##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31,
    2010   Commission file number: 001-32997
  
  Magnum Hunter Resources
    Corporation
 (Name of registrant as specified
    in its charter)
  Delaware

86-0879278(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)   777 Post Oak Boulevard, Suite 650, Houston, Texas
    77056
 (Address of principal executive
    offices, including zip code)
  Registrants telephone number including area code:
    (832) 369-6986
  Securities registered under Section 12(b) of the Act:
  Title of Each Class

Name of Each Exchange on Which Registered$0.01 par value Common Stock
    10.25% Series C Cumulative Perpetual Preferred Stock

NYSE
    NYSE Amex   Securities registered under Section 12(g) of the Act:
    None
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer þ

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




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##### 





Magnum
    Hunter Resources Corporation
  2010
    Annual Report on
    Form 10-K
  Table of
    Contents
  Glossary of Oil and Natural Gas Terms


3Item 1.


BUSINESS


9Item 1A.


RISK FACTORS


19Item 2.


PROPERTIES


37Item 3.


LEGAL PROCEEDINGS


47Item 4.


[REMOVED AND RESERVED]


48Item 5.


MARKET FOR REGISTRANTS COMMON EQUITY,
    RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES


48Item 6.


SELECTED FINANCIAL DATA


52Item 7.


MANAGEMENTS DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


53Item 7A.


QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT
    MARKET RISK


74Item 8.


FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


F-1Item 9.


CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
    ACCOUNTING AND FINANCIAL DISCLOSURE


77Item 9A.


CONTROLS AND PROCEDURES


77Item 9B.


OTHER INFORMATION


78Item 10.


DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
    GOVERNANCE


78Item 11.


EXECUTIVE COMPENSATION


78Item 12.


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
    AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


78Item 13.


CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    AND DIRECTOR INDEPENDENCE


78Item 14.


PRINCIPAL ACCOUNTANT FEES AND SERVICES


78Item 15.


EXHIBITS AND FINANCIAL STATEMENT
    SCHEDULES


78EX-4.1EX-10.8EX-10.9EX-10.11EX-10.18EX-21.1EX-23.1EX-23.2EX-23.3EX-31.1EX-31.2EX-32.1EX-99.1




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##### Table of Contents



CAUTIONARY
    NOTICE
  Form 10-K
    
    adverse economic conditions in the United States and globally;
    difficult and adverse conditions in the domestic and global
    capital and credit markets;
    changes in domestic and global demand for oil and natural gas;
    volatility in the prices we receive for our oil and natural gas;
    the effects of government regulation, permitting and other legal
    requirements;
    future developments with respect to the quality of our
    properties, including, among other things, the existence of
    reserves in economic quantities;
    uncertainties about the estimates of our oil and natural gas
    reserves;
    our ability to increase our production and oil and natural gas
    income through exploration and development;
    our ability to successfully apply horizontal drilling techniques
    and tertiary recovery methods;
    the number of well locations to be drilled, the cost to drill
    and the time frame within which they will be drilled;
    drilling and operating risks;
    the availability of equipment, such as drilling rigs and
    transportation pipelines;
    changes in our drilling plans and related budgets;
    the adequacy of our capital resources and liquidity including,
    but not limited to, access to additional borrowing
    capacity; and
    other factors discussed under Risk Factors in
    Item 1A of this report.   1




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##### Table of Contents



and/or
  Forms 10-K, 10-Q 8-K
 2




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##### Table of Contents



GLOSSARY
    OF OIL AND NATURAL GAS TERMS    bbl
    
    Stock tank barrel, or 42 U.S. gallons liquid volume, used in
    this report in reference to crude oil or other liquid
    hydrocarbons.bcf
    
    Billion cubic feet of natural gas.boe
    
    Barrels of crude oil equivalent, determined using the ratio of
    six mcf of natural gas to one bbl of crude oil, condensate or
    natural gas liquids.boe/d or boepd
    
    boe per day.Completion
    
    The process of treating a drilled well followed by the
    installation of permanent equipment for the production of
    natural gas or oil, or in the case of a dry hole, the reporting
    of abandonment to the appropriate agency.Condensate
    
    Hydrocarbons which are in the gaseous state under reservoir
    conditions and which become liquid when temperature or pressure
    is reduced. A mixture of pentanes and higher hydrocarbons.Development well
    
    A well drilled within the proved area of a natural gas or oil
    reservoir to the depth of a stratigraphic horizon known to be
    productive.Drilling locations
    
    Total gross locations specifically quantified by management to
    be included in the Companys multi-year drilling activities
    on existing acreage. The Companys actual drilling
    activities may change depending on the availability of capital,
    regulatory approvals, seasonal restrictions, oil and natural gas
    prices, costs, drilling results and other factors.Dry hole
    
    A well found to be incapable of producing either oil or natural
    gas in sufficient quantities to justify completion as an oil or
    gas well.EUR
    
    Estimated ultimate recovery.Exploratory well
    
    A well drilled to find and produce natural gas or oil reserves
    not classified as proved, to find a new reservoir in a field
    previously found to be productive of natural gas or oil in
    another reservoir or to extend a known reservoir.Field
    
    An area consisting of either a single reservoir or multiple
    reservoirs, all grouped on or related to the same individual
    geological structural feature and/or stratigraphic condition.Formation
    
    An identifiable layer of rocks named after its geographical
    location and dominant rock type.Lease
    
    A legal contract that specifies the terms of the business
    relationship between an energy company and a landowner or
    mineral rights holder on a particular tract of land.Leasehold
    
    Mineral rights leased in a certain area to form a project area.mbbls
    
    Thousand barrels of crude oil or other liquid hydrocarbons.mbblspd
    
    Thousand barrels of crude oil or other liquid hydrocarbons per
    day. 3




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mboe
    
    Thousand barrels of crude oil equivalent, determined using the
    ratio of six mcf of natural gas to one bbl of crude oil,
    condensate or natural gas liquids.mboepd
    
    Thousand barrels of crude oil equivalent, determined using the
    ratio of six mcf of natural gas to one bbl of crude oil,
    condensate or natural gas liquids, per day.mcf
    
    Thousand cubic feet of natural gas.mcfpd
    
    Thousand cubic feet of natural gas per day.mcfe
    
    Thousand cubic feet equivalent, determined using the ratio of
    six mcf of natural gas to one bbl of crude oil, condensate or
    natural gas liquids.mcfepd
    
    Thousand cubic feet equivalent, determined using the ratio of
    six mcf of natural gas to one bbl of crude oil, condensate or
    natural gas liquids, per day.mmbbls
    
    Million barrels of crude oil or other liquid hydrocarbons.mmblspd
    
    Million barrels of crude oil or other liquid hydrocarbons per
    day.mmboe
    
    Million barrels of crude oil equivalent, determined using the
    ratio of six mcf of natural gas to one bbl of crude oil,
    condensate or natural gas liquids.mmboepd
    
    Million barrels of crude oil equivalent, determined using the
    ratio of six mcf of natural gas to one bbl of crude oil,
    condensate or natural gas liquids, per day.mmbtu
    
    Million British Thermal Units.mmbtupd
    
    Million British Thermal Units per daymmcf
    
    Million cubic feet of natural gas.mmcfpd
    
    Million cubic feet of natural gas per day.Net acres, net wells, or net reserves
    
    The sum of the fractional working interests owned in gross
    acres, gross wells, or gross reserves, as the case may be.NYMEX
    
    New York Mercantile Exchange.ngl
    
    Natural gas liquids, or liquid hydrocarbons found in association
    with natural gas.Overriding royalty interest
    
    Is similar to a basic royalty interest except that it is created
    out of the working interest. For example, an operator possesses
    a standard lease providing for a basic royalty to the lessor or
    mineral rights owner of
    1/8 of 8/8.
    This then entitles the operator to retain 7/8 of the total oil
    and natural gas produced. The 7/8 in this case is the 100%
    working interest the operator owns. This operator may assign its
    working interest to another operator subject to a retained 1/8
    overriding royalty. This would then result in a basic royalty of
    1/8, an overriding royalty of 1/8 and a working interest of 3/4.
    Overriding royalty interest owners have no obligation or
    responsibility for developing and operating the property. The
    only expenses borne by the overriding royalty owner are a share
    of the production or severance taxes and sometimes costs
    incurred to make the oil or gas salable. 4




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Plugging and abandonment
    
    Refers to the sealing off of fluids in the strata penetrated by
    a well so that the fluids from one stratum will not escape into
    another or to the surface. Regulations of all states require
    plugging of abandoned wells.Present value of future net revenues
    (PV-10)
    
    The present value of estimated future revenues to be generated
    from the production of proved reserves, before income taxes,
    calculated in accordance with Financial Accounting Standards
    Board guidelines, net of estimated production and future
    development costs, using prices and costs as of the date of
    estimation without future escalation, without giving effect to
    hedging activities, non-property related expenses such as
    general and administrative expenses, debt service and
    depreciation, depletion and amortization, and discounted using
    an annual discount rate of 10%.
    PV-10 uses
    year-end prices for 2008 and prior years and the arithmetic
    12-month
    average
    beginning-of-the-month
    price for 2009 and subsequent years.Production
    
    Natural resources, such as oil or gas, taken out of the ground.Proved oil and gas reserves
    
    Proved oil and gas reserves are those quantities of oil and gas,
    which, by analysis of geoscience and engineering data, can be
    estimated with reasonable certainty to be economically
    producible  from a given date forward, from known
    reservoirs, and under existing economic conditions, operating
    methods, and government regulations  prior to the
    time at which contracts providing the right to operate expire,
    unless evidence indicates that renewal is reasonably certain,
    regardless of whether deterministic or probabilistic methods are
    used for the estimation. The project to extract the hydrocarbons
    must have commenced or the operator must be reasonably certain
    that it will commence the project within a reasonable time.(i) The area of the reservoir considered as
    proved includes:(A) The area identified
    by drilling and limited by fluid contacts, if any, and(B) Adjacent undrilled
    portions of the reservoir that can, with reasonable certainty,
    be judged to be continuous with it and to contain economically
    producible oil or gas on the basis of available geoscience and
    engineering data.(ii) In the absence of data on fluid contacts,
    proved quantities in a reservoir are limited by the lowest known
    hydrocarbons (LKH) as seen in a well penetration unless
    geoscience, engineering or performance data and reliable
    technology establish a lower contact with reasonable certainty.(iii) Where direct observation from well
    penetrations has defined a highest known oil (HKO) elevation and
    the potential exists for an associated gas cap, proved oil
    reserves may be assigned in the structurally higher portions of
    the reservoir only if geoscience, engineering or performance
    data and reliable technology establish the higher contact with
    reasonable certainty.(iv) Reserves which can be produced
    economically through application of improved recovery techniques
    (including, but not limited to, fluid injection) are included in
    the proved classification when: 5




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(A) Successful testing
    by a pilot project in an area of the reservoir with properties
    no more favorable than in the reservoir as a whole, the
    operation of an installed program in the reservoir or an
    analogous reservoir, or other evidence using reliable technology
    establishes the reasonable certainty of the engineering analysis
    on which the project or program was based; and(B) The project has
    been approved for development by all necessary parties and
    entities, including governmental entities.(v) Existing economic conditions include prices
    and costs at which economic producibility from a reservoir is to
    be determined. For 2009 and subsequent years, the price shall be
    the average price during the
    12-month
    period prior to the ending date of the period covered by the
    report, determined as an unweighted arithmetic average of the
    first-day-of-the-month
    price for each month within such period, unless prices are
    defined by contractual arrangements, excluding escalations based
    upon future conditions.Proved developed oil and gas reserves
    
    Proved developed oil and gas reserves are reserves that can be
    expected to be recovered through existing wells with existing
    equipment and operating methods. Additional oil and gas expected
    to be obtained through the application of fluid injection or
    other improved recovery techniques for supplementing the natural
    forces and mechanisms of primary recovery should be included as
    proved developed reserves only after testing by a
    pilot project or after the operation of an installed program has
    confirmed through production response that increased recovery
    will be achieved.Proved undeveloped oil and gas reserves
    
    Proved undeveloped oil and gas reserves are reserves that are
    expected to be recovered from new wells on undrilled acreage, or
    from existing wells where a relatively major expenditure is
    required for recompletion. Reserves on undrilled acreage shall
    be limited to those drilling units offsetting productive units
    that are reasonably certain of production when drilled. Proved
    reserves for other undrilled units can be claimed only where it
    can be demonstrated with certainty that there is continuity of
    production from the existing productive formation. Under no
    circumstances should estimates for proved undeveloped reserves
    be attributable to any acreage for which an application of fluid
    injection or other improved recovery technique is contemplated,
    unless such techniques have been proved effective by actual
    tests in the area and in the same reservoir.Probable reserves
    
    Probable reserves are those additional reserves that are less
    certain to be recovered than proved reserves but which, together
    with proved reserves, are as likely as not to be recovered. When
    deterministic methods are used, it is as likely as not that
    actual remaining quantities recovered will exceed the sum of
    estimated proved plus probable reserves. When probabilistic
    methods are used, there should be at least a 50% probability
    that the actual quantities recovered will equal or exceed the
    proved plus probable reserves estimates. Probable reserves may
    be assigned to areas of a reservoir adjacent to proved reserves
    where data control or interpretations of available data are less
    certain, even if the interpreted reservoir continuity of
    structure or productivity does not meet the reasonable certainty
    criterion. Probable reserves 6




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may be assigned to areas that are structurally higher than the
    proved area if these areas are in communication with the proved
    reservoir. Probable reserves estimates also include potential
    incremental quantities associated with a greater percentage
    recovery of the hydrocarbons in place than assumed for proved
    reserves.Possible reserves
    
    Possible reserves are those additional reserves that are less
    certain to be recovered than probable reserves. When
    deterministic methods are used, the total quantities ultimately
    recovered from a project have a low probability of exceeding
    proved plus probable plus possible reserves. When probabilistic
    methods are used, there should be at least a 10% probability
    that the total quantities ultimately recovered will equal or
    exceed the proved plus probable plus possible reserves
    estimates. Possible reserves may be assigned to areas of a
    reservoir adjacent to probable reserves where data control and
    interpretations of available data are progressively less
    certain. Frequently, this will be in areas where geoscience and
    engineering data are unable to define clearly the area and
    vertical limits of commercial production from the reservoir by a
    defined project. Possible reserves also include incremental
    quantities associated with a greater percentage recovery of the
    hydrocarbons in place than the recovery quantities assumed for
    probable reserves. Possible reserves may be assigned where
    geoscience and engineering data identify directly adjacent
    portions of a reservoir within the same accumulation that may be
    separated from proved areas by faults with displacement less
    than formation thickness or other geological discontinuities and
    that have not been penetrated by a wellbore, and the Company
    believes that such adjacent portions are in communication with
    the known (proved) reservoir. Possible reserves may be assigned
    to areas that are structurally higher or lower than the proved
    area if these areas are in communication with the proved
    reservoir. Where direct observation has defined a highest known
    oil (HKO) elevation and the potential exists for an associated
    gas cap, proved oil reserves should be assigned in the
    structurally higher portions of the reservoir above the HKO only
    if the higher contact can be established with reasonable
    certainty through reliable technology. Portions of the reservoir
    that do not meet this reasonable certainty criterion may be
    assigned as probable and possible oil or gas based on reservoir
    fluid properties and pressure gradient interpretations.Productive well
    
    A well that is found to be capable of producing either oil or
    natural gas in sufficient quantities to justify completion as an
    oil or gas well.Project
    
    A targeted development area where it is probable that oil or
    natural gas can be produced from new wells.Prospect
    
