Floyd C. Wilson, Chairman and Chief Executive Officer, commented, "First quarter results exceeded expectations. Our persistent focus on improving returns via technological innovation and good old fashioned hard work is beginning to pay off. We are firing on all cylinders from an operational standpoint and are excited about the opportunities that lie ahead."
East Texas Assets Divestiture
As previously announced, the Company agreed to divest non-core assets in East Texas for $450 million, subject to closing and post-closing adjustments. The transaction is expected to close in May 2014 with an effective date of April 1, 2014.
The assets being sold by Halcón include approximately 83,000 net acres primarily located in Leon, Madison and Grimes Counties, Texas. These properties produced an average of approximately 3,718 Boe/d during the first quarter of 2014. Estimated proved reserves associated with these assets, as of December 31, 2013, were approximately 16.3 MMBoe, 39% of which were proved developed.
The Company continues to evaluate all remaining non-core properties for additional divestiture opportunities during 2014.
Liquidity and Capital Spending
During the first quarter of 2014, the borrowing base on Halcón's revolving credit facility was increased to $800 million from $700 million in conjunction with the Company's regular spring redetermination. As of March 31, 2014, Halcón had undrawn capacity on its senior secured revolving credit facility plus cash on hand totaling approximately $452 million. Pro forma for the pending sale of non-core assets in East Texas, and a related $100 million reduction to the revolver borrowing base, the Company had undrawn capacity on its senior secured revolving credit facility plus cash on hand totaling approximately $802 million as of March 31, 2014.
During the first quarter of 2014, Halcón incurred capital costs of $331.2 million on drilling and completions, $14.2 million on infrastructure/seismic and $113.8 million for acquisitions primarily in the TMS and El Halcón areas, net of $2.2 million of divestiture proceeds. In addition, the Company incurred $54.7 million for capitalized interest/G&A and other.