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 playand provided a general update. New East Texas Eagle Ford Internally referred to as El Halcón, this new East Texas EagleFord Shale play has been established as the Company's fourth corearea. The play extends across several counties in EastTexas. Halcón is targeting 150,000 net acres in the play andcurrently has in excess of 50,000 net acres leased or undercontract. The Company has seven wells producing, one well being completedand three wells being drilled in this play. The averageinitial and 30 day rates for the producing wells have been 859barrels of oil equivalent per day ("Boe/d", 94% oil) and 694 Boe/d(94% oil), respectively. These seven Eagle Ford wells have anaverage effective lateral length of 5,632 feet and were completedwith an average of 28 frac stages. Expectations are to spud15 to 20 wells in the play in 2013 by operating 1 to 3 rigs whilespending approximately $100 million. Halcón's early stageestimates for reserves per well are 350,000 to 400,000 barrels ofoil equivalent with development costs of $7 million to $8million. Floyd C. Wilson, Chairman and Chief Executive Officer,commented, "This management team knows a thing or two about theEagle Ford Shale, and we intend to utilize our extensive knowledgeof the formation to exploit this new opportunity to createshareholder value." General Update The Company is fully engaged in the drilling phase of itsdevelopment and is currently operating 16 rigs on its assets. Halcón estimates it will add up to three operated drilling rigs toits program by year end 2013. Wilcox Based on 3D seismic data and drilling results, the Company hasdecided to dedicate more resources to its 110,000 net acre Wilcoxposition predominantly located in Southwest Louisiana. Halcónrecently embarked on a multi-well program in this play.
The first well, the Smartt 1, is currently flowing back and wascompleted with 11 perforated intervals via a 3 stage frac in a 900foot thick Wilcox section. This well was drilled to a totalmeasured depth ("TMD") of 11,500 feet. Halcón anticipates asignificant increase in activity in this play during the balance of2013.Bakken/Three Forks The Company is in the process of implementing several drillingand completion modifications across its 130,000 net acre WillistonBasin position that are expected to improve recoveries and lowercosts. Halcón is optimistic that an ongoing focus on thesemodifications will continue to yield positive results. Initial results from the implementation of several drilling andcompletion modifications are encouraging. In Williams County,North Dakota, the initial production rate on the most recentlydrilled and completed Middle Bakken well in the Marmon area was1,142 Boe/d (85% oil), which is 37% higher than the average initialrate for all previously drilled Company-owned Middle Bakken wellsin the area. Halcón believes this increase is largely due toa modified completion technique. In addition, the Companybelieves modified completion techniques that included an increasednumber of stages, increased proppant volumes and a reduced gelcomponent, resulted in the two most recently drilled and completedThree Forks wells in the McGregory Buttes area on the Fort Bertholdreservation having an average initial production rate of 1,819Boe/d (95% oil), which represents a 20% improvement to the averageinitial rate for all previously drilled Three Forks wells owned byHalcón in the McGregory Buttes area. Continued flaring of approximately 6 million cubic feet per dayof natural gas, inclement winter weather and the implementation ofbatch drilling negatively impacted first quarter 2013 production byapproximately 1,500 Boe/d. Woodbine As a result of the unveiling of the new East Texas Eagle FordShale play as a separate and distinct area, the Company currentlyhas approximately 220,000 net acres prospective for the Woodbine inLeon, Madison, Grimes and Polk Counties. Halcón expects tospud 60 to 65 gross operated wells in the Woodbine in 2013, whilespending approximately $390 million. The Company plans tokeep three to five operated rigs active in the play throughout2013.
