Halcón Resources Corporation (NYSE:HK) (“Halcón” or the “Company”)
today announced its second quarter 2016 results.
Production for the three months ended June 30,
2016 averaged 35,879 barrels of oil equivalent per day
(Boe/d). Production was comprised of 77% oil, 11% natural gas
liquids (NGLs) and 12% natural gas for the quarter. The
Company shut-in approximately 5,000 Boe/d of net production during
the second quarter due to low commodity prices.
Halcón generated total revenues of $106.1
million for the second quarter of 2016. In addition, Halcón
realized a net gain on settled derivative contracts of $80.8
million during the quarter.
Excluding the impact of hedges, Halcón realized
87% of the average NYMEX oil price, 20% of the average NYMEX oil
price for NGLs and 70% of the average NYMEX natural gas price
during the second quarter of 2016.
Total operating costs per unit were $21.40 per
Boe during the second quarter. After adjusting for selected
items, total operating costs per unit (see Selected Operating Data
table for additional information), were $17.43 per Boe and $17.02
per Boe for the three and six months ended June 30, 2016,
respectively, an 8% decline from the six month period ended a year
earlier.
Halcón reported a net loss available to common
stockholders of $382.4 million, or $3.17 per diluted share for the
second quarter. After adjusting for selected items primarily
related to a non-cash, pre-tax full cost ceiling impairment charge
and a non-cash, pre-tax unrealized loss on derivative contracts
(see Selected Item Review and Reconciliation table for additional
information), net income was $37.7 million, or $0.26 per diluted
share for the second quarter of 2016.
Restructuring Update
As previously announced, the Company has filed
for an accelerated pre-packaged bankruptcy under Chapter 11 of the
bankruptcy code to affect a comprehensive balance sheet
restructuring. Halcón anticipates emerging from bankruptcy 45
to 60 days from the date of filing. The Company expects its
common shares to continue to be listed on the NYSE during
bankruptcy although no assurance can be made that this will be the
case. Halcón plans to operate as usual during the
restructuring process and will continue to pay all royalty owners,
suppliers and vendors in full consistent with normal terms.
Liquidity and Capital
Spending
As of June 30, 2016 Halcón’s liquidity was
approximately $373 million, which consisted of $450 million of
revolver availability less $101 million drawn on the revolver plus
$24 million in cash and cash equivalents. The Company agreed
to limit the availability under its revolving credit facility from
$700 million to $450 million as part of the waiver agreement it
executed with its bank group on May 26, 2016. The Company has
a commitment from its bank group, led by JP Morgan and Wells Fargo,
for a $600 million debtor in possession credit facility (the “DIP”)
with $500 million of availability once the interim order approving
the DIP is received from the bankruptcy court. The DIP will
convert to a reserve-based revolving credit facility with $600
million in availability upon its exit from bankruptcy.
During the second quarter of 2016, the Company
incurred capital costs of $43 million on drilling and completions,
and $1 million on infrastructure, seismic and leasehold
acquisitions. In addition, Halcón incurred $24 million for
capitalized interest, G&A and other in the second quarter.
Hedging Update
Halcón has 22,000 barrels per day of oil hedged
for the last six months of 2016 at an average price of $81.44 per
barrel. For 2017, the Company has 3,750 barrels per day of
oil hedged at an average price of $65.75 per barrel. Halcón
estimates the pre-tax mark-to-market value of its hedge portfolio
to be approximately $162 million as of July 27, 2016.
Operations Update
The Company is currently running 1 operated rig
in the Fort Berthold area of the Williston Basin and plans to keep
this rig running through the remainder of 2016. Halcón has no
other operated rigs running and the Company does not plan
additional rigs until oil prices improve. The Company
currently has 12 wells in the Bakken being completed or waiting on
completion. Halcon also recently commenced completion operations on
two wells in its Tuscaloosa Marine Shale area that were drilled in
2015.
Bakken/Three Forks
The Company operated an average of 1 rig in
the Williston Basin during the second quarter of
2016.
Halcón spudded 4 wells and put 13 wells online
in the Fort Berthold area of the Williston Basin during
the three months ended June 30, 2016. The Company did not
participate in any non-operated wells during the quarter.
Production averaged 25,633 Boe/d during the second quarter of 2016
in the Williston Basin.
