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Halcón Touts Kibler Well, Considers Processing Plant
YOUNGSTOWN, Ohio -- Halcón Resources is touting its Kibler 1H well in Lordstown, which the Houston company reports “tested at a rate of 2,233 barrels of oil equivalent a day (75% liquids), assuming full ethane recovery, which compares favorably to the other highly productive wells in the play.”
The Kibler well tested better than "all but ten wells across the entire play," said CEO Floyd C. Wilson during a conference call with analysts Thursday. "The test results for the Kibler 1H in Trumbull County and the Allen 1H in Venango County, Pennsylvania were excellent."
The Kibler production results were released Thursday as part of Halcón’s second-quarter financial report during which the company also revealed that its Halcón Field Services “continues to engage in discussions for a potential joint venture to develop a high pressure, rich gas gathering system and scaled cryogenic gas processing for Halcón's oil and gas assets in Ohio and Pennsylvania.”
No additional information was provided on the potential midstream project.
Said the company referring to the Kibler well, “This discovery well for the Utica/Point Pleasant play in Trumbull County tested at 860 barrels of condensate per day and 4.5 million cubic feet of natural gas per day (1,350 BTU). Based on composition analysis and assuming 27% gas shrink, Halcón estimates the well would produce an additional 821 barrels of NGLs per day. The Kibler 1H was drilled to a total measured depth of 14,257 feet, had an effective lateral length of 6,734 feet and was completed with 26 frac stages. The company has significant holdings in Trumbull and Mahoning counties, Ohio and believes there is potential to drill hundreds of wells on its acreage in the area over time.”
Halcón reported net income of $37.3 million, or eight cents per diluted share for the quarter. After adjusting for selected items, the company reported net income fof $16.8 million, or 4 cents pershare, compared to net income of $2.8 million, or 2 cents in the 2012 quarter.
The company said it operated an average of two rigs in in Ohio and Pennsylvania during the second quarter, and the process of delineating Halcón's Utica/Point Pleasant acreage position is essentially complete.
"We continue to make progress on all fronts,' Wilson said in a statement. “Operationally, we are generating better returns on the wells we have recently drilled in our core areas by focusing on improving recoveries and reducing costs. As is our practice, our portfolio management process is underway and we expect to be a more concentrated oil company by the end of this year."
Halcón said it has finished drilling its first nine Utica wells and is evaluating results. One Utica well is producing, four wells that have been tested and are shut-in awaiting infrastructure, two wells are being tested and two wells are resting. Halcón expects to operate a minimum of one rig in the play throughout the remainder of 2013 and anticipates seven of the nine wells drilled to be flowing into sales pipelines by the end of the year, the company said.
Halcón has 142,000 net acres leased or under contract in the Utica shale play. The company said its focus is on building an inventory of approved/permitted multi-well pads in preparation for a full scale development program that will target lateral lengths between 7,000 and 9,000 feet.
Meantime, he company's midstream subsidiary, Halcón Field Services, has entered into an exclusive arrangement with the Ohio Commerce Center in Lordstown to develop a $70 million oil storage and rail-loading facility. In its earnings release, the company noted the Ohio Commerce Center has over 12,000 feet of recently installed loop track and direct access to Class 1 rail service, “making it an ideal location for low cost rail services to support the rapid production growth expected in the northern tier of the Utica/Point Pleasant play.” The company said it plans to build the terminal in phases, the first of which is expected to go into service by the end of 2013. At scale, Halcón says it anticipates the facility would accommodate unit train loads at the rate of 140,000 barrels of oil or condensate per day.
Published by The Business Journal, Youngstown, Ohio.
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