    A specific geographic area which, based on supporting
    geological, geophysical or other data and also preliminary
    economic analysis using reasonably anticipated prices and costs,
    is deemed to have potential for the discovery of commercial
    hydrocarbons.R/P
    
    The reserves to production ratio. The reserve portion of the
    ratio is the amount of a resource known to exist in an area and
    to be economically recoverable. The production portion of the
    ratio is the amount of resource used in one year at the current
    rate. 7




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Recompletion
    
    The process of re-entering an existing well bore that is either
    producing or not producing and completing new reservoirs in an
    attempt to establish or increase existing production.Reserves
    
    Oil, natural gas and gas liquids thought to be accumulated in
    known reservoirs.Reservoir
    
    A porous and permeable underground formation containing a
    natural accumulation of producible natural gas and/or oil that
    is confined by impermeable rock or water barriers and is
    separate from other reservoirs.Secondary recovery
    
    A recovery process that uses mechanisms other than the natural
    pressure of the reservoir, such as gas injection or water
    flooding, to produce residual oil and natural gas remaining
    after the primary recovery phase.Shut-in
    
    A well that has been capped (having the valves locked shut) for
    an undetermined amount of time. This could be for additional
    testing, could be to wait for pipeline or processing facility,
    or could be for a number of other reasons.Standardized measure
    
    The present value of estimated future cash inflows from proved
    oil and natural gas reserves, less future development,
    abandonment, production and income tax expenses, discounted at
    10% per annum to reflect timing of future cash flows and using
    the same pricing assumptions as were used to calculate
    PV-10.
    Standardized measure differs from
    PV-10
    because standardized measure includes the effect of future
    income taxes.Successful
    
    A well is determined to be successful if it is producing oil or
    natural gas, or awaiting hookup, but not abandoned or plugged.Undeveloped acreage
    
    Lease acreage on which wells have not been drilled or completed
    to a point that would permit the production of commercial
    quantities of oil and natural gas regardless of whether such
    acreage contains proved reserves.Water flood
    
    A method of secondary recovery in which water is injected into
    the reservoir formation to displace residual oil and enhance
    hydrocarbon recovery.Working interest
    
    The operating interest that gives the owner thereof the right to
    drill, produce and conduct operating activities on the property
    and receive a share of production and requires the owner to pay
    a share of the costs of drilling and production operations. 8




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Item 1.
    BUSINESS  Website
    Access to Reports
  Form 10-K, Form 10-Q, Form 8-K, www.magnumhunterresources.com
  The
    Company
  Overview
      PV-10
  (832) 369-6986 www.magnumhunterresources.com
    Recent
    Developments
    Completed Triad Acquisition. 23-year
 9




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rights-of-way;
  Completed PostRock Acquisition.
        Pending NGAS Resources Acquisition.
     10




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NGAS
    transaction highlights:
  
    Multi-year inventory of approximately 2,400 identified low-risk
    horizontal unconventional drilling locations (historical success
    ratio of 98%)
    Ability to achieve an estimated $7 to $8 million of
    synergies and cost reductions through a restructured gas
    gathering and transportation agreement; consolidation of general
    and administrative expenses with Triad Hunter and Magnum
    Hunters corporate headquarters; elimination of duplicative
    public company expenses; and the potential spin-off of
    NGASs broker-dealer business unit to a third party
    management group
    Exposure to highly attractive Huron Shale leases
    Substantial liquids potential in emerging Weir oil play with
    existing lease inventory
    Highly accretive to reserves, production and cash flow per share
    Ability to hold significant lease acreage without substantial
    drilling expenditures required in the immediate future  Pending NuLoch Resources Acquisition.
  share-for-share
   11




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
    Proved reserves (1P) of 5.2 mmboe as of December 31, 2010
    (82% crude oil and 25% proved developed producing)
    Proved and probable reserves (2P) of 8.2 mmboe as of
    December 31, 2010
    Productive capacity as of February 14 , 2011 of approximately
    1,550 boe per day (86% crude oil, 70% from the Williston Basin),
    of which 1,080 boe per day of productive capacity is from
    14 net Bakken-Three Forks Sanish wells drilled and completed
    An additional 630 boe per day 30-day production rate (IP-30
    rate) of potential production exists behind pipe in standing
    cased and/or
    wells currently drilling in the Williston Basin
    Approximately 71,600 net Williston Basin mineral lease
    acres (32,900 located in Divide and Burke Counties, North
    Dakota) which are prospective for the Bakken-Three Forks Sanish
    formations
    Approximately 50,680 net mineral lease acres located in
    Alberta with estimated net daily production of 470 boe per
    day (53% light crude oil)  NuLoch
    transaction highlights:
  
    Multi-year inventory of approximately 267 net identified
    Williston Basin drilling locations (approximately 7.3% booked as
    proved reserves), representing estimated risked reserve
    potential of 31.4 mmboe (estimated unrisked reserve potential is
    80.0 mmboe)
    Long-lived reserves with an R/P ratio of 9.2 years
    All identified Williston Basin drilling locations are targeting
    the Bakken-Three Forks / Sanish formations using long
    reach horizontal drilling and multi-stage fracturing techniques
    Estimated per well
    IP-30 rate
    in the 350 boe per day range with per well EURs in the 475 mboe
    range and all in costs of approximately $7.0 million per
    well in the North Dakota acreage
    Estimated internal rates of return of approximately 35% (based
    on a NYMEX price of $85 per barrel of oil) 12




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Magnum
    Hunters Summary of Proved Reserves, Wells and
    Production
  SEC
    Case Reserve Summary
  At December 31, 2010Productive


2010 AverageProved





%


Wells


Daily ProductionArea

Reserves(a)


PV-10(b)(c)


Oil


Gross


Net


Volumes(d)(e)(mmboe)


(Millions)











(boe)Appalachia


9.182


$
104.26



35
%


2,090



2,014.1



774North Dakota


2.508


$
46.55



96
%


151



70.9



361Texas


1.435


$
20.86



64
%


17



5.8



127Other


0.274


$
6.13



88
%


4



0.4



39Total


13.400


$
177.80



51
%


2,262



2,091.2



1,301     (a)
    
    Mmboe is defined as one million barrels of oil equivalent
    determined using the ratio of six mcf of natural gas to one bbl
    of crude oil, condensate or natural gas liquids.(b)
    
    The prices used to calculate this measure were $79.43 per barrel
    of oil and $4.37 per mmbtu of natural gas. The prices represent
    the average prices per barrel of oil and per mmbtu of natural
    gas at the beginning of each month in the
    12-month
    period prior to the end of the reporting period. These prices
    were adjusted to reflect applicable transportation and quality
    differentials on a
    well-by-well
    basis to arrive at realized sales prices used to estimate our
    reserves at this date.(c)
    
    The standardized measure for our proved reserves at
    December 31, 2010 was $128 million. See
    Item 2. Properties  Reserves for a
    definition of pre-tax
    PV-10 and a
    reconciliation of our standardized measure to our pre-tax
    PV-10 value.(d)
    
    Average daily production volumes calculated based on
    360-day year.(e)
    
    Excluding production from the Cinco Terry discontinued
    operations. See note 6 to our consolidated financial
    statements.  NYMEX
    Futures Strip Case Reserve Summary
  At December 31, 2010Productive


2010 AverageProved





%


Wells


Daily ProductionArea

Reserves(a)


PV-10(b)


Oil


Gross


Net


Volumes(c)(d)(mmboe)


(Millions)











(boe)Appalachia


9.636


$
142.49



35
%


2,090



2,014.1



792North Dakota


2.664


$
61.39



95
%


151



70.9



361Texas


1.988


$
30.87



71
%


17



5.8



127Other


0.277


$
7.82



88
%


4



0.4



39Total


14.566


$
242.57



52
%


2,262



2,091.2



1,319     (a)
    
    Mmboe is defined as one million barrels of oil equivalent
    determined using the ratio of six mcf of natural gas to one bbl
    of crude oil, condensate or natural gas liquids.(b)
    
    The prices used to calculate this measure were the NYMEX futures
    strip prices as of December 31, 2010.(c)
    
    Average daily production volumes calculated based on
    360-day year.(d)
    
    Excluding production from the Cinco Terry discontinued
    operations. See note 6 to our consolidated financial
    statements. 13




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Business
    Strategy
    Focus on Unconventional Resource Plays
  Strategic Acquisitions
  Focus on Acquisition and Development of Oil and Liquids Rich
    Resources
  Operating Control
  Employment of Advanced Technologies
  Leveraging the Experience of our Management
    Team
  Development of Eureka Hunter Pipeline Assets
  Competitive
    Strengths
    Experienced Management Team
 14




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Balanced Long-Lived Asset Base with Substantial Oil
    Reserves
  Acreage Position and Drilling Inventory in Core Resource
    Areas
  Operated Assets
  Marcellus Infrastructure Assets rights-of-way
  2011
    Operating Capital Budget
    
    Approximately $65 million to drill 14 gross (7 net)
    horizontal wells in Texas targeting the Eagle Ford Shale;
    Approximately $60 million to drill 15 gross (12.5 net)
    horizontal wells in the Appalachian Basin targeting the
    Marcellus Shale; and
    An estimated $25 million for the further development of the
    Eureka Hunter midstream system in northwest West Virginia.    Marketing
    and Pricing
   15




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##### Table of Contents




    uncertainty in the global economy;
    changes in global supply and demand for oil and natural gas;
    the condition of the U.S. and global economies;
    the actions of certain foreign countries;
    the price and quantity of imports of foreign oil and liquid
    natural gas;
    political conditions, including embargoes, war or civil unrest
    in or affecting oil producing activities of certain countries;
    the level of global oil and natural gas exploration and
    production activity;
    the level of global oil and natural gas inventories;
    production or pricing decisions made by the Organization of
    Petroleum Exporting Countries (OPEC);
    weather conditions;
    technological advances affecting energy consumption or
    production; and
    the price and availability of alternative fuels.    
    our production
    and/or sales
    of oil and natural gas are less than expected;
    payments owed under derivative hedging contracts come due prior
    to receipt of the hedged months production revenue; or
    the counterparty to the hedging contract defaults on its
    contract obligations.   16




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##### Table of Contents



2011


2012Natural Gas HedgesSwapsVolume (mmbtu/d)


112



99Price per mcf

$
5.98


$
6.15CollarsVolume (mmbtu/d)


2,113



1,884Floor Price per mcf

$
5.37


$
5.00Ceiling Price per mcf

$
7.43


$
8.65Total Gas Volume Hedged


811,980



723,600Total proved developed producing(PDP)


1,598,220



1,143,700Total % of PDP Hedged


51
%


63
%   2011


2012Crude Oil HedgesFloorsVolume (bbls/d)


158



151Price per bbl

$
80.00


$
80.00SwapsVolume (bbls/d)


42



N/APrice per bbl

$
85.08



N/ACollarsVolume (bbls/d)


496



187Floor Price per bbl

$
73.49


$
78.66Ceiling Price per bbl

$
95.95


$
102.14Total Oil Volume Hedged


254,070



123,592Total PDP


360,010



290,710Total % of PDP Hedged


71
%


43
%   Competition
     17




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Operating
    Hazards and Risks
      Governmental
    Regulation
       18




---



##### Table of Contents



Formation
    Employees
    Facilities
  sub-leased
  Available
    Information
  (832) 369-6986. 1-800-SEC-0330. Form 10-K, Form 10-Q, Form 8-K
  Item 1A.
    RISK
    FACTORS    Risks
    Related to Our Business
  Future
    economic conditions in the U.S. and global markets may have a
    material adverse impact on our business and financial condition
    that we currently cannot predict.
   19




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##### Table of Contents



Volatility
    in oil and natural gas prices may adversely affect our business,
    financial condition or results of operations and our ability to
    meet our capital expenditure obligations and financial
    commitments.
    
    uncertainty in the global economy;
    changes in global supply and demand for oil and natural gas;
    the condition of the U.S. and global economies;
    the actions of certain foreign countries;
    the price and quantity of imports of foreign oil and liquid
    natural gas (LNG);
    political conditions, including embargoes, war or civil unrest
    in or affecting oil producing activities of certain countries;
    the level of global oil and natural gas exploration and
    production activity;
    the level of global oil and natural gas inventories;
    production or pricing decisions made by OPEC;
    weather conditions;
    technological advances affecting energy consumption; and
    the price and availability of alternative fuels.    The
    recent financial crisis may have lasting effects on our
    liquidity, business and financial condition that we cannot
    predict.
    If our
    access to oil and gas markets is restricted, it could negatively
    impact our production, our income and ultimately our ability to
    retain our leases. Our ability to sell natural gas and/or
    receive market prices for our natural gas may be adversely
    affected by pipeline and gathering system capacity
    constraints.
   20




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##### Table of Contents



and/or
    We
    depend on a relatively small number of purchasers for a
    substantial portion of our revenue. The inability of one or more
    of our purchasers to meet their obligations may adversely affect
    our financial results.
    Shortages
    of oil field equipment, services and qualified personnel could
    reduce our cash flow and adversely affect results of
    operations.
  and/or
  We
    cannot control activities on properties that we do not operate
    and are unable to control their proper operation and
    profitability.
   21




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##### Table of Contents




    the nature and timing of the operators drilling and other
    activities;
    the timing and amount of required capital expenditures;
    the operators geological and engineering expertise and
    financial resources;
    the approval of other participants in drilling wells; and
    the operators selection of suitable technology.  Our
    development and exploration operations require substantial
    capital, and we may be unable to obtain needed capital or
    financing on satisfactory terms, which could lead to a loss of
    properties and a decline in our oil and natural gas
    reserves.
    
    our proved reserves;
    the amount of oil and natural gas we are able to produce from
    existing wells;
    the prices at which oil and natural gas are sold; and
    our ability to acquire, locate and produce new reserves.    We may
    incur substantial losses and be subject to substantial liability
    claims as a result of our oil and natural gas operations, and we
    may not have enough insurance to cover all of the risks that we
    may ultimately face.
     22




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##### Table of Contents




    environmental hazards, such as uncontrollable flows of oil,
    natural gas, brine, well fluids, toxic gas or other pollution
    into the environment, including groundwater and shoreline
    contamination;
    abnormally pressured formations;
    mechanical difficulties, such as stuck oil field drilling and
    service tools and casing collapses;
    fires and explosions;
    personal injuries and death; and
    natural disasters.    We
    have limited management and staff and will be dependent upon
    partnering arrangements.
    
    the possibility that such third parties may not be available to
    us as and when needed; and
    the risk that we may not be able to properly control the timing
    and quality of work conducted with respect to our projects.    Our
    business may suffer if we lose key personnel.
    Drilling
    for and producing oil and natural gas are high risk activities
    with many uncertainties that could adversely affect our
    business, financial condition and results of
    operations.
    
    delays imposed by or resulting from compliance with regulatory
    requirements; 23




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##### Table of Contents




    unusual or unexpected geological formations;
    pressure or irregularities in geological formations;
    shortages of or delays in obtaining equipment and qualified
    personnel;
    equipment malfunctions, failures or accidents;
    unexpected operational events and drilling conditions;
    pipe or cement failures;
    casing collapses;
    lost or damaged oilfield drilling and service tools;
    loss of drilling fluid circulation;
    uncontrollable flows of oil, natural gas and fluids;
    fires and natural disasters;
    environmental hazards, such as natural gas leaks, oil spills,
    pipeline ruptures and discharges of toxic gases;
    adverse weather conditions;
    reductions in oil and natural gas prices;
    oil and natural gas property title problems; and
    market limitations for oil and natural gas.    Competition
    in the oil and natural gas industry is intense, which may
    adversely affect our ability to compete.
    We
    have limited experience in drilling wells to the Marcellus
    Shale, Eagle Ford Shale and Bakken Shale and limited information
    regarding reserves and decline rates in the Marcellus Shale,
    Eagle Ford Shale and Bakken Shale. Wells drilled to these shale
    areas are more expensive and more susceptible to mechanical
    problems in drilling and completion techniques than wells in
    other conventional areas.
   24




