is established, at the date such vote is taken or the effective date of any written consent.

4.Dividends.

(a) Holders shall be entitled to receive, out of funds legally available therefor, and the Corporation shall pay, cumulative dividends on the Series B Preferred Stock at the Dividend Rate per share. Dividends on the Series B Preferred Stock shall accrue daily commencing as of the Original Issue Date at the Dividend Rate then in effect, and shall be deemed to accrue from the Original Issue Date whether or not earned or declared and whether or not there are profits, surplus or other funds of the Corporation legally available for the payment of dividends. Dividends on the Series B Preferred Stock shall (i) be calculated on the basis of a 360-day year, and (ii) commencing on the Original Issue Date, be payable quarterly in arrears on each March 31, June 30, September 30, and December 31, except if such date is not a Business Day, such dividend shall be payable on the next succeeding Business Day (each, a “Dividend Payment Date”).

(b) The Corporation may pay required dividends (i) in shares of Series B Preferred Stock or (ii) subject to the receipt of any consent required under the Corporation’s senior secured credit facility as from time to time in effect, in cash; provided, however, the Corporation shall not pay any cash dividends on its Common Stock, or any other Junior Securities other than the Series C Stock, within a 180-day period before or after a Dividend Payment Date upon which the Corporation has paid in kind, rather than cash, dividends on the Series B Preferred Stock. In the event that the Corporation elects to pay dividends in shares of Series B Preferred Stock, the number of shares of Series B Preferred Stock to be issued to each Holder in respect of such dividend shall be determined by dividing the total dividend then payable to such Holder by the Stated Value, and rounding up to the nearest whole share, and the Corporation shall, on or before the fifth Business Day following the applicable Dividend Payment Date, issue and deliver to such Holder a certificate, registered in the name of the Holder or its designee, for the number of shares of Series B Preferred Stock to which the Holder shall be entitled. Notwithstanding any other provision of this Certificate of Designation, the Corporation shall not be entitled to pay dividends by issuing Series B Preferred Stock unless the Corporation has obtained stockholder approval, if required, for the issuance in accordance with the applicable rules and regulations of the Eligible Market.

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(c) Notwithstanding any other provision of this Certificate of Designation, the Corporation shall not pay any dividends on, or make any distributions with respect to, in cash or in kind or otherwise, its Common Stock or any other Junior Securities when accrued and unpaid dividends are owed to the Holders.

5.Registration of Series B Preferred Stock. The Corporation shall register shares of the Series B Preferred Stock, upon records to be maintained by the Corporation for that purpose (the “Series B Preferred Stock Register”), in the name of the record Holders thereof from time to time. The Corporation may deem and treat the registered Holder of shares of Series B Preferred Stock as the absolute owner thereof for the purpose of any conversion or redemption thereof or any distribution to such Holder, and for all other purposes, absent actual written notice to the contrary from the registered Holder.

6.Registration of Transfers. The Corporation shall register the transfer of any shares of Series B Preferred Stock in the Series B Preferred Stock Register, upon surrender of certificates evidencing such shares to the Corporation at its address specified herein. Upon any such registration or transfer, a new certificate evidencing the shares of Series B Preferred Stock so transferred shall be issued to the transferee and a new certificate evidencing the remaining portion of the shares not so transferred, if any, shall be issued to the transferring Holder.

7.Liquidation.

(a) In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary (a “Liquidation Event”), which shall be deemed to include (i) the acquisition of the Corporation by another person or affiliated group of persons by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger, consolidation, issuance of new securities or transfer of issued and outstanding securities) where less than a majority of the voting power of the acquiring or surviving person or group immediately following such acquisition is held by persons or entities who were stockholders of the Corporation immediately prior to such acquisition, (ii) a sale or other disposition of all or substantially all of the assets of the Corporation and (iii) a sale or other disposition of assets that results in funds being available for distribution to stockholders that are in excess of those necessary or appropriate for the Corporation to conduct its business operations (including repayment of its outstanding liabilities) and execute its business plan and that are sufficient to pay the Series B Stock Liquidation Preference in full (as defined below), as determined by the Board of Directors, the Holders of Series B Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets or surplus funds of the Corporation to the holders of Junior Securities by reason of their ownership thereof, an amount per share in cash equal to the greater of (x) the Stated Value for each share of Series B Preferred Stock then held by them (as adjusted for any stock split, stock dividend, stock combination or other similar transactions with respect to the Series B Preferred Stock), plus all accrued and unpaid dividends on such Series B Preferred Stock as of the date of such event, or (y) the amount payable per share of Common Stock which such Holder of Series B Preferred Stock would have received if such Holder had converted to Common Stock immediately prior to the Liquidation Event all of the shares of Series B Preferred Stock then held by such Holder together with all accrued but unpaid dividends on such Series B Preferred Stock as of the date of such event (the “Series B Stock Liquidation Preference”). If, upon the occurrence of a Liquidation Event, the funds thus distributed among the Holders of the Series B Preferred Stock shall be insufficient to permit the payment to such Holders of the full Series B Stock Liquidation Preference, then the entire assets and funds of the Corporation legally available for distribution shall be distributed ratably among the Holders of the Series B Preferred Stock in proportion to the aggregate Series B Stock Liquidation Preference that would otherwise be payable to each of such Holders.

