HOUSTON, TEXAS, April 15, 2013 (GLOBE NEWSWIRE) -- Halcón Resources Corporation (NYSE: HK) ("Halcón" or the "Company") today unveiled a new East Texas Eagle Ford Shale play and provided a general update. New East Texas Eagle Ford Internally referred to as El Halcón, this new East Texas Eagle Ford Shale play has been established as the Company's fourth core area. The play extends across several counties in East Texas. Halcón is targeting 150,000 net acres in the play and currently has in excess of 50,000 net acres leased or under contract. The Company has seven wells producing, one well being completed and three wells being drilled in this play. The average initial and 30 day rates for the producing wells have been 859 barrels of oil equivalent per day ("Boe/d", 94% oil) and 694 Boe/d (94% oil), respectively. These seven Eagle Ford wells have an average effective lateral length of 5,632 feet and were completed with an average of 28 frac stages. Expectations are to spud 15 to 20 wells in the play in 2013 by operating 1 to 3 rigs while spending approximately $100 million. Halcón's early stage estimates for reserves per well are 350,000 to 400,000 barrels of oil equivalent with development costs of $7 million to $8 million. Floyd C. Wilson, Chairman and Chief Executive Officer, commented, "This management team knows a thing or two about the Eagle Ford Shale, and we intend to utilize our extensive knowledge of the formation to exploit this new opportunity to create shareholder value." General Update The Company is fully engaged in the drilling phase of its development and is currently operating 16 rigs on its assets. Halcón estimates it will add up to three operated drilling rigs to its program by year end 2013. Wilcox Based on 3D seismic data and drilling results, the Company has decided to dedicate more resources to its 110,000 net acre Wilcox position predominantly located in Southwest Louisiana. Halcón recently embarked on a multi-well program in this play.
The first well, the Smartt 1, is currently flowing back and was completed with 11 perforated intervals via a 3 stage frac in a 900 foot thick Wilcox section. This well was drilled to a total measured depth ("TMD") of 11,500 feet. Halcón anticipates a significant increase in activity in this play during the balance of 2013.Bakken/Three Forks The Company is in the process of implementing several drilling and completion modifications across its 130,000 net acre Williston Basin position that are expected to improve recoveries and lower costs. Halcón is optimistic that an ongoing focus on these modifications will continue to yield positive results. Initial results from the implementation of several drilling and completion modifications are encouraging. In Williams County, North Dakota, the initial production rate on the most recently drilled and completed Middle Bakken well in the Marmon area was 1,142 Boe/d (85% oil), which is 37% higher than the average initial rate for all previously drilled Company-owned Middle Bakken wells in the area. Halcón believes this increase is largely due to a modified completion technique. In addition, the Company believes modified completion techniques that included an increased number of stages, increased proppant volumes and a reduced gel component, resulted in the two most recently drilled and completed Three Forks wells in the McGregory Buttes area on the Fort Berthold reservation having an average initial production rate of 1,819 Boe/d (95% oil), which represents a 20% improvement to the average initial rate for all previously drilled Three Forks wells owned by Halcón in the McGregory Buttes area. Continued flaring of approximately 6 million cubic feet per day of natural gas, inclement winter weather and the implementation of batch drilling negatively impacted first quarter 2013 production by approximately 1,500 Boe/d. Woodbine As a result of the unveiling of the new East Texas Eagle Ford Shale play as a separate and distinct area, the Company currently has approximately 220,000 net acres prospective for the Woodbine in Leon, Madison, Grimes and Polk Counties. Halcón expects to spud 60 to 65 gross operated wells in the Woodbine in 2013, while spending approximately $390 million. The Company plans to keep three to five operated rigs active in the play throughout 2013.
