Friday, August 2, 2013

Halcon Earnings Call

The TMS was discussed briefly on Halcon's earnings call.


Kyle Rhodes - RBC Capital Markets, LLC, Research Division
And then just moving over to the TMS. There's been some momentum in the play, with a few good results albeit to the east of your acreage. I'm just wondering how you guys are thinking about that play kind of going forward.
Floyd C. Wilson - Chairman and Chief Executive Officer
We have not lost interest whatsoever. As we reported early on, our Broadway well had the thickness and the organic content and all the basic reservoir characteristics we like to see in the shale well, very similar to what they're getting east of there. So we had some completion problems there, lost the well essentially. We're not planning on anything there this year. We have plenty of lease term. But we're very interested and hopeful that the play is going to turn into a moneymaker for the industry and including ourselves.
Kyle Rhodes - RBC Capital Markets, LLC, Research Division
And did you guys look at the Devon acreage at all?
Floyd C. Wilson - Chairman and Chief Executive Officer
We look at everything in any area, but we didn't really pursue it. We've got quite a bit of acreage over there now.
Kyle Rhodes - RBC Capital Markets, LLC, Research Division
To the east?
Floyd C. Wilson - Chairman and Chief Executive Officer
Pardon me?
Kyle Rhodes - RBC Capital Markets, LLC, Research Division
To the east, you said? You have acreage over there to the east?
Floyd C. Wilson - Chairman and Chief Executive Officer
Well, our acreage block is expansive in the area. I think we have close to 100,000 acres in leases and options, some number about like that, 90,000 or 100,000, I don't know.

TRANSCRIPT:

16 comments:

  1. He never directly answered the question about whether they had acreage in the "east" TMS.
    Do they?

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  2. Not on any on my maps nor from any of my information from other blogs but then I could miss it. He is welcome to come east of the river into Mississippi anytime. That would make a lot of folks happier. The more the merrier.

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  3. There is plenty of land left for lease in St. Helena Parish, as well as some in Tangipahoa Parish, that is within the area that Kirk has designated as commercially viable. Come on over.

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  4. There is PLENTY of land in Amite county which remains unleased. NONE of my neighbors have leased, and we are ALL in this "high resitivity" area.

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  5. He doesn't know? Compare this CEO's responses to Encana and Goodrich's earnings call. This CEO does not inspire confidence. I am happy I did not lease with Halcon.

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  6. Malone:]

    Maybe Floyd Wilson was being somewhat evasive on purpose as to not show Halcon’s true hand at this time. Floyd Wilson has a very impressive past record of smarts and huge success. It would be a mistake to under estimate his intelligence.

    However, he is human and it is possible that he may have been a little fuzzy on some of the acreage specifics Halcon has in the TMS, but don’t think for a minute that he is asleep at the wheel so to speak.

    Just my take on his comment for what it is worth.

    John

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  7. There is a lot of scattered unleased land all over the TMS including in Amite and Wilkinson, butare there any large blocks unleased? No so much. Other, at least mid to large operators may be reluctant to lease small scattered acreage plus Amelia Resources and Trinity and Cortez all have big blocks for sale but no takers yet. Add to this the fact that it will be very difficult for Encana and Goodrich to drill what they already have leased and you have a scenario where new leasing is going to be slow or non-existent for the near future. Maybe Encana and Goodrich will not renew some leases and those areas may be re-leased. This is going to be a slowly developed play without competing operators. IMO

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  8. Not having even been contacted to lease yet, what happens now? If this is such a hot play as promoted by numerous parties, why is it going to be a slowly developed play?

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  9. I do not believe that Halcon has any acreage in the area I define as TMS-East

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  10. Mark.

    Too few operators in a play makes it slow to develop. Availability of drilling rigs is another problem. Lack of money for the few operators is also a problem. Encana and Goodrich both need to attract JV partners for $. Most operators are in several plays at once, so budget resources are spread out. Not many service companies are located near the TMS. The process of building up to rapid development mode is a slow process. Convincing investors to put money into the TMS has not been easy. A lot of them rushed into the Haynesville for example and lost their butt when gas prices fell or were unable to drill the high priced leases they bought before their leases expired. There are a myriad of reason I believe this will not happen overnight. I hope I am wrong but I believe we will all have to be patient while we go nuts with anticipation.

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  11. Yep, patience. You nailed it, Free Medicine. But, those last completions sure make it easier to wait.

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  12. That's exactly what I was wondering, CB. If those numbers are that good, just what else is needed to prod this thing along? Some of us don't have the luxury of waiting.

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  13. Only thing I can think of for a landowner to do to speed things up would be to come up with $13 million and drill his own well. I am a little short($ wise) personally.

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  14. FM is correct. Mark get your rig "drilling to the right". keep in mind that right now US oil companies have more places to invest than they have capital so it's an internal competition for $$ amongst projects.

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  15. Money is very cheap today, cheapest probably in my entire life. Are there not drilling rigs sitting idle?

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  16. If Halcon were to lease acreage east of the Mississippi, who would they use? What company has been doing their leasing? Anyone know?

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