Halcón Announces 2014 Earnings

March 18, 2015 Elizabeth Alford

Halcon Resource's Eagle Ford Acreage Map

Halcón Resources announced its 2014 results that included a net income for of $71.7 million and record production for its Eagle Ford operations.

Halcón operations in the Eagle Ford saw a production growth of 136% year-over-year. The company operated an average of three rigs in El Halcón during the fourth quarter, but currently have only one rig running. For 2015 El Halcón drilling program will focus on capturing leases and holding acreage. Foremost, the company will focus on ways to reduce completed well costs.

Other 2014 highlights include:

Q4 revenues of $239.5 million
Revenues for the full year 2014 totaled $1,148.3 million, an increase of 15% compared to the full year 2013
Q4 production was 46,076 barrels of oil equivalent per day (Boe/d) and 42,107 Boe/d, respectively
Production was comprised of 81% oil, 9% natural gas liquids (NGLs) and 10% natural gas for the quarter and 83% oil, 7% NGLs and 10% natural gas for the year.
Q4 operating costs per unit decreased by 23% compared to the same period of 2013
Total operating costs per unit for the full year were $24.14 per Boe, representing a decrease of 17%

“We’ve reduced our 2015 drilling completion budget several times over the past few months. Service costs have come down significantly and continue to come down since the beginning of the year. Companywide, we currently have 26 operated wells being completed or waiting on completion. We’re operating three rigs, two in the Williston and one at El Halcón in East Texas.”

— Floyd C. Wilson, Chairman & CEO

Halcón expects that completed well costs will decline by an additional 10% to 20% by midyear. In addition to across-the-board service cost reductions, they also plan to bring certain tasks in-house in order to reduce middlemen cost.

Halcón Resources Focused on El Halcón Area Sweet Spots

May 9, 2014 Kirk Eggleston

In its first quarter 2014 report, Halcón Resources made the claim that its entire East Texas El Halcón area is "de-risked and repeatable". That may sound a little like a sales pitch, and likely, it is. Halcón Resources CEO, Floyd Wilson, has indicated within the last year that a sale of the company wouldn't be out of the question. For the time being however, no definitive or official statements have been made by Halcón Resources, but it sounds like a nice bow is being wrapped around the company for a potential buyer.

During the first quarter, Halcón further strengthened its Eagle Ford position by divesting some of its' non-core East Texas properties, and in a separate transaction in March 2014, the company acquired nine wells in El Halcón from Aresco LP. The purchase price of the wells was undisclosed.

Recently, several Eagle Ford operators have begun testing for the upper Eagle Ford. Halcón officials revealed in a quarterly conference call that they're sticking to their current game plan to drill in the "sweet spots" of their acreage.

“We [] have an upper section that has pay in it. We think we’re fracking into it from where we are, and we don’t really plan on changing what we’re doing. We’re in the sweet spot of the zone, and it’s repeatable across the entire acreage position. We’re not really interested to go after some other hit-or-miss-type objectives. We’re going to stay with what’s working well.”

— Charles Cusack, COO

El Halcón First Quarter 2014 Operations Update

Halcón's average production from its' El Halcón area during the first quarter of 2014 was 7,018 boe/d. That's an 843% increase compared to the same period last year. Company officials say current production is approximately 10,400 boe/d in the area.

“First quarter results exceeded expectations. We are firing on all cylinders from an operational standpoint and are excited about the opportunities that lie ahead.”

— Floyd Wilson, CEO

Halcón operated an average of four rigs in El Halcón during the first quarter and expects to operate an average of two to three rigs in the play for the remainder of the year. There are currently 57 Eagle Ford wells producing, 5 wells being completed or waiting on completion and 3 wells being drilled.

Austin Exploration Eagle Ford Well with Halcón Resources Has Good Initial Production (IP) Rates

April 25, 2014 Kirk Eggleston

Austin Exploration Eagle Ford Acreage Map

Australian-based Austin Exploration saw good initial production (IP) rates from its' first Eagle Ford well with farmee partner

Halcón Resources in late March 2014 of 1,066 boe/d (87% oil). The well (Stifflemire #1H) was drilled to a total depth of 17,000 feet with an 8000 foot horizontal leg into the Eagle Ford Shale.

