Magnum Hunter Resources (NYSE: MHR) is planning to spend $400 million in 2014 to drill for oil and gas. That should boost the company's daily production to 35,000 barrels of oil equivalent per day by the end of the year. Let's take a closer look at its plans for 2014 and what investors can expect.

Finalizing the exit of the Eagle Ford
Magnum Hunter Resources isn't expecting to spend any money to drill in the Eagle Ford Shale next year. The company sold most of its Eagle Ford assets to Penn Virginia (NYSE: PVA) earlier in 2013 for cash and stock. It also recently signed an option with an Australian buyer for the rest of its acreage targeting the Pearsall Shale and Eagle Ford. If the option is exercised Magnum Hunter will receive around $25 million for the asset. Combine that with the fact that Magnum Hunter sold the rest of its Penn Virginia stock and we could see it completely out of the Eagle Ford by the end of January.

Momentum in the Marcellus and Utica
Most of 2014 will be spent targeting the Marcellus and Utica Shale plays. The company is spending $260 million of its $400 million capex plans on those two plays. Magnum Hunter expects to drill 23-25 gross wells in the region with a focus area in three counties in Ohio and two in West Virginia. The company sees this region being what will fuel its production growth in 2014.

CEO Gary Evans noted in the company's press release announcing its 2014 plans that its "ability to grow both production and reserves at the highest internal rate of return within our existing asset base, undoubtedly lies in our acreage position located in the Utica and Marcellus Shale resource plays. Therefore, this region will be allocated the largest portion of our 2014 capital expenditure budget." Unlocking what it believes to be vast resources on its Utica Shale position could make Magnum Hunter a top natural-gas stock in the year ahead.

Backing off in the Bakken
The sale of its Eagle Ford assets to Penn Virginia made the Bakken was one of Magnum Hunter's two core plays as it received about half of its drilling capital in 2013. That's not the case in 2014 as the company is only allocating about $50 million on its Bakken position. While it will participate in 15-20 gross wells next year, those will all be as a nonoperated partner. The company's position in the Bakken isn't as good as some of its peers, which is why it isn't seeing returns as high in the play.

Earlier this year the company sold off some of its Bakken acreage to Oasis Petroleum (OAS) for $32.5 million. That deal was part of Oasis Petroleum's massive land grab. With the potential for higher returns in Appalachia, it makes sense to back off on the Bakken. In fact, it wouldn't surprise me to see more Bakken land sales, if not a complete exit, from Magnum Hunter in 2014.

Making money on midstream
The final bucket of 2014 capital will go to the company's Eureka Hunter midstream segment. The company is allocating $90 million to grow the business in 2014. It sees this investment enabling it to gather more gas for its own account as well as for other producers.

Paying for growth
In addition to the cash it received from its Eagle Ford sales, Magnum Hunter expects to be an active seller in 2014. It sees the potential to sell between $200-$400 million in noncore assets in an effort to help fund its capital plan. Those funds, along with internally generated cash flow and borrowings under its credit facilities will be used to pay for its $400 million capital plan. It's an aggressive plan in that the company is selling assets and using debt to fund it, however, the payoff could be huge if it's able to unlock the potential of its Utica acreage.

Investor takeaway
We're seeing a much more focused Magnum Hunter Resources in 2014. The company basically is becoming a Marcellus and Utica driller as its completing its exit of the Eagle Ford and really backing off on the Bakken. It wouldn't surprise me to see the company make future moves to eventually exit the Bakken as well as sell its midstream business in an effort to put its full attention on its vast potential in Appalachia.