Halcón Resources To Reduce Operated Rig Activity Level In July To Three

(RTTNews) - Halcón Resources Corp. (HK) said it will reduce its operated rig count in July 2018 from four to three, primarily due to lower near-term realized oil prices in the Midland market.

Halcón is currently in advanced negotiations to secure 25,000 bbl/d of firm capacity on a pipeline to the Gulf Coast, which is targeted to be in service by the second half of 2019.

The company noted that the agreement will result in it sending a majority of its forecasted oil production to Gulf Coast markets once the pipeline is operational. The agreement is not expected to include any minimum volume commitments or similar obligations.

Halcón currently has 8,000 bbl/d of MidCush basis hedges in place for the second half of 2018 at -$11.69 and 12,000 bbl/d of MidCush hedges in place for the first half of 2019 at -$3.02.

Halcón said it expects second-quarter 2018 production to be within the previously announced guidance range of 13,000 to 14,000 boe/d. The company plans to provide updated full-year 2018 guidance, including the impact of the reduced rig activity, as part of its second quarter earnings release.

Floyd Wilson, Halcón's Chairman and CEO said, "With widening MidCush differentials, we have seen our recent oil price realizations decline significantly. Accordingly, we have decided to moderate our drilling pace to three operated rigs for the remainder of 2018. We can still generate substantial near-term production growth with three rigs running while at the same time decreasing our cash flow outspend."