Halcón currently has working interests in
approximately 119,000 net acres prospective for the Bakken and
Three Forks formations in the Williston Basin, substantially
all of which is held by production (HBP). With one operated rig
running, the Company plans to spud 10 to 15 gross operated wells
over the remaining six months of 2016 with an average working
interest of approximately 68%. Halcón also expects to participate
in 15 to 20 gross non-operated wells over the last six months of
2016 with an average working interest of approximately 5%.
Halcón expects operated wells put online over the remainder of 2016
to have an average EUR of approximately 900 MBoe. Current
operated drilling and completion costs are $6.2 million in FBIR and
$5.7 million in Williams County.
The Company is currently the operator of 214
producing Bakken wells and 68 Three Forks wells.
"El Halcón" - East Texas Eagle Ford
The Company did not run an operated rig in El
Halcón during the second quarter of 2016.
Halcón put 3 wells online in the El Halcón area
during the second quarter. Production averaged 7,900 Boe/d
during the second quarter of 2016 in El Halcón.
Halcón currently has working interests in
approximately 83,000 net acres prospective for the Eagle Ford
formation in East Texas, approximately 79% of which is HBP.
The Company currently operates 112 El Halcón wells. Halcón
anticipates adding a rig back to this area when oil prices
improve.
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 Quentin Hicks,
Senior Vice President of Finance & Investor Relations, at
832-538-0557 or qhicks@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, the
ability to confirm and consummate a plan of reorganization in
accordance with the terms of the restructuring support agreement;
risks attendant to the bankruptcy process, including the effects
thereof on the Company’s business and on the interests of various
constituents, the length of time that the Company might be required
to operate in bankruptcy and the continued availability of
operating capital during the pendency of such proceedings; risks
associated with third party motions in any bankruptcy case, which
may interfere with the ability to confirm and consummate a plan of
reorganization, potential adverse effects on the Company's
liquidity or results of operations; increased costs to execute the
reorganization, effects on market price of the Company's common
stock and on the Company's ability to access the capital markets,
and the risks set forth in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 2015 and other filings
submitted by the Company to the 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.
|
HALCÓN RESOURCES CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited) |
(In thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
Operating revenues: |
|
|
|
|
|
|
|
|
|
Oil, natural gas and natural gas liquids sales: |
|
|
|
|
|
|
|
|
|
|
Oil |
|
$ |
99,095 |
|
|
$ |
158,110 |
|
|
$ |
174,062 |
|
|
$ |
282,523 |
|
|
|
Natural gas |
|
|
3,159 |
|
|
|
5,578 |
|
|
|
6,901 |
|
|
|
12,537 |
|
|
|
Natural gas
