Halcón Resources Corporation (NYSE:HK) (“Halcón” or the “Company”)
today announced its first quarter 2017 results.
Production for the three months averaged 38,478
barrels of oil equivalent per day (Boe/d). Production was
comprised of 76% oil, 12% natural gas liquids (NGLs) and 12%
natural gas for the quarter. Halcón’s first quarter
production includes the impact of its previously announced El
Halcón East Texas asset sale which closed on March 9, 2017, as well
as its acquisition of Delaware Basin assets in Pecos County, Texas
which closed on February 28, 2017. First quarter production
came in well above the Company’s guidance range of 36,000 to 37,000
Boe/d and was only down slightly versus Halcón’s fourth quarter
2016 production of 38,620 Boe/d despite the sale of the El Halcón
assets. This outperformance was primarily driven by better
than expected production on the recently acquired Pecos County
assets as well as higher than forecasted production from wells
completed in the fourth quarter of 2016 in the Williston
Basin.
Halcón generated total revenues of $135.6
million for the first quarter of 2017. The Company reported
net income available to common stockholders of $188.6 million for
the first quarter. Halcón also reported net income per basic
and diluted share of $2.07 and $1.69, respectively for the first
quarter of 2017. After adjusting for selected items (see
Selected Item Review and Reconciliation table for additional
information), the Company generated net income of $6.9 million, or
$0.06 per diluted share for the first quarter of 2017.
Adjusted EBITDA (see EBITDA Reconciliation table for additional
information) totaled $73.3 million for the first quarter of
2017.
Excluding the impact of hedges, Halcón realized
90% of the average NYMEX oil price, 27% of the average NYMEX oil
price for NGLs and 77% of the average NYMEX natural gas price
during the first quarter of 2017. Realized hedge proceeds
totaled approximately $2.2 million for the first quarter of
2017.
Total operating costs per unit, after adjusting
for selected items (see Selected Operating Data table for
additional information), were $18.70 per Boe during the three
months ended March 31, 2017, compared to $16.66 per Boe for the
same period in 2016. This increase in per unit total
operating costs was primarily driven by higher production taxes in
2017 given a higher commodity price environment and higher workover
expense driven by more activity in the Williston Basin and
declining year over year production. Halcón’s general and
administrative (“G&A”) expense was $6.02 per Boe in the first
quarter while its G&A expense, as adjusted (see Selected
Operating Data table for additional information), was $3.44 per Boe
during the first quarter of 2017 representing a 24% decrease versus
the first quarter of 2016, despite a year over year decline in
production. This reduction in G&A expense, as adjusted,
is reflective of the corporate cost reduction measures taken by the
Company over the last year to improve the profitability of its
business.
Liquidity and Capital
Spending
As of March 31, 2017, Halcón’s liquidity pro
forma for its recent borrowing base redetermination was
approximately $706 million, which consisted of cash on hand plus
undrawn capacity on the Company’s senior secured revolving credit
facility. Halcón recently received commitments from its
senior secured lenders for a $650 million borrowing base,
representing an increase of $50 million versus its previous
borrowing base.
During the first quarter of 2017, Halcón
incurred capital costs of approximately $39 million on drilling and
completions and $2 million on infrastructure, seismic and other
costs. Halcón also incurred $722 million on leasing and
acquisitions, comprised primarily of its Pecos County acquisition
in the Delaware Basin.
2017 Guidance Update
The Company increased both its second quarter
and full year 2017 production guidance by 1,000 Boe/d. Halcón is
now projecting second quarter production to be between 33,000 and
35,000 Boe/d and its full year 2017 production to be 38,000 to
40,000 Boe/d. Halcón increased its infrastructure, seismic and
other capex guidance for 2017 to be $30 million to account for an
acquisition of surface acreage and more infrastructure spending in
Ward County. Halcón revised its 2017 production mix to be 78% oil,
11% gas and 11% NGL. Finally, production tax guidance was reduced
to $3.00 to $5.00 Boe/d for 2017.
Hedging Update
As of May 3, 2017, Halcón had 20,645 barrels per
day of oil hedged for the last nine months of 2017 at an average
price of $54.89 per barrel. For 2018, the Company had 5,000
barrels per day of oil hedged at an average price of $54.73 per
barrel. Halcón currently has 18,900 Mmbtu/day of gas hedged
for the last nine months of 2017 at an average price of
$3.34/Mmbtu. The Company also has 5,000 Mmbtu/day of gas
hedged in 2018 at an average price of $3.19/Mmbtu.