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(b) In the event of a Liquidation Event, following completion of the distributions required by the first sentence of paragraph (a) of this Section 7, if assets or surplus funds remain in the Corporation, the holders of the Junior Securities shall share in all remaining assets of the Corporation, in accordance with the General Corporation Law of Delaware and the Certificate of Incorporation of the Corporation, as amended.

(c) The Corporation shall give each Holder written notice of any Liquidation Event no less than 30 days prior to the occurrence thereof.

8.Conversion.

(a) At the option of any Holder, from time to time, all or any portion of the Series B Preferred Stock held by such Holder may be converted into one share of duly authorized, validly issued, fully-paid and non-assessable share of Common Stock (each an “Underlying Share”) per share of Series B Preferred Stock to be converted by such Holder, as adjusted for any stock dividends, splits, combinations or similar events.  The number of Underlying Shares into which each share of Series B Preferred Stock is convertible, as adjusted from time to time in accordance with this Section 8, is referred to herein as the “Conversion Number.”  A Holder may convert Series B Preferred Stock into Common Stock pursuant to this paragraph at any time, and from time to time, after the Original Issue Date until the date that is 20 years following the Original Issue Date, by delivering to the Corporation (i) a Conversion Notice, in the form attached hereto as Exhibit “A”, appropriately completed and duly signed, and (ii) the original certificate(s) evidencing the Series B Preferred Stock being converted. The date any such Conversion Notice and original certificate(s) are delivered to the Corporation (as determined in accordance with the notice provisions hereof) is a “Conversion Date.”

(b)Adjustments to Conversion Number.

(i)Stock Splits and Combinations.  If the outstanding shares of Common Stock are split into a greater number of shares, the Conversion Number will be proportionately increased.  If the outstanding shares of Common Stock are combined into a smaller number of shares, the Conversion Number then in effect immediately before such combination will be proportionately decreased.  These adjustments will be effective at the close of business on the date the split or combination becomes effective.

(ii)Dividends and Other Distributions in Shares of Common Stock.  If the Corporation declares or makes a dividend or other distribution payable in shares of Common Stock to holders of Common Stock, then the Conversion Number will be increased, effective at the close of business on the date of issuance of the shares of Common Stock paid as a dividend or distribution (the “Measurement Date”), to a number determined by multiplying such Conversion Number by a fraction:

(A) the numerator of which will be sum of (x) the number of shares of Common Stock outstanding immediately prior to the Measurement Date plus (y) the number of shares of Common Stock issued in payment of such dividend or distribution, and

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(B) the denominator of which will be the number of shares of Common Stock outstanding, on a fully diluted basis, immediately prior to the Measurement Date.

(iii)Dividends and Distributions Other Than In Shares of Common Stock.  If the Corporation declares or makes a dividend or other distribution to holders of Common Stock payable in capital stock, other securities or other property (including but not limited to cash and evidences of indebtedness) other than shares of Common Stock, then the Corporation shall provide that the Holders of Series B Preferred Stock will receive upon conversion thereof, in addition to the number of shares of Common Stock receivable thereupon, such capital stock, other securities or other property (including but not limited to cash and evidences of indebtedness) that they would have received had their shares of Series B Preferred Stock been converted into Common Stock on the date of such event and had retained such capital stock, other securities or other property (including but not limited to cash and evidences of indebtedness) receivable from the date of such event until the Conversion Date.

(iv)         Rules of Calculation; Treasury Stock.  The number of shares of Common Stock outstanding will be calculated on the basis of the number of issued and outstanding shares of Common Stock on the applicable date, not including shares held in the treasury of the Corporation.  The Corporation shall not pay any dividend on or make any distribution to shares of Common Stock held in treasury.

(v)         Waiver.  Notwithstanding the foregoing, the Conversion Number will not be increased if the Corporation receives, prior to the Measurement Date, written notice from the Holders representing at least a majority of the then outstanding shares of Series B Preferred Stock, voting together as a separate class, that no adjustment is to be made as the result of a dividend or other distribution on shares of Common Stock.  This waiver will be limited in scope and will not be valid for any dividend or other distribution on shares of Common Stock not specifically provided for in such notice.

9.Mechanics of Conversion.  Upon conversion of any share of Series B Preferred Stock, the Corporation shall promptly (but in no event later than three Business Days after the Conversion Date) issue or cause to be issued and cause to be delivered to or upon the written order of the Holder and in such name or names as the Holder may designate a certificate for the Underlying Shares issuable upon such conversion. The Holder, or any Person so designated by the Holder to receive Underlying Shares, shall be deemed to have become the holder of record of such Underlying Shares as of the Conversion Date. Upon surrender of a certificate following one or more partial conversions, the Corporation shall promptly deliver to the Holder a new certificate representing the remaining shares of Series B Preferred Stock.

10.Redemption Rights.

(a)Redemption by the Corporation.  The Corporation shall have the right to repurchase (a “Corporation Redemption”) all or any portion of the then outstanding shares of Series B Preferred Stock at a price, in cash, equal to the Stated Value per share, plus all accrued but unpaid dividends thereon to the date of payment (the “Corporation Redemption Price”), (i) at any time following the two-year anniversary of the Original Issue Date, or (ii) if the average trading price of the Common Stock as traded or quoted on the applicable Eligible Exchange equals or exceeds $4.74 per share (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like, with respect to such shares) (the “Corporation Redemption Trading Price”) for five consecutive trading days.

