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.

Halcón Resources Sets New Operations Records in the Williston Basin

Halcon Bakken Acreage Map
Halcon Bakken Acreage Map

During the first quarter of 2014, Halcón Resources (HK) set new company operations records in the Williston Basin for drilling and production.

A major focus for Halcón is on improving efficiencies, particularly those associated with pad drilling. Currently, Halcón is in the process of putting six new wells online in the Fort Berthold area that were drilled from a single pad and spaced 660' apart. The initial production (IP) rate for one of these wells during the quarter was a record breaking 4,225 boe/d. 

The company also recorded its fastest drilling times to date during the first-quarter. A Bakken well in the Fort Berthold area was drilled in 12 days (spud to total depth). Another Three Forks well in the Fort Berthold area was drilled in 17 days (spud to total depth).

Halcón Williston Basin First Quarter Operations Update

Halcón operated an average of four rigs in the Williston Basin during the first quarter, and the company plans to keep an average of three to four rigs active for the remainder of the year. Average production for the quarter was 23,313 boe/d. That's a 73% increase compared to the same period in 2013.

Weather-related issues slowed down drilling and completion that were begun late in the fourth quarter of 2013. Despite the weather-related impacts and delays, Halcon saw average initial and 30 day production rates improve during the quarter. Company officials say activity in the Williston Basin has since returned to normal, and current production is approximately 25,000 Boe/d.

Halcón Non-Operated Interests in the Williston Basin

Halcón participated in 72 non-operated wells during the quarter with an average working interest of approximately 6%. Current production from non-operated wells is approximately 3,500 boe/d.

By contrast, there are currently 144 Bakken wells producing, 11 Bakken wells being completed or waiting on completion and 2 Bakken wells being drilled on Halcón's operated acreage.

Similarly, there are currently 44 Three Forks wells producing, 5 Three Forks wells being completed or waiting on completion and 2 Three Forks wells being drilled on the Company's operated acreage.

Read more at halconresources.com

Nearly Half of Halcon 2014 Budget Targeting Bakken - ~$475 Million

Halcon Bakken Acreage Map
Halcon Bakken Acreage Map

Halcon is focused on drilling wells in the Fort Berthold area in 2014 and anticipates spending approximately 49% of its total drilling and completions budget in the Williston Basin. Based on previous budget estimates, that's about ~475 million.

Read more: Halcon Holds Production Guidance & Lowers its 2014 Capital Budget

The company's plan for 2014 is to focus on its "de-risked" acreage, which includes the Fort Berthold area.

Floyd Wilson, CEO, said in a company statement, “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.

Halcon's 2014 Bakken Guidance

In the first-quarter of 2014, Halcon anticipates weather-related production interruptions in the Bakken.

For the full-year, the Company plans to operate an average of 4 rigs and spud 40 to 50 gross operated wells. Halcon also anticipates participating in 200-225 gross non-operated wells, with an average working interest of 3%.

Halcon's Fourth-Quarter Bakken Production

In the fourth-quarter of 2013, Halcon Resource's Bakken production increased by 15% over the third-quarter to 24,125 boe/d, despite adverse weather conditions. Company estimates accounted for weather-related impacts of ~1,040 boe/d.

Halcon's Fourth-Quarter Bakken Activity

Halcon operated an average of five rigs in the Bakken, and participated in 50 non-operated wells, with an average working interest of 3% in the fourth-quarter of 2013.

In the Fort Berthold area, the company spudded eight wells and broutght 10 wells online. For some of Halcon's Fort Berthold area wells, strong results came from the application of the "slickwater frac" technique. The company plans on continuing this practice in 2014.

At Winter NAPE, Wilson, was quoted, “[the company’s] most recent wells in the Bakken are the best ever.

Halcón also spudded four wells and put two wells online in Williams County in the fourth-quarter.

Read more at halconresources.com

Winter NAPE Expo Business Conference Highlights - 2014


The NAPE Expo is a North American event with some international influence, which features key players in the oil and gas industry. The business conference theme for 2014 was sustainability in the U.S. oil and gas industry.

The conference touched on key issues such as hydraulic fracking, sustainable business strategies and technological innovations.

Multiple speakers  put a spotlight on the practice of hydraulic fracturing. Here are some of their comments:

  • Former Secretary of the Interior, Ken Salazar, said, "I believe hydraulic fracking is safe... there is not a single case where fracking has caused an environmental problem for anyone."
  • David Blackmon, Dir. FTI Consulting, said, "the biggest issue by far facing the industry today is water."
  • "Treatment and recycling will be one of the main drivers moving the industry forward over the next 10 years," said Andrew Slaughter, VP, Upstream Research, IHS

The Business of Unconventional Drilling and Technology

  • Robert Turnham, CEO, Goodrich Petroleum on business strategy: "we move early, identify opportunities and take the risk up-front. If you move early, then you enjoy lower royalty burdens straight off the top."
  • Industry targeting the "sweet spots" in the shale plays. Floyd Wilson, CEO, Halcon Resources, on the Bakken: "[the company's] most recent wells in the Bakken are the best ever."
  • Apache converting waste gas to electricity for field grid usage
  • General industry focus on artificial lift technology in shale drilling to quickly drain reservoirs
  • New diverter technology being utilized to make marginally economic wells profitable

Other Highlights from the Conference

  • Luke Keller, VP, BP America, said, "[the] U.S. could achieve energy independence by 2035."
  • "$2000 financial benefit to every American household by 2015 due to unconventional drilling of natural gas," according to Don McClure, VP, Government Stakeholder Relations and Legal, EnCana Oil and Gas USA
  • "Tremendous amount of light sweet crude is about to be discovered and put into the marketplace [in the U.S.]" according to Charles McConnell, Rice University
  • Industry encouraged to support better outreach and education initiatives via social media outlets

Learn more about NAPE by visiting napeexpo.com

Halcon Holds Production Guidance & Lowers Its 2014 Capital Budget

Halcon Resources Bakken Acreage Map
Halcon Resources Bakken Acreage Map

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

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

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

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

Read more at halconresources.com