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Halcón Resources: Is Testing The Upper Eagle Ford On The Agenda?
- Halcón’s latest (through August) well performance data in the Eagle Ford is analyzed.
- El Halcón production has remained approximately flat since June; Q3 volumes may show a slight decline from Q2.
- Evaluating Upper Eagle Ford potential, versus the Lower Eagle Ford results, may be the next step for Halcón.
- The article presents Halcón’s latest (through July, 2014) well performance data in the Eagle Ford play.
- El Halcón production decline in July relative to the Q2 2014 average was expected and is driven by a trough in the completions schedule.
- Halcon’s Eagle Ford drilling program will remain HBP-driven for at least another year. Significant well cost savings are expected thereafter.
- El Halcón may prove to be a two-bench play.
Halcon Resources: The Future Remains Questionable And Unclear
- Halcon's recent speculative rise due to the Tuscaloosa Marine Shale has been gradually coming to an end.
- Halcon's valuation remains very high although the gradual fundamental deterioration is obvious.
- There are much cheaper E&P companies out there with low debt ratios and a stellar balance sheet.
Halcón Resources: The Second TMS Well Comes In Strong
- Halcón made public test results for its second TMS East well, the Black Stone 4H-2.
- On a per lateral foot basis, the result is in line with the play's cutting-edge IP rate.
- Two additional wells, the Fassman 9H-1 and SD Smith 1H, have been successfully drilled and are now in the completion stage.
- Halcón made a strong case for the TMS' potential to evolve into a highly successful play.
Halcón Resources: Eagle Ford Update And Latest TMS Data Points
- The article presents Halcón’s latest (through June, 2014) well performance in the Eagle Ford.
- The month-on-month decline in gross production in June was driven by a trough in completions schedule.
- July Eagle Ford volumes are expected to stabilize as at least three strong new wells were brought online during the month.
- The most recent TMS results by Encana and Goodrich are strong and indicate that the TMS thesis as it relates to Halcón remains intact.
Halcón Resources: Solid Second Quarter Driven By The Bakken
- Halcón just reported a solid operational quarter driven by the FBIR area in the Bakken.
- The company commented that Fort Berthold wells completed in Q2 are performing above the 801 Mboe type curve.
- A slight shortfall in El Halcón volumes relative to my earlier estimate is the result of a slow completions schedule in June.
- The reported mechanical problem in the Black Stone 4H-2 well in the TMS is a disappointment but does not change the TMS thesis.
- The company increased the midpoint of its 2014 production guidance by 2.5%.
Update: Halcón Resources - What To Expect From The Q2 Report
- Halcón will report its Q2 results after the market’s close on Wednesday.
- I expect Halcón to report at least one well result and provide progress report on two additional wells in its TMS operational update.
- I estimate the company to post net production of 26,000 boe/d in the Bakken and 10,000 boe/d in El Halcón.
Halcón Resources: Eagle Ford Production May Grow 35%+ Sequentially In The Second Quarter, Despite Slower Drilling
- The article presents Halcón’s latest (through May 2014) well performance in the Eagle Ford.
- Based on a well-by-well data aggregation, the company’s daily gross oil production in El Halcón is up ~32% sequentially so far in Q2.
- Most notably, the latest wells are performing stronger on average than the company's earlier wells.
- The growth rate is likely to subside in the second half of the year due to the decline in the pace of drilling.
Halcón Resources: Success In The TMS Redefines Upside Potential
- Recent drilling results in the Tuscaloosa Marine Shale, both by Halcón and other operators, indicate that the play’s ultimate success is increasingly probable.
- A week ago, Halcón received an important endorsement of its TMS asset from Apollo Global Management in the form of the first tranche of a $400 million mezzanine financing.
- Given the scale and quality of Halcón’s position in the TMS, the asset may prove defining for the stock’s valuation.
- Factoring in the potential impact from the TMS, the stock’s risk/reward profile appears favorable.
Good Results In The TMS Plus The Iraq War May Be Just What The Doctor Ordered For Halcon Resources
- In its June 9, 2014 TMS update, HK reported the initial IP rate of the Hoseshoe Hill 11-22H-1 well at 1,548 Boe/d.
- The Iraq War III may cause a 10% to 20% long-term price spike in oil. This would be tremendously positive for HK.
- Recent HK results from the Bakken are much higher with EURs about +40% higher than previous wells.
Halcon Resources: The High Debt And The High Key Multiples Continue Going Hand In Hand
- The drilling results from the Tuscaloosa Marine shale are not impressive, given the fact that the cost per well is approximately $13 million or higher.
- Halcon made an expensive deal with Apollo to fund the development of its acreage at the Tuscaloosa Marine shale.
- Halcon's valuation is very high although its balance sheet remains highly leveraged.
- There are much cheaper E&P companies out there with low debt ratios and a stellar balance sheet.
Halcón Resources: Inaugural TMS Well Shines; Financing Is Expensive
- Halcon’s inaugural HorseShoe Hill well in the TMS is a convincing success.
- The well confirms the strong performance of the most recent three TMS wells by Goodrich Petroleum.
- Positive read-across to Goodrich, Comstock, Sanchez and Encana.
- Preferred financing from Apollo is expensive but is structured to limit the sell-down of the asset.
Halcón Resources: Impressive Downdip Test Results At El Halcón
- Halcón's downdip wells in the East Texas Eagle Ford are performing admirably, which suggests that the best wells are still ahead.
- The Reveille #1H produced over 40,000 barrels of oil in 42 days, setting a new productivity record in the play.
- The Keystone #1H is another notable test which confirms the excellent quality of Halcón's acreage in Burleson County.