Halcón believes it has defined the limits of Woodbine production at Halliday Field in Leon County and, based on internally developed on-going technical analysis, is confident that this area of the play has been de-risked. In an ongoing effort to increase operating efficiencies and lower well costs, full scale pad drilling is now being utilized to develop the Halliday Field. The combination of full scale pad drilling and underperforming wells drilled to define the edge of the field negatively impacted production by approximately 1,000 Boe/d in the first quarter of 2013.The Company is currently evaluating other horizons within the play, and preliminary work suggests that a vertical drilling program targeting multiple zones may be prospective in Leon and Madison Counties. In addition, the results of a 330 square mile 3D seismic survey that spans across parts of Madison, Grimes and Walker Counties should be in-house and processed by the end of 2013. This 3D seismic survey is expected to allow Halcón to plan the effective development of a horizontal drilling program in this more exploratory area of the play. Halcón Field Services ("HFS") continues to implement infrastructure solutions throughout the Woodbine play. A natural gas compression and processing plant operated by HFS has throughput capacity of 20 million cubic feet per day and is expected to be put into service this week in Madison County, Texas. Once the plant is placed into service, approximately 2 million cubic feet per day of natural gas production (333 Boe/d), most of which is currently being flared, will be processed and sold. Utica/Point Pleasant Interest in the Utica/Point Pleasant play seems to be peaking at a time when well data is becoming more available and activity continues to ramp. However, the Company believes the industry is still in the early stages of what could develop into one of the most exciting unconventional resources plays in the lower 48.
Halcón is currently conducting its first production test on the Philips 1H well in Mercer County, Pennsylvania and expects to perform its second production test on the Allam 1H well in Venango County, Pennsylvania in early May. Expectations are to test six wells by the end of the second quarter of 2013. The Company currently has one well flowing back, three wells resting, two wells being completed or waiting on completion and two wells being drilled on its 140,000 net acre position in this play.Drilling results from Halcón's 10 well delineation program should be available in the third quarter of 2013. Once the data becomes available, the Company anticipates it will be able to make a decision on how to proceed with its multi-modal infrastructure build-out in the play and should also be in a position to determine when and where to increase its operated rig count. Tuscaloosa Marine Shale ("TMS") Halcón recently completed its first horizontal well in the TMS, the Broadway H1, in Rapides Parish, Louisiana. This well was drilled to a TMD of 19,442 feet with 5,192 feet of effective lateral and completed with a 22 stage frac; however, the well suffered a casing failure while drilling out the plugs. The Company is currently evaluating an attempt to re-enter the lower portion of the casing string. Halcón is encouraged enough by the geologic characteristics of the formation and excellent shows encountered in the Broadway H1 to justify drilling an additional well near the Broadway H1 in 2013. Portfolio Management The Company initiated its portfolio management process in the fourth quarter of 2012 with the divestment of approximately 500 Boe/d of production in South Louisiana. The divestment of all assets not considered core is part of Halcón's strategy to build an oil company focused on three to five core resource plays.
As previously disclosed, the marketing process to divest 24,000 net acres in Fayette and Gonzales Counties, Texas is ongoing. Five wells were recently completed and these assets are currently producing approximately 2,000 Boe/d net to the Company.Halcón intends to divest the remainder of its conventional assets throughout the balance of 2013 and into 2014. The conventional properties currently targeted for divestiture are producing approximately 4,500 Boe/d. Forward-Looking Statements This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that are not strictly historical statements constitute forward-looking statements and may often, but not always, be identified by the use of 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. Additionally, initial production rates, average 30 day production rates and improvements mentioned herein are not necessarily indicative of future production rates or performance. Forward-looking statements are based on current beliefs and expectations and involve certain assumptions or estimates that involve various risks and uncertainties that could cause actual results to differ materially from those reflected in the statements. These risks include, but are not limited to, those set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and other filings submitted by the Company to the U.S. Securities and Exchange Commission ("SEC"), copies of which may be obtained from the SEC's website at www.sec.gov or through the Company's website at www.halconresources.com . Readers should not place undue reliance on any such forward-looking statements, which are made only as of the date hereof. The Company has no duty, and assumes no obligation, to update forward-looking statements as a result of new information, future events or changes in the Company's expectations. About Halcón Resources Halcón Resources Corporation is an independent energy company engaged in the acquisition, production, exploration and development of onshore oil and natural gas properties in the United States.
CONTACT: Scott M. Zuehlke VP, Investor Relations Halcon Resources (832) 538-0314