Halcon Earnings, 1Q14

Updates

May 13, 2014: 1Q14 Halcon transcript -- 

• almost 75% production growth qoq -- despite very harsh winter
• 25,000 bopd
• IPs improving, 10% better qoq
• in the Fort Berthold area, slickwater fracks continue to outperform the 801K EUR that the company released just a few months ago
• will test slickwater in Three Forks/Fort Berthold, but company thinks "hybrid" fracks will work better
• currently drilling 6 new wells from a single pad; 660 feet apart; IP from one of these wells set a company record of 4,225 boe
• Williams County slickwater completions outperforming the 477K EUR previously set
• El Halcon in East Texas, almost exponential; growing over 800% qoq; 10,000 boepd
• added some TMS acreage; now 316,000 TMS acres
• this is surprising: water is a cost that Halcon struggles with (as do all operators, I assume); it depends on where one is in the basin
• lessons learned in the Bakken will be taken to the TMS
• going from 4 rigs in the Bakken to "three to four rigs" but will complete just as many wells
• will concentrate on Fort Berthold this year; Williams County yet to have its day in the sun
• near the end, mentioned "coil fracking" in passing; so slickwater, coiled, and hybrid all mentioned in this conference call; no major change for Halcon how they complete their wells

Later, 11:40 p.m. central time: is the Bakken grossly undervalued compared to the Eagle Ford?

Later, 11:18 p.m. central time: production surges as earnings beat street -- Motley Fool.

Halcon Resources produced an average of 36,622 barrels of oil equivalent per day. That was above the high end of the company's guidance, which helped it top earnings estimates. Production was also 41% higher than last year's first quarter, as the company's focus on technological innovation yielded strong well results.

The company also was able to push its total operating costs lower by 8% year over year. On top of that, Halcon Resources was able to realize a higher average prices per BOE than in last year's first quarter. The combination of higher production and energy prices along with lower costs had a noticeable impact on the company's bottom line. This was evidenced as net cash provided by operating activities surged from $45.7 million in last year's first quarter to $159.5 million this quarter.

I guess the bad weather in North Dakota was fickle, hitting other operators in the Bakken but sparing Halcon. 

Later, 11:17 p.m. central time: Halcon looking to sell all non-core assets.  As previously announced, the company agreed to divest non-core assets in East Texas for $450M, subject to closing and post-closing adjustments. The transaction is expected to close in May, with an effective date of April 1. The company continues to evaluate all remaining non-core properties for additional divestiture opportunities during 2014.  

Original Post

I will have to wait to see how analysts see this report.

Reconciliation table for additional information), net income was $11.9 million, or $0.03 per diluted share, for the three months ended March 31, 2014. Halcón reported a net loss available to common stockholders of $77.9 million, or $0.19 per diluted share for the quarter. The reported net loss available to common stockholders for the quarter includes a non-cash pre-tax impairment charge of $61.2 million, primarily related to non-core asset sales.

Opening paragraph:

Halcón generated total revenues of $275.1 million for the three months ended March 31, 2014, an increase of 44% compared to the three months ended March 31, 2013. Production for the quarter was above the high-end of guidance and increased to 36,622 barrels of oil equivalent per day (Boe/d), 41% higher than the same period of 2013. First quarter 2014 production was 85% oil, 6% natural gas liquids (NGLs) and 9% natural gas.

Briefing.com confirms that this was a beat by 1 cent.

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A Note to the Granddaughters

Casablanca has always been my favorite movie. When I get into a Casablanca phase, I find myself watching it several times a week for several weeks. The movie may not be as good, and the movie may not have the star power that Casablanca had, but the Great Gatsby story, in some ways, might be better than the Casablanca story. For one thing, the latter is autobiographical and an autobiographical story is (should) always be better than a concocted story, no matter how good the fictional story.

I guess one way to find out whether the Great Gatsby is as good as Casablanca is to see how often I find myself watching it during my GG phase. 

Young and Beautiful, The Great Gatsby, Lana Del Rey