Richard Zeits over at Seeking Alpha on Halcon:
- Recent wells in Fort Berthold area continue to track well above Halcón’s 801 Mboe type curve.
- The current AFEs are running at $8.5 million per well; $8.0 million per well expected by mid-year.
- Ceramic proppant has been fully replaced with white sand, with no reduction in performance expected.
- At the type curve, wells are strongly economic assuming the current strip pricing.
According to Richard Zeits:
Halcón's FBIR data points are impressive and suggest that the company
should be able to realize significant full drill-out value for its FBIR
asset, even assuming only moderate recovery in oil prices.
The
obvious challenge is that Halcón's FBIR holdings are limited in size.
The company controls ~20 operated drilling units in this area. With the
high-density drilling that has been proven successful, Halcón's "core of
the core" inventory likely exceeds a hundred locations and therefore
represents at least several years of active drilling. In this regard,
the FBIR acreage should allow Halcón to sustain its company-wide
production at a relatively stable level, even in the event of a
protracted commodity price trough.
However, this crown jewel asset
alone is not sufficient to support the company's entire enterprise
value. Other assets must also "work" well and therefore a meaningful
recovery in the price of oil would certainly help.
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