liquids |
|
|
3,504 |
|
|
|
3,889 |
|
|
|
5,441 |
|
|
|
7,957 |
|
|
|
Total
oil, natural gas and natural gas liquids sales |
|
|
105,758 |
|
|
|
167,577 |
|
|
|
186,404 |
|
|
|
303,017 |
|
|
Other |
|
|
389 |
|
|
|
447 |
|
|
|
1,092 |
|
|
|
1,201 |
|
|
|
Total
operating revenues |
|
|
106,147 |
|
|
|
168,024 |
|
|
|
187,496 |
|
|
|
304,218 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Production: |
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
|
16,981 |
|
|
|
25,233 |
|
|
|
37,559 |
|
|
|
59,018 |
|
|
|
Workover and other |
|
|
7,915 |
|
|
|
3,731 |
|
|
|
15,706 |
|
|
|
6,845 |
|
|
|
Taxes other than
income |
|
|
9,753 |
|
|
|
12,903 |
|
|
|
17,011 |
|
|
|
25,144 |
|
|
Gathering
and other |
|
|
10,519 |
|
|
|
7,746 |
|
|
|
21,903 |
|
|
|
21,492 |
|
|
Restructuring |
|
|
189 |
|
|
|
309 |
|
|
|
5,073 |
|
|
|
2,230 |
|
|
General and
administrative |
|
|
24,708 |
|
|
|
22,662 |
|
|
|
66,324 |
|
|
|
47,071 |
|
|
Depletion,
depreciation and accretion |
|
|
39,671 |
|
|
|
101,194 |
|
|
|
94,937 |
|
|
|
220,338 |
|
|
Full cost
ceiling impairment |
|
|
257,869 |
|
|
|
948,633 |
|
|
|
754,769 |
|
|
|
1,502,636 |
|
|
Other
operating property and equipment impairment |
|
|
- |
|
|
|
- |
|
|
|
28,056 |
|
|
|
- |
|
|
|
Total
operating expenses |
|
|
367,605 |
|
|
|
1,122,411 |
|
|
|
1,041,338 |
|
|
|
1,884,774 |
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
|
|
(261,458 |
) |
|
|
(954,387 |
) |
|
|
(853,842 |
) |
|
|
(1,580,556 |
) |
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses): |
|
|
|
|
|
|
|
|
|
Net gain (loss) on derivative contracts |
|
|
(54,523 |
) |
|
|
(87,564 |
) |
|
|
(35,781 |
) |
|
|
12,184 |
|
|
Interest expense and other, net |
|
|
(58,322 |
) |
|
|
(60,922 |
) |
|
|
(106,113 |
) |
|
|
(122,229 |
) |
|
Gain (loss) on extinguishment of debt |
|
|
- |
|
|
|
22,766 |
|
|
|
81,434 |
|
|
|
22,766 |
|
|
Gain (loss) on extinguishment of Convertible Note and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
modification of February 2012 Warrants |
|
|
- |
|
|
|
(8,219 |
) |
|
|
- |
|
|
|
(8,219 |
) |
|
|
Total
other income (expenses) |
|
|
(112,845 |
) |
|
|
(133,939 |
) |
|
|
(60,460 |
) |
|
|
(95,498 |
) |
Income (loss) before income taxes |
|
|
(374,303 |
) |
|
|
(1,088,326 |
) |
|
|
(914,302 |
) |
|
|
(1,676,054 |
) |
Income tax benefit (provision) |
|
|
- |
|
|
|
(286 |
) |
|
|
- |
|
|
|
(199 |
) |
Net income (loss) |
|
|
(374,303 |
) |
|
|
(1,088,612 |
) |
|
|
(914,302 |
) |
|
|
(1,676,253 |
) |
Series A preferred dividends |
|
|
(3,198 |
) |
|
|
(4,902 |
) |
|
|
(6,396 |
) |
|
|
(9,803 |
) |
Preferred dividends and accretion on redeemable noncontrolling
interest |
|
(4,852 |
) |
|
|
(11,067 |
) |
|
|
(28,517 |
) |
|
|
(19,718 |
) |
Net income (loss) available to common
stockholders |
|
$ |
(382,353 |
) |
|
$ |
(1,104,581 |
) |
|
$ |
(949,215 |
) |
|
$ |
(1,705,774 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share of common
stock: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(3.17 |
) |
|
$ |
(10.13 |
) |
|
$ |
(7.89 |
) |
|
$ |
(17.66 |
) |
|
|
Diluted |
|
$ |
(3.17 |
) |
|
