Halcon Reduces 2014 Capital Spending Plans - Production Guidance Flat

December 30, 2013 R.T. Dukes

Halcon Resources is lowering its capital budget for 2014 and keeping its production guidance the same at 38,000-42,000 boe/d.

The company originally planned to spend more than $1 billion, but has lowered its budget 14% to $950 million.

Approximately $125 million will be spent on leasehold, infrastructure, and seismic. Halcon also plans to divest $300-400 million in properties in 2014.

“We expect to fund our entire 2014 capital budget with a combination of cash flow from operations, borrowings under our revolving credit facility and proceeds from additional non-core asset sales.”

— Floyd C. Wilson, CEO

Halcon Resouces' Record Eagle Ford IP Comes From Step Out Well - Nears Acreage Target

November 6, 2013 R.T. Dukes

Halcon Resources set an initial production record from an Eagle Ford well in Brazos County that is a five mile step out from the nearest producing well. The Stasny-Honza 1H came online producing 1,262 boe/d.

Halcon has three rigs working in the area and plans to have four rigs active through 2014. The company spudded 13 wells and brought 19 wells to production in the third quarter. Net production from the area grew to 6,500 boe/d from 31 wells during the quarter. Eight wells are waiting to be completed and three wells are being drilled.

“Third quarter results were defined by continued expansion of our activities in the Williston Basin, El Halcón and other areas.”

— Floyd C. Wilson, Chairman and Chief Executive Officer

The company continues to work toward and optimal drilling and completion combination. The average time from spud-to-total depth decreased to 14.4 days during the quarter and the average drilling cost per foot decreased 19%. A company record was set by drilling a well with an 8,000 ft lateral in 7.3 days.

Halcon is closing in on its target of leasing 100,000 net acres in the area. The company has secured leases or commitments on 90,000 plus acres to date.

Company-wide more than 40% production growth is expected in 2014. Read the full release at halconresources.com

Austin Exploration Reaches Eagle Ford Deals With Halcon & Petromax

August 19, 2013 R.T. Dukes

Austin Exploration recently completed two farm out deals on the company's ~5,000 acres in the Eagle Ford.

The first deal was signed with Halcon Resources and included over 4,200 acres in the Birch Prospect in Burleson County. Halcon paid $1.9 million upfront for an 18 month drilling option and will gain a 70% interest in the block by funding the next three Eagle Ford wells ($24-27 million cost).

The second farm out deal was signed with Petromax and covers 645 acres in the Birch-Loan Oak unit in Burleson County. Petromax will fund the first horizontal Eagle Ford well in the unit and will earn a 70% interest in the prospect.

Wells in both areas are estimated to cost $8-9 million. Halcon and Petromax will fund approximately $32-36 million in Eagle Ford wells to earn a 70% interest in the respective acreage. The deals value Austin Exploration's acreage at over $3,000 per acre.

Austin Exploration had drilled one vertical well on the property to date. The Krueger #1 encountered seven hydrocarbon bearing zones and a 270 ft thick portion of the Eagle Ford. The well was drilled to a depth of 9,325 ft.

Read more about the company at austinexploration.com

Halcon Focused On El Halcon - Completes Sale In Fayette & Gonzales Counties

August 13, 2013 R.T. Dukes

Halcon Resources completed the sale of Eagle Ford acreage in Fayette and Gonzales counties for $144 million in the second quarter. The deal included 24,189 net acres, 1,811 boe/d of production, and approximately 3.6 million boe of reserves. The deal provides capital that will be used to expand the company's operations in its core areas (Bakken and El Halcon). The company plans to sell an additional 4,500 boe/d in 2013.

At the company's El Halcon prospect in Brazos County, four rigs began drilling 16 wells and four wells were brought to production during the quarter. The Eagle Ford wells had average initial production rates of 822 boe/d, which is lower than expected. Two of the wells had horizontal laterals that veered outside of the target zone. The two wells that were drilled in the optimal location produced an average of 1,016 boe/d.

“Halcón is making progress towards its goal of leasing 100,000 to 150,000 net acres in El Halcón.
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Halcon will run 3-4 rigs in the El Halcon area in 2013 and is making progress toward expanding its position from 60,000 net acres to 100,000-150,000 net acres in the play. Watch for the company to further improve economics in the area as crews become more efficient. Drilling speed has already improved by 36% in most recent wells.

Halcon has 14 wells producing in the area with 9 wells waiting to be completed.

Read the full press release at halconresources.com

Halcon Allocating More Capital To Its Brazos County Eagle Ford Development

June 10, 2013 R.T. Dukes

Halcon announced plans to spend $100 million targeting the Eagle Ford in Brazos County in 2013 just two months ago. Now, the company might spend double or triple that number.

The company didn't say how much more capital would be allocated to the play, but said "capital is being reallocated to El Halcon from the Woodbine..."

When plans were to spend $100 million in the play, Halcon stated it would operate 1-3 rigs throughout the year. It's just June and the company already has 5 rigs working the play. The company had planned to spend ~$390 million in the Woodbine, so if we assume half of the capital is reallocated to the Eagle Ford, it is very likely Halcon will spend between $200-300 million this year alone.

Eagle Ford Laterals Getting Longer

The two most recent wells drilled in the area have average laterals of 8,349 ft and came online at more than 1,100 boe/d (94% oil) each. Those rates were achieved with a 16/64 choke and represent improvement of 18% over recent wells.

The Bison 1H well in Brazos County was drilled from spud to total depth in less than 11 days, including a 9,000+ ft lateral.

Halcon is also utilizing pad drilling where possible and set casing on three wells in just nine days.

Halcon has 9 wells producing in the area, 5 wells awaiting completion and 5 wells being drilled.

Highlights from the operations update weren't limited to the Eagle Ford, Halcon also announced a Bakken well that produced more than 3,000 boe/d. Read the full operations update at halconresources.com