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Halcon Resources devising new strategic, financial plans

by Erika Green

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Halcon Resources reported a first quarter 2019 net loss of $336.6 million, or $2.12 per diluted share, as it develops new strategic and financial plans, Kallanish Energy reports.

That compares to a Q1 2018 net loss of $2.6 million, or 2 cents a share. The Denver-based company said it generated total revenue of $51.9 million in the most recent quarter.

The independent producer said adjusted Ebitda was $21.9 million. The adjusted net loss of $1.7 million, or 1 cent per share.

In late March, Halcon engage Tudor Pickering and Holt and Perella Weinberg Partners to assist the company in evaluating strategic and financial alternatives — including a possible sale, merger, or asset sales.

The company said it doesn’t plan to make any further comment on where the company is heading until a specific transaction is approved by its board.

The company said net production in Q1 2019 averaged 17,089 barrels of oil-equivalent per day (Boe/d). That production was 60% oil, 19% natural gas liquids and 21% natural gas.

Unexpected downtime at third-party sour gas takeaway outlets in Monument Draw in the Delaware Basin of West Texas/southeast New Mexico led to lower gas volumes than expected, Halcon said.

The company said its new Valkyrie sour gas processing plant became operational in early April and those third-party issues no longer exist. Halcon said it’s currently producing 20,400 Boe/d (57% oil, 19% NGLs and 24% gas).

It is operating two rigs in Monument Draw and plans to do so through the end of 2019. It recently put online four new Wolfcamp wells in Monument Draw plus a previously shut-in well. It plans to begin service on eight to 10 gross operated wells in Monument Draw in 2019.

Halcon has asked the Railroad Commission of Texas for approval to develop an acid gas injection well. The commission will likely rule in the third quarter of 2019. It would take up to 10 months to build that well, which would reduce gas treating costs and increase treatment capacity.

The company spent $101 million in Q1 2019 on capital expenditures.

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