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42nd Annual Howard Weil Energy Conference – Halcon Resources Corp

Halcon Resources Corp · Mar 25, 2014 · 47 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 1
    42nd Annual Howard Weil Energy Conference March 25, 2014
  2. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 2
    Company Profile Significant Resource Opportunity Key Statistics (1) (2) Total Proved Reserves: 136 MMBoe Bakken/Three Forks 142,000 Net Acres % Proved Developed: 40% 90.5 MMBoe Proved Reserves (1) % Oil: 84% % Operated: 92%…
  3. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 3
    2013 Pro Forma Reserves Reconciliation Proved PF Proved Reserves Reconciliation (MMBoe) Reserves Reserves As of 12.31.12 108.8 82.8 Extensions, discoveries and additions 69.7 69.7 Purchases 3.2 - Sales (23.3) - Production…
  4. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 4
    On Track to Deliver What we have done has lead to this Built a formidable oil company in two years by Three scalable, crude oil core resource acquiring assets, leasing property and drilling in plays each with a deep drilling…
  5. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 5
    Drilling in Most Economic Areas in 2014 D&C Capex by Area ( in millions) 950 35% Lower vs. 2013 Other TMS 1% 10% El Halcn Williston Basin 40% 100% of Total D&C Allocated to SWEET SPOT Acreage 90% of Bakken 49% D&C…
  6. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 6
    ...Leading to Strong Production Growth Growth Assets in Place and De-Risked Pro Forma Production Growth (MBoe)/d) (1) 40.0 Actual PF Production 24.9 +61% Guidance Midpoint 15.0 +65% PF 2012 PF 2013 2014 Guidance 8…
  7. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 7
    Tuscaloosa Marine Shale (TMS) New Core Play Established - 307,000 Net Acre Position Scalable Shale Play with Significant Upside Potential Black oil reservoir in Mississippi and Louisiana (94% oil, 42 gravity) Proximity to Gulf Coast…
  8. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 8
    Activity Map ECA Anderson 17H-1 GDP GDP ECA IP: 897 Boe/d Crosby 12H-1 5 miles IP: 1,087 Boe/d CMR/Foster Creek 20- Anderson 18H-1 HK 7H-1 ECA IP: 1,028 Boe/d Shuckrow 10H-1 IP: 546 Boe/d Anderson 17H-2 WI: 52% IP: 891 Boe/d…
  9. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 9
    West to East TMS Cross Section Amoco Prod. Co. Wagner & Brown Bass Enterprises Prod. Co. Goodrich Texaco Artonish Pltn 2-8 Ventress LT Rex Timber 25-7 Crosby 12-1H Griffin W K 8 Wilkinson Co., Mississippi Wilkinson Co., Mississippi…
  10. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 10
    TOC and Porosity Similar Properties Across Trend 90 MILES CORE TOTAL % POROSITY CORE TOC BY VOLUME RAPIDES PARISH WILKINSON CO. AMITE CO. E. LOUISIANA MISSISSIPPI MISSISSIPPI LOUISIANA 12
  11. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 11
    Well Performance Improving Rapidly Historical Industry Practice Current Industry Practice Halcn Planned Practice Shorter lateral: 2,000 5,000 Longer lateral: 6,000+ Longer lateral: 7,200+ Lateral placement varied, trial and error…
  12. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 12
    HK Type Curve Methodology HK has analyzed all Effective Normalized to Cluster As is EUR/Ft(1) 7,200 horizontal TMS wells drilled Well Lateral Qi Di Qf Df Life Spacing Proppant Length (Yrs) (Lbs/Ft) to date (Ft) (Ft) Bo/Ft…
  13. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 13
    Dedicated Experienced Asset Team Projected Well Cost (MMs) Initial Delineation Phase First wells in the program Spud to rig release = 48 days Transition to Multi-Well Pad Development Multi-rig program, majority of wells still…
  14. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 14
    Learning Curve Utilizing rig and crew from successful El Halcn area Focus on reducing chances of hole instability problems Drill the intermediate section (vertical) with oil based mud Drilling Set intermediate casing +/- 100 into the…
  15. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 15
    TMS Conclusions The Oil is There 1 TMS represents one of the most attractive emerging crude oil resource plays in North America 2 Large, concentrated, highly operated position with favorable lease terms provide for efficient…
  16. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 16
    Geologic Setting HK Lease Area Play Outline Key El Halcn Technical Facts - 300 Organic Rich Shale Target - 10,500 Avg. Depth - 7-10% GRI Measured Porosity - 2-4% TOC by Weight - Pressure gradient: 0.55-0.65 psi/ft 18
  17. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 17
    El Halcn Eagle Ford Shale AGAIN Key Highlights 100,000 net acres leased target achieved Acreage in SWEET SPOT of play 1,000+ future locations to drill assuming 800 spacing 2014 Outlook Expect to spud 40-50 gross operated wells w/…
  18. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 18
    El Halcn (East TX Eagle Ford Shale) Isopach HK Acreage Located in SWEET SPOT of Play 20
  19. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 19
    Rapid Production Growth Expected to Continue El Halcn 2013 Net Daily Production Growth 7,138 4,989 1,649 744 1Q13 2Q13 3Q13 4Q13 21
  20. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 20
    Wells Outperforming Type Curve 22 Note: Archetype wells spaced a minimum of 750 feet apart and completed with 1,200 lbs, or more, of proppant per lateral foot.
