Halcón Resources Reduces 2015 Budget

halcon bakken
halcon bakken

In a press release on January 8th, Halcón Resources executives announced that they will slash their drilling and production budget almost in half for 2015. The Houston-based company affirmed it will reduce operations in the Bakken to two rigs in the Fort Berthold area of North Dakota.

This is the second round of cuts for the Bakken producer in less than two months due to the continued decline in oil prices. Projected spending for the company is set at between $375 - 425 million, which represent a steep decline from 2014 numbers of $950 million. Even with decreased spending for 2015, production is expected to increase to an average 40,000-45,000 barrels per day, compared to 43,554 b/d in the third quarter of 2014.

Halcon CEO Floyd Wilson says that, “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.

More Budget Cuts for Continental Resources

Hamm slashes budget
Hamm slashes budget

For the second time in as many months, Continental Resources announces huge adjustments to its 2015 budget in response to plummeting oil prices.

In a press release before Christmas, the energy giant announced the details including plans to slash their 2015 capital expenditures to $2.7 billion. Additional cuts will come as they decrease the number of operated rigs, which they predict to drop from 50 to approximately 31 operated rigs by the end of 2015.

In an interview with Forbes, CEO Harold Hamm explained that the company is taking the necessary precautions to weather this storm and protect bondholders. Seemingly unfazed in his comments, Hamm credits his confidence to his past experience with these types of scenarios.

Harold Hamm tells Forbes that “It’s all part of our plan. If prices go down, we are going to cut back to save our wealth — which is oil in the ground.” Hamm goes on to say that, “I’ve seen this six or seven times. We have ample liquidity, our total revolver available, no near-term debt, a lean organization with just 1,100 people, production of 200,000 barrels per day, and a low-cost, high-margin operation. We’re going to navigate right through it.

Bakken Operators Slash Budgets for 2015

Bakken Producers Slash 2015 Budgets
Bakken Producers Slash 2015 Budgets

As the free-fall in crude prices continues, major Bakken operators are expressing their caution by slashing their budgets for 2015.

Marathon Oil is the latest giant to announce that its projected budget will curb exploration spending by a whopping 20% for 2015. Though the company still forecasts spending in upwards of $4.4 billion, the decrease is another sign that the spiraling oil prices are casting a dark shadow over the incredible growth that is taking place in the shale regions.

We remain confident in our investment opportunities in the three U.S. resource plays,” Marathon Oil President and Chief Executive Officer Lee Tillman said in a statement. “Our 2015 capital program is not opportunity constrained but will reflect sound discipline in managing cash flows in the current price environment.

Related: Eagle Ford and Bakken Drilling Permits Fall 30%

This news comes as oil plunged Thursday to an incredible $54.11, prices not seen since 2009. And Marathon is not the only E&P company to back off on growth plans. ConocoPhillips is also shaving 20% off for 2015, by deferring investment in unconventional plays. The company, however, is continuing to affirm its commitment to Bakken region, which continues to be a major source of growth for the company. Bakken’s largest operator, Continental Resources, also seems to be getting skittish as it announced Wednesday it will reduce spending in 2015 by $600 million and delay new rig starts while they wait out the current situation.

For more on 2015 budgets visit Reuters.com