Austin Exploration entered the Eagle Ford in 2011, and in May 2013 announced a farm-out program with Halcón, whereby Halcón agreed to pay for the cost of three horizontal wells to earn a 70% interest in 4,400 acres of Austin's Birch Project. The cost to drill these wells is approximately $10 million per well.

“The oil flow from our first Eagle Ford well with Halcón gives confidence for our highest expectations for the future potential of the wider field which has the capacity for another 100 drilling locations. It proves the value we saw in this property when we acquired it in 2011. It also confirms the decision to bring world class operator Halcón to the project to advance the drilling program. The success at Eagle Ford will generate the revenue needed to fund the further development of our projects.”

— Austin Exploration Managing Director and CEO, Dr. Mark Hart

In April 2014, Austin announced that drilling had begun on the second and third wells in tandem due to the good initial production rates from the Stifflemire #1H). The Kaiser 2H and the Nemo 1H well be drilled to a planned total depth of 17,500 feet with an 8,000 to 10,000 foot lateral.

Austin has approximately 5,000 acres covering the Eagle Ford Shale formation in Burleson County, TX. The company is primarily targeting the Eagle Ford Shale and Austin Chalk, but is also prospective for the Taylor Sands, Buda Limestone and Georgetown formations.

Aresco LP Sells Eagle Ford Wells to Halcón Resources

March 20, 2014 Kirk Eggleston

Dallas-based Aresco-LP announced the sale of nine wells to Halcón Resources Corporation in March 2014 for an undisclosed amount.

The wells are located within Halcón's ~100,000-acre "El Halcón" core operating area in Brazos and Madison Counties.

“As our investors enjoy the opportunity to recycle capital into new projects, we wish Halcón best of luck as they continue their expansion throughout their El Halcón area of interest in East Texas.”

— Aresco CEO, Brandon Laxton

n 2014, Halcón plans on focusing much of it's activity in "El Halcón". The purchase of these wells from Aresco falls in-line with the company's opertations strategy.

“Our focus in 2014 is on drilling wells in the sweet spots of our de-risked acreage in the Williston Basin and El Halcón.”

— Halcón CEO, Floyd Wilson

Halcón Resources Will Spend 40% of its 2014 Budget in the Eagle Ford - ~$380 Million

March 5, 2014 Kirk Eggleston

Halcón plans on spending ~$380 million in its East Texas Eagle Ford acreage (El Halcón) in 2014. That's approximately 40% of the company's budget.

At the end of February, 2014, there were 45 Eagle Ford wells producing, 10 wells completing or waiting on completion, and 4 wells being drilled.

Halcón currently has working interests in approximately 100,000 net acres tied to prospective drilling in the Eagle Ford formation in East Texas. The Company plans to operate an average of 3 rigs and spud 40 to 50 gross operated wells in 2014.

“Our focus in 2014 is on drilling wells in the sweet spots of our de-risked acreage in the Williston Basin and El Halcón. We will also begin drilling wells on our newly acquired acreage located in what we believe to be the core of theTuscaloosa Marine Shale. We are primed for growth and have a deep drilling inventory. We are committed to maintaining capital discipline and dedicated to improving capital efficiency.”

— Floyd Wilson, CEO

In 2014, the company plans to drill wells with an average lateral length of 7,500 feet, as tests continue to determine the most efficient completion design. In 2013, the company found there was a direct correlation between lateral length to EUR for wells completed with a sufficient volume of proppant.

Halcón's Fourth-Quarter Eagle Ford Production

Halcón operated an average of four rigs in El Halcón during the fourth quarter, spudded 13 wells and put 9 wells online. The company produced an average of 7,138 boe/d in El Halcón during the fourth quarter. That's an increase of 43% over the third-quarter of 2013.

Halcón Eagle Ford Highlights

~$380 million will be spent in Halcón's East Texas Eagle Ford acreage (El Halcón) in 2014
Halcón plans to operate an average of 3 rigs and spud 40 to 50 gross operated wells in 2014 in El Halcón
43% increase in Eagle Ford production to 7,138 boe/d in the fourth-quarter of 2013
At the end of February, 2014, 45 Eagle Ford wells were producing, 10 wells were being completed or waiting on completion and 4 wells were being drilled