$ |
(10.13 |
) |
|
$ |
(7.89 |
) |
|
$ |
(17.66 |
) |
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
120,708 |
|
|
|
109,063 |
|
|
|
120,360 |
|
|
|
96,569 |
|
|
|
Diluted |
|
|
120,708 |
|
|
|
109,063 |
|
|
|
120,360 |
|
|
|
96,569 |
|
|
|
|
|
|
|
|
|
|
|
|
HALCÓN RESOURCES CORPORATION |
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) |
(In thousands, except share and per share
amounts) |
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
2016 |
|
|
|
2015 |
|
Current assets: |
|
|
|
|
Cash |
$ |
7,173 |
|
|
$ |
8,026 |
|
|
Accounts
receivable |
|
112,855 |
|
|
|
173,624 |
|
|
Receivables from derivative contracts |
|
135,455 |
|
|
|
348,861 |
|
|
Restricted cash |
|
17,164 |
|
|
|
16,812 |
|
|
Inventory |
|
1,498 |
|
|
|
4,635 |
|
|
Debt
issuance costs, net |
|
5,557 |
|
|
|
- |
|
|
Prepaids
and other |
|
8,694 |
|
|
|
4,635 |
|
|
Total
current assets |
|
288,396 |
|
|
|
556,593 |
|
Oil
and natural gas properties (full cost method): |
|
|
|
|
Evaluated |
|
7,679,917 |
|
|
|
7,060,721 |
|
|
Unevaluated |
|
1,180,148 |
|
|
|
1,641,356 |
|
|
Gross oil
and natural gas properties |
|
8,860,065 |
|
|
|
8,702,077 |
|
|
Less - accumulated
depletion |
|
(6,779,116 |
) |
|
|
(5,933,688 |
) |
|
Net oil
and natural gas properties |
|
2,080,949 |
|
|
|
2,768,389 |
|
Other operating property and equipment: |
|
|
|
|
Gas gathering and other
operating assets |
|
100,355 |
|
|
|
130,090 |
|
|
Less - accumulated
depreciation |
|
(23,155 |
) |
|
|
(22,435 |
) |
|
Net other
operating property and equipment |
|
77,200 |
|
|
|
107,655 |
|
Other noncurrent assets: |
|
|
|
|
Receivables from
derivative contracts |
|
5,642 |
|
|
|
16,614 |
|
|
Debt issuance costs,
net |
|
- |
|
|
|
7,633 |
|
|
Equity in oil and
natural gas partnership |
|
11 |
|
|
|
209 |
|
|
Funds in escrow and
other |
|
1,613 |
|
|
|
1,599 |
|
Total assets |
$ |
2,453,811 |
|
|
$ |
3,458,692 |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable and
accrued liabilities |
$ |
242,189 |
|
|
$ |
295,085 |
|
|
Asset retirement
obligations |
|
412 |
|
|
|
163 |
|
|
Current portion of
long-term debt, net |
|
2,825,807 |
|
|
|
- |
|
|
Total
current liabilities |
|
3,068,408 |
|
|
|
295,248 |
|
Long-term debt, net |
|
- |
|
|
|
2,873,637 |
|
Other noncurrent liabilities: |
|
|
|
|
Liabilities from
derivative contracts |
|
194 |
|
|
|
290 |
|
|
Asset retirement
obligations |
|
48,554 |
|
|
|
46,853 |
|
|
Other |
|
9,283 |
|
|
|
6,264 |
|
Commitments and contingencies |
|
|
|
Mezzanine equity: |
|
|
|
|
Redeemable
noncontrolling interest |
|
212,503 |
|
|
|
183,986 |
|
Stockholders' equity (deficit): |
|
|
|
|
Preferred stock:
1,000,000 shares of $0.0001 par value authorized; 222,454 and
244,724 |
|
|
|
|
shares of
5.75% Cumulative Perpetual Convertible Series A, issued and
outstanding |
|
|
|
|
at June
30, 2016 and December 31, 2015, respectively |
|
- |
|
|
|
- |
|
|
Common stock:
1,340,000,000 shares of $0.0001 par value authorized; |
|
|
|
|
122,647,511 and 122,523,559 shares issued and outstanding |
|
|
|
|
at June
30, 2016 and December 31, 2015, respectively |
|
12 |
|
|
|
