HOUSTON, TEXAS, Oct. 22, 2012 (GLOBE NEWSWIRE) -- Halcón Resources Corporation (NYSE: HK) ("Halcón" or the"Company") today announced that it has entered into a privatelynegotiated definitive agreement with Petro-Hunt, L.L.C. and anaffiliated entity, to acquire producing and undeveloped oil and gasassets in the Williston Basin ("Williston Basin Assets") for anaggregate purchase price of approximately $1.45 billion, consistingof $700 million in cash and $750 million in equity. The Williston Basin Assets are comprised of approximately 81,000net acres (~95% operated) prospective for the Bakken and ThreeForks formations primarily located in Williams, Mountrail, McKenzieand Dunn Counties, North Dakota. Current average netproduction from these assets is in excess of 10,500 barrels of oilequivalent per day (Boe/d) and total proved reserves, as estimatedby third party reserve engineers, are approximately 42.4 millionbarrels of oil equivalent (MMBoe), 88% oil, with an internallyestimated resource potential of greater than 100 MMBoe. Currently there are five operated drilling rigs running on theproperties. On a pro forma basis for this transaction, the Company has over135,000 net acres in the Williston Basin and company-wide currentaverage net production is approximately 26,500 Boe/d. Additionally, Halcón has entered into an agreement pursuant towhich Canada Pension Plan Investment Board ("CPPIB") has agreed topurchase $300 million of the Company's common stock at $7.16 pershare, subject to customary closing conditions and thesuccessful closing of the acquisition of the Williston BasinAssets. Halcón has secured financing commitments from Wells Fargo, J.P.Morgan, Goldman Sachs and Barclays pursuant to which the borrowingbase under the Company's senior secured revolving creditfacility will be increased to $850 million and such banks haveagreed 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 measuresand is consistent with our strategy of building an oil company witha multi-year drilling inventory in several liquids-richbasins. The assets we are acquiring are located in what isarguably the most attractive oil producing basin in the lower 48,on a risk adjusted basis. This transaction improves ourleverage profile and will effectively increase our estimated provedreserves on a pro forma basis by over 58% to approximately 115million barrels of oil equivalent, 79% of which is liquids."
Bruce W. Hunt, President of Petro-Hunt, L.L.C., commented, "Weare pleased to become a significant Halcón shareholder through thistransaction. The track record of Halcón's management teamspeaks for itself and we are confident they will do a great job ofdeveloping these solid assets. Petro-Hunt has a long historyof operating oil and gas properties in the Williston Basin. We will continue to operate production of approximately 24,000Boe/d and develop our 600,000 plus acres of oil and gas leaseholdin the Williston Basin with the full attention of our existingstaff."R. Scott Lawrence, CPPIB's Vice-President, Head of RelationshipInvestments, remarked, "CPPIB's investment aligns with our strategyto provide strategic, long-term capital to well-positionedcompanies like Halcón and work with management to help create valuenow and in the future." The $750 million equity consideration will initially be issuedas preferred stock that will automatically convert into commonstock at $7.45 per share following an increase in Halcón'sauthorized common shares to accommodate conversion and obtainingcertain regulatory approvals. Terms and Conditions The Company's board of directors has unanimously approved thetransaction, which is subject to customary closing conditions,including approval of listing of the Halcón common stock to beissued in the transaction on the New York Stock Exchange andregulatory clearance. The effective date of the transactionis June 1, 2012, and Halcón anticipates completing the transactionin December 2012. Mitchell Energy Advisors acted as financial advisor toHalcón. Tudor, Pickering, Holt & Co. acted as financial advisor toCPPIB. Investor Conference Call Halcón will host a conference call on October 22, 2012 todiscuss the proposed transaction at 9:00 a.m. EDT (8:00 a.m. CDT). Investors may participate in the conference call viatelephone by dialing (877) 810-3368 for domestic callers or (914)495-8561 for international callers, in both cases using conferenceID 43905963, and asking for the Halcón call a few minutes prior tothe start time. An accompanying slide presentation and a linkto the live audio webcast will be available on Halcón's website at http://www.halconresources.comon the day of the presentation. About Halcón Resources Halcón Resources Corporation is an independent energy companyengaged in the acquisition, production, exploration and developmentof onshore oil and natural gas properties in the United States.
Forward-Looking StatementsThis release contains forward-looking statements within themeaning of Section 27A of the Securities Act and Section 21E of theSecurities and Exchange Act of 1934 as amended. Statements that arenot strictly historical statements constitute forward-lookingstatements and may often, but not always, be identified by the useof such words such as "expects", "believes", "intends","anticipates", "plans", "estimates", "potential", "possible", or"probable" or statements that certain actions, events or results"may", "will", "should", or "could" be taken, occur or be achieved.The forward-looking statements include statements about futureoperations, estimates of reserve and production volumes and theanticipated timing for closing the proposed transaction.Forward-looking statements are based on current expectations andassumptions and analyses made by us in light of our experience andour perception of historical trends, current conditions andexpected future developments, as well as other factors we believeare appropriate under the circumstances. However, whether actualresults and developments will conform with expectations is subjectto a number of risks and uncertainties, including but not limitedto: the possibility that Halcón may be unable to satisfy theconditions to closing; that the acquisition may involve unexpectedcosts; the risks of the oil and gas industry (for example,operational risks in exploring for, developing and producing crudeoil and natural gas; risks and uncertainties involving geology ofoil and gas deposits; the uncertainty of reserve estimates; theuncertainty of estimates and projections relating to futureproduction, costs and expenses; potential delays or changes inplans with respect to exploration or development projects orcapital expenditures; health, safety and environmental risks andrisks related to weather such as hurricanes and other naturaldisasters); uncertainties as to the availability and cost offinancing; fluctuations in oil and gas prices; inability to timelyintegrate and realize expected value from acquisitions; inabilityof management to execute its plans to meet its goals; shortages ofdrilling equipment, oil field personnel and services;unavailability of gathering systems, pipelines and processingfacilities; and the possibility that government policies may changeor governmental approvals may be delayed or withheld. Halcón's annual report on Form 10-K for the year ended December 31,2011, subsequent quarterly reports on Form 10-Q and current reportson Form 8-K, and other Securities and Exchange Commission filingsdiscuss some of the important risk factors identified that mayaffect the business, results of operations, and financialcondition. Halcón undertakes no obligation to revise or updatepublicly any forward-looking statements for any reason.
CONTACT: Scott M. Zuehlke VP, Investor Relations Halcon Resources (832) 538-0314