Friday, November 6, 2015

Halcon 3Q15 Transcript

Transcript.

Opening comments from CFO:
  • production for 3Q15 in line; 41K boepd
  • production guidance for full year: in line with previous despite all the shut-in or deferred wells
  • LOE plus workover expense: $7 per BOE; below our guidance; a 6% improvement
  • cash G&A: $4.85 per boe; toward the low end of guidance
  • taxes: $3.23 per boe; below our guidance
  • gathering, transportation, other: $2 per boe; in line
  • CAPEX: $84 million in 3Q15; in line 
  • $827 million in liquidity
  • bank group recently reaffirmed the company's $850 borrow base
  • reduced overall debt by more than $800 million
CEO:
  • operating three rigs; hope to do the same next year (2016) also
  • three rigs should run about 25% less in CAPEX; production flat
Hold your horses, we'll get to El Halcon in a few minutes.

La Malaguena, Chingon
Sophia, in her minion language tells me this song is about the sad state of affairs in the oil patch.


Williston Basin
  • all wells coming on line this year exceeded published type curves; continue to set new drilling records
  • average drilling time: 14 days
  • CWC: $7.2 million / well
  • AFE's projected: $6.8 million / well
  • selling 95% of our natural gas
El Halcon, East Texas
  • spud-to-TD: 11.4 days
  • shortest time for a three-string well: just under 10 days 
  • fracking: four stages/day; record five stages/day
  • multi-well pads; $6.8 million / well
  • expensive design change: extend lateral leg by 500 feet to approximately 7,500 feet; 33% more proppant, now up to about 2,000 pounds/foot; old design a lot less expensive, but a lot less efficient
Q & A
  • drilling faster is putting pressure on CAPEX (note)
  • CAPEX: $325 million this year; 25% less year but maintain production
  • if things improve, we are not going to increase CAPEX
  • reiterating: will be starting multi-well pads in Texas this year/next
  • one rig in Texas; completing 2, 3 or 4 wells/quarter 
  • 660 feet between wells in the middle Bakken
  • when drilling TF, don't want to directly stack laterals; must be alternate stacking ("drainage issues")
  • everything in middle Bakken/TF is 660-foot spacing  

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