12 |
|
|
Additional paid-in
capital |
|
3,288,371 |
|
|
|
3,283,097 |
|
|
Accumulated
deficit |
|
(4,173,514 |
) |
|
|
(3,230,695 |
) |
|
Total
stockholders' equity (deficit) |
|
(885,131 |
) |
|
|
52,414 |
|
Total liabilities and stockholders' equity
(deficit) |
$ |
2,453,811 |
|
|
$ |
3,458,692 |
|
|
|
|
|
|
|
|
|
|
HALCÓN RESOURCES CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited) |
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net income
(loss) |
|
$ |
(374,303 |
) |
|
$ |
(1,088,612 |
) |
|
$ |
(914,302 |
) |
|
$ |
(1,676,253 |
) |
Adjustments
to reconcile net income (loss) to net cash |
|
|
|
|
|
|
|
|
provided by
(used in) operating activities: |
|
|
|
|
|
|
|
|
|
Depletion,
depreciation and accretion |
|
|
39,671 |
|
|
|
101,194 |
|
|
|
94,937 |
|
|
|
220,338 |
|
|
Full cost
ceiling impairment |
|
|
257,869 |
|
|
|
948,633 |
|
|
|
754,769 |
|
|
|
1,502,636 |
|
|
Other
operating property and equipment impairment |
|
|
- |
|
|
|
- |
|
|
|
28,056 |
|
|
|
- |
|
|
Share-based
compensation, net |
|
|
1,507 |
|
|
|
3,438 |
|
|
|
3,652 |
|
|
|
8,210 |
|
|
Unrealized
loss (gain) on derivative contracts |
|
|
135,303 |
|
|
|
175,712 |
|
|
|
224,281 |
|
|
|
183,713 |
|
|
Amortization and write-off of deferred loan costs |
|
|
1,278 |
|
|
|
2,533 |
|
|
|
3,024 |
|
|
|
4,092 |
|
|
Non-cash
interest and amortization of discount and premium |
|
|
718 |
|
|
|
602 |
|
|
|
1,269 |
|
|
|
1,709 |
|
|
Loss (gain)
on extinguishment of debt |
|
|
- |
|
|
|
(22,766 |
) |
|
|
(81,434 |
) |
|
|
(22,766 |
) |
|
Loss (gain)
on extinguishment of Convertible Note and modification |
|
|
|
|
|
|
|
|
|
|
of February 2012
Warrants |
|
|
- |
|
|
|
8,219 |
|
|
|
- |
|
|
|
8,219 |
|
|
Accrued
settlements on derivative contracts |
|
|
9,810 |
|
|
|
10,811 |
|
|
|
(23,072 |
) |
|
|
(26,781 |
) |
|
Other
income (expense) |
|
|
2,048 |
|
|
|
2,467 |
|
|
|
3,973 |
|
|
|
5,008 |
|
Cash flow
from operations before changes in working capital |
|
|
73,901 |
|
|
|
142,231 |
|
|
|
95,153 |
|
|
|
208,125 |
|
Changes in
working capital |
|
|
34,468 |
|
|
|
(18,636 |
) |
|
|
47,590 |
|
|
|
9,405 |
|
Net cash
provided by (used in) operating activities |
|
|
108,369 |
|
|
|
123,595 |
|
|
|
142,743 |
|
|
|
217,530 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
Oil and
natural gas capital expenditures |
|
|
(53,499 |
) |
|
|
(143,125 |
) |
|
|
(170,258 |
) |
|
|
(407,751 |
) |
|
Other
operating property and equipment capital expenditures |
|
|
(240 |
) |
|
|
(3,133 |
) |
|
|
(886 |
) |
|
|
(7,478 |
) |
|
Funds held
in escrow and other |
|
|
118 |
|
|
|
2,053 |
|
|
|
(233 |
) |
|
|
3,012 |
|
Net cash
provided by (used in) investing activities |
|
|
(53,621 |
) |
|
|
(144,205 |
) |
|
|
(171,377 |
) |
|
|
(412,217 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
Proceeds
from borrowings |
|
|
139,000 |
|
|
|
935,000 |
|
|
|
425,000 |
|
|
|
1,296,000 |
|
|
Repayments
of borrowings |
|
|
(195,000 |
) |
|
|
(912,000 |
) |
|
|
(395,648 |
) |
|
|
(1,129,000 |
) |
|
Debt
issuance costs |
|
|
(1 |
) |
|
|
(18,612 |
) |
|
|
(1,186 |
) |
|
|
(18,612 |
) |
|
Common
