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Halcón Resources Corporatio Message Board

  • shavitmi shavitmi Mar 27, 2014 11:05 AM Flag

    HK finanically is in great shape

    have to remember that they chose to spend CAPEX of 1 billion $$
    they can always reduce it and turn profit after debt pay

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    • HK has maintained 40,000 BOE/D since October and that was through a harsh wither up in North Dakota.
      The HK production rate sustains a $1B revenue and process improvement and connection to pipelines as infrastructure gets established will save the company an additional $1.50 per BOE this year to the "NET" income.

      So lets summarize by Net Revenue Interest in each oil play.
      FBIR= Fort Berthold Indian Reservation
      Will = Williston basin
      TMS = Tuscaloosa Marine Shale

      FBIR has 801 MBOE per well expected with NRI of 55%
      TMS has 792 MBOE per well expected with NRI of 51%
      El Hal has 452 MBOE per well expected with NRI of 53%
      Will has 477 MBOE per well expected with NRI of 65%

      So 12 rigs drilling today @ 1 finish per month is 144 wells per year
      Any Net Revenue Interest 50% and above pays off 2X (two times) the cost of drilling the well.
      So HK is drilling 140-150 wells per year and doubling income with each well.
      That pays off a lot of debt.
      If you are an investor it appears you'll get your money back in a hurry.
      What would you rather have no debt or $1B in revenue doubling with each well drilled?

      Sentiment: Buy

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