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(b)Notice for Corporation Redemption. The Corporation must deliver notice of a Corporation Redemption to the Holders at least 20 calendar days prior to the date of such Corporation Redemption (the “Corporation Redemption Date”). Such notice shall state the date of the Corporation Redemption Date, the Corporation Redemption Price, the number of shares of Series B Preferred Stock to be redeemed, and that the Holder is to surrender to the Corporation, at the place or places where certificates for shares of Series B Preferred Stock are to be surrendered for redemption, in the manner and at the price designated, the certificate or certificates representing the shares of Series B Preferred Stock to be redeemed. Upon receipt of notice of a Corporation Redemption, each Holder shall have the option to convert any Series B Preferred Stock held by such Holder into Common Stock, in accordance with Sections 8 and 9 hereof, at any time on or prior to the Corporation Redemption Date.

(c)Redemption by the Holder. At any time following the two-year anniversary of Original Issue Date and prior to the 20-year anniversary of the Original Issue Date, upon the written request of the Holder, the Series B Preferred Stock shall be redeemed by the Corporation in cash for a redemption price of $3.75 (as adjusted for any stock split, stock dividend, stock combination or other similar transactions with respect to the Series B Preferred Stock) per share of Series B Preferred Stock (the “Holder Redemption Price”). Such redemption is referred to herein as a “Holder Redemption.”

(d)Notice for Holder Redemption.  A Holder may request the redemption of its Series B Preferred Stock in cash pursuant to this paragraph at any time following the two-year anniversary of the Original Issue Date until the date that is 20 years following the Original Issue Date, by delivering to the Corporation (i) a notice requesting the redemption of its Series B Preferred Stock pursuant to this Section 10(b), and (ii) the original certificate(s) evidencing the Series B Preferred Stock being redeemed.

(e)Mechanics of Redemption. Upon receipt of the original certificate(s) evidencing the Series B Preferred Stock being redeemed, the Corporation shall promptly deliver the Corporation Redemption Price or the Holder Redemption Price, as applicable, to the Holders of the Series B Preferred Stock.

11.Reservation of Common Stock. The Corporation shall at all times reserve and keep available for issuance upon the conversion of shares of Series B Preferred Stock, such number of its authorized but unissued shares of Common Stock as will from time to time be sufficient to permit the conversion of all outstanding shares of Series B Preferred Stock (including any shares of Series B Preferred Stock paid by the Corporation as in kind dividends on the Series B Preferred Stock), and shall take all action to increase the authorized number of shares of Common Stock if at any time there shall be insufficient authorized but unissued shares of Common Stock to permit such reservation or to permit the conversion of all outstanding shares of Series B Preferred Stock; provided, that the Holders approve any such action that requires a vote of the Holders in accordance with Section 3.

12.Charges, Taxes and Expenses. The issuance of certificates for shares of Series B Preferred Stock and for Underlying Shares issued upon conversion of (or otherwise in respect of) the Series B Preferred Stock shall be made without charge to the Holders for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Corporation; provided, however, that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the registration of any certificates for Common Stock or Series B Preferred Stock in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring the Series B Preferred Stock or receiving Underlying Shares in respect of the Series B Preferred Stock.

7

13.Replacement Certificates. If any certificate evidencing Series B Preferred Stock or Underlying Shares is mutilated, lost, stolen or destroyed, the Corporation shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution for such certificate, a new certificate, but only upon receipt of evidence reasonably satisfactory to the Corporation of such loss, theft or destruction and customary and reasonable indemnity, if requested. Applicants for a new certificate under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Corporation may prescribe.

14.Certain Adjustments. The Corporation Redemption Trading Price is subject to adjustment from time to time as set forth in this Section 14.

(a)Stock Dividends and Splits. If the Corporation, at any time while any shares of Series B Preferred Stock are outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, or (iii) combines outstanding shares of Common Stock into a smaller number of shares, then in each such case the Corporation Redemption Trading Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately following the close of business on the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately following the close of business on the effective date of such subdivision or combination.

(b)Fundamental Transactions. If, at any time while any shares of Series B Preferred Stock are outstanding, the Corporation consummates a Fundamental Transaction (as defined below) set forth in subsections (i) or (iii) thereof, then (i) if such transaction is for equity consideration, the Corporation Redemption Trading Price shall be divided by the exchange ratio applicable in such transaction to shares of Common Stock, (ii) if such transaction is for cash consideration, the Corporation Redemption Trading Price shall be multiplied by a fraction of which the numerator shall be the Fair Market Value of a share of the common stock of the acquiring entity and the denominator shall be the Fair Market Value of a share of Common Stock, and (iii) if such transaction is for a combination of equity and cash consideration, the methods set forth in (i) and (ii) above shall be used proportionately to determine the adjusted Corporation Redemption Trading Price.

(c)Calculations. All calculations under this Section 14 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Corporation, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

(d)Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 14, the Corporation at its expense will promptly compute such adjustment in accordance with the terms hereof and prepare a certificate describing in reasonable detail such adjustment and the transactions giving rise thereto, including all facts upon which such adjustment is based. Upon written request, the Corporation will promptly deliver a copy of each such certificate to each Holder.

