UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 25, 2015
HALCÓN RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
|
Delaware |
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001-35467 |
|
20-0700684 |
|
(State or other jurisdiction
of incorporation) |
|
(Commission File Number) |
|
(IRS Employer
Identification No.) |
|
1000 Louisiana St., Suite 6700
Houston, Texas |
|
77002 |
|
(Address of principal executive offices) |
|
(Zip Code) |
Registrant’s telephone number, including area code: (832) 538-0300
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On February 25, 2015, Halcón Resources Corporation (the “Company”) issued a press release with respect to the Company’s fourth quarter and full year 2014 financial results. The press release is furnished as Exhibit 99.1 to this Current Report. The press release contains certain measures discussed below that may be deemed “non-GAAP financial measures” as defined in Item 10 of Regulation S-K of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In each case, the most directly comparable GAAP financial measure and information reconciling the GAAP and non-GAAP measures is also included in the press release.
Exhibit 99.1 shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
From time to time management discloses net income (loss) and earnings per share excluding selected items as well as cash flow from operations, general and administrative and gathering and other expenses adjusted for selected items. These measures are presented based on management’s belief that these non-GAAP measures enable a user of the financial information to understand the impact of these items on reported results. Additionally, this presentation provides a beneficial comparison to similarly adjusted measurements of prior periods. These measures are not measures of financial performance under GAAP and should not be considered as an alternative to net income, earnings per share and cash flow from operations, as defined by GAAP. These measures may not be comparable to similarly named non-GAAP measures that other companies may use and may not be useful in comparing the performance of those companies to our performance.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibit is furnished as part of this Current Report on Form 8-K:
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Exhibit No. |
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Description |
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99.1 |
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Press release issued by Halcón Resources Corporation dated February 25, 2015. |
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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HALCÓN RESOURCES CORPORATION |
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|
|
|
|
|
|
|
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February 25, 2015 |
By: |
/s/ Mark J. Mize |
|
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Name: |
Mark J. Mize |
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|
Title: |
Executive Vice President, Chief Financial Officer and Treasurer |
3
Exhibit 99.1
|
|
NEWS RELEASE |
Halcón Resources Announces Fourth Quarter and Full Year 2014 Results
Borrowing Base Reaffirmed at $1.05 Billion
Production Significantly Hedged Through 2016
HOUSTON, TEXAS — February 25, 2015 — Halcón Resources Corporation (NYSE:HK) (“Halcón” or the “Company”) today announced its fourth quarter and full year 2014 results.
Halcón generated total revenues of $239.5 million for the quarter ended December 31, 2014. Revenues for the full year 2014 totaled $1,148.3 million, an increase of 15% compared to the full year 2013.
Production for the three months and full year ended December 31, 2014 was 46,076 barrels of oil equivalent per day (Boe/d) and 42,107 Boe/d, respectively. The Company reported full year 2014 production above its guidance range. Production was comprised of 81% oil, 9% natural gas liquids (NGLs) and 10% natural gas for the quarter and 83% oil, 7% NGLs and 10% natural gas for the year.
Including the impact of hedges, Halcón realized 105% of the average NYMEX oil price, 35% of the average NYMEX oil price for NGLs and 94% of the average NYMEX natural gas price during the fourth quarter 2014. For the full year 2014, including the impact of hedges, the Company realized 91% of the average NYMEX oil price, 36% of the average NYMEX oil price for NGLs and 94% of the average NYMEX natural gas price.
Total operating costs per unit, after adjusting for selected items (see Selected Operating Data table for additional information), decreased by 23% to $21.27 per Boe during the three months ended December 31, 2014, compared to the same period of 2013. Total operating costs per unit for the full year, after adjusting for selected items (see Selected Operating Data table for additional information), were $24.14 per Boe, representing a decrease of 17% versus 2013.
After adjusting for selected items primarily related to the non-cash impact of derivatives and non-cash impairment charges (see Selected Item Review and Reconciliation table for additional information), net income was $20.6 million, or $0.05 per diluted share, and $71.7 million, or $0.17 per diluted share, for the quarter and full year ended December 31, 2014, respectively. Halcón reported net income available to common stockholders of $247.3 million, or $0.48 per diluted share for the fourth quarter and $282.9 million, or $0.59 per diluted share for the year.