stock issued |
|
|
- |
|
|
|
9,335 |
|
|
|
- |
|
|
|
15,354 |
|
|
Restricted
cash |
|
|
(174 |
) |
|
|
(161 |
) |
|
|
(325 |
) |
|
|
(352 |
) |
|
Offering
costs and other |
|
|
(3 |
) |
|
|
(1,590 |
) |
|
|
(60 |
) |
|
|
(2,443 |
) |
Net cash
provided by (used in) financing activities |
|
|
(56,178 |
) |
|
|
11,972 |
|
|
|
27,781 |
|
|
|
160,947 |
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in
cash |
|
|
(1,430 |
) |
|
|
(8,638 |
) |
|
|
(853 |
) |
|
|
(33,740 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash at
beginning of period |
|
|
8,603 |
|
|
|
18,611 |
|
|
|
8,026 |
|
|
|
43,713 |
|
Cash at end
of period |
|
$ |
7,173 |
|
|
$ |
9,973 |
|
|
$ |
7,173 |
|
|
$ |
9,973 |
|
|
|
|
|
|
|
|
|
|
|
|
HALCÓN RESOURCES CORPORATION |
SELECTED OPERATING
DATA (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
Production volumes: |
|
|
|
|
|
|
|
|
Crude oil
(MBbls) |
|
|
2,498 |
|
|
|
3,007 |
|
|
|
5,274 |
|
|
|
6,103 |
|
Natural
gas (MMcf) |
|
|
2,322 |
|
|
|
2,509 |
|
|
|
4,842 |
|
|
|
5,144 |
|
Natural
gas liquids (MBbls) |
|
|
380 |
|
|
|
333 |
|
|
|
781 |
|
|
|
675 |
|
Total
(MBoe) |
|
|
3,265 |
|
|
|
3,758 |
|
|
|
6,862 |
|
|
|
7,635 |
|
Average
daily production (Boe/d) |
|
|
35,879 |
|
|
|
41,297 |
|
|
|
37,703 |
|
|
|
42,182 |
|
|
|
|
|
|
|
|
|
|
Average
prices: |
|
|
|
|
|
|
|
|
Crude oil
(per Bbl) |
|
$ |
39.67 |
|
|
$ |
52.58 |
|
|
$ |
33.00 |
|
|
$ |
46.29 |
|
Natural
gas (per Mcf) |
|
|
1.36 |
|
|
|
2.22 |
|
|
|
1.43 |
|
|
|
2.44 |
|
Natural
gas liquids (per Bbl) |
|
|
9.22 |
|
|
|
11.68 |
|
|
|
6.97 |
|
|
|
11.79 |
|
Total per
Boe |
|
|
32.39 |
|
|
|
44.59 |
|
|
|
27.16 |
|
|
|
39.69 |
|
|
|
|
|
|
|
|
|
|
Cash
effect of derivative contracts: |
|
|
|
|
|
|
|
|
Crude oil
(per Bbl) |
|
$ |
32.19 |
|
|
$ |
28.60 |
|
|
$ |
35.60 |
|
|
$ |
31.48 |
|
Natural
gas (per Mcf) |
|
|
0.16 |
|
|
|
0.85 |
|
|
|
0.15 |
|
|
|
0.73 |
|
Natural
gas liquids (per Bbl) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Total per
Boe |
|
|
24.74 |
|
|
|
23.46 |
|
|
|
27.47 |
|
|
|
25.66 |
|
|
|
|
|
|
|
|
|
|
Average prices computed after cash effect of settlement of
derivative contracts: |
|
|
|
|
|
|
|
Crude oil
(per Bbl) |
|
$ |
71.86 |
|
|
$ |
81.18 |
|
|
$ |
68.60 |
|
|
$ |
77.77 |
|
Natural
gas (per Mcf) |
|
|
1.52 |
|
|
|
3.07 |
|
|
|
1.58 |
|
|
|
3.17 |
|
Natural
gas liquids (per Bbl) |
|
|
9.22 |
|
|
|
11.68 |
|
|
|
6.97 |
|
|
|
11.79 |
|
Total per
Boe |
|
|
57.13 |
|
|
|
68.05 |
|
|
|
54.63 |
|
|
|
65.35 |
|
|
|
|
|
|
|
|
|
|
Average
cost per Boe: |
|
|
|
|
|
|
|
|
Production: |
|
|
|
|
|
|
|
|
Lease
operating |
|
$ |
5.20 |
|
|
$ |
6.71 |
|
|
$ |
5.47 |
|
|
$ |
7.73 |
|
Workover
and other |
|
|
2.42 |
|
|
|
0.99 |
|
|
|
2.29 |
|
|
|
0.90 |
|
Taxes
other than income |
|
|
2.99 |
|
|
|
3.43 |
|
|
|
2.48 |
|
|
|
3.29 |
|
Gathering
and other, as adjusted (1) |
|
|
2.27 |
|
|
|
1.78 |
|
|
|
2.25 |
|
|
|
1.89 |
|
Restructuring |
|
|
0.06 |
|
|
|
0.08 |
|
|
|
0.74 |
|
|
|
0.29 |
|
General
and administrative, as adjusted (1) |
|
|
4.55 |
|
|
|
4.60 |
|
|
|
4.53 |
|
|
|
4.77 |
|
Depletion |
|
|
11.55 |
|
|
|
26.26 |
|
|
|
13.21 |
|