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##### Table of Contents



Prospects
    that we decide to drill may not yield oil or natural gas in
    commercially viable quantities.
    New
    technologies may cause our current exploration and drilling
    methods to become obsolete.
    Our
    indebtedness could adversely affect our financial condition and
    our ability to operate our business.
    
    it may be difficult for us to satisfy our obligations, including
    debt service requirements under our credit agreements;
    our ability to obtain additional financing for working capital,
    capital expenditures, debt service requirements and other
    general corporate purposes may be impaired;
    a significant portion of our cash flow is committed to payments
    on our debt, which will reduce the funds available to us for
    other purposes, such as future capital expenditures;
    we are more vulnerable to price fluctuations and to economic
    downturns and adverse industry conditions and our flexibility to
    plan for, or react to, changes in our business or industry is
    more limited; and
    our ability to capitalize on business opportunities, and to
    react to competitive pressures, as compared to others in our
    industry, may be limited.  We
    have a history of losses and cannot assure you that we will be
    profitable in the foreseeable future.
   25




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##### Table of Contents



We do
    not have a significant operating history and, as a result, there
    is a limited amount of information about us on which to make an
    investment decision.
    Our
    proved reserves and related
    PV-10 as of
    December 31, 2010 have been reported under new SEC rules
    that went into effect on January 1, 2010. The estimates
    provided in accordance with the new SEC rules may change
    materially as a result of interpretive guidance that may be
    subsequently released by the SEC.
  PV-10 12-month first-day-of-the-month PV-10
  Our
    estimated reserves are based on many assumptions that may turn
    out to be inaccurate. Any significant inaccuracies in these
    reserve estimates or underlying assumptions may materially
    affect the quantities and present value of our
    reserves.
        
    actual prices we receive for oil and natural gas;
    actual cost of development and production expenditures;
    the amount and timing of actual production;
    supply of and demand for oil and natural gas; and
    changes in governmental regulations or taxation. 26




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##### Table of Contents



We may
    be limited in our ability to book additional proved undeveloped
    reserves under the new SEC rules.
    Unless
    we replace our oil and natural gas reserves, our reserves and
    production will decline, which would adversely affect our
    business, financial condition and results of
    operations.
    Product
    price derivative contracts may expose us to potential financial
    loss.
    
    production is less than expected;
    the counterparty to the derivative contract defaults on its
    contract obligations; or
    there is a change in the expected differential between the
    underlying price in the hedging agreement and actual prices
    received.    If oil
    and natural gas prices decline, we may be required to take
    additional write-downs of the carrying values of our oil and
    natural gas properties, potentially triggering
    earlier-than-anticipated
    repayments of any outstanding debt obligations and negatively
    impacting the trading value of our securities.
   27




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Restrictive
    covenants in our senior credit facility may restrict our ability
    to pursue our business strategies.
    
    incur indebtedness;
    grant liens;
    make certain payments;
    change the nature of our business;
    dispose of all or substantially all of our assets or enter into
    mergers, consolidations or similar transactions;
    make investments, loans or advances;
    pay cash dividends, unless certain conditions are met and are
    subject to a basket of $10.25 million per year
    available for payment of dividends on preferred stock; and
    enter into transactions with affiliates.    
    an EBITDAX to interest ratio of not less than 2.5 to 1.0;
    a debt to EBITDAX ratio of not more than 4.0 to 1.0 for each
    fiscal quarter ending during the remaining term of the senior
    credit facility; and
    a ratio of consolidated current assets to consolidated current
    liabilities of not less than 1.0 to 1.0.   28




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##### Table of Contents



Our
    obligations under our senior credit facility are secured by
    substantially all of our assets, and any failure to meet our
    debt obligations would adversely affect our business and
    financial condition.
      We are
    subject to complex federal, state and local laws and
    regulations, including environmental laws, which could adversely
    affect our business.
    and/or
  clean-up
  Enactment
    of legislative or regulatory proposals under consideration could
    negatively affect our business.
  cap-and-trade
 29




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##### Table of Contents



Federal
    and state legislation and regulatory initiatives relating to
    hydraulic fracturing could result in increased costs and
    additional operating restrictions or delays.
    Climate
    change legislation or regulations restricting emissions of
    greenhouse gases could result in increased operating
    costs and reduced demand for the oil, natural gas and NGLs that
    we produce.
  cap-and-trade
  Massachusetts,
    et al. v. EPA
   30




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##### Table of Contents



We
    must obtain governmental permits and approvals for our drilling
    operations, which can be a costly and time consuming process,
    which may result in delays and restrictions on our
    operations.
    Our
    operations expose us to substantial costs and liabilities with
    respect to environmental matters.
    The
    adoption of derivatives legislation by Congress and related
    regulations could have an adverse impact on our ability to hedge
    risks associated with our business.
   31




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##### Table of Contents



Certain
    federal income tax deductions currently available with respect
    to oil and natural gas exploration and development may be
    eliminated as a result of future legislation.
    
    the repeal of the percentage depletion allowance for oil and gas
    properties;
    the elimination of current deductions for intangible drilling
    and development costs;
    the elimination of the deduction for certain
    U.S. production activities; and
    an extension of the amortization period for certain geological
    and geophysical expenditures. It is unclear, however, whether
    any such changes will be enacted or how soon such changes could
    be effective.    Acquired
    properties may not be worth what we pay due to uncertainties in
    evaluating recoverable reserves and other expected benefits, as
    well as potential liabilities.
    Our
    recent acquisitions and any future acquisitions may not be
    successful, may substantially increase our indebtedness and
    contingent liabilities, and may create integration
    difficulties.
    
    post-closing discovery of material undisclosed liabilities of
    the acquired business or assets;
    the unexpected loss of key employees or customers from the
    acquired businesses;
    difficulties resulting from our integration of the operations,
    systems and management of the acquired business; and
    an unexpected diversion of our managements attention from
    other operations. 32




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##### Table of Contents



We
    pursue acquisitions as part of our growth strategy and there are
    risks in connection with acquisitions.
      
    recoverable reserves;
    exploration and development potential;
    future oil and natural gas prices;
    operating costs; and
    potential environmental and other liabilities.      Our
    current Eureka Hunter midstream operations and the expected
    future expansion of these operations, which include or will
    include natural gas gathering operations and a natural gas
    processing plant, subject us to additional governmental
    regulations.
   33




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##### Table of Contents



Risks
    Related to Our Equity Securities
  The
    price of our common stock has fluctuated substantially since it
    first became listed on a national securities exchange in August
    2006, and may fluctuate substantially in the
    future.
    
    changes in oil and natural gas prices;
    variations in quarterly drilling, recompletions, acquisitions
    and operating results;
    changes in financial estimates by securities analysts;
    changes in market valuations of comparable companies;
    additions or departures of key personnel;
    the level of our overall indebtedness;
    future issuances of our common stock and related dilution to
    existing stockholders; and
    the other risks and uncertainties described in this Risk
    Factors section and elsewhere in this report.   34




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##### Table of Contents



The
    market for our common stock may not provide investors with
    sufficient liquidity or a market based valuation of our common
    stock.
    We
    will likely issue additional common stock in the future, which
    would dilute our existing stockholders.
        Our
    amended and restated certificate of incorporation, amended and
    restated bylaws, and Delaware law contain provisions that could
    make it more difficult for a third party to acquire us without
    the consent of our board of directors and our executive
    officers, who collectively beneficially owned approximately 7.5%
    of the outstanding shares of our common stock as of
    February 15, 2011.
    
    the ability of our board of directors to issue shares of our
    common stock and preferred stock without stockholder approval;
    the ability of our board of directors to make, alter, or repeal
    our bylaws without further stockholder approval;
    the requirement for advance notice of director nominations to
    our board of directors and for proposing other matters to be
    acted upon at stockholder meetings; 35




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##### Table of Contents




    requiring that special meetings of stockholders be called only
    by our chairman, by a majority of our board of directors, by our
    chief executive officer or by our president; and
    allowing our directors, and not our stockholders, to fill
    vacancies on the board of directors, including vacancies
    resulting from removal or enlargement of the board of directors.        Because
    we have no plans to pay dividends on our common stock,
    stockholders must look solely to appreciation of our common
    stock to realize a gain on their investments.
    We are
    able to issue shares of preferred stock with greater rights than
    our common stock.
    Our
    assets are subject to liquidation preferences in favor of the
    holders of our Series C Preferred Stock, which will impact
    the rights of holders of our common stock if we
    liquidate.
    Our
    outstanding warrants which are exercisable for shares of our
    common stock, may be exercised, which would dilute our existing
    common stockholders.
   36




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##### Table of Contents



The
    market price of our common stock could be adversely affected by
    sales of substantial amounts of our common stock and securities
    convertible into, or exchangeable for, shares of our common
    stock in the public markets and the issuance of shares of common
    stock and securities convertible into, or exchangeable for,
    shares of our common stock in future acquisitions.
      Item 2.
    PROPERTIES  Appalachian
    Basin/Marcellus Shale
           37




---



##### Table of Contents



South
    Texas/Eagle Ford Shale
  20-40
 38




---



##### Table of Contents



39




---



##### Table of Contents



Williston
    Basin/Bakken Shale
         40




---



##### Table of Contents



Other
    Properties
  South Louisiana / East Chalkley
  Other
  Midstream
    Assets
    rights-of-way rights-of-way
 41




---



##### Table of Contents



and/or out-of-market
  Equipment
    and Services
  Alpha Hunter Drilling
  Hunter Disposal
  Reserves
      Proved
    Reserves
  12-month
 42




---



##### Table of Contents



beginning-of-the-month Regulation S-X Regulation S-K.
  Net Reserves (SEC Prices at 12/31/10)Category

Oil


NGL


Gas


PV-10(mbbls)


(barrels)


(mmcf)


($mm)Proved Developed


3,720







18,888


$
111.8Proved Undeveloped


3,104







20,564


$
66.0Total Proved


6,824







39,452


$
177.8     Net Reserves (Based on NYMEX Futures Prices at 12/31/10)Category

Oil


NGL


Gas


PV-10(mbbls)


(barrels)


(mmcf)


($mm)Proved Developed


3,975







20,577


$
144.9Proved Undeveloped


3,632







21,167


$
97.7Total Proved


7,607







41,744


$
242.6       2010


2009


2008DescriptionProved Developed ReservesOil (bbls)


3, 720,300



1,694,700



1,092,730NGLs (bbls)






361,000



301,577Natural Gas (mcf)


18,887,700



4,952,500



2,549,496Proved Undeveloped ReservesOil (bbls)


3,104,000



2,126,800



769,309NGLs (bbls)






426,000



245,636Natural Gas (mcf)


20,564,200



4,411,700



1,703,450Total Proved Reserves (boe)(1)(2)


13,399,700



6,169,200



3,118,076PV-10
    Value ($mm)(3)

$
177.8


$
65.6


$
21.0Standardized Measure ($mms)

$
128.0


$
47.4


$
15.6     (1)
    
    The estimates of reserves in the table above conform to the
    guidelines of the SEC. Estimated recoverable proved reserves
    have been determined without regard to any economic impact that
    may result from our financial 43




---



##### Table of Contents



derivative activities. These calculations were prepared using
    standard geological and engineering methods generally accepted
    by the petroleum industry. The reserve information shown is
    estimated. The certainty of any reserve estimate is a function
    of the quality of available geological, geophysical, engineering
    and economic data, and the precision of the engineering and
    geological interpretation and judgment. The estimates of
    reserves, future cash flows and present value are based on
    various assumptions, and are inherently imprecise. Although we
    believe these estimates are reasonable, actual future
    production, cash flows, taxes, development expenditures,
    operating expenses and quantities of recoverable oil and natural
    gas reserves may vary substantially from these estimates.(2)
    
    We converted natural gas to oil equivalent at a ratio of six mcf
    to one boe.(3)
    
    Represents the present value, discounted at 10% per annum
    (PV-10), of
    estimated future cash flows before income tax of our estimated
    proved reserves. The estimated future cash flows set forth above
    were determined by using reserve quantities of proved reserves
    and the periods in which they are expected to be developed and
    produced based on prevailing economic conditions. The estimated
    future production is priced based on the
    12-month
    unweighted arithmetic average of the
    first-day-of-the-month
    price for the period January through December 2010, using $79.43
    per bbl and $4.37 per mmbtu and adjusted by lease for
    transportation fees and regional price differentials. Management
    believes that the presentation of the non-GAAP financial measure
    of PV-10
    provides useful information to investors because it is widely
    used by professional analysts and sophisticated investors in
    evaluating oil and natural gas companies.      For the Year EndedProved Reserves (mboe)

December 31, 2010Proved reserves  beginning of year


6,169.2Revisions of previous estimates


(22.2
)Improved recovery


0.0Extensions and discoveries


3,194.1Production


(588.9
)Purchases of reserves in place


7,037.1Sales of reserves in place


(2,389.6
)Proved reserves  end of year


13,399.7Proved developed reserves  beginning of year


2,880.7Proved developed reserves  end of year


5,842.4   Recent
    SEC Rule-Making Activity
    
    Commodity Prices:  Economic producibility of
    reserves and discounted cash flows are now based on a
    12-month
    average commodity price unless contractual arrangements
    designate the price to be used.
    Disclosure of Unproved Reserves:  Probable and
    possible reserves may be disclosed separately on a voluntary
    basis.
    Proved Undeveloped Reserve
    Guidelines:  Reserves may be classified as proved
    undeveloped if there is a high degree of confidence that the
    quantities will be recovered and they are scheduled to be
    drilled within the next five years, unless the specific
    circumstances justify a longer time. 44




---



##### Table of Contents




    Reserves Estimation Using New
    Technologies:  Reserves may be estimated through
    the use of reliable technology in addition to flow tests and
    production history.
    Reserves Personnel and Estimation
    Process:  Additional disclosure is required
    regarding the qualifications of the chief technical person who
    oversees the reserves estimation process. We are also required
    to provide a general discussion of our internal controls used to
    assure the objectivity of the reserves estimate.
    Non-Traditional Resources:  The definition of
    oil and gas producing activities has expanded and focuses on the
    marketable product rather than the method of extraction.  Reserve
    Estimation
        Acreage
    and Productive Wells Summary
    Developed


UndevelopedAcreage(1)


Acreage(2)


Total AcreageGross


Net


Gross


Net


Gross


NetAppalachia


70,803



62,652



110,449



33,723



181,252



96,375North Dakota


15,200



6,536



3,411



1,116



18,611



7,652Texas


6,993



1,916



51,152



24,229



58,145



26,145Other


714



443



90,000



8,866



90,714



9,309Total


93,710



71,547



255,012



67,934



348,722



139,481     (1)
    
    Developed acreage is the number of acres allocated or assignable
    to producing wells or wells capable of production. 45




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##### Table of Contents



(2)
    
    Undeveloped acreage is lease acreage on which wells have not
    been drilled or completed to a point that would permit the
    production of commercial quantities of oil and natural gas,
    regardless of whether such acreage includes proved reserves.    Producing


