Pretty simple if new pad drilling / frac results are huge they will raise production which in turn will raise revenues, and cash flow will grow significantly. They will grow into debt as ebitda grows. They do not care about total debt they are more concerned with leverage metrics. All debt is long term with earliest being due in 2017... if they are at 100,000 Boe/d in couple years debt will not be a concern. They are significantly hedged for all of 2014 and are hedging for 2015 in order to protect cash flow.
Very interesting analysis... anyone who uses terms such as "Hahahehehehohoharharoohhhh!" is obviously highly educated. Sad, pathetic.
Halcon northern acreage is not liquid but is dry gas, so Floyd is not interested in northern portion and wrote it off. However acreage in southern Trumbull and Mahoning counties is very oily. The Kibler 1H discovery well in Trumbull County came in at 2,233 barrels of oil equivalent per day, one of the top producers in the play, and they have room for about 500 wells in the area.
moron alert !!!! these negative posts are one of two things, a small time short bashing or somebody who got crushed being long and is now bitter and bashing. Either way should be ignored.
Shorts who cover that is... Floyd has enough liquidity for all of 2014 Capex already in place, liquidity will actually grow as production and reserves grow, There is no doubt reserves will grow as they have doubled potential wells with pad drilling. El Halcon will be at 100k acres by next call and they room for 1000 wells there. (more reserves) Floyd has no intention of paying off long term debt, he will have sold and moved on before 2020.
#27277 - HRC OPERATING, LLC, FORT BERTHOLD 148-94-19C-18-5H, SESW 19-148N-94W, DUNN CO., 366' FSL and 1369' FWL, DEVELOPMENT, EAGLE NEST, 20997', 9-5/8 inch , 2442' Ground, API #33-025-02395
#27278 - HRC OPERATING, LLC, FORT BERTHOLD 148-94-30B-31-5H, SESW 19-148N-94W, DUNN CO., 332' FSL and 1436' FWL, DEVELOPMENT, EAGLE NEST, 21688', 9-5/8 inch , 2439' Ground, API #33-025-02396
#27279 - HRC OPERATING, LLC, FORT BERTHOLD 148-94-19C-18-4H, SESW 19-148N-94W, DUNN CO., 299' FSL and 1503' FWL, DEVELOPMENT, EAGLE NEST, 21018', 9-5/8 inch , 2436' Ground, API #33-025-02397
#27280 - HRC OPERATING, LLC, FORT BERTHOLD 148-94-30B-31-4H, SESW 19-148N-94W, DUNN CO., 265' FSL and 1571' FWL, DEVELOPMENT, EAGLE NEST, 21498', 9-5/8 inch , 2433' Ground, API #33-025-02398
Management had a great opportunity to raise guidance while lowering capex today with press release which I believe would have sent shorts running.... but they did not. You claim they are producing over 40K in Bakken alone... could you be wrong ? or are they playing a massive low ball game.
--Standard & Poor's Ratings Services
said today that its 'CCC+' issue-level rating and '6' recovery rating on
Halcon Resources Corp.'s senior unsecured notes due 2020 are unchanged
following the company's proposed $400 million add-on. The 'B' corporate credit
rating and stable outlook on Halcon remain unchanged. The '6' recovery rating
indicates our expectation for negligible (0%-10%) recovery in the event of a
Our ratings on Halcon reflect limited reserves and production, high operating
costs, an aggressive growth strategy, and participation in the volatile and
capital intensive nature of the oil and gas industry. These weaknesses are
adequately offset at the rating level by an oil-weighted reserve profile, an
experienced management team, and extensive acreage holdings in multiple
onshore liquids-rich U.S. basins. Our ratings also reflect the company's
substantial indebtedness and concerns about the level and source of capital
required to develop this broad collection of properties. We characterize
Halcon's business risk as "vulnerable," its financial risk as "highly
leveraged," and its liquidity as "adequate."
so true, the fear going into 2014 was will they dilute to pay for bloated capex. They have answered that question, they have reduced capex, they have planned future non -core asset sales, they are growing cash flow, and bad news in my opinion anther new offering due in 2020. My guess is management does not care about LT debt because Halcon will be sold well before 2020.
Don't you think based on your #'s that Halcon would have RAISED guidance today they are sticking to 38000-42000 even though you have Bakken at 40000 now... do you need to re-evaluate ??
2014 capex is set and it appears they will not need to raise additional debt for remainder of year now its all about production, if they blow away the 38000-42000 guidance while spending significantly less money then this will rally big time. I think Floyd knows Bakken and El Halcon will get him production he needs but that only leaves him with 2 productive assets. Woodbine and Utica are huge unknowns.
They are terming out a portion of the balance on the revolver as they have done in the past. The message is more oil production growth for less capex. Other positive is Floyd is basically saying no more dilution. When they raise guidance above 42000 Boe/d in a few months then it will go much higher.