|
|
28.20 |
|
|
|
|
|
|
|
|
|
|
(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 |
|
$ |
7.57 |
|
|
$ |
6.03 |
|
|
$ |
9.66 |
|
|
$ |
6.17 |
|
Share-based compensation: |
|
|
|
|
|
|
|
|
Non-cash |
|
|
(0.46 |
) |
|
|
(0.91 |
) |
|
|
(0.53 |
) |
|
|
(1.08 |
) |
Transaction costs, key employee retention agreements and
other: |
|
|
|
|
|
|
|
|
Cash |
|
|
(2.56 |
) |
|
|
(0.52 |
) |
|
|
(4.60 |
) |
|
|
(0.32 |
) |
General
and administrative, as adjusted |
|
$ |
4.55 |
|
|
$ |
4.60 |
|
|
$ |
4.53 |
|
|
$ |
4.77 |
|
|
|
|
|
|
|
|
|
|
Gathering and other, as
reported |
|
$ |
3.22 |
|
|
$ |
2.06 |
|
|
$ |
3.19 |
|
|
$ |
2.81 |
|
Rig
termination / stacking charges |
|
|
(0.95 |
) |
|
|
(0.28 |
) |
|
|
(0.94 |
) |
|
|
(0.92 |
) |
Gathering and other, as
adjusted |
|
$ |
2.27 |
|
|
$ |
1.78 |
|
|
$ |
2.25 |
|
|
$ |
1.89 |
|
|
|
|
|
|
|
|
|
|
Total operating costs,
as reported |
|
$ |
21.40 |
|
|
$ |
19.22 |
|
|
$ |
23.09 |
|
|
$ |
20.90 |
|
Total
adjusting items |
|
|
(3.97 |
) |
|
|
(1.71 |
) |
|
|
(6.07 |
) |
|
|
(2.32 |
) |
Total operating costs,
as adjusted(2) |
|
$ |
17.43 |
|
|
$ |
17.51 |
|
|
$ |
17.02 |
|
|
$ |
18.58 |
|
|
|
|
|
|
|
|
|
|
(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 June 30, |
|
Six Months Ended June 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
As
Reported: |
|
|
|
|
|
|
|
|
Net income (loss)
available to common stockholders, as reported |
|
$ |
(382,353 |
) |
|
$ |
(1,104,581 |
) |
|
$ |
(949,215 |
) |
|
$ |
(1,705,774 |
) |
Series A preferred
dividends |
|
|
3,198 |
|
|
|
4,902 |
|
|
|
6,396 |
|
|
|
9,803 |
|
Preferred dividends and
accretion on redeemable noncontrolling interest |
|
|
4,852 |
|
|
|
11,067 |
|
|
|
28,517 |
|
|
|
19,718 |
|
Net income (loss), as
reported |
|
|
(374,303 |
) |
|
|
(1,088,612 |
) |
|
|
(914,302 |
) |
|
|
(1,676,253 |
) |
|
|
|
|
|
|
|
|
|
Impact of
Selected Items: |
|
|
|
|
|
|
|
|
Unrealized loss (gain)
on derivatives contracts: |
|
|
|
|
|
|
|
|
Crude
oil |
|
$ |
134,701 |
|
|
$ |
173,329 |
|
|
$ |
223,542 |
|
|
$ |
180,910 |
|
Natural
gas |
|
|
602 |
|
|
|
2,383 |
|
|
|
739 |
|
|
|
2,803 |
|
Total
mark-to-market non-cash charge |
|
|
135,303 |
|
|
|
175,712 |
|
|
|
224,281 |
|
|
|
183,713 |
|
Full cost ceiling
impairment |
|
|
257,869 |
|
|
|
948,633 |
|
|
|
754,769 |
|
|
|
1,502,636 |
|
Other operating
property and equipment impairment |
|
|
- |
|
|
|
- |
|
|
|
28,056 |
|
|
|
- |
|
Loss (gain) on
extinguishment of debt |
|
|
- |
|
|
|
(22,766 |
) |
|
|
(81,434 |
) |
|
|
(22,766 |
) |
Loss (gain) on
extinguishment of Convertible Note and modification of February
2012 Warrants |
|
|
- |
|
|
|
8,219 |
|
|
|
- |
|
|
|
8,219 |
|
Deferred financing
costs expensed, net (1) |
|
|
- |
|
|
|
879 |
|
|
|
665 |
|
|
|
879 |
|
Restructuring |
|
|
189 |
|
|
|
309 |
|
|
|
5,073 |
|
|
|
2,230 |
|
Rig termination /
stacking charges, key employee retention agreements and other |
|
|
13,498 |
|
|
|
5,349 |
|
|
|
41,022 |
|
|
|
16,897 |
|
Selected items, before
income taxes |
|
|
406,859 |
|
|
|
1,116,335 |
|
|
|
972,432 |
|
|
|
1,691,808 |
|
Income tax effect of
selected items (2) |