Producing


Total ProducingOil Wells


Gas Wells


WellsGross


Net


Gross


Net


Gross


NetAppalachia


1,398.0



1,375.6



692.0



638.6



2,090.0



2,014.2North Dakota


151.0



70.9



0.0



0.0



151.0



70.9Texas


4.0



2.8



15.0



2.2



19.0



5.0Other


2.0



1.3



0.0



0.0



2.0



1.3Total


1,555



1,451



707



641



2,262



2,091     Year Ending

Expiring AcreageDecember 31,

Gross


Net2011


12,425



8,8482012


20,267



12,6872013


25,865



20,7572014


31,156



21,864Total


89,713



64,156   Drilling
    Results
    2010


2009


2008Gross


Net


Gross


Net


Gross


NetExploratory Wells:Productive


8



6.67



3



0.70



25



2.45Unproductive


0



0.00



1



0.10



11



2.20Total


8



6.67



4



0.80



36



4.65Developmental Wells:


67



6.70



27



3.80



8



1.41Total Wells:Productive


75



13.37



30



4.50



33



3.86Unproductive


0



0.00



1



0.10



0



0.00Total


75



13.37



31



4.60



33



3.86Success Ratio(1)


100.0
%


100.0
%


96.8
%


97.8
%


100.0
%


100.0
%  46




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##### Table of Contents



(1)
    
    The success ratio is calculated as follows: (total wells
    drilled  non-productive wells  wells
    awaiting completion)/(total wells drilled  wells
    awaiting completion).  Oil and
    Gas Production, Prices and Costs
    Years EndedDecember 31,2010


2009Oil and Gas Production:Oil (mbbl)


316



115Gas (mmcf)


952



191Oil Equivalent (mboe)


475



146Average Sales Price:Oil ($/bbl)

$
72.41


$
53.56Gas ($/mcf)

$
5.07


$
2.46Oil Equivalent ($/boe)

$
58.37


$
45.11Lease Operating Expense ($/boe)

$
21.90


$
26.58   Title to
    Properties
    
    customary royalty interests;
    liens incident to operating agreements and for current taxes;
    obligations or duties under applicable laws;
    development obligations under oil and gas leases;
    net profit interests;
    overriding royalty interests;
    non-surface occupancy leases; and
    lessor consents to placement of wells.  Item 3.
    LEGAL
    PROCEEDINGS   47




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##### Table of Contents



Item 4.
    [REMOVED
    AND RESERVED]  PART II
  Item 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASE OF EQUITY SECURITIES  Common
    Stock Trading Summary
    High

Low2010:First quarter

$
3.29


$
1.50Second quarter


5.49



3.00Third quarter


4.85



3.75Fourth quarter


8.05



3.872009:First quarter

$
0.65


$
0.21Second quarter


0.84



0.20Third quarter


1.43



0.54Fourth quarter


2.24



1.20   Holders
    Dividends
   48




---



##### Table of Contents



Securities
    Authorized for Issuance Under Equity Compensation
    Plans
    Number of SecuritiesNumber of Securities


Weighted-Average


Remaining Available forto be Issued Upon


Exercise Price of


Future Issuance UnderExercise of


Outstanding Options,


Equity Compensation PlansOutstanding Options,


Warrants and


(Excluding SecuritiesWarrants and Rights(a)


Rights(b)


Reflected in Column(a))(c)Equity compensation plans approved by security holders


9,079,356


$
3.69



5,248,827Equity compensation plans not approved by security holders


4,000,000


$
0.37



Total


13,079,356


$
2.65



5,248,827     Recent
    Sales of Unregistered Securities
               49




---



##### Table of Contents



and/or
  Repurchases
    of Common Stock
   50




---



##### Table of Contents



Share
    Performance Graph
      COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN
  
  December 31,2005

2006

2007

2008

2009

2010Magnum Hunter Resources


100.00



80.56



56.56



9.42



44.28



205.70S & P 500


100.00



115.79



122.16



76.96



97.33



111.99Dow Jones US Expl & Production


100.00



105.37



151.39



90.65



127.42



152.32  51




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##### Table of Contents



Item 6.
    SELECTED
    FINANCIAL DATA  Year Ended December 31,2010


2009


2008


2007


2006(In thousands, except per-share data)Income Statement DataRevenues

$
32,724


$
6,844


$
11,590


$
6,638


$
1,516Net loss from continuing operations


(22,257
)


(15,569
)


(9,468
)


(5,781
)


(3,858
)Income/(loss) from discontinued operations


8,457



445



2,582



242



(41
)Net loss


(13,800
)


(15,124
)


(6,886
)


(5,539
)


(3,899
)Dividends on preferred stock


(2,467
)


(26
)


(734
)


(511
)


Net loss attributable to common shareholders

$
(16,267
)

$
(15,150
)

$
(7,621
)


(6,050
)


(3,899
)Basic and Diluted Earnings (Loss) Per ShareContinuing operations

$
(0.38
)

$
(0.40
)

$
(0.28
)

$
(0.30
)

$
(0.19
)Discontinued operations


0.13



0.01



0.07



0.02



(0.01
)Net loss per share

$
(0.25
)

$
(0.39
)

$
(0.21
)

$
(0.28
)

$
(0.20
)Statement of Cash Flows DataNet cash provided by (used in)Operating activities

$
(1,167
)

$
3,372


$
3,437


$
854


$
(755
)Investing activities


(118,281
)


(16,624
)


(10,379
)


(29,964
)


(6,590
)Financing activities


117,720



9,413



(2,338
)


40,225



8,212Balance Sheet DataCash and cash equivalents

$
554


$
2,282


$
6,121


$
15,400


$
4,285Other current assets


12,572



4,591



4,059



3,329



103Property, equipment, net, successful efforts method


232,601



46,410



39,134



42,482



3,974Other assets


3,240



13,301



12,351



5,152



2,586Total assets

$
248,967


$
66,584


$
61,665


$
66,363


$
10,948Current liabilities

$
44,235


$
6,219


$
3,497


$
14,274


$
218Long-term debt


26,019



13,000



21,500







Other long-term liabilities


5,155



2,673



1,590



2,108



31Redeemable preferred stock


70,236



5,374







7,232



Shareholders equity


103,322



39,318



35,078



42,749



10,699Total liabilities and shareholders equity

$
248,967


$
66,584


$
61,665


$
66,363


$
10,948  52




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##### Table of Contents



Item 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS    General
    and Business Overview
      2010
    Recap and 2011 Outlook
  Acquisition of Triad Energy Assets. 23-year rights-of-way;
  
    $8 million in cash ($4 million net);
    $15 million of our Series B Redeemable Convertible
    Preferred Stock, issued to certain banks who were secured
    creditors of Triad Energy in its Chapter 11 proceedings (In
    June 2010, all outstanding shares of Series B Preferred
    Stock were either converted into shares of common stock of the
    Company or redeemed by the Company for cash); 53




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##### Table of Contents




    $55 million repayment of Triad Energy senior debt through
    borrowings under our senior credit facility discussed
    below; and
    Assumption of approximately $3 million of equipment
    indebtedness.  Completed PostRock Acquisition.
        Pending NGAS Resources Acquisition.
     54




---



##### Table of Contents



Pending NuLoch Resources Acquisition.
  share-for-share
      Divestiture of West Texas /Cinco Terry
    Assets.
  Senior Credit Facility.
     55




---



##### Table of Contents



Redemption of Series B Preferred
    Stock.
    Equity Financings.
  
    $38.7 million of common equity financings throughout the
    course of the year.
    $64.9 million in gross proceeds from the issuance of our
    10.25% Series C Cumulative Perpetual Preferred Stock, at a
    price of $25.00 per share. We incurred costs of
    $1.4 million to issue those shares.
    $16.1 million in gross proceeds from the exercise of
    warrants and stock options during 2010.  Shale
    Resource Play Properties
  Appalachian Basin/Marcellus Shale.
  South Texas/Eagle Ford Shale.
 56




---



##### Table of Contents



Williston Basin/Bakken Shale.
  Other
    Properties
  South Louisiana/East Chalkley
  East Texas/Surprise
  Other
  Eureka
    Hunter Midstream
    and/or rights-of-way rights-of-way
   57




---



##### Table of Contents



and/or out-of-market
  Equipment
    and Services
  Alpha Hunter Drilling
  Hunter Disposal
  Critical
    Accounting Policies and Estimates
    Oil
    and Gas Activities  Successful Efforts
    
    geological and geophysical evaluation costs are expensed as
    incurred;
    dry holes for exploratory wells are expensed, and dry holes for
    developmental wells are capitalized; and
    capitalized costs related to proved oil and gas properties,
    including wells and related equipment and facilities, are
    evaluated for impairment based on an analysis of undiscounted
    future net cash flows in accordance with ASC 360,
    Accounting for the Impairment or Disposal of Long Lived Assets.
    If 58




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##### Table of Contents



undiscounted cash flows are insufficient to recover the net
    capitalized costs related to proved properties, then we
    recognize an impairment charge in income from operations equal
    to the difference between the net capitalized costs related to
    proved properties and their estimated fair values based on the
    present value of the related future net cash flows.  Proved
    Reserves
  Modernization of Oil and Gas Reporting
  
    Commodity prices.  Economic producibility of
    reserves is now based on the unweighted, arithmetic average of
    the closing price on the first day of the month for the
    12-month
    period prior to fiscal year end, unless prices are defined by
    contractual arrangements;
    Undeveloped oil and gas reserves.  Reserves may
    be classified as proved undeveloped for undrilled
    areas beyond one offsetting drilling unit from a producing well
    if there is reasonable certainty that the quantities will be
    recovered;
    Reliable technology.  The rules now permit the
    use of new technologies to establish the reasonable certainty of
    proved reserves if those technologies have been demonstrated
    empirically to lead to reliable conclusions about reserves
    volumes;
    Unproved reserves.  Probable and possible
    reserves may be disclosed separately on a voluntary basis;
    Preparation of reserves estimates.  Disclosure
    is required regarding the internal controls used to assure
    objectivity in the reserves estimation process and the
    qualifications of the technical person primarily responsible for
    preparing reserves estimates; and
    Third party reports.  We are now required to
    file with the SEC the report of any third party used to prepare
    or audit our reserve estimates.  2010-03,
    12-month
 59




---



##### Table of Contents



Derivative
    Instruments and Commodity Derivative Activities
           60




---



##### Table of Contents



Asset
    Retirement Obligation
      Share-Based
    Compensation
    Valuation
    of Property and Equipment
  Accounting
    for the Impairment or Disposal of Long-Lived Assets
      Revenue
    Recognition
     61




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##### Table of Contents



Income
    Taxes
  Income Taxes
      Recently
    Issued Accounting Pronouncements
  ASC 2010-06, (ASC 820-10).
  ASC 2010-09,
  Effects
    of Inflation
   62




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##### Table of Contents



Results
    of Operations
    Years Ended December 31,2010


2009


2008Revenues (in thousands)Oil

$
22,892


$
6,138


$
9,624Gas


4,823



469



569Total oil and gas sales

$
27,715


$
6,607


$
10,193Field operations revenue

$
4,742


$



$
Field operations expense

$
4,363


$



$
ProductionOil (mbbls)


316



115



111Gas (mmcf)


952



191



130Total (mboe)


475



146



132Total (boe/d)


1,301



401



363Average pricesOil (per bbl)

$
72.41


$
53.56


$
86.92Gas (per mcf)


5.07



2.46



4.36Total average price (per boe)

$
58.37


$
45.11


$
76.96Costs and expenses (per boe)Lease operating

$
21.90


$
26.48


$
30.42Severance tax and marketing


4.85



3.41



5.36Exploration


1.97



5.40



55.45Impairment of properties


0.64



4.33



14.90General and administrative (see Note)


52.44



57.98



29.93Depletion, depreciation and accretion


18.79



21.63



53.04       Years
    ended December 31, 2010 and 2009
  Oil and gas production.
 63




---



##### Table of Contents



Oil and gas sales.
  Field Operations Revenue and Expense.
  Other income.
  Lease operating expense.
  Severance taxes and marketing.
  Exploration.
  Impairment of oil and gas properties.
  Depletion, depreciation and accretion.
 64




---



##### Table of Contents



General and administrative.
  Interest expense, net.
  Commodity derivative activities.
  Net loss attributable to non-controlling
    interest.
  Loss from Continuing Operations.
  Income from discontinued operations.
 65




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##### Table of Contents



Dividends on Preferred Stock.
  Net loss attributable to common
    shareholders.
  Years
    ended December 31, 2009 and 2008
  Oil and gas production.
  Oil and gas sales.
  Other income.
  Lease operating expense.
  Severance taxes and marketing.
  Exploration.
 66




---



##### Table of Contents



Impairment of oil and gas properties.
  Depletion, depreciation and accretion.
  General and administrative.
  Interest expense, net.
  Loss on debt extinguishment.
  Commodity derivative activities.
  Net loss attributable to non-controlling
    interest.
  Loss from continuing operations.
 67




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##### Table of Contents



Income from discontinued operations.
  Dividends on Preferred Stock.
  Net loss attributable to common
    shareholders.
  Liquidity
    and Capital Resources
           68




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##### Table of Contents



Years Ended December 31,2010


2009


2008(In thousands)Cash flows provided by (used in) operating activities

$
(1,167
)

$
3,372


$
3,437Cash flows used in investing activities


(118,280
)


(16,624
)


(10,378
)Cash flows provided by (used in) financing activities


117,720



9,413



(2,338
)Net decrease in cash and cash equivalents

$
(1,727
)

$
(3,839
)

$
(9,279
)     Years Ended December 31,2010





2009(In thousands)Borrowing base

$
71,500






$
25,000Cash and cash equivalents


554







2,282Debt


(30,000
)






(13,000
)Liquidity

$
42,054






$
14,282     Operating
    Activities
    Investing
    Activities
   69




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##### Table of Contents



Financing
    Activities
      2011
    Capital Expenditures Budget
    Year EndingDecember 31,2011(In thousands)Appalachian BasinMarcellus Shale drilling

$
56,300Eureka Hunter Pipeline


25,000Acreage acquisition


3,600Eagle FordEagle Ford Shale drilling


61,500Acreage acquisition


3,600Total capital expenditures

$
150,000    70




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##### Table of Contents



Revolving
    Credit Facility
             71




---



##### Table of Contents



Covenants
        Related
    Party Transactions
     72




---



##### Table of Contents



Contractual
    Commitments
                Contractual Obligations

Total


2011


2012 - 2013


2014 - 2015


After 2015Long-term debt(1)

$
33,151


$
7,132


$
24,793


$
1,226


$
Interest on long-term debt(2)


2,730



1,539



1,159



32



Operating lease obligations(3)


2,557



754



870



636



297Asset retirement obligations(4)


4,455



100



695



274



3,386Employment agreements with senior officers


1,179



1,179











Drilling contract commitment


3,197



3,197











Total

$
47,269


$
13,901


$
27,517


$
2,168


$
3,683     (1)
    
    See Note 8 to our consolidated financial statements for a
    discussion of our revolving credit facility.(2)
    
    Interest payments have been calculated by applying the interest
    rates ranging from 0.00%  6.34% at December 31,
    2010, to the outstanding long-term debt of $33.2 million at
    December 31, 2010.(3)
    
    Operating lease obligations are for office space and equipment.(4)
    
    See Note 6 to our consolidated financial statements for a
    discussion of our asset retirement obligations.  Off-Balance
    Sheet Arrangements
   73




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##### Table of Contents



Item 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.    Proved
    Reserves
  12-month
    Commodity
    Price Risk
     74