Operations Update
Delaware Basin
Halcón’s Pecos County assets consist of 21,495
net acres and current production of ~3,200 Boe/d. Production
from this asset has increased 45% since closing the acquisition in
late February when the assets were producing ~2,200 Boe/d.
The Company was able to significantly improve the productivity of
this asset by optimizing production through putting wells on ESPs,
reducing midstream constraints and other initiatives.
Production averaged 923 Boe/d during the first quarter of 2017 in
the Delaware Basin (reflecting production for the one month period
Halcón owned this asset during the quarter).
The Company began drilling its first two
operated wells on the northern portion of its Pecos County assets
(Balbo Adriana West 1H and the Berkley State East 2H) in
mid-March. These wells are both Wolfcamp B wells with 10,000
foot laterals and are scheduled to be frac’d in June 2017.
Halcón plans to run two rigs on its Pecos County acreage for the
remainder of 2017 and will begin continuous frac operations with a
committed frac fleet beginning in June 2017. The Company
expects to spud 16 gross operated wells in Pecos County in 2017
with 10 being put online before year end. 15 of the 16 wells are
scheduled to be 10,000 foot laterals and include 8 Wolfcamp B
wells, 7 Wolfcamp A wells and 1 Bone Spring well. The
expected average working interest in these 2017 operated wells is
70%.
Halcón also has an option agreement which allows
it to purchase up to 15,040 net acres located primarily in Ward
County, Texas for a cost of $11,000 per acre. The Company
recently completed its first Wolfcamp A horizontal well on the
southern tract of this acreage and the well is currently flowing
back after completion. This well was a ~5,500 foot lateral
completed with 35 frac stages. Halcón is also planning to
drill a vertical pilot well followed by a horizontal well on the
northern tract of the acreage in the third quarter of 2017.
Given successful drilling results on and offsetting the Company’s
Ward County acreage, it plans to exercise the option on the
southern tract of the acreage (6,720 net acres) in June 2017 at a
cost of $73.9 million.
Williston Basin
Halcón currently has working interests in
approximately 119,300 net acres prospective for the Bakken and
Three Forks formations in the Williston Basin, substantially
all of which is held by production (HBP).
The Company operated one rig in
the Williston Basin during the first quarter of
2017. Halcón spud 8 wells during the three months
ended March 31, 2017. Halcón did not put any wells
online during the quarter as it delayed completion activity until
April to avoid the additional completion costs associated with
extreme winter weather conditions in North Dakota. Production
averaged 31,629 Boe/d during the first quarter of 2017 in the
Williston Basin.
Halcón recently added a second operated rig in
the Williston Basin and now is running two rigs on its Fort
Berthold Indian Reservation (“FBIR”) acreage and plans to do so for
the remainder of 2017. The Company is also planning to
complete a number of its 2017 wells in FBIR utilizing fracs with
~1,000 lbs/ft. of proppant vs. its typical proppant loading level
of ~500 lbs/ft. The Company’s average estimated D&C costs
for its 2017 drilling plans are $6.7 million in FBIR (inclusive of
the additional cost associated with wells completed with higher
proppant intensity).
The Company plans to operate an average of 1.75
rigs and spud 35 to 45 gross operated wells in the Williston Basin
in 2017 with an average working interest of approximately 77%.
Halcón expects to put 25 to 30 gross wells online in 2017 with an
average working interest of approximately 71%. Halcón also expects
to participate in 100 to 120 gross non-operated wells in 2017 with
an average working interest of approximately 1.5%.
The Company is currently the operator of 225
producing Bakken wells and 75 Three Forks wells. Halcón currently
has 6 Bakken wells and 4 Three Forks wells being completed or
waiting on completion on its operated acreage.
Conference Call and Webcast
Information
Halcón Resources Corporation (NYSE:HK) has
scheduled a conference call for Thursday, May 4, 2017, at 11:00
a.m. EDT (10:00 a.m. CDT). To participate in the conference call,
dial (877) 810-3368 for domestic callers, and (914) 495-8561 for
international callers a few minutes before the call begins and
reference Halcón Resources conference ID 6893810. The
conference call will also be webcast live over the Internet on
Halcón Resources’ website at http://www.halconresources.com in the
Investor Relations section under Events & Presentations.
A telephonic replay of the call will be available approximately two
hours after the live broadcast ends. To access the replay,
dial (855) 859-2056 for domestic callers or (404) 537-3406 for
international callers, in both cases referencing conference ID
6893810.
About Halcón Resources
Halcón Resources Corporation is an independent
energy company engaged in the acquisition, production, exploration
and development of onshore oil and natural gas properties in the
United States.
For more information contact Quentin Hicks,
Senior Vice President of Finance & Investor Relations, at
832-538-0557 or qhicks@halconresources.com.