8

15.Fundamental Transactions. If, at any time while any shares of Series B Preferred Stock are outstanding, (i) the Corporation effects any merger of the Corporation into or consolidation of the Corporation with another Person, (ii) the Corporation effects any sale of all or substantially all of its assets in one or a series of related transactions, or (iii) the Corporation effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of shares of Common Stock covered by Section 14(a)) (in any such case, a “Fundamental Transaction”), then, to the extent such Fundamental Transaction does not constitute a Liquidation Event, upon any subsequent conversion of Series B Preferred Stock, each Holder shall have the right to receive, for each Underlying Share that would have been issuable upon such conversion absent such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the record holder of such Underlying Shares immediately prior to such record date (the “Alternate Consideration”).

16.Fractional Shares. The Corporation shall not be required to issue or cause to be issued fractional Underlying Shares upon conversion of Series B Preferred Stock. If any fraction of an Underlying Share would, except for the provisions of this Section, be issuable upon conversion of Series B Preferred Stock, the number of Underlying Shares to be issued will be rounded up to the nearest whole share.

17.Notice of Corporate Events.  If the Corporation (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including, without limitation, any granting of rights or warrants to subscribe for or purchase any capital stock of the Corporation or any subsidiary, or (ii) authorizes or approves, enters into any agreement contemplating or solicits stockholder approval for any Liquidation Event or Fundamental Transaction then the Corporation shall deliver to each Holder a notice which shall specify (1) the record date for the purpose of such dividend or distribution and a description of such dividend or distribution, (2) the date on which any such Liquidation Event or Fundamental Transaction is expected to become effective, and (3) the date, if any, that is to be fixed as to when the holders of record of Common Stock (or other securities) shall be entitled to exchange their shares of Common Stock (or other securities) for securities or other property deliverable upon any such Liquidation Event or Fundamental Transaction.

18.Notices. Any and all notices or other communications or deliveries hereunder (including without limitation any Conversion Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 5:00 p.m. (Houston time) on a Business Day, (ii) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Business Day or later than 5:00 p.m. (Houston time) on any Business Day, (iii) the Business Day following the date of transmittal, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be: (i) if to the Corporation, to 777 Post Oak Blvd., Suite 910, Houston, Texas 77056, facsimile: (832) 369-6992, attention Chief Financial Officer, or (ii) if to a Holder, to the address or facsimile number appearing on the Corporation’s Preferred Stock Register or such other address or facsimile number as such Holder may provide to the Corporation in accordance with this Section.

19.Miscellaneous.

(a) The headings herein are for convenience only, do not constitute a part of this Certificate of Designation and shall not be deemed to limit or affect any of the provisions hereof.

(b) No provision of this Certificate of Designation may be amended, except in a written instrument signed by the Corporation and Holders of at least a majority of the shares of Series B Preferred Stock then outstanding.

9

(c) The Series B Preferred Stock (i) is senior to all other equity interests in the Corporation outstanding as of the Original Issue Date in right of payment, whether with respect to dividends or upon liquidation or dissolution, or otherwise and (ii) will be senior to all other equity or equity equivalent securities issued by the Corporation after the Original Issue Date.

(d) Any of the rights of the Holders of Series B Preferred Stock set forth herein may be waived by the affirmative vote of Holders of a majority of the shares of Series B Preferred Stock then outstanding. No waiver of any default with respect to any provision, condition or requirement of this Certificate of Designation shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

[Signature Page Follows.]

10

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designation for the Series B Preferred Stock to be executed by its duly authorized officer on February 10, 2010.

MAGNUM HUNTER RESOURCES CORPORATION
By:	/s/ Gary C. Evans
	Name: Gary C. Evans
	Title: Chairman and Chief Executive Officer

11

EXHIBIT A

FORM OF CONVERSION NOTICE

(To be executed by the registered Holder in order to convert shares of Series B Preferred Stock)

The undersigned hereby elects to convert the number of shares of Series B Redeemable Convertible Preferred Stock indicated below into shares of common stock, $0.01 par value per share (the “Common Stock”), of Magnum Hunter Resources Corporation, a Delaware corporation (the “Corporation”), as of the date written below.

__________________________________________________

Date to Effect Conversion

__________________________________________________

Number of shares of Series B Preferred Stock

owned prior to Conversion

__________________________________________________

Number of shares of Series B Preferred Stock to be Converted

__________________________________________________

Number of shares of Common Stock to be Issued

__________________________________________________

Number of shares of Series B Preferred Stock subsequent

to Conversion

By: _______________________________________________

Name of Holder:______________________________________

12

EX-99.1

EXHIBIT 99.1

NEWS RELEASE    FOR IMMEDIATE RELEASE

MAGNUM HUNTER RESOURCES

ANNOUNCES FINAL CLOSING

ON THE ACQUISITION OF

APPALACHIAN BASIN FOCUSED

TRIAD ENERGY

Houston – (Market Wire) – February 16, 2010 – Magnum Hunter Resources Corporation (NYSE Amex: “MHR” and “MHR-PC”, the “Company”) announced today that the Company has closed on the previously announced acquisition of privately-held Triad Energy Corporation and affiliates (collectively “Triad”), an Appalachian Basin focused energy company.  The final closing announced today follows the January 28, 2010 announcement by Magnum Hunter that the United States Bankruptcy Court for the Southern District of Ohio, Eastern Division had approved an order confirming Triad Energy Corp.’s Plan of Reorganization which ratified and approved Magnum Hunter’s Asset Purchase Agreement to acquire substantially all of the assets of Triad and certain of its affiliated entities which was originally executed on October 28, 2009.