---



##### Table of Contents



Fair MarketCommodity

Type

Volume/Month

Duration

Price


ValueOil

Buy - CALL

4562

Jan 11 - Dec 11


82.25


$
797,111Oil

Buy - PUT

4,800 bbls

Jan 11 - Dec 11


80.00



(425,732
)Oil

Buy - PUT

4,600 bbls

Jan 12 - Dec 12


80.00



(291,803
)Oil

Buy - PUT

1400

Jan 11 - Dec 11


75.00



28,869Oil

Buy - PUT

3042

Jan 11 - Dec 11


75.00



63,062Oil

Buy - PUT

1525

Jan 12 - Dec 12


75.00



90,392Oil

Buy - PUT

150 bbl per day

Jan 11 - Mar 11


60.00



49Oil

Buy - PUT

150 bbl per day

Jan 11 - Mar 11


52.00



2Oil

Buy - PUT

200 bbl per day

Jan 11 - Dec 11


75.00



126,124Oil

Collar

4,178 bbls

Jan 12 - Dec 12


80.00 -100.00



(131,921
)Oil

Collar

5,000 bbls

June 10 - Dec 11


70.00 - 82.25



(725,170
)Oil

Sell - CALL

4562

Jan 11 - Dec 11


90.00



(503,117
)Oil

Sell - CALL

1400

Jan 11 - Dec 11


95.00



(109,174
)Oil

Sell - CALL

3042

Jan 11 - Dec 11


97.20



(203,728
)Oil

Sell - CALL

1525

Jan 12 - Dec 12


108.00



(114,902
)Oil

Sell - CALL

200 bbl per day

Jan 11 - Dec 11


100.00



(333,332
)Oil

Sell - PUT

4562

Jan 11 - Dec 11


52.00



(7,078
)Oil

Sell - PUT

1400

Jan 11 - Dec 11


60.00



(6,497
)Oil

Sell - PUT

3042

Jan 11 - Dec 11


60.00



(14,203
)Oil

Sell - PUT

1525

Jan 12 - Dec 12


55.00



(20,624
)Oil

Swap

435 bbls

Jan 11 - Dec 11


85.25



(44,299
)Oil

Swap

2,250 bbls

Jan 11 - Dec 11


85.00



(89,085
)Natural Gas

Collar

12,500 mmbtu

Jan 11 - Dec 11


5.00 - 8.20



94,505Natural Gas

Collar

4,165 mmbtu

Jan 11 - Dec 11


5.00 - 8.95



31,801Natural Gas

Collar

10,000 mmbtu

Jan 12 - Dec 12


5.00 - 9.82



69,012Natural Gas

Collar

47,600 mmbtu

Jan 11 - Dec 11


5.50 - 7.10



549,074Natural Gas

Collar

47,300 mmbtu

Jan 12 - Dec 12


5.00 - 8.40



302,517Natural Gas

Swap

3,400 mmbtu

Jan 11 - Dec 11


5.98



52,047Natural Gas

Swap

3,000 mmbtu

Jan 12 - Dec 12


6.15



38,148$
(777,952
)        75




---



##### Table of Contents




    Level 1 Quoted prices are available in
    active markets for identical assets or liabilities as of the
    reporting date. At December 31, 2010, we had no
    Level 1 measurements.
    Level 2 Pricing inputs are other than
    quoted prices in active markets included in Level 1, which
    are either directly or indirectly observable as of the reporting
    date. Level 2 includes those financial instruments that are
    valued using models or other valuation methodologies. These
    models are primarily industry-standard models that consider
    various assumptions, including quoted forward prices for
    commodities, time value, volatility factors and current market
    and contractual prices for the underlying instruments, as well
    as other relevant economic measures. Our derivatives, which
    consist primarily of commodity swaps and collars, are valued
    using commodity market data which is derived by combining raw
    inputs and quantitative models and processes to generate forward
    curves. Where observable inputs are available, directly or
    indirectly, for substantially the full term of the asset or
    liability, the instrument is categorized in Level 2. At
    December 31, 2010, all of our commodity derivatives were
    valued using Level 2 measurements.
    Level 3 Pricing inputs include
    significant inputs that are generally less observable from
    objective sources. These inputs may be used with internally
    developed methodologies that result in managements best
    estimate of fair value. At December 31, 2010, our
    Level 3 measurements were used to calculate our asset
    retirement obligation and our impairment analysis of proved
    properties at December 31, 2010. 76




---



##### Table of Contents



Item 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  INDEX TO
    FINANCIAL STATEMENTS
  Report of Independent Registered Public
    Accounting Firm  2010 and 2009


F-2Report of Independent Registered Public
    Accounting Firm  2008


F-3Balance Sheets at December 31, 2010 and
    2009


F-5Statements of Operations for the years ended
    December 31, 2010, 2009, and 2008


F-6Statements of Shareholders Equity for the
    years ended December 31, 2010, 2009, and 2008


F-7Statements of Cash Flows for the years ended
    December 31, 2010, 2009, and 2008


F-8Notes to Financial Statements


F-9  F-1




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm           Internal Control  Integrated Framework
      F-2




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM         (a) (b) (c)
          F-3




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
            
     F-4




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2010


2009ASSETSCURRENT ASSETS:Cash and cash equivalents

$
554,186


$
2,281,568Accounts receivable


11,705,046



2,706,086Derivative assets






1,261,534Prepaids and other current assets


867,013



94,113Assets held for sale  current






529,957Total current assets


13,126,245



6,873,258PROPERTY AND EQUIPMENT:Oil and natural gas properties, successful efforts accounting


189,911,500



46,229,171Gas gathering and other equipment


42,689,125



180,878Total property and equipment


232,600,625



46,410,049OTHER ASSETS:Assets held for sale  long term






11,128,583Derivative assets






1,092,152Deferred financing costs, net of amortization of $1,236,664 and
    $35,831, respectively


2,678,244



1,012,756Other assets


561,711



67,253Total Assets

$
248,966,825


$
66,584,051LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Current portion of notes payable

$
7,132,455


$
44,157Accounts payable


29,839,557



3,813,623Accrued liabilities


3,914,136



885,622Revenue payable


2,629,999



342,585Dividend payable






25,654Derivative liability


718,771



69,136Liabilities associated with assets held for sale 
    current






1,038,598Total current liabilities


44,234,918



6,219,375Payable on sale of partnership


640,695



640,695Notes payable, less current portion


26,018,615



13,000,000Derivative payable


59,181



Asset retirement obligation


4,455,327



1,964,749Liabilities associated with assets held for sale 
    long term






67,557Total liabilities


75,408,736



21,892,376COMMITMENTS AND CONTINGENCIES (Note 14)REDEEMABLE PREFERRED STOCK:Series C Cumulative Perpetual Preferred Stock, cumulative
    dividend rate 10.25% per annum, 4,000,000 authorized, 2,809,456
    and 214,950 issued & outstanding as of
    December 31, 2010 and 2009, respectively, with liquidation
    preference of $25.00 per share


70,236,400



5,373,750SHAREHOLDERS EQUITY:Preferred stock, 6,000,000 shares authorized, none issued
    and outstanding






Common stock, $0.01 par value; 150,000,000 shares
    authorized, 74,863,135 and 50,591,610 shares issued and
    outstanding as of December 31, 2010 and 2009, respectively


748,631



505,916Additional paid in capital


152,438,989



71,936,306Accumulated deficit


(49,402,300
)


(33,135,693
)Treasury Stock, previously deposit on Triad, at cost,
    761,652 shares


(1,310,357
)


(1,310,357
)Unearned common stock in KSOP, at cost


(603,613
)


Total Magnum Hunter Resources Corporation shareholders
    equity


101,871,350



37,996,172Noncontrolling interest


1,450,339



1,321,753Total Shareholders Equity


103,321,689



39,317,925Total Liabilities and Shareholders Equity

$
248,966,825


$
66,584,051    F-5




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Year Ended December 31,2010


2009


2008REVENUE:Oil and gas sales

$
27,714,542


$
6,606,901


$
10,192,818Field operations


4,741,889







Gain on sale of assets


71,069



14,000



1,196,963Other income


196,173



222,668



200,000Total revenue


32,723,673



6,843,569



11,589,781EXPENSES:Lease operating expenses


10,399,323



3,878,512



4,028,906Severance taxes and marketing


2,304,570



499,523



710,308Exploration


936,371



790,569



7,344,390Field Operations


4,362,618







Impairment of oil & gas properties


305,786



633,953



1,973,015Depreciation, depletion and accretion


8,923,202



3,167,839



7,025,525General and administrative


24,900,996



8,490,364



3,964,664Total expenses


52,132,866



17,460,760



25,046,808OPERATING LOSS


(19,409,193
)


(10,617,191
)


(13,457,027
)OTHER INCOME (EXPENSE):Interest income


60,526



959



188,932Interest expense


(3,593,524
)


(2,691,097
)


(2,361,152
)Loss on debt extinguishment










(2,790,829
)Gain (loss) on derivative contracts


814,037



(2,325,251
)


7,311,255Loss from continuing operations before non-controlling interest


(22,128,154
)


(15,632,580
)


(11,108,821
)Net (income) loss attributable to non-controlling interest


(128,586
)


63,156



1,640,466Net loss attributable to Magnum Hunter Resources Corporation
    from continuing operations


(22,256,740
)


(15,569,424
)


(9,468,355
)Income from discontinued operations


8,456,811



445,215



2,582,021Net loss


(13,799,929
)


(15,124,209
)


(6,886,334
)Dividends on Preferred Stock


(2,466,679
)


(25,654
)


(734,406
)Net loss attributable to common shareholders

$
(16,266,608
)

$
(15,149,863
)

$
(7,620,740
)Weighted average number of common shares outstanding, basic and
    diluted


63,921,525



38,953,834



36,714,489Net loss from continuing operations

$
(0.38
)

$
(0.40
)

$
(0.28
)Net income from discontinued operations

$
0.13


$
0.01


$
0.07Net loss per common share, basic and diluted

$
(0.25
)

$
(0.39
)

$
(0.21
)    F-6




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY
  UnearnedNumber of








Additional








CommonShares


Deposit


Common


Paid in


Accumulated


Treasury


Shares in


Noncontrolling


Totalof Common


on Triad


Stock


Capital


Deficit


Stock


KSOP


Interest


EquityBALANCE, January 1, 2008


36,599,372


$



$
365,994


$
49,723,515


$
(10,365,090
)

$



$



$
3,025,375


$
42,749,794Dividends on Series A Convertible Preferred


















(734,406
)














(734,406
)Restricted stock issued to employees and directors


168,800







1,688



341,782



















343,470Stock compensation














1,246,205



















1,246,205Net loss


















(6,886,334
)










(1,640,466
)


(8,526,800
)BALANCE, December 31, 2008


36,768,172


$



$
367,682


$
51,311,502


$
(17,985,830
)

$



$



$
1,384,909


$
35,078,263Restricted stock issued to employees and directors


1,886,200







18,862



1,361,719



















1,380,581Stock compensation














1,710,753



















1,710,753Issued 2,294,474 shares for acquisition of Sharon
    Resources, Inc.


2,294,474







22,944



2,661,591



















2,684,535Cost of issuing 214,950 shares of Series C Preferred
    Stock














(418,205
)


















(418,205
)Issued 8,881,112 shares of Common Stock


8,881,112







88,811



14,006,206



















14,095,017Dividends on Series C Convertible Preferred


















(25,654
)














(25,654
)Cost of issuing 761,652 shares as deposit on Triad
    Acquisition


761,652



(1,310,357
)


7,617



1,302,740



















Net loss


















(15,124,209
)










(63,156
)


(15,187,365
)BALANCE, December 31, 2009


50,591,610


$
(1,310,357
)

$
505,916


$
71,936,306


$
(33,135,693
)

$



$



$
1,321,753


$
39,317,925Restricted stock issued to employees and directors


2,539,317







25,393



425,584



















450,977Stock compensation














5,929,435



















5,929,435Stock Options surrendered by holder for cash payment














(115,500
)


















(115,500
)Issued shares of common stock for payment of services


55,932







559



164,441



















165,000Cost of issuing 2,594,506 shares of Series C Preferred
    Stock














(1,418,969
)


















(1,418,969
)Issued shares of Common Stock for cash


10,832,076







108,321



38,569,998



















38,678,319Issued shares of Common Stock upon exercise of warrants


7,536,654







75,367



16,030,693



















16,106,060Issued shares of common stock upon stock option exercise


52,500







525



124,303



















124,828Issued shares of Common Stock upon redemption of Series B
    Convertible Preferred Stock


1,000,000







10,000



3,722,000



















3,732,000Dividends on Series B Convertible Preferred


















(130,625
)














(130,625
)Dividends on Series C Cumulative Perpetual Preferred


















(2,336,054
)














(2,336,054
)761,652 shares of common stock as deposit on Triad
    Acquisition returned to treasury






1,310,357















(1,310,357
)










Loan of 153,300 shares to KSOP


























(603,613
)






(603,613
)Issued shares of common stock for acquisition of assets


2,255,046







22,550



17,070,698



















17,093,248Net loss


















(13,799,928
)










128,586



(13,671,342
)BALANCE, December 31, 2010


74,863,135


$



$
748,631


$
152,438,989


$
(49,402,300
)

$
(1,310,357
)

$
(603,613
)

$
1,450,339


$
103,321,689    F-7




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  CONSOLIDATED STATEMENTS OF CASH
    FLOWS
  Year Ended December 31,2010


2009


2008Cash flows from operating activitiesNet loss

$
(13,799,928
)

$
(15,124,209
)

$
(6,886,334
)Adjustments to reconcile net loss to net cash provided by
    operating activities:Non-controlling interest


128,586



(63,156
)


(1,640,466
)Depletion, depreciation, and accretion


10,345,698



4,499,611



7,682,293Stock-based compensation


6,380,412



3,091,334



1,589,675Impairment


305,785



633,953



1,973,015Gain on asset retirement obligation










(16,837
)Exploratory costs






647,001



7,140,013Gain on sale of assets


(6,730,680
)


(14,000
)


(1,196,963
)Loss on extinguishment of debt










2,790,829Unrealized (gain) loss on derivative contracts


3,062,502



7,700,129



(9,116,145
)Amortization of deferred financing cost included in interest
    expense


1,200,833



1,233,611



1,737,458Changes in operating assets and liabilities:Accounts receivable and accrued revenue


(2,949,213
)


(1,908,945
)


(114,366
)Prepaid expenses and other current assets


134,277



(16,313
)


(49,887
)Accounts payable


8,865,622



1,571,108



(631,563
)Revenue payable


359,476



342,585



Accrued liabilities


(8,470,237
)


779,030



176,607Net cash provided by (used in) operating activities


(1,166,867
)


3,371,739



3,437,329Cash flows from investing activitiesCapital expenditures


(81,842,289
)


(13,274,656
)


(16,222,790
)Change in advances


1,764,852



(1,326,889
)


Cash received in purchase of Sharon Resources, Inc.