1
Liquidity and Capital Spending
As previously disclosed, the Company’s liquidity as of December 31, 2014 was approximately $553 million, which consisted of cash on hand plus undrawn capacity on its senior secured revolving credit facility.
The borrowing base on Halcón’s senior secured revolving credit facility was recently reaffirmed at $1.05 billion in conjunction with the regular spring redetermination.
During the fourth quarter of 2014, the Company incurred capital costs of $271.8 million on drilling and completions, $3.0 million on infrastructure/seismic and $13.0 million on leasehold acquisitions, offset by divestiture proceeds of $5.4 million. In addition, Halcón incurred $49.1 million for capitalized interest, G&A and other.
The Company incurred capital costs of $1,193.6 million on drilling and completions, $41.7 million on infrastructure/seismic and $310.5 million on leasehold acquisitions in 2014, offset by divestiture proceeds totaling $485.8 million. In addition, the Company incurred $200.6 million for capitalized interest, G&A and other.
Production Guidance
Halcón expects to produce an average of 42 — 44 MBoe/d during the first quarter of 2015.
Hedging Update
The Company’s strategy is to hedge approximately 80% of expected production for the next 18 to 24 months. Halcón has 31,332 barrels per day of oil hedged for 2015 at an average price of $90.32 per barrel. For 2016, the Company has 20,497 barrels per day of oil hedged at an average price of $84.80 per barrel. Halcón plans to opportunistically layer in additional hedges to attain targeted levels. The Company estimates the pre-tax mark-to-market value of its hedge portfolio to be approximately $502 million as of February 24, 2015.
An updated slide presentation containing detailed information on Halcón’s hedge portfolio can be accessed on its website at http://www.halconresources.com in the Investor Relations section under Events & Presentations.
Conference Call and Webcast Information
Halcón Resources Corporation (NYSE:HK) has scheduled a conference call for Thursday, February 26, 2015, at 10:00 a.m. EST (9:00 a.m. CST). To participate in the conference call, dial (877) 810-3368 for domestic callers, and (914) 495-8561 for international callers a few minutes before the call begins and reference Halcón Resources conference ID 74053927. The conference call will also be webcast live over the Internet on Halcón Resources’ website at http://www.halconresources.com in the Investor Relations section under Events & Presentations. A telephonic replay of the call will be available approximately two hours after the live broadcast ends and will be accessible until March 4, 2015. To access the replay, dial (855) 859-2056 for domestic callers or (404) 537-3406 for international callers, in both cases referencing conference ID 74053927.
2
About Halcón Resources
Halcón Resources Corporation is an independent energy company engaged in the acquisition, production, exploration and development of onshore oil and natural gas properties in the United States.
For more information contact Scott Zuehlke, Vice President of Investor Relations, at 832-538-0314 or szuehlke@halconresources.com.
Forward-Looking Statements
This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that are not strictly historical statements constitute forward-looking statements and may often, but not always, be identified by the use of such words such as “expects”, “believes”, “intends”, “anticipates”, “plans”, “estimates”, “potential”, “possible”, or “probable” or statements that certain actions, events or results “may”, “will”, “should”, or “could” be taken, occur or be achieved. Forward-looking statements are based on current beliefs and expectations and involve certain assumptions or estimates that involve various risks and uncertainties that could cause actual results to differ materially from those reflected in the statements. These risks include, but are not limited to, those set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 and other filings submitted by the Company to the U.S. Securities and Exchange Commission (“SEC”), copies of which may be obtained from the SEC’s website at www.sec.gov or through the Company’s website at www.halconresources.com. Readers should not place undue reliance on any such forward-looking statements, which are made only as of the date hereof. The Company has no duty, and assumes no obligation, to update forward-looking statements as a result of new information, future events or changes in the Company’s expectations.
