Halcon Resources Stock Jumps 48% on $1.4 Billion Asset Sale

Energy

Published: July 11, 2017 9:45 am

Last Updated: January 12, 2020 10:16 am

Shares of oil producer Halcón Resources Corp. (NYSE: HK) traded up more than 40% in Tuesday’s premarket following an announcement that the company has agreed to sell its operated assets in the Williston Basin (Bakken shale) for $1.4 billion in cash to Bruin E&P Partners, a portfolio company of Arclight Capital Partners. The effective date of the transaction is June 1 and the company expects the deal to close within 60 days.

The assets included in the sale currently produce about 29,000 barrels of oil equivalent per day. Following the transaction, Halcón’s remaining production will be about 7,500 barrels of oil equivalent per day from producing wells in the Delaware Basin of the Permian. Halcón said it will operate two rigs in the Delaware Basin for the rest of 2017 and that it expects production to rise to 13,000 barrels a day by the end of the year.

Halcón plans to use $789 million of the proceeds to repay 50% of its high-yield 6.75% notes at 103% of par and 100% of its outstanding 12% second-lien notes.

Floyd Wilson, Halcón’s board chair, chief executive and president, commented:

The sale of our Williston Basin operated assets transforms Halcón into a single-basin company focused on the Delaware Basin where we have more than 41,000 net acres in Ward and Pecos Counties representing decades of highly economic drilling inventory. The cash proceeds from this transaction and related debt reduction provide us with a strong balance sheet and liquidity to execute our growth plans.

The transaction required approval by 50% of holders of the 6.75% notes, which the company said it obtained on Monday. The same percentage of common stockholders also was needed to approve the deal, and Halcón said it achieved that level this morning.

Halcón’s stock closed Monday at $4.46, down about 73% over the past 12 months. Shares traded up more than 36% early Tuesday’s at $6.08. The 52-week high is $16.55, and the consensus price target is $9.57.

Travel Cards Are Getting Too Good To Ignore (sponsored)

Credit card companies are pulling out all the stops, with the issuers are offering insane travel rewards and perks.

We’re talking huge sign-up bonuses, points on every purchase, and benefits like lounge access, travel credits, and free hotel nights. For travelers, these rewards can add up to thousands of dollars in flights, upgrades, and luxury experiences every year.

It’s like getting paid to travel — and it’s available to qualified borrowers who know where to look.

We’ve rounded up some of the best travel credit cards on the market. Click here to see the list. Don’t miss these offers — they won’t be this good forever.