|
|
- |
|
|
|
(18,819 |
) |
|
|
- |
|
|
|
(22,675 |
) |
Selected items, net of
tax |
|
|
406,859 |
|
|
|
1,097,516 |
|
|
|
972,432 |
|
|
|
1,669,133 |
|
|
|
|
|
|
|
|
|
|
As
Adjusted: |
|
|
|
|
|
|
|
|
Net income (loss)
available to common stockholders, excluding selected items |
|
$ |
32,556 |
|
|
$ |
8,904 |
|
|
$ |
58,130 |
|
|
$ |
(7,120 |
) |
Interest on Convertible
Note, net |
|
|
5,115 |
|
|
|
- |
|
|
|
9,255 |
|
|
|
- |
|
Net income (loss)
available to common stockholders after assumed conversions,
excluding selected items (3) |
|
$ |
37,671 |
|
|
$ |
8,904 |
|
|
$ |
67,385 |
|
|
$ |
(7,120 |
) |
|
|
|
|
|
|
|
|
|
Basic net income (loss)
per common share, as reported |
|
$ |
(3.17 |
) |
|
$ |
(10.13 |
) |
|
$ |
(7.89 |
) |
|
$ |
(17.66 |
) |
Impact of selected
items |
|
|
3.44 |
|
|
|
10.21 |
|
|
|
8.37 |
|
|
|
17.59 |
|
Basic net income (loss)
per common share, excluding selected items (3) |
|
$ |
0.27 |
|
|
$ |
0.08 |
|
|
$ |
0.48 |
|
|
$ |
(0.07 |
) |
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) per common share, as reported |
|
$ |
(3.17 |
) |
|
$ |
(10.13 |
) |
|
$ |
(7.89 |
) |
|
$ |
(17.66 |
) |
Impact of selected
items |
|
|
3.43 |
|
|
|
10.21 |
|
|
|
8.36 |
|
|
|
17.59 |
|
Diluted net income
(loss) per common share, excluding selected items (3)(4) |
|
$ |
0.26 |
|
|
$ |
0.08 |
|
|
$ |
0.47 |
|
|
$ |
(0.07 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities |
|
$ |
108,369 |
|
|
$ |
123,595 |
|
|
$ |
142,743 |
|
|
$ |
217,530 |
|
Changes in working
capital |
|
|
(34,468 |
) |
|
|
18,636 |
|
|
|
(47,590 |
) |
|
|
(9,405 |
) |
Cash flow from
operations before changes in working capital |
|
|
73,901 |
|
|
|
142,231 |
|
|
|
95,153 |
|
|
|
208,125 |
|
Cash components of
selected items |
|
|
1,831 |
|
|
|
(7,511 |
) |
|
|
65,286 |
|
|
|
41,019 |
|
Income tax effect of
selected items (2) |
|
|
- |
|
|
|
2,782 |
|
|
|
- |
|
|
|
(5,274 |
) |
Cash flow from
operations before changes in working capital, adjusted for selected
items (4) |
|
$ |
75,732 |
|
|
$ |
137,502 |
|
|
$ |
160,439 |
|
|
$ |
243,870 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 2016 columns this represents tax impact using an estimated tax
rate of 0.0% due to the Company maintaining a full valuation
allowance. |
For the 2015 columns this represents tax impact using an
estimated tax rate of 37.04%. These columns also include an
adjustment for the change in valuation allowance of $394.7
million and $604.0 million for the three and six months ended
June 30, 2015, respectively. |
(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 June 30, 2016
and 2015 was calculated based upon weighted average diluted shares
of 144.5 million and 109.2 million, respectively, due to the
net income available to common stockholders, excluding selected
items. |
The impact of selected items for the six months ended June 30,
2016 was calculated based upon weighted average diluted shares of
144.1 million due to the net income available to
common stockholders, excluding selected items. |
|
|
|
|
|
|
|
|
|
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