Forward-Looking Statements
This release may contain forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. Statements that are not strictly
historical statements constitute forward-looking statements
and may often, but not always, be identified by the use
of such words such as "expects", "believes", "intends",
"anticipates", "plans", "estimates", "potential",
"possible", or "probable" or statements that certain
actions, events or results "may", "will", "should", or "could" be
taken, occur or be achieved. Forward-looking statements are
based on current beliefs and expectations and
involve certain assumptions or estimates that
involve various risks and uncertainties that could cause
actual results to differ materially from those reflected in the
statements. These risks include, but are not limited to, those set
forth in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2016 and other filings submitted by the
Company to the U.S. Securities and Exchange Commission
(SEC), copies of which may be obtained from the SEC's website
at www.sec.gov or through the Company's website
at www.halconresources.com. Readers should not place
undue reliance on any such forward-looking statements, which are
made only as of the date hereof. The Company has no duty,
and assumes no obligation, to update forward-looking
statements as a result of new information, future events
or changes in the Company's expectations.
|
|
HALCÓN RESOURCES CORPORATION |
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited) |
|
(In thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
Predecessor |
|
|
|
|
|
Three Months |
|
Three Months |
|
|
|
|
|
Ended |
|
Ended |
|
|
|
|
|
March 31, 2017 |
|
March 31, 2016 |
|
Operating revenues: |
|
|
|
|
|
|
Oil, natural gas and natural gas liquids sales: |
|
|
|
|
|
|
|
Oil |
|
$ |
122,521 |
|
|
$ |
74,967 |
|
|
|
|
Natural gas |
|
|
6,219 |
|
|
|
3,742 |
|
|
|
|
Natural gas
liquids |
|
|
6,025 |
|
|
|
1,937 |
|
|
|
|
Total oil, natural gas and natural gas liquids
sales |
|
|
134,765 |
|
|
|
80,646 |
|
|
|
Other |
|
|
833 |
|
|
|
703 |
|
|
|
|
Total
operating revenues |
|
|
135,598 |
|
|
|
81,349 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
Production: |
|
|
|
|
|
|
|
Lease operating |
|
|
20,644 |
|
|
|
20,578 |
|
|
|
|
Workover and other |
|
|
11,441 |
|
|
|
7,791 |
|
|
|
|
Taxes other than
income |
|
|
11,576 |
|
|
|
7,258 |
|
|
|
Gathering
and other |
|
|
11,942 |
|
|
|
11,384 |
|
|
|
Restructuring |
|
|
755 |
|
|
|
4,884 |
|
|
|
General and
administrative |
|
|
20,849 |
|
|
|
41,616 |
|
|
|
Depletion,
depreciation and accretion |
|
|
32,886 |
|
|
|
55,266 |
|
|
|
Full cost
ceiling impairment |
|
|
- |
|
|
|
496,900 |
|
|
|
(Gain) loss
on sale of oil and natural gas properties |
|
|
(231,190 |
) |
|
|
- |
|
|
|
Other
operating property and equipment impairment |
|
|
- |
|
|
|
28,056 |
|
|
|
|
Total
operating expenses |
|
|
(121,097 |
) |
|
|
673,733 |
|
|
Income (loss) from operations |
|
|
256,695 |
|
|
|
(592,384 |
) |
|
Other income (expenses): |
|
|
|
|
|
|
Net gain (loss) on derivative contracts |
|
|
26,398 |
|
|
|
18,742 |
|
|
|
Interest expense and other, net |
|
|
(24,843 |
) |
|
|
(47,791 |
) |
|
|
Gain (loss) on extinguishment of debt |
|
|
(56,898 |
) |
|
|
81,434 |
|
|
|
Total other income (expenses) |
|
|
|
(55,343 |
) |
|
|
52,385 |
|
|
Income (loss) before income taxes |
|
|
201,352 |
|
|
|
(539,999 |
