Magnum Hunter Resources 8-K Other Events

Exhibit 99.1

UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

The following Unaudited Pro Forma Combined Financial Data are derived from the consolidated financial statements of Magnum Hunter and certain historical financial data in respect of various assets acquired by Magnum Hunter. The Unaudited Pro Forma Combined Balance Sheet of Magnum Hunter as of September 30, 2010 has been prepared assuming the acquisition of the PostRock assets, NGAS Resources, and NuLoch Resources and all necessary ancillary transactions had been consummated on September 30, 2010. The Unaudited Pro Forma Combined Income Statement for the year ended December 31, 2009 and the nine months ended September 30, 2010 have been prepared assuming the acquisition of the PostRock assets, NGAS Resources, and NuLoch Resources and all necessary ancillary transactions had been consummated as of January 1, 2009. We have also included for clarity unaudited pro forma combined balance sheet and unaudited pro forma combined income statements for the combination of Magnum Hunter, PostRock and NGAS Resources. The pro forma adjustments set forth on the attached Unaudited Pro Forma Combined Balance Sheet and Unaudited Pro Forma Combined Income Statements reflect the following as if they occurred on the dates hereinabove set forth:

(1) PostRock, NGAS Resources, and NuLoch Resources Acquisitions. The first and second completed phases of the acquisition of PostRock assets as described in the Purchase and Sale Agreement dated December 24, 2010, the NGAS Resources acquisition as described in the Arrangement Agreement dated December 23, 2010, and the NuLoch Resources acquisition as described in the Arrangement Agreement dated January 19, 2011.

(2) Incurrence of indebtedness under the proposed new revolving credit facility to be entered into pursuant to and as described in the commitment letter from Bank of Montreal dated January 13, 2011.

(3) Issuance of common stock upon the closing dates of the acquisition of the PostRock assets NGAS Resources, and NuLoch Resources.

(4) Payment of change of control compensation in the NGAS Resources and NuLoch Resources acquisitions.

The Unaudited Pro Forma Balance Sheet reflects the preliminary adjustments to record the estimated fair values of the assets and liabilities acquired in the acquisitions of the PostRock assets NGAS Resources and NuLoch Resources. The final entries, and the resulting effect on Magnum Hunter’s balance sheet as well as items in Magnum Hunter’s Income Statements, may differ based on the actual determination of the fair values of the assets acquired and liabilities assumed.

Transaction costs related to these acquisitions will be recorded as expenses in the periods in which these costs are incurred. These expenses are not included in the Unaudited Pro Forma Combined Income Statements.

The Unaudited Pro Forma Combined Financial Data should be read in conjunction with the notes thereto and with the consolidated financial statements of Magnum Hunter and the notes thereto as filed in Magnum Hunter’sForm 10-K andForm 10-Q.

The Unaudited Pro Forma Combined Financial Data are not indicative of the financial position or results of operations of Magnum Hunter which would actually have occurred if the transactions described above had occurred at the dates presented or which may be obtained in the future. 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.

The Unaudited Pro Forma Combined Financial Data include financial information received from PostRock and NuLoch Resources and such financial information has been accepted and incorporated as presented without independent verification of such financial information.

