Blue Ridge Mountain Resources Inc (fka BRMR)

[starbuxsux]

I never understood a non-cash compensation????? Sounds ~contradictory~

Not worried though...looks like a whole bunch of stocks were affected today, and these are December calls so time is on my side... for now.

Production Results for the Three Months Ended September 30, 2011

Average daily production during the third quarter ended September 30, 2011 was 5,270 barrels of oil equivalent per day ("Boepd") (47% crude oil) which represents a 303% increase over the 1,308 Boepd reported during the third quarter of 2010 and a 7% increase over the production rate of 4,947 Boepd reported during the second quarter of 2011. The increase in the Company's production rate was a result of both the NGAS and NuLoch acquisitions and the Company's ongoing success in its drilling programs in its three unconventional resource plays. Although the Company realized a significant production increase over prior periods, the third quarter September 30, 2011 production rate was significantly impacted by shut-in production in the Williston Basin due to adverse weather related issues and the installation of new artificial lift in its Eagle Ford properties. These two factors impacted production negatively by approximately 750 Boepd for the third quarter of 2011. The Company was able to fully restore this production by the end of the third quarter and also added substantial production in the second half of September through the completion of new wells in the Eagle Ford (2 gross, 0.8 net), the Marcellus (3 gross, 3 net) and the Williston Basin/Tableland Field of Saskatchewan, Canada (1 gross, 1 net). Much of this new production is 100% working interest to Magnum Hunter's ownership and therefore the incremental impact of these new wells is material to daily production numbers. As a result, the Company's production rate increased in October to approximately 7,500 Boepd. The Company's current daily production is approximately 8,400 Boepd with a number of new wells located in all three divisions currently being fracture stimulated. Magnum Hunter remains on target to achieve its previously stated goal of a daily production exit rate for fiscal year 2011 in excess 10,000 Boepd.

Proved Reserve Overview

The Company's total proved reserves increased by 5.8 million Boe or 19% to 37.0 million Boe (52% crude oil and ngls; 48% proved developed producing) as of September 30, 2011 as compared to 31.2 million Boe (55% crude oil & ngls; 50% proved developed producing) at June 30, 2011. The increase in total proved reserves is all attributable to new wells completed in the three unconventional resource plays.



Appalachian/Marcellus Update

In the Appalachian Basin, Magnum Hunter has allocated approximately $70 million (27.5% of the total capital budget) to drill 37 gross wells (22 net wells) during fiscal year 2011. The 2011 capital budget includes approximately $65 million for 17 gross wells (15.5 net wells) targeting the liquids rich Marcellus Shale play of Northwestern West Virginia and Southeastern Ohio and approximately $5 million primarily for 20 gross wells (6.5 net wells) targeting the Huron Shale and Weir Oil Sands located in Kentucky.

Marcellus Shale - Magnum Hunter has drilled 12 gross wells (10.5 net wells) in the liquids-rich Marcellus Shale play in Northwest West Virginia since December of last year. Of these new wells, 10 gross wells (8.5 net wells) are currently producing and 2 gross wells (2.0 net wells), Everett Weese #1107 and #1108, are awaiting fracture stimulation and one gross well (1.0 net), Everett Weese #1109, is currently being drilled. All three of the Everett Weese wells will be completed in sequence during December 2011, and are expected to be on production by December 31, 2011. During September 2011, Triad Hunter successfully completed 3 gross wells (3 net wells); the WVDNR #1102, the WVDNR #1103 and the WVDNR #1104 in Wetzel County, West Virginia with IP rates of 10.0 MMcfed, 10.5 MMcfed, and 10.4 MMcfed, respectively. During October 2011, Triad Hunter completed one vertical Marcellus well, the Roger Weese #1002, and one horizontal Marcellus well, the Roger Weese #1110, with IP rates of 0.4 MMcfed and 9.7 MMcfed, respectively. It should be noted that these wells were tested and remain on restricted production rates until additional pipeline meter expansion has been complete which is expected by November 11, 2011. Magnum Hunter currently anticipates spudding an additional 2 gross wells (2 net wells) in its Marcellus Shale region prior to year-end 2011.