) |
|
Income tax benefit (provision) |
|
|
(12,000 |
) |
|
|
- |
|
|
Net income (loss) |
|
|
189,352 |
|
|
|
(539,999 |
) |
|
Non-cash preferred dividend |
|
|
(801 |
) |
|
|
- |
|
|
Series A preferred dividends |
|
|
- |
|
|
|
(3,198 |
) |
|
Preferred dividends and accretion on redeemable noncontrolling
interest |
|
- |
|
|
|
(23,665 |
) |
|
Net income (loss) available to common
stockholders |
|
$ |
188,551 |
|
|
$ |
(566,862 |
) |
|
|
|
|
|
|
|
|
|
Net income (loss) per share of common
stock: |
|
|
|
|
|
|
|
Basic |
|
$ |
2.07 |
|
|
$ |
(4.72 |
) |
|
|
|
Diluted |
|
$ |
1.69 |
|
|
$ |
(4.72 |
) |
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
Basic |
|
|
91,274 |
|
|
|
120,011 |
|
|
|
|
Diluted |
|
|
112,084 |
|
|
|
120,011 |
|
|
|
|
|
|
|
|
|
|
HALCÓN RESOURCES CORPORATION |
|
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) |
|
(In thousands, except share and per share
amounts) |
|
|
|
|
|
|
|
|
|
Successor |
|
|
|
March 31, 2017 |
|
December 31, 2016 |
|
Current assets: |
|
|
|
|
|
Cash |
$ |
62,157 |
|
|
$ |
24 |
|
|
|
Accounts
receivable |
|
122,910 |
|
|
|
147,762 |
|
|
|
Receivables from derivative contracts |
|
11,757 |
|
|
|
5,923 |
|
|
|
Prepaids
and other |
|
6,112 |
|
|
|
6,940 |
|
|
|
Total current
assets |
|
202,936 |
|
|
|
160,649 |
|
|
Oil
and natural gas properties (full cost method): |
|
|
|
|
|
Evaluated |
|
1,226,499 |
|
|
|
1,269,034 |
|
|
|
Unevaluated |
|
843,746 |
|
|
|
316,439 |
|
|
|
Gross oil and
natural gas properties |
|
2,070,245 |
|
|
|
1,585,473 |
|
|
|
Less - accumulated
depletion |
|
(497,250 |
) |
|
|
(465,849 |
) |
|
|
Net oil and
natural gas properties |
|
1,572,995 |
|
|
|
1,119,624 |
|
|
Other operating property and equipment: |
|
|
|
|
|
Gas gathering and other
operating assets |
|
54,826 |
|
|
|
38,617 |
|
|
|
Less - accumulated
depreciation |
|
(1,883 |
) |
|
|
(1,107 |
) |
|
|
Net other
operating property and equipment |
|
52,943 |
|
|
|
37,510 |
|
|
Other noncurrent assets: |
|
|
|
|
|
Receivables from
derivative contracts |
|
3,205 |
|
|
|
- |
|
|
|
Funds in escrow and
other |
|
2,132 |
|
|
|
1,887 |
|
|
Total assets |
$ |
1,834,211 |
|
|
$ |
1,319,670 |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable and
accrued liabilities |
$ |
160,594 |
|
|
$ |
186,184 |
|
|
|
Liabilities from
derivative contracts |
|
1,578 |
|
|
|
16,434 |
|
|
|
Other |
|
4,759 |
|
|
|
4,935 |
|
|
|
Total current
liabilities |
|
166,931 |
|
|
|
207,553 |
|
|
Long-term debt, net |
|
940,572 |
|
|
|
964,653 |
|
|
Other noncurrent liabilities: |
|
|
|
|
|
Liabilities from
derivative contracts |
|
167 |
|
|
|
486 |
|
|
|
Asset retirement
obligations |
|
26,530 |
|
|
|
31,985 |
|
|
|
Other |
|
1,223 |
|
|
|
2,305 |
|
|
Commitments and contingencies |
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
Successor Preferred stock: 1,000,000 shares of $0.0001 par value
authorized; 5,518 and no |
|
|
|
|
|
shares issued and outstanding as of March 31, 2017 and December 31,
2016, respectively |
|
- |
|
|
|
- |
|
|
|
Successor Common stock: 1,000,000,000 shares of $0.0001 par value
authorized; 92,947,576 |
|
|
|
|
|
and 92,991,183 shares issued and outstanding as of March 31, 2017
and December 31, 2016, |
|
|
|
|
|
respectively |
|
9 |
|
|
|
9 |
|
|
|
Successor Additional paid-in capital |
|
989,411 |
|
|
|
592,663 |
|
|
|
Retained
earnings (accumulated deficit) |
|
(290,632 |
) |
|
|
(479,984 |
) |
|
|