235,023



Net cash paid in acquisition of Triad


(59,500,299
)






Proceeds from sale of assets


21,238,322



500,000



7,843,962Purchase of derivatives






(2,700,850
)


Change in deposits


58,681



(56,246
)


Investment in partnership










(1,999,800
)Net cash used in investing activities


(118,280,733
)


(16,623,618
)


(10,378,628
)Cash flows from financing activitiesNet proceeds from sale of common stock and warrants


38,678,319



14,095,017



Net proceeds from sale of preferred shares


63,443,681



4,955,545



Proceeds from exercise of warrants


16,106,060







Loan KSOP shares


(603,613
)






Options exercised


124,828







Options surrendered for cash


(115,500
)






Preferred stock dividend paid


(2,492,333
)






Principal payments on debt


(84,885,648
)


(34,193,566
)


(2,253,861
)Proceeds from debt borrowings


101,580,745



25,718,196



9,354,295Payment on payable on sale of partnership






(113,560
)


Payment of deferred financing costs


(2,866,321
)


(1,048,587
)


(1,471,545
)Redemption of preferred stock


(11,250,000
)






(7,966,735
)Net cash provided by (used in) financing activities


117,720,218



9,413,045



(2,337,846
)Net decrease in cash and cash equivalents


(1,727,382
)


(3,838,834
)


(9,279,145
)Cash and cash equivalents, beginning of year


2,281,568



6,120,402



15,399,547Cash and cash equivalents, end of year

$
554,186


$
2,281,568


$
6,120,402Cash paid for interest

$
2,748,945


$
2,142,454


$
1,554,484Noncash transactionsStock issued for acquisition of PostRock assets

$
17,093,248


$



$
Series B Preferred stock issued for acquisition of Triad

$
14,982,000


$



$
Debt assumed in acquisition of Triad

$
3,411,816


$



$
Common stock issued for payment of services

$
165,000


$



$
Common stock issued in conversion of Series C Perpetual
    Preferred Stock

$
3,732,000


$



$
Capitalized interest in oil and gas properties

$



$



$
1,080,177Accrued capital expenditures

$
23,217,800


$



$
1,527,440Stock issued for acquisition of Sharon Resources, Inc.

$



$
2,684,535


$
Refinancing of Petrobridge loan

$



$



$
16,239,152    F-8




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATIONNotes to Financial Statements
  NOTE 1 
    ORGANIZATION
    AND NATURE OF OPERATIONS      NOTE 2 
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  Principles
    of Consolidation and Presentation
        Reclassification
    of Prior-Year Balances
    Cash
    and cash equivalents
    Financial
    Instruments
   F-9




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
  Oil
    and Gas Properties
  Capitalized
    Costs
    December 31,2010


2009Mineral interests in properties:Unproved properties

$
57,427,823


$
12,490,361Proved properties


84,967,556



28,119,550Wells and related equipment and facilities


55,937,955



19,599,812Uncompleted wells, equipment and facilities


13,581,022



71,150Advances


5,618



65,722Total costs


211,919,974



60,346,595Less accumulated depreciation, depletion and amortization


(22,008,474
)


(14,117,424
)Net capitalized costs

$
189,911,500


$
46,229,171       unit-of-production
     F-10




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
        Estimates
    of Proved Oil and Gas Reserves
    
    the quality and quantity of available data;
    the interpretation of that data;
    the accuracy of various mandated economic assumptions;
    and the judgment of the persons preparing the estimate.    12-month
    Oil
    and Gas Operations
  Revenue
    Recognition
   F-11




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
      Accounts
    Receivable
      Revenue
    Payable
    Advances
    from Non-Operators
    Production
    Costs
      Dependence
    on Major Customers
   F-12




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
  Dependence
    on Suppliers
    Other
    Property
        Deferred
    financing costs
    Derivative
    Financial Instruments
  marked-to-market
  Asset
    Retirement Obligation
   F-13




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
    Share
    Based Compensation
    Income
    Taxes
        Loss
    per Common Share
     F-14




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
    Reclassification
    of Prior-Year Balances
    Recently
    Issued Accounting Pronouncements
  ASC 2010-06, (ASC 820-10).
  ASC 2010-09,
  NOTE 3 
    FAIR
    VALUE OF FINANCIAL INSTRUMENTS    
    Level 1  Quoted prices (unadjusted) for
    identical assets or liabilities in active markets
    Level 2 Quoted prices for similar assets
    or liabilities in active markets; quoted prices for identical or
    similar assets or liabilities in markets that are not active;
    and model-derived valuations whose inputs or significant value
    drivers are observable
    Level 3 Significant inputs to the
    valuation model are unobservable F-15




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
     Level 2
    Classification:
  Derivative
    Instruments
        Fair Value Measurements on a Recurring BasisDecember 31, 2010Level 1


Level 2


Level 3Commodity derivatives

$



$



$
Total assets at fair value

$



$



$
Commodity derivatives

$



$
777,952


$
Total liabilities at fair value

$



$
777,952


$
   Fair Value Measurements on a Recurring BasisDecember 31, 2009Level 1


Level 2


Level 3Commodity derivatives

$



$
2,353,686


$
Total assets as fair value

$



$
2,353,686


$
Commodity derivatives

$



$
69,136


$
Total liabilities at fair value

$



$
69,136


$
   NOTE 4 
    FINANCIAL
    INSTRUMENTS AND DERIVATIVES   F-16




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
    FairVolume/





MarketCommodity

Type

Month

Duration

Price

ValueOil

Buy - CALL

4562

Jan 11 - Dec 11

82.25

$
797,111Oil

Buy - PUT

4,800 bbls

Jan 11 - Dec 11

80.00


(425,732
)Oil

Buy - PUT

4,600 bbls

Jan 12 - Dec 12

80.00


(291,803
)Oil

Buy - PUT

1400

Jan 11 - Dec 11

75.00


28,869Oil

Buy - PUT

3042

Jan 11 - Dec 11

75.00


63,062Oil

Buy - PUT

1525

Jan 12 - Dec 12

75.00


90,392Oil

Buy - PUT

150 bbl per day

Jan 11 - Mar 11

60.00


49Oil

Buy - PUT

150 bbl per day

Jan 11 - Mar 11

52.00


2Oil

Buy - PUT

200 bbl per day

Jan 11 - Dec 11

75.00


126,124Oil

Collar

4,178 bbls

Jan 12 - Dec 12

80.00 - 100.00


(131,921
)Oil

Collar

5,000 bbls

June 10 - Dec 11

70.00 - 82.25


(725,170
)Oil

Sell - CALL

4562

Jan 11 - Dec 11

90.00


(503,117
)Oil

Sell - CALL

1400

Jan 11 - Dec 11

95.00


(109,174
)Oil

Sell - CALL

3042

Jan 11 - Dec 11

97.20


(203,728
)Oil

Sell - CALL

1525

Jan 12 - Dec 12

108.00


(114,902
)Oil

Sell - CALL

200 bbl per day

Jan 11 - Dec 11

100.00


(333,332
)Oil

Sell - PUT

4562

Jan 11 - Dec 11

52.00


(7,078
)Oil

Sell - PUT

1400

Jan 11 - Dec 11

60.00


(6,497
)Oil

Sell - PUT

3042

Jan 11 - Dec 11

60.00


(14,203
)Oil

Sell - PUT

1525

Jan 12 - Dec 12

55.00


(20,624
)Oil

Swap

435 bbls

Jan 11 - Dec 11

85.25


(44,299
)Oil

Swap

2,250 bbls

Jan 11 - Dec 11

85.00


(89,085
)Natural Gas

Collar

12,500 mmbtu

Jan 11 - Dec 11

5.00 - 8.20


94,505Natural Gas

Collar

4,165 mmbtu

Jan 11 - Dec 11

5.00 - 8.95


31,801Natural Gas

Collar

10,000 mmbtu

Jan 12 - Dec 12

5.00 - 9.82


69,012Natural Gas

Collar

47,600 mmbtu

Jan 11 - Dec 11

5.50 - 7.10


549,074Natural Gas

Collar

47,300 mmbtu

Jan 12 - Dec 12

5.00 - 8.40


302,517Natural Gas

Swap

3,400 mmbtu

Jan 11 - Dec 11

5.98


52,047Natural Gas

Swap

3,000 mmbtu

Jan 12 - Dec 12

6.15


38,148$
(777,952
)    F-17




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
  NOTE 5 
    ACQUISITIONS  Triad
      Fair value of total purchase price:Cash consideration

$
8,000,000Payment of Triad senior and other debt


55,210,910Assumption of equipment indebtedness


3,411,816Issuance of $15,000,000 stated value Series B
    Preferred Stock


14,982,000Total

$
81,604,726Amounts recognized for assets acquired and liabilities assumed:Working capital

$
4,195,113Proved oil and gas properties


49,708,193Unproved oil and gas properties


12,386,212Gas gathering system assets


10,000,000Field servicing equipment


7,576,000Asset retirement obligation


(2,260,792
)Total

$
81,604,726Working capital acquired was as follows:Cash

$
3,710,610Accounts receivable


2,404,514Prepaid expenses


222,521Inventory


684,656Other current assets


553,139Accounts payable


(1,087,133
)Accrued liabilities


(365,256
)Revenue payable


(1,927,938
)Total working capital acquired

$
4,195,113  F-18




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
      PostRock
      Business
    Combinations
    2,255,046 shares of common stock issued on
    December 30, 2010 at $7.58 per share

$
17,093,248Cash paid December 30, 2010


13,938,891Total

$
31,032,139Amounts recognized for assets acquired and liabilities assumed:Working capital

$
(61,109
)Oil and gas properties


30,959,698Equipment and other fixed assets


150,550Asset retirement obligation


(17,000
)Total

$
31,032,139Working capital acquiredTransfer tax payable

$
(61,109
)$
(61,109
)    F-19




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
    For the Year Ended December 31,2010


2009(In thousands)Total operating revenue

$
36,773


$
34,953Total operating costs and expenses


55,362



41,543Operating income (loss)


(18,589
)


(6,590
)Interest expense and other


3,859



(10,807
)Net loss attributable to Magnum Hunter Resources Corporation


(14,730
)


(17,397
)Dividends on preferred stock


(2,664
)


(1,153
)Net loss attributable to common stockholders

$
(17,394
)

$
(18,550
)Loss per common share, basic and diluted

$
(0.26
)

$
(0.34
)     NOTE 6 
    DISCONTINUED
    OPERATIONS    Year Ended December 312010


2009


2008Oil and Gas Sales and other revenues from discontinued operations

$
4,850,496


$
3,428,132


$
4,293,660Operating expenses from discontinued operations


(2,613,153
)


(2,337,668
)


(1,300,933
)Interest expense from discontinued operations


(377,500
)


(645,249
)


(410,706
)Gain on sale of discontinued operations


6,659,611







Income tax expense on sale of discontinued operations


(62,643
)






Net income from discontinued operations

$
8,456,811


$
445,215


$
2,582,021  F-20




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
    NOTE 7 
    ASSET
    RETIREMENT OBLIGATIONS      2010


2009Asset retirement obligation at beginning of period

$
2,032,306


$
1,589,197Purchased in Sharon Resources acquisition






150,211Assumed in Triad Acquisition


2,260,792



Assumed in PostRock Acquisition


17,000



Liabilities incurred


45,797



150,822Liabilities settled


(276,414
)


(22,914
)Accretion expense


375,846



164,990Revisions in estimated liabilities






Asset retirement obligation at end of period

$
4,455,327


$
2,032,306   NOTE 8 
    NOTES PAYABLE    2010


2009Note payable due February 1, 2010, 4.75%

$



$
44,157Various equipment notes payable with maturity dates April 2012
    to August 2015, interest rates of 0.00%  6.34%


3,151,070



Senior revolving credit facility due November 23, 2012,
    4.5% Tranche A and 5.5% tranche BTranche A at 4.5% due November 23, 2012


23,500,000



13,000,000Tranche B at 5.5%, due November 30, 2011


6,500,000$
33,151,070


$
13,044,157Less: current portion


(7,132,455
)


(44,157
)Total Long-Term Debt

$
26,018,615


$
13,000,000  F-21




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
    2011

$
7,132,4552012


24,135,2672013


657,7052014


639,765Thereafter


585,878$
33,151,070   Notes
    Payable
      Revolving
    Credit Facility
         F-22




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
            Covenants
   F-23




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
  NOTE 9 
    SHARE
    BASED COMPENSATION          2010


2009


2008Weighted-





Weighted-





Weighted-Average





Average





AverageShares


Exercise Price


Shares


Exercise Price


Shares


Exercise PriceOutstanding at beginning of period


7,117,000


$
0.93



1,035,000


$
3.11



1,125,000


$
3.68Granted


5,892,332


$
4.70



6,107,000


$
0.56



310,000


$
1.90Exercised


(52,500
)

$
2.05






$







$
Forfeited or expired


(177,550
)

$
1.36



(25,000
)

$
2.50



(400,000
)

$
3.80Outstanding at end of period


12 ,779,282


$
2.65



7,117,000


$
0.93



1,035,000


$
3.11Exercisable at end of the year


7,563,750


$
1.29



4,776,750


$
0.98



902,500


$
3.56     Non-Vested Options

2010


2009


2008Non-vested at beginning of period


2,340,250



432,500



575,000Granted


5,892,332



6,107,000



310,000Vested


(2,964,500
)


(4,174,250
)


(352,500
)Forfeited


(52,550
)


(25,000
)


(100,000
)Non-vested at December 31, 2010


5,215,532



2,340,250



432,500    F-24




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
    Year Ended December 31,2010(1)

2009(1)

2008(1)Weighted average fair value per option granted during the
    period(2)

2.65

0.37

1.36Assumptions(3):Weighted average stock price volatility

79.32%

108 - 263%

104 - 105%Weighted average risk free rate of return

1.78%

1.36 - 2.53%

1.87 - 2.69%Weighted average expected term

4.24 years

4.23 years

3.25 years     (1)
    
    Our estimated future forfeiture rate is zero.(2)
    
    Calculated using the Black-Scholes fair value based method for
    service and performance based grants and the Lattice Model for
    market based grants.(3)
    
    The Company does not pay dividends on our common stock.        2010


2009


2008Weighted





Weighted





WeightedAverage Price





Average Price





Average PriceNon-Vested Shares

Shares


per Share


Shares


per Share


Shares


per ShareNon-vested at beginning of year


2,310,000


$
0.44



215,000


$
2.04



75,000


$
2.50Granted


253,930


$
5.45



4,168,181


$
0.33



240,000


$
1.90Vested


(2,263,856
)

$
0.47



(2,048,181
)

$
0.43



(100,000
)

$
2.04Forfeited





$




(25,000
)

$
2.50






$
Non-vested at end of year


300,074


$
4.43



2,310,000


$
0.44



215,000


$
2.04     NOTE 10 
    SHAREHOLDERS
    EQUITY  Common
    Stock
     F-25




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
  Form S-3,
    3-year
     F-26




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
                Series A
    Convertible Preferred Stock
    Series B
    Redeemable Convertible Preferred Stock
   F-27




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
      Series C
    Cumulative Perpetual Preferred Stock
  Series C Preferred
    Stock
      2010


2009


2008Dividend on Series A Preferred Stock










(734,406
)Dividend on Series B Preferred Stock


(130,625
)






Dividend on Series C Preferred Stock


(2,336,054
)


(25,654
)


Total dividends on Preferred Stock


(2,466,679
)


(25,654
)


(734,406
)   Treasury
    Stock
    Unearned
    Common Stock in KSOP
    Noncontrolling
    Interests
   F-28




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
    2010


2009


2008Noncontrolling interest at beginning of period

$
1,321,753


$
1,384,909


$
3,025,375Income/(Loss) to noncontrolling interest


128,586



(63,156
)


(1,640,466
)Noncontrolling interest at end of period

$
1,450,339


$
1,321,753


$
1,384,909   Common
    Stock Warrants
           F-29




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
    2010


2009


2008Weighted -





Weighted -





Weighted -Average





Average





AverageShares


Exercise Price


Shares


Exercise Price


Shares


Exercise PriceOutstanding at beginning of year


8,577,688


$
2.15



6,838,962


$
2.15



6,838,962


$
2.15Granted





$




1,738,726


$
2.50






$
Exercised, forfeited, or expired


(7,614,654
)

$
2.14






$







$
Outstanding at end of year


963,034


$
2.91



8,577,688


$
2.22



6,838,962


$
2.15Exercisable at end of year


963,034


$
2.91



6,838,962


$
2.15



6,838,962


$
2.15     NOTE 11 
    INCOME
    TAXES     F-30




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
    2010


2009


2008(In thousands)Statutory tax expense (benefit)