Huron Shale and Weir Oil Sands - Triad Hunter has drilled and completed 10 gross wells (10.0 net wells) on lease acreage acquired earlier this year in the NGAS acquisition, targeting the Huron Shale and Weir Oil Sands. Magnum Hunter currently anticipates spudding an additional 10 gross wells (6.5 net wells), primarily on Huron Shale acreage prior to year-end 2011. Since acquiring NGAS earlier this year, we have drilled 4 gross (4.0 net) Weir wells in Kentucky. We continue to improve our drilling and completion techniques as evidenced by our last Weir well which is still flowing 1,450 Mcfe per day.

Williston/Bakken Update

Williston Hunter's highlights include its successful efforts to restore weather related lost production volumes, complete previously drilled wells and commence production on newly completed wells. Williston Hunter has restored production which was previously shut-in during most of the third quarter. Williston Hunter has an additional 29.0 gross (8.8 net) wells which are currently either in active completion operations or awaiting completion operations. Williston Hunter expects 87% of this production to be light oil.

Magnum Hunter has allocated approximately $70 million, or 27.5%, of the total Company capital budget to this region. This includes the drilling of 52 gross (11.3 net) Middle Bakken/Three Forks Sanish wells, acquiring land, installing production facilities and the completion of 18 gross (4.1 net) wells previously drilled but not completed in 2010. Williston Hunter has identified approximately $25 million in capital projects for the balance of fiscal year 2011, continuing with six drilling rigs active in North Dakota and one active drilling rig in Canada.

As of November 8, 2011, Williston Hunter had drilled 35 gross (6.2 net) wells year-to-date. In North Dakota, 32 gross (3.2 net) wells were spud or in the process of being spudded and 3 gross (3.0 net) wells were drilled in Saskatchewan. Significant progress has been made in reducing the completion backlog of the 18 gross (4.1 net) wells in Williston Hunter's inventory at December 31, 2010. There have been 16 gross (3.9 net) wells now completed and on production. Additionally, 17 gross (3.3 net) wells of the total wells drilled in 2011 have now been completed.

In Divide County, North Dakota, we have experienced higher IP rates on the recently drilled wells due to improved fracture stimulation techniques and down hole pump design, including the Almos Farms well (0.1 net), which was brought on production at a peak rate of 1,236 Boepd. Average IP 24 hour rates at Williston Hunter have been 700 Boepd in North Dakota (two mile laterals) and 425 Boepd for our two most recent wells (one mile laterals) completed in Tableland, Saskatchewan. Our rates of return in Tableland are comparable to North Dakota primarily due to substantially reduced government royalties, improved completion techniques and lower service costs.

Eureka Hunter Appalachian Pipeline System

Magnum Hunter has allocated approximately $40 million (15.7% of the total capital budget) for fiscal year 2011 capex requirements associated with its Eureka Hunter Pipeline ("Eureka Hunter") system in northwest West Virginia. The Company has completed approximately 42 miles of 20 inch high pressure pipe installation. Eureka Hunter believes its actual construction costs have been averaging approximately 50% below that of its competitors. Projects completed during 2011 have included: (i) 8 miles of 20-inch mainline pipe westward to interconnect with our Pursley Lateral; (ii) 14.35 miles of 20-inch pipe known as the "Pursley Lateral" in Tyler County, West Virginia; (iii) acquisition of rights-of-way and commencement of construction of 3.5 miles of 16 inch pipe from the Eureka mainline headed south into Doddridge County, West Virginia; (iv) began clearing rights-of-way to commence construction in the first quarter of 2012 of approximately 10 miles of 20-inch pipe to be known as the "Wetzel DNR Lateral"; and (v) began acquiring rights-of-way in preparation of building approximately 8 miles of 20-inch pipe to be known as the "Mobley Lateral." The Mobley Lateral will connect Eureka Hunter to the MarkWest Mobley processing facility (the "Mobley Plant") by the end of the second quarter of 2012. Eureka Hunter also recently announced a processing agreement with MarkWest to provide a "full liquids solution" both to Magnum Hunter on its equity gas from the Marcellus as well as provides a solution to third party producers through the Mobley Plant. The Eureka Hunter Pipeline system has a total of approximately 182 miles of pipeline/existing rights-of-way that will ultimately have capacity to gather 200-300 MMcf per day in northwest West Virginia.

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