How Do Halcon Resources' Recent Bakken Wells Compare To EOG's And Continental's?
- EOG's recent Eagle Ford wells are, on average, better than HK's Bakken wells.
- HK's El Halcon (east Eagle Ford) recent wells IPs do not begin to compare with EOG's recent Eagle Ford wells IPs.
- HK's recent Bakken wells are roughly comparable to CLR's recent Bakken wells IPs.
- From a value standpoint, both EOG and CLR beat HK.
- Following a production slowdown in El Halcón during the winter months, Halcón Resources staged a strong turn-around in March.
- The company’s downdip wells are performing strongly, which may signal a bright future for the play in general.
- The Reveille #1H sets a new productivity record in the East Texas Eagle Ford.
Halcón Resources: Weak First Quarter; A Stronger Quarter Ahead
- While Halcón’s Q1 production came in above guidance, the result is underwhelming in absolute terms.
- Q2 is shaping up as a much improved quarter, with the production guided to increase by 20% sequentially.
- El Halcón shows good promise in the southern portion of the acreage. The entire 100,000 net acres in the play are pronounced de-risked.
- A convincing success in the TMS remains critical to the stock price.
Halcon Resources: Strong Read-Across From Goodrich's TMS Result
- The outstanding Blades 33H-1 well result in the TMS reported this morning by Goodrich Petroleum has a strong positive read-across to Halcon.
- Halcon's first TMS well, the Horseshoe Hill 11-22H-1, is expected next month, and another five wells are planned to be spudded by July.
- The Blades well provides a potent catalyst for Halcon's stock. Another half a dozen offset operator well results are expected within two months.
- Presented are the latest well-by-well production data and analysis for Halcón's East Texas Eagle Ford operation.
- After a 43% sequential production increase in Q4, Halcón will likely post a much slower growth in the play during Q1.
- The slow-down is attributable to a pause in the company’s completions calendar in December and January, not well results.
- Early data for the most recent wells indicates continued consistent performance. Growth momentum will be regained going into Q2.
- Among the latest East Texas Eagle Ford news, Halcón is not the buyer of Clayton Williams’ asset package in Brazos County.
Mon, Aug. 18, 10:43 AM
- Halcon Resources (HK -0.8%) is upgraded to Buy from Hold with an $8 price target at MLV & Co., which notes HK has suffered a rocky road to this point but believes its growth outlook has been enhanced by a focus on three core oil plays.
- MLV says it is encouraged by consecutive quarters of better than expected execution, highlighted by a 2014 production guidance raise.
- The firm says the market can't keep ignoring HK's continued execution, with the recent pullback in the stock unwarranted and representing a compelling entry point.
Wed, Jul. 30, 4:24 PM
Tue, Jul. 29, 5:35 PM
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Wed, Jun. 25, 2:55 PM
- Halcon Resources (HK +4.4%) is higher after Miller Tabak initiates coverage of the energy E&P company with a Buy rating and a $9 price target, believing HK will significantly outperform the E&P sector in 2014 as investors begin to realize the massive upside of the company's divisions.
- The firm says HK offers growth with a top-tier management team, and foresees multiple expansion in the stock price over the next 12 months as the company executes on its developmental drilling program and its balance sheet improves.
Tue, Jun. 17, 3:59 PM
- Halcon Resources (HK +2.1%) hits a new 52-week high as Canaccord raises its price target for the shares to $6 from $5.50, despite a stretched valuation and high financial leverage.
- HK has built positions in two of the leading U.S. liquids-rich resource plays, the Williston Basin and Eagle Ford, but it has established the Tuscaloosa Marine Shale as a third core area, and the firm says HK's new partnership should speed development there.
Mon, Jun. 9, 2:18 PM
- Halcon Resources (HK -2.2%) says Apollo Global Management (APO -1.2%) will invest up to $400M in one of its wholly owned subsidiaries that will hold all of its 314K acres in the Tuscaloosa Marine Shale, which stretches across Louisiana and Mississippi.
- Apollo will contribute $150M for 150K preferred shares of the subsidiary, with an option to buy 250K additional shares, and will receive up to 4% overriding royalty interest from 75 wells to be drilled and completed on the Tuscaloosa acreage.
- HK also says its Horseshoe Hill 11-22-H-1 well in Mississippi had an initial daily production rate of 1,208 bbl of oil and 1.1M cf of natural gas.
- HK already had said it plans to begin drilling 10-12 wells in the TMS this year and expects to participate in 15-20 non-operated wells.
Thu, Jun. 5, 2:58 PM
- Halcon Resources (HK +3.8%) is maintained at Buy but with a $9 price target, raised from $7, at Wunderlich, which notes shares have climbed due to continued growth of HK's Tuscaloosa Marine Shale acreage position and initial activity.
- Upcoming initial well results and the potential for a Tuscaloosa joint venture could begin to show the value in the play while also allowing HK to boost its production and liquidity positions, the firm says, adding that it believes these potential catalysts are not priced into the stock.
Wed, May. 7, 4:23 PM| 2 Comments
Tue, May. 6, 5:35 PM
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Mon, Apr. 14, 2:56 PM
- Goodrich Petroleum (GDP +28.9%) soars nearly 30% after reporting strong results from a well drilled in the emerging Tuscaloosa Marine shale play at a cheaper cost than any previous successful well.
- The Blades well is the first confirming data point on the acreage acquired from Devon and helps de-risk this acreage, according to Wells Fargo, and goes a long way towards addressing issues with drilling out plugs - "a very positive development."
- GDP's results are cause for excitement among investors in Halcon Resources (HK +8.5%), whose first Tuscaloosa well is expected next month with another five wells planned to be spudded by July.
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