$
(4,692
)

$
(5,142
)

$
(2,341
)State income tax


63







Effect of permanent differences


346



6



544Change in valuation allowance


4,346



5,136



1,797Total Tax Expense

$
63


$



$
     2010


2009


2008(In thousands)Deferred tax assets:Net operating loss carryforwards

$
19,275


$
15,302


$
10,551Asset retirement obligations


1,515



691



540Share based compensation


2,768



2,412



1,397Depletion carry forwards


870



455



Deferred tax liability:Property and equipment


(3,301
)


(2,593
)


(4,992
)Net deferred tax assets


21,217



16,267



7,496Valuation allowances


(21,217
)


(16,267
)


(7,496
)Net deferred tax

$



$



$
   2007-2010 2006-2010
 F-31




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
  NOTE 12 
    OTHER
    INFORMATION  Quarterly
    Data (Unaudited)
    Quarter Ended2010

March 31

June 30

September 30

December 31

Total YearTotal revenue

$
6,654,958


$
8,401,772


$
7,920,002


$
9,746,941


$
32,723,673Loss from operations


(4,492,686
)


(6,451,088
)


(3,394,376
)


(5,071,043
)


(19,409,193
)Net loss attributable to common shareholders


(4,049,059
)


(5,993,503
)


(4,323,657
)


(1,900,389
)


(16,266,608
)Basic and diluted loss per common share

$
(0.07
)

$
(0.10
)

$
(0.06
)

$
(0.02
)

$
(0.25
)2009Total revenue

$
1,095,635


$
1,716,390


$
1,587,778


$
2,443,766


$
6,843,569Loss from operations


(1,685,337
)


(1,290,856
)


(2,869,461
)


(4,771,537
)


(10,617,191
)Net loss attributable to common shareholders


(1,371,283
)


(3,393,576
)


(3,052,222
)


(7,332,782
)


(15,149,863
)Basic and diluted loss per common share

$
(0.04
)

$
(0.09
)

$
(0.08
)

$
(0.18
)

$
(0.39
)2008Total revenue

$
2,541,935


$
3,287,493


$
4,314,438


$
1,445,915


$
11,589,781Income (loss) from operations


(927,300
)


656,734



(428,286
)

$
(12,758,175
)


(13,457,027
)Net loss attributable to common shareholders


(1,634,205
)


(1,882,826
)


(535,538
)


(3,568,171
)


(7,620,740
)Basic and diluted loss per common share

$
(0.05
)

$
(0.05
)

$
(0.01
)

$
(0.10
)

$
(0.21
)   Supplemental
    Oil and Gas Disclosures (Unaudited)
    2010


2009


2008Purchase of non-producing leases

$
46,683,478


$
2,602,387


$
1,410,023Purchase of producing properties


53,116,350



3,288,174



Exploration costs


43,466,026



3,794,254



5,796,608Development costs


13,640,669



6,798,142



11,607,005Asset retirement obligation


2,170,849



278,119



93,153$
159,077,372


$
16,761,076


$
18,906,789   Oil
    and Gas Reserve Information
   F-32




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
    Total
    Proved Reserves
  Crude Oil andCondensate


Natural Gas(Mbbl)


(Mcf)Balance December 31, 2007


2,369.7



2,082.0Extensions, discoveries and other additions


698.0



2,655.9Revisions of previous estimates


(506.6
)


(143.8
)Production


(151.8
)


(341.1
)Balance December 31, 2008


2,409.3



4,253.0Extensions, discoveries and other additions


982.3



2,087.3Revisions of previous estimates


1,330.2



34.1Purchases of reserves in place


83.4



3,468.0Sales of reserves in place


(16.4
)


(20.5
)Production


(180.3
)


(457.7
)Balance December 31, 2009


4,608.5



9,364.2Revisions of previous estimates


(112.4
)


541.1Purchase of reserves


3,328.8



22,249.7Extensions, discoveries, and other additions


890.5



13,822.1Sale of reserves


(1,506.6
)


(5,298.1
)Production


(384.4
)


(1,227.1
)Balance December 31, 2010


6,824.4



39,451.9Developed reserves, included aboveDecember 31, 2008


1,394.3



2,549.5December 31, 2009


2,055.3



4,952.5December 31, 2010


3,720.3



18,887.7   Standardized
    Measure of Discounted Future Net Cash Flows Relating to Proved
    Reserves
  12-month
     F-33




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
      Years Ended December 31,2010


2009


2008Future cash flows

$
709,788


$
262,758


$
109,100Future production costs


(253,544
)


(93,078
)


(48,972
)Future development costs


(77,216
)


(33,245
)


(15,342
)Future income tax expense


(88,233
)


(30,858
)


(11,541
)Future net cash flows


290,795



105,577



33,24510% annual discount for estimated timing of cash flows


(162,836
)


(58,189
)


(17,624
)Standardized measure of discounted future net cash flows

$
127,959


$
47,388


$
15,621     Changes
    in Standardized Measure of Discounted Future Net Cash
    Flows
    Year Ended December 31,2010


2009


2008Balance, beginning of period


47,388



15,621



40,112Net change in sales and transfer prices and in production
    (lifting) costs related to future production


17,133



12,387



(35,731
)Changes in estimated future development costs


(50,950
)


(18,755
)


(9,458
)Sales and transfers of oil and gas produced during the period


(19,054
)


(4,757
)


(9,107
)Net change due to extensions, discoveries and improved recovery


51,022



17,578



10,334Net change due to revisions in quantity estimates


(355
)


17,654



(4,807
)Previously estimated development costs incurred during the period


25,020



6,798



8,738Accretion of discount


2,740



2,614



4,011Purchase of minerals in place


112,406



8,739



Sale of minerals in place


(23,837
)


(262
)


Other


(1,863
)


(3,606
)


Net change in income taxes


(31,691
)


(6,623
)


11,529Standardized measure of discounted future net cash flows


127,959



47,388



15,621     2010

2009

2008Oil (per bbl)

$
79.43


$
54.96


$
40.33Natural gas liquids (per bbl)

$



$
27.20


$
23.00Gas (per mcf)

$
4.37


$
3.35


$
5.04  F-34




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
  NOTE 13 
    RELATED
    PARTY TRANSACTIONS      NOTE 14 
    COMMITMENTS
    AND CONTINGENCIES  Payable
    on Sale of Partnership
    Operational
    Contingencies
  day-to-day
  Leases
    Drilling
    Contract
    Supplemental
    Agreements
   F-35




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
  NOTE 15 
    CONDENSED
    CONSOLIDATING GUARANTOR FINANCIAL STATEMENTS  Form S-3.
  Magnum
    Hunter Resources Corporation and Subsidiaries Condensed
    Consolidating Balance Sheets
  As of December 31, 2010MagnumMagnum











HunterHunter





Non





ResourcesResources


Guarantor


Guarantor





CorporationCorporation


Subsidiaries


Subsidiaries


Eliminations


ConsolidatedASSETSCurrent assets

$
4,808,920


$
6,436,054


$
1,881,271


$



$
13,126,245Intercompany accounts receivable


131,690,949











(131,690,949
)


Property and equipment (using successful efforts accounting)


12,048,947



149,647,430



70,904,248







232,600,625Investment in subsidiaries


80,877,446











(80,877,446
)


Other assets


2,723,447



511,699



4,809







3,239,955Total Assets

$
232,149,709


$
156,595,183


$
72,790,328


$
(212,568,395
)

$
248,966,825LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities

$
24,852,489


$
13,480,404


$
5,902,025


$



$
44,234,918Intercompany accounts payable






56,326,104



75,364,845



(131,690,949
)


Long-term liabilities


24,385,846



3,022,926



3,765,046







31,173,818Redeemable preferred stock


70,236,400















70,236,400Shareholders equity


112,674,974



83,765,749



(12,241,588
)


(80,877,446
)


103,321,689Total Liabilities and Stockholders Equity

$
232,149,709


$
156,595,183


$
72,790,328


$
(212,568,395
)

$
248,966,825   F-36




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
  As of December 31, 2009MagnumMagnum











HunterHunter





Non





ResourcesResources


Guarantor


Guarantor





CorporationCorporation


Subsidiaries


Subsidiaries


Eliminations


ConsolidatedASSETSCurrent assets

$
4,755,262


$
1,268,689


$
849,307


$



$
6,873,258Intercompany accounts receivable


48,398,232











(48,398,232
)


Property and equipment (using successful efforts accounting)


6,927,379



3,403,599



36,079,071







46,410,049Investment in subsidiaries


2,684,536











(2,684,536
)


Other assets


13,274,994



25,750











13,300,744Total Assets

$
76,040,403


$
4,698,038


$
36,928,378


$
(51,082,768
)

$
66,584,051LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities

$
4,222,587


$
1,507,593


$
489,195


$



$
6,219,375Intercompany accounts payable






423,347



47,974,885



(48,398,232
)


Long-term liabilities


13,874,238



131,099



1,667,664







15,673,001Redeemable preferred stock


5,373,750















5,373,750Shareholders equity


52,569,828



2,635,999



(13,203,366
)


(2,684,536
)


39,317,925Total Liabilities and Stockholders Equity

$
76,040,403


$
4,698,038


$
36,928,378


$
(51,082,768
)

$
66,584,051  F-37




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
  Magnum
    Hunter Resources Corporation and Subsidiaries Condensed
    Consolidating
    Statements of Operations
  For the Twelve Months Ended December 31, 2010MagnumMagnum











HunterHunter





Non





ResourcesResources


Guarantor


Guarantor





CorporationCorporation


Subsidiaries


Subsidiaries


Eliminations


ConsolidatedRevenues

$
1,312,437


$
21,765,252


$
11,983,097


$
(2,337,113
)

$
32,723,673Expenses


27,339,209



18,293,302



11,556,429



(2,337,113
)


54,851,827Loss from continuing operations before equity in net income of
    subsidiary


(26,026,772
)


3,471,950



426,668







(22,128,154
)Equity in net income of subsidiary


3,770,032











(3,770,032
)


Net income (loss)


(22,256,740
)


3,471,950



426,668



(3,770,032
)


(22,128,154
)Less: Net income attributable to non-controlling interest










(128,586
)






(128,586
)Net income (loss) from continuing operations attributable to
    Magnum Hunter Resources Corporation


(22,256,740
)


3,471,950



298,082



(3,770,032
)


(22,256,740
)Income from discontinued operations


8,456,811















8,456,811Net loss


(13,799,929
)


3,471,950



298,082



(3,770,032
)


(13,799,929
)Dividends on preferred stock


2,466,679















2,466,679Net income (loss) attributable to common shareholders

$
(16,266,608
)

$
3,471,950


$
298,082


$
(3,770,032
)

$
(16,266,608
)   F-38




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
  For the Twelve Months Ended December 31, 2009MagnumMagnum











HunterHunter





Non





ResourcesResources


Guarantor


Guarantor





CorporationCorporation


Subsidiaries


Subsidiaries


Eliminations


ConsolidatedRevenues

$
981,460


$
103,238


$
5,776,804


$
(17,933
)

$
6,843,569Expenses


16,054,229



151,775



6,282,052



(11,907
)


22,476,149Loss from continuing operations before equity in net losses of
    subsidiary


(15,072,769
)


(48,537
)


(505,248
)


(6,026
)


(15,632,580
)Equity in net loss of subsidiary


(490,629
)










490,629



Net loss


(15,563,398
)


(48,537
)


(505,248
)


484,603



(15,632,580
)Less: Net loss attributable to non-controlling interest










63,156







63,156Net loss from continuing operations attributable to Magnum
    Hunter Resources Corporation


(15,563,398
)


(48,537
)


(442,092
)


484,603



(15,569,424
)Income from discontinued operations


445,215















445,215Net loss


(15,118,183
)


(48,537
)


(442,092
)


484,603



(15,124,209
)Dividends on preferred stock


25,654















25,654Net loss attributable to common shareholders

$
(15,143,837
)

$
(48,537
)

$
(442,092
)

$
484,603


$
(15,149,863
)   For the Twelve Months Ended December 31, 2008MagnumMagnum











HunterHunter





Non





ResourcesResources


Guarantor


Guarantor





CorporationCorporation


Subsidiaries


Subsidiaries


Eliminations


ConsolidatedRevenues

$
1,629,303


$



$
9,960,478


$



$
11,589,781Expenses


(385,601
)






23,084,203







22,698,602Income (loss) from continuing operations before equity in net
    losses of subsidiary


2,014,904







(13,123,725
)






(11,108,821
)Equity in net loss of subsidiary


(11,483,259
)










11,483,259



Net loss


(9,468,355
)






(13,123,725
)


11,483,259



(11,108,821
)Less: Net loss attributable to non-controlling interest










1,640,466







1,640,466Net loss from continuing operations attributable to Magnum
    Hunter Resources Corporation


(9,468,355
)






(11,483,259
)


11,483,259



(9,468,355
)Income from discontinued operations


2,582,021















2,582,021Net loss


(6,886,334
)






(11,483,259
)


11,483,259



(6,886,334
)Dividends on preferred stock


734,406















734,406Net loss attributable to common shareholders

$
(7,620,740
)

$



$
(11,483,259
)

$
11,483,259


$
(7,620,740
)  F-39




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
  Magnum
    Hunter Resources Corporation and Subsidiaries
    Condensed
 Consolidating Statements of Cash Flows
  For the Year Ended December 31, 2010MagnumMagnum











HunterHunter





Non





ResourcesResources


Guarantor


Guarantor





CorporationCorporation


Subsidiaries


Subsidiaries


Eliminations


ConsolidatedCash flow from operating activities

$
(92,809,146
)

$
72,453,047


$
19,189,232


$



$
(1,166,867
)Cash flow from investing activities


(21,925,836
)


(77,193,571
)


(19,161,326
)






(118,280,733
)Cash flow from financing activities


117,998,360



(79,723
)


(198,419
)






117,720,218Net increase (decrease) in cash


3,263,378



(4,820,247
)


(170,513
)






(1,727,382
)Cash at beginning of period


(1,707,061
)


3,726,562



262,067







2,281,568Cash at end of period

$
1,556,317


$
(1,093,685
)

$
91,554


$



$
554,186   For the Year Ended December 31, 2009MagnumMagnum











HunterHunter





Non





ResourcesResources


Guarantor


Guarantor





CorporationCorporation


Subsidiaries


Subsidiaries


Eliminations


ConsolidatedCash flow from operating activities

$
718,543


$
439,018


$
2,214,178


$



$
3,371,739Cash flow from investing activities


(12,548,538
)


(529,064
)


(3,546,016
)






(16,623,618
)Cash flow from financing activities


9,413,045















9,413,045Net decrease in cash


(2,416,950
)


(90,046
)


(1,331,838
)






(3,838,834
)Cash at beginning of period


4,420,499



235,022



1,464,881







6,120,402Cash at end of period

$
2,003,549


$
144,976


$
133,043


$



$
2,281,568   F-40




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
  For the Year Ended December 31, 2008MagnumMagnum











HunterHunter





Non





ResourcesResources


Guarantor


Guarantor





CorporationCorporation


Subsidiaries


Subsidiaries


Eliminations


ConsolidatedCash flow from operating activities

$
1,091,868


$



$
2,345,461


$



$
3,437,329Cash flow from investing activities


(8,196,187
)






(2,182,441
)






(10,378,628
)Cash flow from financing activities


(2,337,846
)














(2,337,846
)Net increase (decrease) in cash


(9,442,165
)






163,020







(9,279,145
)Cash at beginning of period


14,097,686







1,301,861







15,399,547Cash at end of period

$
4,655,521


$



$
1,464,881


$



$
6,120,402   NOTE 16 
    SUBSEQUENT
    EVENTS        NGAS
  NGAS
  out-of-market
 F-41