  21. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 21
    Continuing to Optimize Completion & Well Design Recent production results support 1,500 lbs/ft to be optimum sand loading Completion Testing increased stage spacing while holding sand loading constant Design Also evaluating increasing…
  22. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 22
    While Driving Drilling Performance Improvements El Halcn 2013 Results (45 wells) 2013 Average: Field Costs and Ft/Day Avg. Drilling Days : 15.97 days spud to TD Avg. Ft/ Day Avg. Feet/Day: 1,225 4.50 Avg. Drilling Cost 1,500 Avg.…
  23. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 23
    Bakken / Three Forks Inventory Growing and Type Curve Estimates Revised Higher Key Highlights 2014 Outlook Expect to spud 40-50 gross operated wells (95% in FBIR) w/ four rigs Expect to participate in 200-225 gross non-op wells…
  24. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 24
    Successful Three Forks Downspacing Tests Capitol Pad Development Plan McKenzie County, ND HK 71% WI Producing MB Well Producing TF Well Producing TF2 Well FB 11B-14-5H (MB) Potential Infill Locations 24HR IP: 3,182 BOED FB…
  25. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 25
    Downspacing Success = Increased Drilling Inventory Potential Gross Operated Drilling Inventory Increase to Current Inventory +92% +27% +24% +144% 80 805 30 25 305 25 90 30 490 +109% 225 330 80 165 +230% 235 50 150…
  26. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 26
    Field Optimization = Improved Economics Single Well Drill vs. 4 Well Batch Drill on Pad Site Average Spud to Total Depth Drilled Days FBIR (Bakken) Williams Co. (Bakken) (293) (390) 100% 100% (143) (78) (30) (400) 39.7 75% 22.0…
  27. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 27
    FBIR Slickwater Wells Outperforming = Upside 200,000 175,000 150,000 SLICKWATER WELLS Cumulative Oil Production (Bbl) 125,000 100,000 75,000 50,000 25,000 0 - 10 20 30 40 50 60 70 80 90 100 110 120 130…
  28. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 28
    Financial Highlights 1 Fund growth and capital expenditures prudently Maintain announced budget All capital directed to highest return assets 2 Focus on liquidity Expect borrowing base to continue to increase as production and…
  29. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 29
    No Near-term Debt Maturities Debt Maturity Schedule Senior 1,400 Notes Senior 8.875% Notes 1,200 Aggregate Principal Amount 9.75% 1,000 (MM) 800 600 Senior Senior Notes 400 Convertible Notes (1) 9.25% 200…
  30. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 30
    Active Hedging Program to Protect Cash Flow Designed to support capital program and protect cash flow Target 80% of expected production over the next 18-24 months Average Floor Price: 89 in 2014; 87 in 2015 Hedged Oil Production…
  31. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 31
    Ample Liquidity to Fund Capital Program Pro Forma Capitalization ( in Millions) HK Borrowing Non-Core East Texas Pro Forma HK (1) 12.31.2013 Base Redetermination Asset Divestiture 12.31.2013 Ca s h a nd Ca s h Equi va l ents 2.8…
  32. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 32
    Appendix
  33. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 33
    2014 Operating and Financial Guidance Summary 1Q14E 2014E Production (Boe/d) Total Low 34,000 38,000 High 36,000 42,000 % Oil 85% % NGLs 5% % Gas 10% Operating Costs and Expenses (/Boe) Lease Operating & Workover Low 8.00 High…
  34. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 34