UNAUDITED PRO FORMA COMBINED BALANCE SHEET
As of September 30, 2010

																NuLoch									Combined
																Resources						Combined			Pro Forma for
							NuLoch									Conversion to			NuLoch			Pro Forma for			Magnum Hunter,
	Magnum			NGAS			Resources			PostRock			NGAS			US GAAP and			Resources			Magnum Hunter,			NGAS Resources,
	Hunter			Resources			Historical			Pro Forma			Pro Forma			USD			Pro Forma			NGAS Resources			PostRock and
	Historical			Historical			(CAN $)			Adjustments			Adjustments			Adjustments			Adjustments			and PostRock			NuLoch Resources
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	836,601		$	5,105,017		$	114,000		$	—		$	—	(4)	$	(3,203	)	$	—		$	5,941,618		$	6,052,415
Accounts receivable		7,002,332			5,535,965			4,291,000	(1)		21,140			—	(4)		(193,470	)		—			12,559,437			16,656,967
Derivative assets		573,657			—			—			—			—			—			—			573,657			573,657
Notes receivable		—			6,632,906			—			—	(2)		(6,632,906	)		—			—			—			—
Prepaids and other current assets		1,433,235			772,755			384,000	(1)		2,658	(2)		(75,141	)(4)		(10,790	)		—			2,133,507			2,506,717
Total current assets		9,845,825			18,046,643			4,789,000			23,798			(6,708,047	)		(207,463	)		—			21,208,219			25,789,756
PROPERTY AND EQUIPMENT (Net of Accumulated Depletion and Depreciation):
Oil and natural gas properties, successful efforts accounting		152,402,137			160,681,864			84,643,000	(1)		44,264,097	(2)		(50,836,043	)(4)		(16,078,371	)(3)		357,589,389			306,512,055			732,666,073
Equipment and other fixed assets		15,065,160			24,018,018			—	(1)		154,300	(2)		(13,612,316	)(4)		328,502			—			25,625,162			25,953,664
Total property and equipment, net		167,467,297			184,699,882			84,643,000			44,418,397			(64,448,359	)		(15,749,869	)		357,589,389			332,137,217			758,619,737
OTHERS ASSETS:
Derivative assets		529,836			—			—			—			—			—			—			529,836			529,836
Note receivable		—			1,742,524			—			—	(2)		(1,742,524	)		—			—			—			—
Other assets		1,600,250			430,374			—			—	(2)		(171,429	)		—			—			1,859,195			1,859,195
Deferred financing costs, net of amortization		2,781,741			837,908			—			—	(2)		(1,128,399	)		—			—			2,491,250			2,491,250
Deferred tax asset		—			—			5,411,000			—			—	(4)		3,209,753	(3)		(8,620,753	)		—			—
Goodwill		—			313,177			—			—	(2)		(313,177	)		—			—			—			—
Total assets	$	182,224,949		$	206,070,508		$	94,843,000		$	44,442,195		$	(74,511,935	)	$	(12,747,579	)	$	348,968,636		$	358,225,717		$	789,289,774
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	17,105,988		$	3,016,509		$	6,561,000		$	—		$	—	(4)	$	(184,364	)(3)	$	—		$	20,122,497		$	26,499,133
Accrued liabilities		4,269,193			3,404,714			2,376,000	(1)		421,951	(2)		9,330,923	(4)		(66,765	)		7,032,198			17,426,781			26,768,214
Revenue payable		2,408,129			—			—			—			—			—			—			2,408,129			2,408,129
Dividend payable		—			—			—			—			—			—			—			—			—
Current portion of notes payable		568,562			49,892,193			5,782,000			—	(2)		(49,892,193	)(4)		(162,474	)(3)		(5,619,526	)		568,562			568,562
