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Permalink Reply by Brian on May 23, 2013 at 5:43am

Halcon Resources Provides Utica/Point Pleasant Operational Update

HOUSTON, May 23, 2013 (GLOBE NEWSWIRE) -- Halcón Resources Corporation (NYSE:HK) ("Halcón" or the "Company") today provided an operational update specific to its acreage in Northeast Ohio and Northwest Pennsylvania, the Company's core area in the Utica/Point Pleasant play.

The Phillips 1H (90% WI), located in Mercer County, Pennsylvania, tested at a peak rate of 120 barrels of condensate per day and 2.5 million cubic feet of per day of 1,250 BTU natural gas. Based on composition analysis and assuming full ethane recovery, Halcón estimates that the well would produce an additional 240 barrels of NGLs per day for a total peak production rate of 730 Boe/d.  This well was drilled to a total measured depth of 12,411 feet, had an effective lateral length of 5,360 feet and was completed with 20 frac stages. Production from the Phillips 1H is currently being placed into a sales pipeline, and the Company expects the well to continue to clean up over time.

The Allam 1H (100% WI), located in Venango County, Pennsylvania, is currently shut-in awaiting infrastructure, and tested at a peak rate of 6.6 million cubic feet of per day of 1,210 BTU natural gas and 22 barrels of condensate per day. Based on composition analysis and assuming full ethane recovery, Halcón estimates that the well would produce an additional 728 barrels of NGLs per day for a total peak production rate of 1,652 Boe/d. This well was drilled to a total measured depth of 14,300 feet, had an effective lateral length of 5,580 feet and was completed with 21 frac stages. The Allam 1H was still recovering load water at the end of the flow test and is expected to continue to clean up once it is opened to pipeline sales.   

The Brugler 1H (90% WI), located in Trumbull County, Ohio, started flowing the frac load back on May 13, 2013. Expectations are to tie this well into a sales pipeline in early July 2013. This well was drilled to a total measured depth of 10,959 feet, had an effective lateral length of 3,826 feet and was completed with 16 frac stages.

The Yoder 2H (90% WI), located in Mercer County, Pennsylvania, is currently resting and the Company plans to begin testing this well on May 30, 2013. This well was drilled to a total measured depth of 10,825 feet, had an effective lateral length of 3,810 feet and was completed with 14 frac stages.

The Kibler 1H (100% WI), located in Trumbull County, Ohio, is currently resting. This well was drilled to a total measured depth of 14,257 feet, had an effective lateral length of 6,734 feet and was completed with 26 frac stages.

Halcón continues to delineate its Utica/Point Pleasant acreage position and expects the process to be substantially complete by the fourth quarter of 2013. The Company plans to adhere to a 60 day resting period on all wells throughout the delineation phase. The focus remains on building an inventory of approved/permitted multi-well pads in preparation for a full scale development program.

There are currently three Utica/Point Pleasant wells producing/testing, three wells resting, one well being completed and one well being drilled.

Floyd Wilson, Chairman and Chief Executive Officer, commented, "I am excited with our early stage Utica/Point Pleasant results. Our position in this part of the Utica/Point Pleasant play is highly prospective, in my opinion, and these results further validate our original thesis. We will refine our drilling and completion techniques in an effort to drill longer laterals, lower costs and increase recoveries. Halcón Field Services continues to evaluate infrastructure solutions and will be prepared to act accordingly based on the information we gather throughout our delineation phase."

Permalink Reply by John Stanton III on May 23, 2013 at 6:06am

  WOW  Thanks Brian...Thanks Halcon for investing in Venango County!

Permalink Reply by James E. Waldeck on May 23, 2013 at 10:34am

Very strong wells. The BTU counts suggest a lot of stripper potential. Earlier they said the Phillips well had 1330 BTU gas. In this release they say 1250 btu. Looks like NW PA will be a energy producing region for a long time.

Permalink Reply by Jodie Schmidt on May 23, 2013 at 6:40am

Looks like halcon stocks dipped a good bit since the announcement.
Anyone have insite?

Permalink Reply by John Stanton III on May 23, 2013 at 8:17am

6.6 million per day, wet gas....great well...

Permalink Reply by Tom on May 23, 2013 at 7:41am

Really not too impressive for the cost of these wells.  Won't make money at those rates.

Permalink Reply by Samuel J. Orr on May 23, 2013 at 8:41am

Believe me Tom, this is a good well. If all Halcon's wells were as good as Allam; Halcon would be very happy!  Do you think that Allam is not a very good well? If you think it is not good, then please provide some objective analysis! 

Permalink Reply by Brian on May 23, 2013 at 9:07am

They listed the peak rate. If they had sustained flowing what kind of rate would it have maintained is the real question. They did not flow Allam near as long as the Phillips did they?

Permalink Reply by John Stanton III on May 24, 2013 at 7:55am

Brian,

It could be that Allam has more rock # than Phillips making the flowback time shorter.  

Permalink Reply by John Stanton III on May 23, 2013 at 10:56am

Allam well is wet gas in eastern Venango County, Seneca Recourses well in Forest County to the west of Venango is wet gas..

Permalink Reply by Tom on May 23, 2013 at 11:58am

First, I would classify the Allam well as semi wet gas.  Since there is currently no processing in the area, the ethane will be sold with methane into the regular pipeline.  22 bbls of condensate is nice, but doesn't do much for the economics.

 

Second, 6.6 mmcfd was the peak rate.  Was it for a minute, an hour, a day?  Regardless, it will not hold up at 6.6 mmcfd.  Time will tell what the decline is.

 

Third, Utica wells are much more expensive than Marcellus wells.  There are 2 reasons for this.  Number 1 is just a function of depth.  Number 2 is an extra string of casing that needs to be ran across the Salina (salt section above the Utica).  At $9-$10+ million a pop and these rates, the Allam well will not be economic.

 

Fourth, I am clearly not the only one who wasn't impressed with these wells.  Halcon stock dropped 10% on this news.

 

Don't get wrong, 6.6 mmcfd and a little liquids is a positive start.  There is improvement needed to make this area economic.  It will need to be a combination of getting costs down and honing in on the correct completion recipe.

 

I'm just trying to temper everyone's expectations.  These are not results that are going to bring companies running to Venango County waving $100 bills.

 

Hopefully with some more testing Halcon can get some results to warrant full scale development.

 

 

Permalink Reply by John Stanton III on May 23, 2013 at 1:54pm

I would say that the numbers are very impressive as the flow back has not been completed on the Allam well as of yet...Look at Seneca Resources results in Forest County...It looks like the sweet spot is Venango County. Perhaps, optimistically could be same as Guernsey County, Ohio.. Really strange that someone would come on here "out of nowhere" the day the results were released and tell us not to expect to much....Royalty calculator on 100 acres at 6.6 mmcfd. per day?   As I said before to others on this site, time will tell....

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