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Company Presentation – Halcon Resources Corp

Halcon Resources Corp · Jun 30, 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. Company Presentation – Halcon Resources Corp – slide 1
    Company Presentation June 2014
  2. Company Presentation – Halcon Resources Corp – slide 2
    Company Profile Significant Resource Opportunity Total Proved Reserves: (1) 119.6 MMBoe % Proved Developed: 41% Bakken/Three Forks 134,000 Net Acres % Oil: 84% 90.4 MMBoe Proved Reserves (1) % Operated: 92% Total Proved PV10:…
  3. Company Presentation – Halcon Resources Corp – slide 3
    Drilling in Most Economic Areas in 2014 D&C Capex by Area ( in millions) 950 35% Lower vs. 2013 TMS El Halcn 10% Williston Basin 40% 100% Allocated to SWEET SPOT Acreage 100% of Williston 50% D&C Allocated to FBIR…
  4. Company Presentation – Halcon Resources Corp – slide 4
    ...Leading to Strong Production Growth Growth Assets in Place and De-Risked Pro Forma Production Growth (MBoe)/d) (1) 40.0 Actual PF Production 24.7 +62% Guidance Midpoint 15.0 +65% PF 2012 PF 2013 2014 Guidance 6…
  5. Company Presentation – Halcon Resources Corp – slide 5
    TMS Geologic Setting El Halcn Closest Comp to TMS HK Lease Area Play Outline - Stratigraphic equivalent to Eagle Ford Shale play - 140-190 organic rich shale target - 11,500-14,500 depth range - 4.5-5.5% total porosity -…
  6. Company Presentation – Halcon Resources Corp – slide 6
    Tuscaloosa Marine Shale (TMS) New Core Play Established - 314,000 Net Acre Position Emerging Shale Play with Significant Upside Potential Black oil reservoir in Mississippi and Louisiana (94% oil, 42 gravity) Proximity to Gulf Coast…
  7. Company Presentation – Halcon Resources Corp – slide 7
    TMS Activity Map GDP GDP GDP Crosby 12H-1 ECA CMR/Foster Creek 20-7H-1 CMR 8-5H-1 Anderson 18H-1 IP: 1,300 Boe/d ECA IP: 527 Boe/d IP: 950 Boe/d IP: 1,178 Boe/d HK Anderson 17H-2 Fassman 9H-1 GDP Bates 25-24H IP : 1,540 Boe/d…
  8. Company Presentation – Halcon Resources Corp – slide 8
    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 El % Volume Halcn 10
  9. Company Presentation – 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. Company Presentation – Halcon Resources Corp – slide 10
    -100 400 0.2 20 0.6 0 160 40 T2N R1W S12 ft) Depth(ft) 0 -20 GOODRICH CROSBY 12-1H TMS Log and Core 1 GDP 12,210 Crosby Minerals 12-1H Wilkinson Co., Mississippi AT90 0 0.2 20 80 12000 C2 AF10 PHIS_SS DTR 0 40 0.2…
  11. Company Presentation – Halcon Resources Corp – slide 11
    TMS 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 13
  12. Company Presentation – Halcon Resources Corp – slide 12
    TMS 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…
  13. Company Presentation – Halcon Resources Corp – slide 13
    Dedicated Experienced Asset Team Projected Well Cost 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 drilled from…
  14. Company Presentation – Halcon Resources Corp – slide 14
    TMS 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…
  15. Company Presentation – 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. Company Presentation – Halcon Resources Corp – slide 16
    El Halcn Eagle Ford Shale - 100-300 organic rich shale target - 6,500-10,500 depth range - 7-10% GRI measured porosity - 2-4% TOC by weight - Pressure gradient: 0.55-0.65 psi/ft HK Lease Area Play Outline 18 Source:…
  17. Company Presentation – Halcon Resources Corp – slide 17
    El Halcn Good and Getting Better Eagle Ford Shale Again Highlights 100,000 net acres leased target achieved HK Javelina 1H IP: 1,171 Boe/d Acreage in SWEET SPOT of play POL: 2.25.14 HK Wombat 1H 1,000+ future locations to drill…
  18. Company Presentation – Halcon Resources Corp – slide 18
    El Halcn (East TX Eagle Ford Shale) Isopach HK Acreage Located in SWEET SPOT of Play 20
  19. Company Presentation – Halcon Resources Corp – slide 19
    Eagle Ford Shale Log and Core Halcon Resources Red Stag 1H Brazos County, Texas Black Organic Rich Shale XRD Mineralogy Austin Chalk by % volume Upper Reservoir Kerogen, 3.9 Other, 6.6 Dolomite, Frac Barrier 2 Quartz,…
  20. Company Presentation – Halcon Resources Corp – slide 20
    Rapid Production Growth Expected to Continue El Halcn Net Daily Production Growth (Boe/d) 1,240% Increase in Daily 10,000 Production HawkSpeed Ahead 744 1Q13 2Q13 3Q13 4Q13 Current (1) 22 (1) As of June 4, 2014
  21. Company Presentation – Halcon Resources Corp – slide 21
    Well Performance 23 Note: Wells spaced a minimum of 750 feet apart and completed with 1,200 lbs, or more, of proppant per lateral foot.
