Halcón Resources Announces Initial Production Results on its First Operated Well in the Delaware Basin and Provides an Updat...
June 01 2017 - 4:15PM
Halcón Resources Corporation (NYSE:HK) (“Halcón” or the “Company”)
today provided production data on its first operated well in the
Delaware Basin and provided an update on other Company
activities.
Halcón’s CRMWD 79 #1H well on the southern
portion of its Ward County acreage was put online in early May of
2017. This well (100% working interest) was completed with an
effective lateral length of ~5,167 feet targeting the Wolfcamp A
interval. The well’s current peak 10 day average rate is
1,235 boe/d, despite flowing back on a restricted choke, with
production comprised of ~84% oil (2 stream). The well’s
current 20 day average production rate is 1,038 boe/d. Both
the 10 and 20 day peak rates are continuing to increase as the
productivity of the well continues to be very strong. The
well’s latest 24 hour production rate was 1,519 boe/d (82% oil) on
a 28/64” choke with wellhead pressure of 2,016 PSI. After
adjusting for lateral length, this well’s early performance is
significantly exceeding Halcón’s type curve EUR estimates for its
Ward County acreage of 1,258 Mboe for a 10,000 foot
lateral.
Given the successful results of its initial
well, the Company will exercise its option to acquire 6,720 net
acres in the southern tract of its Ward County acreage for $11,000
per acre, on or prior to the option expiration date of June 15,
2017. Halcón also plans to spud a vertical well on the
northern tract (8,320 net acres) of its Ward County acreage in the
third quarter of 2017, expected to be followed by a horizontal well
shortly thereafter. As previously disclosed, the Company
currently expects to exercise its option to acquire this acreage
position for $11,000/acre on or before the option expiration date
of December 31, 2017.
Halcón also recently closed an acquisition of
3,634 net acres in Pecos County for $88.0 million. This
acreage represents a partner’s interest in Halcón operated
units. Current production associated with this acquisition is
~790 boe/d, and after adjusting for current production at an
assumed value of $40,000 per flowing boe/d, this acquisition
equates to an effective purchase price of $15,520 per net
acre. Separately, the Company continues to add additional
acreage near its existing positions in Pecos and Ward
Counties. Halcón currently has approximately 41,555 net acres
in the Delaware Basin either acquired or under contract at an
average adjusted purchase price of $20,342 per acre (assuming a
value of $40,000 per flowing boe/d for current production).
Halcón‘s Delaware Basin assets are currently producing ~4,500 boe/d
net which is well above its forecast for the area. The
Company plans to continue to run 2 rigs on its Delaware Basin
properties for the remainder of 2017 and will begin completion
activities on its first Pecos County well in mid-June of 2017 with
a dedicated frac fleet that will operate for the remainder of the
year in the Delaware Basin.
In the Williston Basin, Halcón is currently
pursuing a sale of its non-operated assets. These properties
currently produce ~2,350 boe/d (91% oil) and include 15,600 net
acres and over 1,000 gross undeveloped locations across the
Williston Basin. Halcón expects to complete this sale later
this summer, subject to an acceptable offer.
The Company plans to use the anticipated
proceeds from the Williston Basin non-operated asset sale, as well
as borrowings on its senior revolving credit facility, to fund the
Ward County option acreage and other Pecos County acreage
acquisitions mentioned herein.
Pro forma for these transactions, Halcón expects
to have adequate liquidity to fund its planned drilling program
without the need for additional capital beyond borrowings on its
senior revolving credit facility.
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.
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