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Halcón Resources Corporatio Message Board

  • valueman60 valueman60 Oct 10, 2013 8:20 AM Flag

    gideonsword

     

    gideon,
    i suspect you missed the gist of the post. Imho, actual earnings part of the q3 release is not what investment community will focus on. The stock is widely followed, analysts estimates of rev range from 220's- 290's,
    The exit rate is more important than the 3q rev or the eps, but even that is not the most critical.
    Why ?
    1. it will include the divested properties which are contributing 4500 boe/d. All of this production is already lost from the HK's pocket book , as the deal terms have an effective date of July 1. That means that the buyers will be able to deduct from the final price they pay to HK , the revenue less costs (which are minimal) from these properties from July 1!
    note also, that this deal has been the 'process" for quite some time, imho, HK intentionally dragged it out, because they were already in trouble with meeting production guidance, so by delaying the closing , they could still keep the production in "reported figures" , so as to help meet or exceed the already reduced production guidance for 3Q and full year 2013.
    2. depletion rates are a question going forward. Some petro engineers I have consulted with have raised the issue questioning if HK is juicing the IP rates, at the potential expense of EUR's I am not
    expressing an opinion about this facet, , just know that it is out there & a momentary exit rate is not all powerful.
    3. a "growing"E&P investement thesis is about the future
    So what is more important?
    I anticipate that in conjunction with the ER, HK will issue production guidance for both the 4Q 13, and full year 2014. The 4Q won't be clean, as it will still have the same 4500 boe/d problem described above.
    If the divestiture closes in the 4Q as planned, the 2014 number would be cleaner, (albeit some divestitures in 2014 could create a hopefully lesser "'problem") continued see reply

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