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
  out-of-market
         F-42




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
    Fair value of total purchase price:946,314 shares of common stock issued on January 14,
    2011 at $7.97 per share

$
7,542,122Cash paid on January 14, 2011


5,763,983Total

$
13,306,105Amounts recognized for assets acquired and liabilities assumed:Working capital

$
(23,184
)Oil and gas properties


13,342,539Equipment and other fixed assets


3,750Asset retirement obligation


(17,000
)Total

$
13,306,105Working capital acquiredPrepaid expenses

$
2,658Transfer tax payable


(25,842
)$
(23,184
)   ExchangeCo NuLoch Arrangement Agreement NuLoch
    Shares MHR Shares Exchangeable
    Shares Plan of Arrangement
  seven-day share-for-share
 F-43




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
  Closing NuLoch
    Securityholder Approval Company Stockholder
    Approval NYSE Court Form S-3 Registration
    Statement
  SEC
  provided
   F-44




---



##### Table of Contents



MAGNUM
    HUNTER RESOURCES CORPORATION
  Notes to
    Financial Statements  (Continued)
    Support Agreements
 F-45




---



##### Table of Contents



Item 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    Item 9A.
    CONTROLS
    AND PROCEDURES  Evaluation
    of Disclosure Controls and Procedures
  Rule 13a-15(e)
  Evaluation
    of Changes in Internal Control over Financial
    Reporting
    Managements
    Report on Internal Controls over Financial Reporting
  Rules 13a-15(f) 15d-15(f)
    Important
    Considerations
   77




---



##### Table of Contents



Item 9B.
    OTHER
    INFORMATION    PART III
  Item 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    Item 11.
    EXECUTIVE
    COMPENSATION    Item 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    Item 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
    INDEPENDENCE    Item 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES    PART IV
  Item 15.
    EXHIBITS,
    FINANCIAL STATEMENT SCHEDULES.  Consolidated Financial
    Statements:
  2.
    Financial Statement Schedule: We have included on
    page 82 of this annual report on Form 10-K, Financial
    Statement Schedule II, Valuation and Qualifying Accounts  Exhibits:
  ExhibitNumber

Description3
.1(1)

Restated Certificate of Incorporation of the Registrant, filed
    February 13, 20023
.1.1(1)

Certificate of Amendment of Certificate of Incorporation of the
    Registrant, filed May 8, 20033
.1.2(1)

Certificate of Amendment of Certificate of Incorporation of the
    Registrant, filed June 6, 20053
.1.3(4)

Certificate of Amendment of Certificate of Incorporation of the
    Registrant, filed July 18, 20073
.1.4(7)

Certificate of Ownership and Merger Merging Magnum Hunter
    Resources Corporation with and into Petro Resources Corporation,
    filed July 13, 20093
.1.5(22)

Certificate of Amendment of Certificate of Incorporation of the
    Registrant, filed November 3, 20103
.2(1)

Amended and Restated Bylaws of the Registrant, dated March 15,
    20013
.2.1(2)

Amendment to Bylaws of the Registrant, dated April 14, 2006 78




---



##### Table of Contents



ExhibitNumber

Description3
.2.2(5)

Amendment to Bylaws of the Registrant, dated October 12, 20064
.1

Form of certificate for common stock#4
.2(13)

Certificate of Designation of Rights and Preferences of 10.25%
    Series C Cumulative Perpetual Preferred Stock, dated December
    10, 20094
.2.1(16)

Certificate of Amendment of Certificate of Designation of Rights
    and Preferences of 10.25% Series C Cumulative Perpetual
    Preferred Stock, dated August 2, 20104
.2.2(20)

Certificate of Amendment of Certificate of Designation of Rights
    and Preferences of 10.25% Series C Cumulative Perpetual
    Preferred Stock, dated September 8, 201010
.1(15)

Employment Agreement between the Registrant and James W. Denny,
    dated May 27, 2008*10
.2(6)

Employment Agreement between the Registrant and Gary C. Evans,
    dated May 22, 2009*10
.3(6)

Stock Option Agreement between the Registrant and Gary C. Evans,
    dated May 22, 2009*10
.4(6)

Restricted Stock Agreement between the Registrant and Gary C.
    Evans, dated May 22, 2009*10
.5(6)

Employment Agreement between the Registrant and Ronald D.
    Ormand, dated May 22, 2009*10
.6(6)

Stock Option Agreement between the Registrant and Ronald D.
    Ormand, dated May 22, 2009*10
.7(6)

Restricted Stock Agreement between the Registrant and Ronald D.
    Ormand, dated May 22, 2009*10
.8

Employment Agreement between the Registrant and H.C.
    Kip Ferguson, dated October 1, 2009*#10
.9

Resignation and General Release Agreement between the Registrant
    and Wayne P. Hall, dated December 22, 2010#10
.10(25)

Amended and Restated Stock Incentive Plan of Registrant*10
.11

Form of Stock Option Agreement under the Registrants
    Amended and Restated Stock Incentive Plan*#10
.12(25)

Form of Restricted Stock Award Agreement under the
    Registrants Amended and Restated Stock Incentive Plan*10
.13(25)

Form of Stock Appreciation Right Agreement under the
    Registrants Amended and Restated Stock Incentive Plan*10
.14(1)

Lease Purchase Agreement between the Registrant and The Meridian
    Resource & Exploration, LLC, dated January 10, 200610
.15(1)

Form of Registration Rights Agreement for $3.00 warrants sold as
    part of the Registrants February 2006 private placement,
    dated February 17, 200610
.16(1)

Form of $3.00 Warrant sold as part of February 2006 private
    placement10
.17(3)

Purchase and Sale Agreement between the Registrant and Eagle
    Operating, Inc., dated December 11, 200610
.18

First Amendment to Purchase and Sale Agreement between the
    Registrant and Eagle Operating, Inc., dated January 25, 2007#10
.19(8)

Agreement and Plan of Merger between the Registrant, Sharon
    Hunter, Inc., Sharon Resources, Inc. and Sharon Energy Ltd.,
    dated September 9, 200910
.20(8)

Purchase and Sale Agreement between the Registrant and Centurion
    Exploration Company, LLC, dated September 14, 200910
.21(9)

Asset Purchase Agreement between the Registrant and Triad Energy
    Corporation, dated October 28, 200910
.22(10)

Form of Securities Purchase and Registration Rights Agreement
    with respect to November 5, 2009 offering10
.23(10)

Form of $2.50 Warrant with respect to the Registrants
    November 5, 2009 offering10
.24(11)

Placement Agency Agreement with respect to the Registrants
    November 10, 2009 offering, dated November 10, 200910
.25(11)

Placement Agency Agreement with respect to the Registrants
    November 11, 2009 offering, dated November 11, 200910
.26(11)

Form of $2.50 Warrant with respect to the Registrants
    November 10 and 11, 2009 offerings 79




---



##### Table of Contents



ExhibitNumber

Description10
.27(12)

Underwriting Agreement between the Registrant and Wunderlich
    Securities, Inc., dated December 9, 200910
.28(14)

Amended and Restated Credit Agreement between the Registrant,
    Bank of Montreal, Capital One, N.A., BMO Capital Markets and
    Capital One, N.A and the lenders party thereto, dated February
    12, 2010+10
.29(17)

First Amendment to Amended and Restated Credit Agreement between
    the Registrant, Bank of Montreal, Capital One, N.A., and the
    lenders party thereto, dated May 13, 201010
.30(18)

At the Market Sales Agreement for Series C Preferred Stock
    between the Registrant and McNicoll, Lewis & Vlak LLC,
    dated June 22, 201010
.31(19)

At the Market Sales Agreement for common stock between the
    Registrant and McNicoll, Lewis & Vlak LLC, dated June 25,
    201010
.32(21)

Limited Waiver of Credit Agreement Provisions, between the
    Registrant and Bank of Montreal and Capital One, N.A., dated
    September 24, 201010
.33(23)

Purchase and Sale Agreement between the Registrant and Approach
    Oil & Gas Inc., dated October 29, 2010+10
.34(24)

At the Market Sales Agreement for common stock between the
    Registrant and McNicoll, Lewis and Vlak, LLC, dated November 12,
    201010
.35(24)

At the Market Sales Agreement  for Series C Preferred Stock
    between the Registrant and McNicoll, Lewis and Vlak, LLC,
    dated November 12, 201010
.36(26)

Second Amendment to Amended and Restated Credit Agreement and
    Waiver between the Registrant, Bank of Montreal, Capital One,
    N.A., and the guarantors and lenders party thereto, dated
    November 30, 2010+10
.37(27)

Arrangement Agreement between the Registrant and NGAS Resources,
    Inc., dated December 23, 2010+10
.38(27)

Form of Support Agreement between the Registrant and certain
    NGAS Resources, Inc. shareholders, dated December 23, 201010
.39(28)

Purchase and Sale Agreement between the Registrant, Quest
    Eastern Resource LLC and PostRock MidContinent Production, LLC,
    dated December 24, 2010+@10
.40(29)

Arrangement Agreement between the Registrant and NuLoch
    Resources Inc., dated January 19, 2011(including Form of Support
    Agreement between the Registrant and certain NuLoch Resources
    Inc. shareholders)+21
.1

List of Subsidiaries#23
.1

Consent of Hein & Associates LLP#23
.2

Consent of MaloneBailey, LLP#23
.3

Consent of Cawley Gillespie & Associates, Inc#31
.1

Certification of Chief Executive Officer Pursuant to Section 302
    of the Sarbanes-Oxley Act of 2002#31
.2

Certification of Chief Financial Officer Pursuant to Section 302
    of the Sarbanes-Oxley Act of 2002#32
.1

Certification of the Chief Executive Officer and Chief Financial
    Officer provided pursuant to 18 U.S.C. Section 1350 as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002#99
.1

Independent Engineer Reserve Report for the year ended December
    31, 2010 prepared by Cawley Gillespie & Associates,
    Inc.#     *
    
    The referenced exhibit is a management contract, compensatory
    plan or arrangement.+
    
    The schedules to this exhibit have been omitted pursuant to Item
    601(b)(2) of
    Regulation S-K
    and will be provided to the SEC upon request.@
    
    Portions of this exhibit are subject to a request for
    confidential treatment and have been redacted and filed
    separately with the SEC.#
    
    Filed Herewith(1)
    
    Incorporated by reference from the Registrants
    Registration Statement on Form SB-2 filed on March 21, 2006. 80




---



##### Table of Contents



(2)
    
    Incorporated by reference from the Registrants Amendment
    No. 1 to Registration Statement on
    Form SB-2
    filed on June 9, 2006.(3)
    
    Incorporated by reference from the Registrants annual
    report on
    Form 10-KSB
    for the year ended December 31, 2006, filed on
    April 2, 2007.(4)
    
    Incorporated by reference from the Registrants quarterly
    report on
    Form 10-QSB
    filed on August 14, 2007.(5)
    
    Incorporated by reference from the Registrants Amendment
    No. 1 to Registration Statement on
    Form SB-2
    filed on September 21, 2007.(6)
    
    Incorporated by reference from the Registrants current
    report on
    Form 8-K
    filed on May 28, 2009.(7)
    
    Incorporated by reference from the Registrants current
    report on
    Form 8-K
    filed on July 14, 2009.(8)
    
    Incorporated by reference from the Registrants current
    report on
    Form 8-K
    filed on September 15, 2009.(9)
    
    Incorporated by reference from the Registrants current
    report on
    Form 8-K
    filed on October 29, 2009.(10)
    
    Incorporated by reference from the Registrants current
    report on
    Form 8-K
    filed on November 6, 2009.(11)
    
    Incorporated by reference from the Registrants current
    report on
    Form 8-K
    filed on November 13, 2009.(12)
    
    Incorporated by reference from the Registrants current
    report on
    Form 8-K
    filed on December 11, 2009.(13)
    
    Incorporated by reference from the Registrants
    Registration Statement on
    Form 8-A
    filed on December 10, 2009.(14)
    
    Incorporated by reference from the Registrants current
    report on
    Form 8-K
    filed on February 19, 2010.(15)
    
    Incorporated by reference from the Registrants annual
    report on
    Form 10-K
    filed on March 31, 2009.(16)
    
    Incorporated by reference from the Registrants quarterly
    report on
    Form 10-Q
    filed on August 12, 2010.(17)
    
    Incorporated by reference from the Registrants current
    report on
    Form 8-K
    filed on May 19, 2010.(18)
    
    Incorporated by reference from the Registrants current
    report on
    Form 8-K
    filed on June 24, 2010.(19)
    
    Incorporated by reference from the Registrants current
    report on
    Form 8-K
    filed on June 25, 2010.(20)
    
    Incorporated by reference from the Registrants current
    report on
    Form 8-K
    filed on September 15, 2010.(21)
    
    Incorporated by reference from the Registrants current
    report on
    Form 8-K
    filed on September 30, 2010.(22)
    
    Incorporated by reference from the Registrants current
    report on
    Form 8-K
    filed on November 2, 2010.(23)
    
    Incorporated by reference from the Registrants current
    report on
    Form 8-K
    filed on November 4, 2010.(24)
    
    Incorporated by reference from the Registrants current
    report on
    Form 8-K
    filed on November 15, 2010.(25)
    
    Incorporated by reference from the Registrants current
    report on
    Form 8-K
    filed on December 3, 2010.(26)
    
    Incorporated by reference from the Registrants current
    report on
    Form 8-K
    filed on December 6, 2010.(27)
    
    Incorporated by reference from the Registrants current
    report on
    Form 8-K
    filed on December 30, 2010.(28)
    
    Incorporated by reference from the Registrants current
    report on
    Form 8-K
    filed on January 5, 2011.(29)
    
    Incorporated by reference from the Registrants current
    report on
    Form 8-K
    filed on January 25, 2011. 81




---



##### Table of Contents



PART
    II  OTHER INFORMATION
  MAGNUM HUNTER RESOURCES CORPORATION
 SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS
 FOR THE YEAR ENDED DECEMBER 31, 2010
   AdditionsBalance at


Charged to


Charged to





Balance atBeginning


Costs and


Other





EndClassification

of Year


Expenses


Accounts


Deductions


of YearYear Ended December 31, 2010Allowance for doubtful accounts on Trade Accounts Receivable






213











213  82




---



##### Table of Contents



SIGNATURES
      By:
    /s/  Gary
    C. Evans   Chairman of the Board and Chief Executive Officer
      Signature

Title

Date/s/  Gary
    C. EvansGary
    C. Evans

Chairman of the Board and Chief Executive Officer (Principal
    Executive Officer)

February 17, 2011/s/  Ronald
    D. OrmandRonald
    D. Ormand

Executive Vice President, Chief Financial Officer and Director
    (Principal Financial Officer)

February 17, 2011/s/  David
    S. KruegerDavid
    S. Krueger

Senior Vice President and Chief Accounting Officer (Principal
    Accounting Officer)

February 17, 2011/s/  J.
    Raleigh Bailes, Sr.J.
    Raleigh Bailes, Sr.

Director

February 17, 2011/s/  Brad
    BynumBrad
    Bynum

Director

February 17, 2011/s/  Victor
    CarrilloVictor
    Carrillo

Director

February 17, 2011/s/  Gary
    L. HallGary
    L. Hall

Director

February 17, 2011/s/  Joe
    L. McClaughertyJoe
    L. McClaugherty

Director

February 17, 2011/s/  Steven
    A. PfeiferSteven
    A. Pfeifer

Director

February 17, 2011/s/  Jeff
    SwansonJeff
    Swanson

Director

February 17, 2011  83