Halcon Provides Tuscaloosa Marine Shale Operational Update

By Joseph R. Fonseca
Monday, June 09, 2014
Halcon Resources

Halcón Resources Corporation (NYSE: HK) ("Halcón"or the "Company") today provided an operational update related to its 314,000 net acre position in the Tuscaloosa Marine Shale ("TMS").

The Horseshoe Hill 11-22H-1 (92% WI) well in Wilkinson County, Mississippi, achieved a 24-hour average initial production rate of 1,208 barrels of oil per day and 1.1 million cubic feet per day of 1,551 BTU natural gas on a 19/64 inch choke.  Based on gas composition analysis and assuming full ethane recovery, the Company estimates that the well would produce an additional 212 barrels of NGLs per day for a total 24-hour average initial production rate of 1,548 barrels of oil equivalent per day.  The well has a 7,060' effective lateral and was completed with 24 frac stages, 21 of which were effectively pumped and 3 of which were partially pumped (less proppant placed than designed). 

Halcón drilled this well in 39 days (spud to TD). The Company has drilled the Black Stone 4H-2 (87% WI) well in Wilkinson County, Mississippi, in 28 days (spud to TD) with a 5,400' lateral.  Completion operations are expected to commence this month.

Halcón recently spudded the Fassman 9H-1 (84% WI), located in Wilkinson County, Mississippi, with a second rig and is planning a 6,030' lateral for this well.

The Company has also spudded the SD Smith 1H (62% WI), located in Wilkinson County, Mississippi, and is planning a 7,660' lateral for this well.

Halcón plans to spud 10 to 12 operated wells in the TMS running an average of two rigs in 2014.  The Company also expects to participate in 15 to 20 non-operated TMS wells in 2014.

In addition, Halcón announced the signing of a definitive agreement with credit funds and accounts managed by affiliates of Apollo Global Management, LLC (NYSE: APO) (together with its consolidated subsidiaries, "Apollo"), which will invest up to $400 million in the Company's wholly owned subsidiary, HK TMS, LLC ("HK TMS").  Upon closing, HK TMS will hold all of Halcón's acreage in Mississippi and Louisiana that is prospective for the TMS formation.  The Company holds 100% of the common shares of HK TMS and is the sole manager of HK TMS.  Apollo will contribute $150 million in cash consideration for 150,000 of HK TMS preferred shares, and under certain circumstances, may acquire up to an additional 250,000 preferred shares of HK TMS on the same terms.  Holders of the HK TMS preferred shares will receive quarterly cash dividends of 8% per annum.    

In conjunction with the issuance of the preferred shares, HK TMS agreed to assign a 4.0% overriding royalty interest ("ORRI"), subject to reduction to 2.0% under certain circumstances, in 75 net wells to be drilled and completed on its TMS acreage. The number of wells subject to the ORRI will increase to the extent that Apollo subscribes for additional preferred shares, with a maximum of 200 net wells subject to such ORRI if Apollo subscribes for the full additional 250,000 preferred shares.

Jefferies LLC acted as exclusive financial advisor to Halcón in connection with the TMS partnership with Apollo.

The Company's midstream subsidiary, Halcón Field Services, has acquired rights to develop an oil handling terminal at the Port of Natchez, a location with direct access to more than two million barrels per day of refining capacity on the Lower Mississippi River.  The Port of Natchez has existing infrastructure including loading docks, pipelines and direct access to the Canadian National railroad.

Floyd C. Wilson, Chairman and Chief Executive Officer, commented, "We are off to a solid start in the TMS, and the capital from our partnership with Apollo will help us to accelerate activity.  The TMS is quickly evolving into a world-class oil play."
 

Maritime Reporter November 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Contracts

Wärtsilä to Begin Building LNG Terminal in January

Wärtsilä has been given full notice to proceed (NTP) from Manga LNG Oy for the supply of a liquefied natural gas (LNG) import terminal in Tornio, Northern Finland.

Polarcus Awarded 3D Project Off West Africa

Polarcus Limited has signed a letter of intent with Perenco Oil & Gas Gabon S.A. for a 3D marine seismic acquisition project offshore West Africa.   The project,

Boskalis, VolkerWessels Win Offshore Wind Farm Work

Royal Boskalis Westminster N.V., in partnership with Volker Stevin International (VolkerWessels), has been awarded a contract by Iberdrola Renewables Offshore Deutschland

Finance

Larger Tankers May Offer Better Return Chances

Investors looking for returns in the tanker markets can invest their capital in a variety of ways. Should an owner invest in a VLCC or an Aframax? How about an

US Plans to Shut Royalty Loophole on Coal Exports

U.S. coal companies will no longer be able to settle royalties at low domestic prices when they make lucrative sales to Asia according to reforms proposed by the Interior Department on Friday.

Hapag-Lloyd Completes CSAV Merger Capital Increase

Hapag-Lloyd completed the planned capital increase of EUR 370 million (approximately $452.5 million) as part of the business combination with the Chilean shipping

News

Port Workers in Argentine Grain Hub End Strike

Port workers in part of the Argentine grains hub of Rosario lifted a work stoppage on Friday, only a day after they went on strike over demands for higher year-end bonuses, a union official said.

Madsen to Chair Norway’s Research Council Executive Board

Henrik O. Madsen appointed chairman of the executive board of the Research Council of Norway   DNV GL president and CEO Henrik O. Madsen was appointed as chairman

Larger Tankers May Offer Better Return Chances

Investors looking for returns in the tanker markets can invest their capital in a variety of ways. Should an owner invest in a VLCC or an Aframax? How about an

Ocean Observation

NOAA: US to See More Floods from Sea Level Rise

Most of U.S. coast may see 30 or more days a year of floods up to 2 feet above high tides. By 2050, a majority of U.S. coastal areas are likely to be threatened

DYT Yacht Transport Carries M/V OCEARCH

The 126-foot research vessel M/V OCEARCH is currently making its way from Port Everglades, Florida to Brisbane, Australia on board DYT Yacht Transport’s semisubmersible

Talisman Sinopec Closes North Sea Platform Ahead of Storm

Talisman Sinopec Energy UK has closed its Buchan Alpha platform in the North Sea, the company said on Wednesday, ahead of an expected severe winter storm. The

 
 
Maritime Security Maritime Standards Navigation Pipelines Pod Propulsion Salvage Ship Simulators Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1943 sec (5 req/sec)