The Triad assets acquired primarily consist of oil and gas property interests in approximately 2,000 operated wells and include over 88,000 net mineral acres located in the states of Kentucky, Ohio, and West Virginia, a natural gas pipeline (Eureka Hunter Pipeline), two salt water disposal facilities, three drilling rigs, workover rigs, and other oilfield equipment.

Magnum Hunter paid cash, issued restricted securities and refinanced Triad’s outstanding debt obligations in the aggregate of approximately $81 million. The $81 million total purchase price is broken out in components of (i) the repayment of $55 million of Triad senior debt via drawing under the Company’s existing $150 million revolving commercial bank commercial bank line of credit ($70 million borrowing base) and assuming approximately $3 million of equipment indebtedness , (ii) issuance to Triad’s senior lenders of $15 million in Series B Redeemable Convertible Preferred Stock with a 2.75% fixed coupon payable quarterly and (iii) paying approximately $8 million in cash.

About Triad Hunter, LLC and Affiliates

Triad Energy Corporation was a 23 year old Reno, Ohio headquartered oil and natural gas exploration and production company previously focused exclusively in the Appalachian Basin with operations in Ohio, West Virginia and Kentucky. As of June 30, 2009, supported by a reserve report prepared by an independent third party engineering firm, Triad Energy had total proved reserves of approximately 5.2 MMBoe (69% crude oil and 69% classified as proved developed producing). Triad had a present value on proved reserves discounted at 10% ($69.89 per Bbl and $3.835 per Mcf) as of June 30, 2009 of $74.1 million. Daily production from existing wells is approximately 1,000 Boe. The third party engineering report does not reflect any future potential that may exist from the drilling of horizontal wells in the Marcellus Shale formation on approximately 50,000 net mineral acres.

The Company’s wholly owned subsidiary, Triad Hunter LLC, presently controls approximately 88,417 net mineral acres located in Ohio, West Virginia and Kentucky, with approximately 75% of this acreage classified as held by production “HBP”.  Triad Hunter’s lease acreage position is concentrated and contiguous with the existing operations and production the Company acquired from Triad.  Proved reserves and upside production potential is reflected in Triad’s mature oil fields currently under primary and secondary development, conventional fields with additional development and behind pipe potential and horizontal drilling of Triad Hunter’s Marcellus Shale acreage position.

Other assets acquired in the closing include (i) oilfield service equipment (three air drilling rigs, pole units, frac tanks, trailers, gang trucks, vacuum trucks, etc.), (ii) two commercial salt water disposal facilities, and (iii) the control of over 182 miles of existing natural gas pipelines and pipeline right-of-ways (Eureka Hunter Pipeline). It is anticipated that the midstream assets can be utilized to solve a portion of the existing Appalachian Basin regional takeaway challenges and allow Magnum Hunter to significantly expand this natural gas transportation and processing business to third parties.

Management Comments

Mr. Gary C. Evans, Chairman and Chief Executive Officer of the Company, commented, “We are extremely pleased to announce final closing on the acquisition of the assets of Triad Energy and its related entities. Magnum Hunter has already begun the process of integrating Triad Hunter’s diverse group of assets and its employees into our existing base of operations. Along with the tremendous upside we see from an approximate 50,000 net mineral acreage position in the Marcellus Shale, we believe there exists additional upside potential for value enhancement within the existing Triad Hunter asset portfolio which also includes an evolving horizontal play in the Huron formation.  With establishment of this new core area of operations for the Company, Magnum Hunter now has one of the most cost effective ownership positions in the Appalachian Basin. We are planning on drilling a minimum of two Marcellus horizontal wells on our acquired acreage before mid-year adjacent to our existing pipeline.  We have recently begun the process of converting the newly acquired Eureka Hunter Pipeline located in Northern West Virginia from a low pressure gathering system with minimal throughput capacity, to one that can move up to 200 million cubic feet per day of new gas capacity.  The opportunity for booking incremental new proven reserves in this region is substantial for Magnum Hunter since no proved undeveloped reserves have previously been accounted for on our Marcellus Shale acreage lease position.”

About Magnum Hunter Resources Corporation

Magnum Hunter Resources Corporation and subsidiaries are a Houston, Texas based independent exploration and production company engaged in the acquisition of exploratory leases and producing properties, secondary enhanced oil recovery projects, exploratory drilling, and production of oil and natural gas in the United States. The Company is presently active in three of the “big four” emerging shale plays in the United States.