Halcón believes it has defined the limits of Woodbine productionat Halliday Field in Leon County and, based on internally developedon-going technical analysis, is confident that this area of theplay has been de-risked. In an ongoing effort to increaseoperating efficiencies and lower well costs, full scale paddrilling is now being utilized to develop the Halliday Field. The combination of full scale pad drilling and underperformingwells drilled to define the edge of the field negatively impactedproduction by approximately 1,000 Boe/d in the first quarter of2013.The Company is currently evaluating other horizons within theplay, and preliminary work suggests that a vertical drillingprogram targeting multiple zones may be prospective in Leon andMadison Counties. In addition, the results of a 330 squaremile 3D seismic survey that spans across parts of Madison, Grimesand Walker Counties should be in-house and processed by the end of2013. This 3D seismic survey is expected to allow Halcón toplan the effective development of a horizontal drilling program inthis more exploratory area of the play. Halcón Field Services ("HFS") continues to implementinfrastructure solutions throughout the Woodbine play. Anatural gas compression and processing plant operated by HFS hasthroughput capacity of 20 million cubic feet per day and isexpected to be put into service this week in Madison County,Texas. Once the plant is placed into service, approximately 2million cubic feet per day of natural gas production (333 Boe/d),most of which is currently being flared, will be processed andsold. Utica/Point Pleasant Interest in the Utica/Point Pleasant play seems to be peaking ata time when well data is becoming more available and activitycontinues to ramp. However, the Company believes the industryis still in the early stages of what could develop into one of themost exciting unconventional resources plays in the lower 48.
Halcón is currently conducting its first production test on thePhilips 1H well in Mercer County, Pennsylvania and expects toperform its second production test on the Allam 1H well in VenangoCounty, Pennsylvania in early May. Expectations are to testsix wells by the end of the second quarter of 2013. TheCompany currently has one well flowing back, three wells resting,two wells being completed or waiting on completion and two wellsbeing drilled on its 140,000 net acre position in thisplay.Drilling results from Halcón's 10 well delineation programshould be available in the third quarter of 2013. Once thedata becomes available, the Company anticipates it will be able tomake a decision on how to proceed with its multi-modalinfrastructure build-out in the play and should also be in aposition to determine when and where to increase its operated rigcount. Tuscaloosa Marine Shale ("TMS") Halcón recently completed its first horizontal well in the TMS,the Broadway H1, in Rapides Parish, Louisiana. This well wasdrilled to a TMD of 19,442 feet with 5,192 feet of effectivelateral and completed with a 22 stage frac; however, the wellsuffered a casing failure while drilling out the plugs. TheCompany is currently evaluating an attempt to re-enter the lowerportion of the casing string. Halcón is encouraged enough bythe geologic characteristics of the formation and excellent showsencountered in the Broadway H1 to justify drilling an additionalwell near the Broadway H1 in 2013. Portfolio Management The Company initiated its portfolio management process in thefourth quarter of 2012 with the divestment of approximately 500Boe/d of production in South Louisiana. The divestment of allassets not considered core is part of Halcón's strategy to build anoil company focused on three to five core resource plays.
As previously disclosed, the marketing process to divest 24,000net acres in Fayette and Gonzales Counties, Texas is ongoing. Five wells were recently completed and these assets are currentlyproducing approximately 2,000 Boe/d net to the Company.Halcón intends to divest the remainder of its conventionalassets throughout the balance of 2013 and into 2014. Theconventional properties currently targeted for divestiture areproducing approximately 4,500 Boe/d. Forward-Looking Statements This release may contain forward-lookingstatements within the meaning of Section 27A of the Securities Actof 1933, as amended, and Section 21E of the Securities Exchange Actof 1934, as amended. Statements that are not strictlyhistorical statements constitute forward-looking statementsand 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 certainactions, events or results "may", "will", "should", or "could" betaken, occur or be achieved. Additionally, initial productionrates, average 30 day production rates and improvements mentionedherein are not necessarily indicative of future production rates orperformance. Forward-looking statements are basedon current beliefs and expectations and involvecertain assumptions or estimates that involve variousrisks and uncertainties that could cause actual results todiffer materially from those reflected in the statements. Theserisks include, but are not limited to, those set forth in theCompany's Annual Report on Form 10-K for the fiscal year endedDecember 31, 2012 and other filings submitted by the Companyto the U.S. Securities and Exchange Commission("SEC"), copies of which may be obtained from the SEC'swebsite at www.sec.gov or through theCompany's website at www.halconresources.com. Readersshould not place undue reliance on any such forward-lookingstatements, which are made only as of the date hereof. TheCompany has no duty, and assumes no obligation, to updateforward-looking statements as a result of newinformation, future events or changes in the Company'sexpectations. 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.
CONTACT: Scott M. Zuehlke VP, Investor Relations Halcon Resources (832) 538-0314