HOUSTON, Dec. 20, 2016 (GLOBE NEWSWIRE) — Halcón Resources Corporation (NYSE:HK) (“Halcón” or the “Company”) today announced its plans to recommence drilling in its El Halcón area of the East Texas Eagle Ford in early 2017. The Company also provided an update on fourth quarter 2016 production in addition to preliminary production and capex guidance for 2017.
East Texas Eagle Ford Update
Due to low commodity prices, the Company has not operated a rig on its El Halcón acreage in nearly a year. Halcón’s decision to resume drilling in this area is driven by the recent improvement in oil prices, in addition to the Company’s technical review of recent offset operator activity in the play. Based on a review of 18 recent offset operator wells, the Company believes it can significantly improve EURs and well economics in the El Halcón area by applying an enhanced completion utilizing slickwater fracs and high intensity proppant loading to improve near wellbore fracturing of the target zone.
Halcón currently has approximately 80,000 net acres prospective for the Eagle Ford formation in East Texas, approximately 82% of which is held by production. The Company has approximately 500 remaining gross operated locations with an average working interest of ~80% based on 1,000 foot spacing. Halcón believes the enhanced completion technique may reduce well spacing to 500 feet and therefore increase the number of remaining locations to more than 1,000.
The table and chart below illustrate the Company’s preliminary type curve expectations for wells completed with the enhanced completion technique.
|Projected El Halcón Type Curve Data Based on Enhanced Completions (Preliminary)|
|Lateral||Fluid||Proppant||D&C||Estimated EUR||IRR at||PV-10 at|
|Length (Ft)||Stages||Type||Amount||Cost ($MM)(1)||(Mboe)(2)||Strip(3)||Strip(2)(3) ($MM)|
|7,500||50||Slickwater||3000 – 3500 lbs/ft||$||8.0||706||39||%||$||4.8|
|(1) Includes all costs associated with drilling and completing a well (i.e. location, title, facilities, artificial lift, etc.).|
|(2) See “Forward Looking Statements” for important disclosures about EURs and PV-10.|
|(3) Based on NYMEX strip oil and gas prices as of 12/2/16 (oil at $54.29/bbl in 2017, $54.82/bbl in 2018 and $54.89/bbl in 2019).|