Richard Zeits
Oil & gas, commodities, long/short equity, research analyst

Halcón Resources: Weak First Quarter; A Stronger Quarter Ahead

The market reacted enthusiastically to Halcón Resources' (NYSE:HK) Q1 2014 results that were announced last week. The stock's almost 15% outperformance relative to the peer group since the announcement may appear surprising. While the production volumes were slightly above guidance, it is difficult to think of the operating results as outstanding: in both of the company's key producing areas - the Bakken/Three Forks and El Halcón - production experienced slight sequential declines. The declines occurred despite the consistent rate of drilling and completion spending relative to the previous quarter.

The positive stock reaction was likely triggered not by the quarter's results but rather by forward-looking data points:

    Halcón guided to a 20% sequential growth in Q2. The guidance...
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