Total stockholders' equity |
|
698,788 |
|
|
|
112,688 |
|
|
Total liabilities and stockholders' equity |
$ |
1,834,211 |
|
|
$ |
1,319,670 |
|
|
|
|
|
|
|
|
|
|
|
|
HALCÓN RESOURCES CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited) |
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
Predecessor |
|
|
|
|
Three Months |
|
Three Months |
|
|
|
|
Ended |
|
Ended |
|
|
|
|
March 31, 2017 |
|
March 31, 2016 |
Cash flows from operating activities: |
|
|
|
|
Net income
(loss) |
|
$ |
189,352 |
|
|
$ |
(539,999 |
) |
Adjustments
to reconcile net income (loss) to net cash |
|
|
|
|
provided by
(used in) operating activities: |
|
|
|
|
|
Depletion,
depreciation and accretion |
|
|
32,886 |
|
|
|
55,266 |
|
|
Full cost
ceiling impairment |
|
|
- |
|
|
|
496,900 |
|
|
(Gain) loss
on sale of oil and natural gas properties |
|
|
(231,190 |
) |
|
|
- |
|
|
Other
operating property and equipment impairment |
|
|
- |
|
|
|
28,056 |
|
|
Share-based
compensation, net |
|
|
8,347 |
|
|
|
2,145 |
|
|
Unrealized
loss (gain) on derivative contracts |
|
|
(24,214 |
) |
|
|
88,978 |
|
|
Amortization and write-off of deferred loan costs |
|
|
185 |
|
|
|
1,746 |
|
|
Non-cash
interest and amortization of discount and premium |
|
|
1,644 |
|
|
|
551 |
|
|
Loss (gain)
on extinguishment of debt |
|
|
56,898 |
|
|
|
(81,434 |
) |
|
Accrued
settlements on derivative contracts |
|
|
(1,265 |
) |
|
|
(32,882 |
) |
|
Other
income (expense) |
|
|
(883 |
) |
|
|
1,925 |
|
Cash flow
from operations before changes in working capital |
|
|
31,760 |
|
|
|
21,252 |
|
Changes in
working capital |
|
|
13,800 |
|
|
|
13,122 |
|
Net cash
provided by (used in) operating activities |
|
|
45,560 |
|
|
|
34,374 |
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
Oil and
natural gas capital expenditures |
|
|
(43,803 |
) |
|
|
(116,920 |
) |
|
Proceeds
received from sale of oil and natural gas properties |
|
|
477,306 |
|
|
|
(422 |
) |
|
Acquisition
of oil and natural gas properties |
|
|
(707,304 |
) |
|
|
161 |
|
|
Acquisition
of other operating property and equipment |
|
|
(25,538 |
) |
|
|
- |
|
|
Other
operating property and equipment capital expenditures |
|
|
(502 |
) |
|
|
(646 |
) |
|
Proceeds
received from sale of other operating property and equipment |
|
|
10,286 |
|
|
|
61 |
|
|
Funds held
in escrow and other |
|
|
- |
|
|
|
10 |
|
Net cash
provided by (used in) investing activities |
|
|
(289,555 |
) |
|
|
(117,756 |
) |
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
Proceeds
from borrowings |
|
|
1,029,000 |
|
|
|
286,000 |
|
|
Repayments
of borrowings |
|
|
(1,065,000 |
) |
|
|
(200,648 |
) |
|
Premium
paid to repurchase the 2020 Second Lien Notes |
|
|
(30,917 |
) |
|
|
- |
|
|
Debt
issuance costs |
|
|
(15,508 |
) |
|
|
(1,185 |
) |
|
Preferred
stock issued |
|
|
400,055 |
|
|
|
- |
|
|
Offering
costs and other |
|
|
(11,502 |
) |
|
|
(208 |
) |
Net cash
provided by (used in) financing activities |
|
|
306,128 |
|
|
|
83,959 |
|
|
|
|
|
|
|
|
Net increase (decrease) in
cash |
|
|
62,133 |
|
|
|
577 |
|
|
|
|
|
|
|
|
Cash at
beginning of period |
|
|
24 |
|
|
|
8,026 |
|
Cash at end
of period |
|
$ |
62,157 |
|
|
$ |
8,603 |
|
|
|
|
|
|
|
|
HALCÓN RESOURCES CORPORATION |
|
SELECTED OPERATING
DATA (Unaudited) |
|
|
|
|
|
Successor |
|
Predecessor |
|
|
|
Three Months |
|
Three Months |
|
|
|
Ended |
|
Ended |
|
|
|
March 31, 2017 |
|
March 31, 2016 |