Warrant liability		—			—			—			—	(2)		1,279,834			—			—			1,279,834			1,279,834
Derivative liability		—			52,306			—			—	(2)		(52,306	)		—			—			—			—
Total current liabilities		24,351,872			56,365,722			14,719,000			421,951			(39,333,742	)		(413,603	)		1,412,672			41,805,803			57,523,872
Deferred compensation		—			1,112,198			—			—	(2)		(1,112,198	)		—			—			—			—
Deferred income tax		—			10,289,262			—			—	(2)		(10,289,262	)		—	(3)		108,631,200			—			108,631,200
Payable on sale of partnership		640,695			—			—			—			—			—			—			640,695			640,695
Notes payable, less current portion		52,689,323			15,256,975			—	(1)		19,702,874	(2)		38,447,848			—			—			126,097,020			126,097,020
Asset retirement obligation		4,634,858			2,397,132			1,375,000	(1)		17,000			—	(4)		(38,638	)		—			7,048,990			8,385,353
Derivative liability		—			146,668			—			—	(2)		(146,668	)		—			—			—			—
Other long-term liabilities		—			1,895,000			—			—			—			—			—			1,895,000			1,895,000
Total liabilities		82,316,748			87,462,957			16,094,000			20,141,825			(12,434,022	)		(452,241	)		110,043,872			177,487,508			303,173,139
COMMITMENTS AND CONTINGENCIES
REDEEMABLE PREFERRED STOCK:
Series C Cumulative Perpetual Preferred Stock, cumulative dividend rate 10.25% per annum, 4,000,000 authorized, 1,153,741 issued and outstanding as of September 30, 2010, with liquidation preference of $25.00 per share		28,843,525			—			—			—			—			—			—			28,843,525			28,843,525
SHAREHOLDERS’ EQUITY:
Preferred stock, 6,000,000 shares authorized, none issued and outstanding		—			—			—			—			—			—			—			—			—
Common stock, $0.01 par value; 100,000,000 shares authorized, 68,885,661 shares issued and outstanding as of September 30, 2010		688,857			132,080,532			77,484,000	(1)		32,012	(2)		(132,000,206	)(4)		(2,177,300	)(3)		(74,878,653	)		801,195			1,229,242
Additional paid in capital		118,317,477			4,735,629			1,856,000	(1)		24,603,358	(2)		52,902,174	(4)		(52,154	)(3)		303,821,533			200,558,638			506,184,017
Accumulated other comprehensive loss		—			—			(713,000	)		—			—	(4)		20,035	(3)		692,965			—			—
Accumulated deficit		(47,501,911	)		(18,184,980	)		122,000	(1)		(335,000	)(2)		16,996,489	(4)		(10,085,919	)(3)		9,288,919			(49,025,402	)		(49,700,402	)
Treasury Stock, previously deposit on Triad, at cost, 761,652 shares		(1,310,357	)		(23,630	)		—			—	(2)		23,630			—			—			(1,310,357	)		(1,310,357	)
Unearned common stock in KSOP, at cost, 137,900 shares		(542,366	)		—			—			—			—			—			—			(542,366	)		(542,366	)
Total Magnum Hunter shareholders’ equity		69,651,700			118,607,551			78,749,000			24,300,370			(62,077,913	)		(12,295,338	)		238,924,764			150,481,708			455,860,134
Non-controlling interest		1,412,976			—			—			—			—			—			—			1,412,976			1,412,976
Total Equity		71,064,676			118,607,551			78,749,000			24,300,370			(62,077,913	)		(12,295,338	)		238,924,764			151,894,684			457,273,110
Total liabilities and shareholders’ equity	$	182,224,949		$	206,070,508		$	94,843,000		$	44,442,195		$	(74,511,935	)	$	(12,747,579	)	$	348,968,636		$	358,225,717		$	789,289,774

