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HOUSTON, TEXAS, Oct. 22, 2012 (GLOBE NEWSWIRE) -- Halcón Resources Corporation (NYSE: HK) ("Halcón" or the "Company") today announced that it has entered into a privately negotiated definitive agreement with Petro-Hunt, L.L.C. and an affiliated entity, to acquire producing and undeveloped oil and gas assets in the Williston Basin ("Williston Basin Assets") for an aggregate purchase price of approximately $1.45 billion, consisting of $700 million in cash and $750 million in equity.
The Williston Basin Assets are comprised of approximately 81,000 net acres (~95% operated) prospective for the Bakken and Three Forks formations primarily located in Williams, Mountrail, McKenzie and Dunn Counties, North Dakota. Current average net production from these assets is in excess of 10,500 barrels of oil equivalent per day (Boe/d) and total proved reserves, as estimated by third party reserve engineers, are approximately 42.4 million barrels of oil equivalent (MMBoe), 88% oil, with an internally estimated resource potential of greater than 100 MMBoe. Currently there are five operated drilling rigs running on the properties.
On a pro forma basis for this transaction, the Company has over 135,000 net acres in the Williston Basin and company-wide current average net production is approximately 26,500 Boe/d.
Additionally, Halcón has entered into an agreement pursuant to which Canada Pension Plan Investment Board ("CPPIB") has agreed to purchase $300 million of the Company's common stock at $7.16 per share, subject to customary closing conditions and the successful closing of the acquisition of the Williston Basin Assets.
Halcón has secured financing commitments from Wells Fargo, J.P. Morgan, Goldman Sachs and Barclays pursuant to which the borrowing base under the Company's senior secured revolving credit facility will be increased to $850 million and such banks have agreed to provide a $500 million bridge loan commitment.
Floyd C. Wilson, Halcón's Chairman and Chief Executive Officer, stated, "This acquisition is immediately accretive on all measures and is consistent with our strategy of building an oil company with a multi-year drilling inventory in several liquids-rich basins. The assets we are acquiring are located in what is arguably the most attractive oil producing basin in the lower 48, on a risk adjusted basis. This transaction improves our leverage profile and will effectively increase our estimated proved reserves on a pro forma basis by over 58% to approximately 115 million barrels of oil equivalent, 79% of which is liquids."