Magnum Hunter owes 70x last year's earnings but shares gain 135% Y/Y

|About: Magnum Hunter Resources Corp. (MHRCQ)|By:, SA News Editor

Magnum Hunter Resources (MHR) is spending borrowed money faster than it comes in, with questions about its future production and potential governance issues, yet lenders, investors and analysts love it: Welcome to the U.S. shale boom.

According to a Bloomberg profile, MHR owes $891M, ~70x its EBITDA in the past year vs. the industry average of 4.3x, and its net loss has soared 32-fold since 2008 while revenues have climbed 17-fold, yet investors have driven its shares up 135% in the past year.

Out of five wells MHR drilled in an undeveloped corner of the Utica shale formation in Ohio and West Virginia, three can’t produce because they don’t have pipeline hookups but one was a gusher, pumping 32.5M cf/day of natural gas - a "game-changer" if MHR can replicate it.

MHR considers the Utica potentially the best shale play in the U.S.: “We’ll either drill it ourselves or we’ll be a prime takeover target for somebody," Chairman/CEO Gary Evans tells Bloomberg.