See accompanying notes to Unaudited Pro Forma Combined Financial Data

UNAUDITED PRO FORMA COMBINED INCOME STATEMENT
Nine Months Ended September 30, 2010

																											Combined
																											Pro Forma
																								Combined			for Magnum
																		NuLoch						Pro Forma			Hunter,
																		Resources						for Magnum			NGAS
									NuLoch						NGAS			Conversion to			NuLoch			Hunter,			Resources,
	Magnum					NGAS			Resources			PostRock			Resources			US GAAP &			Resources			NGAS			PostRock
	Hunter			PostRock		Resources			Historical			Pro Forma			Pro Forma			USD			Pro Forma			Resources			and NuLoch
	Historical			Historical		Historical			(CAN $)			Adjustments			Adjustments			Adjustments			Adjustments			and PostRock			Resources
REVENUE:
Oil and gas sales	$	23,920,482		$	1,565,341	$	17,644,686		$	10,137,000		$	—		$	—	(4)	$	(43,897	)	$	—		$	43,130,509		$	53,223,612
Field operations and other		3,330,013			—		18,283,713			—			—			—			—			—			21,613,726			21,613,726
Total revenue		27,250,495			1,565,341		35,928,399			10,137,000			—			—			(43,897	)		—			64,744,235			74,837,338
EXPENSES:
Lease operating expenses		8,153,941			477,661		11,007,455			2,917,000			—			—	(4)		(520,455	)		—			19,639,057			22,035,602
Severance taxes and marketing		2,167,359			112,275		—			—			—			—	(4)		725,143			—			2,279,634			3,004,777
Exploration		1,075,643			—		—			—			—			—	(4)		6,178,682			—			1,075,643			7,254,325
Field operations		3,143,255			—		12,086,682			—			—			—			—			—			15,229,937			15,229,937
Impairment of oil and gas properties		19,991			—		—			—			—			—			—			—			19,991			19,991
Depreciation, depletion and accretion		7,138,488			—		9,906,178			6,898,000	(5)		286,475	(7)		(4,976,199	)(4)		(876,705	)(13)		(1,580,830	)		12,354,942			16,795,407
General and administrative		17,903,244			—		9,166,021			2,736,000			—	(8)		(625,344	)(4)		1,207,388			—			26,443,921			30,387,309
Total expenses		39,601,921			589,936		42,166,336			12,551,000			286,475			(5,601,543	)		6,714,053			(1,580,830	)		77,043,125			94,727,348
LOSS FROM OPERATIONS		(12,351,426	)		975,405		(6,237,937	)		(2,414,000	)		(286,475	)		5,601,543			(6,757,950	)		1,580,830			(12,298,890	)		(19,890,010	)
OTHER INCOME AND (EXPENSE):
Interest income		54,578			—		667,686			13,000			—	(9)		(658,526	)(4)		(448	)		—			63,738			76,290
Interest expense		(3,016,429	)		—		(5,073,965	)		(128,000	)(6)		(664,972	)(10)		3,748,826	(4)		4,407			—			(5,006,540	)		(5,130,133	)
Gain (Loss) on derivative contracts		2,347,808			—		(337,195	)		—			—	(11)		337,195			—			—			2,347,808			2,347,808
Other, net		—			—		307,808			—			—			—			—			—			307,808			307,808
Net loss before income taxes		(12,965,469	)		975,405		(10,673,603	)		(2,529,000	)		(951,447	)		9,029,038			(6,753,991	)		1,580,830			(14,586,076	)		(22,288,237	)
Income tax benefit		—			—		2,270,287			626,000			—	(12)		(2,270,287	)(4)		602,205	(14)		(1,228,205	)		—			—
Net (income) loss attributable to non-controlling interest		(91,223	)		—		—			—			—			—			—			—			(91,223	)		(91,223	)
Net loss attributable to Magnum Hunter		(13,056,692	)		975,405		(8,403,316	)		(1,903,000	)		(951,447	)		6,758,751			(6,151,786	)		352,625			(14,667,229	)		(22,379,460	)
Dividend on Preferred Stock		(1,309,527	)		—		—			—			—			—			—			—			(1,309,527	)		(1,309,527	)
Net loss attributable to common shareholders	$	(14,366,219	)	$	975,405	$	(8,403,316	)	$	(1,903,000	)	$	(951,447	)	$	6,758,751		$	(6,151,786	)	$	352,625		$	(15,986,826	)	$	(23,688,987	)
Loss per common share Basic and diluted	$	(0.23	)																					$	(0.22	)	$	(0.20	)
Weighted average number of common shares outstanding Basic and diluted		62,010,895								(15	)		3,201,360	(15)		8,032,627			(15	)		42,804,675			73,244,882			116,049,557