|
|
|
|
|
|
|
Production volumes: |
|
|
|
|
|
Crude oil
(MBbls) |
|
|
2,631 |
|
|
|
2,776 |
|
|
Natural
gas (MMcf) |
|
|
2,439 |
|
|
|
2,520 |
|
|
Natural
gas liquids (MBbls) |
|
|
425 |
|
|
|
401 |
|
|
Total
(MBoe) |
|
|
3,463 |
|
|
|
3,597 |
|
|
Average
daily production (Boe/d) |
|
|
38,478 |
|
|
|
39,527 |
|
|
|
|
|
|
|
|
Average
prices: |
|
|
|
|
|
Crude oil
(per Bbl) |
|
$ |
46.57 |
|
|
$ |
27.01 |
|
|
Natural
gas (per Mcf) |
|
|
2.55 |
|
|
|
1.48 |
|
|
Natural
gas liquids (per Bbl) |
|
|
14.18 |
|
|
|
4.83 |
|
|
Total per
Boe |
|
|
38.92 |
|
|
|
22.42 |
|
|
|
|
|
|
|
|
Cash
effect of derivative contracts: |
|
|
|
|
|
Crude oil
(per Bbl) |
|
$ |
0.79 |
|
|
$ |
38.68 |
|
|
Natural
gas (per Mcf) |
|
|
0.05 |
|
|
|
0.14 |
|
|
Natural
gas liquids (per Bbl) |
|
|
- |
|
|
|
- |
|
|
Total per
Boe |
|
|
0.63 |
|
|
|
29.95 |
|
|
|
|
|
|
|
|
Average prices computed after cash effect of settlement of
derivative contracts: |
|
|
|
|
Crude oil
(per Bbl) |
|
$ |
47.36 |
|
|
$ |
65.69 |
|
|
Natural
gas (per Mcf) |
|
|
2.60 |
|
|
|
1.62 |
|
|
Natural
gas liquids (per Bbl) |
|
|
14.18 |
|
|
|
4.83 |
|
|
Total per
Boe |
|
|
39.55 |
|
|
|
52.37 |
|
|
|
|
|
|
|
|
Average
cost per Boe: |
|
|
|
|
|
Production: |
|
|
|
|
|
Lease
operating |
|
$ |
5.96 |
|
|
$ |
5.72 |
|
|
Workover
and other |
|
|
3.30 |
|
|
|
2.17 |
|
|
Taxes
other than income |
|
|
3.34 |
|
|
|
2.02 |
|
|
Gathering
and other, as adjusted (1) |
|
|
2.66 |
|
|
|
2.23 |
|
|
Restructuring |
|
|
0.22 |
|
|
|
1.36 |
|
|
General
and administrative, as adjusted (1) |
|
|
3.44 |
|
|
|
4.52 |
|
|
|
|
|
|
|
|
(1)
Represents gathering and other and general and administrative costs
per Boe, adjusted for items noted in the reconciliation below: |
|
|
|
|
|
|
|
General and
administrative: |
|
|
|
|
|
General
and administrative, as reported |
|
$ |
6.02 |
|
|
$ |
11.57 |
|
|
Share-based compensation: |
|
|
|
|
|
Non-cash |
|
|
(2.41 |
) |
|
|
(0.60 |
) |
|
Transaction costs, key employee retention agreements and
other: |
|
|
|
|
|
Cash |
|
|
(0.17 |
) |
|
|
(6.45 |
) |
|
General
and administrative, as adjusted(2) |
|
$ |
3.44 |
|
|
$ |
4.52 |
|
|
|
|
|
|
|
|
Gathering and other, as
reported |
|
$ |
3.45 |
|
|
$ |
3.16 |
|
|
Rig termination
/ stacking charges |
|
|
(0.79 |
) |
|
|
(0.93 |
) |
|
Gathering and other, as
adjusted(3) |
|
$ |
2.66 |
|
|
$ |
2.23 |
|
|
|
|
|
|
|
|
Total operating costs,
as reported |
|
$ |
22.07 |
|
|
$ |
24.64 |
|
|
Total adjusting
items |
|
|
(3.37 |
) |
|
|
(7.98 |
) |
|
Total operating costs,
as adjusted(4) |
|
$ |
18.70 |
|
|
$ |
16.66 |
|
|
|
|
|
|
|
|
(2) General and administrative, as adjusted, is a
non-GAAP measure that excludes non-cash share-based compensation
charges relating to equity awards under our incentive stock plans,
as well as cash charges associated with transactions, key employee
retention agreements and other costs incurred in connection with
our restructuring. The Company believes that it is useful to
understand the effects that these charges have on general and
administrative expenses and total operating costs and that
exclusion of such charges is useful for comparison to prior
periods. |
|
|
|
|
(3) Gathering and other, as adjusted, is a non-GAAP
measure that excludes rig termination and stacking charges incurred
as a result of reductions in our drilling activities due to a
dramatic decline in oil and natural gas prices beginning in 2014.
