Few oil and gas stocks have performed as well as Magnum Hunter Resources (NYSE: MHR) this past year: The company is up more than 80% year to date. That's just part of the story as the stock is up nearly 180% from panic-induced lows from this past April after the company fired its auditor, which delayed the filing of its annual report.

Magnum Hunter Resources has done most of what it needed to do to win back investors. That said, it still has some work to do, which leaves the company with a lot of untapped upside. Let's take a closer look at the three reasons why this is one irresistible stock for energy investors not afraid of a little risk.

Lots of untapped potential
Magnum Hunter Resources currently holds proved reserves totaling 57.8 million barrels of oil equivalent, or BOE. But the company is sitting on vast untapped potential. Its 3P reserves, which includes proved, probable, and possible reserves, is 119.3 million BOE.

But what's really intriguing is the company's internal estimate of contingent reserves. In part because of its vast untapped Utica Shale potential, Magnum Hunter sees 728.9 million BOE in contingent resources. Add it all up and the company believes the net asset value of its shares is somewhere between $8.83 and $14.37 per share.

The company sees its biggest potential upside from the Utica Shale. It's currently drilling its first wells into the play and has yet to book any reserves. But it sees the wells that peers like Antero Resources (AR 1.49%) are drilling in close proximity to its acreage as a sign of good things to come. As the slide below shows, Antero Resources and others have drilled a number of wells with triple digit initial production rates.

Source: Magnum Hunter Resources Investor Presentation (link opens a PDF)

Lots of value being realized
Magnum Hunter has spent this past year selling off noncore assets. Its biggest deal saw it cashing out of its Eagle Ford Shale assets as it sold them to Penn Virginia (NYSE: PVA). That deal was a good one for both companies: Penn Virginia was able to extend its Eagle Ford position, while Magnum Hunter was able to exit a play that would simply be too expensive for it to really build scale. Instead, it was able to take the money from Penn Virginia and reinvest those proceeds in the two plays where it does have scale: the Bakken and the Marcellus/Utica.

That said, Magnum Hunter isn't done realizing the value within its portfolio of oil and gas properties. The company has a number of small conventional oil and gas assets on the market that should net it another $200 million. Further, it owns a sizable stake in a midstream company that also could be monetized. Each asset monetization enhances the company's liquidity, which gives it more money to reinvest in its untapped resource potential.

Focused on two great core plays
Realizing the value of its noncore properties has really shifted the focus of Magnum Hunter to its two core plays. For a small company, focus is good. Instead of being spread too thin, Magnum Hunter can build scale to bring down costs and improve its returns.

While it's not in the best spot in the Bakken, or in the really high impact gas areas of the Marcellus in Pennsylvania, the company still has a solid position in those two plays. Further, the upside to extending its Appalachian position over to the Utica is key to creating long-term value. Bottom line, focus is more important right now for a company the size of Magnum Hunter rather than having too many irons in the fire.

Investor takeaway
Magnum Hunter Resources is a very intriguing energy stock. There is no doubt the company carries higher risk, but the reward here is just as high. That makes it a great speculative way to play America's energy boom.