3
HALCÓN RESOURCES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
|
|
|
Three Months Ended December 31, |
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Years Ended December 31, |
|
|
|
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2014 |
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2013 |
|
2014 |
|
2013 |
|
|
Operating revenues: |
|
|
|
|
|
|
|
|
|
|
Oil, natural gas and natural gas liquids sales: |
|
|
|
|
|
|
|
|
|
|
Oil |
|
$ |
|
223,215 |
|
$ |
272,368 |
|
$ |
1,071,319 |
|
$ |
944,535 |
|
|
Natural gas |
|
9,136 |
|
7,348 |
|
37,101 |
|
27,319 |
|
|
Natural gas liquids |
|
9,064 |
|
8,588 |
|
37,460 |
|
24,564 |
|
|
Total oil, natural gas and natural gas liquids sales |
|
241,415 |
|
288,304 |
|
1,145,880 |
|
996,418 |
|
|
Other |
|
(1,956 |
) |
998 |
|
2,381 |
|
3,088 |
|
|
Total operating revenues |
|
239,459 |
|
289,302 |
|
1,148,261 |
|
999,506 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
Production: |
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
34,539 |
|
44,506 |
|
130,239 |
|
139,182 |
|
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Workover and other |
|
3,643 |
|
1,992 |
|
16,193 |
|
6,268 |
|
|
Taxes other than income |
|
23,329 |
|
26,006 |
|
106,331 |
|
88,622 |
|
|
Gathering and other |
|
8,600 |
|
4,844 |
|
26,719 |
|
11,745 |
|
|
Restructuring |
|
— |
|
3,964 |
|
987 |
|
4,471 |
|
|
General and administrative |
|
26,422 |
|
33,525 |
|
116,532 |
|
132,410 |
|
|
Depletion, depreciation and accretion |
|
145,465 |
|
143,391 |
|
534,421 |
|
463,655 |
|
|
Full cost ceiling impairment |
|
178,503 |
|
238,673 |
|
239,668 |
|
1,147,771 |
|
|
Other operating property and equipment impairment |
|
31,769 |
|
200 |
|
35,558 |
|
67,454 |
|
|
Goodwill impairment |
|
— |
|
— |
|
— |
|
228,875 |
|
|
Total operating expenses |
|
452,270 |
|
497,101 |
|
1,206,648 |
|
2,290,453 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
|
(212,811 |
) |
(207,799 |
) |
(58,387 |
) |
(1,290,947 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses): |
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on derivative contracts |
|
510,367 |
|
7,516 |
|
518,956 |
|
(31,233 |
) |
|
Interest expense and other, net |
|
(38,575 |
) |
(33,953 |
) |
(145,689 |
) |
(58,198 |
) |
|
Total other income (expenses) |
|
471,792 |
|
(26,437 |
) |
373,267 |
|
(89,431 |
) |
|
Income (loss) before income taxes |
|
258,981 |
|
(234,236 |
) |
314,880 |
|
(1,380,378 |
) |
|
Income tax benefit (provision) |
|
(219 |
) |
(176,152 |
) |
1,076 |
|
157,716 |
|
|
Net income (loss) |
|
258,762 |
|
(410,388 |
) |
315,956 |
|
(1,222,662 |
) |
|
Series A preferred dividends |
|
(4,960 |
) |
(4,959 |
) |
(19,838 |
) |
(10,745 |
) |
|
Preferred dividends and accretion on redeemable noncontrolling interest |
|
(6,457 |
) |
— |
|
(13,176 |
) |
— |
|
|
Net income (loss) available to common stockholders |
|
$ |
|
247,345 |
|
$ |
(415,347 |
) |
$ |
282,942 |
|
$ |
(1,233,407 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share of common stock: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
|
0.59 |
|
$ |
(1.01 |
) |
$ |
0.68 |
|
$ |
(3.25 |
) |
|
Diluted |
|
$ |
|
0.48 |
|
$ |
(1.01 |
) |
$ |
0.59 |
|
$ |
(3.25 |
) |
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
417,281 |
|
412,042 |
|
415,772 |
|
379,621 |
|
|
Diluted |
|
539,219 |
|
412,042 |
|
542,394 |
|
379,621 |
|