    2013 Pro Forma Production Reconciliation 1Q13 2Q13 3Q13 4Q13 2013 Actual (Boe/d) 26,022 29,165 37,707 40,217 33,329 Acquisition Impact (Boe/d) (1) 1,147 965 169 - 566 Closed 5.7.13 Gasco El Halcn 307 161 - - 116 Closed 7.15.13…
  35. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 35
    2013 Proved Reserves Reconciliation Oil Gas NGL Total Proved Reserves Reconciliation (MBbls) (MMcf) (MBbls) MBoe As of 12.31.12 87,378 96,145 5,383 108,785 Extensions, discoveries and additions 61,160 25,364 4,344 69,731 Purchases…
  36. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 36
    TMS 605 Mboe Type Curve Investment Sensitivity to Completed Well Cost (1) Type Curve Details IRR PV-10 Oil (MBbl) 566 Gross EUR 80% 7.0 60% 6.0 Gas (MMcf) 229 PV-10 ( MM) IRR % 40% 5.0 Total (MBoe) 605 Oil (% of…
  37. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 37
    TMS 792 MBoe Type Curve Investment Sensitivity to Completed Well Cost (1) Type Curve Details IRR PV-10 Oil (MBbl) 742 Gross EUR 120% 11.0 100% 10.0 Gas (MMcf) 300 PV-10 ( MM) IRR % Total (MBoe) 792 80% 9.0 Oil…
  38. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 38
    TMS Lithology TMS Clay Distribution Total clay content is high, but % of swelling clays (smectite) is low Total clay and smectite in TMS is very similar to East % Volume TX Eagle Ford Shale (El Halcn) 40
  39. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 39
    New El Halcn 452 MBoe Type Curve EUR Increases by 22% Investment Sensitivity to Completed Well Cost (1) Type Curve Details 60% 6.0 IRR PV-10 Oil (MBbl) 420 Gross EUR 50% 5.0 40% 4.0 Gas (MMcf) 189 PV-10 ( MM) IRR…
  40. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 40
    New FBIR 801 MBoe Type Curve MB/TFS EUR Increases by 39% Investment Sensitivity to Completed Well Cost (1) Type Curve Details 120% 12.0 IRR PV-10 Oil (MBbl) 687 Gross EUR 100% 10.0 80% 8.0 Gas (MMcf) 687 PV-10 ( MM)…
  41. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 41
    New Williams County 477 MBoe Type Curve EUR Increases by 43% Investment Sensitivity to Completed Well Cost (1) Type Curve Details 50% 5.0 IRR PV-10 Oil (MBbl) 415 Gross EUR 40% 4.0 Gas (MMcf) 373 PV-10 ( MM) 30% 3.0…
  42. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 42
    Derivative Detail as of 3.21.14 Oil Hedge Summary FY 2014 FY 2015 FY 2016 Volume Ceiling / Floor Volume Ceiling / Floor Volume Ceiling / Floor (Bbls) Swap Price (1) Purchased (1) Floor Sold (1) (Bbls) Swap Price (1) Purchased (1)…
  43. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 43
    Oil Hedging Details as of 3.21.14 The following table details the expected impact to pretax income (in millions, except prices) from the settlement of our derivative contracts at various NYMEX oil prices Oil Prices (/Bbl) Period…
  44. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 44
    Oil & Gas Marketing Avg. NYMEX 2014 Marketing Highlights 4Q13 HK Oil Differentials by Area (1) Oil Price 97.57 Williston Basin 98% 99% Oil Marketing 98% 95% 89% Expect 85-90% of production to be connected to 85% pipeline…
  45. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 45
    El Halcn Cross Section 47
  46. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 46
    Halcn Ownership (in thousands) Basic Dilutive Securities Fully Diluted Net Diluted (6) (1) (2) (3) (4) (5) Owner Shares Percent Conv. Debt Conv. Preferred Warrants RSAs PSUs Options Shares Percent Shares Percent (7) HALRES LLC - -…
  47. 42nd Annual Howard Weil Energy Conference – Halcon Resources Corp – slide 47
    Contact: Scott M. Zuehlke, VP Investor Relations 1000 Louisiana St., Suite 6700 Houston, TX 77002 832-538-0314 szuehlkehalconresources.com www.halconresources.com

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