See accompanying notes to Unaudited Pro Forma Combined Financial Data

UNAUDITED PRO FORMA COMBINED INCOME STATEMENT

Year Ended December 31, 2009

																												Combined
																												Pro Forma
																									Combined			for Magnum
																			NuLoch						Pro Forma			Hunter,
																			Resources						for Magnum			NGAS
										NuLoch						NGAS			Conversion to			NuLoch			Hunter,			Resources,
	Magnum						NGAS			Resources			PostRock			Resources			US GAAP &			Resources			NGAS			PostRock
	Hunter			PostRock			Resources			Historical			Pro Forma			Pro Forma			USD			Pro Forma			Resources			and Nuloch
	Historical			Historical			Historical			(CAN $)			Adjustments			Adjustments			Adjustments			Adjustments			and PostRock			Resources
REVENUE:
Oil and gas sales	$	10,035,033		$	819,806		$	26,586,422		$	6,662,000		$	—		$	—	(4)	$	(745,571	)	$	—		$	37,441,261		$	43,357,690
Field operations and other		222,668			—			31,237,251			—			—			—			—			—			31,459,919			31,459,919
Gain on sale of property		14,000			—			3,346,491			—			—			—			—			—			3,360,491			3,360,491
Total revenue		10,271,701			819,806			61,170,164			6,662,000			—			—			(745,571	)		—			72,261,671			78,178,100
EXPENSES:
Lease operating expenses		4,220,345			909,151			11,357,397			2,342,000			—			—	(4)		(554,131	)		—			16,486,893			18,274,762
Severance taxes and marketing		1,057,818			47,970			—			—			—			—	(4)		325,707			—			1,105,788			1,431,495
Exploration		896,337			—			—			—			—			—	(4)		1,140,856			—			896,337			2,037,193
Field operations		—			22,776			21,344,671			—			—			—			—			—			21,367,447			21,367,447
Impairment of oil & gas properties		633,953			—			—			—			—			—			—			—			633,953			633,953
Depreciation, depletion and accretion		4,499,611			—			14,019,826			5,434,000	(5)		189,021	(7)		(6,583,042	)(4)		(638,180	)(13)		(926,795	)		12,125,416			15,994,441
General and administrative		8,490,364			—			12,965,735			1,433,000			—			—	(4)		964,910			—			21,456,099			23,854,009
Total expenses		19,798,428			979,897			59,687,629			9,209,000			189,021			(6,583,042	)		1,239,162			(926,795	)		74,071,933			83,593,300
LOSS FROM OPERATIONS		(9,526,727	)		(160,091	)		1,482,535			(2,547,000	)		(189,021	)		6,583,042			(1,984,733	)		926,795			(1,810,262	)		(5,415,200	)
OTHER INCOME (EXPENSE):
Interest income		959			—			355,675			2,000			—	(8)		(327,811	)(4)		(239	)		—			28,823			30,584
Interest expense		(3,336,346	)		—			(9,049,931	)		(156,000	)(6)		(886,629	)(10)		4,586,834	(4)		18,675			—			(8,686,072	)		(8,823,397	)
Gain (loss) on derivative contracts		(2,325,251	)		—			14,726			—			—	(11)		(14,726	)		—			—			(2,325,251	)		(2,325,251	)
Other, net		—			—			(845,560	)		—			—			—	(4)		7,534,402			—			(845,560	)		6,688,842
Net loss before income taxes and extrordinary items		(15,187,365	)		(160,091	)		(8,042,555	)		(2,701,000	)		(1,075,650	)		10,827,339			5,568,105			926,795			(13,638,322	)		(9,844,422	)
Income tax benefit		—			—			341,394			2,304,000			—	(12)		(341,394	)(4)		104,473	(14)		(2,408,473	)		—			—
Extraordinary item		—			—			—			2,281,000			—			—	(4)		(2,281,000	)		—			—			—
Less: Net loss attributable to non-controlling interest		63,156			—			—			—			—			—			—			—			63,156			63,156
Net loss attributable to Magnum Hunter		(15,124,209	)		(160,091	)		(7,701,161	)		1,884,000			(1,075,650	)		10,485,945			3,391,578			(1,481,678	)		(13,575,166	)		(9,781,266	)
Dividend on Preferred Stock		(25,654	)		—			—			—			—			—			—			—			(25,654	)		(25,654	)
Net loss to attributable to common shareholders	$	(15,149,863	)	$	(160,091	)	$	(7,701,161	)	$	1,884,000		$	(1,075,650	)	$	10,485,945		$	3,391,578		$	(1,481,678	)	$	(13,600,820	)	$	(9,806,920	)
Net loss per common share, basic and diluted	$	(0.39	)																						$	(0.27	)	$	(0.11	)
Weighted average number of common shares outstanding, basic and diluted		38,953,834										(15)		3,201,360	(15)		8,032,627				(15)		42,804,675			50,187,821			92,992,496

See accompanying notes to Unaudited Pro Forma Combined Financial Data

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

(1) To record the acquisition of PostRock’s assets for an estimated purchase price of $44.3 million. The estimated purchase price includes cash payment and issuance of common stock of Magnum Hunter, which is based on the closing price of $7.58 per share on December 30, 2010, the closing date for the first phase of the PostRock acquisition, and the closing price of $7.97 per share on January 14, 2011, the closing date for the second phase of the PostRock acquisition. The purchase and sale agreement for the PostRock properties had valued the common stock at $6.21 per share based on the volume weighted average price of Magnum Hunter’s common stock for the 10 consecutive trading days prior to execution of the agreement on December 24, 2010. 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 following table summarizes the assets acquired and purchase price paid:

Fair value of total purchase price:
2,255,046 shares of common stock issued on December 30, 2010 valued at $7.58 per share	$	17,093,248
946,314 shares of common stock issued on January 14, 2011 valued at $7.97 per share		7,542,122
Cash paid December 30, 2010 with funds to be borrowed under the proposed new revolving line of credit agreement		13,938,891
Cash paid on January 14, 2011 with funds to be borrowed under the proposed new revolving line of credit agreement		5,763,983
Net operations since effective date		(21,140	)
Total	$	44,317,104
Amounts recognized for assets acquired and liabilities assumed:
Working capital		(84,293	)
Oil and gas properties	$	44,264,097
Equipment and other fixed assets		154,300
Asset retirement obligation		(17,000	)
Total	$	44,317,104
Working capital acquired:
Prepaid expenses		2,658
Transfer tax payable		(86,951	)
Total working capital acquired	$	(84,293	)

(2) To record the acquisition of NGAS Resources’ assets for an estimated purchase price of $117.7 million. The estimated purchase price includes the estimated shares of common stock of Magnum Hunter to be issued to shareholders of NGAS Resources, the estimated shares of common stock of Magnum Hunter issued to certain holders of NGAS Resources convertible notes, payment to Seminole to restructure a gas gathering and transportation agreement, the assumption of the senior credit facility of NGAS Resources, the assumption of certain notes payable related to equipment included in the transaction, and the payoff in cash of the remaining NGAS Resources convertible notes. 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 following table summarizes the assets acquired, liabilities assumed, and purchase price paid:

Fair value of total purchase price:
Estimated 6,634,026 shares of common stock at estimated $7.15 per share(1)	$	47,433,286
Estimated 1,398,601 shares of common stock at estimated $7.15 per share(1)		10,000,000
Senior credit facility assumed		34,000,000
Estimated NGAS Resources convertible notes to be paid off in cash at closing		13,554,823
Other long-term debt assumed		6,150,000
Change in control payments in cash with funds to be borrowed under the proposed new revolving line of credit agreement		5,000,000
Common stock warrants and options		1,564,677
Total	$	117,702,786
Amounts recognized for assets acquired and liabilities assumed:
Working capital	$	1,484,450
Bonds and deposits		258,945
Oil and gas properties		109,845,821
Equipment and other fixed assets		10,405,702
Other long term liabilities		(4,292,132	)
Total	$	117,702,786
Working capital acquired:
Cash	$	5,105,017
Accounts receivable		5,535,965
Prepaid expenses		697,614
Accounts payable		(3,016,509	)
Accrued liabilities		(892,858	)
Transaction closing costs		(3,432,923	)
Drilling advances		(2,511,856	)
Total working capital acquired	$	1,484,450

(1) The closing stock price on January 26, 2011 for Magnum Hunter was used to estimate the value of the shares to be issued in the NGAS Resources acquisition. The final entries and the resulting effect on Magnum Hunter’s balance sheet may differ as they will be based on the actual stock price at the date of closing.

(3) To record the acquisition of NuLoch Resources’ assets for an estimated purchase price of $414.7 million. The estimated purchase price includes the estimated shares of common stock of Magnum Hunter to be issued to shareholders of NuLoch Resources and the deferred tax liability resulting from the acquisition. 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 following table summarizes the assets acquired, liabilities assumed, and purchase price paid:

Fair value of total purchase price:
Estimated 42,804,675 shares of common stock at estimated $7.15 per share(1)	$	306,053,426
Deferred income tax liability (see schedule below)		108,631,200
Total	$	414,684,626
Amounts recognized for assets acquired and liabilities assumed:
Working capital	$	(10,388,639	)
Oil and gas properties		426,154,018
Equipment and other fixed assets		255,610
Asset retirement obligation		(1,336,363	)
Total	$	414,684,626
Working capital acquired:
Cash	$	110,797
Accounts receivable		4,097,529
Prepaid expenses		373,210
Advances		72,893
Transaction closing costs		(6,357,198	)
Accounts payable and accrued liabilities		(8,685,870	)
Total working capital acquired	$	(10,388,639	)

(1) The closing common stock price on January 26, 2011 for Magnum Hunter was used to estimate the value of the shares to be issued in the NuLoch Resources acquisition. The final entries, and the resulting effect on Magnum Hunter’s balance sheet may differ as they will be based on the actual stock price at the date of closing.