HALCÓN RESOURCES CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except share and per share amounts)
|
|
|
December 31, |
|
|
|
|
2014 |
|
2013 |
|
|
Current assets: |
|
|
|
|
|
|
Cash |
|
$ |
43,713 |
|
$ |
2,834 |
|
|
Accounts receivable |
|
276,559 |
|
312,518 |
|
|
Receivables from derivative contracts |
|
352,530 |
|
2,028 |
|
|
Restricted cash |
|
16,131 |
|
— |
|
|
Inventory |
|
4,693 |
|
5,148 |
|
|
Prepaids and other |
|
9,079 |
|
16,098 |
|
|
Total current assets |
|
702,705 |
|
338,626 |
|
|
Oil and natural gas properties (full cost method): |
|
|
|
|
|
|
Evaluated |
|
6,390,820 |
|
4,960,467 |
|
|
Unevaluated |
|
1,829,786 |
|
2,028,044 |
|
|
Gross oil and natural gas properties |
|
8,220,606 |
|
6,988,511 |
|
|
Less - accumulated depletion |
|
(2,953,038 |
) |
(2,189,515 |
) |
|
Net oil and natural gas properties |
|
5,267,568 |
|
4,798,996 |
|
|
Other operating property and equipment: |
|
|
|
|
|
|
Gas gathering and other operating assets |
|
126,804 |
|
125,837 |
|
|
Less - accumulated depreciation |
|
(14,798 |
) |
(8,461 |
) |
|
Net other operating property and equipment |
|
112,006 |
|
117,376 |
|
|
Other noncurrent assets: |
|
|
|
|
|
|
Receivables from derivative contracts |
|
151,324 |
|
22,734 |
|
|
Debt issuance costs, net |
|
55,904 |
|
64,308 |
|
|
Deferred income taxes |
|
136,826 |
|
8,474 |
|
|
Equity in oil and natural gas partnership |
|
4,309 |
|
4,463 |
|
|
Funds in escrow and other |
|
3,833 |
|
1,514 |
|
|
Total assets |
|
$ |
6,434,475 |
|
$ |
5,356,491 |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
607,750 |
|
$ |
636,589 |
|
|
Liabilities from derivative contracts |
|
— |
|
17,859 |
|
|
Asset retirement obligations |
|
106 |
|
71 |
|
|
Current portion of deferred income taxes |
|
136,826 |
|
8,474 |
|
|
Current portion of long-term debt |
|
— |
|
1,389 |
|
|
Total current liabilities |
|
744,682 |
|
664,382 |
|
|
Long-term debt |
|
3,746,736 |
|
3,183,823 |
|
|
Other noncurrent liabilities: |
|
|
|
|
|
|
Liabilities from derivative contracts |
|
9,387 |
|
19,333 |
|
|
Asset retirement obligations |
|
38,371 |
|
39,186 |
|
|
Other |
|
5,964 |
|
2,157 |
|
|
Commitments and contingencies |
|
|
|
|
|
|
Mezzanine equity: |
|
|
|
|
|
|
Redeemable noncontrolling interest |
|
117,166 |
|
— |
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Preferred stock: 1,000,000 shares of $0.0001 par value authorized; 345,000 shares of 5.75% Cumulative Perpetual Convertible Series A, issued and outstanding as of December 31, 2014 and 2013 |
|
— |
|
— |
|
|
Common stock: 1,340,000,000 and 670,000,000 shares of $0.0001 par value authorized; 427,808,306 and 415,729,962 shares issued and outstanding at December 31, 2014 and 2013, respectively |
|
42 |
|
41 |
|
|
Additional paid-in capital |
|
2,995,402 |
|
2,953,786 |
|
|
Accumulated deficit |
|
(1,223,275 |
) |
(1,506,217 |
) |
|
Total stockholders’ equity |
|
1,772,169 |
|
1,447,610 |
|
|
Total liabilities and stockholders’ equity |
|
$ |
6,434,475 |
|
$ |
5,356,491 |
|
HALCÓN RESOURCES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
|
|
|
Three Months Ended December 31, |
|
Years Ended December 31, |
|
|
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
258,762 |
|
$ |
(410,388 |
) |
$ |
315,956 |
|
$ |
(1,222,662 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
|
|
Depletion, depreciation and accretion |
|