The Company believes that it is useful to understand the effects
that these charges have on gathering and other expense and total
operating costs and that exclusion of such charges is useful for
comparison to prior periods. |
|
|
|
|
(4) Represents lease operating, workover and other
expense, taxes other than income, gathering and other expense and
general and administrative costs per Boe, adjusted for items noted
in reconciliation above. |
|
|
|
|
|
|
|
|
HALCÓN RESOURCES CORPORATION |
|
SELECTED ITEM REVIEW AND RECONCILIATION
(Unaudited) |
|
(In thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
Successor |
|
Predecessor |
|
|
|
Three Months |
|
Three Months |
|
|
|
Ended |
|
Ended |
|
|
|
March 31, 2017 |
|
March 31, 2016 |
|
As
Reported: |
|
|
|
|
|
Net income (loss)
available to common stockholders, as reported |
|
$ |
188,551 |
|
|
$ |
(566,862 |
) |
|
Non-cash preferred
dividend |
|
|
801 |
|
|
|
- |
|
|
Series A preferred
dividends |
|
|
- |
|
|
|
3,198 |
|
|
Preferred dividends and
accretion on redeemable noncontrolling interest |
|
|
- |
|
|
|
23,665 |
|
|
Net income (loss), as
reported |
|
|
189,352 |
|
|
|
(539,999 |
) |
|
|
|
|
|
|
|
Impact of
Selected Items: |
|
|
|
|
|
Unrealized loss (gain)
on derivatives contracts: |
|
|
|
|
|
Crude oil |
|
$ |
(23,560 |
) |
|
$ |
88,841 |
|
|
Natural gas |
|
|
(654 |
) |
|
|
137 |
|
|
Total
mark-to-market non-cash charge |
|
|
(24,214 |
) |
|
|
88,978 |
|
|
Full cost ceiling
impairment |
|
|
- |
|
|
|
496,900 |
|
|
(Gain) loss on sale of
oil and natural gas properties |
|
|
(231,190 |
) |
|
|
- |
|
|
Other operating
property and equipment impairment |
|
|
- |
|
|
|
28,056 |
|
|
Loss (gain) on
extinguishment of debt |
|
|
56,898 |
|
|
|
(81,434 |
) |
|
Deferred financing
costs expensed, net (1) |
|
|
- |
|
|
|
665 |
|
|
Restructuring |
|
|
755 |
|
|
|
4,884 |
|
|
Rig termination /
stacking charges, key employee retention agreements, transaction
costs and other |
|
|
3,330 |
|
|
|
27,524 |
|
|
Selected items, before
income taxes |
|
|
(194,421 |
) |
|
|
565,573 |
|
|
Income tax effect of
selected items (2) |
|
|
12,000 |
|
|
|
- |
|
|
Selected items, net of
tax |
|
|
(182,421 |
) |
|
|
565,573 |
|
|
|
|
|
|
|
|
As
Adjusted: |
|
|
|
|
|
Net income (loss)
available to common stockholders, excluding selected items |
|
$ |
6,931 |
|
|
$ |
25,574 |
|
|
Interest on convertible
debt, net |
|
|
- |
|
|
|
4,140 |
|
|
Net income
(loss) available to common stockholders after assumed conversions,
excluding selected items (3) |
$ |
6,931 |
|
|
$ |
29,714 |
|
|
|
|
|
|
|
|
Basic net income (loss)
per common share, as reported |
|
$ |
2.07 |
|
|
$ |
(4.72 |
) |
|
Impact of selected
items |
|
|
(1.99 |
) |
|
|
4.93 |
|
|
Basic net income (loss)
per common share, excluding selected items (3) |
|
$ |
0.08 |
|
|
$ |
0.21 |
|
|
|
|
|
|
|
|
Diluted net income
(loss) per common share, as reported |
|
$ |
1.69 |
|
|
$ |
(4.72 |
) |
|
Impact of selected
items |
|
|
(1.63 |
) |
|
|
4.93 |
|
|
Diluted net income
(loss) per common share, excluding selected items (3)(4) |
|
$ |
0.06 |
|
|
$ |
0.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities |
|
$ |
45,560 |
|
|
$ |
34,374 |
|
|
Changes in working
capital |
|
|
(13,800 |
) |
|
|
(13,122 |
) |
|
Cash flow from
operations before changes in working capital |
|
|
31,760 |
|
|
|
21,252 |
|
|
Cash components of
selected items |
|
|
5,271 |
|
|
|
63,455 |
|
|
Income tax effect of
selected items (2) |
|
|
12,000 |
|
|
|
- |
|
|
Cash flow from
operations before changes in working capital, adjusted for selected
items (3) |
|
$ |
49,031 |
|
|
$ |
84,707 |
|
|
|
|
|
|
|
|
(1)
Represents charges related to the write-off of debt issuance costs
associated with the Predecessor Credit Agreement. |
|
|
|
|
|
|
|
(2) For the
2017 (Successor) column, this represents the tax impact from the
estimated alternative minimum tax generated primarily by the gain