											Deferred
				Book		Tax					Asset
Deferred Income Tax Liability	Rate			Basis		Basis		Difference			(Liability)
PPE US		38.0	%	$	272,426,827	$	29,492,753	$	(242,934,074	)	$	(92,217,800	)
PPE Canada		25.0	%		150,037,504		53,264,982		(96,772,522	)		(24,193,100	)
NOL US – 2009		38.0	%				1,704,787		1,704,787			647,100
NOL Canada – 2009		25.0	%				28,530,348		28,530,348			7,132,600
Net Deferred Tax Liability								$	(309,471,461	)	$	(108,631,200	)

(4) To record the adjustment to NuLoch Resources’ historical financial statements prepared in accordance with Canadian GAAP and in Canadian dollars to United States GAAP and United States dollars. The adjustment includes:

a.	To convert Canadian GAAP full cost accounting to US GAAP successful efforts accounting for oil and gas properties. This has reduced the net book value (NBV) of property and equipment as all geological and geophysical costs and general and administrative costs capitalized under Canadian GAAP have been expensed to conform with US GAAP. The NBV has also decreased due to all unsuccessful exploratory wells being expensed. The resulting change in NBV of oil and gas properties along with the reduction of depletion on a field level basis resulted in lower depletion expense over the periods presented.
b.	To adjust NuLoch Resources for the conversion to US GAAP of an acquisition it completed in 2009. This adjustment resulted in the recording of additional fair value of oil and gas property and equipment of $8,969,000 and the value of shares issued increasing by $660,000 (Canadian GAAP value at announcement date vs US GAAP at closing date). These adjustments resulted in a future tax asset reduction of $2,242,000 and an increase in a recorded gain in 2009 of $6,278,000.
c.	To adjust for Canadian GAAP “Flow-through shares” for treatment under US GAAP. This resulted in an increase to additional paid in capital and a decrease in deferred tax asset.

d.   Due to the adjustments noted above, adjustments to income tax expense or benefit were made to statements presented.

e.   To convert NuLoch Resources’ balance sheet as of September 30, 2010, income statement for the nine months ended September 30, 2010, and income statement for the twelve months ended December 31, 2009 from Canadian dollars to United States dollars using the applicable conversion factors.

(5)	To record the pro forma adjustment to depletion and depreciation expense as the result of treating the acquisition of the PostRock assets as if it had occurred January 1, 2009. Depletion was calculated using the units of production method.
(6)	To record the pro forma adjustment to interest expense as the result of treating the cash paid in the acquisition of the PostRock assets as if it had been borrowed January 1, 2009.
(7)	To record the pro forma adjustment to NGAS Resources’ depletion and depreciation expense as the result of treating the acquisition of NGAS Resources as if it had occurred January 1, 2009. Depletion was calculated using the units of production method.
(8)	To record the pro forma adjustment to NGAS Resources’ refinancing costs amortized as the result of treating the acquisition of NGAS Resources as if it had occurred January 1, 2009.
(9)	To record the pro forma adjustment to NGAS Resources’ interest income on notes receivable as the result of restructuring a gas gathering and transportation agreement as if it had occurred January 1, 2009.
(10)	To record the pro forma adjustment to NGAS Resources’ interest expense as the result of treating the acquisition of NGAS Resources and the payment of assumed debt using Magnum Hunter’s credit facility as if it had occurred January 1, 2009.
(11)	To record the pro forma adjustment to NGAS Resources’ gain (loss) on derivative contracts as the result of treating the acquisition of NGAS Resources as if it had occurred January 1, 2009. The derivative loss reported by NGAS Resources was the result of the convertible feature on certain notes payable which will be paid at closing.
(12)	To record the pro forma adjustment to NGAS Resources’ income tax benefit on its income statements as the result of treating the acquisition of NGAS Resources as if it had occurred January 1, 2009. The deferred tax liability and income tax benefit on the NGAS Resources financial statements will be eliminated as the result of the fair market value adjustment to the oil and gas properties resulting from the acquisition.
(13)	To record the pro forma adjustment to NuLoch Resources’ depletion and depreciation expense as the result of treating the acquisition of NuLoch Resources as if it had occurred January 1, 2009. Depletion was calculated using the units of production method.
(14)	To record the pro forma adjustment to NuLoch Resources’ income tax benefit as the result of treating the acquisition of NuLoch Resources as if it had occurred January 1, 2009.
(15)	Acquisition shares were added to the weighted average number of common shares outstanding as if the shares were issued January 1, 2009.