145,465 |
|
143,391 |
|
534,421 |
|
463,655 |
|
|
Full cost ceiling impairment |
|
178,503 |
|
238,673 |
|
239,668 |
|
1,147,771 |
|
|
Other operating property and equipment impairment |
|
31,769 |
|
200 |
|
35,558 |
|
67,454 |
|
|
Goodwill impairment |
|
— |
|
— |
|
— |
|
228,875 |
|
|
Deferred income tax provision (benefit) |
|
— |
|
175,642 |
|
— |
|
(159,239 |
) |
|
Share-based compensation, net |
|
4,896 |
|
5,118 |
|
18,733 |
|
17,112 |
|
|
Unrealized loss (gain) on derivative contracts |
|
(469,625 |
) |
(10,228 |
) |
(508,285 |
) |
8,728 |
|
|
Amortization and write-off of deferred loan costs |
|
1,117 |
|
1,313 |
|
4,315 |
|
2,656 |
|
|
Non-cash interest and amortization of discount and premium |
|
804 |
|
630 |
|
2,780 |
|
2,025 |
|
|
Accrued settlements on derivative contracts |
|
(25,868 |
) |
— |
|
(25,868 |
) |
— |
|
|
Other expense (income) |
|
(1,841 |
) |
6,668 |
|
(2,435 |
) |
1,427 |
|
|
Cash flow from operations before changes in working capital |
|
123,982 |
|
151,019 |
|
614,843 |
|
557,802 |
|
|
Changes in working capital, net of acquisitions |
|
(37,938 |
) |
(48,700 |
) |
53,091 |
|
(63,878 |
) |
|
Net cash provided by (used in) operating activities |
|
86,044 |
|
102,319 |
|
667,934 |
|
493,924 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
Oil and natural gas capital expenditures |
|
(345,692 |
) |
(551,476 |
) |
(1,524,341 |
) |
(2,380,445 |
) |
|
Acquisition of Williston Basin Assets |
|
— |
|
(532 |
) |
— |
|
(32,713 |
) |
|
Proceeds received from sales of oil and natural gas assets |
|
4,210 |
|
288,031 |
|
484,184 |
|
448,299 |
|
|
Advance on carried interest |
|
— |
|
— |
|
(189,442 |
) |
— |
|
|
Other operating property and equipment capital expenditures |
|
(2,727 |
) |
(19,224 |
) |
(43,083 |
) |
(139,295 |
) |
|
Funds held in escrow and other |
|
368 |
|
9,002 |
|
1,589 |
|
3,455 |
|
|
Net cash provided by (used in) investing activities |
|
(343,841 |
) |
(274,199 |
) |
(1,271,093 |
) |
(2,100,699 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
Proceeds from borrowings |
|
532,000 |
|
965,000 |
|
2,276,000 |
|
3,725,000 |
|
|
Repayments of borrowings |
|
(320,000 |
) |
(786,000 |
) |
(1,719,000 |
) |
(2,644,400 |
) |
|
Debt issuance costs |
|
(62 |
) |
(4,571 |
) |
(819 |
) |
(23,873 |
) |
|
Series A preferred stock issued |
|
— |
|
— |
|
— |
|
345,000 |
|
|
Series A preferred dividends |
|
(4,960 |
) |
— |
|
(4,960 |
) |
— |
|
|
Common stock issued |
|
— |
|
— |
|
— |
|
222,870 |
|
|
HK TMS, LLC preferred stock issued |
|
— |
|
— |
|
110,051 |
|
— |
|
|
HK TMS, LLC tranche rights |
|
— |
|
— |
|
4,516 |
|
— |
|
|
Preferred dividends on redeemable noncontrolling interest |
|
— |
|
— |
|
(3,518 |
) |
— |
|
|
Restricted cash |
|
(147 |
) |
— |
|
(16,131 |
) |
— |
|
|
Offering costs and other |
|
(9 |
) |
(176 |
) |
(2,101 |
) |
(17,494 |
) |
|
Net cash provided by (used in) financing activities |
|
206,822 |
|
174,253 |
|
644,038 |
|
1,607,103 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash |
|
(50,975 |
) |
2,373 |
|
40,879 |
|
328 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at beginning of period |
|
94,688 |
|
461 |
|
2,834 |
|
2,506 |
|
|
Cash at end of period |
|
$ |
43,713 |
|
$ |
2,834 |
|
$ |
43,713 |
|
$ |
2,834 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information: |
|
|
|
|
|
|
|
|
|
|
Cash paid for interest, net of capitalized interest |