  22. Company Presentation – Halcon Resources Corp – slide 22
    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…
  23. Company Presentation – Halcon Resources Corp – slide 23
    While Driving Drilling Performance Improvements Avg. Field Cost Estimate (FCE) vs. Avg. Ft/Day 2 String Well Design 3 String Well Design Avg. Field Cost Est. 8.00 1000 3.60 1900 Avg. Ft/Day 7.00 900 3.55 800 3.50 1800 6.00…
  24. Company Presentation – Halcon Resources Corp – slide 24
    Bakken / Three Forks Improvements Ongoing Highlights 2014 Outlook Expect to spud 45 gross operated wells (95% in FBIR) with 3-4 rigs Expect to participate in 275 gross non-op wells (Avg. WI 3%) New slickwater FBIR wells…
  25. Company Presentation – Halcon Resources Corp – slide 25
    Improvements Driving Production Growth Williston Basin Daily Production Growth (Boe/d) (1) Key Metrics 420% Increase 4Q12 1Q14 30,000 Avg. Avg. % in Daily Production Spud to TD (Days) FBIR 33 19 (42%) Williams Co. 18 14(2)…
  26. Company Presentation – 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) (293) (390) 100% (143) (78) (30) (400) 40 75% 1.3 MM & 25 Days in savings 22…
  27. Company Presentation – Halcon Resources Corp – slide 27
    FBIR Slickwater Wells Outperforming = Upside 225,000 200,000 175,000 150,000 Cumulative Oil Production (Bbl) 125,000 100,000 75,000 50,000 25,000 Producing Days 0 - 10 20 30 40 50 60 70 80 90 100…
  28. Company Presentation – Halcon Resources Corp – slide 28
    Financial Highlights 1 Maintain announced D&C budget & direct capital to highest return assets 2 Focus on liquidity Expect borrowing base to continue to increase as production and reserves grow Continue to monetize non-core…
  29. Company Presentation – 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. Company Presentation – Halcon Resources Corp – slide 30
    Hedging Program as of 6.4.14 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 (Bo/d) (1) Hedge…
  31. Company Presentation – Halcon Resources Corp – slide 31
    Oil Hedging Details as of 6.4.14 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 ( MM) Oil Prices (/Bbl)…
  32. Company Presentation – Halcon Resources Corp – slide 32
    Ample Liquidity to Fund Capital Program Pro Forma Capitalization ( in Millions) HK Non-Core East Texas Apollo TMS Pro Forma HK 3.31.2014 Asset Divestiture Partnership 3.31.2014 (3) Ca s h a nd Ca s h Equi va l ents 0.4 102.0 150.0…
  33. Company Presentation – Halcon Resources Corp – slide 33
    Appendix
  34. Company Presentation – Halcon Resources Corp – slide 34
    2014 Operating and Financial Guidance Summary 2Q14E 2014E Production (Boe/d) Total Low 39,000 38,000 High 41,000 42,000 % Oil 85% % NGLs 5% % Gas 10% Operating Costs and Expenses (/Boe) Lease Operating & Workover Low 8.00 High…
  35. Company Presentation – Halcon Resources Corp – slide 35
    HK TMS 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)…
  36. Company Presentation – 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. Company Presentation – 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. Company Presentation – Halcon Resources Corp – slide 38
    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 %…
  39. Company Presentation – Halcon Resources Corp – slide 39
    El Halcn Cross Section 41
  40. Company Presentation – Halcon Resources Corp – slide 40
    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) IRR…
  41. Company Presentation – Halcon Resources Corp – slide 41
    Recent Downspacing Success Yale Pad North Development Plan Dunn County, ND Total IP (4 wells) 10,983 Boe/d HK 71.8% WI Producing MB Well Producing TF Well Potential Infill Locations FB 22C-15-9H (MB) IP: 3,640 Boe/d FB…
  42. Company Presentation – Halcon Resources Corp – slide 42
    More Recent Downspacing Success Yale Pad South Development Plan Dunn County, ND Total IP (6 wells) 15,220 Boe/d HK 45.5% WI Producing MB Well Producing TF Well Potential Infill Locations FB 27B-34-8H (MB) IP: 3,849 Boe/d…
  43. Company Presentation – Halcon Resources Corp – slide 43
    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 IRR…
  44. Company Presentation – Halcon Resources Corp – slide 44
    Derivative Detail as of 6.4.14 Oil Hedge Summary 9 Mos 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)…
  45. Company Presentation – Halcon Resources Corp – slide 45
    Oil & Gas Marketing Avg. NYMEX 2014 Marketing Highlights 1Q14 HK Oil Differentials by Area (1) Oil Price 98.60 102% 101% Williston Basin Oil Marketing 96% 93% 89% Expect 85-90% of production to be connected to pipeline by…
  46. Company Presentation – 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. Company Presentation – 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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