For more information, please view our website at www.magnumhunterresources.com

2

Forward-looking Statements

The statements contained in this press release that are not historical are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including statements, without limitation, regarding the Company’s expectations, beliefs, intentions or strategies regarding the future. Such forward-looking statements may relate to, among other things: (1) the Company’s proposed exploration and drilling operations on its and Triad’s various properties, (2) the expected production and revenue from its and Triad’s various properties, (3) the Company’s proposed redirection as an operator of certain properties and (4) estimates regarding the reserve potential of its and Triad’s various properties.  These statements are qualified by important factors that could cause the Company’s actual results to differ materially from those reflected by the forward-looking statements.  Such factors include but  are not limited to: (1) the Company’s ability to finance the continued exploration, drilling and operation of  its and Triad’s various properties, (2) positive confirmation of the reserves, production and operating expenses associated with its and Triad’s various properties; and (3) the general risks associated with oil and gas exploration, development and operation, including those risks and factors described from time to time in the Company’s reports and registration statements filed with the Securities and Exchange Commission, including but not limited to the Company’s Annual Report on Form 10-K, Form 10-K/A and Form10-K/A  for the year ended December 31, 2008 filed with the Securities and Exchange Commission on March 31, 2009,  April 29, 2009 and September 11, 2009, respectively, and the Company’s Quarterly Reports on Form 10-Q for the quarters ending March 31, 2009 and June 30, 2009, filed on May 11, 2009, August 14, 2009 and November 16, 2009, respectively. The Company cautions readers not to place undue reliance on any forward-looking statements. The Company does not undertake, and specifically disclaims any obligation, to update or revise such statements to reflect new circumstances or unanticipated events as they occur.

####

Contact:  M. Bradley Davis Senior Vice President of Capital Markets bdavis@magnumhunterresources.com (832) 203-4545

3

EX-99.2

EXHIBIT 99.2

UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

The following unaudited pro forma combined financial data are derived from the consolidated financial statements of the Company and certain historical financial data in respect of various assets acquired by the Company.  The Unaudited Pro Forma Balance Sheet of the Company as of September 30, 2009 has been prepared assuming the Triad acquisition and all necessary ancillary transactions had been consummated on September 30, 2009.  The Unaudited Pro Forma Income Statement for the year ended December 31, 2008 and the nine months ended September 30, 2009 have been prepared assuming the Triad acquisition and all necessary ancillary transactions had been consummated as of January 1, 2008. The pro forma adjustments set forth on the attached Unaudited Pro Forma Balance Sheet and Unaudited Pro Forma Income Statements reflect the following as if they occurred on the dates hereinabove set forth:

(1)	Triad Acquisition.  The Triad acquisition as described in the Asset Purchase Agreement dated October 28, 2009 (including the issuance of the Redeemable Convertible Preferred Stock as part of the acquisition price of Triad).
(2)	Incurrence of indebtedness under the New Revolving Credit Facility described in the commitment letter from Bank of Montreal dated October 23, 2009.
(3)	Issuance of common stock which occurred between October 31, 2009 and February 10, 2010.  This is included because it is a required condition to move forward and close the acquisition.
(4)	Issuance of preferred stock as described elsewhere in this document.  This is  included because it is a required condition to move forward and close the acquisition.

The Unaudited Pro Forma Balance Sheet reflects the preliminary allocations of the purchase price for the acquisition of Triad to the assets and liabilities of the Company. The final allocation of the purchase price, and the resulting effect on the balance sheet as well as depreciation and depletion expense in the accompanying Unaudited Pro Forma Combined Income Statements, may differ based on the actual final allocation of the purchase price.

The unaudited pro forma combined financial data should be read in conjunction with the notes thereto and with the consolidated financial statements of the Company and the notes thereto as filed in the Company's Form 10-K and Form 10-Q.

The unaudited pro forma combined financial data are not indicative of the financial position or results of operations of the Company which would actually have occurred if the transactions described above had occurred at the dates presented or which may be obtained in the future.  Additionally, the final terms of the Asset Purchase Agreement, the New Revolving Credit Facility, and the preferred stock issuances differed in certain important respects from those used in the unaudited pro-forma combined financial data.  In addition, future results may vary significantly from the results reflected in such statements due to normal oil and natural gas production declines, changes in prices paid for oil and natural gas, future acquisitions, drilling activity and other factors.

- 1 - -

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

As of September 30, 2009

(dollars in thousands)

	Magnum Hunter			Pro Forma			Note
	Historical			Adjustments			Ref		Pro Forma
ASSETS:
Current Assets
Cash & Equivalents	$	2,332		$	4,102			(6)	$	6,434
Accounts Receivables		1,544			2,825			(1)		4,369
Derivative Assets		1,766			-					1,766
Other Current Assets		154			1,131			(1)		1,285
Total Current Assets		5,796			8,058					13,854
Property and Equipment
Oil and natural gas properties, successful efforts accounting
Unproved		18,594			11,396			(1)		29,990
Proved Properties, Net		35,493			58,773			(1)		94,266
Machinery, Equipment and Other, net		131			8,721			(1)		8,852
Total Property and Equipment, net		54,218			78,890					133,108
Other Assets
Derivative Assets		2,067			-					2,067
Deferred financing costs, net of amortization		888			1,501			(2)		2,389
Other Assets		11			417			(1)		428
TOTAL ASSETS	$	62,980		$	88,866				$	151,846
LIABILITIES & EQUITY:
Current Liabilities
Accounts Payable	$	1,321		$	1,450			(1)	$	2,771
Accrued Liabilities		169			546			(1)		715
Distribution Payable		213			1,750			(1)		1,963
Other Current Liabilities		813			-			(1)		813
Current Portion of Equipment Notes					867			(1)		867
Total Current Liabilities		2,516			4,613					7,129
Notes Payable, Revolving Credit Agreement		12,000			53,000			(3)		65,000
Notes Payable, Term Loan		15,000			(15,000	)		(3)		-
Notes Payable for Equipment, less current portion		-			3,086			(1)		3,086
Asset Retirement Obligation		1,886			139			(1)		2,025
TOTAL LIABILITIES		31,402			45,838					77,240
Redeemable Convertible Preferred Stock		-			15,000			(1)		15,000
Redeemable Perpetual Preferred Stock, Series C		-			6,835			(10)		6,835
Shareholders Equity
Common stock, $0.01 par value		431			133			(4)		564
Additional Paid-In-Capital		55,694			23,136			(4)		78,292
					(538	)		(10)
Accumulated Deficit		(25,802	)		(1,538	)		(5)		(27,340	)
Total MHR Shareholders' Equity		30,323			21,193					51,516
Minority Interest		1,255			-					1,255
Total Equity		31,578			21,193					52,771
TOTAL LIABILITIES & EQUITY:	$	62,980		$	88,866				$	151,846