|
$ |
28,288 |
|
$ |
24,028 |
|
$ |
132,557 |
|
$ |
25,462 |
|
|
Cash paid (refunded) for income taxes |
|
(3,600 |
) |
— |
|
(8,600 |
) |
9,014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Disclosure of non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
|
|
Accrued capitalized interest |
|
$ |
4,160 |
|
$ |
(659 |
) |
$ |
(1,180 |
) |
$ |
9,890 |
|
|
Asset retirement obligations |
|
2,134 |
|
(49,549 |
) |
(1,262 |
) |
(39,472 |
) |
|
Series A preferred dividends paid in common stock |
|
— |
|
4,959 |
|
14,878 |
|
9,092 |
|
|
Accretion of redeemable noncontrolling interest |
|
3,432 |
|
— |
|
6,633 |
|
— |
|
|
Preferred dividends on redeemable noncontrolling interest paid-in-kind |
|
3,025 |
|
— |
|
3,025 |
|
— |
|
|
Payable for acquisition of oil and natural gas properties |
|
— |
|
2,157 |
|
— |
|
2,157 |
|
|
Receivable for sale of oil and natural gas properties |
|
1,000 |
|
— |
|
1,000 |
|
— |
|
HALCÓN RESOURCES CORPORATION
SELECTED OPERATING DATA
(Unaudited)
|
|
|
Three Months Ended December 31, |
|
Years Ended December 31, |
|
|
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Production volumes: |
|
|
|
|
|
|
|
|
|
|
Crude oil (MBbls) |
|
3,444 |
|
3,120 |
|
12,787 |
|
10,148 |
|
|
Natural gas (MMcf) |
|
2,620 |
|
2,116 |
|
8,812 |
|
8,003 |
|
|
Natural gas liquids (MBbls) |
|
358 |
|
227 |
|
1,113 |
|
683 |
|
|
Total (MBoe) |
|
4,239 |
|
3,700 |
|
15,369 |
|
12,165 |
|
|
Average daily production (Boe) |
|
46,076 |
|
40,217 |
|
42,107 |
|
33,329 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average prices: |
|
|
|
|
|
|
|
|
|
|
Crude oil (per Bbl) |
|
$ |
64.81 |
|
$ |
87.30 |
|
$ |
83.78 |
|
$ |
93.08 |
|
|
Natural gas (per Mcf) |
|
3.49 |
|
3.47 |
|
4.21 |
|
3.41 |
|
|
Natural gas liquids (per Bbl) |
|
25.32 |
|
37.83 |
|
33.66 |
|
35.96 |
|
|
Total per Boe |
|
56.95 |
|
77.92 |
|
74.56 |
|
81.91 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash effect of derivative contracts: |
|
|
|
|
|
|
|
|
|
|
Crude oil (per Bbl) |
|
$ |
11.79 |
|
$ |
(1.03 |
) |
$ |
0.94 |
|
$ |
(2.42 |
) |
|
Natural gas (per Mcf) |
|
0.05 |
|
0.23 |
|
(0.15 |
) |
0.25 |
|
|
Natural gas liquids (per Bbl) |
|
— |
|
— |
|
— |
|
— |
|
|
Total per Boe |
|
9.61 |
|
(0.73 |
) |
0.69 |
|
(1.85 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Average prices computed after cash effect of settlement of derivative contracts: |
|
|
|
|
|
|
|
|
|
|
Crude oil (per Bbl) |
|
$ |
76.60 |
|
$ |
86.27 |
|
$ |
84.72 |
|
$ |
90.66 |
|
|
Natural gas (per Mcf) |
|
3.54 |
|
3.70 |
|
4.06 |
|
3.66 |
|
|
Natural gas liquids (per Bbl) |
|
25.32 |
|
37.83 |
|
33.66 |
|
35.96 |
|
|
Total per Boe |
|
66.56 |
|
77.19 |
|
75.25 |
|
80.06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average cost per Boe: |
|
|
|
|
|
|
|
|
|
|
Production: |
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
$ |
8.15 |
|
$ |
12.03 |
|
$ |
8.47 |
|
$ |
11.44 |
|
|
Workover and other |
|
0.86 |
|
0.54 |
|
1.05 |
|
0.52 |
|
|
Taxes other than income |
|
5.50 |
|
7.03 |
|
6.92 |
|
7.28 |
|
|
Gathering and other (1) |
|
1.96 |
|
1.31 |
|
1.72 |
|
0.97 |
|
|
Restructuring |
|
— |
|
1.07 |
|
0.06 |
|
0.37 |
|
|
General and administrative, as adjusted (1) |
|
4.80 |
|
6.78 |
|
5.98 |
|
8.99 |
|
|
Depletion |
|
33.66 |
|
38.08 |
|
34.09 |
|
37.28 |
|
(1) Represents gathering and other and general and administrative costs per Boe, adjusted for items noted in the reconciliation below:
|
General and administrative: |
|
|
|
|
|
|
|
|
|
|
General and administrative, as reported |
|
$ |
6.23 |
|
$ |
9.06 |
|
$ |
7.58 |
|
$ |
10.89 |
|
|
Share-based compensation: |
|
|
|
|
|
|
|
|
|
|
Non-cash |
|
(1.15 |
) |
(1.38 |
) |
(1.22 |
) |
(1.41 |
) |
|
Acquisition and merger transaction costs: |
|
|
|
|
|
|
|
|
|
|
Cash |
|
(0.28 |
) |
(0.90 |
) |
(0.38 |
) |
(0.49 |
) |
|
General and administrative, as adjusted |
|
$ |
4.80 |
|
$ |
6.78 |
|
$ |
5.98 |
|
$ |
8.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gathering and other, as reported |
|
$ |
2.03 |
|
$ |
1.31 |
|
$ |
1.74 |
|
$ |
0.97 |
|
|
Total adjusting items |
|
(0.07 |
) |
— |
|
(0.02 |
) |
— |
|
|
Gathering and other, as adjusted |
|
$ |
1.96 |
|
$ |
1.31 |
|
$ |
1.72 |
|
$ |
0.97 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs, as reported |
|
$ |
22.77 |
|
$ |
29.97 |
|
$ |
25.76 |
|
$ |
31.10 |
|
|
Total adjusting items |
|
(1.50 |
) |
(2.28 |
) |
(1.62 |
) |
(1.90 |
) |
|
Total operating costs, as adjusted (2) |
|
$ |
21.27 |
|
$ |
27.69 |
|
$ |
24.14 |
|
$ |
29.20 |
|
(2) Represents lease operating, workover and other expense, taxes other than income, gathering and other expense and general and administrative costs per Boe, adjusted for items noted in reconciliation above.
HALCÓN RESOURCES CORPORATION
SELECTED ITEM REVIEW AND RECONCILIATION (Unaudited)
(In thousands, except per share amounts)
|
|
|
Three Months Ended December 31, |
|
Years Ended December 31, |
|
|
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
|
As Reported: |
|
|
|
|
|
|
|
|
|
|
Net income (loss) available to common stockholders, as reported |
|
$ |
247,345 |
|
$ |
(415,347 |
) |
$ |
282,942 |
|
$ |
(1,233,407 |
) |
|
Series A preferred dividends |
|
4,960 |
|
4,959 |
|
19,838 |
|
10,745 |
|
|
Preferred dividends and accretion on redeemable noncontrolling interest |
|
6,457 |
|
— |
|
13,176 |
|
— |
|
|
Net income (loss) |
|
$ |
258,762 |
|
$ |
(410,388 |
) |
$ |
315,956 |
|
$ |
(1,222,662 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Impact of Selected Items: |
|
|
|
|
|
|
|
|
|
|
Unrealized loss (gain) on derivatives contracts: |
|
|
|
|
|
|
|
|
|
|
Crude oil |
|
$ |
(464,055 |
) |
$ |
(13,502 |
) |
$ |
(499,882 |
) |
$ |
9,606 |
|
|
Natural gas |
|
(5,571 |
) |
3,273 |
|
(6,644 |
) |
544 |
|
|
Total mark-to-market non-cash charge |
|
(469,626 |
) |
(10,229 |
) |
(506,526 |
) |
10,150 |
|
|
Full cost ceiling impairment |
|
178,503 |
|
238,673 |
|
239,668 |
|
1,147,771 |
|
|
Other operating property and equipment impairment |
|
31,769 |
|
200 |
|
35,558 |
|
67,454 |
|
|
Goodwill impairment |
|
— |
|
— |
|
— |
|
228,875 |
|
|
Deferred financing costs expensed, net(1) |
|
— |
|
955 |
|
499 |
|
1,846 |
|
|
Restructuring |
|
— |
|
3,964 |
|
987 |
|
4,471 |
|
|
Acquisition and merger transaction costs and other |
|
(725 |
) |
3,336 |
|
4,052 |
|
5,921 |
|
|
Selected items, before income taxes |
|
(260,079 |
) |
236,899 |
|
(225,762 |
) |
1,466,488 |
|
|
Income tax effect of selected items(2) |
|
21,926 |
|
177,574 |
|
(18,447 |
) |
(182,888 |
) |
|
Selected items, net of tax |
|
$ |
(238,153 |
) |
$ |
414,473 |
|
$ |
(244,209 |
) |
$ |
1,283,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
As Adjusted: |
|
|
|
|
|
|
|
|
|
|
Net income (loss) available to common stockholders, excluding selected items |
