To Unit Holders of TEL Offshore Trust:
Magnum Hunter Resources, Inc., a Nevada corporation ("Magnum Hunter" or the
"Purchaser") headquartered in Irving, Texas, hereby offers to purchase 2,261,770
Units of beneficial interest (the "Units") of TEL Offshore Trust, a trust
created under the laws of the State of Texas (the "Trust"), or such other number
of Units that, together with the Units already owned by Purchaser, represents
51% of the Trust's outstanding Units on the date of purchase. The price per Unit
that Magnum Hunter is offering in cash is $5.80 (such amount, or any greater
amount per Unit paid pursuant to the Offer as defined below), being hereinafter
referred to as the ("Offer Price"), net to the seller without interest, upon the
terms and subject to the conditions set forth in this Offer to Purchase and in
the related Letter of Transmittal (which, together with any amendments of
supplements hereto or thereto, collectively constitute the "Offer").
The purpose of the Offer is to enable Magnum Hunter to acquire a
significant ownership interest in the Trust as an investment, based on its
expectation that there may be underlying value in the oil and gas properties
owned by the Trust. Our future plans with respect to the Trust will depend in
part on the Unit Holders response to the Offer. If more than the maximum number
of Units being sought are tendered and not withdrawn prior to the Expiration of
the Offer, we will accept Units for purchase on a pro rata basis, subject to
certain conditions described in the Offer.
The Offer presents Unit Holders with an opportunity to sell their Units at
a substantial premium to both the current market trading price as well as the
recent historical market trading price of the Units, without the customary costs
associated with market sales with a brokerage firm. Additionally, due to the
recent volatility in oil and gas prices and the reduction in value associated
with the natural decline in oil and gas reserves, Magnum Hunter believes this
Offer presents a unique opportunity to the Unit Holders to sell their Units.
Magnum Hunter Resources, Inc. is a rapidly growing independent energy
company whose Common Stock and Bonds are listed on the American Stock Exchange
under the symbols "MHR"and "MHR.B", respectively. The company is engaged in the
acquisition, exploration and development, gas gathering and processing, and
marketing for onshore oil and gas properties with a geographic focus in Texas,
Oklahoma, and New Mexico. The company believes that ownership of the Units in
the TEL Offshore Trust will strategically allow it to expand its geographic
focus to offshore in the Gulf of Mexico where reserve life is typically much
shorter and would therefore complement Magnum Hunter's 15 year reserve life
index.
The materials included in this package include important information
concerning Magnum Hunter, the terms and conditions to the Offer, tax
implications and instructions for tendering your Units. It is important that
Unit Holders take some time to carefully read the attached Offer, the Letter of
Acceptance and other accompanying materials in order to evaluate the Offer being
made by the Purchaser.
Each Unit Xxxxxx must make his or her own decision based on his or her
particular circumstances. Unit holders should consult with their respective
advisors about the financial, tax, legal and other implications to them of
accepting this Offer to purchase your Units. If you desire additional
information regarding the Offer or need assistance in tendering your Units to
the Purchaser, you may call the Information Agent, Corporate Investor
Communications, Inc. at (000) 000-0000.
MAGNUM HUNTER RESOURCES, INC.
Xxxx X. Xxxxx
President and CEO
