Halcón Resources will reduce its rig count in the El Halcón in East Texas from three to one, according to the company’s press release on January 8th. This is the second round of cuts for the Houston - based company in less than two months with executives citing the continued decline in oil prices as the reason for the move.
Halcón's spending for 2015 is projected at between $375 - 425 million, representing a steep decline from 2014 numbers of $950 million. Even with these drastic cuts, the company anticipates that production in 2015 will increase to an average of 40,000-45,000 barrels per day. This is compared to 43,554 b/d in the third quarter of 2014.
“Our plan is to deploy capital to assets where results indicate EURs and initial production rates higher than our published type curves. We are comfortable with our current liquidity position and we expect our strong hedge portfolio to continue generating income well into 2016. Although we are significantly hedged, the continued weakness in crude oil prices, combined with elevated service costs, calls for conservative planning. We expect to see these costs come down dramatically during 2015.”
Read the full report at halconresources.com.
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