|
$ |
20,609 |
|
$ |
4,085 |
|
$ |
71,747 |
|
$ |
60,938 |
|
|
Net income (loss) from assumed conversions |
|
— |
|
— |
|
— |
|
6,724 |
|
|
Net income (loss) available to common stockholders after assumed conversions, excluding selected items(3) |
|
$ |
20,609 |
|
$ |
4,085 |
|
$ |
71,747 |
|
$ |
67,662 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per common share, as reported |
|
$ |
0.59 |
|
$ |
(1.01 |
) |
$ |
0.68 |
|
$ |
(3.25 |
) |
|
Impact of selected items |
|
(0.54 |
) |
1.02 |
|
(0.51 |
) |
3.41 |
|
|
Basic net income (loss) per common share, excluding selected items(3) |
|
$ |
0.05 |
|
$ |
0.01 |
|
$ |
0.17 |
|
$ |
0.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income (loss) per common share, as reported |
|
$ |
0.48 |
|
$ |
(1.01 |
) |
$ |
0.59 |
|
$ |
(3.25 |
) |
|
Impact of selected items |
|
(0.43 |
) |
1.02 |
|
(0.42 |
) |
3.40 |
|
|
Diluted net income (loss) per common share, excluding selected items(3)(4) |
|
$ |
0.05 |
|
$ |
0.01 |
|
$ |
0.17 |
|
$ |
0.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities |
|
$ |
86,044 |
|
$ |
102,319 |
|
$ |
667,934 |
|
$ |
493,924 |
|
|
Changes in working capital, net of acquisitions |
|
37,938 |
|
48,700 |
|
(53,091 |
) |
63,878 |
|
|
Cash flow from operations before changes in working capital |
|
123,982 |
|
151,019 |
|
614,843 |
|
557,802 |
|
|
Cash components of selected items |
|
1,506 |
|
6,464 |
|
6,931 |
|
9,556 |
|
|
Income tax effect of selected items |
|
(558 |
) |
(2,318 |
) |
(2,567 |
) |
(3,455 |
) |
|
Cash flow from operations before changes in working capital, adjusted for selected items(3) |
|
$ |
124,930 |
|
$ |
155,165 |
|
$ |
619,207 |
|
$ |
563,903 |
|
(1) Represents charges related to the write-off of debt issuance costs associated with decreases in the Company’s borrowing base under its senior revolving credit facility.
(2) For the 2014 columns, this represents tax impact using an estimated tax rate of 37.04%. These columns include a $(74.4) million (quarter-to-date) and $(102.1) million (year-to-date) adjustment for the change in valuation allowance.
(3) Net income (loss) and earnings per share excluding selected items and cash flow from operations before changes in working capital adjusted for selected items are non-GAAP measures. These financial measures are presented based on management’s belief that they will enable a user of the financial information to understand the impact of these items on reported results. Additionally, this presentation provides a beneficial comparison to similarly adjusted measurements of prior periods. These financial measures are not measures of financial performance under GAAP and should not be considered as an alternative to net income, earnings per share and cash flow from operations, as defined by GAAP. These financial measures may not be comparable to similarly named non-GAAP financial measures that other companies may use and may not be useful in comparing the performance of those companies to Halcón’s performance.
(4) The impact of selected items for the three months ended and year ended December 31, 2014 was calculated based upon weighted average diluted shares of 418.8 million and 422.0 million, respectively, due to the net income available to common stockholders, excluding selected items.
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