THE BIG QUESTION...HOW MUCH / ACRE DID HALCON RECEIVE FOR MERCER COUNTY LEASES ASSIGNED TO SHELL?

It appears that most of HK leasehold acreage in Mercer County that was recently assigned to Shell was from CX Energy's Mount Jackson 4 group for which HK (Halcon) paid $3850 / acre. The question is how much of a "haircut" did Halcon take on the transfer of these leases to Shell? I called Investor Relations at Halcon and got only a voicemail. Left a message and my e-mail address but doubt I will get a response. I firmly believe that under SEC rules the HK to Shell assignments are in the aggregate enough to constitute a material event, the details of which (price per acre and aggregate acres transferred) should be disclosed by Halcon to current and potential investors. If anyone reading this has access to the information, please post it to this thread.

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Permalink Reply by Samuel J. Orr on October 18, 2013 at 4:10am

I neglected to add that perhaps 20,000 acres + or - is a rough guess as to the amount of Mercer County leasehold acreage assigned by HK to SHELL (Swepi)! A further question is whether this transfer is a small  part of the non-core acreage that Halcon said it was going to dispose of for $302 million dollars?? That announcement was made several months ago by HK but no details were given about where said acreage was located or how much HK was to receive!?

Permalink Reply by Samuel J. Orr on October 18, 2013 at 8:14am

I just received a phone call from Investor Relations at Halcon. I was informed that no net acres in the Utica were disposed of by HK but that HK acreage in the Utica was traded to SHELL in exchange for other acreage in the Utica that SHELL transferred to HK as part of a swap. I was further informed that the acreage that HK acquired from SHELL in the transaction was also in Pennsylvania. I should perhaps have pressed her for where the acreage is located but I did not do so. I hope this info is accurate and helpful! In summary HK, if it is to be believed, has just as many acres in the Utica as it had before the recent assignments of various Mercer County leaseholds to Shell!

Permalink Reply by Jim Litwinowicz on October 18, 2013 at 11:21am

Sounds like the basic horse trading companies do to build drilling units...."you take this township, I'll give you that one"   Good news as this should accelerate drilling operations. Would like to know specifically where each is working but we will have to wait to hear from landowners that were swapped for that info. And if these are smaller parcels that were needed to fill in units, the acreage may be smaller.

Good info, thanks Sam

Permalink Reply by victor snodgrass on October 18, 2013 at 2:18pm

There were lots of leases in Salem and Perry twp. that were transferred from Halcon to Shell that I know of. 

Permalink Reply by RoughRice on October 18, 2013 at 2:18pm

Excellent work Sam!

Permalink Reply by Samuel J. Orr on October 19, 2013 at 3:22am

I believe there are people out there ( attorneys and title searchers) who have a code to access Mercer County Recorder's Office. Those who have access can print the list of assigned leases showing names of landowners and township but not the size of the parcels. I believe the total number of pages might be 40-60 and I believe the cost is $0.25 / page. Anyone with GIS capabilities could clearly take the list of assigned leases and map out who got what and where. I suspect, but do not know, that a citizen could show up at the recorders office and get the list of landowners and the townships of parcels assigned from HK to SHELL (Swepi) and a similar list for those parcels assigned from SHELL to HK.

Permalink Reply by Samuel J. Orr on October 19, 2013 at 8:00am

Superb News !!! When first learning of HK lease assignments to Shell, I was worried that HK had cooled on their Mercer County Utica acreage and was selling much of it at possibly "fire sale" prices similar to what Chesapeake did with much of its Utica Acreage. I was both overjoyed and relieved to learn that the transactions between HK (Halcon) and Shell only involved trading some acreage within the Utica. A lady from HK's investor relations department assured me that HK had not disposed of any net acres in the Utica, but that some HK acreage was traded for some Shell acreage and vice versa so that each company could have acreage within the Utica that could more easily been assembled into drilling units. Enough said!

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