from the sale of the El Halcón Assets. |
|
For
the 2016 (Predecessor) column, this represents tax impact using an
estimated tax rate of 0.0% due to the Company maintaining a full
valuation allowance. |
|
|
|
|
|
|
|
(3) Net
income (loss) and earnings per share excluding selected items and
cash flow from operations before changes in working capital
adjusted for selected items are non-GAAP measures |
|
presented based on management's belief that they will enable a user
of the financial information to understand the impact of these
items on reported results. Additionally, this |
|
presentation provides a beneficial comparison to similarly adjusted
measurements of prior periods. These financial measures are not
measures of financial performance under GAAP |
|
and
should not be considered as an alternative to net income, earnings
per share and cash flow from operations, as defined by GAAP. These
financial measures may not be comparable |
|
to
similarly named non-GAAP financial measures that other companies
may use and may not be useful in comparing the performance of those
companies to Halcón's performance. |
|
|
|
|
|
|
|
(4) The
impact of selected items for the three months ended March 31, 2017
(Successor) and 2016 (Predecessor) was calculated based upon
weighted average diluted shares of 112.1 million |
|
143.8 million, respectively, due to the net income available to
common stockholders, excluding selected items. |
|
|
|
|
|
|
|
HALCÓN RESOURCES CORPORATION |
|
EBITDA RECONCILIATION
(Unaudited) |
|
(In thousands) |
|
|
|
Successor |
|
Predecessor |
|
|
|
|
Three Months
Ended |
|
Three Months
Ended |
|
|
|
|
March 31, 2017 |
|
March 31, 2016 |
|
|
|
|
|
|
|
|
|
Net income (loss), as
reported |
|
$ |
189,352 |
|
|
$ |
(539,999 |
) |
|
|
Interest
expense |
|
|
25,190 |
|
|
|
46,082 |
|
|
|
Depletion, depreciation and accretion |
|
|
32,886 |
|
|
|
55,266 |
|
|
|
Full cost
ceiling impairment |
|
|
- |
|
|
|
496,900 |
|
|
|
Other
operating property and equipment impairment |
|
|
- |
|
|
|
28,056 |
|
|
|
Income
tax provision (benefit) |
|
|
12,000 |
|
|
|
- |
|
|
|
Share-based compensation |
|
|
8,347 |
|
|
|
2,145 |
|
|
|
Interest
income |
|
|
(99 |
) |
|
|
(11 |
) |
|
|
(Gain)
loss on sale of other assets |
|
|
68 |
|
|
|
(59 |
) |
|
|
EBITDA(1) |
|
$ |
267,744 |
|
|
$ |
88,380 |
|
|
|
Impact of adjusting
items: |
|
|
|
|
|
|
Restructuring |
|
|
755 |
|
|
|
4,884 |
|
|
|
Loss
(gain) on extinguishment of debt |
|
|
56,898 |
|
|
|
(81,434 |
) |
|
|
(Gain)
loss on sale of oil and natural gas properties |
|
|
(231,190 |
) |
|
|
- |
|
|
|
Loss
(gain) on mark-to-market of embedded derivative and tranche
rights |
|
|
- |
|
|
|
974 |
|
|
|
Unrealized loss (gain) on derivatives contracts |
|
|
(24,214 |
) |
|
|
88,978 |
|
|
|
Write-off
of deferred loan costs |
|
|
- |
|
|
|
665 |
|
|
|
Rig
termination / stacking charges |
|
|
2,743 |
|
|
|
3,352 |
|
|
|
Transaction costs, key employee retention agreements and other |
|
|
587 |
|
|
|
23,198 |
|
|
|
Adjusted EBITDA(1) |
|
$ |
73,323 |
|
|
$ |
128,997 |
|
|
|
|
|
|
|
|
|
|
(1)
EBITDA and Adjusted EBITDA are non-gaap measures. These financial
measures are presented based on management's belief that they will
enable a user of the financial |
|
|
information
to understand the impact of these items on reported results.
Additionally, this presentation provides a beneficial comparison to
similarly adjusted measurements of prior |
|
|
periods.
These financial measures are not measures of financial performance
under GAAP and should not be considered as an alternative to GAAP.
These financial measures may |
|
|
not be
comparable to similarly named non-GAAP financial measures that
other companies may use and may not be useful in comparing the
performance of those companies to |
|
|
Halcón's
performance. |
|
|
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