See accompanying notes to Unaudited Pro Forma Combined Financial Data

- 2 - -

UNAUDITED PRO FORMA COMBINED INCOME STATEMENT

Nine Months Ended September 30, 2009

(dollars and shares in thousands)

	Magnum Hunter			Triad			Pro Forma			Note
	Historical			Historical			Adjustments			Ref	Pro Forma
Revenue:
Oil and Gas Sales	$	6,566		$	12,684		$	-			$	19,250
Field Operations		-			4,997			-				4,997
Other Income		200			68			-				268
Gain(Loss) on Sale		-			(21	)		-				(21	)
Total Revenue		6,766			17,728			-				24,494
Expenses:
Lease Operating Expenses		3,807			4,701			-				8,508
Field Operations		-			4,991			-				4,991
Exploration		392			391			-				783
Depreciation, Depletion and Accretion		3,100			3,821			850		(7)		7,771
General and Administrative		4,521			1,910			-				6,431
Total Expenses		11,820			15,814			850				28,484
Income (Loss) From Operations		(5,054	)		1,914			(850	)			(3,990	)
Other Income and (Expense)
Interest Income		1			16			-				17
Interest Expense		(1,867	)		(1,752	)		929		(8)		(2,690	)
Bankruptcy Professional Fees		-			(2,728	)		-				(2,728	)
Gain (Loss) on Derivative Contracts		(1,027	)		600			-				(427	)
Net Loss		(7,947	)		(1,950	)		79				(9,818	)
Less: Net Loss Attributable to Noncontrolling Interest		130			-			-				130
Net Loss Attributable to Magnum Hunter Resources Corporation		(7,817	)		(1,950	)		79				(9,688	)
Dividend on Preferred Stock		-			-			(835	)	(9),(10)		(835	)
Net Loss Attributable to Common Stockholders	$	(7,817	)	$	(1,950	)	$	(756	)		$	(10,523	)
Earnings Per Common Share
Basic and Diluted	$	(0.21	)								$	(0.21	)
Weighted Average Number of Common Shares Outstanding
Basic and Diluted		36,864			-			13,298		(4)		50,162

See accompanying notes to Unaudited Pro Forma Combined Financial Data

- 3 - -

UNAUDITED PRO FORMA COMBINED INCOME STATEMENT

Year Ended December 31, 2008

(dollars and shares in thousands)

	Magnum Hunter			Triad			Pro Forma			Note
	Historical			Historical			Adjustments			Ref	Pro Forma
Revenue:
Oil and Gas Sales	$	14,486		$	32,570		$	-			$	47,056
Field Operations		-			7,771			-				7,771
Other Income		200			1			-				201
Gain(Loss) on Sale		1,197			2,237			-				3,434
Total Revenue		15,883			42,579			-				58,462
Expenses:
Lease Operating Expenses		5,379			8,579			-				13,958
Field Operations		-			10,161			-				10,161
Exploration		7,349			473			-				7,822
Impairment of Oil and Gas Properties		1,973			-			-				1,973
Depreciation, Depletion and Accretion		7,682			5,833			777		(7)		14,292
General and Administrative		3,964			3,587			-				7,551
Total Expenses		26,347			28,633			777				55,757
Income (Loss) From Operations		(10,464	)		13,946			(777	)			2,705
Other Income and (Expense)
Interest Income		189			110			-				299
Interest Expense		(2,772	)		(4,093	)		1,666		(8)		(5,199	)
Bankruptcy Professional Fees		-			(329	)		-				(329	)
Loss on Debt Extinguishment		(2,791	)		-			-				(2,791	)
Gain (Loss) on Derivative Contracts		7,311			(3,397	)		-				3,914
Net Loss		(8,527	)		6,237			889				(1,401	)
Less: Net Loss Attributable to Noncontrolling Interest		1,640			-			-				1,640
Net Loss Attributable to Magnum Hunter Resources Corporation		(6,887	)		6,237			889				239
Dividend on Preferred Stock		(734	)		-			(1,112	)	(9),(10)		(1,846	)
Net Loss Attributable to Common Stockholders	$	(7,621	)	$	6,237		$	(223	)		$	(1,607	)
Earnings Per Common Share
Basic and Diluted	$	(0.21	)								$	(0.03	)
Weighted Average Number of Common Shares Outstanding
Basic and Diluted		36,714			-			13,298		(4)		50,012

See accompanying notes to Unaudited Pro Forma Combined Financial Data

- 4 - -

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

(dollars in thousands)

