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IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp

Halcon Resources Corp · Apr 8, 2014 · 49 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. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 1
    IPAA OGIS New York Conference April 8, 2014
  2. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 2
    Company Profile Significant Resource Opportunity Total Proved Reserves: (1) 136 MMBoe % Proved Developed: 40% Bakken/Three Forks 142,000 Net Acres % Oil: 84% 90.5 MMBoe Proved Reserves (1) % Operated: 92% Total Proved PV10:…
  3. IPPA OGIS NEW YORK CONFERENCE – 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. IPPA OGIS NEW YORK CONFERENCE – 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 24.9 +61% Guidance Midpoint 15.0 +65% PF 2012 PF 2013 2014 Guidance 6…
  5. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 5
    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 7 Source:…
  6. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 6
    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 POL: 2.25.14 Acreage in SWEET SPOT of play 1,000+ future locations to drill assuming 800…
  7. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 7
    El Halcn (East TX Eagle Ford Shale) Isopach HK Acreage Located in SWEET SPOT of Play 9
  8. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 8
    Eagle Ford Shale Log and Core Halcon Resources Red Stag 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, Calcite,…
  9. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 9
    Rapid Production Growth Expected to Continue El Halcn 2013 Net Daily Production Growth (Boe/d) 9,300 7,138 4,989 1,649 744 1Q13 2Q13 3Q13 4Q13 Current (1) 11 (1) Eight wells put online since late February 14.
  10. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 10
    Wells Outperforming Type Curve 12 Note: Wells spaced a minimum of 750 feet apart and completed with 1,200 lbs, or more, of proppant per lateral foot.
  11. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 11
    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…
  12. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 12
    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 Avg. Drilling Cost 4.50 1,600 Avg.…
  13. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 13
    Geologic Setting El Halcn Closest Comp to TMS - 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 - 1.8-4.5% TOC by volume - Natural…
  14. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 14
    Tuscaloosa Marine Shale (TMS) New Core Play Established - 307,000 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…
  15. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 15
    Activity Map ECA 5 miles GDP Anderson 17H-1 Crosby 12H-1 GDP ECA IP: 897 Boe/d ECA HK IP: 1,087 CMR/Foster Creek Anderson 18H-1 Anderson 17H-2 Shuckrow 10H-1 Boe/d 20-7H-1 IP: 1,028 Boe/d IP: 891 Boe/d WI: 52% IP: 546 Boe/d Est.…
  16. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 16
    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…
  17. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 17
    -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…
  18. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 18
    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 20
  19. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 19
    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…
  20. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 20
    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…
  21. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 21
    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…
  22. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 22
    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…
  23. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 23
    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…
  24. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 24
    Bakken / Three Forks Inventory Growing and Type Curve Estimates Revised Higher Highlights 2014 Outlook Expect to spud 50 gross operated wells (95% in FBIR) w/ four rigs Expect to participate in 200 gross non-op wells (Avg. WI 3%)…
  25. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 25
    Successful Three Forks Downspacing Tests Capitol Pad Development Plan McKenzie County, ND Total IP (7 wells) 17,278 Boe/d HK 71% WI Producing MB Well Producing TF Well Producing TF2 Well FB 11B-14-5H (MB) Potential Infill…
  26. IPPA OGIS NEW YORK 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) (293) (390) 100% (143) (78) (30) (400) 39.7 75% 1.3 MM & 25 Days in savings…
  27. IPPA OGIS NEW YORK 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. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 28
    Halcn Field Services (HFS) Infrastructure Challenges = Opportunity Support Halcn Drilling Operations in Core Plays Bakken / Three Forks El Halcn TMS (East TX Eagle Ford) Partnering with downstream Installed 45 miles of low…
  29. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 29
    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…
  30. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 30
    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…
  31. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 31
    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…
  32. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 32
    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…
  33. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 33
    Appendix
  34. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 34
    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…
  35. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 35
    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…
  36. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 36
    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…
  37. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 37
    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…
  38. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 38
    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…
  39. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 39
    El Halcn Cross Section 41
  40. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 40
    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…
  41. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 41
    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…
  42. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 42
    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 44
  43. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 43
    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)…
  44. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 44
    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…
  45. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 45
    Derivative Detail as of 4.4.14 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)…
  46. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 46
    Oil Hedging Details as of 4.4.14 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 Oil Prices (/Bbl) Period 70.00…
  47. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 47
    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…
  48. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 48
    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 - -…
  49. IPPA OGIS NEW YORK CONFERENCE – Halcon Resources Corp – slide 49
    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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