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Halcón Resources Corporatio Message Board

  • s.eranger@sbcglobal.net s.eranger Nov 13, 2013 2:46 PM Flag

    Seeking Alpha Article by Value Digger....

    This is the best response I've seen to date. By the way, he also recommends Arsenal oil & Gas.

    "Arsenal can hardly be considered a "Bakken" producer. It's virtually a #$%$-ant next to the companies you compare it to, and, even after a 10-1 reverse split, can't be considered to be in a serious investor's ballpark.

    Their 9 month 2013/2012 revenue showed an increase of less than 300 boed. That's about an 8% increase in production, the bulk of which is in Canada and possibly facing the same depressing problems as are their junior company peers up there. Likely, that explains what presents itself as a production situation that is hardly noteworthy, never mind a growth stock. In fact, had the 'commodity prices' they received (according to their company statement) not increased on an average of 14%, comparison revenues would likely be a negative.

    The company also reported that their 67% interest Bakken "Stanley" type wells, though having a respectable 1,000+ IPs, would likely show a boed yearly average of just 265 boed. You may have only lightly hinted at this 9 month near-stagnancy growth, but you may also may have ignored that such small increases in total average company production, lends strongly to the likelyhood that reserves may be declining faster than they are being replaced. With a Q4 planned Capex of $10 mil, they will likely wind up owning the equivalent of another well this year. That's pretty staggering growth, isn't it? One whole well... Break out the free beer!

    As to your negative attitude towards HK, how would HK's outlook fare if you ignored prior months production history and considered only the most recent 3 month's results as typical in assessing their potential growth moving forward; A sustainable 9,000 boed quarterly production increase, a quarterly base of $186 mil free cash from production growing at 40%, 30 wells being drilled and completed in oil rich zones with IPs averaging from over 1,000 boed to over 3,000 boed,...continued..

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