(1) To record the acquisition of Triad’s assets for an estimated purchase price of $85,568.  The estimated purchase price includes the payoff in cash of loans under Triad’s existing revolving and term credit agreement, the payoff in cash of existing debtor in possession financing, the payoff in cash of certain other Triad liabilities and costs at closing, the assumption of certain notes payable related to equipment included in the transaction, the assumption of certain other current liabilities of Triad, and the issuance of Redeemable Convertible Preferred Stock of the Company. The acquisition is accounted for under the purchase method of accounting.  All assets acquired and liabilities assumed are recorded at fair market value as determined by management. As noted above, these are preliminary estimates and are subject to adjustment.  The Company expects to incur legal and professional fees connected with this transaction of $650, which will be expensed. The following table summarizes the assets acquired and purchase price paid:

ASSETS ACQUIRED (at fair market value):
Unproved oil and gas properties	$	11,396
Proved oil and gas properties		58,773
Equipment and other fixed assets		8,721
Other non current assets		417
Cash and cash equivalents		2,305
Accounts receivable		2,825
Other current assets		1,131
Total assets acquired	$	85,568
PURCHASE PRICE (at fair market value)
Cash payments at closing:
Payoff Triad Revolver	$	55,000
Payoff DIP loan		500
Payoff other Triad liabilities at closing		7,230
Total cash payments		62,730
Liabilities assumed:
Notes payable for equipment		3,953
ARO assumed		139
Accounts payable		1,450
Accrued liabilities		546
Distribution payable		1,750
Other current liabilities		-
Total liabilities assumed		7,838
Redeemable Convertible Preferred Stock
Stated value $15 million, reflected at estimated current fair market value		15,000
Total purchase price paid	$	85,568
Decrease in cash from the acquisition:
Cash payment portion of purchase price	$	62,730
Estimated legal and professional transaction fees		650
Less Cash and equivalents acquired from Triad		(2,305	)
Net decrease in cash from the acquisition	$	61,075

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(2) To record the estimated deferred financing fees associated with the Company’s New Revolving Credit Facility, of $2,389, net of write off of $888, for the Company’s existing facility which is being extinguished and replaced as part of this transaction.  The resulting net change to deferred financing costs is:

New Credit Facility debt issuance costs	$	2,389
Unamortized debt issuance costs expensed		(888	)
Net change to Deferred financing costs	$	1,501

(3) To record new borrowings and refinancing associated with the Triad acquisition as follows:

New Revolving Credit Facility	$	65,000
Repay Company’s previous Revolving Credit Facility		(12,000	)
Net change to revolving facility		53,000
Repay Company’s previous Term Loan Facility		(15,000	)
Fees paid on new credit facility		(2,389	)
Net proceeds from New Credit Facility	$	35,611

(4) To record the issuance of common stock for the purpose of securing cash necessary for the acquisition of Triad.  The issuance occurred at various times between October 31, 2009 and February 10, 2010.  We issued approximately 13.3 million common shares and approximately 1.7 million warrants for net proceeds of approximately $23,843. The Company’s common stock has a par value of one cent per share.  The Company incurred fees of $574 to register the common and preferred stock under a universal shelf registration.

(5) To record the Company's charge against earnings of ($1,538) resulting from the estimated legal and professional fees incurred in the Triad acquisition of $650 (see Note 1) and the write-off of deferred financing costs related to the previous credit facility of $888 (see Note 2).

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(6) To record the  change in cash as a result of the Triad acquisition, the borrowing and repayment under the new and old revolving credit facilities, respectively, and the net proceeds from the planned issuance of common stock. The following table summarizes the changes in cash and equivalents as reflected on the pro forma balance sheet:

Net proceeds from New Credit Facility (see Note 3)	$	35,611
Net proceeds from the issuance of common stock (see Note 4)		23,843
Net proceeds from the issuance of preferred stock (see Note 10)		6,297
Fees paid for the registration of common and preferred stocks (see Note 4)		(574)
Net change in cash from the acquisition of Triad (see Note 1)		(61,074	)
Net change to cash and cash equivalents	$	4,102

(7) To record the pro forma adjustment to depletion and depreciation expense as the result of treating the acquisition of Triad as if it had occurred January 1, 2008. Depletion was calculated using the units of production method.  Depreciation was computed using the straight-line method based on the following useful lives:

Gas gathering system	20 years
Disposal well	20 years
Machinery and equipment	5 - 10 years

(8) To record the pro forma adjustment to interest expense as the result of treating the acquisition of Triad, the borrowing and repayment under the new and old revolving credit agreements, and the proceeds from the issuance of common stock and preferred stock  as if they occurred January 1, 2008.

(9) To record the effect of the issuance of the Redeemable Convertible Preferred Stock as if it had been issued at January 1, 2008. For the nine month period in 2009, the dividend adjustment reflects cash dividends of $309. For the one year period in 2008, the dividend adjustment reflects cash dividends of $412.

(10) To record the effect of the issuance of the Series C Preferred Stock for the purpose of securing cash necessary for the acquisition of Triad as if it had been issued at January 1, 2008.  The Series C Preferred Stock will have a stated value of $6,835 and will pay a 10.25% cash dividend.  Net proceeds after selling expenses of $538 were $6,297.  For the nine month period in 2009, the dividend adjustment reflects cash dividends of $525.  For the one year period in 2008, the dividend adjustment reflects cash dividends of $701.

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